Canadian Taxpayers Federation
Albertans’ income tax bills are going up. That’s despite Premier Jason Kenney’s promise not to raise taxes. It’s because of a sneaky backdoor tax grab known as bracket creep. And Kenney knows it’s wrong.
Bracket creep happens when governments don’t move tax brackets in sync with inflation and taxpayers get bumped into a higher tax bracket even though what we can afford hasn’t increased. The Alberta government’s own bureaucrats project this will end up costing taxpayers hundreds of millions of dollars.
Leading up to his first provincial budget, Kenney promised Albertans that he would balance the books without raising taxes.
“It will be a credible path to bring our finances back to balance without raising taxes,” said Kenney.
And nowhere in Kenney’s election platform is there any mention of income tax hikes. As opposition leader, Kenney rightfully railed against the New Democrats for hammering Albertans with their carbon tax without ever including it in the NDP platform. What’s good for the goose is good for the gander.
Bracket creep will make the tough times tougher. Kenney should know this; he’s already acknowledged that this is the worst possible time for the government to be taking more money from Albertans.
“Why, in a period of prolonged economic challenge, would we make things worse by taking more hard-earned money away from taxpayers when we’re operating the least efficient government in Canada by a country mile?” remarked Kenney when asked about raising taxes before his first budget.
But “taking more hard-earned money away from taxpayers” is exactly what Kenney’s government is doing with bracket creep. The Canadian Taxpayers Federation estimates that this tax hike will cost a two-income household between $70 and $222 in 2020 alone, depending on income levels. And this cost will continue to rise until Kenney ends bracket creep.
Kenney knows that Albertans will be feeling the pain as bracket creep siphons money out of our wallets. He used to stick up for taxpayers against politicians who wanted to increase their tax take so covertly.
“[Bracket creep is a] hidden and regressive tax grab,” wrote Kenney in a Calgary Herald column dated Dec. 10, 1997. “For low and middle income families, bracket creep can suck enough money from the family budget to cause serious financial hardship.”
With a government debt tab that has already passed the $70-billion mark, Kenney needs to make tough decisions to keep Alberta’s leaking fiscal ship from completely going under. But he should be doing this by reducing the size of our bloated provincial government.
Shortly after becoming premier, Kenney commissioned the Blue Ribbon Panel of financial experts to do a deep-dive into Alberta’s spending problem. These experts found that the Alberta government is overcharging taxpayers by $10 billion every year and the deficit would be slain if Alberta’s politicians simply spent like their peers.
“Raising taxes … is not the answer,” explained the panel. “If a family was paying more than their neighbours for having their car serviced and getting worse results, it would not simply find more money to pay the higher costs … It would find out what others were doing to get better results at a lower cost.”
Why did Kenney commission the panel if he wasn’t going to take the spending problem seriously and hike taxes anyway? If Kenney is really worried about the budget challenges, then he should cancel the $950 million in corporate welfare for petrochemical firms instead of reaching into taxpayers’ pockets with bracket creep and hoping we wouldn’t notice.
Kenney made a clear promise to Albertans to balance the budget without raising taxes. He broke that promise with his 2019 budget. But Kenney can redeem himself by taking his own advice and ending bracket creep in the upcoming budget.