Alberta’s tax advantage eroding, policy head suggests PST

By Eric Mathison

A lack of reform in Alberta’s tax system is causing the decline of the province’s economic advantage, said Jack Mintz, professor of economics and director of the University of Calgary’s School of Public Policy.

At a presentation for the SPP last week, Mintz outlined Alberta’s future as a destination for businesses and workers, stating that a lack of reform, the efforts of other provinces and circumstance are all playing a role in diminishing the lauded position of the province’s economy.

The challenge Alberta faces is “financial pressure arising from the need to increase spending on an aging population and natural resource revenue growth that does not keep up with general growth in the economy,” Mintz’s report states.

He said the increased competitiveness of other provincial tax systems is negatively affecting Alberta.

“Alberta needs to restructure its tax system to focus on consumption, not capital and labour,” said Mintz. “[The shift] will limit our reliance on volatile sources of revenue such as oil and natural gas.”

He provided a variety of ways to boost Alberta’s tax advantage to attract new business to the province. Some reforms are more radical — Mintz offers a provincial sales tax as a possible solution, as it would permit decreases in other forms of tax.

While the policies may be easy to suggest, convincing the public of Mintz’s suggested reforms will be more difficult.

A student who attended the talk wasn’t optimistic that the policies would win the approval of voters.

“It’s hard, you know, when there is good evidence that something should be done, but people have a reaction to it before they’ve heard the argument,” said the unnamed student.

The lecture is part of a series by the SPP covering a variety of social issues related to public policy. The talk was introduced by professor Robert Mansell of the economics department, who afterwards provided some insight into the role of public policy in the wider community.

“Issues repeatedly arise in the news that are complex and require understanding to appreciate the wider impact they will have. Talks like this provide the opportunity for that type of discussion,” he said.

Upcoming events put on by the SPP include a lecture on health-care reform, and another regarding world energy needs.

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