The Alberta government has demonstrated rare fiscal discipline by refusing to immediately eliminate its provincial fuel tax, despite calls from various groups including the provincial NDP and the Canadian Taxpayers Federation. Chris Nelson, writing for the Calgary Herald, praises Premier Danielle Smith for showing backbone in the face of political pressure to offer voter bribes with money the province does not have.
A Welcome Display of Restraint
Nelson notes that governments typically cave to demands for tax cuts, but Smith's government held firm. However, Smith softened the refusal by reminding Albertans that relief could come if oil prices remain high for an extended period, as the government already has a plan to reduce the fuel tax under such conditions.
Contrast with Federal Action
In contrast, Prime Minister Mark Carney rushed to cut the federal gas tax by 10 cents per litre, but many gas stations raised prices by a similar amount just before the cut, leaving prices virtually unchanged. Nelson questions why Smith should follow Carney's lead, given that both are politicians who might use tax breaks as electoral bribes.
The Cost of Inaction
Nelson points out that the Alberta government is already effectively distributing nearly $1,900 per person to the province's five million residents through deficits and services, totaling about $9.4 billion—the size of this year's expected deficit. He argues that some citizens still clamor for an additional 13-cent-per-litre gas tax reduction, which would be funded by revenues from a war-torn region with vast oil reserves.
Lessons from Norway
Nelson contrasts Alberta's approach with Norway's, which has amassed nearly $2 trillion in its oil fund by saving resource revenues. Alberta's Heritage Savings Trust Fund, once a model for Norway, now holds only $32 billion due to decades of underfunding and withdrawals. Smith's government has stopped the practice of taking annual returns from the fund, but Nelson argues that more needs to be done to secure the province's financial future.
In conclusion, Nelson commends Smith for not bowing to immediate demands, but emphasizes that Alberta must learn from its past mistakes and prioritize long-term savings over short-term political gains.
