FOR IMMEDIATE RELEASE: July 2, 1998
Race to the bottom in taxes will mean a race to the bottom in services
Talk of further tax cuts is irresponsible, says AFL
EDMONTON – The Alberta government is playing a dangerous game by getting involved in a tax-slashing competition with Ontario, says the secretary treasurer of the Alberta Federation of Labour. "Lower taxes may allow consumers to keep a few more dollars in their pockets," says Les Steel. "But tax cuts also mean that there will be less money available for things like education, health care and the maintenance of our roads and highways." Steel was responding to comments made yesterday by Gord Olsen, a spokesman for Premier Ralph Klein in Calgary. Olsen said the Alberta government is willing to "take Ontario on in a race to the bottom" in terms of personal income taxes. As it stands right now, Ontario’s personal income tax rate of 40.5 per cent is the lowest in the country. Alberta, with a rate of 44 per cent, is the second lowest – but the overall tax burden in Alberta is lower, primarily because the province has no sales tax. Steel says Albertans should be concerned by Olsen’s comments because a race to the bottom in terms of taxes also means a race to the bottom in terms of public services like health care and education. "Most Albertans don’t mind paying taxes, as long as they know that they’re getting good services in return," says Steel. "The problem today is that the quality of our services has already been eroded by five years of deep budget cuts. If tax revenue is reduced any further, the situation is just going to get worse." Steel says it would be particularly irresponsible for the Alberta government to implement new tax cuts now that the province is facing the prospect of reduced income from other sources. "Lower than expected oil prices have already reduced revenue and, after the plebiscites on VLTs this Fall, the government may also loose millions of dollars in income from gambling," says Steel. "Given this situation, it’s reckless for the government to consider further tax cuts." Steel says Albertans don’t want to see more public service lay-offs; they don’t want to see the closure of more hospital beds; and they don’t want to see an increase in the trend towards over-crowded classrooms in our schools. "But these are exactly the kinds of things that will happen if this government gets itself involved in a competition with Ontario over taxes," he says. "It’s a dangerous game -- and it’s game in which Albertans and Alberta communities will be the losers."
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