Business leader won’t fret over UCP tax cut plan

Steve Mclellan says he isn’t going to lose any sleep over the United Conservative Party’s campaign promise to dramatically reduce Alberta’s corporate income taxes if elected later this year.

UCP Leader Jason Kenney on Monday unveiled his plan to cut the corporate tax rate to eight per cent from 12 per cent over the next four years, a move he said will create at least 55,000 new jobs.

The Saskatchewan Party government has long favoured lower business taxes. In its 2012 growth plan, the government proposed lowering the province’s rate to 10 per cent from 12 per cent by 2015.

Five years later, the province walked back its pledge to cut the rate to 11 per cent by the end of 2019, arguing that an increase in British Columbia meant the current rate remained competitive.

Mclellan, who has helmed the Saskatchewan Chamber of Commerce since 2007, acknowledged the importance of tax competitiveness, but said he’s not especially concerned about “pre-election political rhetoric.”

“First they’ve got to get elected and then they’ve got to look at the books and see if this is something they can afford to do. While it would be a move applauded, I’m sure, by the business community in Alberta, they also need to have core services,” he said.

Kenney said the UCP’S economic analysis projects an initial decline in government revenue — which would be offset by cancelling a $3.7-billion plan to lease rail cars for oil — followed by increases in

When the budget is balanced, we’ll be in a position to examine a range of tax policies to determine whether we can provide tax relief

a stronger economy.

The Alberta NDP, which raised the corporate tax rate to 12 per cent 2015, responded by saying Alberta’s rate remained competitive and suggesting the UCP’S proposal amounted to a corporate giveaway.

If the UCP is elected and follows through, Mclellan said, a lower tax rate in Alberta could affect new business investment, but is unlikely to spark an exodus of established businesses from Saskatchewan.

“I’m not worried that this would cripple our economy. As a matter of fact, if they did it and it became a catalyst for more investment from their own businesses, it might mean businesses opportunities for Saskatchewan (to) sell into Alberta.”

Greater Saskatoon Chamber of Commerce CEO Darla Lindbjerg took a dimmer view of the potential effects of a drastic corporate tax cut in Alberta, saying it would not be a “good scenario” for Saskatchewan.

Lindbjerg echoed the government’s view that competitiveness is becoming a major issue.

The Saskatchewan government is making no commitments, saying only that its taxes are competitive and that it “continuously reviews tax treatment and regulation for all industries in our province.”

“When the budget is balanced, we’ll be in a position to examine a range of tax policies to determine whether we can provide tax relief where it’s most needed and would have the greatest economic impact,” government spokesman James Parker wrote in an email.

Finance Minister Donna Harpauer has said she expects to deliver a balanced budget on March 20, eliminating the $1.2-billion deficit identified three years ago.