Indexation freeze hurts taxpayers, NDP argues

‘Sneaky’ change could add $600M to Alberta’s coffers

EDMONTON The amount of money Albertans can earn tax-free will stay the same for the first time in nearly two decades, after Thursday’s budget hit pause on indexation.

When Canadians file their 2020 income taxes, Albertans will earn $19,369 tax-free — the same basic personal amount as in 2019. Since 2001, that amount has risen with inflation, so taxpayers aren’t penalized for earning more as costs go up.

Likewise, the government announced in Thursday’s budget the provincial tax brackets will stay as they are for now, meaning a bump in wages could push workers into a higher tax bracket.

The change is expected to be a $600-million boon to provincial coffers during the next four years.

The Opposition NDP said Friday the move was an underhanded way of getting more revenue from taxpayers without technically raising taxes. The indexation pause wasn’t in the UCP’S platform, Edmonton-whitemud NDP MLA Rakhi Pancholi said.

Pancholi called the move hypocritical,

The fact that he’s bringing this forward when he railed against it for so long just shows how sneaky and backhanded he’s being.

handing out an excerpt of a 20-year-old exchange in the House of Commons from when Premier Jason Kenney was the member of Parliament for Calgary Southeast.

In the 1999 exchange, Kenney criticizes then-prime minister Jean Chretien’s tax policies as not providing enough relief for Canadians.

“A fair chunk of (increased revenue) is attributable to higher tax rates through the pernicious, invidious tax bracket creep which sucks about a billion additional dollars out of the pockets of middle income Canadians every year ...” Kenney said the time.

Said Pancholi: “The fact that he’s bringing this forward when he railed against it for so long just shows how sneaky and backhanded he’s being.”

The Canadian Taxpayers’ Federation, of which Kenney was once CEO, also panned the move, calling it a “sneaky tax hike” at a time people can’t afford it.

Income brackets should rise with inflation because people are also paying higher living expenses, Franco Terrazzano, Alberta director of the federation, said Friday.

“Albertans gave the government a clear mandate to get the fiscal house in order without raising taxes,” he said.

Government spokesman Harrison Fleming said Albertans won’t be paying more in taxes.

“Income taxes have not been increased,” he said in an emailed statement. “If you earn the same amount of money next year, you will pay no extra income tax. It’s beyond rich for the NDP, which raised taxes on job creators, income, property, and fuel & home heating with their carbon tax, to now claim they care about taxpayers.”

Government budget documents say Albertans will continue to pay the lowest provincial taxes in Canada “for the foreseeable future.”

In 2019, Alberta had the highest personal amount tax-free. Saskatchewan residents are next, with a $16,065 personal amount, and Nova Scotia has the lowest threshold at $8,481.

However, some provinces with lower personal amounts pay lower tax rates.