Alberta should use surplus to address debt, save and lower taxes: Fraser Institute ableg abpoli
“The Smith government has a fundamental choice to make with the Alberta surplus: Use it as an opportunity to improve Alberta for the long term or spend it away,” said Hill, a senior economist at the Fraser Institute.According to the province’s Q2 economic update in November, taxpayer-supported debt was forecast to be $79.8 billion at the end of March, a $13.3 billion reduction from the end of 2022.
Tombe, in his essay, said the more the debt is paid down, the less it will cost to service the debt, which currently costs Albertans more than $2 billion a year. He said the debt could be paid off by 2030, about the time it is forecasted world demand for oil will peak. “Eliminating provincial debt within a decade could save a cumulative total of nearly $20 billion in interest costs,” he wrote.Hill acknowledged that everyday Albertans may not feel the effects of government debt first-hand, “but that’s the money that they’re paying on their taxes, and it’s going toward these debt interest payments,” she said. “And if those get out of control, then they have to tax more.”This advertisement has not loaded yet, but your article continues below.
Due to the high price of oil, Alberta is projected to collect $28.1 billion in resource revenue in 2022-23, $14.3 billion more than originally budgeted. But that volatility can swing the other way and drop to below $5 billion, as it did in 2015-17 and again in 2020-21.He would drop the basic tax rate to eight per cent, and 12 per cent on incomes above $131,220, which would cost $3.3 billion, or install a flat tax of eight per cent, which would cost $4.9 billion.
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