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The Alberta NDP Budget from a Finance and HR Perspective Part 3

The Work Standards Promise:

(5.4) We will review employment standards to support family-friendly work standards, including improving compassionate care leaves and providing time off for family responsibilities.

The Reality:

Continuous updating of employment standards is normal.  It is hoped that this review will also include provisions for more mental health initiatives as they relate to the Canadian Mental Health Commissions National Standard of Canada for Psychological Health and Safety in the Workplace, as well as the innovative Mindful Manager initiative that has swept the UK, Australia and New Zealand. SlideShare: The Mindful Employer

The Corporate and High Earner Tax Promise:

(6.1) Large profitable corporations will contribute a little more. We will cut the PCs’ wasteful corporate tax breaks by increasing Alberta corporate tax to 12% (from 10%), retaining the current small business tax rate and no sales tax.

    10. The High Earner Tax Increase Promise:

(6.2) The top 10% of income earners will contribute a little more. We will introduce a high income, progressive tax system that asks the top 10% of tax filers to contribute to public services based on their ability to pay. To that end, we will introduce a set of new high-income tax rates that will ask the top 10% of Alberta tax filers to contribute according to their ability to pay: 12% on taxable income over $125,000 to $150,000; 13% on taxable income over $150,000 to $200,000; 14% on taxable income over $200,000 to $300,000; and 15% on taxable income over $300,000.

The Reality:

Balancing job creation and taxation is a fine dance. I was recently in the State of Florida.  How does this relate?  They have no personal income taxation! None. Personal income taxes are replaced by high sales taxes, many paid by tourists like me.  Alaska is another example (see Table 2 below).  They have managed to have Energy Royalties replace personal income tax entirely. Increasing the corporate tax rate, at a time when many in the energy sector are struggling, may be an initiative that deserves a re-think.  It will be refreshing to have an NDP led royalty and taxation review.  However, like solving healthcare, they may find their room to move is pretty limited.

    11.The Health Levy and User Fee Elimination Promise

(6.3) Under our plan, everyone else – 90% of tax filers – gets a break from the tax and fee increases Jim Prentice is proposing in his budget. To that end:

We will eliminate Mr. Prentice’s regressive health levy, saving working and middle class Alberta families up to $1000 a year per tax filer.
And we will roll back Mr. Prentice’s new user fees that affect Alberta families the most, including motor vehicle registration, marriage, death and birth certificates and their 600% increase to the mortgage registration tax that will make buying a new home much more difficult. These steps will save Albertan families an average of $214 a year.
Low income families will also benefit from our proposals regarding the Alberta Working Family Supplement and the Alberta Family Employment Tax credit (p.16).

   12.The Donation Tax Credit Reinstatement Promise:

(6.4) We will reverse the PCs’ cuts to the charitable donation tax credit.

The Reality:

This reinstatement makes sense to me. The tax savings created was limited and the message sent, that charitable donations are not to be encouraged, never resonated with me.

Conclusion:

There are not many times in the history of a provincial government when new minds and new approaches are able to make decisions unfettered by interest lobby groups.  The NDP now has a chance to deliver on its promise of overall change.

It is important to note that while the politicians have changed, the government advisors have not.  This government advisory group, whether in Health, Finance, Education, or any other area may still be tied to outdated models and interest lobby groups.  The NDP owes it to all Albertans to ensure that their advisors have the tools and breadth of options to help the new government create lasting change.
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