Democratic reform, corporate tax bump revealed in Alberta throne speech

Alberta’s new NDP government plans to raise corporate taxes, ban political donations from unions and businesses and end the province’s flat 10 per cent personal income tax rate.

New NDP era, but no new promises in speech from the throne

Premier Rachel Notley gave a thumbs up to the crowd at the Alberta legislature before the speech from the throne on Monday. (Jason Franson/Canadian Press )

Alberta's new NDP government plans to raise corporate taxes, ban political donations from unions and businesses and end the province's flat 10 per cent personal income tax rate.

The measures were promised during the election campaign, but confirmed Monday in the speech from the throne, which revealed the government's agenda for the short spring session set to last about two weeks.

The government plans to introduce three bills. The changes to political donations will be covered in Bill 1, An Act to Renew Democracy in Alberta. The ban will be grandfathered to Monday, the day the bill is expected to be tabled in the legislature, Premier Rachel Notley said.

"Working together with all of our colleagues in the house, we will ensure that these principles become the new normal in Alberta," she said.

Bill 2 will increase corporate taxes by two percentage points, bumping the tax rate from 10 to 12 per cent. The small business tax will stay at three per cent.

Wildrose Leader Brian Jean is vowing to work with the new government on democratic reform whenever possible, but criticized the tax hikes. (CBC)
The government also plans to introduce a progressive income tax system in which people with salaries exceeding $125,000 a year will pay more.

"In this we are ending Alberta's brief and unfortunate experiment with what I've always said, I believe, was a regressive flat tax," Notley said. "And we are returning to a more typical, and I would suggest more fair, Canadian tax system."

Bill 3 is an interim supply bill to fund essential public services like education and health care until the government introduces a full budget in the fall.

The tone of the throne speech, read by Lt.-Gov. Lois Mitchell, was positive, with an emphasis on co-operation and working together.

"We can disagree without being disagreeable. We can talk about what unites us as well was what divides us," Mitchell said. "We can listen to each other and build on each other's best ideas."

The government pledged to provide stable and predictable funding for health care, human services and education.

The speech touched on building a national energy strategy with other provinces and a review of royalty rates. Notley said a panel to review royalty rates wouldn't be announced until the end of summer.

Democratic reform

Clearing out the legacy of 44 years of Progressive Conservative rule appears to be at the top of Notley's mind as she heads into her first session as premier.

In addition to the changes in Bill 1, Notley and Wildrose Leader Brian Jean are proposing a new legislative committee to review government rules on elections and ethics and to strengthen whistleblower legislation.

The committee will be made up of nine government and eight opposition members of the legislature.

Notley would like to see a ban on government ministers making funding announcements during elections and wants to expand the scope of the ethics commissioner.

As for Jean, the new Wildrose leader said he was pleased that Notley reached out to the opposition. He vowed to be positive and to work with the government whenever possible, but to also hold it accountable.

"We will keep their feet to the fire when necessary for the better interest of Albertans' future," he said.

While Jean said he supports Notley's democratic reform initiatives, he wasn't happy with the jump in corporate taxes and a pending royalty review, saying it creates too much instability in the economy.

He said the government needs to cut spending before raising taxes.

"This has not been done, this has not been addressed and we believe this should be the first step."

"We need a stable economy, we need a predictable economy, we need to send clear signs to the marketplace that Alberta is the place to do business," he said.

Ric McIver, interim leader of the Progressive Conservatives, was critical of Notley on the corporate tax increase and for failing to mention agriculture, forestry, tourism and culture in the throne speech.

He slammed the new government for banning corporate donations, which historically benefited the Progressive Conservatives. McIver claimed the NDP is changing the laws to benefit itself.

"It is a naked attempt to tilt the political scale in the current government's balance," he said.

McIver said the current system is more transparent in that donations from corporations are publicly reported. He said the new system could leave itself open to loopholes where corporations and unions could still donate through private individuals.

However, McIver wasn't able to provide any examples of how that might happen.