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Time for sales tax in Alberta: Parkland Institute

In order for Alberta to achieve long-term fiscal stability, the province needs to address it's "long-standing revenue problem" and consider a provincial sales tax, states a report on Alberta's finances released by the Parkland Institute on Monday.

'The resources revenue gusher ... those days are gone'

Two reports on Alberta's financial future recommend the province stop depending on oil and gas, which the Parkland Institute calls a sunset industry. (Getty Images)

To achieve long-term fiscal stability, Alberta must consider a provincial sales tax, concludes a report released Monday by the Parkland Institute.

The report, Cutting Through the Blue Ribbon: A Balanced Look at Alberta's Finances, was prepared in anticipation of the Janice MacKinnon report released by the Kenney government last week, said Bob Ascah, one of the three co-authors of the report.

Both reports recommend Alberta move away from resource revenues to fund ongoing expenses.

In past decades the province has relied primarily on revenues from oil and gas, which is "a sunset industry," Ascah told CBC on Monday.

"The resource-revenue gusher — the oil and gas fairy — which successive governments ... have believed could bail the province out, that those days are gone and are not going to return," Ascah said.

The Parkland report recommends a combination of tax increases to stabilize revenues, including a provincial sales tax, harmonized with the federal GST.

For people who think about the public finances, this is an attractive solution but politicians have a different view, Ascah said. 

Most political parties see a sales tax as "political suicide," he said.

While the MacKinnon report argues the province must make substantial budget cuts to balance its books, the Parkland report disputes Alberta is facing a financial crisis from overspending

The situation is not dire and, while caution is warranted, Alberta has a manageable debt, Ascah said.

Alberta's expenditures are not out of line with Canada's three largest provinces — Quebec, Ontario and British Columbia, the report says.

"Public sector wages are commensurate over time with those found in these other jurisdictions for educational services, health care and and social assistance, and public administration," it says.

Parkland Institute is a public policy research institute at the University of Alberta.

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