The provincial budget in Alberta could be balanced in 2012/22 and leave room for several personal and business tax cuts, something that many are calling for across Canada.
That’s the finding of a study by the Fraser Institute which calculates that there could be personal and business income tax relief, carbon tax relief, and capital gains tax relief, and a balanced budget – if the government were to cut program spending by 10.9% over the next three years.
“Eliminating the deficit quickly and pursuing tax reform to regain the province’s former tax advantage across North America should be a priority for the Alberta government,” said Ben Eisen, Fraser Institute senior fellow and co-author of A Spending Framework for Alberta: Balancing the Need for Deficit Elimination and Tax Reform.
The cuts in programs would clearly be significant but Eisen says that it would bring spending closer in line to British Columbia, which currently spends 21% less per person than Alberta.
And Eisen says the program spending cut would enable other priorities which would be for the wider good of the province’s residents.
“Given Alberta’s dire economic situation, its fiscal policy needs to be focused on creating the conditions for prosperity, which means eliminating the deficit but also, importantly, regaining competitiveness to attract entrepreneurs, investors, and business owners,” he said.
Eisen has previously called for large tax cuts in Alberta for it to regain its competitive advantage.
No longer leading
Eisen’s study is part of a Fraser Institute book “Alberta Prosperity: A Plan for Opportunity and Growth”, which explores policy reforms in Alberta’s finances, the health-care and education systems, the investment climate and resource regulation, among others.
“Alberta no longer leads in several critical policy areas, which is a marked departure from just 10 years ago,” said Jason Clemens, executive vice-president of the Fraser Institute. “This new book provides policymakers with a clear plan to restore the province’s finances, improve competitiveness and raise living standards for Albertans.”
The book is available as a free download at www.fraserinstitute.org
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