UCP leader Jason Kenney promises no change to personal income tax rates

Jason Kenney speaks to the media at his first convention as leader of the United Conservative Party in Red Deer, Alta., Sunday, May 6, 2018. THE CANADIAN PRESS/Jeff McIntosh

Alberta Opposition Leader Jason Kenney says he won’t be making any changes to personal income tax rates if his party wins the spring election.

Kenney says that with Alberta running multi-billion-dollar deficits, the cupboard is bare and tax reform will have to wait.

“Because of the NDP’s fiscal train wreck, we do not have the fiscal room to reduce personal income tax rates at this time,” Kenney said Thursday.

“We can’t cut every tax at the same time while we will be inheriting something like a $7-billion deficit and a $60-billion debt.”

READ MORE: Notley attacks Kenney budget plan, says even spending freeze a harmful cut for Alberta

Kenney said the United Conservatives would delay any tax changes until the budget was balanced. They would then strike a panel to advise the government on how “to get the most bang for the buck, in terms of jobs and growth through tax policy.”

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That would include an analysis of returning to a 10 per cent flat tax on income, which was used in the province for more than a decade until it was eliminated by Premier Rachel Notley’s government in 2015.

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Notley replaced it with a progressive tax. Most Albertans still pay a 10 per cent rate, but anyone earning about $128,000 a year or higher pays more.

United Conservative Party members voted last year to endorse a policy to return to the flat tax. Kenney said he sees merit to the argument, but the timing is wrong.

“I like it in principle, but I can’t commit to something when we don’t know what the overall fiscal situation will be of a future government.”

The NDP has said a return to the flat tax would equate to an annual $700-million tax giveaway to the wealthy and is indicative of a party that caters to well-heeled insiders.

READ MORE: Alberta conservatives eye flat tax, private health delivery in draft policies

Kenney reiterated that other tax changes are coming. He has previously announced that he would repeal the provincial carbon tax on heating and gasoline and gradually reduce corporate income tax to eight per cent from 12 per cent.

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The NDP raised the corporate tax rate two percentage points to 12 per cent in 2015.

READ MORE: Jason Kenney says UCP government would cut Alberta’s corporate tax rate

Kenney has also said taxes and regulatory red tape imposed by the NDP are strangling the province’s economic recovery from low oil prices.

Notley, however, has called that a red herring. She notes that Albertans still have the lowest overall taxes compared with other jurisdictions and pay no provincial sales tax.

READ MORE: Deficit revised to $7.5 billion but Alberta grapples with oil price differential

Asked why Alberta can afford tax cuts for corporations but not for individual rate payers, Kenney said it’s the best decision in a difficult situation.

A cut to job creators, he said, would lead to economic growth that would bring higher overall tax revenue and the opportunity for more tax breaks down the road.

“You get twice as much economic bang for the buck by reducing business taxes as you do personal taxes.”

Alberta is to take in $12.1 billion in personal income taxes this year against total revenue of $49.6 billion. The deficit is being projected to come in at $6.9 billion.