Edmonton AM business panel: Alberta sales tax

I start my day listening to CBC Edmonton. They wake me up every morning and today was one of my favourite features of the week: the Edmonton AM business panel. It features Calgary Herald columnist Deborah Yedlin and Alberta Venture editor Paul Marck.

They were discussing Alberta’s budget issues and the possibility of a sales tax in Alberta. Evidently I’ve been out of the loop because the Alberta government is floating trial balloons about it. I guess MLA Doug Griffiths has been discussing it.

HST in B.C.

I grew up in B.C., where there is a vicious fight (led by former B.C. premier Bill Vander Zalm) regarding the widely-despised HST imposed on B.C. residents by Premier Gordon Campbell, who promised in the last election he wouldn’t replace the provincial sales tax with a combined GST/PST in the form of a federal HST.

B.C. residents have achieved their goal in a petition to reverse the HST legislation, but how it’s going to pan out, who knows? B.C. also has recall legislation for its MLAs and if Premier Gordon Campbell doesn’t obey the petition, B.C. Liberal MLAs face a distinct possibility they’re going to lose their jobs sooner than the next election.

La-la land in Alberta?

Yes, Albertans do live in la-la land, at least from the perspective of sales taxes. There aren’t many places out there that have no local sales tax. Can I name any others? No. I’m not sure I’d find many.

I would expect there’d be a huge fight if a sales tax were seriously discussed here and the Alberta Conservatives might just be signing their own death warrant if they do. Whether anyone really believes the Wildrose Party could win the next election wouldn’t be debated if a sales tax were imposed in Alberta.

It’s like an Alberta badge of honour to not have a provincial sales tax. Talk to residents from other provinces and they’re practically in awe.

So when I listened to the Edmonton A.M. business panel this morning, I had to laugh. I didn’t laugh at the idea that the province needed a stable source of revenue to ride out the highs and lows of resource revenues, which is a serious issue here.

I laughed at Deborah Yedlin and Paul Marck for their ridiculous suggestion that the Alberta government could sell residents on it by saying it would be revenue neutral. The natural question would be, so why bother? They suggested that personal and business taxes could be reduced.

Umm, did you guys not listen to your own conversation? You’re saying Alberta has a revenue problem and not a spending problem. So, why would you want a sales tax that would just be revenue neutral? It doesn’t seem to take care of the problem you’ve identified. You need to think before you talk. Seriously.

Diversifying Alberta’s economy

I don’t want a sales tax, but I do agree Alberta needs to do something about the boom/bust cycles in its economy. If the government had a long-term vision, it would actually look at diversifying the economy.

Alberta currently relies on oil and gas far too heavily. Other major industries include forestry, tourism, agriculture and mining.

What about high tech? Since moving to Alberta I’ve been rather surprised at the tech industry in this province, especially in Edmonton. It’s a surprisingly large, growing and successful community, but it really flies under the radar.

What I do see is a way to balance out the Alberta economy by getting away from primary industry and moving towards a high tech economy in a big way. I wouldn’t include high tech companies that are reliant on the oil and gas sector.

Alberta could be an energy leader, not just an oil and gas leader. High tech companies researching and producing alternative energy products would make sense. The Alberta government doesn’t seem to get that Alberta’s expertise should be energy, not just oil and gas. It’s rebranding, but also rethinking. I don’t see much rethinking in our government though.

If the province is really going to move forward, that’s one step it needs to take. Are we just going to import solar panels, wind turbines, fuel cells and other alternative energy technology, or are we going to develop it here?

In addition, the Alberta government needs to support and encourage other high tech industries. There are many examples of successful Alberta software companies such as Bioware (video games), Yardstick Software (learning management system software) and many others.

Alberta has a successful nanotech industry. We have a lot of creative people that are working here now and we need to keep here

Economic diversification key: Education

What the Alberta government should do a much better job of is to support its education system from kindergarten through university. Instead it’s choked off funding, particularly at the university level, forcing students to take on more debt at the same time universities are scrambling for funding and laying off staff.

If anything, the Alberta government should recognize that education is an investment in the future of the province and not simply a line item in the budget. If we had leaders in our province with vision, they’d know this. Sadly, we do not.

We should be reducing the cost of education and encouraging as many Albertans as possible to get training in the high tech industries of the future. The province also should not be burdening students with massive piles of debt. This debt also acts as a disincentive for students to attend university here, or staying here once they’ve finished. With a massive debt load, students will run to locations with the highest wages and are less likely to stay here.

Back to sales taxes

If Albertans trusted the government to spend wisely, not blow tax dollars on various projects and not simply cut social services every time there’s a downturn in the economy, there might be more chance Albertans would accept a sales tax. Yeah right, who am I kidding?

I agree that the government should increase its revenue, but it should also spend responsibly. Instead of further subsidies to the oil and gas sector, it should be investing in the future of Alberta: education and high technology.

With the current crop of politicians, I just don’t see it happening. A sales tax may be the way to even things out, but it can’t be revenue neutral. It has to generate real income for the government, but is a sales tax the best way to do it? I’m not sure and I’m not sure anyone in the Alberta government now has the balls to do the right thing anyway. They’re just too worried about continuing their reign.