Locals are divided on whether a Provincial Sales Tax (PST) should be implemented to assist with Alberta’s debt.
Phyllis Kruesel, owner of A-OK Shoes and Key Men’s Apparel in Bonnyville, believes there has to be other options.
“I just think, as a business person, the consumers are already paying enough tax. Everybody is paying enough taxes as it is, and I think there’s better ways to fix their spending than to ask people to pay more,” she stressed.
While Alberta doesn’t have a PST, which is a tax that applies to goods and services at the time of a purchase, most provinces have some form of it. In many provinces, a single value added sales tax known as the Harmonized Sales Tax (HST) combines the federal Goods and Services Tax (GST) and the provincial PST.
“I think that bodes well in terms of people viewing Alberta as cost savings in some ways and competitive for businesses,” noted Ryan Lefebvre, president of the Cold Lake Regional Chamber of Commerce. “In the end, (a PST) may help bolster services in some ways and it could fix the deficit, but it could also negatively impact the business community and the people who run those businesses.”
While he wasn’t a fan of the idea, Ryan Chornohos, owner of Bonnyville businesses Lakeland Arctic Spas and Purified Water Shoppe, as well as Cheap Smokes and Cigars, felt a PST is something that should be considered.
“I don’t think I’d want it, but it will be an inevitability, and I think it’s an idea that we have to seriously look at.”
The Parkland Institute, a non-partisan research centre located at the University of Alberta, suggested implementing a PST in their Cutting Through the Blue Ribbon: A Balanced Look at Alberta’s Finances report as a way of addressing Alberta’s deficit.
It was put together as a response to the UCP government’s MacKinnon report, which suggested the province review and eliminate lower priority programs and end the freeze on post-secondary tuition fees as some of the ways to address Alberta’s debt.
According to the blue-ribbon panel, led by former Saskatchewan finance minister Janice MacKinnon, the province should cut spending by $600-million per year to balance the budget by 2022/23.
When the Nouvelle asked readers on social media what they thought, many believed Alberta’s debt could be handled differently.
“I’m sick and tired of all these taxes and excuses for more and new taxes,” exclaimed Marlo Schweigert in a comment. “Take the money they get already from taxing us and learn to spend it on necessities. We have a government spending problem, not a tax shortfall problem.”
Samantha Gowanlock believes a sales tax would discourage lower and middle-class families from buying and fuelling the economy, and suggested a small income tax increase to the top one per cent earners.
“Average Albertans can’t really afford the added cost of a sales tax right now. Obviously, the cutting back of government spending that doesn’t affect frontline workers should be a priority.”
One reader proposed bringing back the carbon tax instead.
“It was generating revenue to transition to green,” noted Linda Feland-Swityk. “That will bring lots of jobs, generating lots of tax revenue. Currently, the energy royalties are very low, and we seriously have to move away from non-renewable resource money. The revenue from tax cuts to corporations is going in the pockets of shareholders, which isn’t fair.”
Some commenters agreed with suggestions in MacKinnon’s report that said there are areas where cuts could be made.
“We have a spending problem as a province,” exclaimed Kevin Latel. “Lots of fat to trim and (Premier) Jason Kenney and the UCP are the ones that are moving toward fixing it.”
The Parkland Institute argued that Alberta has a manageable debt, while the MacKinnon document states the province is facing a financial crisis due to overspending.
Others saw the long-term impacts of potential cuts as negative for frontline workers.
“Alberta has enjoyed worldwide envy for our school system,” detailed Greg King. “With deep cuts, that will change. Every province other than Alberta has a sales tax. Maybe we can change the tax brackets, maybe return the carbon tax, maybe we let the government own profit-generating businesses. Whatever the case, the boom days are gone and a ‘temporary’ cut while we hold out for economic rebound won’t fix anything. It will just be a band-aid until inflation causes our already stretched public services to break.”
Both reports suggested Alberta needs to find new ways of covering expenses, instead of relying on resource revenues.
“I never want to say ‘move away from the resource revenue,’ because the oil and gas sector is something that we need to build back up and something we want to see thrive again,” executive director of the Bonnyville and District Chamber of Commerce Serina Parsons said. “However, in areas of economic decline, Alberta does need to have a more sustainable platform moving ahead.”
While he believed Alberta needs to expand their means of stability, Ben Fadeyiw, owner of Budget Blinds in Cold Lake, said the resource isn’t going away anytime soon.
“There’s so much more to it besides what people think that we use it for. People think that we just use it to fuel our vehicles, but I think it’s so much more encompassing than that.”
Lefebvre described the sector as the “lifeblood of Alberta,” noting there’s no way the province could move away from its revenue.
“I think we should be using it as much as we can, and I don’t think there’s an opportunity to look at other avenues to generate business,” he detailed, adding other sources of energy could assist in attracting businesses to Alberta.
Scheduled to be released in the coming months, the province will use information from the MacKinnon report in their 2019 budget planning.
