Is a provincial sales tax in Alberta’s future?

Alberta Premier Alison Redford.
Albertans take great pride in the fact that they live in the only province in the country without a provincial sales tax.

But, with lower than expected oil revenues and a looming $6 billion deficit, it's just maybe what the province needs to cure it's economic woes.

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According to the Calgary Herald, a PST was the hot topic at an economic summit — called by premier Alison Redford — over the weekend.

The summit saw over 350 Albertans from academia, the business community and the non-profit sector — as well as MLAs from all parties in the legislature — in attendance.

Many of the panelists argued for a consumption tax even if they differed over whether the province’s $40-billion budget is out of line.

George Gosbee, president and CEO of AltaCorp Capital, said the province could no longer rely on natural resource revenues to pay for programs and government should introduce a five per cent sales tax.

“We had a free ride and we had a great ride. Now’s the time to get off of it,” Gosbee said.

Talk of a PST is not new in Alberta.

In the 1990s, some called on then premier Ralph Klein to institute a sales tax in the face of a $3 billion deficit and a $23 billion debt. He chose to go another route: he cut spending.

That's what Derek Fildebrandt of the Canadian Taxpayers Federation is suggesting. He says Alberta doesn't have a revenue problem, it has a spending problem.

"We don't believe that this is necessary to balance the books because we have abundant revenues. The problem is that we are spending far beyond our means," he told Yahoo! Canada News.

"We spend more than almost any other province, per capita. We also have some of the highest revenues. In fact, revenues increased by 21 per cent over the last decade, adjusting for population growth and inflation. As large as this growth is, spending increased by 25 per cent after inflation and population growth. Therein lies the problem."

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For her part, premier Alison Redford isn't ready to talk about a sales tax.

"Oh, I don’t think we’re anywhere near that at all. I think the fact that people are beginning to talk about it as an idea is a really important thing," Redford told reporters at the summit according to the Canadian Press.

"Ideas are important, but no need to jump the gun on that."

But will the premier be singing the same tune if she can't cut spending and if oil and gas revenues don't rebound in the near term?

The Calgary Herald's Don Braid summed up the 'take-away' from the weekend conference the best:

"Even though a sales tax isn’t on the table yet, the conference definitely moved it closer to the dining room."

(Photo courtesy of Reuters)

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