Premier Jason Kenney says now is not the time to introduce a provincial sales tax (PST) as Alberta grapples with its “most challenging period” since the Great Depression, but the province will be looking at tax measures in the future.
“I do not believe that the right response in the midst of that economic crisis is to impose a new tax,” he told Mercedes Stephenson on The West Block when asked about the possibility of establishing PST.
“Now, when we get through all of this, I’ve said to Albertans that there will be a fiscal reckoning.”
Kenney’s United Conservative government committed to striking a panel on tax reform at some point during its mandate, he said.
“So that will be a debate that Albertans will have in the future, but right now our focus is on gradually reopening the economy from the pandemic and doing everything we can to protect the financial security of families and job creators.”
The province is facing a “double economic whammy,” he said, with the coronavirus pandemic and the price of oil hitting historic lows at the same time.
“I’m expecting to see unemployment as high as 25 per cent in this quarter,” Kenney said. “We may be seeing a 30 per cent contraction in our economy and I cannot overstate the degree of economic adversity. In relative terms, it will be the most challenging period in Alberta’s economy since the Great Depression of the 1930s.”
While Albertans pay federal sales tax (GST) of five per cent on purchases, it’s the only province without either a provincial sales tax or a harmonized federal-provincial tax. (The territories, however, have not imposed PST or HST).
Outside of Alberta and the territories, effective sales tax rates are in the range of 11 to 15 per cent, depending on the province.
Several experts who spoke with Global News recently said PST is a possible route to alleviating the province’s unprecedented economic situation.
“I think there’s room for a modest PST, to generate revenue in these uncertain times. You could even put a sunset on the PST — you could have it for five years or so, for the revenue to start to improve,” Chaldeans Mensah, an associate professor of political science at MacEwan University, said earlier this month.
—With files from Allison Bench, Global News