With the recent tabling of the Alberta budget, tax reform is once again "centre stage" in the theatre known as Canadian politics.

Alberta Treasurer Stockwell Day is proposing to de-link Alberta's provincial tax system from its federal counterpart. Instead of Albertans paying provincial tax on a percentage of their federal tax payable, a tax on a tax, they will instead pay a single rate of 11% on their taxable income, a tax on income.

This move to flatter taxation is to be applauded and Mr. Day has ensured that the move is beneficial to all income groups. Part-n-parcel with the planned move to the single rate tax is a substantive increase in the provincial basic personal exemption and spousal exemption to $11,620 up from $7,131 and $6.,055 respectively. And Mr. Day has pledged to index the exemption to inflation to ensure that the hidden tax increase known as "bracket creep" is vanquished from the Alberta landscape.

The drawback is that these changes won't take effect until January 1, 2002 and only if certain economic growth targets are met, which are principally reliant on oil and natural gas revenues.

The critics will also slam the single rate as an erosion of progressivity in the tax system. This is utter nonsense. Alberta has now ensured that those with incomes under 11,620 pay a rate of 0% and everyone else pays 11% on their income above the basic personal exemption. So the effective provincial rate on someone earning $30,000 is 6.7% and the effective rate on someone at % 100,000 is 9.7%. The system is still progressive, just not as punitive and punishingly progressive as it is now!

It is estimated that the fiscal impact of these measures is a $600 million loss to the Alberta treasury. So Albertans will receive $600 million in tax relief, not a bad start.

And the de-linking won't mean a separate tax collection bureaucracy either. The feds will continue to collect all taxes and simply remit the provincial portion to the Alberta government.

So the big question is: Will this happen across Canada? An unequivocal yes is warranted. Ontario and Newfoundland are actively looking at de-linking from the federal system, and Manitoba has tentative plans to de-link by 2001.

Such moves are natural in an environment where provinces wish to assert greater autonomy in their decision making and they also ensure that their expenditure plans are more or less insulated from federal policy shocks, be they tax increases or decreases.

By incorporating several of the recommendations made by the Alberta Tax Review Committee into its 1999 budget, the Alberta government has also shown its taxpayers that their voices are being heard and that Alberta taxpayers are the rightful owners of the tone, tenor and direction of public policy. (Note to federal government: Wake Up!)

The tax reform movement has received a new tank of gas, it's now up to taxpayers to drive this jalopy from coast to coast.

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While Alberta and Ontario continue to compete with each other in the race to drive down taxes, it should also be noted that Ontario is not immune from tax hunger.

A recent newspaper story reports that the Ontario Ministry of Finance plans to hire 563 new tax collectors over the next two years and their ongoing efforts will reap an extra $350 million in tax revenues by 2001-2002. It seems that every $1 dollar spent on salaries and benefits for the tax folk yields $5 in new revenues.

Say it ain't so Ernie Eves!