Edmonton

Are the Tories planning to axe the flat tax?

The declining price of oil and its impact on Alberta's finances is raising questions about whether the government wants to change the 10 per cent flat income tax rate.

Opposition raising questions about how Alberta plans to deal with dropping oil prices

Alberta Premier Jim Prentice said that there are currently no talks underway about changing the province's flat 10 per cent personal income-tax rate. (CBC)

The declining price of oil and its impact on Alberta's finances is raising questions about whether the government wants to change the 10 per cent flat income tax rate.

Premier Jim Prentice has said he has no plans to introduce a provincial sales tax. But he remains vague on what may be under consideration.

On Wednesday, Prentice said he plans to deliver a balanced budget in 2014. He says the government will rein in spending while keeping an eye on the price of oil.

For now, the premier says there has been no talk about changing the tax structure.

“At this point that discussion has not yet happened,” he said. “I’m not saying that it will never happen.”

In Wednesday's question period, Wildrose leader Danielle Smith tried to get Prentice to rule out a tax increase.

“Will he commit right here, right now, that his government will keep the 10 per cent, single rate for personal income tax?” she asked.

Prentice stuck to his talking points.

“Albertans, as I say, expect prudence, they expect discipline, they expect spending discipline from their government,” he said.

Alberta is the only province with a flat income-tax rate. In all other provinces and territories, the more an individual earns the higher the tax rate.

For example, in 2014 people in Ontario will pay 5.05 per cent on the first $40,120 of their taxable income; 9.15 per cent on the next $40,12; 11.16 per cent on the next $69,758; 12.16 per cent on the next $70,000; and 13.16 per cent on the amount over $220,000.

NDP leader Rachel Notley said a progressive tax rate is more fair.

“We need to get rid of the flat tax,” she said. “We need to ensure that very wealthy Albertans are paying their fair share.”

As for the Wildrose, they are calling on the government to curb expenses instead of raising taxes.

If Prentice insists on raising taxes, he should call an election and campaign on it, the Wildrose said.

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