Alberta budget gets failing grade

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November 2, 2015 8:15 AM

The Alberta NDP’s first budget has been given a grade of “D” for debts and deficits.

At least according to Paige MacPherson, Alberta director for the Canadian Tax Federation, who says the amount of borrowing outlined by finance minister Joe Ceci will likely result in major tax hikes down the road.

“We’re looking at a deficit this year, $8.9 billion. The debt is increasing by $6.1 billion this year, which is going to bring this year’s debt to $18 billion, and then beyond that, we’re looking at effectively doubling our debt in two and a half years,” said MacPherson.

“We’re looking at a very dramatic, quick increase in the debt in the province and absolutely no fiscal responsibility out of this budget that we’re seeing this year.

“I think that the debt and the deficit are the two biggest concerns coming out of this budget and what these things are going to mean are tax hikes in the future. If we’re not paying big taxes for these debts and deficits now, then we’re going to be paying them in the future.”

She says there was a good amount of detail in the budget regarding what the government wants to spend on but not much in the way of how the money will be paid back. The projections for oil were also something MacPherson describes as “rosy”, saying their estimates should be a lot more cautious in this area.

There was no talk about trimming when it comes to spending and she says this fact is troubling when talking about a proposed balanced budget in the coming years.

See “Budget,” Page 3

“They’ve changed their balanced budget date twice in the last six months and when it comes to their balanced budget plan, when I look at the numbers, I’m not convinced that that’s something they can make happen, and frankly I’m not really convinced it’s a priority for them anyway,” she said.

“Really what we need to see is spending cuts. Plain and simple. They have a spending problem, not a revenue problem.”

This spending problem, coupled with the fact that there wasn’t much in the way of new taxes in the budget, is what makes MacPherson certain that there are tax increases on the horizon. She says Albertans should brace themselves for the next budget because that’s when she thinks the tax hikes will come into play.

There were a couple areas that did see tax increases this time around, however. The mark up on alcohol was raised as was the mark up on tobacco. A small brewers tax was also introduced for out of province companies, so people buying craft beer that isn’t brewed in Alberta will feel a hit in their wallets.

“That’s going to hit hard. It can make the difference of three dollars for a case of craft beer if it comes out of province,” MacPherson said. “It’s definitely going to hit those producers hard, liquor stores, and it’s going to make it less attractive and less affordable for consumers to be able to try neat craft beers from other places. So that’s one that flew under the radar a little bit in the budget.”

Another tax that was implemented in the budget, and MacPherson says is particularly important, is called the Locomotive fuel Tax.

“The locomotive fuel tax is important because obviously in Alberta we’re having a big problem when it comes to pipelines for getting our oil to market. Now what we’re seeing is an additional tax on top of those trains. They’re the ‘fill-in’, they’re what get are oil to market now,” she said.

“The trains that are carrying that bitumen are going to face an extra tax and for that reason, I think that the taxes are pretty ideology tainted taxes and of course it’s an additional tax on the farmers trying to get their grain out. So the tax hikes weren’t substantial but I do think they were relatively ideological.”

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