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Tax cuts expected as Alberta’s UCP government moves to “renew the Alberta Advantage”

The Ottawa Citizen with Melanee Thomas 12 May 2019

Alberta Premier Jason Kenney and his newly appointed Finance Minister Travis Toews will move to “renew the Alberta Advantage” on Monday, implying the province is about to slash taxes even as it awaits the outcome of a panel convened to study the province’s finances.

Kenney and Toews are scheduled to make an announcement in Edmonton about “making it easier to do business in Alberta” on Monday morning, alongside Lafarge Canada CEO of Western Canada Brad Kohl, in what is widely expected to be the implementation of a tax cut.

The new UCP government would not discuss what is planned but referred the National Post to the United Conservative Party’s election campaign, which included a promise to cut provincial corporate taxes from 12 per cent to eight per cent over the course of four years.

Kenney and the UCP also criticized tax hikes by the previous NDP government and talked publicly about restoring the “Alberta Advantage” championed by former premier Ralph Klein. The Alberta Advantage included a flat 10-per-cent personal income tax rate on everyone in the province, but the UCP stopped short of promising to reduce personal income taxes for Albertans earning over $128,000 per year back down to 10 per cent.

Last week, Kenney and Toews announced a panel to study the province’s finances and report back to government ahead of its budget in the fall. The panel is focused on Alberta’s balance sheet and expenditures, not on taxes.

“It suggests to me that they’re looking at half the issue,” said Melanee Thomas, associate professor of political science at the University of Calgary.

As a result of the panel’s focus, Thomas said it’s not surprising the new government would move to start cutting taxes before the panel delivers its report.

She said the UCP was elected with a large majority but the new government is still risking a potential backlash if it moves to cut corporate income taxes because former PC governments experienced pushback when they tried to shift the tax burden onto residents.

“The risk I see is if people interpret it in the same way as they interpret the (former premier Jim) Prentice budget,” Thomas said, noting that Prentice had put forward a plan that raised taxes across the board except for businesses because the province faced a recession from a drop in oil prices.

Kenney and the UCP are expected to move quickly to cut corporate tax rates but it’s unclear if they will also reduce personal income taxes in Alberta, or re-establish the flat 10-per-cent tax rate, Mount Royal University political science professor Duane Bratt said.

“They were very cautious,” Bratt said of the UCP on the flat personal income tax. “They made statements like they would like to get to that but maybe not right now.”

“The whole Alberta Advantage is bringing back the mythologies of the 1990s Klein era,” he added.