Bell: Danielle Smith vows delayed tax cut for Albertans is now coming
'There will be a tax cut coming sooner than we had initially expected,' says Premier Danielle Smith
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Published Jul 25, 2024 • Last updated 10 hours ago • 3 minute read
We will get our income tax cut. Soon.
The tax cut Premier Danielle Smith promised us.
Start spreading the news. Read all about it.
The tax cut. Last month, this scribbler asked about the tax cut. It was not pleasant.
After all, Premier Danielle Smith’s social media is like a machine churning out how the provincial government books are so good, how the economy is so good, how Alberta is so booming.
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Pardon me if many of us aren’t feeling the boom. We’re not feeling anything trickling down to us.
Many of us want the tax cut Smith promised. Some of us really need the tax cut.
And, until now, what we have been told is to wait.
Wait until 2026 for half the tax cut and 2027 for the other half.
But the tax cut was Smith’s first promise in the last election campaign where she talked about the cost of living and affordability and how a tax cut would mean $760 a year for an individual and $1,500-plus for a family.
If Smith couldn’t make it happen, she shouldn’t have promised it.
Or she should have said we’d only get the tax cut if the planets aligned.
Alas, that’s not as sexy a kickoff to an election campaign.
But the story doesn’t end there.
This week as the premier discussed some tough topics, including answering questions pitched in my last column, Smith revealed some good news.
“There will be a tax cut coming sooner than we had initially expected,” says the premier.
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Smith says she had to make sure the tax cut wouldn’t send the provincial government’s finances into the red, into deficit.
Smith says the tax cut is “substantial.” It’s $1.4 billion.
Of course, Smith knew the cost of the tax cut.
The premier explains how her budget boss Nate Horner “was worried about what we would experience in this budget.”
Horner crunched the numbers and out popped a very small surplus, not as big as the cost of the tax cut.
Smith says her government wanted to make sure they had enough cash coming in to bankroll the tax cut.
Now Smith speaks of a surge in dollars coming into the government treasure chest from personal income taxes.
Then there’s all those dollars from the oilpatch and with companies paying off their capital costs they pay a higher rate of royalties to the province.
The premier also says there will be a lot of effort in the fall to cut wasteful spending so the tax cut can be delivered.
Souls in the government believe there could be an announcement of the tax cut in the fall and the cut could be felt on paycheques in this coming year. The next provincial budget is expected in February.
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Nate Horner, President of Treasury Board and Minister of Finance speaks to media at an embargoed Budget 2024 news conference prior to delivering the budget in the Alberta Legislature on Thursday, Feb. 29, 2024 in Edmonton. Greg Southam/PostmediaWill we see the full tax cut or will it be half a tax cut in 2025 and half a tax cut in 2026?
That decision has apparently not been made but Smith sounds like she would pay out the promise in full.
“If we can do it all at once we’d love to be able to do that.”
On the other hand, the sight of the roller coaster of an up-and-down Alberta economy seems to flash before her eyes.
“I don’t think anybody wants to be in the situation we’ve been in historically where we spend every single last penny of the windfall revenues that come in and when the numbers don’t pan out the next year now you’re running $5 billion, $6 billion and $10 billion deficits.”
There is also political reality and as we all know politics is a blood sport.
In November, UCP members will vote on Smith’s leadership. The turnout to the party gabfest in Red Deer is expected to be big and the tax cut is just one item on a laundry list of complaints.
Nate Horner, Smith’s budget boss, insists he wants to bring the tax cut forward and says Smith is pressing on him to make it happen.
Horner adds he wants “to deliver it as quickly as possible.” He wants “to expedite the process.”
“We’re going to make sure we can walk and chew gum. We’re going to do it while not borrowing to do it.
“We can do it and balance the budget if we do it smart.”
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