Premier Jim Prentice has a few things
right when he assesses Alberta's budget problems. Yes, we are all in
this together, and yes, it will take some patience and sacrifice from
all of us to move forward from here.
But he gets things infuriatingly wrong
when he exempts the largest and richest portions of “all of us”
from doing any heavy lifting to return our finances to good order.
The exemptions are so obvious, that
minds disposed to see them can see a plot arising.
I have such a mind, and this is what I
see: Prentice does not see the period of low energy revenues lasting
very long. In the meantime, he's not going to let a perfectly good
crisis go to waste, so he is using it to break the power of the
public service unions.
Prentice intends to roll back the
salaries and numbers of the public service. Even though he's already
said publicly that doing so is not the answer to solving Alberta's
budget problems, this will be the cornerstone of his next budget.
These salaries are indeed the highest
in the nation — and it is never good to be on the top end or bottom
end of any list of this type. But the government he now leads agreed
to the current wage structure to buy labour peace in times of great
good fortune.
It was expedient then to settle high.
It is expedient now to settle low. So be it; that is the nature of
labour negotiations in a democracy.
But scapegoating teachers, nurses and
provincial road crews and office staff will never solve the basic
problems of our provincial economy.
I believe Prentice is well aware of
this. So I also suspect he's not giving us the total picture here.
All of his media pronouncements are
geared to sound incredibly dire, but analyzing them leads one to
think they may not be as bad as he wants us to believe.
Consider this picture: Prentice —
with the blessing of all of us — presents a budget containing
significant cuts in government services and staff spending. As well,
there will be service fees for health care and severe hikes in
university and college tuition fees.
This all gets passed, and then oil
prices miraculously recover. Presto! See, we don't need no stinkin'
sales tax. Look how our corporations are back at work creating wealth
in our low-tax environment! Look how we all succeeded together!
Except, there will be a lot fewer
social workers to go around tending the broken families in low-income
groups. If you are low-wage and get sick, you will be double-damned —
not only are you paying a high portion of income for health fees,
health care is not improved, and poor people do not have the same pay
protection in the event of sickness that rich people have.
We will still have the most polarized
income strata in Canada, with the rich getting even richer, while the
poor must dig deeper for fees for every assistance they receive from
a dwindling list of services.
Please, tell me I'm wrong. Show me what
I'm missing here.
If we're all in this together, a sales
tax is the fairest way to see we all sacrifice together, to stabilize
the ups and downs of energy revenues. Consumption taxes, blended with
income taxes are the best possible way for governments to gain
income, while spreading the load as evenly as possible. In a
10-per-cent flat tax environment, it's the only tax the rich would
really pay.
I'm willing to accept that having the
lowest corporate taxes in the industrialized world is an advantage —
except for the studies showing that tax rates are not a significant
factor in decisions businesses make in their growth plans. Businesses
go where there's a profit, and taxes are only a small consideration
in that.
I'm willing to accept that energy
royalty rates must remain a sacred cow, especially recalling the
nastiness that happened the last time the government sought to move
them upward. OK, but does that have to mean that our finite and
cyclical resource revenues absolutely should not be put into savings
for the future?
Aren't our children and grandchildren
part of “all of us?”
I have howled before that previous
Alberta governments had sold us out. This looks like it's going to be
just more of the same — only worse for public servants and worse
for anyone on low incomes.
But if Prentice is right, and energy
cycles back up again, well, that will be situation normal, won't it?
And a large, rich and capable portion of “all of us” didn't have
to do much at all to help in the downturn.
That's called making the most of a
crisis.
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