A new report from the Business Council of Alberta says the province should institute a harmonized sales tax (HST) and reinstate the provincial carbon tax.
According to the report by the council, Alberta overspends and undertaxes, which has resulted in a $40-billion debt.
Over the years, the province has been able to get away with it due to resource royalties from oil and gas companies; however, the council says this reliance has now caused a problem.
“Provincial governments dependent on resource revenues tend to increase spending in response to high commodity prices but resist curtailing spending when prices decline,” says the report.
(Business Council of Alberta)
Mike Holden, chief economist with the Business Council of Alberta, says that on average, the province collects eight per cent less revenue than other provinces.
“We are the only province that doesn’t have a sales tax of any kind. Most have harmonized sales taxes,” he said.
A harmonized sales tax, or HST, blends a new provincial sales tax with the existing federal goods and services tax (GST).
“We’ve used resource royalties to sort of patch over the difference, and as royalties are falling … we’ve increasingly made up that gap with debt.”
Holden says that because of this, a new fiscal model is needed to fix the province’s finances, and that spending cuts alone will not be enough.
“Most Albertans wouldn’t want us to cut our way to fiscal sustainability, so we have to take a look at what we can do on the revenue side.”
He isn’t yet recommending how big the sales tax should be but says every one per cent would add about one billion to provincial coffers.
COVID-19 impacts
While the pandemic didn’t create the issue, Holden says it definitely magnified the debt and added a sense of urgency.
“Twelve years ago, we had a $50-billion net asset position and we swung $90 billion into a $40-billion-dollar debt. And that’s all pre COVID.”
He says moderate action now would stave off more drastic action later.
“We’re not suggesting that be done immediately. This isn’t like a 2021 budget issue. It’s something that we need to talk about now and then plan out what it looks like.”
Holden says he understands it’s not a popular option but Alberta may not have another choice.
“Given the trajectory of resource revenues in the province, we can’t really rely on them in the future. And so hoping that they rebound isn’t a plan,” he said.
Why a carbon tax
Holden says that by reinstating the provincial carbon tax, the Alberta government would receive additional revenue.
Right now, Alberta has the federal carbon tax in effect, which Ottawa collects and provides rebates.
“If the province sort of repatriates that carbon tax, it provides a large cash influx into provincial government coffers, and then we can have a discussion about what we actually do with that money,” he said.
As well, he says this will show the investment community how serious Alberta is about reducing carbon emissions.
“They’re not popular ideas, for sure. But I think we do need to talk about them and talk about why we’re in the situation where we need to actually actively consider these options.”
Feb 28, 2021 • 11 hours ago • 3 minute read • 84 Comments
Prime Minister Justin Trudeau, with Health Minister Patty Hajdu, holds an empty COVID-19 vaccine vial after the first vaccinations were given at the Civic Hospital in Ottawa on Dec. 15, 2020. Photo by REUTERS/Blair Gable /Toronto Sun
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Canada is being described as a “vaccine pirate” after the latest announcement of COVID vaccine approvals showed we will be getting our doses from a facility funded to provide vaccines for the developing world.
On Friday, Health Canada announced that they had approved two related but distinct products, the AstraZeneca vaccine developed in collaboration with Oxford University and COVISHIELD, a version of the AstraZeneca recipe manufactured by Serum Institute of India.
The problem is that Canada will be getting its doses, starting as early as Wednesday, from the Serum Institute, an organization funded to produce vaccine doses for low- and middle-income countries.
Like the announcement that the Trudeau government will take 1.9 million doses from COVAX, this makes it look like Canada is taking vaccines meant for poorer countries.
In a news release last June announcing the deal that would allow the SII to produce the AstraZeneca vaccine, the company specifically said it was “to supply 1 billion doses for low-and-middle-income countries” In September, a donation from the Bill and Melinda Gates Foundation allowed the program to expand by an extra 100 million doses.
Every single one of which is a dose made in India for developing countries, which Canada poached last week because Trudeau bungled our own procurement.
How many people in other lands will this kill? “Sunny ways” it isn’t. Ashamed to be Canadian today. https://t.co/esfzPL0824
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“This is vaccine manufacturing for the Global South, by the Global South, helping us to ensure no country is left behind when it comes to the race for a COVID-19 vaccine,” said Dr. Seth Berkley, CEO Gavi, the alliance to ensure poor countries have access to vaccines.
Now Canada has found its way to the front of that line.
Procurement Minister Anita Anand confirmed on Friday that of the 3.9 million doses of the AstraZeneca/COVISHIELD vaccines that we will see delivered before the end of June, 2 million will come from the Serum Institute and 1.9 million from COVAX.
The move has led one former Canadian health bureaucrat who now works internationally to accuse the Trudeau government of turning Canada into a “global vaccine pirate.” It’s a view held by many people paying attention to the details of our latest vaccine announcement.
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Amir Attaran, a professor with the School of Epidemiology and Public Health at the University of Ottawa, accused the Trudeau government of poaching these doses from developing countries.
“How many people in other lands will this kill? ‘Sunny ways’ it isn’t,” Attaran said on Twitter.
Dr. Srinivas Murthy, an infectious disease specialist with the B.C. Children’s Hospital, said that Canada was taking doses away from LMICs or low and middle-income countries.
“This is much more anger-inducing than the COVAX conversation weeks ago. The Serum Institute of India was funded by CEPI and GAVI to produce vaccines for LMICs. Canada, because of diplomacy and money, is skipping that line and taking doses meant for LMICs,” Dr. Murthy said.
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When the Trudeau government announced at the beginning of February that we would be taking vaccines from COVAX, the move was blasted by a broad range of organizations including Doctors Without Borders and Oxfam.
“Canada should not be taking the COVAX vaccine from poor nations to alleviate political pressures at home,” Oxfam said at the time.
This is much more anger-inducing than the COVAX conversation weeks ago. The Serum Institute of India was funded by CEPI and GAVI to produce vaccines for LMICs. Canada, because of diplomacy and money, is skipping that line and taking doses meant for LMICs.https://t.co/YmWERXomLjhttps://t.co/9LT8taSHyw
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Yet, that is exactly what Trudeau was doing in early February and it is what he is doing now. Canadians are upset at seeing Americans, Brits, Italians, Serbians and Barbadians vaccinated much fast than we are, and they are rightly blaming the federal government.
Even the record 643,000 doses received across the country last week is less than the Americans use before lunch each day.
Justin Trudeau campaigned on improving Canada’s reputation on the world stage, now we are taking vaccines meant for developing countries. It is nothing short of a national embarrassment.
The Trudeau government owes Canadians an explanation on his latest moves; let’s hope he faces the tough questions he should later this week.
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