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Prentice disconnected from reality

Posted on March 11, 2015 by Taber Times

Apparently, Alberta Premier Jim Prentice has a different definition of what ‘everybody’ means.

According to Prentice, ‘everybody’ does not include Corporate Alberta when it comes shouldering the burden for billions of dollars in lost oil revenue.

“In terms of who is responsible, we all need only look in the mirror. All of us have had the best of everything and have not had to pay for what it costs,” Prentice noted in a CBC Radio interview last week. “Collectively, we got into this as Albertans and collectively we’re going to get out of it, and everybody is going to have to shoulder some share of the responsibility.”

It appears the fear of a disconnect with the Provincial Progressive Conservatives with your average Albertan now that there is no formidable Opposition with the decimation of the Wildrose Party numbers is well founded with such laughable statements by Prentice. Despite being the most well off province in the country, will the Alberta Progressive Conservative Party look in the mirror themselves with its four-decade stewardship dealing with the province’s finances in taking some responsibility in shouldering some of the blame?

One in 10 Albertan children live in poverty which does not even account for the numerous families hovering around the poverty line.

Alberta currently has the highest rate of working poverty of any Canadian province. In Alberta, the poorest income group was the hardest hit by the recession compared to all jurisdictions. By 2009, the poorest 20 per cent had 4.3 per cent of total after-tax income whereas the richest 20 per cent enjoyed 44.3 per cent of the after-tax income, mostly at the expense of the middle class group. In 2009, half of Canadians were living on less than $25,400. Of low wage workers, 56.6 per cent of them are over the age of 25.

Those must be some rose-coloured glasses Premier Prentice is wearing if these stats present “All of us have had the best of everything and have not had to pay for what it costs.”

In one breath Prentice noted everybody has to shoulder some portion of the responsibility, but in another breath says corporate tax rates nor oil royalties will be increased. Suggestions have been made to changing Alberta’s current 10 per cent flat tax on personal income tax.

The theory goes if you keep corporate taxes low, the extra revenue those corporations generate will go towards infrastructure and job creation for growth. But according to a Parkland Institute report, since 1990 Alberta revenues from corporate taxes have remained under $5 billion: corporate profits skyrockted from under $10 billion to well over $50 billion. Despite a significant drop related to the Great Recession of 2008, corporate profits are again on the rise and today sit around $30 billion. Over the past 20 years, corporations operating in Alberta have amassed substantial wealth while making consistently very limited contributions to funding the services, such as health and education, that Albertans need – or even to covering the costs that corporations impose on the provincial government, such as those for infrastructure, environmental monitoring, and regulation.

A Canadian Centre for Policy Alternatives study tracked 198 companies on the S&P/TSX composite from 2000 through 2009 and found those companies—Canada’s largest corporations (many with influence in Alberta)—are making 50 per cent more profit and paying 20 per cent less tax than they did a decade ago. The number of jobs created by Canada’s largest corporations was lower than the average employment growth in the economy as a whole in this time frame.

According to a Canadian Labour Congress report, dividends as a percentage of after-tax profits have risen from 30 per cent in 2000 to more than 50 in recent years.

In other words, these ‘job creators’ that Prentice talks about in not wanting to raise corporate tax (which is the lowest rate in the whole country) are not creating jobs, but rather simply increasing dividends among investors and salaries among managers with their more than favourable business climate set up in this province.

It is true, it looks like there may be tough economic times for Albertans.

But this responsibility that Prentice speaks of in sharing should be put on everybody, including the money and power elite who benefit from corporate welfare who seem to have plenty of pull in provincial politics.

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