SIMS: Albertans need tax cut, balanced budget

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Albertans are fighting to afford the basics and they are counting on the tax cut the provincial government promised them.

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The Alberta government pledged to cut income tax during the election almost three years ago.

The UCP pledged “tax cuts for all Albertans,” saying it would reduce the lowest income tax rate from 10% down to 8% for the first $60,000 of earnings. That move would save the average family about $1,500 per year.

Folks earning less than $60,000 a year would see a 20% reduction to their annual provincial income tax bill.

With the budget being released on Thursday, the government needs to make good on its promise and it sounds like it’s happening.

If it happens, it’ll be the biggest tax cut since the late Ralph Klein was premier of Alberta.

Here’s why this is a big deal…

More than 40% of Albertans report they are within $200/month of not being able to make the minimum payments on all their bills.

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People are struggling to afford rent, to keep the lights on and to stop the phone calls from creditors. This state of being is known as “living paycheque to paycheque.”

Albertans are faring better than most Canadians, thanks to lower housing costs, higher earnings and no PST, but it is still tough out there for many working people.

The tough situation is largely thanks to the federal government punishing people with carbon taxes and causing inflation by printing money and wasting it.

Albertans could use $750 each in income tax relief.

For a family of four, that’s more than a month’s worth of big trips to the grocery store.

If Albertans save about $1,500 per family with this income-tax cut, that could cover a month’s rent on a two-bedroom apartment.

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To make sure these tax cuts are sustainable, the province also needs to stay in balance.

Alberta needs to set the tone for the country. Ottawa desperately needs to balance its budget. So do the other provinces.

But here’s the biggest reason Alberta needs to balance the budget: It saves Alberta taxpayers money on debt interest payments.

Last year, Albertans paid about $3.3 billion to cover the interest payments on the debt.

Over the last 30 years, Albertans have paid about $28.8 billion in interest payments on the provincial debt.

To put that money into perspective, that amount could otherwise build about 22 new hospitals or buy about 58,000 family homes.

Keeping the budget balanced is the best way to improve credit ratings and push down interest rates on the debt.

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Keeping spending in check and saving taxpayers’ money also means being able to pay down the debt itself.

Right now, the provincial debt is estimated at $94.9 billion.

For the government to claim it has a balanced budget, that total debt number needs to go down, not up.

Last year, the debt went up. That can’t happen again. The debt must go down.

A balanced budget means there is no deficit and the total debt is not going up.

Alberta is on a firm fiscal track right now, with strong spending laws keeping the rate of spending increases below the rate of inflation plus population growth for the year previous.

We also have the Taxpayer Protection Act which shields us from a PST and from personal and business tax increases, without a referendum.

To stay on that straight and narrow, the Alberta government must deliver on its promised income tax cut, and it needs to keep the budget balanced.

Kris Sims is the Alberta Director for the Canadian Taxpayers Federation

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