On June 15, the Alberta NDP government delivered their first ever throne speech, which saw the proposal of three new bills. The second of which, Bill 2, is called the Act to Restore Fairness to Public Revenue. If passed, Bill 2 will increase corporate income tax from 10 to 12 per cent and introduce a progressive income for those who earn more than $125,000 per year.
John Winter, president of the Lloydminster Chamber of Commerce, said the bill could be good for many Albertans, but might hurt the province’s larger businesses.
“(Premier Rachel Notley’s) thinking is that it’s going to benefit the majority of Albertans, but it could have some impact on the bigger corporations,” he said. “It’s only two per cent, but when you’re talking multi-millions or billions of dollars, that’s a lot of money. So it appeases most people, but definitely some people won’t be happy with it.”
The way these taxes will benefit the rest of the province comes in Bill 3, an act which seeks to restore stability to Alberta’s education, health care and human services. It’s likely that the NDP are looking to use the revenue from the new taxes to support these areas.
Winter says he doesn’t know that the corporate income tax would cripple big businesses because there are similar tax percentages in other parts of the country and corporations still get by. So even though the corporate tax won’t ruin large entities, he thinks in a worst-case scenario the tax might make owners think twice about locating to the province.
“It wouldn’t be the only thing to stop them or keep them from coming into the province, but it’s just one more thing that’s different now,” Winters said. “I think most corporations, when you get into those sizes of companies, they have so many people looking at so many different factors that that’s just one more piece of the puzzle.”
As for the progressive income tax on residents making more than $125,000 per year, Winter says it depends on what tax bracket you’re in to whether or not it would be considered a bad thing. He says around 95 per cent of Albertans are below that bracket, so the majority of those in the province won’t notice the change; however, it almost deters people from striving to earn more in order to avoid the new taxation.
“Which isn’t what you’d think you’d want as the message you’re trying to send people, but I guess her thinking is that those people have the money and it’s all right to take from them, so it’s just different,” he said. “We’ve had 44 years of doing it the other way, so it’ll be a little bit of a shock to some people. But in a year’s time or six months, this will be the norm and this is what we’ll have to work with.
“We just hope that on the other end, if we’re getting taxed more, hopefully we’re not waiting in the emergency room for four hours. So you kind of get the kicker on the other end to make up for some of these things.”