NDP says return to flat tax would only benefit rich
The United Conservative Party’s potential embrace of a returned Alberta flat tax set off political fireworks Thursday, with the NDP slamming it as a regressive tax cut for the rich and UCP Leader Jason Kenney accusing the government of fearmongering.
The fledgling party’s draft policy framework, intended to spark debate among members ahead of the party’ s founding convention in May, includes a call for a return to a flat 10-per-cent tax on income, which was brought in by Ralph Klein’s former Progressive Conservative government before being officially scrapped by the NDP in 2015.
Under the tax brackets brought in by the NDP government, those making less than $128,145 already pay a 10-per-cent rate, meaning a move back to the flat tax would translate into a cut only for high-income earners if no other measures were adopted.
Finance Minister Joe Ceci said returning to a flat tax would cost the provincial treasury $851 million annually while overwhelmingly benefiting “the one per cent.”
Albertans in the top tax bracket, making over $307,547 annually, would get a tax cut of $681 million, says the government.
“That’s not a good thing for Alberta,” Ceci said in an interview Thursday. “It’s a slam on regular families and it’s a cut to programs and services.”
The policy framework also calls for scrapping the province’s carbon tax, rolling back the NDP’s hike of the corporate tax rate from 12 to 10 per cent and eliminating the small-business tax. The latter two measures would cost the treasury $750 million in revenue.
Ceci also took aim at other proposed policies in the framework, such as bolstered funding for private schools and increased privately funded, privately delivered health care to address wait times.
He said the proposals show the UCP wants to turn back the clock to the Klein era and that a government led by Kenney would be “extreme” and out of touch with the needs of ordinary Albertans.
Kenney was not made available for an interview Thursday.
In a Facebook post, Kenney stressed that members of the UCP — a new party formed to bring together Progressive Conservative and Wildrose members — would have the final say on party policy.
The May convention will be the culmination of a process that will include regional meetings on policy development. Constituency associations or 10 UCP members working together can submit amendments and new policy proposals.
“This is by no means our party’s finalized policy. Some of the proposals might eventually be adopted, while others could be amended or rejected outright,” wrote Kenney.
“They’ll talk about what a ‘dark and terrible’ place Alberta supposedly was before the NDP came to power ... fearmongering is really all they have left.”
Kenney’s Unite Alberta Twitter account posted defences of the flat tax, which was a signature policy of the Klein government from the time it was introduced in 2001. The final Tory government under Jim Prentice intended to move away from the flat tax but was defeated by the NDP in the 2015 provincial election before its budget passed.
UCP MLA Ric McIver, a former PC cabinet minister under Prentice, said he personally backs a return to the flat tax.
“I thought it was a good policy when we had it before,” said the Calgary-Hays MLA.
But he expects there will be UCP members with strong feelings on both sides of the debate.
“I don’t know how to call this one,” said McIver.
Other policies in the framework, such as the openness to privately funded health care, drew criticism Thursday from groups including Friends of Medicare.
The 21-page framework was drawn up by a party committee based on the resolutions and constitutions of the PC and Wildrose parties.
It makes no reference to hotbutton social issues such as abortion but touches on other potentially contentious areas, including reintroducing Senate elections, repealing farm-safety legislation and introducing competition for the Workers Compensation Board.
While the document calls for repealing the NDP’s carbon tax and 100-megatonne cap on oilsands emissions, it proposes that Alberta set greenhouse gas reduction targets in line with international agreements.
Those would be met by re-establishing the PCs’ old carbon levy on large industrial emitters and “technology innovation and research, use of low-emission fuels and alternative viable renewable energy sources.”
Mount Royal University political scientist Duane Bratt expects UCP members to eagerly back policies such as the flat tax, with their evocation of Klein a key part of their appeal. That will set up a “stark contrast” between the governing party and the Opposition heading into the 2019 election campaign.
“The separation between the UCP and the NDP gets wider every day,” said Bratt.