Every single time Alberta faces a financial challenge, some academics recommend the same pseudo-solution: a provincial sales tax. They seem blissfully unaware that governments are struggling because Albertans are struggling and a PST will make hard times even harder.
Here’s proof of that disconnect: these academics always demand a provincial sales tax (PST) but never call for a referendum to ask Albertans for permission.
Let’s take a moment to reintroduce these academics to the Albertans they want to tax more.
While all of Canada is feeling the pain of the COVID-19 economic shutdown, Alberta’s woes began more than half a decade ago.
The oil price collapse that began in 2014 brought devastation for many Albertans, who were forced to say goodbye to their colleagues with cardboard boxes in hand. By March 2016, about 100,000 oil patch workers had been laid off.
But that wasn’t the end of Alberta’s tough times.
Dwayne, a manager in the oil industry, phoned into Calgary 770 CHQR radio’s Danielle Smith Show with a haunting Christmas story in 2018.
“I have to lay off 25 per cent of my workforce right before Christmas,” Dwayne revealed. “I love my guys, but I have to lay off 25 per cent. They’re going home to tell their wives tonight that Christmas is over. We’ve taken a pay cut so we can keep as many people employed as we can and today I have to break people’s hearts.
“This is the worst day of my life.”
Fast-forward to earlier this year. Finally, Albertans were beginning to see a glimmer of light at the end of the tunnel. Then came the triple whammy of a health pandemic coupled with the economic shutdown and second oil price collapse that crushed the economic recovery.
Former oil and gas worker Christina Coffey told Global News recently that she’s still laying awake “half the night” worried about losing her home. More than 100,000 Albertans were added to the ranks of the unemployed in March and Premier Jason Kenney warns that we still haven’t hit rock bottom.
“The end of the pandemic will not be the end of the economic downturn, the likes of which we have not seen since the 1930s,” said Kenney, who is also expecting 25 per cent unemployment.
Alberta politicians of all stripes who actually have to look these people in the eye when they run for election understand that there’s no room for huge sales tax hikes.
“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 multibillion-dollar tax on the Alberta economy and Alberta families,” Kenney said.
New Democrat Leader Rachel Notley made similar comments about a PST when she was premier.
“I don’t think you take that kind of money out of the economy when the economy is struggling,” said Notley in 2018.
The people who knock on doors for a living understand that there’s no way Albertans can fork over billions more through a sales tax.
But selling a PST at the doors is exactly what sales tax advocates would be legally required to do. That’s because the former government of Ralph Klein, which was pushed by Kenney during his time at the Canadian Taxpayers Federation, passed the Alberta Taxpayer Protection Act. It requires a referendum before politicians can siphon away more money through a PST.
The PST debate can’t be exclusive to ivory towers or scholarly essays. It has to happen in our local shops and at kitchen tables and, in the end, it has to respect Albertans’ right to vote on any PST proposal in a referendum.
It’s telling that the people pushing for a PST never talk about looking Albertans in the eye and asking for permission.
Franco Terrazzano is the Alberta director of the Canadian Taxpayers Federation.