by Tristan Turner
Finance Minister Doug Horner recently released the province’s 2014 budget, a budget that will mean lacking support for services, inadequate post-secondary funding and an unsustainable debt-borrowing model that will only serve to hurt the province’s pocket book in the long term.
While overall Horner claimed the budget posted a surplus in excess of $1 Billion, this does not mean the province is not borrowing money. In fact, the province is set to borrow over $5 Billion to finance capital projects (primarily highways, health care centres and schools), and while this spending was necessary, and welcome, the method of funding these projects is absurd and irresponsible. The province currently pays over $400 Million dollars in debt servicing, and this figure is projected to nearly double by 2017.
Danielle Smith, leader of the Wildrose Opposition, spoke to this issue directly: “This government has now locked us into spending at least $820 million in finance charges for the next 30 years,” she said. “That is money that’s just wasted, flushed down the drain.”
While she is correct in this analysis, the answer to the issue of long-term debt mitigation is not service cuts in a province with a growing demand for services and a great need for new investment in equalizing social programs, as Smith’s party so often supports. Instead of reducing investment in social programs that build our economy, address social issues that cost our province Billions, and establish the needed infrastructure to facilitate our private-sector growth, we should look to changing the revenue and tax model that relies too heavily on inconstant resource royalties.
Alberta remains as the only province that charges a flat income tax, meaning that in our province you are charged a flat 10% regardless of your income, so whether you made $30 thousand or $30 million a year, you’re charged the same provincial income tax rate. This is financially unsustainable and fundamentally unfair to low and middle class families that are ultimately made to bear a greater portion of the tax burden. The role of government should be to reduce – not increase – income and social inequality.
While income tax is an issue, corporate tax rates are another major concern. This province posts some of the greatest returns on investment for corporations operating within the province, and we still maintain some of the lowest tax rates in North America and the developed world. If our province is going to achieve debt freedom and adequate social program spending, we will need to force companies operating here to pay their fair share of corporate taxes, something this government is not doing.
As Canada’s wealthiest province, we should not have to suffer the peaks and valleys of resource royalty revenues effecting frontline services as we did in the last ‘bitumen bubble’. Instead the province should be proactively raising new revenue to mitigate the inconsistency resource revenue causes and adequately address social and economic inequity.
In Alberta, our governments should be saving Billions in the Alberta Heritage Savings Trust fund, not borrowing to meet the needs of new capital spending.
Our MLA Maureen Kubinec, Finance Minister Doug Horner, Premier Alison Redford, and this government in general, has failed Albertans with this budget and little is likely to change going into the 2016 election.