Alberta Businesses Dead Set Against Sales Tax

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Alberta is facing a budget deficit of approximately $5 billion. While there are a variety of ways in which to address this gap, implementing a sales tax is a non-starter, according to business owners surveyed on the matter.

3 in 4 businesses oppose a sales tax.

In a poll conducted by the Canadian Federation of Independent Business, nearly 75% said that they were opposed to the government implementing a sales tax, indicating that doing so would negatively impact their company. Just 14% said that it wouldn't be a hindrance.

Richard Truscott, CFIB vice president for Alberta and British Columbia, indicated that what bodes favorably for Alberta businesses is that Premier Jim Prentice has pledged not to install a sales tax.

However, were there to be one, business owners indicated that it would have its lasting repercussions - and not in a good way. For instance, the poll found that 79% said it would add to their administrative costs and expenses. Additionally, 64% said that they wouldn't be able to invest as much into their company's growth. Roughly two-thirds pointed out that it would likely have a neutralizing effect on sales, causing them to slow rather than pick up.

Truscott added that Prentice can put a lot of minds at ease by making a formal pledge not to implement a provincial sales tax, as this would "calm the fears of many entrepreneurs that a sales tax is still under active consideration by the Alberta government."

Nearly one-third of businesses say a sales tax would likely result in layoffs.Nearly one-third of businesses say a sales tax would likely result in layoffs.

Government Proposes New Health Insurance Tax

Prentice was true to his word, as the Alberta legislature recently came to a decision on how to raise $1.5 billion in extra taxes without installing a sales tax. The proposal calls for Albertans who earn $50,000 per year or more to pay a premium on their health insurance through taxes, CBC News reported. The maximum that can be paid is $1,000, coming from those who make six-figure salaries.

Amber Ruddy, CFIB's senior policy analyst, said that while the business community is glad a sales tax has been averted, taxes will do the opposite of what's intended.

"This new health care levy that we're facing is essentially another tax hike," said Ruddy, CBC News reported. "When you add this up, it's taking about a billion and a half dollars out of the economy at a time when we're facing tough economic times."

Free market proponents say that the best way to inject life into the country's economy is by enhancing purchasing power. CFIB determined in a recent study that if government workers were paid what their contemporaries in the private sector make, taxpayers would save $20 billion per year, money that many people would back into the economy by buying.

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