[Flash Walken]

Originally Posted by Vedder

https://nationalpost.com/news/politi...-and-tax-hikes



This isn't "around the edges" type stuff. Raising taxes, health care premiums, and weaning the funding of the operating budget off of royalty revenues.

The political miscalculation was his refusal to raise corporate taxes. Notley was able to point to that and play to the electorate's favorite idea that someone else should pay for everything.

Well, in my opinion it is. The majority of the budget savings were coming from a roughly 10% cut to spending. The prentice budget forecast raising roughly 2.5 billion from new taxation, in the same frame as saying the province was looking at a 7 billion dollar hole just based on the price of oil at the time.

In my opinion, that's eating around the edges. The political miscalculation wasn't only on not raising corporate taxes, it was that income tax raises on high income earners weren't enough, and were labeled as 'temporary'. Again, that isn't addressing the fundamental structural problem of tax revenue in the province.

Adam Legge, president of the Calgary Chamber of Commerce, said he sees little negative impact from ditching the flat tax.

“I think they probably could have gone even further. Some of the increases, while growing over time, could have been more significant from the start,” he said.

And that's just it in my mind. It wasn't addressing the fundamental lack of revenue, it was proposing significant program cuts that for many albertans was the second time in a generation they've had to live through that. The revenue problem is 30 years old. Cuts were not going to address that and I think implicitly the voter base understood that, and further, didn't trust a PC government who had dug the hole in the first place to dig them out.

While the government says it wants to protect the province's health and education budgets, both of which together represent 61 per cent of government spending, Mr. Campbell's press secretary didn't rule out cuts for those sectors. However, if the government were to leave health and education untouched, the rest of program spending would face cuts of 17 per cent to ensure the same level of savings.

"We're focused on protecting core services and looking for efficiencies in government, but everything else is on the table," Kevin Zahara told The Globe and Mail.

The decline in oil prices since the summer has forced a 17-per-cent decline in the province's revenues. So far, Mr. Prentice has ruled out raising corporate taxes, energy royalties or introducing a provincial sales tax.

With the Conference Board of Canada and CIBC warning that the province's economy could contract over the coming year and see large increases in unemployment, Mr. Prentice has conceded to running several deficits and vowed to not make deep cuts that would trip the province further into recession.

The size of the announced cuts didn't come as a surprise to Todd Hirsch, the Calgary-based chief economist of ATB Financial. "They've got a big gap to cover and $7-billion is a big hole for a province the size of Alberta to fill. However, a cut of that size will be unpleasant for a lot of people," said Mr. Hirsch.

It is truly stunning when the CCPA and the Fraser Institute can agree on economics, but both agreed the province needed to look immediately at weening resource revenue off entirely. A return to the Lougheed 30% days, at least. They had wildly different proposals on how to do that, but everyone and their mother could see the status quo wasn't working.

Last week, he unveiled new austerity measures, including a promise to disband 80 of the province’s 320 boards, agencies and commissions by the end of the fiscal year.

On Tuesday, he shelved a planned rollback on the charity tax credit that would have added $90 million to Alberta’s bottom line.

Charities said the rollback punished the needy and Prentice agreed.

Political analyst Bob Murray said it is a big gamble for Prentice.

“Sure he was able to say ‘Look at the correction that we made (on charity tax credits) because we listened to Albertans,’ but he’s very quickly destroyed his own narrative,” said Murray, vice president of research with the Frontier Centre for Public Policy.

“Now he’s opened up to these accusations that he’s willing to negotiate the key pieces of the fiscal plan when two weeks ago he was telling us that he’s not afraid to make the tough decisions whether or not they’re all that popular.”

I can give Prentice definite credit for listening somewhat to economists who warned about the impact massive cuts would have on the economy, but his budget still fell very short of addressing the foundational aspects of the budget shortfall.

His budget over promised and under delivered when he said it would be radical. You don't get yourself out of a 7-10 billion dollar hole by raising cigarette and alcohol taxes, or taxing fuel that most of the province uses to operate the economy. To me, that's eating around the edges.