Premier Prentice – My Two Cents about the Budget

UPDATE… at the request of the Edmonton Journal, I rewrote the piece below and the EJ published it HERE.

Dear Premier Prentice:

We met west of Edmonton at a BBQ when you were campaigning for your position. I appreciated your speech and remember thinking you could be a strong Premier and move our Province forward in a variety of ways. I am sure you weren’t all that happy that shortly after winning the post you faced plummeting oil prices and the prospect of $7 billion or so in lost revenue.

I imagine you have a few voices offering up their advice about what to do now. I filled out your online form about the budget. I hope many, many other Albertans did, too. At the risk of being one more voice amongst the din of thousands, here’s mine, written from the perspective of a boomer who has held numerous leadership positions in the community sector as well as operated a couple of businesses. I will try to be as concise as possible.

We have a revenue problem
I would suggest that the loss of $7 billion in revenue represents a revenue problem, not an expenditure problem. It’s a structural problem in our economy – too much dependency on oil. Markets can be volatile and cyclical; we need a more diverse and optimally reliable revenue mix. I know you know that, but I encourage you to do more than release an annual budget. We need a long-term plan that doesn’t allow for a knee-jerk reaction to our revenue issue to rule the day in year one of that plan.

The economy should work for the majority
Please keep in mind that during the boom times, the good times in Alberta, the poor and disenfranchised typically do not benefit, if at all, to the degree of folks like you and me do. The steady rise in the wealth gap provincially, nationally, and around the world indicates that no matter the ups and downs in the economy, it is most often true that those who have wealth continue to grow wealth and those who lack income remain, at best, stagnant. Those in deep poverty are actually worse off than they were a decade ago. This suggests to me that we need leadership that ensures those who are the worst off in our Province should not be pushed further away from what little hope they have of experiencing the Alberta Advantage.

It’s time to raise some taxes and fees
I imagine you know that the Government could raise taxes to generate an additional $8 to $10 billion in revenue and still legitimately claim that Alberta is the lowest tax Province in Canada. That just tells us how much lower we are taxed now.

No one hugs the tax man, but all of us want to benefit from living in Alberta. I hear a sales tax is off the table. Maybe you are right about that, I don’t really know for sure. That said, in Canada, corporate taxes have decreased markedly over the years while personal income tax has not decreased at all. Do you think this requires some review, perhaps a rethink on what corporate social responsibility should be in terms of paying taxes? Corporations create wealth and the wealthy are growing income and assets consistently and significantly.

It’s good to hear that you are concerned about the flat tax we have currently which hurts lower income workers. A progressive tax will help with the revenue problem and lessen the tax burden on those who need every dime they earn to have a decent living.

Isn’t it time to rethink Alberta Health Care fees? We lost $2 billion in revenues when that fee was eliminated. I would think it mostly helped employers because that benefit was typically paid in full or partially by businesses and organizations. It seems to me that it was about that time when our health care system became over-stressed due to a shortage in doctors, and incredibly long waits in emergency wards. There’s some fixing there we need to do.

Public Education needs more support, not less
Teachers are coming out of a three year freeze on their wages. That’s a long time to stay flat as housing, food, clothing and other costs continue to rise. I am not sure we can blame teachers for the looming deficit. Not only do we need to address the wage challenge here, but my sense is some promises made by the Government have not been fulfilled. For example, classrooms now are integrated which means special needs students included as full members in the general student population.

It’s a good thing, but unfortunately this principle of integration has not been supported by the funds required to support teachers in a class room of 35 (which is too big a number) that might have a blind student, a disabled student, three students with learning disabilities and several who don’t speak English. Without the resources, it’s not really integration; it’s more of a gathering of students that teachers must do their best to educate. And by the way, each year our public school teachers spend between $500 and $2500 of their own wages on classroom supplies because our school system has no money to stock classrooms with the basics. Can you imagine the outrage if business forced their employees to spend that amount of their hard earned money on office supplies? Everyone knows this is happening. Time to do something about that.

Don’t abandon the poverty elimination strategy and the ten year plan to end homelessness
The ten-year plan is working and its existence is a prime example of a caring government. If anything, we need a renewed commitment, not the dissipation over time of this incredible and important initiative. We need to end poverty, Mr. Premier. Poverty is wrong and we need to set things right. Hundreds of thousands of citizens are living poor and data suggests that nearly half of the population is living pay cheque to pay cheque. We need a government that pays attention to that because if the economic vulnerability of so many people continues to grow and deepen, we will face decreased consumer spending, impacts on tax revenues, and social unrest.  I know it’s hard right now, but now more than ever is when we need leadership that speaks clearly and boldly about ending poverty for so many Albertans: Aboriginal people, newcomers, youth, single parents, the disabled, the mentally-ill, and the growing number of working poor.

Be careful about what you do to the non-profit sector
Yes, I have a vested interested, given where I work, but please think about this: non-profit organizations are structurally underfunded by governments as well as nearly all community based funders. This means that non-profit employees are paid substantially less than the comparable staff employed by the government and most of the time they receive no pension or RRSP benefits. It’s not that they are not worth the money because often your government departments recruit my staff away and offer them much higher wages. Often these are the same departments that fund our human service contracts and insist on inadequate funding levels. It is often the case that long-term non-profit workers end up retiring into poverty. It’s ironic, don’t you think?

If you cut 9% or 10% to human service agencies doing contract work with you, you are in effect cutting back on contract funds that frankly do not pay the full cost of the contract and haven’t for years. So please be careful because deep cuts here – and for some any cuts at all – will not only harm more low paid workers but will result in less support for those Albertans that need it the most.

I know. No matter what you do, you will be vilified and praised and everything in between. You won’t please everyone and frankly how could you? I am just asking you to consider the above points and then do what you believe is fair and just as you move forward with your budget.

Thanks for listening.

Mark

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