Killing Jobs and Investment: Rachel Notley’s Latest Job-Killing Tax Hike Will Eliminate Alberta’s Tax Advantage
(May 25, 2023) — Yesterday, Danielle Smith, Leader of the United Conservative Party, announced that a re-elected UCP government’s first piece of legislation would be Bill 1: the Taxpayer Protection Amendment Act, recommitted to keeping taxes low so businesses can continue creating jobs and generating opportunities that benefit Albertans.
Last week, Rachel Notley and the NDP released their campaign costing plan. What they failed to share with Albertans was their massive tax hike on job creators and the impacts it would have on investment and revenue. Just like the previous time Rachel Notley was in government, her 38 per cent take hike would lead to job losses, costs being passed on to families, or job creators would just move elsewhere. After spending four years ignoring economic reality and watching as her job-killing policies shut the door on businesses and investment, Rachel Notley still doesn’t get it, saying that even with her 38 per cent tax hit, since Alberta will be about as competitive as Quebec and Ontario, “frankly, I don’t exactly know where they would go.”
“Once again, you can’t trust Rachel Notley on taxes,” said Fort McMurray-Lac La Biche UCP candidate Brian Jean. “She’s trying to pull the wool over our eyes and hoping we’ll forget how many head offices, rigs and equipment, and thousands of jobs fled south to the US the last time she was in office. Not only will her business-killing tax hike give Alberta no advantage within Canada, we will see jobs and opportunity flow south again.”
Under the current UCP rate of 8%, only the 7 states with no state corporate tax at all are more competitive than Alberta.
If the NDP gets its way, we’ll lose our advantage to 17 more states, leaving us behind 24 states and in the middle of the pack.
Rachel Notley should listen to the experts.
The Alberta Enterprise group says the Notley tax hike would especially make us less competitive with the US gulf coast – who we compete with for prosperity-creating projects in the clean-tech and petrochemical industries.
Other experts, businesses, and even a union are sounding the alarm over the NDP’s irresponsible proposal.
The Alberta Chambers of Commerce says the move won’t “benefit any Albertan,” and that low rates mean more investment and “more investment in the province means more business activity and more job opportunities.”
The Christian Labour Association of Canada (CLAC)—a private-sector labour union representing 60,000 members across Canada—has also joined the chorus, saying the business tax hike will undermine an investment climate that attracts good-paying jobs for skilled Albertans.
“Hiking business tax rates by 20 per cent was one of the NDP’s first acts as government in 2015. Economists warned them and businesses pleaded with them, but Rachel Notley and her NDP refused to listen,” continued Jean. “Instead, they barreled ahead with their reckless policy, resulting in jobs and investment leaving our province in droves. Undeterred by the damage they caused last time, the NDP is promising to do the same thing again, this time with a reckless tax hike of 38 per cent on our job creators.”
Jack Mintz, the President’s Fellow at the University of Calgary’s School of Public Policy, estimates that, in addition to investment losses, 33,700 Albertans will lose their jobs as a result of the NDP’s tax hike.
“Job losses don’t just impact the individual worker, but their spouse, children, and the other family members who rely on their income,” said Rebecca Schulz, the UCP candidate for Calgary-Shaw. “The true cost of the NDP’s business tax hike will be significantly higher. We’ve been here before. We all know where this road leads. It’s a dead end to economic stagnation and hardship for Albertans.”
An economy’s strength depends on its competitiveness. That’s why, in 2019, the UCP slashed business taxes from 12 per cent to eight per cent, making Alberta far and away the best place in Canada to do business. The NDP’s proposed hike will virtually eliminate Alberta’s tax advantage. Using the same well-respected tax-rate model he co-developed, Dr. Mintz projects the hike will result in an investment loss of $1.1 billion to Alberta.
“Under Rachel Notley and the NDP, Alberta will be about as competitive as Quebec and Ontario—and it gets worse,” explained Schulz. “We’re not just competing against other provinces. Alberta must compete on the international stage, particularly with the United States.”
“Under the current UCP rate of eight per cent, only the six states with no corporate tax at all are more attractive than Alberta from a business tax perspective,” continued Schulz. “If the NDP gets its way, we’ll lose our advantage to half of the states, leaving us in the middle of the pack.”
Last time, when Rachel Notley and the NDP hiked the tax rate by 20 per cent, they promised the move would bring in billions of dollars in extra revenue. Instead, it killed economic growth and the government ended up collecting nearly $9 billion less than expected.
“Strong government revenues are needed to fund the level of services Albertans expect and deserve. You can maybe fund them in the short term by borrowing billions and billions of dollars, but we all know that’s not sustainable.
“Living beyond your means eventually catches up with you, and government services like healthcare suffer as a result. Rachel Notley and the NDP may not appreciate that, but the UCP does,” concluded Schulz. “We’re the only party this election with a responsible plan for spending, growth, and stability.”
Read Jack Mintz’s analysis
Read the statement from the Alberta Chambers of Commerce
Read the statement from CLAC
Read the statement from the Alberta Enterprise Group