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Alberta needs a provincial sales tax like it needs a hole in the head

Here’s the good news: the majority of United Conservative Party leadership candidates have pledged not to impose a Provincial Sales Tax (PST) or raise taxes on Albertans.

Six UCP leadership candidates signed the Canadian Taxpayers Federation Pledge, which reads: “I will never impose a Provincial Sales Tax and I will not raise taxes.”

All of the perceived frontrunners and most of the lesser-known candidates said no to a PST.

It needs to stay that way.

Alberta is one of the more affordable places left to live in Canada, and not having a PST is one of the main reasons why.

Academics and talking heads have recommended Alberta finally cave and join the PST club with the rest of the provinces.

Albertans should ignore that advice, and there’s a perfect parable to point to on the other side of the Rockies.

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Frugal folks have long said that B.C. better stands for “Bring Cash.” The PST is slapped on nearly everything sold in that province, from used shoes at thrift shops to cars on the lot.

In B.C., the PST is applied to house building supplies such as concrete, rebar, plywood and shingles, adding about $20,000 to the cost of building a home. The PST is applied to internet bills, cleaning supplies, home heating and pet food.

Some PST pushers say, “it’s only a few dollars; what’s the big deal?”

The PST is big money.

The B.C. government takes about $9 billion per year from taxpayers, half of whom are already struggling to afford the basics.

Once a government gets hooked on the cash from a PST, they turn into bloodsuckers, sniffing out anyone who tries to save some money.

For example, many B.C. residents wait to make big purchases on things such as appliances until they come to Alberta. They buy their washer and dryer set at stores in High River instead of Langley, bringing it home with them. That saves seven per cent, or about $150 in PST.

In 2003, the B.C. government tried to force Costco to disclose the names and addresses of British Columbians shopping at its Alberta locations. The government wanted to nail customers with the PST dating back to 1998. Costco rightly told them to buzz off.

Do Albertans want their government shaking them down for every last cent, trying to track them on their trips to squeeze more tax dollars out of them?

While PST pushers say that a consumption tax only hits the wealthier folks, the opposite is true.

For example:

Fred buying a Ferrari probably wouldn’t worry about the PST, but his food delivery guy, Hank, who’s saved up to buy a used Honda Civic for $6,000, feels the sting of the 12 per cent PST on used cars from private sellers in B.C. That’s a $720 tax bill that could have paid for about a month’s worth of Hank’s groceries.

Consumption taxes hurt lower-income people the most. If a rich person spends $100 on clothes and a lower income person spends $100 on clothes, both are nailed with the same PST. However, it hurts the lower-income person more because they have less money to spend.

Lower-income people often live paycheque to paycheque. If a tax takes a bigger chunk of that paycheque, there’s less for another need. That hurts a lot more for those who are already hurting.

It’s good news that the next leader of the UCP has vowed not to impose a PST on Albertans.

For now, Alberta will stand out as the only province with no provincial sales tax, saving its people billions of dollars per year.

Let’s hold politicians to their promises and keep it that way.

Kris Sims is Alberta Director and Interim British Columbia Director of the Canadian Taxpayers Federation.

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