Alberta Gives $2 Billion To US Each year

Time for Alberta to stop acting like Alabama.

Alberta gives gives $2B to U.S. treasury (external - login to view)

Alberta gives gives $2B to U.S. treasury

Wasted tax revenue points to need to reform broken system

By Gil McGowan, For The Calgary Herald September 6, 2010

Labour Day has marked the contribution of the labour movement to Canadian society for almost as long as there has been a Canada.

Thanks to pressure from unions and others, most Canadians now enjoy eight-hour work days and 40-hour work weeks, weekends off, vacations, overtime pay, benefits, pensions, public health care -- the list of achievements is too long to put them all here.

The labour movement's role in creating a well-paid middle class is undeniable -- as are the benefits that brings to our society.

A large chunk of the population earning enough money to fuel the economy and pay taxes is a good thing.

But while we, in the labour movement, are happy to do our bit on taxes, it is disconcerting to note this Labour Day that the Alberta government is giving away billions of tax dollars. Yes -- that's billions.

This year the province will allow $2 billion to be wasted that would pay for a lot of extra health care and other vital public services.

How can this be happening? It is the consequence of tax cuts for large corporations implemented by the provincial government.

Those tax cuts mean that U.S. corporations operating in Alberta will pay $2 billion this year in taxes to the U.S. government, rather than pay that same amount into provincial coffers.

Alberta charges a corporate tax rate of only 10 per cent for large corporations, by far the lowest in Canada (we do not, incidentally, have the lowest small-business tax rates).

The federal government recently lowered its corporate rate to 15 per cent. Our combined corporate tax rate is 25 per cent, compared to 35 per cent in the United States.

But American companies don't benefit when Canadian rates are cut. U.S. tax rules stipulate that corporations have to pay a total of 35 per cent.
Whatever is charged in Canada goes to the Canadian federal and provincial governments, and the difference between the Canadian and U.S. rates goes to the treasury in Washington.

So, Alberta takes its share (10 per cent), Ottawa takes its share (15 per cent), and the U.S. takes 10 per cent to bring the total to 35 per cent.
Last year, that 10-percent difference flowing from U.S. corporations operating in Alberta was $2 billion. Alberta could double its rate and keep that $2 billion here and the bottom lines of those U.S. companies would remain the same.
That's right -- we could get $2 billion more for health care or other public services here without anyone paying any more in taxes. We'd just stop giving it away to our American neighbours.

The $2-billion giveaway is part of a larger pattern of tax madness in Alberta.
We have by far the lowest personal income tax rate for the very wealthy, but among the highest tax rates for the lowest-income workers.

Alberta is one of the only provinces to not charge a tax on financial institutions, but our small business rate is higher than many other jurisdictions.

Because some tax rates are far too low, we rely on unsustainable oil and gas royalty revenue to fund our programs -- and that's why the recent economic downturn left so many Albertans scratching their heads. In a province blessed with the world's most sought-after natural resources, a highly educated workforce and one of the most sustained economic booms in history, it took only one global blip in the markets and our provincial cupboard was bare.

This instability is due to a tax system that does not work for the long-term health and prosperity of Albertans. We are not saving for the future. We take money from the investment gains of the Heritage Trust Fund and spend it. We have little capacity to weather changes in oil and gas prices. And we have no plan for a post-fossil-fuel economy.

The economic situation in Alberta is far from rosy today. News from the U.S. and Europe has economists and analysts concerned that the recovery from the recession is weak, uncertain times lie ahead and some fear a double-dip recession is on the horizon.

This makes it vital for the government to fix our broken revenue system now.
This can be done if we have a simple, grown-up conversation about revenues and how to put us on more stable, sustainable ground through changes to the tax system for both individuals and corporations.

While some have called for a provincial sales tax, we believe that unfairly punishes Albertans on low incomes.

We can start to fix the system by acknowledging that while the Americans may be our closest friends, sending them $2 billion that they haven't even asked for isn't being a good neighbour, it's being a fool. And, you know what they say about a fool and his money . . . .

Gil McGowan is president of the Alberta Federation of Labour, which represents 140,000 workers in the province.

Copyright (c) The Calgary Herald

Consider the source for the article. Only a tad biased.
Quote: Originally Posted by taxslaveView Post

Consider the source for the article. Only a tad biased.

Not so. Check here.
Fossil fuel subsidies undermine renewables (external - login to view)

I made the topic on CC a few weeks ago.

Fossil fuel subsidies undermine renewables

By Paul Hanley, The StarPhoenix July 27, 2010

Canadian taxpayers are paying somewhere in the neighbourhood of $2 billion in subsidies to highly profitable oil, gas and coal companies every year. Worldwide, oil subsidies alone are estimated at $667 billion annually, though some estimates put the subsidy figure much higher.

To put this into perspective, worldwide subsidies to oil companies are equivalent to more than twice the global contribution to foreign aid and three times the amount invested globally in renewable energy.

The subsidies go to some of the most profitable companies in the world: The top five earning publicly traded oil companies, for example, reap $156 billion in profits annually.

Among the many reasons to object to subsidies is that they create an artificial advantage for dirty fossil fuels over clean energy sources. They make it appear that green energy is significantly more costly to develop than it really is, relative to other energy sources.

Currently, oil and gas companies enjoy several federal government support programs in Canada including programs that allow them to transfer tax-deductible expenditures back and forward as they see fit. Some of the programs include the Canadian Exploration Expenditures and Canadian Development Expenditure programs, a resource allowance, scientific, research and development tax credits and flow-through shares.

There is a movement underway to end these unfair and unwise subsidies. In 2006, the Department of Finance published a plan called Advantage Canada that committed to "enhancing the overall fairness and neutrality of the tax system," meaning that reducing tax breaks to favoured sectors should be part of the government's tax policy.

Then in 2009, Canada joined the other G20 nations to commit specifically to removing subsidies to fossil fuels. A recently leaked Finance Canada memo, which recommended the removal of subsidies, pointed out that there is no clear rationale why Canadian oil and gas producers should continue to receive these benefits.
While a number of subsidies have been reduced or are being phased out in Canada, total fossil fuel subsidies are actually up about 80 per cent from earlier this decade, according to research from the Pembina Institute.

Ecojustice, a Canadian environmental NGO, claims that in the last two years Canada has spent as much on oil and gas subsidies as on ameliorating climate change.

Removing fossil fuel subsidies worldwide would, according to a report by the International Energy Agency (IEA), result in reducing oil consumption by 850 million tonnes (6.7 billion barrels) by 2020, the combined consumption of Japan, South Korea, Australia and New Zealand, or 13 years of oil sands production at current rates of extraction.

According to the OECD, a careful phase-out of fossil fuel subsidies could be a low-cost way to reduce greenhouse gas emissions. According to new OECD analysis based on data from the IEA, ending fossil fuel subsidies could cut global greenhouse gas emissions by 10 per cent from the levels they would otherwise reach in 2050 under a "business as usual" scenario.

The subsidy figures presented so far do not include another category of subsidies called externalities. Externalities include indirect subsidies that result from avoiding the cost of dumping pollutants, such as greenhouse gases, into the environment.
You and I are charged a fee to dump our garbage in the landfill or our wastes into a sewer; coal and oil companies can dump their carbon dioxide and other pollutants into the atmosphere at no cost, which amounts to a massive subsidy that will ultimately be paid by average citizens.

Relatively speaking, renewables sources like wind or solar power are pollution free. When we properly account for all costs, including subsidies and externalities like pollution, renewable energy sources become cost effective. They are certainly more deserving of subsidy than fossil fuels.

Removing subsidies for fossil fuels would reduce energy consumption and lower greenhouse gas emissions. In addition, making fossil fuel companies pay to release greenhouse gases through a carbon tax would make renewable energy sources competitive and usher in a new era of cleaner energy.

Copyright (c) The StarPhoenix,
Bar Sinister
Quote: Originally Posted by taxslaveView Post

Consider the source for the article. Only a tad biased.

Of course it is biased. Who would not be biased against a government that is so poorly run and does its best to benefit foreign interests rather than the voters who elected it. And as for the information; you might not like it, but can you disprove it?
Quote: Originally Posted by Bar SinisterView Post

Of course it is biased. Who would not be biased against a government that is so poorly run and does its best to benefit foreign interests rather than the voters who elected it. And as for the information; you might not like it, but can you disprove it?

Yeah, that was the retort I wanted to give.

Some people just will not listen to some people, the facts do not matter to them. I guess we have found an ideologue.
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