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John Carpay | Barrister and Solicitor

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Why Albertans deserve a tax cut in 2005

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The pre-tax income for the average Alberta family has grown 54% in eight years, but Alberta's politicians have hiked spending by 91% during the same period. In other words, the budget of Alberta's politicians is growing faster than the budgets of Alberta's households. 

In the past eight years, Alberta's spending on government programs is up by an amazing 91%, rising from $12.7 billion in 1996 to $24.2 billion in 2004. When you consider Alberta's 15% population growth and 23% inflation during the past eight years, a 91% increase for the budgets of politicians is still huge.

In contrast to this 91% increase, the average Alberta household saw its pre-tax income rise from $51,900 in 1996 to $71,000 in 2002, and a projected $80,000 in 2004. Alberta families now earn 54% more than they did eight years ago, in contrast to Alberta politicians whose spending is up by 91%. When you factor in Alberta's population growth and inflation, this means the average family's earnings are up by 26% in real terms, while per-person spending on government programs is up by 34% in real terms.

This gap between 26% and 34% begs the question: if Albertans managed to make ends meet with a 26% increase in their pre-tax earnings, why couldn't our politicians have done likewise Why did they increase the size of government by 34% 

If Alberta's politicians had increased their budgets in line with increases to household income, Albertans would be keeping an extra $1.5 billion in their pockets this year. Abolishing the $1,056-per-year health care premium tax plus half of the provincial property tax would be one way of cutting provincial taxes by $1.5 billion.

The politicians' never-ending greed for more revenues begs the question of who has a valid first claim to your earnings: you or the government 

Income is earned because people work, buy, sell, farm, manufacture, invent, trade, invest, explore, develop resources, take risks, set up new businesses etc. Every day, millions of individuals make choices about what to buy, where to work, how to run their businesses, which new products to develop, which services to provide, and where to invest their money. Wealth is created by workers and managers, investors and businesses, buyers and sellers, inventors and manufacturers, all of them together making billions of voluntary decisions.

If government is our master, and we its servants, then government certainly has a valid first claim to all income earned by people. It would then follow that government has to "pay for" tax cuts which it can't "afford" because lower taxes "cost" too much. But if wealth belongs first to the Albertans who created it, then tax cuts cost nothing, are always affordable, and don't ever need to be paid for.

After hiking up program spending by 91% in eight short years, the Alberta government is still swimming in money as it enters 2005. Total tax revenues of $28.6 billion this fiscal year amount to almost $9,000 for every man, woman and child in Alberta, or $36,000 in provincial taxes for a family of four.

It's our money, we've earned it, and greedy politicians are taking too much of it to pay for a 91% increase in their budget. That's why Albertans deserve a tax cut in 2005.

Last Updated on Sunday, 17 April 2011 21:46
 

$864,102 wasted on pre-election advertising campaign

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This past September and October - just before the provincial election was called - the Alberta government spent at least $864,102 to promote its new car insurance system. This $864,102 includes radio and newspaper advertising, and the printing and mailing of brochures across Alberta. Large newspaper ads and numerous radio ads claimed that the controversial new system was fair - an opinion with which many Albertans disagree.

The new car insurance system has been criticized for providing huge reductions in premiums paid by bad drivers, and only small reductions to good drivers. Media have reported that the new fixed "price grid" is driving some insurance companies out of Alberta, which would reduce competition and force all Albertans to pay more for car insurance in the long run. Many Albertans have said it's unfair to limit damages for pain and suffering to $4,000 for injuries deemed "minor."

There are many different opinions about car insurance. Tax dollars should not be spent to promote one of them, or any of them. Especially not right before the provincial election, in which car insurance was an issue on which political parties took different positions. Yet that is what this $864,102 campaign did: it promoted the Tory viewpoint that the new system is good.

Unlike government advertising which warns you about a flu bug and tells you where you can get your flu shot, this advertising campaign didn't provide information which Albertans needed to act on. The new law forces companies to reduce insurance premiums, without Albertans needing to apply or to fill out forms. The point of the ads was to persuade Albertans that the new car insurance system is fair.

Tax dollars are well spent on advertising when they help to prevent harm, in the interest of public health and public safety. For example, during an especially hot and dry summer the government should warn the public about an extreme fire hazard and a ban on campfires. But if the government had not spent $864,102 of our money to promote the new car insurance scheme, no harm would have resulted.

Spending $864,102 to promote a new car insurance system is especially galling when the Alberta government collects $191 million per year from Albertans through a 3% hidden sales tax on insurance. Albertans pay this 3% sales tax on personal and home insurance policies. Also, this tax is included in the price of goods and services sold by businesses, who must pay 3% on their business and property insurance costs. If the government scrapped this 3% tax, it would put over $200 per year into the hands of an Alberta family of four. The $191 million collected through the 3% sales tax is pretty close to the $200 million per year which the government claims Albertans will save in insurance premiums. Why not just scrap the 3% hidden sales tax, and save taxpayers the cost of a whole new bureaucracy to implement and administer this new system 

The debate about car insurance will continue, and that's fine.

What must stop is the use of our tax dollars to promote one particular viewpoint.

Last Updated on Sunday, 17 April 2011 21:48
 

Only Santa Claus can give you free daycare

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When you listen to advocates of state-run daycare, it's obvious that many Canadian adults still believe in Santa Claus. But now they call him "government."

Santa Claus delivers many gifts, all of them without cost. Santa doesn't suck money out of your wallet when you buy gas for your car, earn your paycheque, or own property. Nor does Santa charge user fees for coming down the chimney. His elves don't belong to powerful public sector unions, and won't threaten to go on strike just before Christmas. Santa can make efficient use of his reindeer without getting attacked by animal rights activists. He doesn't have to contend with Kyoto supporters accusing him of contributing to global warming with his North Pole toy factory.

Last Updated on Sunday, 17 April 2011 21:50 Read more...
 

Albertans didn't get what they voted for

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Albertans are served poorly by a voting system which doesn't give them the representation they voted for. The majority of Albertans rejected Ralph Klein's Tories in the provincial election. Nevertheless, three quarters of the MLAs in Alberta's legislature are Progressive Conservatives.

A better voting system would give Albertans what they really voted for: a legislature with 39 PCs, 24 Liberals, eight New Democrats, eight Alberta Alliance, three Greens and one Socred MLA.

Alberta's "first-past-the-post" system, by which some MLAs are elected with as little as 30% of the vote in their ridings, is designed to provide a direct link between voters and their MLAs.

In theory, this system provides direct accountability, because the MLA must try to earn and keep the support of the people in his or her riding.

But in practice, Alberta's political system is completely dominated by political parties, whose leaders have the legal right to ban or exclude any candidate of whom the leader disapproves. The current system forces candidates - and MLAs, once the candidates are elected - to be "yes-men" to the party leaders. Candidates win and lose primarily on the strengths - and weaknesses - of their party leaders. Party discipline is extremely tight. Any "speaking up for constituents" takes place out of public view, behind the closed doors of party caucus meetings. That's why Alberta taxpayers cannot hold their MLAs accountable because every major decision - whether on car insurance or health care or education - is made behind closed doors, not in the legislature.

If there was genuine public debate in the legislature, followed by free votes that taxpayers could monitor, then our current voting system could provide us with real accountability. But with the extreme dominance of parties and party leaders - to the exclusion of individual MLAs - it is unfair for parties to have representation in the legislature which does not match their share of the popular vote. Hence the need for a different voting system.

In B.C., Gordon Campbell's Liberals created a Citizens' Assembly on Electoral Reform after winning 77 of the 79 seats in the province in the 2001 election. This Assembly consists entirely of citizens - two per provincial riding. Without the involvement of politicians, this Assembly studied different voting systems used in countries around the world. The Netherlands and many other countries have voting systems by which a party wins seats in direct proportion to its percentage of the popular vote. France has a "second round" or run-off election between the top two candidates, in districts where no candidate receives more than 50% of the vote in the first round. Other countries like Ireland allow voters to rank candidates, so that a voter's second choice is considered if the voter's first choice did not receive enough support. The Assembly's recommendation for a new voting system for B.C. will be accepted or rejected by voters in a referendum in May of 2005.

We Albertans pride ourselves on being leaders and innovators. But when it comes to voting reform, we're stuck in the nineteenth century. It's time for Alberta to create its own Citizens' Assembly on Electoral Reform, so that taxpayers will get the transparency and accountability they deserve, and citizens will get what they actually voted for.

Last Updated on Monday, 18 April 2011 20:10
 

Policy committees should represent all Albertans, not just Tories

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According to the most recent Report of Selected Payments to MLAs, Alberta taxpayers shelled out $142,488 in one year to six MLAs for chairing partisan policy committees on which only Progressive Conservative MLAs are allowed to serve.

In Alberta, Standing Policy Committees of Tory MLAs are responsible for examining and approving policies governing education, health care, finance, the environment, and all government programs. Occasionally these committees will hear presentations from interest groups in public view, but debate among MLAs - and the MLAs' votes on policy - are always conducted in secret. It's impossible for taxpayers to know what topics and policies a Tory MLA has voted on, and which way she or he voted.

But didn't Premier Klein's Progressive Conservatives just receive another mandate to continue governing Alberta 

Yes, but a mandate to govern is not a mandate to govern in secret, hiding debates and votes from public view. With secrecy there is no accountability, because you never know what your MLA said - or failed to say - behind closed doors. Premier Klein's Tories have a mandate to govern in the legislature, in full public view. There is no mandate to continue making all major policy decisions in the secrecy of government caucus meetings and Tory-only standing policy committees.

A mandate to govern is not a mandate to exclude the majority of Albertans from participating in democracy. Most Albertans rejected Premier Klein's Tories, who still ended up with three quarters of the seats in the legislature thanks to a voting system which doesn't give Albertans what they voted for. In a democracy, people who voted for opposition parties -whether they are 53% of the population (as in Alberta) or a minority of the population - deserve to be represented. Opposition MLAs might lose every vote in the Legislature, but they should still have a right to participate in discussions about things that matter to taxpayers.

Whether the issue is taxes or health care or education or roads, a democracy allows input in policy-making from opposition members. At the end of the day, the government may use its majority to push its agenda through. But that should happen after MLAs from all parties, representing all Albertans, have had their say.

Alberta is the only jurisdiction in Canada where taxpayer-funded policy committees exclude opposition members. Even the federal Liberals in Ottawa allow opposition MPs to serve on policy committees, recognizing that not all Canadians voted for the government party.

Of course political parties can create their own internal committees as they see fit. Political parties might have their "rural caucus" or "environmental caucus" or "family issues caucus" in order to study and develop party policy. But taxpayers should not have to pay extra money to MLAs or MPs who serve on their own party's internal policy committees.

Albertans love to hate the federal Liberals. But when it comes to respecting the democratic process, Klein's Tories can learn a lesson from Ottawa, where policy committees have representation from all parties. If MLAs receive extra pay from taxpayers for committee work, it should only be for committees which include MLAs from all parties, in recognition of the fact that not all Albertans vote for the government party.

Last Updated on Monday, 18 April 2011 20:11
 


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