Carbon levy passes, Albertans face taxing years ahead
The New Democrats exit the legislature, stage left, very proud of themselves as they head happily to the party’s convention in Calgary this weekend.
The legislature (or rather, the NDP majority) passed the new carbon tax law Tuesday just before adjourning for the summer.
After days of debate, the NDP accepted just one small opposition amendment. People who have documents and property seized by tax inspectors will get receipts. Don’t lose yours.
The carbon tax is the signpost legislation of this busy session. It’s also the first new tax in many decades to be imposed on Canadans without being promised, or at least mentioned, in an election campaign.
This is risky business for the NDP, especially during a recession when so many other charges are starting to pile up before the carbon levy even takes effect.
A tax revolt may be brewing in this province — a serious one, the kind that toppled former premier Gordon Campbell in B.C. when he said there were no plans for a harmonized sales tax, and then did it anyway.
The government’s books show that even with current revenues projected to grow over the next few years, and with carbon revenue factored in, the deficit in 2018-19 will still be $8.4 billion.
Almost the only budget number that looks good these days is the West Texas oil price, which was forecast to average $42 US this year, but is suddenly above $50.
Don’t look for salvation there, though. Oil and gas revenues would have to increase almost tenfold to bring the province anywhere near a balanced budget. As former treasurer Jim Dinning used to say, that dog won’t hunt.
Which leaves only two options: big spending cuts or major new tax revenues. The NDP favours taxes.
The government’s hunger for revenue will necessarily be insatiable. They’re after big bills and small change too. It all adds up.
Many Calgarians are hopping mad about their new property tax bills. The city pins the heft of them on the province, which refused to tinker with its share of the education property tax to reduce the burden.
Premier Rachel Notley says the province didn’t change anything in the tax regime. Technically, that’s correct.
But this very inaction raised the bills.
City councillors first set a 4.7 per cent increase. Later, they reduced it to 3.5 per cent.
Then the province left its chunk of this Byzantine system alone.
The effect is a 10.2 per cent increase in the provincial share of the education tax. That means a 6.1 per cent overall jump for the average taxpayer.
Nor did the NDP exempt charities and non-profits from the carbon tax. This is painful to a variety of shoestring budget agencies that are already strapped by shrinking donations.
Ex-premier Jim Prentice was blasted last year when he proposed to cut tax credits for charitable contributions. He reversed that, but not before he was portrayed as a cross between Scrooge and the Grinch.
Notley says the government can’t start “carving out” groups from the carbon levy. She feels that would defeat the whole goal of reducing carbon consumption.
Notley promised to work with the charities to help them reduce their consumption — and therefore the tax — as much as possible.
But that seems to be it. There will be few exemptions beyond the big one for farm fuel.
Notley is even immune to Mayor Naheed Nenshi’s plea that the tax on gasoline — 4.49 cents per litre — will eventually cost the city $6.5 million annually.
That in turn will add another half-point to the property tax rate.
The province is also blithely ignoring the long-standing convention that one level of government doesn’t tax another.
This appears to be the reality of the next few years. The NDP will tax, and it will collect.
Don Braid’s column appears regularly in the Herald
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