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New era: Alberta NDP spends extra $682M, introduces bill to hike tax on wealthy

Alberta Minister of Health and Seniors Sarah Hoffman is shown during her swearing-in ceremony in Edmonton on May 24, 2015. Alberta's NDP government says it will spend an extra $682 million to reverse health-care cuts and fund larger school enrolment. Hoffman says details on where the money will come from will be in the fall budget.
Image Credit: THE CANADIAN PRESS/Jason Franson
June 19, 2015 - 6:00 AM

EDMONTON - Alberta's NDP government has announced it will spend an extra $682 million on schools, hospitals, and social care and introduced a bill to increase taxes on large businesses and the wealthy.

The bill, tabled by Finance Minister Joe Ceci on Thursday, proposes increasing the tax rate on large corporations to 12 per cent from 10 per cent effective July 1.

It also moves to hike income taxes on anyone making more than $125,000 a year effective Oct. 1.

Currently, all Albertans pay a 10 per cent flat tax on income.

The bill directs that anyone with taxable income over $125,000 but under $150,000 pay 12 per cent.

Those making over $150,000 but less than $200,000 would pay 13 per cent, those making over $200,000 but less than $300,000 would pay 14 per cent and those earning over $300,000 would pay 15 per cent.

Ceci has said the changes will not have an impact on 93 per cent of Alberta's tax filers.

There are no plans to change the three per cent tax on small businesses.

Earlier Thursday, Health Minister Sarah Hoffman said some of the tax money would be used to pay for the $682 million in new initiatives.

"We're working towards ensuring there's additional revenue, but Albertans made it very clear during the election that they did not want to see cuts to health care and education and human services," she said.

Hoffman made the announcement alongside Minister of Advanced Education Lori Sigurdson, Education Minister David Eggen and Human Services Minister Irfan Sabir.

The lion's share of the money, $500 million, is to go to health to reverse $1 billion in planned cuts under the former Progressive Conservative government.

There is to be $40 million to increase base funding for post-secondary schools by two per cent, freeze tuition for two years and cancel market modifiers approved by the Tories for 25 programs.

An extra $103 million is to go to schools to handle thousands of new students this fall.

There's also an extra $39 million earmarked for Sabir's department for a variety of programs, including housing and outreach services for women and children fleeing family violence.

The new cash is part of an interim supply bill being debated in the legislature. It proposes $15.4 billion in spending to keep the government operating until the New Democrats bring in a budget in October.

The Tories introduced a budget for the 2015-16 fiscal year just before the election, but lost the vote and are now the third party in the house. That budget called for $48.4 billion in spending.

The new money announced by the NDP would be on top of that.

The opposition parties have already come out against the changes.

The Wildrose party has said the NDP should not boost taxes until it has done a thorough review to find savings in government.

The Progressive Conservatives say making people who are well off pay more will simply drive them to live or pay taxes in another jurisdiction, leaving Alberta's middle class to make up the difference.

News from © The Canadian Press, 2015
The Canadian Press

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