On the Fiscal Situation

It is always flattering to have people you respect and admire begin to talk the same language as you. In my case I had a discussion with a room full of economists and emphasized the need for a full and free discussion with Albertans, amongst Albertans, about the fiscal situation of the province with a view to deliberately choosing the future we wished to make. I pointed out that the all of the corporate and personal income tax collected in this province pays for 80% of the healthcare budget. That’s it. We don’t collect enough to pay for the rest of healthcare, or education, or advanced education, or seniors programs, or agriculture programs, environment, roads, schools or hospitals, or anything else. We rely on other sources such as royalties and gambling revenue to make up the difference.

Many people complain that the province spends too much money. When I ask where cuts should be made however, and ask that the suggestions for provincial funding cuts have to affect them directly (since it is always easy to offer cuts that affect others), few offer any concrete plans that would remotely balance the books. There is no doubt there is some waste that can be cut, but it doesn’t amount to the billions of dollars in shortfall that the province would incur – without royalty revenues. Often the subject changes to a lamentation that we still rely on royalty revenues too much and that the government should do more to save the royalty revenue so that we don’t have to be so dependant. I concur, but then the question comes back to what programs should be cut, or where will the new revenue sources come from to pay for the programs we have now. The instant response is always the same. Don’t increase taxes.

So, it seems that the province spends too much money, has to cut to get rid of the deficit without cutting any programs that affect anyone and without reducing the building of much needed schools and hospitals and roads, and that we must also quit spending royalty money, which will widen the deficit gap, but that we cannot raise taxes to pay for any of it. Each piece of that is possible in isolation. Cut spending – check. Keep programs – check. End the deficit – check. Save all royalties – check. Don’t raise taxes – check. Only the opposition would tell you that all of this is possible at the same time. One member constantly yells that he needs schools in his riding while he also calls on the government to reduce its infrastructure spending. I guess it’s only your schools that he doesn’t want to be built.

So I suggested that we need to have a free and open discussion about the future. Do we want to cut programs or keep them? Do we want to save royalties and raise taxes, or do we want to do with fewer programs? We need to have a frank discussion and it is long overdue, frankly. So I was asked if Albertans should discuss moving to a progressive tax rate (over the current single tax rate) or if they should be discussing a consumption tax. I suggested that Albertans should be allowed to discuss whatever they like as we plan and build for the next generation of Albertans. We need a public discussion of our taxing, spending, and savings policies now. I was labelled by the opposition as wanting a sales tax.

Jack Mintz came out with a report after my comments that indicated that Alberta risks losing its tax advantage in just a few short years if it doesn’t review its tax structure, just as I have suggested. Premier Lougheed said that it is time that Albertans and the province engage in a serious discussion about our taxing and spending policies, just as I have suggested. Even the recent release of the Shaping Alberta Report recommended that we must plan to discuss savings and spending policy. It is high time we quit being afraid to look our future in the face and make some deliberate choices about what we want and what we are willing to pay for. It is our responsibility to plan a better future so the next generation doesn’t have to make the choices we refused to even discuss. If we don’t, they will be lamenting that we still rely on royalty revenue, that we still have great programs that we don’t actually pay for with tax dollars, and that we still don’t really want to deal with the situation.

I refuse to pass the buck on to my children. I have always been ready to discuss the elephant in the room. That challenge listed above has been the elephant in the room for 2 decades. I won’t let it carry on. That’s why I am running. If you are ready to plan our future rather than stumble through periods of good fortune, I need your help, now to win, and after to find the solutions.