The Alberta NDP government's recently tabled budget has its pros and cons, said Sundre's mayor.
“I was optimistic to hear that MSI (Municipal Sustainability Initiative) funding — for both operational and capital projects — was left in that budget,” Terry Leslie told the Round up during a phone interview last week.
“There was some talk that that money wouldn't be there — that would have been devastating to municipalities, so I was happy to hear about that.”
But before long, he added, “I'm very concerned about both the provincial and federal deficits that we're looking at.”
The mayor said he could appreciate that both governments are avoiding huge cuts that would merely exacerbate the economic difficulties Alberta and Canada are going through, but expressed reservations regarding the long-term cost of adding billions to overall debt.
Alberta's projected deficit for 2016 is about $10 billion, while the Trudeau Liberals have anticipated a deficit of close to $30 billion. Both governments have pledged major investments in infrastructure.
“Infrastructure debt in municipalities across the province is huge,” said Leslie.
There has definitely been a change in direction under Alberta's new NDP government, he said, adding there remains a level of uncertainty in terms of what extent the carbon tax's impact will have.
“We'll be trying to predict what those costs will be,” he said.
The town's tax increase for 2017, when the carbon tax will be implemented, will be “more significant than the last few years.”
Every level of government or institution that levies taxes has to be very conscious of what's going on in the economy, and the mayor said officials must limit the impact they control on tax increases.
The province's budget provides an overall look, but it will require a period of time to see what the impacts on the community might be, he said.
Town officials had recently been concerned over a delay in the government announcing the school requisition rate, but that has since been determined, albeit a little close to the wire, he said.
“For a new government with fairly substantial issues to address, you would expect they would need some time.”
But now that the provincial budget is in place, it's a matter of waiting to find out what the local ramifications will be. Town officials want to maintain a good relationship with the provincial government, “because we have to have it,” he said.
The process of collaboratively working together to promote sustainability and growth — particularly in these times — is crucial, he said.
As the Town of Sundre is facing an impending need to upgrade the wastewater treatment facility's capacity as well as the quality of water it releases — a project that could cost somewhere in the $10-million range — the infrastructure funding will be essential, he said.
As for the NDP's reduction in the small business tax rate to two from three per cent, the mayor said, “anything that assists small business is huge. Small businesses in our community need as many breaks as they can get — small businesses in every community.”
As for whether the provincial government should consider implementing a provincial sales tax (PST) — Alberta remains the only province in Canada that does not have one — the mayor did not dismiss the notion outright but did say the province needs to remain competitive with the rest of the country.
“I think consumption taxes are proven to be fairer,” he said.
But having no sales tax gives the province an edge, he added.
“That's one advantage that might bring investment back to the province.”
However, if the financial situation in the province continues to deteriorate, the government and Albertans just might have to consider alternatives, he said.
“We have to look at ways to generate income without just passing the cost on to taxpayers.”
The Round Up also spoke about the budget with Mike Beukeboom, president of the Sundre and District Chamber of Commerce.
Speaking candidly, Beukeboom said he's not generally been one to “dive head first” into provincial and federal budgets.
“There's so much detail. Will they actually follow through with a lot of this stuff? Changes happen — that's a given; it's a norm. Maybe oil prices go up and they can do more. Maybe prices go down and they can do less,” he said.
There were no particular surprises in the budget, as “good old economic theory tells us that when times are tough, government at all levels can really start to generate some positive economic spin by investing in infrastructure.”
However, such investments should be carefully considered to ensure that every dollar the government spends on infrastructure provides a return on that investment. For example, would repairing a bridge increase efficiency or improve the ability of a community's local workforce to get to and from work, making everyone more profitable, he said.
“I really would hope that any of this infrastructure investment spending that takes place in this new budget has a plan of what the return on investment will be.”
Also, while both the provincial and federal governments have promised massive investments in infrastructure counting into the billions, whether any of those funds will be granted in this area remains to be seen, he said, adding Sundre needs a new bridge to cater specifically to heavy truck traffic. Such a project would benefit both industry and the community by providing a more efficient high load corridor past Sundre while at the same time making the downtown core more appealing and safe for residents and visitors, he said.
These are the kinds of projects that should be invested in because in the long-term, they “will make us a stronger province.”
The Alberta NDP's small business tax rate reduction is welcome, as he said entrepreneurs will be able to reinvest any savings back into their operation, “and that's always positive.”
Regarding the carbon tax, Beukeboom called it “one of those mystical creatures. I guess for me, I wonder if anyone truly understands what the overall impact of that will be.”
The carbon tax is an interesting yet bizarre concept, he said, adding he wasn't convinced the government has fully thought it through.
“I don't care where you think the monies are coming from or going to, at the end of the day, it's the consumer who pays.”
As for a sales tax, the government should only consider it as a “last resort,” he said.
“We've always talked about the Alberta Advantage. From a consumer perspective, that's (no PST) a big one. From a hockey stick to a case of beer, there's a big difference between buying that here and in B.C.”
Adding, for example, a five per cent PST on top of the five per cent GST would really hit the pocketbook, he said.
“In a time when we're trying to create an incentive of consumer spending to help kick-start the economy again, sales taxes don't do it. Those ones hurt. It's hard for people to say they'll have to come up with an additional five to seven per cent.”
An economic downturn is the wrong time to implement a sales tax, he said. Such taxes should only be considered “during the middle of a boom, not the bottom of a bust. That's just another kick in the teeth for residents.”
Introducing a sales tax now would hurt more than whatever gains it creates, he said.
“Asking farmers to pay five per cent more on seed or fertilizer for crops, it just makes no sense whatsoever.”
