After premier Jim Prentice dropped his highly-anticipated budget on Thursday, Alberta started looking a little bit more like the rest of Canada with more taxes and a move away from a resource-based budget.
In arguably his biggest move since becoming premier last fall, Prentice was tasked with desperately trying to make ends meet as the province has pretty well hit the bottom of the economic rollercoaster ride
Prentice was forced to make some dramatic moves in order to keep the economy afloat, facing a $7 billion shortfall since oil process started tanking last summer.
The old saying “desperate times call for desperate measures” is apt. By raising income taxes, so-called sin taxes, and increasing efficiencies, the province hopes to become less reliant on oil revenues, which although hard to swallow for some, is a good thing in the long run.
Albertans are proud of their tax regime, having the lowest taxes in the country, and no provincial sales tax.
And although we agree that not having a sales tax is nice, is it practical in the long term?
Probably not.
By implementing a two per cent sales tax, Alberta would have still been well below the national sales tax average and would have gained a reliable source of income.
So, what about the future … a future that probably includes oil selling at $50 a barrel.
Alberta could look to the United Arab Emirates, a country that also relies on oil revenues for a good chunk of its revenues. But instead of squandering its wealth, the UAE has used its oil money to invest in the country and has become an international tourist destination.
They know that one day the wells will run dry.
But increased tourism is only one way to diversify the economy. We’re a province rich in resources, yet those raw materials are simply shipped out to other parts of the world for further processing.
What if those jobs and businesses were here?
Wise, bold decisions now will set the course for Alberta in the decades to come. We’re hoping our provincial politicians are up for the task.
