History was made this week with Alberta’s first ever Speech from the Throne from an NDP government. Unlike other Throne Speeches, this was a cautious effort from a new government that is going out of its way to give comfort to Albertans that the NDP is not going to do anything drastic. There were no indications of an epic swing to the left but rather a government focused on the political centre. As a result, the speech did not contain a lot of detail about what Albertans might expect over the next four years.
In an effort to provide comfort, Alberta’s history was employed. The NDP went to great lengths to position their government as “in line” with Alberta’s historical values and squarely focused on the people. They even went so far as to praise the PC party for its efforts to assert that the resources within the province’s borders are undeniably owned by Albertans. This, of course, will set the stage for the new government to frame the reasons for a royalty review in the fall: “to ensure Albertans are getting their fair share.”
The first three items on the legislative docket are far from ideological. Bill One focuses on restricting political donations. Bill Two presents a modified progressive personal tax system – that is only marginally different from the one proposed by Jim Prentice in his spring budget – but with an increase to the corporate tax rate for large businesses. Bill Three is the interim supply bill, designed to allow the province to operate until a full budget is passed in the fall.
From a budgetary perspective, do these policies move the needle towards balancing the province’s books? Perhaps, but it won’t be as dramatic as some may think. If the goal is to increase government revenues by increasing corporate taxes, the government should prepare themselves for disappointment. Studies show that quite the opposite happens, as large companies move their taxable income elsewhere. This is easier to do in within Canada where tax shifting across provinces is simpler than shifting money out of Canada. So, no one should be surprised that the government of Saskatchewan is actively courting Alberta businesses with promises of a “stable regulatory regime” and “balanced books.”
The rest of the speech provided hints at some of what the government intends to focus on with jobs, health, education, First Nations, and environment/sustainable resource development on the list. But, even by the broad sweeping standards of a Throne Speech, there was not a lot of detail. The result is that, once again, Premier Notley is left to provide this comfort to industry and taxpayers alike.