Kenney slashing public spending by 8 to 10 percent while giving corporations massive tax cuts
In a televised address yesterday, Premier Jason Kenney announced his government’s plans to introduce austerity measures. The fine print in the details should have Albertans worried.
The deficit-slashing outlook will entail a 2.8 percent cut to program spending over four years. Kenney insists that healthcare and education spending will be excluded. To achieve these targets, Kenney plans to target public service employment, planning to reduce the size of Alberta’s civil service by approximately 10 percent. That is roughly 20,000 jobs on the line.
More damaging is the government’s move to begin de-indexing “a number of government programs and tax expenditures.” De-indexation is the process of freezing spending at current levels, rather than increasing them to match population growth and inflation. As the non-profit advocacy group, Progress Alberta, points out, this move will make budget cuts equivalent to an 8 to 10 percent decrease in public spending.
That’s roughly 20,000 civil service jobs Kenney wants to cut. Also a 2.8% budget cut plus not funding for inflation and population growth over 4 years will be roughly equivalent to an 8-10% budget cut over that time. This is monstrous. #ableg https://t.co/BGOrkMAN3t— Progress Alberta (@ProgressAlberta) October 24, 2019
These cuts come in the wake of the recent MacKinnon report which recommended Alberta decrease its per capita spending to the levels of provincial governments in Ontario, Quebec, and British Columbia. Such a change, MacKinnon argued, would transform Alberta’s deficit into a surplus. The report, however, did not take into consideration any approach that entailed increasing revenues rather than slashing expenditures. Alberta could just as easily balance its budget by raising taxes to the levels seen in other provinces, such as instituting a sales tax.
Instead, hidden in Kenney’s address was a massive corporate tax cut that would bleed the province’s coffers of potential revenues. An imprudent move considering the recent layoffs by companies that had been the beneficiaries of tax cuts earlier in the year. Just this week, Husky Energy laid off hundreds of workers despite receiving a tax break to the tune of $233 million.
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