FOR IMMEDIATE RELEASE: January 29, 1998
Unions angered by Klein's call for lower corporate taxes
Alberta businesses already get a sweetheart deal, says AFL
Union leaders in Alberta are frustrated by Premier Klein's suggestion that corporate taxes in the province should be lowered in order to remain "competitive" with other jurisdictions. "Alberta already has the lowest corporate tax rate in the country -- and many companies have found ways to avoid paying even that minimal amount," says Les Steel, Secretary-Treasuer of the Alberta Federation of Labour. "Alberta businesses certainly don't deserve more special treatment. They already get a sweetheart deal." Steel made his comments earlier today on what the labour movement has designated "Corporate Tax Freedom Day." Corporate Tax Freedom Day is the date each year when corporations, on average, have earned enough to cover their tax bill. Individuals don't reach their "tax freedom day" until June. As part of the AFL's efforts to draw attention to Corporate Tax Freedom Day, Steel released information about 31 large, profitable Alberta corporations that paid little or no tax in 1996, the latest year for which figures are available. The list, dominated by some of Alberta's most successful firms, includes Calgary-based Renaissance Energy, which paid no tax on profits of $292 million and Edmonton-based Telus Corp. which paid only 3.2 per cent tax on profits of $251 million. "Among Alberta's publicly-traded companies that made more than $15 million in profits, we were able to find 11 that paid absolutely no tax on cumulative profits of more than $1 billion. And that's just the big guys -- it doesn't include the dozens of smaller corporations that paid no tax on their profits," says Steel. "After looking at these figures it's hard to understand Premier Klein's concerns about remaining competitive. Zero tax is as low as you can go -- you can't get any more competitive than that." Steel said labour leaders are also frustrated because Klein promised during the Growth Summit to postpone any tax cuts until the problems caused by four years brutal budget cuts had been addressed. "The Premier promised that tax cuts would be put on the back burner until problems with our hospitals, schools, roads and infrastructure had been fixed," said Steel. "That still hasn't happened, so Mr. Klein shouldn't be talking about reducing taxes. If he goes ahead with this plan he will be breaking his word and ignoring the wishes of Albertans. He will also be robbing his own government of the revenue it needs to maintain quality services and a modern, well-maintained infrastructure." Steel says that if the Premier really wants to reform the province's tax system, he should establish a formal tax review commission with representatives from the general public. "The decision about tax reform should not be left to government and business insiders. The public should have a say. When Corporate Tax Freedom Day falls on the same day as tax freedom day for working people, then we will finally be getting close to restoring tax fairness." (Note: See attached Backgrounder for details on taxes paid by Alberta corporations.)
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