No more tax hikes: Prentice

Premier says his government will stick with 10- year fiscal plan

Premier Jim Prentice says there will be no further tax hikes coming from his PC government after a round of new revenue measures in last week’s provincial budget that he calls “very modest for most Albertans.”

But opposition parties said provincial residents were dinged in this year’s budget and they expect Prentice to try to wring more cash out of Albertans following a provincial election that could be called in a matter of days.

In a meeting with the Herald’s editorial board Tuesday, Prentice said his government won’t be swayed from the framework laid out in the budget to restore Alberta’s fractured finances after a massive drop in oil prices.

That means no additional taxes, said the premier.

“This is my commitment. This is a 10- year fiscal plan, there’s been a lot of thought that’s put into it,” said Prentice.

“We have no intention of bringing in other revenue measures. These are the revenue measures we think are necessary to bring the government back into balance. We think the projections are all realistic and we think that if we just stick with the plan, we’ll be fine.”

The new provincial budget ditches Alberta’s flat tax on income, introducing a new progressive health- care levy for all those earning more than $ 50,000, and new brackets for people earning more than $ 100,000 annually.

There were also a host of increases to user fees and hikes to fuel, liquor and tobacco taxes.

With the income tax changes kicking in on July 1, the government says an individual making $ 60,000 annually will pay an additional $ 161 in taxes in 2015, while someone earning $ 100,000 will pay an extra $ 361. A two- income family making $ 100,000 will shell out an extra $ 238.

But Prentice said those Albertans will still pay hundreds or thousands of dollars less than they would in comparable provinces such as British Columbia, Saskatchewan and Ontario.

“We’ve asked people who can afford to pay a little bit more to pay a little bit more, but by and large the revenue initiatives are very modest for most Albertans,” he added.

But Brian Jean, newly elected leader of the Wildrose Party, said Albertans are facing the largest tax hike in provincial history thanks to Prentice.

He noted that just one initiative, raising land title fees, will add more than $ 1,000 to the cost of buying a home.

“That’s not modest, that’s huge ... and they’re doing a ton of things like that,” said the former Conservative MP from Fort McMurray.

Jean said Prentice has shown himself unwilling to cut the priciest government in Canada and suspects the premier of planning to bring in a provincial sales tax after the next election to finance operations.

The Tory government expects the package of new tax measures in this year’s budget to bring in an additional $ 2.2 billion in revenue when they are fully implemented in 2016- 17.

Liberal Leader David Swann said he also expects new tax measures in the future because the budget fails to live up to Prentice’s stated goal of weaning the government from its dependence on energy revenues.

Swann said Tuesday he agrees with Prentice that the tax measures in the budget are modest. The government should have gone further in taxing high- income earners and by increasing corporate tax rates, which went untouched, said the Calgary- Mountain View MLA.

“I don’t know how ... he can say this is it for the next 10 years because it’s not going to meet the needs of a growing Alberta and get us off the royalty roller- coaster,” said Swann.

NDP Leader Rachel Notley said she doesn’t believe Prentice’s pledge of no new revenue initiatives.

“This government hasn’t been able to stick to a one- year plan, let alone a 10- year plan,” she said, noting as just one example that Alberta students will likely face rising tuition fees in coming years.

Notley said the tax and fee increases in the budget will not be modest for many low- and middleincome earners, especially when combined with program cuts.

The government’s fiscal plan calls for spending to be essentially frozen this year and the two years after.

Prentice said that by the end of three years, that puts spending $ 8.6- billion below where it would be under business- as- usual circumstances.

In February, Finance Minister Robin Campbell said the government intended to hold the line on spending and then cut five per cent, translating into a nine per cent cut.

While that led many to expect a massive cut that never came in the budget, Prentice said Tuesday that was never the government plan.

“There was never an intention to do that in a single year. From the very first time we spoke to an economist, they made it clear we should not do this in a single year, that it would be damaging to the province’s economy,” said the premier.