In Alberta, a bitter-tasting sales tax is on the table – Gary Mason (Globe and Mail – January 31, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Alison Redford appears destined to go down in history as the premier who introduced Albertans to a fact of life most Canadians have lived with for generations: a sales tax.

It won’t happen in the budget she will introduce in early March – she has said as much. Instead, it would appear the province will run another deficit – its sixth in a row – rather than make the kind of draconian cuts necessary to balance its books. But a sales tax is coming. There seems no escaping it now.

It’s all rather hard to believe. For years, Alberta has been the economic envy of the country, awash in petro dollars that allowed a succession of premiers to avoid the hard choices their counterparts in other parts of the country have been forced to make.

When spending got truly out of hand, Ralph Klein took a cleaver to things. But then it resumed as normal, with successive governments radically expanding the size and cost of the public sector while exhausting money supplies in the province’s Sustainability Fund. For more than four decades, Alberta’s Progressive Conservative governments have blithely ignored the possibility that, one day, oil money might not be there to bail them out.

Well, the moment of reckoning has arrived. Ms. Redford has been on an exhaustive media blitz to explain how it’s come to pass that the province finds itself in the economic pickle it does. Some $6-billion in projected oil revenues have disappeared for the coming fiscal year.  The province’s sole customer, the United States, doesn’t need bitumen the way it once did. Subsequently, prices have tanked.

Alberta has to find new markets for its oil – that has been clear for some time. More specifically, it needs a route to Asia, where expanding economies still require lots of energy. Asia offers Alberta an economic upside that would be worth tens of billions to the province’s economy. The easiest way to get oil there would be by pipeline to the West Coast. We all know where those efforts are going – nowhere. So the province is looking at alternative avenues, such as through the north, east and even down through the U.S.

For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/commentary/in-alberta-a-bitter-tasting-sales-tax-is-on-the-table/article8020342/

 

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