Rachel Notley's Sales Tax

Unveiled as part of her election campaign platform, Rachel Notley proclaims her government will have a balanced budget in 2023-24. Aside from the assumption that this would be the first year in a third NDP term of government, a balanced budget includes all sorts of spending promises. How the NDP will accomplish both a balanced budget and increased spending remains their dirty secret.

During the 2015 provincial election that brought the NDP to power, not once did Notley announce she would introduce a carbon tax if her party formed government. Once elected – albeit accidentally – her NDP government introduced a carbon tax and then spent $9 million in ads justifying it to Albertans. It is the single largest tax hike in Alberta history, implemented without a public mandate and in violation of the Alberta Taxpayer Protection Act, which requires a referendum before a sales tax can be introduced.

In their 2018 budget, the NDP revealed that as they increase the rate by 67%, there will be no additional ‘green’ spending, and no increase in the rebates. It had a budget estimate of bringing in $1.34 billion in 2018-19. This is almost equal to the combined royalties on crude oil and natural gas of $1.59 billion for the same period. Oil price futures to 2024 show oil at about $61 per barrel. If Rachel Notley is serious about balancing the budget, then additional sources of tax revenue are her only option.

When the current carbon tax was introduced, it was set at $20 per tonne, increased to $30 per tonne in 2017, and planned to increase to $50 per tonne. That carbon tax is applied to all home heating, gasoline, food, clothing – essentially, everything we need and buy.

Simply increasing the carbon tax to $50 per tonne will not ensure a balanced budget, especially as NDP policies cause further destruction of Alberta’s oil and gas industry, resulting in even less royalty revenue in addition to less corporate and personal tax revenues.

Using the 2018-19 budgeted amount of $1.34 billion of carbon tax revenue, and increasing the carbon tax to $100 per tonne, the Alberta Government would take in about $4.5 billion. Four years of that tax level will bring in about $18 billion. This is a long way off from the $53 billion of tax debt the NDP has accumulated over the past four years.

Alberta Government documents show us where an NDP government is headed. A sales tax of 7-8% would increase government revenues to the point where Rachel Notley could almost balance the budget.

According to the CBC, Rachel Notley has advocated a Provincial Sales Tax.

CBC: You've spoken in the past about how we need to have a conversation about a PST.

Notley: No, no,  no — I haven't been talking about that.

CBC: Your exact quote is: "In the long term, is this a conversation we need to have? I think it is — but not right now. It needed to happen in the context of a government needing a mandate." Is this something you want Albertans talking about in the coming campaign?

Notley: No. Not at all.

Last year, Notley told the National Post “We have never outlined that $30 was where it was going to stop. People who talk about effective carbon pricing acknowledge that, as time progresses, it needs to go up.

And this is just the provincial carbon tax. A memo from the Canadian government’s Department of Finance contemplated increases on the federal portion beyond $50 per tonne: “The overall approach is to be reviewed by 2022 (referred to as the ‘five-year review’) to confirm the path forward, including continued increases in stringency in future years.” A secret memo leaked from Environment Canada estimates that for Canada to meet its climate targets, the carbon tax would need to be $300 per tonne in 2050.

If Albertans are genuinely opposed to a provincial sales tax, then the last thing they should do on Election Day is re-elect Rachel Notley and her NDP government.