Connect with us

Opinion

UCP Tax Cut Hits the Target but Misses the Mark

Published

7 minute read

Opinion by Cory G. Litzenberger

Well for fear of being lynched, let me talk about how I think the UCP’s Job Creation Tax Cut may be (partially) incorrect.

While I applaud politicians for laying out their plans in advance of an election, my fear is that the plan is too slow in implementation and cuts too far.

I think a tax cut needs to be moderate and quick – not slow and deep.

Here are my thoughts for various tax changes we need to do in Alberta:

General Corporate Income Tax Rate:

Instead of cutting by 1% per year over 4 years, bring it back by 2% to 10% from 12% in the first year and keep it there.

By delaying the cut as the UCP currently proposes, it could reduce the impact it will have on the economy as the change to the bottom line will not be impacted enough for a corporation to make larger investment until year two or three of the plan.

Quicker action by government will result in quicker action by business, resulting in quicker action in the economy and job creation.

10% also still makes us the lowest jurisdiction in Canada.

Personal Income Tax change to 3 brackets:

– 8% for first $50k
– 10% for the next $100k
– 12% for over $150k

This reduction from 10% on the first $50,000 saves roughly $600 in personal income tax (after factoring in the basic personal tax credit) for every individual making more than $50,000 a year.

It also saves 2% for those making under $50,000 currently.

This is an important cut in order to reward people that call Alberta home, as you will see below.

A rich person paying 12% in Alberta on their personal income is better than them paying 0% because they live somewhere else.

Harmonized Sales Tax (HST) 5%

Yes, I think we need to remove the inflationary and regressive carbon tax as it is way too high of a burden and causes a ripple effect in inflationary pricing how it was implemented.

However, I suggest we implement a 5% HST (which is a flow-through for businesses and does not have the same impact on pricing).

Now, hear me out before you break out the yellow vest!

Currently, anyone visiting our province as either a tourist or a temporary worker from another province are using our infrastructure like roads, water, and yes, even hospital emergency rooms.

When these non-Alberta residents file their personal tax returns, they file it based on their home province of residence as of December 31. Since most of them don’t have a permanent residence in Alberta, this results is them paying income taxes to other provinces, while using our infrastructure for free.

Other provincial residents not paying any taxes in Alberta while here unfairly puts the cost on all of us that live here.

If we implemented an HST similar to the GST program, low income households would still receive credit back (just like GST credit) to offset most (if not all) of any HST they pay.

The $600 in income tax savings we mentioned above for everyone else, is equivalent to $12,000 of taxable supplies consumed ($24,000 in a double income household where they each make over $50,000 of income).

Don’t forget that basic grocery and shelter do not have sales taxes, and if Andrew Scheer gets elected, neither will basic home heating.(https://twitter.com/andrewscheer/status/854364648388182016)

This income tax reduction of $600 to $1,200 would offset much of the sales tax you would pay, but would now start to charge non-Alberta resident visitors and workers.

The reason for an HST instead of a PST is that currently, an HST is required to be charged by all GST registrants across Canada. If you are a GST registrant, you are automatically an HST registrant.

For example, in my office in Red Deer, I have to charge my Ontario customers HST and send it in to the government even though my business is in Alberta.

An HST could reduce the potential for tax leakage out of our province by funneling it back to Alberta because of other retailers in other provinces requiring to charge it on things purchased outside of, or shipped to, Alberta.

Results

– a competitive corporate tax rate to attract investment and do it quicker than the original UCP plan;
– low personal income tax to attract wealthy individuals (and their tax residency) back to Alberta to make it their place of residence, again, quickly;
– removal of the inflationary carbon tax;
– insertion of a relatively low cost HST so that we can get back some of that transfer payment money from the residents of other provinces.

In Summary

– Reduce Corporate moderately and quickly.
– Reduce Individual moderately and quickly.
– Remove Carbon tax.
– Implement an HST.

I know that the slight mention of a sales tax in Alberta makes the hair on the back of your neck stand straight up, and for many conservative politicians, they would resign before suggesting it. However, even as a fiscal-conservative tax accountant like myself, I believe that if it is implemented properly with tax reductions elsewhere, it can add to the bottom line for the province.

I also think it can do so without being a burden to those that live here by taxing those that don’t.
———
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

CEO | Director CGL Tax Professional Corporation With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://CGLtax.ca/Litzenberger-Cory.html

Follow Author

C2C Journal

“Freedom of Expression Should Win Every Time”: In Conversation with Freedom Convoy Trial Lawyer Lawrence Greenspon

Published on

Lawrence Greenspon Defends the Fundamental Freedoms of All Canadians

By Lynne Cohen

“Law is an imperfect profession,” famed American lawyer Alan Dershowitz – defender of such notorious clients as Claus Von Bülow, Jeffrey Epstein, Harvey Weinstein and O.J. Simpson – once wrote. “There is no perfect justice…But there is perfect injustice, and we know it when we see it.”

Like Dershowitz, Lawrence Greenspon has spent a career fighting injustice in all its forms. Over the past 45 years Greenspon has become one of Canada’s best-known criminal lawyers through his defence of a long list of clients at risk of being crushed by Canada’s legal system – from terrorists to political pariahs to, most recently, Tamara Lich, the petite grandmother who became the public face of the 2022 Freedom Convoy protest.

In taking on these cases, Greenspon is not only giving his clients the best defence possible, he’s also defending the very legitimacy of Canada’s legal system.

Lich faced six charges and up to 10 years in jail for her role organizing the peaceful Ottawa protest. Earlier this month she was found guilty on a single charge of mischief. The Crown says it intends to seek a two-year sentence for that one charge.

In an interview, Greenspon said he decides on cases based on whether he believes in the cause central to the case: “What’s at stake. And can I make a difference?” What attracted him to Lich’s case were key aspects of the Charter of Rights and Freedoms that Greenspon felt needed defending. “Canadians have a constitutionally protected right to freedom of expression and freedom of peaceful assembly,” he said. “These are fundamental freedoms, and they’re supposed to be protected for all of us.”

At issue was the impact the protest had on some downtown Ottawa residents and whether that conflicted with Lich’s right to free speech and peaceful protest. “We were prepared to admit right off the bat that there were individuals who lived in downtown Ottawa who experienced some interference with their enjoyment of their property,” Greenspon noted.

“But when you put freedom of expression and freedom of peaceful assembly on a scale against interference with somebody’s enjoyment of property, there’s no contest. Freedom of association and peaceful assembly, and freedom of expression – these should win every time.”

Such a spirited defence of Canadians’ Charter rights is characteristic of the entire body of Greenspon’s legal work. Although his clients aren’t always as endearing as Lich.

Prior to being in the spotlight for the Lich trial, most Canadians probably remember Greenspon from the 2008 trial of Mohamed Momin Khawaja, the first person charged under Canada’s Anti-Terrorism Act. The evidence against Khawaja was substantial and convincing. He was even planning a suicide mission against Israel. Greenspon is a Jew. It was not an issue.

“The fundamental point is that everybody’s entitled to a defence,” Greenspon said. What really mattered was the constitutionality of the new terror law, which Greenspon argued impinged on the free speech rights of Canadians.

In 2018 Greenspon represented Joshua Boyle, who faced over a dozen criminal charges stemming from accusations made by his wife Caitlin Coleman after they returned from being held captive in Afghanistan. Greenspon’s meticulous cross-examination of Coleman led Judge Peter Doody of the Ontario Superior Court of Justice to conclude, “I do not believe her, just as I do not believe Mr. Boyle.” All charges against Boyle were dismissed.

He also defended Senator Mike Duffy, who in 2014 found himself charged in connection with an expense account scandal. “Duffy’s presumption of innocence had been completely annihilated. I had no problem representing Mike. In fact, I feel proud to have represented Mike,” he said.

Throughout his legal career, Greenspon has fought tirelessly for the constitutional rights of all his clients, regardless of public sympathy or apparent guilt. While such a stance can make him unpopular, such work offers a crucial bulwark against the state’s misuse of its authority in pursuing particular individuals, as well as the gradual erosion of the liberties promised to all Canadians by the Charter of Rights and Freedoms.

Every Canadian has a stake in ensuring the court system is held to account at all times, regardless of the apparent evidence, current political mood or public support.

Without the work of lawyers such as Greenspon, Charter rights can soon deteriorate into empty platitudes – as the federal government’s shocking treatment of the peaceful Freedom Convoy protesters revealed. That included the unjustified imposition of the Emergencies Act, the freezing of donors’ bank accounts, the mass arrest of supporters and the marked reluctance to grant bail to those charged.

As Greenspon pointed out numerous times during the trial, the conciliatory and always respectful Lich represents the very ideals of peaceful protest in Canada. And for the sole charge on which she was convicted, she still faces two years in a federal penitentiary.

In the case of Khawaja, Greenspon was asked by an Ottawa synagogue to explain why he, as a Jew, was defending an Islamist terrorist. “I told the synagogue members, somebody has to stand up for the person who finds themselves set against the entire machinery of the state. In this case it happens to be Khawaja. But what if the next guy is named Dreyfus?”

Lynne Cohen is a writer at C2C Journal, where the longer original version of this story first appeared.

Continue Reading

Business

It Took Trump To Get Canada Serious About Free Trade With Itself

Published on

From the  Frontier Centre for Public Policy

By Lee Harding

Trump’s protectionism has jolted Canada into finally beginning to tear down interprovincial trade barriers

The threat of Donald Trump’s tariffs and the potential collapse of North American free trade have prompted Canada to look inward. With international trade under pressure, the country is—at last—taking meaningful steps to improve trade within its borders.

Canada’s Constitution gives provinces control over many key economic levers. While Ottawa manages international trade, the provinces regulate licensing, certification and procurement rules. These fragmented regulations have long acted as internal trade barriers, forcing companies and professionals to navigate duplicate approval processes when operating across provincial lines.

These restrictions increase costs, delay projects and limit job opportunities for businesses and workers. For consumers, they mean higher prices and fewer choices. Economists estimate that these barriers hold back up to $200 billion of Canada’s economy annually, roughly eight per cent of the country’s GDP.

Ironically, it wasn’t until after Canada signed the North American Free Trade Agreement that it began to address domestic trade restrictions. In 1994, the first ministers signed the Agreement on Internal Trade (AIT), committing to equal treatment of bidders on provincial and municipal contracts. Subsequent regional agreements, such as Alberta and British Columbia’s Trade, Investment and Labour Mobility Agreement in 2007, and the New West Partnership that followed, expanded cooperation to include broader credential recognition and enforceable dispute resolution.

In 2017, the Canadian Free Trade Agreement (CFTA) replaced the AIT to streamline trade among provinces and territories. While more ambitious in scope, the CFTA’s effectiveness has been limited by a patchwork of exemptions and slow implementation.

Now, however, Trump’s protectionism has reignited momentum to fix the problem. In recent months, provincial and territorial labour market ministers met with their federal counterpart to strengthen the CFTA. Their goal: to remove longstanding barriers and unlock the full potential of Canada’s internal market.

According to a March 5 CFTA press release, five governments have agreed to eliminate 40 exemptions they previously claimed for themselves. A June 1 deadline has been set to produce an action plan for nationwide mutual recognition of professional credentials. Ministers are also working on the mutual recognition of consumer goods, excluding food, so that if a product is approved for sale in one province, it can be sold anywhere in Canada without added red tape.

Ontario Premier Doug Ford has signalled that his province won’t wait for consensus. Ontario is dropping all its CFTA exemptions, allowing medical professionals to begin practising while awaiting registration with provincial regulators.

Ontario has partnered with Nova Scotia and New Brunswick to implement mutual recognition of goods, services and registered workers. These provinces have also enabled direct-to-consumer alcohol sales, letting individuals purchase alcohol directly from producers for personal consumption.

A joint CFTA statement says other provinces intend to follow suit, except Prince Edward Island and Newfoundland and Labrador.

These developments are long overdue. Confederation happened more than 150 years ago, and prohibition ended more than a century ago, yet Canadians still face barriers when trying to buy a bottle of wine from another province or find work across a provincial line.

Perhaps now, Canada will finally become the economic union it was always meant to be. Few would thank Donald Trump, but without his tariffs, this renewed urgency to break down internal trade barriers might never have emerged.

Lee Harding is a research fellow with the Frontier Centre for Public Policy.

Continue Reading

Trending

X