Stelmach rules out tax hikes, rescinds liquor levy

Ending speculation about possible tax hikes, Alberta Premier Ed Stelmach announced Tuesday the province is not increasing personal or corporate taxes to deal with Alberta's growing financial woes.
Alberta Premier Ed Stelmach announces on Tuesday in Calgary the cancellation of liquor tax increases implemented in April. ((CBC))

Ending speculation about possible tax hikes, Alberta Premier Ed Stelmach announced Tuesday the province is not increasing personal or corporate taxes to deal with Alberta's growing financial woes.

"As long as I'm premier of this province, there will be no tax increases ... No tax increases, period," Stelmach forcefully told reporters after a cabinet meeting in Calgary.

"So don't talk about them 'cause there won't be a sales tax and there won't be any tax increases, period. We're going to look at not only our budgets but the effectiveness of the programs and look to see how we can grow the pie by removing some of the barriers to investment."

The premier said he wants to send a clear signal to investors and to all Albertans that it's not going to get more expensive to live in the province.

Stelmach also said he's immediately rolling back the liquor tax increases that were introduced in the spring budget. That move will reduce government revenues by $180 million a year — and add to this year's deficit that had already been projected to reach almost $5 billion.

Stelmach said he was never comfortable with the April jump in liquor prices when the government markup was boosted by $1.30 for a dozen beer, 75 cents for a bottle of wine and $2.89 for a 750 ml bottle of spirits.

"It was something that I had a hard time agreeing with; it's been bothering me all that time," he admitted.

"We have to … continue to work to reduce the cost of doing business in this province. That's the way you build Alberta's future, and I tell you that Albertans expect confidence and stability in these very, very difficult economic times, and that is my focus," he said. "So just to close: cold beer, hot day, during very difficult economic times."

No immediate price changes

Barry Snowdon, the general manager of CSN Wine and Spirits on Centre Street in Calgary, said his customers won't see an immediate price drop.

"We change our prices as soon as we buy our next inventory or when our next order. So anything that we've purchased and already paid for a couple of days ago, and arrived today, that is still going to be at the price we paid for it," he said.

There are no plans to rescind the tobacco tax increases that were also implemented in April.

While hiking taxes should be a last resort, it should still be an option for a government to consider, said Alberta Liberal finance critic Dave Taylor.

Many people have suggested that a funding shortfall would have to be balanced by both raising taxes and government job cuts. Cutting out taxes doesn't leave many other options, said Taylor.

"Apparently that can only mean spending cuts now. And we know that the last time the Conservatives went on a slash-and-burn spending cut exercise that they did a lot of damage."

Even more confusing is the reversal on the liquor tax, Taylow said.

"Well, sir, you were the premier. It was on your watch that this tax increase happened. If you weren't in favour of it from the get-go, why did it ever happen?"

With files from Canadian Press