In true Albertan style, citizens reject the proposed sales tax making it difficult for Premier Prentice to attack the budget shortfall.
Albertans reject sales tax to fill budget gap
By Andrea Janus
Source :Business News Network
Nearly three quarters of Albertans are opposed to a provincial sales tax to help fill the revenue gap left by falling oil prices, according to a new poll.
Alberta Premier Jim Prentice recently floated the idea of a sales tax to make up for a projected $7 billion budget shortfall. While no decisions have been made, and Prentice himself has said he is “not embracing” a sales tax, the idea appears wildly unpopular with voters.
In a survey of 3,184 Albertans, Mainstreet Technologies asked whether respondents approve or disapprove of a PST to balance the budget. The results showed that:
· 73 per cent of decided residents disapprove.
· 27 per cent approve.
Of those who disapprove, 53 per cent said they “strongly” disapprove, while 20 per cent “somewhat” disapprove.
When asked what type of tax increase they would favour the most in order “to raise additional revenues in the future,” only 11 per cent of decided residents favoured a provincial sales tax.
· 18 per cent favoured higher energy royalties.
· 21 per cent favoured a personal income tax increase.
· 22 per cent favoured a health care premium.
· 28 per cent favoured user fees or sin taxes.
Meanwhile, asked how the province should deal with the coming budget shortfall — cut spending, run a bigger deficit, increase borrowing, or raise taxes — 55 per cent of decided respondents said the province should cut its own spending. Only 19 per cent said “raise taxes,” 14 per cent said “bigger deficits,” while 12 per cent said “increase borrowing.”
The findings suggest Prentice has “a huge uphill battle” on his hands if he wants to move forward with a sales tax, pollster Quito Maggi told CTV Calgary.
However, the popular solution isn’t always what’s best for voters, University of Calgary political scientist Melanee Thomas said.
“It’s kind of like eating your vegetables,” Thomas told CTV. “Just because you don’t necessarily like doing it, doesn’t mean that you don’t do it, because it’s the best thing for you.”
In fact, now may be the right time for Prentice to introduce a sales tax when the political opposition is so weak. Much of the Wildrose Party caucus recently crossed the floor to join the governing Progressive Conservatives, leaving just a handful of opposition MLAs behind.
“With the absence of a viable alternative, you’ve got to wonder whether or not it’s as suicidal as some might think it would be,” Thomas said.
Economists tend to favour consumption taxes, such as sales taxes, over increases to income taxes, Todd Hirsch, chief economist at ATB Financial said Monday.
However, Maggi said that sin taxes and user fees will not bring enough in to provincial coffers to balance the budget.
“When we looked at how Albertans want the Premier to deal with the upcoming budget the most popular idea was to cut spending – but there just isn’t much to cut,” Maggi said in a statement accompanying the poll results.
“This really places the PC government and the opposition parties in a tough bind. A PST has the most potential to raise revenue, but Albertans are firmly opposed.”
Reaction on the street in Calgary was mixed on Monday. Some residents acknowledged that the government likely has little option if oil prices remain low. However, others reflected the poll’s findings of strong opposition.
“We have the Alberta advantage now,” one woman told CTV. “But I think if we put that in the province, then we’re basically the same as all the other provinces.”