MLA Bikman applauds provincial budget

By Trevor Busch
Southern Alberta Newspapers

The fiscal gravy train of royalty revenue having screeched to a halt on the heels of a freefall collapse in energy prices, most Albertans were probably expecting to see a provincial budget that pulled out all stops to claw Alberta back into the black.
The 2015-2016 budget announced last week isn’t that exactly — sporting an eye-popping $5 billion consolidated deficit, the largest in the province’s history — but cuts and economies are being faced in almost all government ministries, and voters are being slapped with a dizzying array of increased fees and taxes almost across the board to the tune of nearly $1.5 billion.
“It’s the approach that we wanted to take, and that we have taken,” said Cardston-Taber-Warner MLA Gary Bikman. “My hat is off to all of the ministers and the premier that actually had to craft this budget. It’s designed to take us off of the royalty rollercoaster, and to put us on a solid fiscal foundation. We know that if Albertans were taxed at the rate of the next lowest jurisdiction to us, we would be paying as Alberta taxpayers about $11 billion more.”
Total government revenues have been projected at $43.4 billion, while expenses are expected to rise to $48.4 billion. The deficit is expected to be offset by contributions from the $6.5 billion-strong Contingency Fund.
Long a bone of contention for the left, corporate income taxes will remain at 10 per cent — still the lowest in Canada. And true to promise, there was no introduction of a provincial sales or payroll tax, and no changes to the collection of oil royalties.
“I think the premier and Minister Robin Campbell took a look at all aspects of the treasury and the economy, and they wisely have avoided taxing corporations, because most of the corporations and companies in our province are small businesses,” said Bikman.
“They’re not large global entities, but they still have to compete in a global economy. The greatest lie of the left — politically and economically — is that corporations don’t pay enough taxes, when in reality, corporations don’t pay any taxes at all. They build the cost of taxes into the price of their goods and services, and charge them to me and you.”
Hitting heavy-footed drivers and those violating other driving laws will see an average 35 per cent increase in fines, more pain will be felt in the areas of registrations, court and land-title searches, marriage certificates and camping costs.
Contentious in rural agricultural areas for its impact on farm input costs, the province is also boosting the gasoline tax by four cents per litre.
“Some other business input costs have gone up because of the increase in fuel taxes. That will hit farmers, and that will hit transportation companies, and all of us that drive. But that’s a reality — our fuel taxes still remain the lowest in Canada,” said Bikman.
Once considered the harbinger of fiscal success in the province, the twin royalty indicators of bitumen and conventional oil are expected to bring in less than $2 billion in 2015, a far cry from what had been previously projected based on US $107 per barrel oil.
Collection of income tax was targeted for revisions which are intended to make those in Alberta’s wealthiest tax brackets contribute more to government finances, eliminating the 10 per cent flat tax rate.
“The rise in personal income tax on people who earn over $100,000, and over $250,000, are a variation on progressive tax but it’s been suggested that they might be temporary. It paves the way for those who are in a better position to pay a little more. That’s fair — it recognizes that the most vulnerable among us need to still be cared for, and they are.”
Teetotallers won’t be feeling any pain, but imbibers will be taking a low blow of a $0.16 increase on a bottle of wine, and $0.90 on a case of beer. Sinful tobacco puffers will see taxes bumped $5 on a carton of cigarettes.
Also targeting the more affluent, a health-care levy has been re-instituted for income earners that exceed $50,000 per year. Starting July 1, it will be paid on an escalating scale and capped at $1,000 per year.
“There will be some cuts to administration within AHS,” said Bikman. “Almost everyone recognizes that efficiencies must be found, and that’s one place that we’ve all looked at as perhaps being a bit top heavy.”
Maintaining a commitment to infrastructure spending, a bevy of borrowed billions is expected to push Alberta’s soaring debt burden close to $18 billion.
Stomaching a $5 billion deficit — in the light of avoiding a Klein-era slash and burn approach to whittling away government expenses — was unavoidable, according to Bikman.
“In terms of doing what we wanted to do in a measured and cadenced way, it was unavoidable. In terms of if you could change the past and go back to the future, there were things that were done in the past that brought us to this point, and these are the things that the premier is trying to address. I think it’s a courageous budget, and I think it sets the tone for what we can expect to see in Alberta. There will be very real changes, and this is the beginning of very real changes that we need to make if we expect to remain competitive in a global economy.”
According to government estimates, total tax increases for a family earning a combined income $120,000 per year will jump $288 in 2015 and $480 in 2016.
Not exactly heavy in the area of new tax breaks for Albertans, the 2015-2016 budget does implement a new refundable tax credit, as well as improvements to rules surrounding lower-income families.
“There’s something in it that will affect virtually everybody,” said Bikman. “All of us are going to be paying a little bit more, in some way or another, whether it’s through direct or indirect taxes. It’s a recognition of Alberta having lived under the protective umbrella of royalties and rising fuel prices. But the reality is that until we have more access to pipelines, both east and west, and possibly north, we will always be receiving a discount to what the price would otherwise be.”
Although insistent in his belief the province should follow its own electoral legislation regarding election “seasons” and postpone any election call until at least the spring of 2016, Bikman recognized why the government might be considering making the move ahead of schedule and sending Albertans back to the polls.
“I believe in set election dates, and I think there’s strength that comes from that. I think that what happened under an older regime — or past several regimes —has created the problems of today. Getting a mandate now means that we can move forward in a proper, measured way, towards that end goal of having us completely weaned off of royalty revenue and on a solid fiscal foundation, within a five year plan and begin to pay off the debt and begin making significant deposits back into the Heritage Savings Trust Fund. To me, the biggest fiscal error in judgement of the last 30-plus years, has been the unwillingness or inability to exercise the discipline to continue to deposit and leave in the interest, in the Heritage Savings Trust Fund.”
Despite slight increases to education and social services, many government departments will be seeing budget cuts, while others are holding the line.
“Some farmers are concerned, because their input costs have gone up, thanks to the increase in fuel, and they’re not happy about that,” said Bikman. “Some of the people in education say there’s aspects of this, that if they are what they appear to be, they’re going to make it harder for us to control costs. There are some Wildrosers that still remain in contact with me, who think that the answer was simply reduce the cost of government with no tax increases. That’s an easy thing to say, but I can tell you of those of us that did cross, think the budget that the premier has brought out, is as close as possible to a budget that a Danielle Smith-led Wildrose would have had to come up with.”