'The timing is the question here': Alberta finance minister says he would consider looking at a PST after the pandemic, further spending cuts
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The Alberta government would consider looking at a provincial sales tax only after the pandemic and further spending cuts, Finance Minister Travis Toews told members of the Edmonton Chamber of Commerce Friday.
In his first address to the chamber in more than a year after March’s event was cancelled due to the pandemic, Toews took questions and feedback from business owners on potential cuts and revenue streams the government ought to consider as it faces an historic projected $24.2-billion deficit as a result of COVID-19 and low oil prices.
“We all want to increase revenues in this province but nobody wants their ox to get gored,” said Toews, echoing comments made by Ken Kobly, president and CEO of Alberta Chambers of Commerce.
Although the province is on track to post its largest deficit in history, Toews and Premier Jason Kenney have repeatedly said that now is not the time to create or raise taxes.
“The timing is the question here,” Toews said, adding that if the government were to examine the sales tax issue seriously a revenue panel or review might come late in its four-year term which ends in 2023.
“I do think there is a sequencing though. We need to deliver a plan which does bring our cost of delivering services in line with that of comparative provinces, and if we reach for our revenue lever too soon we may lose ambition on the former — and that is that we are delivering most efficiently,” said Toews.
Economists have long criticized Alberta’s reliance on resources like oil and gas, and have argued a provincial sales tax is a much more stable and efficient source of revenue. The government’s recovery plan focuses largely on attracting investment to the province to spur economic growth.
Janet Riopel, executive director of the chamber, referred to a sales tax as “the elephant in the room” at Friday’s town hall.
She said business owners want the province to form a panel of experts to study the revenue side of Alberta’s books in the same way the MacKinnon Panel was tasked with looking at the expense side.
Toews said that was a fair recommendation and that he would consider it.
“I think it will be important to review the province’s revenue structure to determine if it’s the appropriate, the most efficient structure that we can have,” said Toews.
Toews also took a question on the UCP’s corporate tax rate, acknowledging that even though U.S. president-elect Joe Biden has promised to raise corporate taxes to 28 per cent from 21 per cent, Alberta was committed to keeping its rate at eight per cent.
“We have no plans on walking (the cut) back,” said Toews.
Toews is expected to present a fiscal update this month and a budget next February.
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