By Janet Keeping
Leader
Green Party of Alberta
Contact Janet
CALGARY, AB/ Troy Media/ - With the price of oil plummeting, it's clear the government of Alberta has to increase its revenues in the next budget. But the position of the official opposition Wildrose Party that cuts to expenditures will do the whole job is ludicrous.
The notion that about $6 billion - which is what the government needs to find - can be found by "trimming the fat" is simplistic. Sure, the government wastes money - and that has to stop - but it doesn't waste $6 billion a year.
Had Alberta put much of its non-renewable resource revenues in the Heritage Savings Trust Fund - a move it should have taken long ago - the province could be looking at something like the nearly trillion dollars now in Norway's oil fund. That would certainly have eased its transition through the present crisis and to a less hydrocarbon intensive way of life.
But that was then, this is now. With oil at about $ 45 per barrel, the need to move to a different way of funding Alberta government functions is, finally, unavoidable. What should the government do?
First, it needs to raise taxes on those who have to this point escaped paying their fair share of government operations - corporations and wealthier Albertans. In a decent society, decisions on taxation are always guided by a commitment to social justice. Alberta already has the largest gap between rich and poor in Canada. Changes to our tax structure must not exacerbate that dangerously destabilizing divide.
Second, it needs to abandon the province's flat income tax rate of 10 per cent and return to the progressive income tax system it had until 2001.
Third, it needs to raise corporate taxes and - as soon as oil prices stabilize - royalties paid by oil and gas companies which profit extremely handsomely from Albertans' resources.
Fourth, it needs to introduce a carbon tax, but not to cover ordinary operating expenses and the costs of much-needed new infrastructure. Proceeds of a carbon tax should instead be devoted to developing serious energy conservation programs and to nurturing renewable energy industries, such as solar, wind and geothermal and other sustainable businesses and generally to easing our society's transition away from our overly intensive dependency on hydrocarbons.
Of course, there are opportunities for cuts in government expenditures as well. For a start, the province needs to search out inappropriate government subsidies and remove them: for example, the billions committed to carbon capture and storage. Money has been spent carelessly during the good times and we need to institute a system whereby expenses that are out of line with other similar jurisdictions are carefully reviewed.
But across-the-board cuts as experienced under Ralph Klein must be rejected. The salaries paid to public sector workers, for example teachers, should not be cut just because they are higher than those paid in other provinces. The cost of pretty much everything in Alberta is higher than elsewhere in Canada because we have more people - nearly all of them in the oil and gas sector - earning very high salaries. We all face higher costs, teachers and nurses included, even if we do not make oil-patch wages.
If our currently unfair taxation system is corrected and unjustified corporate giveaways eliminated, many Albertans might even be willing to bear new taxes, such as a sales tax.
But we should be wary of sales taxes because they are inherently regressive - poor people pay as much for an item as do the very rich. Since Alberta already has a large gap between rich and poor, the introduction of a sales tax would have to include rebates which carefully reflect ability to pay.
You have probably heard the expression: "Never waste a crisis." Along with gobs of money, Albertans have wasted the crises precipitated by previous falls in oil prices. The present one could provide the impetus to finally move us beyond petro-state public financing to the better, more sustainable place we need to be.
We Albertans desperately need this to happen.
— Janet Keeping is Leader of the Green Party of Alberta.
