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Make Your Voices Heard

Author: Troy Lanigan 2000/11/23
Most governments in Canada could only dream. Having achieved budget surpluses earlier this decade, Alberta is now poised to completely eliminate its provincial debt in just two years. The question is: where do we go from here

The Klein government has just released a survey that will be sent to every Alberta household seeking guidance on disposition of interest savings and "unpredictable resource money". The survey will likely be a precursor to the debate about the future of taxes generally and income taxes in particular.

Broad 'direction seeking' surveys on the province's fiscal direction have been sent out in the past. Most, including the one sent just two years ago, placed debt reduction as priority number one. To its credit, the Alberta government has a law that directs 75% of all budget surpluses into debt reduction. Without that legislation and perhaps, without that consultation, it's doubtful we would be in the position we are today.

But it's not all good news. That survey of two years ago listed tax cuts, priority spending, and increased

saving in the Alberta Heritage Trust Fund as ordered priorities behind debt reduction.

Simply put: it hasn't been that way at all. The province's just released second quarter fiscal update again puts increased spending far ahead of tax relief. Spending is up a billion dollars in just the first 6 months of the current fiscal year. In fact, the government is now spending what it had budgeted to spend two years from now.

Tax cuts $485-million, less than half of what the government will add in new spending.

As for the $12-billion Heritage Trust Fund, it's income this year is being transferred into general revenue. Not exactly what survey respondents had in mind.

Still, it's important to send this survey in. The premier says that it "will be binding on the government to the extent that's it's politically prudent to listen to what people have to say". On the big issues, that appears to be the case. And, given overwhelming consensus it would be difficult for a government soon heading to the polls to do otherwise.

For our part, the Canadian Taxpayers Federation (CTF) recommends that "unpredictable resource money" be directed to "savings" in questions 4 and 5 on the survey, which leads into the debate on the future of taxes in Alberta.

The CTF will soon be commissioning a study examining the prospects for eliminating income tax in the province without having to impose a sales tax. The idea is this: direct resource revenue surpluses to the Heritage Trust Fund to the point where income generated by the Fund would supplant what is currently raised by income taxes. Can it be done Yes. A similar arrangement operates in the state of Alaska -- called the Permanent Fund - with much success. Looking to the future, Alaska's Permanent Fund now generates more revenue than the state's "unpredictable" resources. The same could be accomplished in Alberta if the government controls its spending and allows the Fund to grow.

So make your voices heard. This survey, coupled with an upcoming election, are opportunities to impact the future of your province.

A Note for our Readers:

Is Canada Off Track?

Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.

Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?

You can tell us what you think by filling out the survey

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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