Calgary Herald

Kenney confirms no sales tax without referendum

- ASHLEY JOANNOU ajoannou@postmedia.com

EDMONTON Premier Jason Kenney has confirmed that a provincial sales tax will not be implemente­d in Alberta unless the idea is approved in a referendum.

In a letter published Monday, the premier told the Canadian Taxpayers Federation that his government supports the law laid out in the Taxpayer Protection Act, which requires a referendum to introduce a new tax.

“As long as I am premier, Albertans will have the final say through a fair referendum vote on whether a hypothetic­al sales tax should be introduced,” Kenney says in the letter dated June 8.

Alberta’s finances have been struggling under what the premier has repeatedly referred to as the “double whammy” of the COVID-19 pandemic and low oil prices. Kenney has warned the projected budget deficit of $6.8 billion for this year could balloon to as high as $20 billion, and has said there will be debate over how to deal with that debt.

But there are no signs of a referendum coming soon. When asked about the possibilit­y, Christine Myatt, Kenney’s press secretary, referred to an interview in March in which the premier said he “cannot imagine a dumber thing to do in the midst of a time of economic fragility ... than add a multibilli­on-dollar tax on the Alberta economy, on Alberta families.”

Franco Terrazzano, the Alberta director of the Canadian Taxpayers Federation, said his organizati­on felt the need to send Kenney a letter and get clarity on his position after supporters of a sales tax started talking about it without mentioning the legally-required referendum.

“As the government starts to rethink budget planning we need to ensure that higher taxes are out of the equation because Albertans just can’t afford it right now,” he said.

Calgary economist Trevor Tombe says a sales tax needs to at least be part of the conversati­on about where the province goes from here.

“We need to recognize that no matter what we choose to do we are incurring costs. When the government accumulate­s debt, that costs us in terms of rising interest payments. If the government were to raise other taxes, that would create costs as well. If the government were to cut back on certain government services, that’s going to create costs as well on those who benefit from those services,” he said Monday.

Tombe said the province should think about a value-added tax similar to the GST federally where taxes are collected only on the end of the chain of production and taxes paid on goods leading up to that point can be collected back from the government.

“It would be incredibly difficult to close that gap between revenue and spending just on the spending side alone, and if we raise revenue then we should do it in the most efficient and stable way possible and that’s with a consumptio­n tax,” Tombe said.

NDP finance critic Shannon Phillips said her party is against a provincial sales tax. She sees other ways of increasing the revenue side of the province’s ledger.

“We believe that Alberta’s finances, in particular its revenue issues, can be addressed through reversing the giveaways ... that Mr. Kenney brought in to already-wealthy corporatio­ns and we believe further that we should do a very serious examinatio­n of our options for increasing revenues from the already wealthy,” she said.

Phillips said the NDP believes people who earn more than $300,000 a year might be able to pay one per cent more in income tax and that the government needs to diversify the economy.

“That is a more reasonable way to address some of the challenges that we have right now that won’t involve working people paying more,” she said.

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