Blog | January 10, 2013

A troublesome dip in Alberta's resource revenue will not translate into higher taxes in the coming year, Premier Alison Redford said Wednesday

By Sarah O'Donnell, Edmonton JournalA troublesome dip in Alberta's resource revenue will not translate into higher taxes in the coming year, Premier Alison Redford said Wednesday.Redford closed the door on the tax discussion one day after Lee Richardson, the premier's principal secretary, told the Calgary Herald that taxes are something that might have to be looked at as the province weighs its options in light of the gap between the price Alberta gets for its oil and the world price."My preference is clear. I don't want to see new taxes," Redford said, after an announcement at NAIT related to a renewed mandate for an expanded Premier's Council on Culture. "I have made a commitment and I'm sticking to my commitment," she said, adding "tax revenue will not change in this budget."What remains uncertain, though, is how Redford's government will fulfil a key election promise to balance the 2013-14 budget, ending a string of budgets with deficits that had to be covered by dwindling savings.She repeated a message at both the NAIT cultural event and at the Realtors Association of Edmonton housing forecast seminar that the province faces tough choices as it builds that budget.Since mid-December, government officials have warned that an oil glut in the U.S., combined with the fact that Alberta's western Canadian select grade oil sells at about $30 less per barrel than West Texas Intermediate, the American benchmark, is hurting the province's bottom line. Resource revenues account for a quarter of Alberta's income.Given those circumstances, Grant MacEwan University political scientist Chaldeans Mensah questioned Wednesday just how firmly Redford has really closed the door on potential tax increases down the road."My read of it is the premier is being careful," he said. "She doesn't want to box herself into a political corner for the opposition to attack. My opinion is she's left the door ajar a bit to leave everything in the mix."By constantly emphasizing that Alberta's financial picture is bleak, Mensah said he believes the government is preparing Albertans for a potential look at its revenue mix.Public Interest Alberta's executive director Bill Moore Kilgannon also believes that the Redford government is preparing Albertans for bad news, but he worries it will involve spending cuts that could hurt the province's most vulnerable.By ruling out new or increased taxes, Moore Kilgan-non said he believes the premier has already put herself in an impossible situation."Premier Redford has put herself in a box and locked herself in there by not allowing an open, public conversation on the revenue side of the ledger," he said."What does it mean for the average Albertan to have a flat tax system?" he said, referring to Alberta's system that sees everyone pay provincial taxes at a rate of 10 per cent. "To just close the door on that discussion is just so short-sighted and keeps us locked in this boom-bust cycle that is not sustainable."NDP Leader Brian Mason predicted Redford will be unable to keep many campaign promises."You can't on the one hand make extravagant campaign promises that involve far more spending than we ever in our wildest dreams promised and then not solve the basic financial problem of the province, which is that they have severely cut taxes for the wealthiest Albertans and for corporations," Mason said.But from other sectors Wednesday, Redford was being reminded of her earlier pledges involving taxes and a balanced budget.The Canadian Taxpayers Federation pointed those on social media to Redford's promise during the 2011 leadership raise to balance the 2013-14 budget without raising taxes.Wildrose finance critic Rob Anderson said the discrepancy between Redford's and Richardson's positions was puzzling since the premier and one of her top advisers should be on the same page on such a critical issue.Anderson said he believes the PCs are trying to ease Albertans into the idea of tax increases under the guise of a revenue crisis.He acknowledged Alberta is selling its oil at a discount, but said that still amounts to "buckets of money" for the province."We're having a great year and we're going to continue to have great years," Anderson said. "The problem is not revenue. If you compare us to every other jurisdiction, the problem is spending. Our spending is the highest in the country."On Wednesday, the premier again ruled out borrowing money to cover the province's operating expenses, such as paying salaries and running programs. But the government has said it will fund projects such as the twinning of Highway 63.Redford said she read Richardson's comments on taxes as being part of the discussion people are having over the tough issues facing Alberta. She said some people have told her that all options should be on the table.Redford would not say when the budget for the 2013-14 year will be released. In recent years, the government has released the budget in February, but the financial challenges mean that officials have not wanted to commit yet to a specific date.Both the finance minister and the chief deputy minister of Alberta's executive council have told departments in recent weeks to suggest savings options as part of the budget process.The province's fiscal year begins April 1.By Sarah O'Donnell, Edmonton Journalsodonnell@edmontonjournal. comThis article was published in the Edmonton Journal on January 10, 2013. Read the full article on the Edmonton Journal website.

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