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Rob Breakenridge: Expert panel needed to review Alberta's revenue sources

If we’re talking about a potentially significant fiscal reset and restructuring, then a mandate from Albertans is reasonable

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If last month’s announcement of the fall referendums was meant to distract from the bad news budget, it turns out such a ploy was unnecessary.

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Global events have provided far more than just a distraction from Alberta’s latest budget — they’ve likely rendered it all but irrelevant.

The forecast of $60-per-barrel West Texas Intermediate (WTI) oil now seems completely out the window as the conflict in Iran has pushed those oil prices closer to $100 per barrel. We’re likely past the point where even a quick resolution to the conflict would settle those prices back to recent levels.

Alberta’s forecasted $9.4-billion deficit for the coming fiscal year is likely now to be much lower. In fact, it could be wiped out altogether, depending how circumstances play out.

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But even if the red ink turns black, it doesn’t undo the decisions that led to the deficit in the first place. It’s a tale as old as time in Alberta, where resource revenues come to the rescue of governments that can’t otherwise figure out how to keep spending and revenue in balance.

When resource revenues surge, there’s little incentive to address those underlying structural problems. When those revenues dry up, that’s usually an indication of tough times, which then provides its own disincentive to tackle spending or revenue.

Basically, it’s never a good time.

But with such a sudden and dramatic swing in Alberta’s fiscal fortunes, coupled with the government’s willingness to consult directly with Albertans on matters of significance, a unique opportunity exists.

The premier recently implied that there could be a vote on a related matter. It was perhaps more of a taunt to critics, however, as she dared proponents of a provincial sales tax to try to gather enough signatures to force a referendum on the issue.

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Clearly, that’s not going to happen.

But there is a potential process that could culminate in a different sort of question being put to Albertans — one that could at least potentially involve a PST. There may not be enough runway for all of this to happen before Oct. 19, but the underlying imperative remains.

In 2019, Alberta launched a blue-ribbon expert panel to review the province’s spending. The expectation at the time was that it would be followed with a similar expert panel to review Alberta’s revenue.

That still hasn’t happened.

It would not tie the government’s hands to any course of action to appoint such a panel. Even though events have overtaken the recent budget, that budget exposed the dire need for a close examination of Alberta’s revenue structure and overreliance on resource revenue.

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A PST could obviously generate billions in revenue, but imposing a new tax has downsides. There’s also the question of tax efficiency and whether shifting from taxing income to taxing consumption offers advantages.

The province has defended the increase in property taxes as a necessary step to cover the cost of a rising education budget. A similar argument could be made for the health-care premiums that once existed in Alberta.

This is all rather politically delicate, to say the least, which is why it makes sense to take it out of the hands of the politicians. The work produced by an expert panel could pave the way for Albertans to have a direct say in whether things need to change.

Decisions around revenue and spending are made each year, and it wouldn’t make sense to hold a referendum on every single annual budget. But if we’re talking about a potentially significant fiscal reset and restructuring — coupled with the precedent of the referendum requirement in the Taxpayer Protection Act — then a mandate from Albertans is reasonable.

That, though, requires a willingness from government to acknowledge the problem and to begin the process.

So far, unfortunately, that doesn’t seem to be happening.

Rob Breakenridge is a Calgary-based podcaster and writer. He can be found at robbreakenridge.ca and reached at rob.breakenridge@gmail.com

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