Sask. Premier Brad Wall raises taxes in budget rollout
Since the moment Rachel Notley became premier of Alberta, Albertans have been pretty consistently subjected to a chorus of adoration and admiration from the province’s right for the fiscal and social policies of Saskatchewan’s premier Brad Wall.
Hardly a week goes by where we don’t see some tweet, social media post, or op-ed from the Wall cheerleaders at the Wildrose or the Canadian Taxpayers Federation (CTF). They extol the fact that Saskatchewan had lost fewer jobs in the downturn, or that Wall doesn’t run deficits, or that he’s willing to take a hard-line stance against public sector workers. Wall has become some sort of ultra-right hero, and these folks on the right lament often that he’s not the one leading Alberta at this moment of fiscal crisis. They make no bones about the fact they believe he would do a better job than Notley, and figure that if Alberta just copied everything he was doing in Saskatchewan, our problems would be solved.
It was quite interesting, therefore, that there was nary a peep out of any of these folks in response to last week’s Saskatchewan budget. No witty posts from Wildrose finance critic Derek Fildebrandt, no statement from Leader of the Opposition Brian Jean, and no op-eds from the Taxpayers Federation’s Paige MacPherson who has written so many gushing pieces about Wall it can be hard to keep track. But, not this time.
So why the silence? Could it be that Wall’s budget is an admission of a truth that Alberta’s right is still unwilling to acknowledge?
As conservative budgets go, Saskatchewan’s latest effort was fairly typical: public sector job cuts, demands for public sector salary concessions, a tax cut to corporations, and cuts to front-line programs and services. There was, however, one surprising aspect to Wall’s budget—he raised taxes on pretty much everything. Between increased sin taxes on alcohol and tobacco, a one percent increase to the province’s sales tax, and the elimination of tax exemptions on everything from children’s clothing to farm fuel, Wall’s budget is expected to generate almost $1 billion in new tax revenue this year.
That’s a billion dollar tax increase on total revenues of just over $14 billion. Alberta’s projected total revenues for this year are just over $45 billion. Can you imagine the degree to which the Wildrose and CTF would lose their minds if the government increased revenues by a similar ratio and added $3 billion in tax revenue this year?
What’s really interesting, however, is that despite all the cuts and the increased taxes the Saskatchewan budget is still projecting a deficit for this year. Apparently a government in a prairie province can cut spending and increase taxes and still not balance the budget. For the record, this is Wall’s fifth deficit budget in the last 10 years—not a great record for someone who prides himself on being a fiscal conservative.
What Wall appears to have figured out is that, like Alberta, Saskatchewan’s finances are too dependant on revenues from the oil and gas industry. The recent collapse of international oil prices has laid bare the reality that years of conservative tax policy have gutted the provinces’ most reliable and dependable stream of revenue and that it’s time to do something about it. Given the reality of current oil prices, and the fact they will not increase for a long time—if ever—Wall seems to have realized the impossibility of ever balancing the books without increasing taxes.
That realization, combined with the reality that Alberta’s GDP growth is currently 2.6 percent compared to Saksatchewan’s 0.8 percent, will give the Wildrose Party, the CTF, and even the PCs some pause for thought. Government spending during a downturn creates jobs, gets money moving, and ultimately helps the economy grow. Austerity policies do not.
That said, Wall’s budget should also give Alberta’s governing New Democrats something to think about. If even Canada’s most conservative premier is willing to concede that waiting for oil prices to improve will never get an oil-dependent province out of the fiscal hole, isn’t it high time the Alberta government came to the same realization and earnestly got about the business of fixing our flawed revenue system? Wall knows we are undertaxed. Shouldn’t we?