While Jason Kenney’s televised address to the province on Tuesday night gave details on how the COVID-19 pandemic in the province could play out in terms of cases and deaths, some political scientists say the comments the premier made in regards to the economic future of Alberta didn’t provide a lot of specifics.
One political scientist in the province said there is one option for the government to increase revenue: implementing a provincial sales tax (PST).
“[We’re] in a situation where the oil and gas sector has completely collapsed in terms of prices, and the revenue picture is going to be looking very unstable going forward,” said Chaldeans Mensah, an associate professor of political science at MacEwan University.
1:51 Alberta premier warns devastating economic impact of COVID-19 could mean record unemployment, negative oil prices
Alberta premier warns devastating economic impact of COVID-19 could mean record unemployment, negative oil prices
Mensah said the pandemic has completely changed the circumstances of the province, and that while the UCP had campaigned on a platform of fiscal conservatism, there needs to be a way of balancing the books going forward.
“The only way available is to look at a modest PST, to provide options for the government to be able to fund programs.”
Kenney said in his Tuesday night address that the social distancing and closure orders in the province would be in place at least until the end of May. He also said that the province would eventually roll out a “relaunch strategy” to get the economy moving again, involving mass testing to get those with immunity back to work, and increasing border screening.
1:30 Explaining Alberta’s probable, elevated and extreme COVID-19 modelling numbers
Explaining Alberta’s probable, elevated and extreme COVID-19 modelling numbers
However, once the premier addressed the situation with the global oil markets, experts said there was a lack of clarity on how the province could move past this.
“There didn’t seem to be a whole lot of answers, and just some real dangerous situations,” Mount Royal University political science professor Duane Bratt said.
“[Kenney] talked about a budget deficit that will triple to about $20 billion dollars, [he] talked about negative prices for energy — where we may have to pay people to take it — and there was no sense of how we’re going to get out of that,” said Bratt.
In his address Tuesday, Kenney said he could not “overstate how grave the implications of this will be for jobs, the economy and the financial security of Albertans.
“Much of this is due to the COVID-19 recession, but it has been made worse by a predatory price war led by Saudi Arabia and Russia, who are trying permanently to damage North America’s energy industry.”
Bratt said that while Kenney did reference the Keystone XL pipeline project as an important energy investment made by the government, as well as the work being put into collaborating with its federal counterpart and the U.S in regards to the energy sector, when it came to the province’s economic future, “he didn’t go into the same degree of details, the same strength of numbers as was on the health side.”
While the PST has been a difficult policy option for governments in the past, the COVID-19 situation has put the government into a spot that would be tricky to get out of without it, Mensah said.
“It’s the time to really put aside the ideology of fiscal conservatism,” Mensah said. “I think there’s room for a modest PST, to generate revenue in these uncertain times. You could even put a sunset on the PST— you could have it for five years or so, for the revenue to start to improve.
“I think Albertans, given the [pandemic] situation, would welcome the [PST] situation politically. The times we are in call for drastic measures.
“The government really has to re-calibrate here and come up with an alternate approach to the province’s finances,” he said.
“I cannot imagine a dumber thing to do in the midst of a time of economic fragility, an oil price collapse and a global recession, than to add a multi-billion-dollar tax on the Alberta economy and on Alberta families,” he said.
1:17 Jason Kenney says government will not implement a PST
Jason Kenney says government will not implement a PST
“You’re talking about a PST that would generate several billion dollars of revenue. That would take several thousand dollars out of the pockets of Alberta families at the worst possible time.
“This government is not going to take thousands of dollars out of people’s household budgets at a time of real economic challenge,” Kenney said.
On Wednesday, a spokesperson for the premier said in a statement that Kenney’s previous comments on the idea of a provincial sales tax still stand.
Cases of COVID-19 have spiked and mass layoffs have been handed out in Alberta since March 9, when there were just seven confirmed cases in the province. Just under a month later, on April 8, there were 1,423.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
