Edmonton’s chief economist calls for provincial sales tax in Alberta

WATCH ABOVE: Edmonton’s chief economist says deep provincial budget cuts could make a difficult economy much worse. Fletcher Kent reports.

EDMONTON — As concerns about the Alberta economy continue to grow, Edmonton’s chief economist is adding his worry to the debate.

“If the government is going to rely solely on tax cuts, it’s going to be very, very difficult. Particularly for the City of Edmonton, as I mentioned, because we host the government here,” John Rose said in an interview after giving a Thursday presentation about the city’s current economic outlook.

Rose indicates 22 per cent of Edmonton’s employment is related to health care, education or public administration; areas that could be susceptible to provincial cuts.

He’s calling on the province to look at revenue sources that are more stable and reliable.

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“When you’re looking at a $7 billion dollar hole; it’s really a sales tax, adjustments to income taxes that are going to help you out.”

On Wednesday, a sombre sounding premier and his finance minister told the media the government is looking at a nine per cent spending cut in the upcoming budget because of that $7 billion hole in provincial finances.

“It’s clearly not realistic in the environment that we are in to expect that government expenditures will continue increase,” the premier indicated Wednesday afternoon.

WATCH:  The PC government delivered another sobering message to Albertans, amid continued low oil prices. Shallima Maharaj has more.

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At the provincial legislature Thursday, NDP finance critic Brian Mason expressed worry about a repeat of the mid-90s, when there were deep level cuts from the Klein government.  Mason calls the government’s most recent warning “troubling”, adding:  “I think something most Albertans will find unacceptable.

“This time, it’s been entirely predictable and the government has had nearly 20 years to fix things so it never happened again.  Anyone who was around during that period will remember the pain, will remember the terrible cuts to our services, the losses of jobs, the losses of homes, the break up of families that occurred as a result.”

“I’m very concerned that the provincial government is going to be over reliant on cuts.”

The anticipation of what’s to come in the provincial budget next month is building.  The city’s chief economist has worked on his forecasts, but admits it could be revised depending on what the Prentice government decides.

John Rose tells Global News Edmonton has a “relatively diverse economy.”  He adds, though, that the one current vulnerability is the province.

The city economist calls reliance on non renewable energy revenues, “an accident waiting to happen.”

With files from Fletcher Kent, Global News

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