Alberta’s 31st general election officially kicked off Monday, with the governing United Conservative Party making a $1-billion announcement to cut personal income taxes and hundreds of millions more in fuel tax savings, while the opposition New Democratic Party attacked the proposal as fiscally questionable while promising to soon unveil its own affordability proposals.
The election, slated for May 29, is expected to be tight and both parties are desperate to woo voters. The UCP is pitching itself as the one most capable of managing the economy and the affordability crisis. The NDP, meanwhile, argues if it should form government, it would end the chaos that marred the past four years and bring a renewed focus to health care and education.
The UCP, which won its first election in 2019 under then-leader Jason Kenney, is expected to shed seats even if it is able to hold on to power. The eventual winner will need to claim at least 44 of Alberta’s 87 seats to form government, and Calgary has emerged as the campaign’s most coveted prize. Voters in Alberta’s largest city are generally more moderate than those in rural parts of the province, where support for the UCP under Danielle Smith remains healthy.
Ms. Smith on Monday promised to reduce personal income taxes by $760 a year for people making more than $60,000 annually. She also said the UCP, if re-elected, would extend the provincial fuel tax holiday to the end of 2023.
“Taxes are the biggest cost for most Alberta families,” she told reporters at a campaign press conference in southeast Calgary.
The UCP, she said, will also create a new 8-per-cent tax bracket for income under $60,000. Those under that threshold will see their provincial tax bill drop by 20 per cent, she said. The measure will shave off about $1-billion in government revenue, the party said.
“This permanent billion-dollar tax cut will provide meaningful, timely tax relief to Albertans at a time when they need it most,” Ms. Smith said.
Alberta depends on oil and gas revenue to keep the province’s finances afloat and while trimming taxes and fuel levies may prove popular on the doorsteps, it could make the government’s revenue even more volatile. The government, in February, calculated a surplus of $2.4-billion in 2023-2024, with revenue from non-renewable resources hitting $18.3-billion, the second-highest on record after the expected windfall of $27.5-billion in 2022-2023.
The most recent budget is predicated on West Texas Intermediate crude trading at an average of US$79 per barrel in the fiscal year. Oil closed at US$75.66 per barrel Monday. The government, in its budget released in February, expected to collect $14.1-billion in personal income taxes in 2023-2024, up $263-million from the year prior.
Ms. Smith also promised to extend Alberta’s tax holiday on gasoline and diesel, which kicked in under Mr. Kenney last April, until the end of the year. The relief program, which Ms. Smith first extended when she became premier, is currently set to expire at the end of June. Under that scenario, Alberta is expected to forgo $570-million in fuel taxes in 2023-2024.
The proposed extension would knock hundreds of millions of dollars more in revenue from the budget. The 2023-2024 budget predicted Alberta would collect $735-million in gasoline and diesel taxes in the fiscal year, despite suspending the taxes for the first quarter.
Alberta gave up $1.17-billion in fuel taxes in 2022-2023.
Rachel Notley, the NDP Leader and former premier, discounted the UCP’s plan to trim taxes.
“It doesn’t come without a cost,” she said at a campaign event in Calgary. “The so-called surplus that these folks delivered is disappearing very, very quickly.”
Ms. Notley said she is worried these tax reductions will come at the expense of appropriate spending on health care and education. However, she also underscored her party’s commitment to make life more affordable for residents. A detailed plan, she said, is coming “very soon” and will target lower- and middle-income Albertans.
The NDP Leader reiterated her commitment to scrapping Kananaskis park fees, promoting economic diversification and restoring rental supplements. She said the NDP would also pass legislation to protect the Canada Pension Plan.
Ms. Notley, who brought the NDP to victory in 2015 following more than four decades of Progressive Conservative control, said she would provide stability after four years of what she considers chaos and unpredictability from the UCP.
“We will keep the good ideas from the last four years. But we will get rid of the chaos and the unpredictability and when we say something in the morning, we’ll still mean it that night,” she said.