Western Standard - Franco Terrazzano of the Canadian Taxpayers Federation on a possible Alberta sales tax

00:00:00.040 Welcome to a Western Standard special. I'm Corey Morgan, columnist with the Western Standard,

00:00:06.720 and I'm joined today by Franco Teresano, who is the Alberta Director of the Canadian Taxpayers

00:00:13.180 Federation, who's been holding our municipal and provincial government's feet to the fire,

00:00:18.540 trying to keep some spending sanity going on at the very least and exposing a lot of what's been

00:00:24.320 going on. So as always, especially in this crazy year, it's been an interesting week in the news.

00:00:30.760 Finance Minister Taze perhaps has committed some blasphemy, I guess you could say, in Alberta by

00:00:37.260 floating the possibility of a provincial sales tax. Can you expand on that? That's right in your turf,

00:00:43.740 Franco. And again, thank you, by the way, for coming on, of course.

00:00:46.720 Well, thanks, Corey, for having me. It's always really a pleasure. Well, you know what? The United

00:00:50.980 Conservatives and our Finance Minister, Travis Taze, I mean, they really need to remember the mandate

00:00:56.260 that Albertans gave them, right? Albertans gave them a mandate to go to Edmonton to cut government

00:01:01.220 fat and to lower taxes. Albertans certainly didn't boot the NDP from office so that United 0.92

00:01:07.420 Conservatives could then have their turn reaching deeper into our pockets. So, I mean, it's really

00:01:12.040 disappointing to be hearing Premier Jason Kenney's Finance Minister flirting with the idea

00:01:17.080 of potentially bringing in a provincial sales tax once the pandemic settles. And really, I don't know what

00:01:23.220 the Finance Minister is thinking. I don't know how he can think that Albertans will have enough cash

00:01:27.720 left on our money tree to pay for a provincial sales tax after, what, five plus years of economic

00:01:33.420 hardships. That includes many job losses, many pay cuts in the private sector, but also includes,

00:01:39.900 what, two oil price collapses and also at least one economic shutdown. So, I don't know how the

00:01:45.200 Finance Minister can think that struggling Albertans will have enough money to pay a provincial sales tax

00:01:51.180 to fund a bloated provincial government. And on top of that, we need to know that a provincial sales

00:01:55.580 tax tax will be costly. If we're even just thinking about a 5% PST, I mean, that could be more than

00:02:01.820 $1,000 per Albertan per year.

00:02:06.500 Oh, it's a direct hit on the cost of living. Albertans are struggling already. It's interesting, we always

00:02:13.680 see, you know, economists and others float how great sales taxes are, consumption taxes are, and perhaps

00:02:18.680 there's room for that discussion. But what we're hearing more is, no, this will just be another tax,

00:02:22.680 in addition to all the taxes we're already paying. The administration, I imagine, you guys have looked

00:02:29.260 into that with the federal sales tax and harmonized sales tax, like as a small business owner in the

00:02:32.900 past, that's another expense as well with bookkeeping and dealing, because it turns all your businesses

00:02:38.760 into automatic tax collectors as well, right? Well, I mean, I think the thing that we're most

00:02:43.900 concerned about is just the fact that why are we paying higher taxes when we're looking at a massive

00:02:50.400 spending problem here, right? It can't just be struggling taxpayers outside of government that

00:02:55.160 are doing all the heavy lifting. So far, we really haven't seen government share in the burden of the

00:03:00.820 downturn, and not just with COVID-19, but really the last five years. If you look at the spending

00:03:05.740 comparisons, and you look at Alberta, well, we would be spending $10 billion less, our provincial

00:03:11.020 government, if its spending was in line per person with other large provinces like British Columbia,

00:03:16.000 Ontario, and Quebec, we have a $10 billion spending problem. And when you look at the budget, even

00:03:21.960 before COVID-19 ever, ever touched down in Alberta, the UCP spending was higher than the

00:03:28.060 New Democrat spending. The UCP was spending more money than the NDP. So I don't know how the finance

00:03:34.380 minister, Travis Taves, how he can credibly start thinking about raising taxes, even if it's just a

00:03:40.560 hypothetical, before he's even cut a single penny from the province's bloated budget.

00:03:46.200 Yeah, we'd want to see, you know, some other efforts, hopefully, rather than just dipping

00:03:49.640 deeper into our pockets. So not every member of the UCP caucus seems to be walking in lockstep on this,

00:03:56.240 though it sounds like Drew Barnes has expressed some concerns. He's certainly, he's the voice of the

00:04:00.720 conservative opposition in there, almost. What do you think of what Drew's been saying?

00:04:04.640 Well, I think it's great that the UCP MLA, Drew Barnes, speaking out against the sales tax,

00:04:11.540 he was actually quite unequivocally against a provincial sales tax and sticking up for

00:04:16.620 taxpayers. And honestly, I think we need to see more United Conservative MLA speak out against tax

00:04:22.620 hikes and speak out, or I should say, speak up for Alberta taxpayers. And again, it really comes down

00:04:29.600 to the UCP need to remember the mandate, the mandate that Albertans gave them, right?

00:04:33.420 And I think if we would ask most Albertans what the UCP mandated it is, I think it would boil down

00:04:39.000 to three important things. Push back against damaging federal policies, try to get the economy

00:04:44.200 going again, and sticking up for taxpayers. Well, a sales tax or any other type of tax increase

00:04:49.660 doesn't fall within any of those important principles here. And what also is very frustrating

00:04:55.320 is that we don't even hear the NDP pushing the UCP to be considering a sales tax. I mean,

00:05:00.220 the NDP had their time and power for four years, and they never brought in a sales tax. And also,

00:05:05.800 interestingly, Rachel Notley, after hearing Travis Taves, the finance minister's recent comments

00:05:12.600 about a sales tax, took quickly to Twitter to raise red flags about it. And Corey, I mean,

00:05:18.180 I couldn't imagine many more thornier issues than a sales tax, which would push Albertans to be looking

00:05:24.660 for a new party than if the UCP government were to implement a sales tax. But on that note,

00:05:30.760 there's one thing that I do think is important to mention, is that Premier Jason Kenney has confirmed

00:05:35.880 that he will abide by the Taxpayer Protection Act. So if the government were to bring in a provincial

00:05:40.860 sales tax, it would first have to go to the people through a referendum. And I just do not think that

00:05:46.200 struggling Albertans will be able to or even want to pay more taxes to keep funding a bloated provincial

00:05:51.640 government. No, I guess if it would go to it, the best opportunity the government would have would

00:05:58.580 be next year. It looks like they're going to be a referendum on equalization. You could couple in a

00:06:02.900 couple other questions. But boy, what a political thing to take on. I mean, a bombshell. Albertans have

00:06:12.240 strongly expressed that they got no use for provincial sales tax, yet they just keep diving into that.

00:06:17.700 So it'll be interesting. But again, it's up to the provincial government to take away those

00:06:21.020 regulations. I mean, we used to have balanced budget legislation once too. So at best, those are

00:06:26.240 just things on principle. So I mean, in the parliamentary system, though, it does work best

00:06:30.800 if, you know, theoretically, it should be individual members speaking for their constituents. I'm glad

00:06:35.680 Mr. Barnes is doing so. It would be nice if some others spoke up and we could have a broader

00:06:40.140 representation. So on the bigger picture, we've got a fiscal update coming along to tell us how we're

00:06:47.220 sitting going into this year. What are you anticipating there?

00:06:51.440 Well, that's correct, Corey. We are expecting another budget update by the end of this month.

00:06:57.660 And certainly we're expecting it to be more bad news. We saw the last budget update in August that

00:07:03.660 brought us some very bad news on the fiscal side, which I think was expected. But I mean,

00:07:09.060 we heard in August that we're going to have, what, a $24 billion deficit, which is the largest

00:07:13.980 deficit in the province's history. And we're steamrolling towards $100 billion in debt by the

00:07:19.920 end of the fiscal year. So we're expecting more bad news from the budget update that we're going

00:07:24.800 to be seeing in November. But, you know, I think it's important to remember everyone out there,

00:07:29.140 like, of course, COVID-19, the recent economic shutdown is impacting everyone. But really the root

00:07:35.160 problems of our budget situation was planted years and years ago. I mean, we have fallen so far from the

00:07:42.340 days when the former Premier, Ralph Klein, held up his paid in full sign back in the summer of 2004,

00:07:49.600 right? Because we've seen the PCs, they doubled program spending between 2004 and 2015. And then

00:07:56.780 we saw the NDP come into power. They continued the spending spree. They continued to rack up debt

00:08:02.000 charges. And the UCP then was put in place to fix the budget mass. But as I said, you know, even before

00:08:08.620 COVID-19 happened, the UCP was spending more than the NDP. And that's why what we're saying is there

00:08:15.720 is no way that the finance minister should even be considering potential tax heights when he hasn't

00:08:21.400 even cut a single penny from our government's bloated budget.

00:08:26.880 Well, and getting further with that, then. So, I mean, if it's almost like they're sounding

00:08:32.880 NDP style where they're constantly looking on the revenue side to fix their problems rather than on

00:08:38.800 the spending side, which again, isn't anything at all what they campaigned on. Something, you know,

00:08:44.940 I mean, we've seen response with them just simply trying to contract out laundry and support services

00:08:50.900 in the health system. And that led to wildcat strikes and the usual hysteria from the usual suspects

00:08:56.400 from the unions and NDP. But something I thought it did sound a little promising. You know, it's a

00:09:02.020 small number relative to what a lot of people in the private sector have had to deal with.

00:09:05.820 But there's actually discussing discussion starting of a broad cut to the public sector

00:09:09.780 salaries, which makes up a massive part of the government budget. What are your thoughts there?

00:09:14.900 Well, first, I think it's very important to note that, I mean, letting local businesses do

00:09:20.340 do laundry services or sell the coffee and donuts in hospitals. Really, that is a common sense,

00:09:27.620 a way to find some savings. So the government does need credit on that one. You mentioned an

00:09:33.140 interesting little point when you said that sometimes the UCP started to sound like the NDP

00:09:37.780 on the spending side. Well, I think that is very important to remember here because back when the NDP

00:09:43.100 was in office, they announced hundreds of millions of dollars worth of corporate welfare for the

00:09:47.560 petrochemical sector. And unfortunately, what we're seeing from the UCP is continuing that,

00:09:52.280 continuing a bad NDP corporate welfare program. And on top of that, the UCP has added another very

00:09:59.240 costly petrochemical subsidy program on top of what the NDP already had in place. So really,

00:10:05.020 the corporate welfare is one of the big issues that we're seeing from the United Conservatives.

00:10:09.360 But back to your question about the labor side, it is a good thing that Premier Jason Kenney is trying

00:10:15.860 to take some air at these ballooning government labor costs. And right now, I think we're hearing

00:10:20.200 what is three to four percent salary cutbacks. You know, it's good to see Premier Kenney pushing on the

00:10:26.720 labor, but let's be honest, a three to four percent pay cut. If you were one of the Albertans outside of

00:10:32.800 government, right, who took a three to four percent pay cut, you're one of the lucky ones. And now we're

00:10:38.400 hearing overheated rhetoric from union bosses who are even threatening work stoppages. Well,

00:10:43.260 you know, I don't think that's going to play well with with the many Albertans who are struggling,

00:10:47.420 right? Because at the end of the day, we have a question. We have a hundred billion dollars worth

00:10:51.260 of debt. And, you know, how are we going to pay that down? And I don't think that we can go to

00:10:55.600 the struggling Albertans who, you know, the families who are just struggling to make ends meet

00:11:00.780 or the small businesses who have already had to lay off their friends, who've had to hand out

00:11:05.920 significant pay cuts and ask these Albertans outside of government to pay more money because union

00:11:11.200 bosses want to pay money. Well, some of the union bosses themselves are quite well compensated.

00:11:18.000 It's quite a world going on out there. But I mean, I guess the question is, is the government ready

00:11:24.260 for that battle? I mean, we had wildcat strikes with such and something as miners outsourcing and

00:11:28.520 then even talking about. So hopefully they remain stoic in pursuing this because we do have to get it

00:11:35.160 under control. I really appreciate the Taxpayers Federation speaking up because we certainly won't hear

00:11:39.920 anything from our official opposition on any of these particular issues. They just want to spend,

00:11:45.020 spend, spend. So where could people find more information about what you guys are up to and

00:11:49.600 keeping governance to account? Well, thanks for that, Corey. And then please head over to

00:11:54.100 taxpayer.com. If you want to look at all the reports and everything that we're putting out,

00:11:57.960 go to taxpayer.com and then click on our newsroom tab and I'm sure you'll find some good stuff there.

00:12:03.600 Great. Well, thank you very much, Franco. It's always informative to sit down with you and I'm

00:12:07.400 certain we'll have much more to talk about soon as our elected officials continue to

00:12:12.500 reach into our pockets. So have a good day. You too. Thanks for having me on.

Western Standard - November 18, 2020

Franco Terrazzano of the Canadian Taxpayers Federation on a possible Alberta sales tax

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