KRIS SIMS: Alberta Budget is sweet and sour for taxpayers

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Albertans are getting a big tax cut. That’s the good news.

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Premier Danielle Smith is making good on her promise to cut the income tax for Albertans.

The government is cutting the lowest income tax rate from 10% down to 8% for the first $60,000 of earnings.

That might sound wonky, but it’s real money in your pocket.

The government estimates this will save the average Alberta worker about $750 per year. In a two-person working family, that’s more than $1,500 extra in your wallet.

Those savings will cover more than a month’s worth of groceries for a family of four or pay for a month’s rent for an apartment.

This tax cut is a big deal.

Right now, about 40% of Albertans are broke. That’s how many people are within $200 every month of not being able to make the minimum payments on all their bills.

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While Albertans are doing better than most in Canada, thanks largely to more affordable housing, higher wages and no PST, that’s still a lot of people teetering on the edge of insolvency.

This tax cut will give folks a bit more breathing room.

Now, the bad news.

The Alberta government is projecting a $5.2-billion deficit for this year and has no plan return to balance for at least the next two years.

Granted, there is a U.S. President Donald Trump-shaped cloud of uncertainty hanging over the province. If Alberta gets slapped with a tariff on oil and gas headed south to the U.S., that is a big bite into the province’s resource revenue.

That means the Alberta government will have a lot less money coming in. But instead of finding savings, the government decided to spend more money.

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When tough times are ahead, you cut unnecessary expenses and save, you don’t max out your credit card.

The Alberta government is spending $4 billion more in this budget than last year. That’s more than an 8% increase in spending.

The province is just barely staying within its new spending laws. The rules state the government cannot increase spending beyond the rate of inflation plus population growth from the year previous.

That spending increase ceiling for this budget was 8.7%. The government increased its total spending by 8.4% compared to last year’s budget.

Typically, that spending limit number floats around 4%-5%. But since inflation has been higher than Snoop Dogg the past few years, the government had a high bar this budget year.

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And it barely made it.

If the government instead had frozen spending to last year’s levels, it could have had a $1-billion surplus and still given Albertans our income tax cut.

The government must find savings.

The CTF recommends in its budget report the government needs to stop doling out corporate welfare, cancel its bullet train to Banff and stop funding frivolous art grants. It also needs to go through its ranks of thousands of bureaucrats with a microscope.

For example, taxpayers are spending more than $30 billion on health care in the budget, nearly half of the province’s total spending.

Alberta Health Services is the largest health bureaucracy in Canada.

Why is that the case? Are all these government employees hard-working front-line nurses, brilliant physicians and injury rehabilitation specialists?

Why does AHS have 232 “directors” on the provincial sunshine list?

They are paid an average salary of $161,781 per year and cost taxpayers more than $137 million.

What do those directors do?

The income tax cut is good news for taxpayers, but the government needs to make cuts and find its way back to a balanced budget.

Kris Sims is the Alberta Director for the Canadian Taxpayers Federation

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