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Thread: Reliance on Carbon Tax, royalties, or a PST, etc - which is best for Alberta

  1. #1

    Default Reliance on Carbon Tax, royalties, or a PST, etc - which is best for Alberta

    If you were tasked with running Alberta which of these would you choose?

    And why?

    And what governing, economic, social and other implications would your choice have?


    Any other option(s)?

  2. #2

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    Other options would include using what makes Alberta different in the world, using our advantages, using what we have that other Nations do not have.

    For example some Island Nations use shipping to fund or help fund government via import/export tariffs and taxes. Other nations concentrate tax on exports or imports or certain activities within.

    I would suggest that the Alberta, the Canadian advantage, is having more valuable natural resources and energy per capita than any other Nation. We should be using those resources to fund government and build and advance our economy.

    That would be a major change of course. Today Canadians have to pay world price for their own resources and products and they have to pay using a foreign currency, USD (pay exchange). Most Canadians that look can see this with oil, we sell our raw resource far below world market value and then pay, in USD, outside market price to import fuel made from that oil. Canada even imports oil at world price and pay in USD. This is true for many products and resources.

    If a company makes a considerable amount of profit from exporting that company expects Canadians to pay the same price. There is nothing saying they have to operate to benefit Alberta or Canada, Canadians should be glad they have jobs, it's always about jobs not net benefits to Albertan's, our economy or our hopes and dreams for our future.

    Of course we can't make such major changes overnight so I would suggest slowly changing laws to benefit Albertan's, we could start by looking at tariffs/taxes on exports, particularly on the export of profits. Money made in Alberta has to stay in Alberta to benefit Alberta even a few percent of the money and resource flowing out of Alberta would make a huge difference.

    Then there is our relationship with Confederation, we pay and pay but get little in return. That alone could increase our provincial coffers by over $10B a year.

    Follow the money to see who is holding real power in Alberta, start to change that and everything changes.

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    that’s a bit like asking which is best for your health - food or water or air...

    just because one furthers a vital function or goal doesn’t invalidate the usefulness of the other two.

    having said that, alberta should be adding a harmonized pst to its arsenal. not only will it create a healthier balance with the province’s other revenue streams including personal and corporate income taxes, it will add balance in at least other areas.

    firstly, it will level the nonexistent “alberta advantage” playing field. virtually every other jurisdiction in the world has some of local vat or sales tax. finding out that we don’t is a surprise and something that is a surprise isn’t an advantage.

    secondly, i think alberta still has the largest number of canadian individuals and corporations who technically live elsewhere. that means they pay income tax elsewhere even though alberta provides them with numerous services and benefits that the rest of us pay for. a harmonized pst could be instituted at virtually no cost - the feds would administer it and forward the monies collected - and alberta would at least receive some revenue based on those things purchased and consumed here to support their activities whether trucks or camp catering or clothes and the cost of delivering those things they work on. personally, it would have individuals contributing to alberta that aren’t currently. corporately, it would have little impact as most of the monies collected - like gst - would be an input tax credit, effectively transferring those monies from other jurisdictions to alberta.

    thirdly, as we continue to diversify a pst would apply on the sale of intellectual property so that those businesses are also contributing on the same playing field as a local cafe or plumbing supply shop or clothing store...
    Last edited by kcantor; 28-10-2018 at 11:03 AM.
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    When I look at how much governments waste I can't support any increases or additional taxes. If they lower taxes it forces departments to at the very least spend less, I doubt if they if they would actually find efficiencies or waste less.

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    Quote Originally Posted by sundance View Post
    When I look at how much governments waste I can't support any increases or additional taxes. If they lower taxes it forces departments to at the very least spend less, I doubt if they if they would actually find efficiencies or waste less.
    you do realize that 40% of alberta’s budget is spent on healthcare, 27% on education and 9% on human services. everything else from highway maintenance to debt service comes from the remaining 24%. how much waste do you really see as opposed to how much you “want to see”? absolutely it’s there and should be eliminated but in relative terms it’s probably a rounding error with the exception of running two separate health and school systems.
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  6. #6

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    Quote Originally Posted by sundance View Post
    When I look at how much governments waste I can't support any increases or additional taxes. If they lower taxes it forces departments to at the very least spend less, I doubt if they if they would actually find efficiencies or waste less.
    Say the choice among the three or choices (some proportion of each) were revenue neutral or even at lower rates. Which would you choose? Or what other option would you chose?

    Could also eliminate those options and just tax income.


    To simplify and de-socialize Alberta they could even privatize all the public resources, the gas, the oil sands, the forests, etc via distributing ownership of all mineral rights etc as shares to all albertans (recipients could then sell the shares for cash or keep for royalties - probably taxable royalties) or sell to corporations and distribute the proceeds. No more reliance on resource revenue and then just tax income or goods and services. There’s all kinds of ways to operate the province.

  7. #7

    Default To HST or not

    Quote Originally Posted by kcantor View Post
    ......alberta should be adding a harmonized pst to its arsenal. not only will it create a healthier balance with the province’s other revenue streams including personal and corporate income taxes, it will add balance in at least other areas. firstly, it will level the nonexistent “alberta advantage” playing field. virtually every other jurisdiction in the world has some of local vat or sales tax. finding out that we don’t is a surprise and something that is a surprise isn’t an advantage. secondly, i think alberta still has the largest number of canadian individuals and corporations who technically live elsewhere. that means they pay income tax elsewhere even though alberta provides them with numerous services and benefits that the rest of us pay for. a harmonized pst could be instituted at virtually no cost - the feds would administer it and forward the monies collected - and alberta would at least receive some revenue based on those things purchased and consumed here to support their activities whether trucks or camp catering or clothes and the cost of delivering those things they work on. personally, it would have individuals contributing to alberta that aren’t currently. corporately, it would have little impact as most of the monies collected - like gst - would be an input tax credit, effectively transferring those monies from other jurisdictions to alberta. thirdly, as we continue to diversify a pst would apply on the sale of intellectual property so that those businesses are also contributing on the same playing field as a local cafe or plumbing supply shop or clothing store...
    When it comes to the HST it seems to me how much a person likes it depends on their view of Canada. If a person sees Canada as a Federation be it a Union of Provincial Republics or a Federation of Ontario and Quebec with territories, then a HST is an excellent method of taxation. A HST with rules decided by those ruling the Federation can and should advance the interests of Federation over than of it's members.

    Being a Value Added tax also ensures huge revenue generation potential that can be carefully targeted to various activities in various territories or regions. HST makes the Federation stronger if not all members. For those that see Canada as a Confederation, a union of sovereign states, as it was originally sold to the charter members and those in Ruperts Land who resisted the Canadian takeover, the HST would not be such a great tax.

    Pro Confederation Canadians would not generally support such a tax because it gives power of what is being taxed locally to the Feds far away. Taxation is an important tool to creating a robust economy. Handing that over to people thousands of miles away from a different area and culture with different hopes and dreams is not going to work well for most regions or members. HST takes money out of the economies of members of Confederation and concentrates into the hands of the Federal government, who then redistributes it back to the various members thorough various programs.

    Confederations should ensure taxes can respond to local conditions to help all members create strong economies, that isn't possible with the power structures in place at the Federal level.

    I think you are correct in saying that everyone else has a VAT and adding one would increase tax revenue. But another entity, the Feds, would decide how much those taxes are allowed to return to help Alberta, which would undermine the argument that monies collected elsewhere in Canada would flow back to Alberta. Alberta already sends well over $10B per year more to Ottawa than is returned in representation, programs, contracts and services. IMO Sending them yet more money is not likely to increase the flow back to Alberta.

    Some people do not like Value Added Taxes because they are generally used to increase the tax load of citizens and in particular poorer citizens. That is one reason VAT has so much support from the wealthy and the Elite. Alberta has only 4 million citizens but hundreds of billions of economic activity. We have the highest GDP per capita and that is with our products being devalued. IMO Alberta should not be looking to those 4 million for more taxes but instead look to the hundreds of billions of activity and the spread between what our products are worth on the world market and what we currently sell them for.

  8. #8

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    Or, we could return the Heritage Fund to the way it was intended. Out the royalties in there and only use the interest for major projects or in times of slowdown. No more royalties going into general revenue to create a fake "Alberta Advantage".

    Taxes should be sufficient to run the day to day provincial requirements.

  9. #9

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    Quote Originally Posted by kkozoriz View Post
    Or, we could return the Heritage Fund to the way it was intended. Out the royalties in there and only use the interest for major projects or in times of slowdown. No more royalties going into general revenue to create a fake "Alberta Advantage".

    Taxes should be sufficient to run the day to day provincial requirements.
    Taxes on what?

    Income, spending, sin, liquidating everything, ... tax the rich, tax the poor, tax everyone equally, or unequally, according to ability to pay (from hard work and/or luck)...

  10. #10

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    Whatever people agree on. Which, if the UCP get into power, will be nothing. An HST would be a non-starter. They've already said they'll kill the carbon tax.

    Until Albertans wake up and realize that a stable tax regime will help the province weather the ups and downs of the oil market, we'll continue the boom/bust cycle.

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    ^^^^ Getting full value for our resource exports is important, but instituting HST in Alberta would not send more money to Ottawa than they are already taking from the GST. All of the extra tax revenue would stay here. The advantage of HST is that it would cost almost nothing to administer, as all of the accounting procedures have already been established. Consumers would just pay 10% instead of 5%, and the provincial deficit would disappear.

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    To heck with more taxes. Refineries, refineries is the answer. The whole world loves light sweet crude. BC and Eastern Canada would even welcome pipelines if it was light sweet crude. Upgrade the bitumen and refine to other products please.
    Last edited by Drumbones; 29-10-2018 at 10:54 PM.

  13. #13

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    Quote Originally Posted by Drumbones View Post
    To heck with more taxes. Refineries, refineries is the answer. The whole world loves light sweet crude. BC and Eastern Canada would even welcome pipelines if it was light sweet crude. Upgrade the bitumen and refine to other products please.
    ‘The market’, the private sector, isn’t building them. Even when oil was climbing over $100/bbl I don’t recall any rush to build refineries. Too bad.

  14. #14

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    Peter Lougheed had the right idea. We're shipping the lowest value product and thus getting the lowest possible royalities and taxes. If Klein hadn't stopped funding the Heritage Fund, the province could have taken an ownership stake in the upgraders in exchange for funding assistance.

    Former premier says bitumen should stay in Alberta

    Alberta shouldn't allow raw bitumen from the oilsands to be shipped to the United States for processing, former premier Peter Lougheed said Tuesday.


    Lougheed told delegates at an energy conference in Calgary that the provincial government should firmly link the licensing of new projects to the processing of bitumen — the tar-like substance mined in the oilsands — at home.


    "I just find it completely unacceptable that our resource involves shipping jobs down the pipeline with bitumen to the United States."


    Lougheed, the keynote speaker at the two-day Oilsands Supply and Infrastructure conference at the Hyatt Regency, said shipping bitumen south is a temporary solution in an overheating economy, but it shouldn't be part of the long-term plan.

    https://www.cbc.ca/news/canada/calga...berta-1.634726

  15. #15

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    Quote Originally Posted by kkozoriz View Post
    Peter Lougheed had the right idea. We're shipping the lowest value product and thus getting the lowest possible royalities and taxes. If Klein hadn't stopped funding the Heritage Fund, the province could have taken an ownership stake in the upgraders in exchange for funding assistance.

    Former premier says bitumen should stay in Alberta

    Alberta shouldn't allow raw bitumen from the oilsands to be shipped to the United States for processing, former premier Peter Lougheed said Tuesday.


    Lougheed told delegates at an energy conference in Calgary that the provincial government should firmly link the licensing of new projects to the processing of bitumen — the tar-like substance mined in the oilsands — at home.


    "I just find it completely unacceptable that our resource involves shipping jobs down the pipeline with bitumen to the United States."


    Lougheed, the keynote speaker at the two-day Oilsands Supply and Infrastructure conference at the Hyatt Regency, said shipping bitumen south is a temporary solution in an overheating economy, but it shouldn't be part of the long-term plan.

    https://www.cbc.ca/news/canada/calga...berta-1.634726
    http://www.connect2edmonton.ca/showt...stone-pipeline



    Oh, and wasn’t it Don Getty that redirected royalties? Not Klein?
    Last edited by KC; 30-10-2018 at 10:43 AM.

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    Could be Getty. Have to check. Either way, royalties should go to the HF and the principal shouldn't be touched.

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    Just my opinion but I feel if the HF exceeded 20 billion the federal government would raid it.

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    There is no legal way for the feds to raid it. None. Zero. That said, the HF could be used for loans to other provinces for various projects. Alberta could use it for the benefit of the entire country. However, as long as it's stuck at a measley $15 billion, it's really not enough to do anything with without depleting it.

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    Quote Originally Posted by kkozoriz View Post
    There is no legal way for the feds to raid it. None. Zero. That said, the HF could be used for loans to other provinces for various projects. Alberta could use it for the benefit of the entire country. However, as long as it's stuck at a measley $15 billion, it's really not enough to do anything with without depleting it.
    i'm not as sure about your underlying assumption here as you seem to be...

    i seem to recall that the feds were contemplating amending the equilization calculations to include the amount of the fund and the monies earned by the fund in what would have been even more negative from alberta's perspective than it already was/is and some of alberta's previous decisions regarding the fund and contributions to it were made to minimize that potential.
    "If you did not want much, there was plenty." Harper Lee

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    And it didn't come to pass because? If the feds could do it to Alberta, they could do it to every province with resource revenue. The provinces wouldn't stand for it.

    The primary reason for shifting the royalties to general revenue was for the phoney "Alberta Advantage", keeping taxes lower than other provinces. Which doesn't work particularly now because the royalties are so low. Add to that, the volitility of oil markets and all it manages to do is make Alberta even more susceptible to swings in the world price. Which was one major reason the HF was founded to protect against.

    And, as I suggested, if the HF was put to work across the country, it would lessen any attempt, doomed may it be, from going after the HF.

  21. #21

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    Quote Originally Posted by kkozoriz View Post
    And it didn't come to pass because? If the feds could do it to Alberta, they could do it to every province with resource revenue. The provinces wouldn't stand for it.

    The primary reason for shifting the royalties to general revenue was for the phoney "Alberta Advantage", keeping taxes lower than other provinces. Which doesn't work particularly now because the royalties are so low. Add to that, the volitility of oil markets and all it manages to do is make Alberta even more susceptible to swings in the world price. Which was one major reason the HF was founded to protect against.

    And, as I suggested, if the HF was put to work across the country, it would lessen any attempt, doomed may it be, from going after the HF.
    I think it was in 1987 under Getty. Not sure that the Alberta advantage slogan existed then. However, sure, it might have been shifted to support the pre-slogan concept of the same.


    Ok here’s a seemingly factual summary. It’s well worth reading the entire article:




    Alberta's 1980s-style fiscal karma is back | Fraser Institute

    “The 1980s/1990s decline in Alberta's fiscal fortunes was the result of politicians who didn't face the fact that boom-time energy prices would not soon return, nor the accompanying boom-time tax revenues.

    So they first tried everything else to balance the books. Alberta's political leaders reduced and then entirely stopped resource revenue transfers to the Alberta Heritage Savings Trust Fund; then they re-directed the fund's earnings to general revenues; and in the 1987 budget, taxes were raised by $1 billion, about a 12 per cent tax hike overall. “

    “...in a comparison of the 1981 and 1986 fiscal years, program spending was 85 per cent higher in that latter year (the first deficit year) when compared to 1981. In contrast, revenues were only 49 per cent higher.” ...

    “When spending increases continually run ahead of revenue growth for half a decade, inevitably, budgets will bust and end up in red ink. It is akin to increasing personal spending every year beyond one's wage increases. That was the lesson of the 1980s, learned late and hard with spending cuts post-1993.

    That lesson has now been...”

    https://www.fraserinstitute.org/arti...-karma-is-back
    Last edited by KC; 30-10-2018 at 08:28 PM.

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    I hurt my arm in the summer, going to the hospital to see if it was broken I was seen by about 5 people over 3 hours. This really could have been done by 2, (perhaps 3 for a clerk or triage assessment) the X-ray tech and the doctor. I know there are tons of inefficiencies, we can find solutions if we look and be creative.

  23. #23

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    Quote Originally Posted by sundance View Post
    I hurt my arm in the summer, going to the hospital to see if it was broken I was seen by about 5 people over 3 hours. This really could have been done by 2, (perhaps 3 for a clerk or triage assessment) the X-ray tech and the doctor. I know there are tons of inefficiencies, we can find solutions if we look and be creative.
    So? Are you saying keep the same taxes and cut costs but not services?

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