Alberta not ruling out PST

A provincial sales tax is not off the table as a potential lifesaver as Alberta continues to swim in a sea of red.

After announcing a fiscal deficit forecast of almost $4.8 billion, Finance Minister Ted Morton said Wednesday the government should be “looking at all the options we have for smoothing out revenue volatility.”

Alberta is the only province without provincial sales tax, and Morton said “Albertans are rather happy with the fact, and even proud of the fact, that there isn’t a sales tax in this province. And for the time being, this government doesn’t have any intention of changing that.”

But there are some influential voices, including internationally renowned tax expert Jack Mintz, who have argued for Alberta to have a PST. Mintz, head of the School of Policy Studies at the University of Calgary, had argued a PST could be used while cutting personal and corporate taxes at the same time.

“There are some theoretical issues that Professor Mintz and others have identified, and we’re looking at those, and we take them seriously,” Morton said.

Part of the problem for Edmonton is that its fiscal fortunes heavily rely on royalty revenues from oil and gas. Both, especially natural gas, have been on a roller-coaster ride over the past two years, and the province’s revenues reflect that.

Morton’s surprise admission united opposition parties across the political spectrum, who say the province’s fiscal woes are of the government’s own making.

“It’s shocking that he wouldn’t rule it (a PST) out,” said Wildrose Alliance Leader Danielle Smith.

“They don’t have a revenue problem. They have a spending problem. And until they get that under control, any kind of talk of increasing taxes is outrageous.”

Ways to cut spending, Smith said, include ending “corporate welfare,” like the $2 billion the government has committed to developing carbon-capture and storage technology, and capping increases in operational spending to inflation plus population growth.

Liberal Leader David Swann, too, dismissed the idea of even considering a PST.

To cut costs, Swann said, he’d reduce the number of ministries to 18 from 24 to avoid duplication, especially in the administration.