OTTAWA – I suppose you could conclude that the spectacle of two leadership candidates actually arguing over tax cuts – with, shockingly, one of them not even in favour! – suggests that the Alberta NDP hasn’t fully transitioned into being a mere progressive conservative party.
As has been said in this space before, Canada nowadays really has only three political parties that have any chance of forming a government either in Ottawa or any provincial capital, although they may do business under slightly different names from place to place: Neoliberal Plus, Classic Neoliberal, and Neoliberal Lite.
And institutionalized tax cuts are bred in the bone of them all, including the supposedly social-democratic New Democratic Party and its provincial offshoots, which when I say Neoliberal Lite is what I have in mind.
I recall an NDP leader calling for a tax increase in 2015, asking the richest people and companies in Alberta to pay “just a little bit more.” That leader was Rachel Notley.
Not that long after she formed a government, we learned that what the NDP had in mind was asking those taxpayers just a little bit less than what the Progressive Conservatives had planned to make them pay.
Nowadays, despite the hysterical rhetoric about the NDP emanating from the right, especially out on the Great Plains, there’s very little light between the NDP and the so-called conservative party on tax policy.
They’re all determined that Alberta should remain the lowest-taxed jurisdiction in North America – at least as far as rich people and corporate persons go – and by a considerable margin to boot.
Still, it turns out that there is a debate within the NDP about this, which comes as a mild surprise.
It was no shock when former justice minister Kathleen Ganley – who seems to be the favourite of the Alberta Opposition party’s establishment to replace Ms. Notley – came out with a news release saying an NDP government led by her would raise the size of the basic personal income exemption for provincial taxpayers to $26,000 from $21,885.
“This plan would mean no Albertan earning less than $26,000 would pay provincial income tax,” the news release boasted – making it, it is said here, a true PC policy, benefitting those less well off a little up front and costing them much more down the line, while doing nothing that would increase revenue from the better off.
“We’re putting money where it matters most – back into the hands of working Albertans,” the news release had Ms. Ganley saying. “This gives a break to the people who keep our economy running, who can barely afford their daily needs, let alone save a little for tomorrow.”
The only thing missing that would have made this a true Progressive Conservative promise would have been a vow to put “more jingle in their jeans.”
The astonishing part was that another candidate, former health minister Sarah Hoffman, respectfully disagreed.
“I do not support Kathleen’s tax cut proposal,” Ms. Hoffman said. “Here’s why: this plan works out to about a dollar a day of tax relief.
“This won’t buy a cup of coffee, let alone help Albertans struggling to pay their bills,” she concluded.
Eventually, this will result in howls of protest from Premier Danielle Smith and her United Conservative Party, but for the moment they’re probably satisfied to let the New Democrats argue and see what happens.
The next thing to happen, of course, was that one of Ms. Ganley’s campaign chairs huffily responded to Ms. Hoffman’s mild criticism by asserting that her argument “has no basis in either economic theory or economic reality.”
“Marginal utility of $400 will be very different for a person living in poverty or on low income than someone making six figures or more,” Mr. Sabir, the NDP’s deputy House leader, complained.
This is true, of course, or at least true enough to be truthy.
Ms. Hoffman’s assertion that an extra $400 won’t go far to help the working poor cope with the burgeoning affordability crisis is true as well. But a real dyed-in-the-wool social democrat would have called for tax increases for the likes of fossil fuel billionaire W. Brett Wilson, to whom $400 is pocket change.
It is also true that institutionalized tax cuts lead inevitably to brutal austerity, brutal austerity to deep cuts in public services, cuts in public services to privatization, and privatization to the immiseration of working people.
This is the economic truth that dare not speak its name in the era of a total elite consensus that neoliberalism is the only possible way to run an economy that respects “freedom.”
Good for Ms. Hoffman for tentatively speaking that truth, although I don’t imagine it will do much for her hopes of wielding power.
You misidentified Mr. Sabir, unless you know something the rest of don’t. Did we “Ms” something?!
Thanks, Scott. Written while standing up in Ottawa Airport. DJC
It never ceases to amaze me how many Albertans, including those on the progressive end of the political spectrum, buy into the “trickle down” nonsense that is trotted out anytime it’s suggested that the wealthy might have to pay a little bit more in taxes. Marlaina and company would tax the poor the poor to support the wealthy if they could, although I suppose that is exactly what is happening with the new pleasure palace being built for Murray Edwards and his wealthy cronies.
I will be looking to see which NDP leadership candidate comes to the closest to, re: taxes, what is described in the following article. At this point, I may be leaning to supporting Sarah Hoffman.
“Why we need to rewrite the script on corporate taxes”
http://www.macewan.ca/campus-life/news/2023/06/news-conversation-jahangir-corporate-tax-23/
Example: “The UCP decreased the corporate tax rate from 12% to 8%. As a result Husky Energy benefitted from about $233 million in tax cuts, but laid off hundreds of workers. The company used Luxembourg as a tax haven.”
So much for “jobs, investment, and economic growth” right here in Alberta. This money left the province while the UCP/TBA cuts to health care, education, child care, etc. has been creating increasing inequality. This, and many other UCP/TBA created problems will be much ‘to fix.’
I think your comment proves that the average Albertan pays no attention to what their choices in government accomplish for them, in this province. Surely if they saw the oil companies and their rich investors getting big tax cuts like you described, making use of tax havens and then promptly laying off those same voting supporters, you would think they’d be up in arms! Instead, on every YT video about Danielle Smith’s ‘fight to protect the oil industry for the sake of Albertan’s’, the comments reveal that they have no idea what she’s doing to them, not for them. And now to see the new potential NDP leaders, planning to continue the same policy of mollifying those same oil and gas companies/industries/wealthy individuals, should strike some level of concern in the hearts of Albertan’s. Having said that last, I completely understand why they wouldn’t be advertising any ideas of increasing the tax on the wealthy and the oil companies, because those new potential leaders remember that Rachel Notley mentioning it, likely helped her lose the last election. TAX INCREASES, Yikes!, the oil companies we love them, double Yikes! Seems like just that phrase (tax increases) gets Albertan’s backs up, doesn’t matter who is the target.
I can only wonder what the future holds as the world’s drive to move away from burning oil and gas continues, what the future of Alberta looks like. What will these voters think when they discover what their pathalogical drive for ‘freedom’ has cost them? No PST, spend as much of your oil revenues as you must to buy off voters……it’s all good, until it isn’t.
True to form, Ganley is kowtowing right out of the gate. It is a sneaky BS move. The only upside is it gives us a view of her true character. Will Ganley be cutting back health, education or welfare to compensate for robbing the treasury of that tax revenue?
While jockeying around who should reduce taxes, making promises of tax cuts (not delivered by UCP) or otherwise, the interesting one this week is the a FOIP request to release the public comments on setting up an Alberta Pension Plan. It looks like the UCP don’t want to let the cat out of the bag of how really unpopular ditching CPP and going for an APP really is and the comments from Albertans about that. I went to an NDP town hall and out of about 300 there only one was in favor.
https://edmontonjournal.com/news/politics/alberta-refuses-to-release-responses-to-governments-pension-plan-survey
Typical of the UCP, they hid behind the survey and then simply ram through what they want regardless of feedback.
You are right about the three shades or flavours of neoliberalism.
Increasing tax credits has been a favorite go to policy of various Federal and Provincial parties in recent decades. It probably doesn’t help that the tax credit system is coincidentally so well set up to suit political hyperbole. For instance, a thousand dollar credit increase sounds big and generous, but at a 25% tax rate it really is only two hundred and fifty dollars of real money.
Some tax credits are straight forward, but others can be more complicated in the name of fairness. The last basic credit increase Federally was only made available to people earning under a certain amount. So some higher income earners did not benefit, but most people did. It was both very progressive and politically astute for the Federal Liberals, but perhaps too complicated for them to get acknowledged for it.
I suppose this is the eternal paradox. In order to gain politically, a lot of people need to feel they will benefit. A tax credit increase targeted at the neediest only may be a moral and sensible thing to do, but it has to be broader to get enough votes.
It is also always a measure of where our economy is at in its boom bust cycle when people and parties talk about increasing tax credits or decreasing tax rates. It is a sign the economy here is at least doing ok to well.
As for those who wonder if all this sort of talk is effective, let’s not forget that the party that brought in a 7% GST was trounced, but the party that reduced it to 5% was elected and then reelected twice more. In the end, 9oliticians talk about this sort of thing because it helps them win.
The tax policies of Ralph Klein, and of the UCP, didn’t help us. They lost us billions of dollars.
Unfortunately, given the current political climate in Alberta, the NDP leadership candidates really have no choice but to run on the issue of tax cuts.
Pollster Janet Brown has often made the point that Albertans are not fiscally conservative, they are merely tax averse. Ms. Brown makes her point by showing how polling reveals that Alberta residents are not willing to embrace the service reductions tax cuts require, they just don’t want to pay the taxes necessary to fund the services. Thanks to oil revenue, this contradiction has been possible for a few generations now.
While it is true that Rachel Notley did successfully campaign on a tax increase in 2015, she also included a corporate tax increase in her 2023 platform, and was widely criticized for it after her election loss.
Ms. Ganley may spin her idea of increasing the basic personal income exemption as an aid to the poor, but the reality is it is a tax cut for everyone, unless other adjustments to the tax formula are also added (compress the remaining brackets or increase the rates).
Economists have been saying for decades that Alberta needs a sales tax, or a serious increase in income tax to get the province off of its resource revenue roller coaster. While it makes sense economically, it is suicide politically, and Albertans will suffer for that paradox in a couple of generations.
When even the NDP leadership is talking tax reform (cuts, efficency, whatever) we are officially on that slippery slope where everything slides to the right. Putin must be laughing his arse off.
Do we know what Ganley’s position is on the Carbon Pricing? I’ve already eliminated voting for Hoffman and Pancholi, because of their criticism of the Carbon Pricing policy.
As a person of faith, I believe it is time that we assert with actions that we have a responsibility to care for one another economically as well as in all other ways. The Biblical concept of Sabbath and Year of Jubilee are all about economic redistribution. The low tax thinking, perhaps the neo-liberalism that you mention, has gripped North America and especially Alberta. It is selfish, even cultish. Properly funded health care, education, and supportive housing will require increases in taxes. While political parties will resist this and appeal to everyone’s self interest, all people of goodwill can work toward more caring society. Did somebody say, “I have a dream?”
David, what you say sounds like an echo of this article that calls the US a cadaverocracy, where the system is so intractable and officeholders are as capable of changing anything as corpses are. But I can’t agree to write off the Alberta NDP as just a shadow conservative party. The political culture and inflation have virtually guaranteed that nobody who favours raising taxes in Alberta could get elected here. The NDP campaigned on a modest corporate tax hike balanced against cuts elsewhere and look where that. got them. No matter who leads them, Alberta would be better off with an NDP government than with Danielle Smith or whoever TBA gets to lead the U CP next. https://www.commondreams.org/opinion/biden-trump-2024-rematch-cadaverocracy
David, I am wondering if that redoubt of social democratic thought the Wordsworth-Irvine Socialist Felowship still exists, WISF. They always gave the ANDP some proper political and philosophical backbone via the remnants of CCF thinking.
In any event, I think progressive taxes are still an excellent vehicle to equalize the health and well being of the population. The USA with its decrease in life span, and increasing income inequality speaks to that. And bonus points, progressive taxes can be made palatable to the middle and lower class earners. Remember the federal NDP under David Lewis, or Peter Lougheed on oil royalties and a fair share for Albertans.
So, some staffer in short pants is asserting that Ms. Hoffman’s disagreement has “no basis in either economic theory or economic reality.”
I do beg to differ. High corporate income taxes give corporations a strong incentive to invest in tax deductible plant and equipment, not to mention staff. Those investments make the company more efficient and profitable. That is why most profitable farmers invest in new equipment near the end of the tax year. That’s economic reality.
We already know what happens when corporations are given tax breaks, as both former Provincial Treasurer Stockwell Day and former Premier Kenney did when they lowered corporate tax rates: head offices disappeared along with jobs. Without corporate taxes, how does Ms. Ganley propose to secure the $300 billion in unfunded oil field clean up liabilities?
As to economic theory: the whole neoliberal Chicago School of economic theory is so discredited that people are turning to fascist movements around the world because of the feckless response of so-called progressive parties to the systematic corporate looting justified by that absurd set of economic theories.
Well there are other ways to stick it to the wealthy if you have to cut taxes (or say you have to in order to get elected, which is what I think is going on here). One way is to cut corporate welfare and cut it hard. This being Alberta, the oil and gas industry is subsidized to the hilt. One easy thing would be to cancel all taxpayer subsidies for orphan well cleanup. When industry and their subsidiary , the UCP, complain, all the NDP would have to do is to put on their neo liberal costumes and point out the the budget has to be balanced and taxpayers’ hard earned money should not be used to subsidize business.
Isn’t it great living under inverted-totalitarianism? Where everyone is free to have their own opinions but it makes no actual difference in the end anyway. Rah, rah, let’s go candidate what’s the name from who cares, yay!!!
OK, DJC, I find I am in disagreement with you on this one. Raising the basic personal exemption on the provincial portion of income taxes increases the threshold below which people at the lower end of the income scale can earn income tax-free. How can this not be a good thing?
As for ideological purity and the NDP leadership campaign, as a longstanding party member, my perspective is this: the only criterion party members should use to assess the candidates must be the ability to beat Daniellezebub and the UCP in the next election. The people of Alberta can’t afford another four years of UCP governance.
Of course the Notley government was nowhere near lefty enough for many people’s tastes — myself included. Their four-year majority government didn’t leave us with a legacy of public auto insurance or returning registry services to the public sector, or a nationalized and regulated power and gas utility system, for example.
It did leave us with the legacy of a conservative, market-based approach to climate change, which was then adopted by the federal Liberals but has since been found to be so politically unpopular that it is essentially doomed regardless of the outcome of the next federal election.
But the NDP’s campaign strategy in the next election has to adhere to the “Willy Sutton rule*” of Canadian politics: go to where the voters are. Alberta doesn’t have enough genuinely left-wing voters to elect a genuinely left-wing government. We might bemoan this fact, and marvel at the ability of a disengaged electorate to consistently vote against their own best interests, but it’s an inescapable reality that a campaign disregards at its peril.
Once again, Job 1 of the next NDP leader is to beat the UCP, not to put forward a quixotic manifesto of social democratic ideological purity. I’ll be voting for whichever candidate I think is most likely to do that, and I think every thoughtful NDP member should do the same.
*For those readers who don’t know who Willy Sutton was, he was an American bank robber famed for saying, in response to the question, “why do you rob banks?”, replied, “because that’s where the money is”.
Seems to me this is a relatively minor disagreement. What Ganley is proposing should happen anyway to take account of inflation. It certainly does not have the impact that going back to a corporate tax of 10 or even 12 percent would have, or raising the income tax rates on the portion of taxable incomes over 150, 200, and 250 K would have, and both of those are things the NDP should do.
And of course raising the personal exemption does nothing for the poorest who are working, those unable to work, students, retirees reliant on CPP and OAS, and so on.
I firmly believe political parties seldom have a serious discussion about tax policy. Almost never in between elections and only occasionally during elections.
What passes for discussion is often not, but rather an emotional, ideological debate. Sometimes smart politicians propose a tax cut, usually modest, just before an election, at a time that gets voters attention. Often they are rewarded for that clever strategy and win. Those politicians who mention or even hint at tax increases at that time in order to maintain a responsible budget position, or services, are more often rewarded with staying in opposition. I suspect 2015 was an anomaly for many reasons, in part because voters were getting increasingly tired of the PC’s and the Wildrose Party opposition with its merger and splintering did not seem up to replacing them at the time.
I do note that the UCP proposed a personal tax cut to 8%, for which Albertans are still waiting. I don’t know how serious the UCP was about it, but it did the trick as it allowed them to contrast themselves as the part of tax cuts and they got reelected. I am a bit surprised, no one in the mainstream media or elsewhere, seems to be holding them to account now for this promise not so far kept, but as I mentioned at the start not much attention is generally paid to discussion about tax policy by the public at large, except in the period right around an election.
So perhaps there will be a lively debate on this issue and it may even have an impact on the party leadership, but the only debate on this that will probably have an impact on the public at large will be one that may not happen for a few years.
Many said the NDP lost in May because it promised to raise taxes. I stop here to emphasize that many Albertans heard only this part of the whole statement but not the part that always, always, always followed it emphasizing that the small increase would be paid by only the wealthiest few. It was as if voters simply stopped listening when they heard the words ‘tax raise’ and it probably didn’t matter how loud the all-important qualifier was shouted, they decided against the NDP without even hearing it. Given how close the race was, many thought the ill-advised promise probably made all the difference.
It’s a fair question whether it would have been wiser to focus on another issue, any other issue —of which Alberta has many pressing or critically urgent ones to pick from—and leave statements about taxes alone. The NDP probably had a better chance of winning had it not made that risky promise. It is Alberta, after all, where taxes have a different kind of demonization than anywhere else in the country.
NDP strategists instead recommended Rachel Notley focus campaign attacks on Danielle Smith, Notley’s smart level-headedness clearly contrasting favourably to Smith’s scattershot lunacy. Voters certainly could relate to Smith’s disastrous healthcare policy, so roundly condemned that one wonders why the NDP didn’t seize upon the issue that so plainly crossed party lines. Even Independent candidates know that’s psephological gold. Indeed, UCP healthcare, pension and policing polices are so loony that a tax raise, even one affecting only the richest of the rich, could have been safely left for a safer forum than the psephological one—like in the political one in the Assembly or the policy-making one among party members.
Why, then, did the NDP raise raising taxes at all during the campaign? It’s a safe bet it was to appease the more ideologically socialist members of the party and maybe of the electorate —which was very nice and considerate of the leadership but, really, did they need to be so reassured? Were they gonna hive-off if Rachel didn’t meet all their demands? During an election campaign? Only the most idealistic could endorse such losing calculus.
But who knows?— maybe the leadership had already reached a compromise with the party’s few Marxists, or maybe they initially demanded a much bigger tax-rise on a much broader income bracket while stropping their butcher knives, tucking-in their bibs and drooling at the prospect of eating the rich. Or maybe it was the epitome of political manoeuvring on Notley’s part that she convinced the far-lefties to instead accept the token increase on the token percentile of greedy capitalism. If any of those were the case, it wouldn’t be the first time the NDP let its most ideological faction interfere with the essentially Clausewitzian fundamentals of any election campaign—nor the first time it cost dear.
Campaign-tactics 101 is to swear the party has no plans to raise taxes. It works better for a challenging party than for an incumbent: the governor recognizes the new government, the new and former finance ministers frankly review current accounts, the victor then announces the outgoing party had misrepresented the state of affairs to voters and that the actual truth requires a tax increase after all. It’s a technical no-blamer for the incoming party, despite its no-new-taxes promise, because it can of course blame the outgoing party. There’s usually some truth to the charge because incumbents tend to paint the rosiest picture in defence of their fiscal record, usually by concealment, making it easy for the new government to call its predecessor liars (that kind of indecorous language is common today, but I recall newly-elected BCNDP premier Mike Harcourt saying only “Yes” when asked if the books were different than what the defeated Socred government claimed on campaign in 1991). Surely that truism can be multiplied many times with regard the UCP’s trustworthiness or fiscal prudence.
It’s barely above political kindergarten that such announcements are best done at the beginning rather than the end of a mandate—and surely rather than in an election campaign; not much more finesse is needed to rationalize the “bad news” shortly after an election because now the issue for citizens is “how much”, not “if”. Here the new government can appear as magnanimous or parsimonious as it thinks politic, say, one or two percent upon the richest two or three percent counterintuitively sounding better in the governing context than that one percent on the top half percent did in the campaigning one; tax credits and rebates for middle and lower income groups sweeten the pot—and there’s four years to gage its success and adjust in time for the next election.
One doesn’t have to be as impolitic as former PM Kim Campbell when she scolded reporters that election campaigns are no time to debate complicated details of public financing. She was right but she did it wrong. Better politicians know how. And of course outright lying is a no-no —like BC Liberal premiere Gordon Campbell found out, resigning in disgrace after promising not to implement a Hybrid Sales Tax on campaign but doing just that soon after winning —and then getting busted by irrefutable evidence that he planned to do this all along. Otherwise he coulda got away with the old “the-economic-situation-has-changed-since-I-made-that-promise” routine. ( A successful politician like Gordo should have known better than lie, but hubris did him in.)
Again, politicians in the special no-tax zone of Alberta have to be more circumspect about the subject—even the word “tax” invokes lightning and brimstone in this weird petro-culture. That said, I’m glad Dippers are doing this debate in the context of a leadership race that’s well before any scheduled election. It’s probably enough—and much safer—to say the party would, if elected, do whatever is necessary to protect something as important as healthcare because it’s probably impossible to estimate the damage that will have been done by the UCP and, therefore, equally impossible to make any kind of statement about how to repair and finance it until it —and the books in general— are available for prudent and responsible inspection—understood is the fact that the UCP government is prone to falsify the actual state of affairs, especially on the healthcare system. Even doing something unpopular like wrecking the public healthcare system requires political smarts—much more than doing something popular—but I never thought the UCP is particularly well endowed in this regard. Its leader is politically gormless, too.
And for heaven’s sake, my Dipper friends!—leave the token tax increases alone: they only prove that ideologues have outsized and outdated influence on the party and, neoliberal-lite, classic or regular aside, that hurts its chances of winning elections.
“It is Alberta, after all, where taxes have a different kind of demonization than anywhere else in the country.” Indeed. Top-shelf pollster Janet Brown is on record as observing that Albertans aren’t truly fiscal conservatives at all — they’re actually just tax- averse.
They want the kind of gold-plated public services that you’d see in much higher-tax jurisdictions, while still starving the government of the revenues to pay for them. It’s fiscal fantasy based on the price of oil remaining forever high.
At this time, given how hard Queen Danielle and the UCP feted Tucker Carlson, one wonders, in light of the suspicious death of Putin critic, Alexei Navalny, why isn’t the NDP going hard against the poor judgment that has been consistently demonstrated by the UCP government. Apart from everything that they’ve done, celebrating an obvious Kremlin asset, like Carlson, must surely rank pretty high on the Look-We’re-Stupid rating. It’s one thing to get confused in the allegiances of over a Ukrainian nationalist who fought the Russians during WW2, but to actually have a dinner of Alberta Beef with Tucker Carlson, who actually promotes the claim that life in Putin’s Russia is better and freer than in the West, surely must be considered a clear and present danger?
At some point, we’re all going to have to come to terms with the reality that the Kremlin has spawned and infected a treasonous mob throughout Canada. Maybe only a formal declaration of war against Russia will give everyone the courage to act.
It was Angie Klein who was so furious with her father Ralph for deliberately destroying our Lougheed tax structure and it was his father Phil who was furious with him for destroying our healthcare system.
Even members of his own family tried to help our family vote him out and ignorant Albertans wouldn’t let us. These are the same fools who have blindly supported Reformer Danielle Smith and find it smart to hurl their sarcastic comments at us for not being as stupid as the them.
A lawyer taught me to call seniors stupid and I have been doing it for years. His comments were “ Without naming names you can call 1,000 seniors stupid and the only ones you will offend are the stupid ones. The rest know you don’t mean them, but know who you do mean. It’s a wonderful way of finding out who these stupid seniors are, you can bet they will feel guilty and assume you are talking about them and attack you”. He was certainly right. I have had a blast doing it.
I have a letter in the Regina Leader Post this week accusing Premier Scott Moe and Pierre Poilievre of not being true Conservatives and being Reformers that you might wish to google and see if you think I’m right?
Excellent letter Mr. Spiller. You might also have mentioned the Reformers attack on the Wheat Pool Cooperatives and the CROW rail rate which did so much to undermine the prairie grain economy.
Here is the link to your letter:
https://leaderpost.com/opinion/letters/letters-moe-poilievre-sure-dont-seem-like-real-conservatives