Kenney rejects sales tax idea; Alberta Business Council comes out in support – Calgary Herald

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Premier Jason Kenney has flatly rejected a recommendation by a coalition of Alberta’s most prominent business leaders who have come out in favour of a provincial sales tax.

On Wednesday, the same day the Business Council of Alberta released a report urging the province to get its fiscal house in order by adopting a harmonized sales tax (HST) as well as a provincial consumer carbon tax, Kenney told reporters there is no chance that next week’s provincial budget will contain any type of new tax.

“As I said a year ago when this (COVID-19) crisis first started, this would be the worst possible time to sink government’s hand deeper into the pockets of taxpayers who are already coping with huge financial stress,” Kenney said. “This would be the worst possible time to ask people to pay more.”

Last summer, Kenney — who has consistently rejected the calls of various economists and think-tanks who have suggested a sales tax could be one remedy for Alberta’s fiscal woes — pledged there will be no sales tax in Alberta under his premiership without a referendum first.

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The Alberta NDP is also against a provincial sales tax, and polling on the issue over the years has consistently demonstrated a lack of support from the general public for the idea. Alberta remains the only province in the country without a provincial sales tax.

But on Wednesday, the Business Council of Alberta — which represents a cross-section of the province’s largest and most successful companies — released a headline-grabbing report calling for a “re-imagined revenue model” for the province that includes discussions of both an HST and a provincial consumer carbon tax.

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According to the organization, Alberta’s finances are on a “concerning trajectory” with both a revenue and an expense problem, and trying to address the problem simply by cutting costs is no longer enough.

“We’ve gone, over 12 years, from having net asset position of $50 billion to net debt position of $40 billion,” said Business Council president Adam Legge. “The resource revenues will not come back to where they were in the past. And they were far too unstable — we need something to provide greater certainty.”

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Legge acknowledged the issue is a contentious one, but he said an HST could bring in about $1 billion for every one per cent tax point in stable, predictable revenue, allowing more future resource revenue to be saved.

“We think it’s a bold notion. And we do expect some pushback, given it’s a sensitive topic in Alberta,” he said. “But there are very few options that we can explore in our province that don’t involve some sort of sales tax.”

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On the topic of a carbon tax, Legge said no decision should be made until an expected Supreme Court of Canada ruling on the constitutionality of federal carbon pricing legislation. But he said if the top court rules in favour of the federal carbon tax, Alberta should reintroduce its own version of the tax to keep those revenues in provincial coffers and prevent them from going to Ottawa.

“At a $50 per tonne carbon tax, that’s about $1.5 billion in provincial revenues. So the math makes sense,” Legge said.

Legge emphasized the Business Council of Alberta is not advocating for a “layering on” of additional taxes, but for a strategic overhaul of the revenue/expense framework in Alberta. He said any government that brings in an HST or provincial carbon tax should look for ways to lower provincial income taxes in exchange, and added that either type of new tax should come with a set of rebates or other mechanisms to maintain progressivity and protect lower-income Albertans.

He added future public polling on either issue should not be framed as a yes/no question, but should ask Albertans whether they would be willing to tolerate a new tax in exchange for maintaining the quality of services they have become used to, while also reducing the amount of debt that will be passed to future generations.

“We’re receiving a lot of positive feedback from people saying this is a conversation whose time has come,” Legge said.

The Alberta Business Council’s membership includes the chief executives of 90 Alberta companies, including Canadian Natural Resources Ltd., TransAlta Corp., Suncor Energy, ATCO Ltd., and WestJet Airlines.

astephenson@postmedia.com

Twitter: @AmandaMsteph