Bill 3 lays out Alberta's plan for phased corporate tax cut from 12 to 8 per cent
UCP government says tax cut will create 55,000 jobs
The Alberta government on Tuesday introduced a bill that would cut the tax rate for large corporations from 12 to eight per cent by Jan. 1, 2022.
Under Bill 3, the Job Creation Tax Cut, the corporate tax rate would drop from 12 to 11 per cent on July 1, with a further decrease to 10 per cent by Jan. 1, 2020.
Two subsequent reductions would happen at the beginning of 2021 and 2022. The small business tax rate will continue to be two per cent.
The NDP opposition said the change to corporate taxes will cost the province $4.5 billion in lost revenue over the next four years.
But Alberta Finance Minister Travis Toews predicted it will offset any revenue shortfall.
"We're confident that the net effect on corporate taxes will not be that drastic," Toews said.
"And over the long term, we believe that these policies will in fact create additional economic activity that will ensure sustainability of government revenues into the future."
He said the government needed to make a "bold move" to attract investment back to the province.
"We recognize that we're competing for capital not only within the country but within the continent, and in fact globally. We know from an energy investment standpoint, Texas, the Dakotas, Colorado are competitors ... that we had to be aware of. So that was part of the reason why we believed we needed to go to eight per cent."
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The government has promised the tax cut will create 55,000 jobs but Toews couldn't say what over what time period.
Former NDP finance minister Joe Ceci said the proposed tax decrease is setting Albertans up for "fiscal whiplash" from cuts to health, schools and other public services.
Ceci said job creation promises never materialized in other jurisdictions that made similar tax changes.
"Right now, we see the finance minister putting all of his economic eggs into one risky basket, and that basket in other jurisdictions resulted in failure," Ceci said.
Toews said the government has already received calls from businesses interested in investing in Alberta.
Bill 3 is among the first pieces of legislation introduced by the UCP government. Last week, the government introduced a bill that would repeal Alberta's carbon tax by the end of May.