Alberta Politics & Government Thread 3.0

[Harry Lime]

Originally Posted by CliffFletcher

The top 20 per cent of households in Canada (roughly $250k household income and up) pays 62 per cent of the country's income taxes. Raising their rates is politically unpopular because there's lots of voters who fall into range (I'd guess more than 30 per cent of the electorate), and many regard themselves as middle class.

Raise income taxes on the top 2 per cent won't generate much money for the simple fact there's a lot fewer people in that range.

DJones is right that sales and property taxes are reliable revenue generators for governments. The Nordic countries - the best real-world models egalitarian countries with robust public services - have 20-25 per cent VAT. And property taxes are a way to unlock the wealth of seniors who have seen their net worth increase substantially just because they bought their homes decades ago. That wealth would otherwise be passed down through inheritance, hardening intergenerational wealth inequality.

The way that the property tax transfer is now, is upon inheritance. Most seniors live very humbly, and couldn't handle a yearly tax on property value. Changing that would be political suicide, unless health care kills all of the old people in time.

If someone making under 40K doesn't pay tax, but I pay 60K on my 300K take home, I would have to be a massive ###### to cry poor, and complain about me keeping the country afloat.

A progressive tax, coupled with a tax on foreign ownership is the way to go (to catch those fleeing to sunnier climes). Get rich on the backs of Canadians, pay into the Canadian social net. That's fair.

[calgarygeologist]

Originally Posted by Harry Lime

Having a 2% royalty before payout, when no one ever reaches payout, is blatant thievery from the province. Even OPEC has a 9% royalty, and they own all of the wells themselves. It's just a protection against future princes bankrupting the country. No resource company would leave, as they would still be making money. They are already downsizing anyway, even with record output.

This province needs balls. Not big ones, normal ones, just the basic minimum.

That's how you get rich as a province. That, and non-corrupt scum in office.

OPEC sets a royalty rate???

[MBates]

Just over 13 years ago, I was invited by Premier Redford as a representative of the justice system to her 'Economic Summit' to confront the 'unprecedented' (except for all the other times before) budget problems then facing Alberta due to volatile world oil prices and difficulties getting our oil out to more diverse markets.

My biggest takeaway from the experience was that there was near universal agreement among all economic advisers that the least regressive tax measure for the economy that could be implemented in a fair way so as to drastically increase revenues and not harm lower income Albertans would be a sales tax.

https://www.cbc.ca/news/canada/alber...-tax-1.1348407

It is not to say all were advocating for one (though many openly were), but nobody could or would venture any good argument against a plan of introducing a PST together with a corresponding large reduction in income tax (potentially as simple as increasing the basic personal exemption before the obligation to pay income tax even kicks in).

Among the business people, economists and academics in favour of bringing a sales tax to Alberta were George Gosbee, CEO of investment firm AltaCorp Capital, and University of Calgary tax expert Jack Mintz.

"It's my view that we don't have a cost problem, we have a revenue problem," said Gosbee, who also said spending cuts would be "draconian."

Gosbee said he's also in favour of bringing back health care premiums.

Mintz said Alberta's challenge has more to do with spending than it does revenue, but that it has a "tax mix problem" as well.

He said the province relies too much on "harmful and volatile" sources of revenue.

Mintz advocates switching from income to consumption-based taxes, whether that's through user fees, excise taxes or a sales tax.

"Many Albertans believe that having no sales tax is a tax advantage. It is the opposite. Not having a sales tax is a disadvantage in today's global economy," he said.

He added U.S. state governments that have low income taxes but have a sales tax, such as Texas, are seeing stronger economic growth.

Unfortunately, because many Albertans believe the opposite of reality as noted in the bolded sentence above, every single politician took an immediate and rock-solid definitive position that no way, no how, would we ever consider a PST.

At some point, Albertans have to take responsibility for what Albertans have done to Albertans. For all the hero fantasies factions of this province want to wrap themselves in, our province has scored a huge pile of 'own goals', and we still refuse to just turn around and at least face the other net before winding up for another booming slapshot...and then bragging about how great we are.

[CliffFletcher]

The popular rejection of a sales tax puts the lie to any notion that the Alberta electorate is more financially savvy or responsible than those in other provinces.

And the notion that anyone makes the huge life decision of moving to another province or country based on their sales tax is beyond belief.

[DJones]

Originally Posted by MBates

Just over 13 years ago, I was invited by Premier Redford as a representative of the justice system to her 'Economic Summit' to confront the 'unprecedented' (except for all the other times before) budget problems then facing Alberta due to volatile world oil prices and difficulties getting our oil out to more diverse markets.

My biggest takeaway from the experience was that there was near universal agreement among all economic advisers that the least regressive tax measure for the economy that could be implemented in a fair way so as to drastically increase revenues and not harm lower income Albertans would be a sales tax.

https://www.cbc.ca/news/canada/alber...-tax-1.1348407

It is not to say all were advocating for one (though many openly were), but nobody could or would venture any good argument against a plan of introducing a PST together with a corresponding large reduction in income tax (potentially as simple as increasing the basic personal exemption before the obligation to pay income tax even kicks in).



Unfortunately, because many Albertans believe the opposite of reality as noted in the bolded sentence above, every single politician took an immediate and rock-solid definitive position that no way, no how, would we ever consider a PST.

At some point, Albertans have to take responsibility for what Albertans have done to Albertans. For all the hero fantasies factions of this province want to wrap themselves in, our province has scored a huge pile of 'own goals', and we still refuse to just turn around and at least face the other net before winding up for another booming slapshot...and then bragging about how great we are.

That's the biggest problem today. Economists, tax specialists, business specialists. There's unanimous agreement on how the best way to tax economies are. That debate ended decades ago. But trying to convince the average laymen is impossible.

You will never convince everyone that corporate taxes are useless, borderline detrimental. You will never convince them that a pst is the best way to extract money from corporations. A health premium or paying a doctor appointment fee is un Canadian. Or that land taxes will help the housing and transit issues.

They see that extra line item on their receipts and they lose their minds. Jacking up the basic personal exemption and dropping income taxes with a charismatic leader is about the only way you'll sell it

[opendoor]

Originally Posted by DJones

Ya I don't want to get taxed as much as them, I just like their funding model. Consumption taxes being the foundation rather than a side tax. I'd use that tax revenue to cut income taxes. They just tax everything

Norway doesn't have royalties, they just charge more corporate taxes

OK, but the difference in consumption taxes relative to overall tax revenue between Canada and somewhere like Norway is basically nothing. 21.9% of Canada's tax revenue is through VATs and consumption taxes vs. 23.0% in Norway; raising GST back up to 6% would basically equalize things.

Yeah, other European countries have higher consumption tax rates leading to more revenue, many into the 27-30% range of total revenue. But it's not like it's the foundation of their tax revenue. If you removed all consumption taxes from places like Denmark, Finland, or Sweden while keeping 100% of Canada's current consumption taxes, the tax-to-GDP ratio in those countries would still be within a few percentage points of Canada's. They have higher consumption taxes primarily because all of their taxes are higher.

And obviously, Canada being next to the US means we have to be cognizant of aligning things to some degree. The US has the lowest consumption taxes in the OECD, so if we strayed from that too far it could be counterproductive.

[Regorium]

Originally Posted by iggy_oi

How are you rationalizing that the “poor” can pay more but the middle and upper classes can’t?

Sorry I was unclear. My point is that broad based taxes that hit all parts of the electorate (including both the working class and the rich) are the only policies that generate enough revenue to sustain our society.

Continuing the raise tax brackets on the top 1% or extreme boutique tax increases on luxury items type of strategy doesn't actually work even if it's politically palatable.

[PepsiFree]

Yeah, at the end of the day anyone who thinks the solution somehow involves them paying the same or less taxes while someone else pays more is incredibly naive and especially absurd from anyone working in financial services.

But this also isn’t the Canadian politics thread. Or the tax thread. So it all comes back to the fact that the UCP government is actively making things more expensive while simultaneously making services worse for everyone in this province (save for the few people in the inner circle they’re enriching). Talking about the right way to fund things as a country while the UCP is destroying things is like talking about which supplements will help your metabolism while you’ve got Stage 4 stomach cancer.

[malcolmk14]

Alright. I've been thinking about this a lot and I can't believe I'm asking it semi-seriously. But do people have an exit plan if separation begins to become a reality? I know it's easy enough to say it'll never happen... but if it does. If the process actually begins it seems like it's already too late to leave, house prices will tank, everyone will be trying to leave at once.

If it goes worst case scenario and the US "helps" Alberta separate then I don't think we'll even be able to leave if we wanted to.

So what is the line? Where do we have to get to for some of you to pull the plug and go somewhere else? My wife and I could work virtually anywhere, and I've got a 5 year old and 1 year old daughter. I do not want any part of separation and if it actually happens, I don't want to wait too long that I'm unable to leave or recognize any sort of value on my property.

[btimbit]

I left Canada last year. We're planning on returning but if the seperation #### gains any real traction we'll go to Halifax instead.

[GGG]

Originally Posted by Harry Lime

The most obvious is to raise royalty rates. Also, to raise corporate tax rates.

It was stupid to lower corporate tax rates when the UCP took office. Corporations just took the money and downsized anyway.

2025–2026 Provincial Corporate Income Tax Rates (General/Small Business)
Alberta: 8% / 2%
British Columbia: 12% / 2%
Manitoba: 12% / 0%
New Brunswick: 14% / 2.5%
Newfoundland & Labrador: 15% / 3%
Nova Scotia: 14% / 1.5%
Ontario: 11.5% / 3.2%
Prince Edward Island: 16% / 1%
Quebec: 11.5% / 3.2%
Saskatchewan: 10% / 0%

Upping to 10% would make a massive difference, and not change a thing in terms of corporate offices moving, or any of the usual threats.

Having a 2% royalty before payout, when no one ever reaches payout, is blatant thievery from the province. Even OPEC has a 9% royalty, and they own all of the wells themselves. It's just a protection against future princes bankrupting the country. No resource company would leave, as they would still be making money. They are already downsizing anyway, even with record output.

This province needs balls. Not big ones, normal ones, just the basic minimum.

That's how you get rich as a province. That, and non-corrupt scum in office.

Companies are post payout all the time.

The Royalty system was reevaluated recently by the NDP government using the foremost economic experts in the field and found the system to maximize capture by Albertans

It makes no sense to compare middle eastern rates to Canada given the different capital intensity. The rotary structure led to a 23 billion dollar windfall 2 years ago.

The system works we just have to quit squandering results. We would have a sovereign wealth fund paying a significant dividend if we just taxed like the next least taxed province and didn’t squander away our money.

[chedder]

Alberta will never leave Canada just like Quebec won't. Whiny snowflakes will just continue to be whiny snowflakes.

[DJones]

Originally Posted by opendoor

OK, but the difference in consumption taxes relative to overall tax revenue between Canada and somewhere like Norway is basically nothing. 21.9% of Canada's tax revenue is through VATs and consumption taxes vs. 23.0% in Norway; raising GST back up to 6% would basically equalize things.

Yeah, other European countries have higher consumption tax rates leading to more revenue, many into the 27-30% range of total revenue. But it's not like it's the foundation of their tax revenue. If you removed all consumption taxes from places like Denmark, Finland, or Sweden while keeping 100% of Canada's current consumption taxes, the tax-to-GDP ratio in those countries would still be within a few percentage points of Canada's. They have higher consumption taxes primarily because all of their taxes are higher.

And obviously, Canada being next to the US means we have to be cognizant of aligning things to some degree. The US has the lowest consumption taxes in the OECD, so if we strayed from that too far it could be counterproductive.

You can't really compare the two. Norway for example dumps all of their resource "royalties" into corporate taxes and they also includes property taxes and everything else. And its a tiny country, I think they have three levels of government but its nothing in comparison to a province.

https://taxfoundation.org/location/n...istration%20(5)

Main thing I see is sales tax brings in the same amount of money as income taxes. In Canada, income taxes are 400-500% more. Which ya, 25% is 500% more than 5%. That tracks. I'd have to read how their corporate taxes work but I imagine normalizing that would make the disparity even worse.

Using Alberta as an example, I think a 5% PST is estimated to bring in about 5 billion. So maybe 7% of government spending.

[opendoor]

Originally Posted by DJones

Main thing I see is sales tax brings in the same amount of money as income taxes. In Canada, income taxes are 400-500% more. Which ya, 25% is 500% more than 5%. That tracks.

Using Alberta as an example, I think a 5% PST is estimated to bring in about 5 billion. So maybe 7% of government spending.

It's really not that different though, with the main difference being what I said earlier where Canada pays for healthcare and a good chunk of its pension-like costs (OAS) through tax revenue rather than social security.

Based on OECD data, 23% of Norway's tax revenue is from consumption taxes while 21.9% of Canada's is. Personal income tax + social security is 45.2% of Norway's tax revenue while it's 50.8% in Canada.

If Canada shifted 10% of its tax revenue from personal income taxes to compulsory social security payments (so it was 25% income tax + 25% social security instead of 35%/15%), the tax breakdown for individuals would be almost identical to Norway, even though nothing tangible would have changed for individuals in Canada.

[CliffFletcher]

With its sovereign oil fund, Norway is anomalous and a bad country for comparisons. Sweden, Denmark, and the Netherlands are better countries for tax comparisons.

[Geraldsh]

Originally Posted by PepsiFree

Yeah, at the end of the day anyone who thinks the solution somehow involves them paying the same or less taxes while someone else pays more is incredibly naive and especially absurd from anyone working in financial services.

But this also isn’t the Canadian politics thread. Or the tax thread. So it all comes back to the fact that the UCP government is actively making things more expensive while simultaneously making services worse for everyone in this province (save for the few people in the inner circle they’re enriching). Talking about the right way to fund things as a country while the UCP is destroying things is like talking about which supplements will help your metabolism while you’ve got Stage 4 stomach cancer.

And don’t forget it’s your own fault you have cancer.

[Ashartus]

Originally Posted by malcolmk14

Alright. I've been thinking about this a lot and I can't believe I'm asking it semi-seriously. But do people have an exit plan if separation begins to become a reality? I know it's easy enough to say it'll never happen... but if it does. If the process actually begins it seems like it's already too late to leave, house prices will tank, everyone will be trying to leave at once.

If it goes worst case scenario and the US "helps" Alberta separate then I don't think we'll even be able to leave if we wanted to.

So what is the line? Where do we have to get to for some of you to pull the plug and go somewhere else? My wife and I could work virtually anywhere, and I've got a 5 year old and 1 year old daughter. I do not want any part of separation and if it actually happens, I don't want to wait too long that I'm unable to leave or recognize any sort of value on my property.

The timing would be really bad for my family - my wife 3 years from her full pension and 2 kids in high school. My only hope would be if real estate doesn't tank too badly so I can still move away when I retire. If this was 25 years ago I'm probably already looking at options to beat the rush.

[#-3]

The idea that sales taxes aren't regressive is wild. And basically complete omits the impact of interest on the whole system in both directions.

Regardless of how many goods you buy, the person hit hardest by a sales tax is the person who spends the last dollar of their earnings the fastest.

If a person throws their income into an investment account for 2 years, earns 15%, then pulls it out to buy a Seadoo, they pay a lot more tax, but they are still almost infinitely further ahead then the guy who is coming up $50 short every single paycheck, getting charged an extra $50 in sales tax every two weeks, only to get a $1300 gst rebate check at the end of the year, which covers the principal debt but not whatever interest that accrued over the year.

Taxes paid at the time the taxee realizes the gain can be progressive, all tax deferrals are inherently regressive, and sales taxes are just that, you pay the tax when you spend the money, not when you receive the money, you differ it until the time you spend it, giving the people with the flexibility to not spend the money an advantage.

Any suggestion around Alberta taxation that doesn't start with matching the next lowest province in income and corporate taxes are looking in the wrong direction