Politics
Provincial sales tax common theme at Alberta economic summit

Wildrose Party leader Danielle Smith speaks to media after the close of the Alberta Economic Summit held at Mount Royal University in Calgary, Alberta, on February 9, 2013.

Credits: MIKE DREW/Calgary Sun

KATIE SCHNEIDER | QMI AGENCY

CALGARY -- It seems many aren’t afraid of the S-word: sales tax.

A provincial consumer tax was the common theme at the Alberta Economic Summit Saturday at Mount Royal University, touted by some as a solution to cope with Alberta’s tough financial times ahead.

The summit, hosted by Premier Alison Redford, gathered economists, academics and watchdog groups in a brainstorming session about Alberta’s looming $6 billion revenue shortfall, and potential ways to get out from under it.

Panelist George Gosbee, president and CEO of AltaCorp. Capital, urged a 5% sales tax and a return to health-care premiums to get off the reliance on resource revenue.

“We had a free ride, we’ve had a great ride, now it’s time to get off -- it’s not time to take up more debt in order to keep that ride going,” he said.

“If you want to have accountability ... a consumption tax will really drive accountability with government.”

Jack Mintz of the University of Calgary’s School of Public Policy reinstated his support for a consumption tax, as a harmonized sales tax, but not to be used as revenue to get out of the red.

“My view is that Alberta doesn’t have a revenue problem, but it does have a spending problem,” he said.

He believes the province should switch from income to consumption-based taxation (whether through fees, excise taxes or sales tax) which would be fairer, diversify the economy, generate jobs and create a less volatile revenue stream.

“Not having a sales tax is a disadvantage in today’s global economy,” he said.

Alberta NDP Leader Brian Mason and Wildrose Leader Danielle Smith both worry the government is just laying the groundwork for a sales tax.

“They are trying to set the stage for a sales tax and that’s not something we support because it’s a more regressive tax,” Mason said.

Smith said she was disappointed the conversation kept turning toward a revenue problem and the solution as a tax.

“I don’t support a sales tax ... it does hit the lowest-income people the hardest,” she said.

But Redford said sales tax wasn’t all she took away, and she wants to hear from Albertans too.

“I also heard a lot today about spending cuts, I heard about reducing provincial income tax or eliminating provincial income tax, reducing corporate tax,” she said.

“I think what it speaks to is where we set the panel, which was to say ‘do we need to have a conversation about revenue?’

“I don’t know the answer to that yet, but there was a lot of smart people engaged in that room who want to keep having that conversation.”

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