Results 1 to 45 of 45

Thread: Alberta's Equalization Payments

  1. #1

    Default Alberta's Equalization Payments

    I thought this subject deserved its own thread and Lamphier's article provides an interesting start to it.


    As it says:


    Even more remarkable, few Canadians seem to be aware of this, except in the vaguest sense. Conspicuously, I’ve never seen these numbers reported in the national media or disclosed by federal and provincial politicians.

    And after calling not one but four leading public policy think tanks, I couldn’t find a single expert who has researched this data, or who was willing to discuss it at any length....

    Don't just read this excerpt, the link is below.


    Lamphier: How much money has flowed out of Alberta to Ottawa? A lot
    FEBRUARY 21, 2016 6:30 AM
    Gary Lamphier of the Edmonton Journal has the story.
    Calgary Herald



    http://calgaryherald.com/storyline/l...o-ottawa-a-lot



    Excerpt:


    "If you’re still wondering why oil-rich Alberta doesn’t have a massive sovereign wealth fund like Norway, consider this.

    ...

    I realize this runs counter to the preferred narrative in Canada, where politicians and media types insist Alberta either “put all its eggs in one basket” by failing to diversify its economy (hello Christy Clark), or that Albertans “spent like drunken sailors” during boom times. ..."




    "...Between 2000 and 2014, on a net basis, Alberta’s individual and corporate taxpayers shipped an estimated $200 billion-plus to the federal government. That’s what left the province, less what the feds reinvested here.

    To put that lofty figure in perspective, it’s nearly 12 times the value of the $17.4 billion Alberta Heritage Savings Trust Fund. No other province — including Ontario, with three times Alberta’s population — even comes close to matching this province’s contribution to the federation.

    During Alberta’s boom years, back in 2007 and 2008, the province’s taxpayers shipped more than $20 billion annually, on a net basis, to Ottawa. And when oil prices returned to triple-digit levels after the 2008-2009 recession, the cash gusher from this province returned. In 2011, for instance, it reached nearly $19 billion.

    Even more remarkable, few Canadians seem to be aware of this, except in the vaguest sense. Conspicuously, I’ve never seen these numbers reported in the national media or disclosed by federal and provincial politicians.

    And after calling not one but four leading public policy think tanks, I couldn’t find a single expert who has researched this data, or who was willing to discuss it at any length. Some seemed downright defensive about it, as if it was “un-Canadian” to explicitly acknowledge one province’s outsized contribution to the federation.

    The only reason I’m now aware of the massive amount of money that has flowed out of Alberta in recent years is due to the efforts of one man. Fred McDougall, 78, is a former deputy minister of forestry who served under former Alberta Premier Don Getty in the 1980s.

    ... "


    "...Other provinces have basically been trying to extort ..."



    Last edited by KC; 26-02-2016 at 09:21 AM.

  2. #2
    I'd rather C2E than work!
    Join Date
    Mar 2010
    Location
    Edmonton area.
    Posts
    7,269

    Default

    It is similar to how the colonies worked in previous centuries, we are basically a colony of eastern Canada.

  3. #3
    C2E Stole my Heart!!!!
    Join Date
    May 2008
    Location
    Clareview
    Posts
    9,286

    Default

    Too my understanding equalization payments go towards social programs and other programs all Canadians enjoy. However, at the same time Ontario is now over $300B in debt and about to go into debt again. Quebec, the richest province in Canada is getting the bulk of Alberta's equalization windfall.

    Another thing, it looks like Ontario will provide free post secondary education to households making less then $50,000. This is madness. And you know who is going to pay the bill for this right?......
    Mom said I should not talk to cretins!

  4. #4

    Default

    Quote Originally Posted by envaneo View Post
    Too my understanding equalization payments go towards social programs and other programs all Canadians enjoy. However, at the same time Ontario is now over $300B in debt and about to go into debt again. Quebec, the richest province in Canada is getting the bulk of Alberta's equalization windfall.

    Another thing, it looks like Ontario will provide free post secondary education to households making less then $50,000. This is madness. And you know who is going to pay the bill for this right?......
    It will be interesting to see what happens to Alberta's contribution.

  5. #5
    C2E Stole my Heart!!!!
    Join Date
    May 2008
    Location
    Clareview
    Posts
    9,286

    Default

    ^ We do get some of that money back though through infrastructure spending and many of those programs we enjoy here as well. If it takes 2 years to become a have not Province, then Alberta is in its second year. So, are we going to have shell out Billions more as a have not Province? When are our University kids going to get free education? Does this mean Ontario's credit rating will be reduced again down to a "A" from a double "A A"?
    Mom said I should not talk to cretins!

  6. #6
    I'd rather C2E than work!
    Join Date
    Mar 2010
    Location
    Edmonton area.
    Posts
    7,269

    Default

    The figures in this report are net not gross. After whatever monies come back, the difference.

  7. #7
    C2E Hard Core Contributor
    Join Date
    Aug 2010
    Location
    Crawford Plains, Millwoods since 1985
    Posts
    2,737

    Default

    Soooo... what's going to happen here? Everyone in the country knows Alberta is hurting, going to get a lot worse once the fiscal year is done... do our equalization payments decrease? I'm thinking they must, but how much?

    Not sure how it all works so some plain English would be mucho appreciated.

  8. #8
    C2E Stole my Heart!!!!
    Join Date
    May 2008
    Location
    Clareview
    Posts
    9,286

    Default

    ^ One can only go to the well for so long.
    Mom said I should not talk to cretins!

  9. #9
    I'd rather C2E than work!
    Join Date
    Mar 2010
    Location
    Edmonton area.
    Posts
    7,269

    Default

    Hopefully the Feds will realize how important the oil industry is to all of Canada and legislate the building of pipelines. Working with the new President to transport oil by pipeline to the gulf refineries and ports would be a plus. Oil will be back and when it is it would be nice to have markets for it, for the good of all of Canada.

  10. #10

    Default

    Quote Originally Posted by Drumbones View Post
    Hopefully the Feds will realize how important the oil industry is to all of Canada and legislate the building of pipelines. Working with the new President to transport oil by pipeline to the gulf refineries and ports would be a plus. Oil will be back and when it is it would be nice to have markets for it, for the good of all of Canada.
    I wonder if we may seen enough production get mothballed to eliminate the surplus over the existing pipeline capacity.


    "Everything in that passage is simply incorrect"
    see below...
    EQUALIZATION QUESTIONS AND MISCONCEPTIONS

    1. Alberta pays for equalization

    One of the common misconceptions is that equalization is entirely paid for by the so-called “have provinces”, notably Alberta. The keyword search activity on this blog regularly shows people searching for things such as “how much does each province pay for equalization”, “how much does province X contribute to equalization”, “province Y receives equalization money from province Z”, etc. It isn’t uncommon to see comments on blogs or online media stories calling for Alberta to “pull out” the equalization program, or about how other provinces are spending the money they get from Alberta via transfer payments from that province. For example, on the Alberta Wild Rose Party website, we find the following:

    Federal equalization and other wealth transfer programs were ostensibly intended to balance the quality of social programs across the country. Instead, what has happened is that the provinces benefiting most from these programs are now able to offer significantly more generous services to their citizens than the two or three provinces who are the actual net contributors (primarily Alberta and Ontario). It is no small irony that the biggest single beneficiary of such transfers, Quebec, provides cheap university tuition and inexpensive provincial day care, while Albertans pay high prices for, and have severe shortages of both in their own province. These annual wealth transfers also create the perverse incentive for ‘have-not’ provinces to retain fiscally irresponsible taxation and spending levels thereby remaining on the transfer dole in perpetuity.

    Everything in that passage is simply incorrect and it is worrying that the party does not understand how equalization actually works. ...


    http://thoughtundermined.com/2012/04...isconceptions/

    Can't forget aspects of the process like this..

    Oil-price plunge could cost Ontario billions in equalization

    "One change we'd like to make, to modernize it, is to include hydro in the calculation," he said. "We'd also argue those provinces with the great advantage of hydro that other's don't have should probably have to have that included in their calculation of economic capacity."

    Provinces that have hydroelectric power are able to export it, but profits made on those exports aren't part of the equalization formula, according to Wall.


    http://www.cbc.ca/news/business/oil-...tion-1.3204437
    CANADA’S EQUALIZATION FORMULA: PEERING INSIDE THE BLACK BOX ... AND BEYOND†
    Jim Feehan, 2014


    Another flaw in the current equalization arrangement is the inclusion of Crown-owned hydro corporations’ remittances of earnings to their provincial owners in the natural resources category of equalization calculations. Many of these corporations are not simply energy producers, but are also vertically integrated, with transmission and retail sales operations, and some have no resources at all, but rely instead on fuel purchased in the marketplace. Moreover, taxes paid by private energy corporations are not considered part of the natural resource category but are included in the business income tax category. This means the formula is essentially inconsistent, discriminating based on the ownership profile. Hydro remittances should be removed from the natural resource revenue category in the formula that calculates equalization. They should go in the business income tax category, just as do the earnings of other commercial Crown corporations and taxes paid by private businesses. Going beyond the formula, it is time to re-consider the practice of exempting commercial Crown corporations from corporate income taxation.

    ...
    A more fundamental and long-recognized problem is the incentive for provinces receiving equalization payments to underprice the water-rental rates they charge for hydro production. Lowering water-rental rates has the effect of reducing provincial hydro revenues, which can entitle those provinces to larger equalization payments, while benefitting residents with cheaper hydro rates. Looked at empirically, ...



    http://policyschool.ucalgary.ca/site...ualization.pdf

    Last edited by KC; 26-02-2016 at 03:07 PM.

  11. #11
    C2E Stole my Heart!!!!
    Join Date
    May 2008
    Location
    Clareview
    Posts
    9,286

    Default

    ^ Good point. Its the surplus that's hurting the market. Right now pipelines would only add to the surplus. Slow and steady wins the race.
    Mom said I should not talk to cretins!

  12. #12

    Default

    Quote Originally Posted by KC View Post
    It will be interesting to see what happens to Alberta's contribution.
    All provinces contribute the same to equalization. However, that isn't enough to pay for equalization. So it is "topped up" by Federal tax revenues (which come from all provinces). What this means in practice is that any province that receives low or no equalization, is subsidizing provinces that receive high equalization, as they get less of their Federal tax back. Health transfer payment inequities exacerbate it even more. In other words, the hundred billion or so of equalization paid to Quebec over the years, has been paid for by all Canadians, but some of those Canadians, like in Alberta, never received equalization like that, so they are subsidizing Quebecors. Its a price we pay to be part of Canada, we help our poor provincial neighbors / don't horde our wealth.
    Last edited by moahunter; 26-02-2016 at 03:03 PM.

  13. #13
    C2E Hard Core Contributor
    Join Date
    Apr 2007
    Location
    Edmonton
    Posts
    3,855

    Default

    Quote Originally Posted by envaneo View Post
    ^ Good point. Its the surplus that's hurting the market. Right now pipelines would only add to the surplus. Slow and steady wins the race.
    No, they would be a huge boon for Alberta. New pipelines would mean we get far closer to market value for our oil instead of a 40% discount. Right now we're only getting $16-18/bbl for our oil because of pipeline capacity.

  14. #14

    Default

    Quote Originally Posted by moahunter View Post
    Quote Originally Posted by KC View Post
    It will be interesting to see what happens to Alberta's contribution.
    All provinces contribute the same to equalization. However, that isn't enough to pay for equalization. So it is "topped up" by Federal tax revenues (which come from all provinces). What this means in practice is that any province that receives low or no equalization, is subsidizing provinces that receive high equalization, as they get less of their Federal tax back. Health transfer payment inequities exacerbate it even more. In other words, the hundred billion or so of equalization paid to Quebec over the years, has been paid for by all Canadians, but some of those Canadians, like in Alberta, never received equalization like that, so they are subsidizing Quebecors. Its a price we pay to be part of Canada, we help our poor provincial neighbors / don't horde our wealth.
    They contribute at the same tax 'rates'.

    Seems that state ownership and type of production may play a role in determining the balancing formula.

  15. #15
    C2E Hard Core Contributor
    Join Date
    Aug 2010
    Location
    Crawford Plains, Millwoods since 1985
    Posts
    2,737

    Default

    Yeah, I read recently that Quebec's hydro is not considered within the formula so they keep the prices artificially low to game the equalization system. Probably read it in Lampier's article a week ago. Dirty, socialist pool being played.

  16. #16

    Default

    Quote Originally Posted by Kitlope View Post
    Yeah, I read recently that Quebec's hydro is not considered within the formula so they keep the prices artificially low to game the equalization system. Probably read it in Lampier's article a week ago. Dirty, socialist pool being played.
    The links in my post #10 above provide some clarity.

    It would be cool to have an online calculator to play with numbers and everything to see what changes could game the taxes paid via the system. ie. Privatization vs. nationalization, changes to exports, etc.

  17. #17
    I'd rather C2E than work!
    Join Date
    Feb 2009
    Location
    Westmount, Edmonton
    Posts
    5,573

    Default

    Quote Originally Posted by Kitlope View Post
    Soooo... what's going to happen here? Everyone in the country knows Alberta is hurting, going to get a lot worse once the fiscal year is done... do our equalization payments decrease? I'm thinking they must, but how much?

    Not sure how it all works so some plain English would be mucho appreciated.
    There are no "equalization payments" from provinces. The equalization program is run from the federal government's general revenue.

    "For every complex problem there is an answer that is clear, simple, and wrong"

  18. #18
    I'd rather C2E than work!
    Join Date
    Feb 2009
    Location
    Westmount, Edmonton
    Posts
    5,573

    Default

    Personally I don't see a lot of difference between the equalization program and how any other jurisdiction spreads it's money around. Provinces build hospitals and roads in rural areas that don't generate the revenue of other areas. Cities do the same. The big difference the equalization program has a fixed formula and process that makes the process a lot less politicized.

    "For every complex problem there is an answer that is clear, simple, and wrong"

  19. #19
    Becoming a C2E Power Poster
    Join Date
    Jan 2016
    Location
    Red Deer
    Posts
    192

    Default

    Who cares how the current equalization program works. The bottom line is this - we give, they take. That's it. Right now Alberta has no money. We have a public sector that does not care about provincial debt and cries for more money. Look at the recent release from the ATA. They want raises. Raises at a time like this? And the NDP have no backbone to fight them as it's their voting base. Scary times.

    Anyway, I fear that Alberta will always be a 'have' province regardless of its economic situation. I stand with Brian Jean, a revamp is required. I find it funny how Trudeau is willing to revamp the NEB (direct affect on Alberta), and the electoral process, yet remains quiet on equalization, while Alberta continues to dole out cash during a recession.

  20. #20

    Default

    Quote Originally Posted by Kitlope View Post
    Soooo... what's going to happen here? Everyone in the country knows Alberta is hurting, going to get a lot worse once the fiscal year is done... do our equalization payments decrease? I'm thinking they must, but how much?

    Not sure how it all works so some plain English would be mucho appreciated.
    I do my best, but this is my understanding of the formula, so use as much as salt as you need, reading this.

    1- A benchmark of the fiscal ability of 10 provinces is created. This is how: Sources of revenue in 5 categories (income tax, business, property tax etc) and the size of that revenue base within 10 provinces delivers a per capita taxable revenue number. This number is multiplied by the "10 province average" tax rate for that source. The benchmark is the sum of these revenue sources.

    2- For natural resources revenue instead of this formula 50% of the actual revenue across 10 provinces is used.

    3-Same calculation is repeated for each province. Size of a taxable revenue in that province per capita multiplied by 10-province average tax rate of that source plus half of actual natural resources revenue.

    4- If the number in step 3, is less than numbers of step 1 and 2, that province is below Canada (i.e. 10 province) fiscal capacity average and qualifies for Equalization payment.

    5- The federal government, from its general revenue allocates the payment to the have-not province.

    6- To limit the growth rate of federal payment to any given province, a cap is applied, so the actual pay is the lower of the number in step 4 or the cap. Also to limit the total pay, the equalization payment rate is limited to average GDP growth of Canada.

    7- Finally to make the formula stable and predictable, the benchmark calculated in steps 1 and 2 is a weighted average of past 3 years, with 50% weight for last year and 25% weight each year before that.

    So the spirit of the program has been to consider longer term fiscal capacity of provinces not year to year fiscal imbalances. In that sense it will take a while for Alberta to fall below the 10 province 3-year rolling average!

    Apologies if that's not as plain as you expected.

  21. #21
    C2E Hard Core Contributor
    Join Date
    Aug 2010
    Location
    Crawford Plains, Millwoods since 1985
    Posts
    2,737

    Default

    No, that's an excellent summary. Thank You.

  22. #22
    I'd rather C2E than work!
    Join Date
    Mar 2007
    Location
    City of Champions
    Posts
    7,396

    Default

    ...
    If equalization is thought of as a sort of insurance program, it appears to be a form of insurance Alberta can never collect on, no matter how lousy local economic conditions get. We seem to be permanently, structurally ineligible.
    ...
    http://nationalpost.com/opinion/colb...5-07ea5988d357

  23. #23
    I'd rather C2E than work!
    Join Date
    Mar 2007
    Location
    City of Champions
    Posts
    7,396

    Default

    Trudeau is now trying to unilaterally extend the current agreement
    https://globalnews.ca/news/4291609/e...canada-kenney/

  24. #24

    Default

    Can someone explain to me why Quebec gets all that money. They don't approve of the pipeline going through their province. The rest of Canada essentially funds all the nice benefits their citizens get like the daycare thing. They sit on most of their natural resources and claim to be a have not province. There is no incentive for them to get things going there when we continually give them cash because why develop your own industries and then lose the equalization payments in the process.

  25. #25

    Default

    Why should Canada have paid to build railroads that connected Alberta to the rest of the country? They weren't offering much to the country.
    Why should Edmonton pay taxes to build highways to remote parts of the province? The amount that they contribute is minuscule.
    Why should Riverbend contribute to build a rec centre in Clareview? Taxes are high enough in Riverbend already.

    It's called being part of a society.

    Until the oil boom of the 70s, Alberta and Saskatchewan were have not provinces.

  26. #26

    Default

    Quote Originally Posted by kkozoriz View Post
    Why should Canada have paid to build railroads that connected Alberta to the rest of the country? They weren't offering much to the country.
    Why should Edmonton pay taxes to build highways to remote parts of the province? The amount that they contribute is minuscule.
    Why should Riverbend contribute to build a rec centre in Clareview? Taxes are high enough in Riverbend already.

    It's called being part of a society.

    Until the oil boom of the 70s, Alberta and Saskatchewan were have not provinces.
    " Have or have not " does quebec deserve near 12 billion out of 14 ish? Why am i working my arse of for this bunch of lowwly scums? NO PIPE LINES, PHUCK THE COUNTRY AND ITS ECONOMY; AND GIVE ME ALMOST 12 BILLION SO THE MOOCHERS CAN LiVE.
    " The strength of a man is in the stride he walks."

  27. #27

    Default

    I have no problem with equalization payments, it's only fair.

    But seriously...why is Quebec getting like 62% of the equalization payments? With their location, they should be able to be more "productive". Are they purposely choosing to be a "have-not" province because of the equalization payments? I don't know much about Quebec, the most recent thing I remember is that their post-secondary education like cheapest of all the provinces and they were fighting a tuition increase. But something doesn't add up.

  28. #28
    I'd rather C2E than work!
    Join Date
    Jan 2009
    Location
    Edmonton
    Posts
    5,165

    Default

    PET was an anglophobe, anti american, champagne socialist...Skippy Trudeau is a celebrity airhead ...but they both loved Quebec.


    http://edmontonsun.com/opinion/columnists/gunter-so-long-as-politicians-need-quebec-votes-equalization-wont-change/wcm/c990f7e5-5018-4481-bc63-0ff42c3c24c6

  29. #29

    Default

    And yet the funding model for the equalization is the one put in place by Stephen Harper while Jason Kenney was in the cabinet. Why did 't they change it then? Was was it so great when they backed it but when Trudeau simply extends it, sudden;t it's because you don't like him or his father.

    Are Kenney & Harper anglophobe, anti american, champagne socialists too?

  30. #30
    I'd rather C2E than work!
    Join Date
    Mar 2007
    Location
    City of Champions
    Posts
    7,396

    Default

    Quote Originally Posted by kkozoriz View Post
    Why should Canada have paid to build railroads that connected Alberta to the rest of the country? They weren't offering much to the country.
    Why should Edmonton pay taxes to build highways to remote parts of the province? The amount that they contribute is minuscule.
    Why should Riverbend contribute to build a rec centre in Clareview? Taxes are high enough in Riverbend already.

    It's called being part of a society.

    Until the oil boom of the 70s, Alberta and Saskatchewan were have not provinces.
    So if that were the case why didn't Alberta see anything in the latest slump? Yet Quebec received tens of billions every year. There is no reason Ontario is a have province and Quebec is a have not, except for political mismanagement and corruption, which Trudeau wishes to remain

  31. #31

    Default

    I read a good article recently that broke down equalization. In the equalization formula they don't use resource revenue in one area and then in another they do...

    I'll have to see if I can dig it up.

  32. #32
    C2E SME
    Join Date
    Mar 2007
    Location
    Sherwood Park, AB
    Posts
    10,977

    Default

    I wonder if property taxes should be included as part of the equalization formula, given that property taxes are largely municipal.

    Also, I wonder if the purchase of Alberta oil would impact Quebec's equalization.
    "Talk minus action equals zero." - Joe Keithley, D. O. A.

  33. #33

    Default

    Has anyone seen all the benefits that Quebec has that no other province gets? One example: Their parental leave method is much better than EI and cheaper, and has a much lower income level to qualify for it. Why do not all provinces have this? Why do I have to only get 55% through EI when they can get 75%? And why am I using Employment INSURANCE? Insurance is for unforeseen circumstances, not for planning to do something like have a child. We pay all our lives into EI and then get screwed when we want to have a kid, then get screwed again at tax time when the government tries to claw some back. Meanwhile there's plenty of bums on social services that don't lose money every time they have another kid, no, they just get rewarded with more money from the government, and then have more kids, and so on...

    That's just one expensive provincial program they have on top of the many other benefits (eg post-secondary) that other provinces DON'T have. So I see it as either ALL provinces get the same programs, spreading out the equalization payments better, or Quebec can stop spending so much on benefits so they won't need to take the majority of it.

    Do I get a bigger salary than someone else in the same position JUST because I spend more money on things? No. So why does this happen with the provinces? If Quebec is overspending so much that they need these payments, then maybe some of these benefits should be cut out.

    The equalization payment program is enshrined in the Canadian constitution in section 36 of the 1982 Constitution Act, which states that: “Parliament and the government of Canada are committed to the principle of making equalization payments to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation” (Subsection 36(2) of the Constitution Act, 1982).
    COMPARABLE LEVELS are the key words here.
    Last edited by alkeli; 31-07-2018 at 04:17 PM.

  34. #34

    Default

    I don't begrudge them their better programs, particularly maternity leave, although I think their near-free university tuition is as unwise. They don't get more equalization because of it, though. Unless enough additional parents take enough longer parental leave to make up for others returning to the workplace when they otherwise wouldn't thanks to free daycare.

    Last I heard they had some sweet deals regarding Hydroquebec, but that's it.

    edit: Equalization is so they can afford "comparable levels". What they do with it is up to them, I suppose.
    There can only be one.

  35. #35

    Default

    Yes and I think under that notion, all other provinces should bring forward their own similar programs and benefits so that the spending is more even. Right now, the average Albertan's taxes taken minus benefits given equals about $5000 going to the federal government, and is the highest in the country, with BC being $1300, Ontario $1000, Saskatchewan $300 and the others bubkus.

    Alberta (and others) should have MORE benefits coming to Albertans so that we all have comparable levels of public services, which will then change things dramatically when it comes to equalization payments.

  36. #36
    C2E SME
    Join Date
    Dec 2009
    Location
    Downtown Edmonton
    Posts
    10,799

    Default

    Quebec also has a PST and significantly higher income tax rates for people making more than 40k a year: https://www.taxtips.ca/taxrates/taxc...rison-2017.htm

    That needs to be part of the comparison. So does their significant amount of debt, which is roughly triple Alberta's on a per capita basis (source is 2 years old, so that might be more like double now as Quebec's been nearly balancing their budget the last couple years): https://www.cbc.ca/news/politics/nat...nada-1.3557745

    If we moved our income tax brackets up to Quebec's level and instituted a PST, I'm sure we could also enjoy similar social programs. But it seems that in Alberta, most people want low taxes AND high spending, which leaves you in a situation where even at $140/barrel oil a few years back, the books were just barely balanced. And we all saw what happened when oil prices cratered.

  37. #37

    Default

    Perhaps we could use PST then. I'd rather pay a PST and have more benefits. Having spent half my life in Ontario and paying PST, it wasn't that big of a deal. I moved here because my job moved me here and found that everything is dramatically more expensive in Alberta except for energy products. I was shocked at how much it cost me to buy groceries and actually walked out of 3 grocery stores mid-way through shopping to find more reasonable prices.

    There's nothing wrong with PST and I'd welcome it if it brings improvements to the province, like benefits, and maybe fixing the damn crappy highways. I survived just fine, and so does everyone else in the PST provinces. Remember that the amount of PST you pay, is all dependent on how much you spend in general. So if you're smart with your money and shop wisely, you pay much less. Others with lots of money who splurge on everything pay much more.

    The way things are now, you don't really have a choice, it comes out of your income and gets pulled out through many men-in-the-middle by the province, from things you don't even see. For example, we may not have PST, but Alberta still has a provincial fuel tax hidden into the price. Same goes with many many other products and services in this province.

    I'd rather see much higher GST/PST and lower or eliminate income tax. I lived in Europe for several years and they had a 19% sales tax. Not even the highest around, and much more than our measly GST/PST. The difference is they don't get screwed over with their income. I'd rather be taxed on what we spend than what we make. Then you at least have more of a choice. Rich people hide their income and shuffle it around to avoid paying. But you can't avoid buying things.
    Last edited by alkeli; 01-08-2018 at 09:43 AM.

  38. #38

    Default

    Nothing against a PST, but rich people also spend less domestically as a portion of their income - poor people neither invest nor travel.
    There can only be one.

  39. #39
    C2E SME
    Join Date
    Dec 2009
    Location
    Downtown Edmonton
    Posts
    10,799

    Default

    No question that sales taxes are somewhat regressive, but that can be softened with rebates/refunds etc for low income people. I don't really have a strong feeling either way on a PST vs. increasing income and other taxes. But Alberta's current spending vs. revenues aren't sustainable, so something's got to give eventually.

  40. #40
    C2E Stole my Heart!!!!
    Join Date
    May 2008
    Location
    Clareview
    Posts
    9,286

    Default

    If the AG had say 1-3 years to test a pst, i'd be ok with that as long a pst was revenue neutural. I doubt its going to happen. The current AG would be more prone to install a pst then its opposition. Due to the UCP's rise in popularity Notley could face having a minoraty Government in the next election. Any implamentation of a pst post 2020 might be drawn up along bipartisan lines.
    Mom said I should not talk to cretins!

  41. #41
    C2E Hard Core Contributor
    Join Date
    Jan 2012
    Location
    Sherwood park
    Posts
    2,546

    Default

    They need something that is not revenue neutral.

  42. #42

    Default

    Introducing PST would need to also include adding benefits for Albertans and reducing other methods by which the AG claws money out of products and services behind the scenes with those dollars hidden in the prices of everything we buy. They can't just ADD PST and keep everything else the same.

  43. #43
    C2E SME
    Join Date
    Dec 2009
    Location
    Downtown Edmonton
    Posts
    10,799

    Default

    So you guys want a revenue neutral tax to reduce the deficit or increase program spending?


  44. #44
    Addicted to C2E
    Mr. Reality Check

    Join Date
    Mar 2006
    Location
    Edmonton, Alberta
    Posts
    11,927

    Default

    Quote Originally Posted by Marcel Petrin View Post
    No question that sales taxes are somewhat regressive, but that can be softened with rebates/refunds etc for low income people. I don't really have a strong feeling either way on a PST vs. increasing income and other taxes. But Alberta's current spending vs. revenues aren't sustainable, so something's got to give eventually.
    they may be nominally regressive at the personal level but i don't think they are at the corporate level.

    particularly if they are harmonized with the gst, i think a pst would be considerably net positive for alberta. at the corporate level, sales taxes are full input tax credits. particularly for companies headquartered elsewhere as well as for individuals whose official province of residence is not alberta for income tax purposes, a pst would be a transfer of tax paid in other jurisdictions to a tax paid in and to alberta.

    on balance, my guess is that structured properly it would not in fact be a regressive tax for lower income individuals and would provide alberta with non-alberta sourced revenue streams.
    "If you did not want much, there was plenty." Harper Lee

  45. #45

    Default

    Quote Originally Posted by Highlander II View Post
    Nothing against a PST, but rich people also spend less domestically as a portion of their income - poor people neither invest nor travel.
    Maybe some sort of adjustment process could be done on the tax form. Put PST on everything including food. Then reauiremmsndatory tax filings so poor and unemployed would be accounted for and a get proper accounting and payment system. Then via the income tax forms calculate rebates based on tax filings. Submit your gross income and a statement of cumulative annual savings. Subtracting savings from income gives you the spend. Then reduce it further with income, medical and other adjustments.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •