Updated 16 August 2022
Well it didn’t take too long for a conscientious staffer in Travis Toews’ campaign to ferret out the 4 September opinion piece in the Edmonton Journal. In the article Smith setting forward what I think are credible views about Alberta’s topsy-Turvey finances stated-
Instead, he (Klein) bought off progressives by spending an excessive and unsustainable amount on public services and he bought off conservatives by lowering taxes below the cost of delivering programs. Now the public service screams holy hell at the mention of austerity and taxpayers say they aren’t prepared to pay a dime more. I’m here to tell you: Everyone — on both sides of the political spectrum — needs to suck it up.
Alberta needs a three-step financial reset.
Step 1: Liquidate the Heritage Fund. Use it to pay off the COVID deficit. It would be unconscionable to add this to the debt load when we have no plan to ever pay it off. Then let’s thank Peter Lougheed for being the only premier we’ve ever had with the fortitude to lock money away so we could pay for this rainy day.
Step 2: Establish the Alberta Sovereign Wealth Fund with a pledge to put every single dollar of resource revenue and every single dollar of investment income it generates in the fund until — at a minimum — it reaches a value of $100 billion and can comfortably generate $5 billion a year in investment income.
Step 3: Balance the budget by increasing taxes and reducing spending in equal measure. We have a structural deficit of at least $10 billion. That means $5 billion in cuts to health care and education (let’s not kid ourselves about where the cuts need to be made) and $5 billion in new taxes. Yes, a provincial sales tax. Let’s not kid ourselves about that either.
The views, now “musings,” of Smith were contained in my opinion piece “Time for Alberta to get off the revenue roller-coaster” in Edmonton Journal’s 8 July edition.
Predictably and opportunistically Toews’ campaign tweeted a video attacking Smith the leadership front runner.
The video which went live at 8 a.m. on 17 July has to date only 6.445 views. In the video he claimed credit for his fiscal management -“I brought fiscal responsibility not by raising taxes and a balanced budget” a task mostly resulting from a rapid rise in oil and natural gas prices. He concluded with the trite claim that he would leave more money in the pockets of Albertans. The failed to mention the de-indexation of personal income time exemption thresholds which is pitting hundreds of millions of dollars into the province’s coffers.
Smith shot back at 9:59 a.m. accusing Toews of “smearing fellow candidates for “past musings,” and referencing an Edmonton Journal piece where the former finance minister said he “would consider looking at a PST.” In fact, Toews follows a long line of Alberta finance ministers musing about a PST. In A Sales tax for Alberta- Why and How, Graham Thomson offers an excellent history of these musings over the past two decades.
Three day s later came Brian Jean….
Much of the hand wringing of Toews and Jean focused on affordability issues relating to “price gouging” by Brian Jean and Toews’ credentials as a tax cutter. Smith’s backtracking from her musings seems to confirm what many party members and voters feel towards politicians- they can be trusted- “say one thing and do another.”
The threads
Most interesting in this PST dus0-up, which also came up in Wednesday’s all-candidates debate (Jespersen recap) are many supportive comments from those following the discussion. To be sure, many of the comments come from progressives and those attacking the particular candidates. The following describes one observer’s view of the reality underlying the discussion.
Rob Breckenridge’s column on 18 July also cast doubt on what he termed “meaningless grandstanding.”
#Yes to pst
For those wishing to follow the debate there is a Twitter hashtag that you gather more information about a provincial sales tax.
Listen to my interview on The Breakout podcast with Nate Pike.
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A fascinating discussion is worth comment. I do think that you ought to publish more about this issue, it may not be a taboo matter but typically folks dont speak about such topics. To the next! Cheers!!