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TERRAZZANO: Kenney knows well his budget contains hidden tax grab

Does Kenney think bracket creep is a tax hike? Clearly yes. The Ministry of Treasury Board and Finance is plotting a perilous path by advising the finance minister to ignore something the premier says cannot be ignored.

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The United Conservatives promised to balance the budget without raising taxes, but buried in the recent budget is a sneaky, backdoor income tax hike known as bracket creep.

Bracket creep happens when governments don’t move tax brackets with inflation and taxpayers get bumped into a higher tax bracket even though what we can afford hasn’t changed. The Alberta government’s own bureaucrats estimate this will cost taxpayers hundreds of millions of dollars.

For some reason Finance Minister Travis Toews thought it would be a good idea to pen an article trying to convince Albertans that he’s not raising taxes. Next time Toews writes a column about taxes he should run it by a well-known tax hawk, and his own boss, Premier Jason Kenney. Kenney knows better than anyone how bracket creep eats away at taxpayers’ wallets.

“[Bracket creep is a] hidden and regressive tax grab,” wrote Kenney in a Calgary Herald column dated Dec. 10, 1997. 

Kenney clearly articulates why bracket creep is a tax hike in his column:

Alberta Finance Minsiter Travis Toews delivers his budget speech. (Source: Legislative Assembly of Alberta)

“First, inflation generally causes taxable income to increase at a faster pace than real income. For example, Canadians earning less than about $6,500 are exempt from paying federal taxes because of the existence of the Basic Personal Credit, a tax-free threshold that must be crossed before any federal taxes are owed.”

Kenney even provides examples.

“Consider the example of a taxpayer named Joe who earns $6,500 this year from his part-time job. In 1996, Joe would pay no taxes since he has not crossed the tax-free threshold yet. But because Joe’s salary increases with inflation, the result would be that Joe moves into a taxpaying bracket. In effect, Joe’s nominal income increases, but his real income stays the same. The result is that Joe’s purchasing power is reduced, and he must hand over $50 to the taxman.”

Over time inflation erodes the tax-free portion of everyone’s wages, which can really bite low-income earners. 

“The second effect of bracket creep is the way it pushes middle-income earners into higher and higher tax brackets, as their real incomes remain the same,” Kenney wrote.

Kenney knows that Albertans will be feeling the pain if he allows bracket creep to siphon money out of our wallets. 

“There is a social cost to de-indexation which cannot be ignored … For low and middle income families, bracket creep can suck enough money from the family budget to cause serious financial hardship.”

Does Kenney think bracket creep is a tax hike? Clearly yes. The Ministry of Treasury Board and Finance is plotting a perilous path by advising the finance minister to ignore something the premier says cannot be ignored. And didn’t Kenney promise a plan to balance the budget without tax hikes?

“It will be a credible path to bring our finances back to balance without raising taxes,” said Kenney before his first budget. When the government increases its income tax revenues by hundreds of millions, it’s a tax hike. By Kenney’s own standards, he’s breaking his promise. 

Kenney used to stick up for taxpayers against politicians who wanted to increase their tax take so covertly. In fact, in 1999, Kenney stood up in Question Period and fired a blistering query at former federal finance minister Paul Martin.

“How can the minister continue to stand in his place and justify a tax system which taxes people without their even knowing it through this pernicious tax grab called bracket creep?” demanded Kenney.

How is the Alberta finance minister going to answer that question in the legislature when he’s standing beside the man who originally posed it?

Albertans didn’t vote for the United Conservatives to put in a sneaky backdoor tax grab. Voters gave elected officials a clear mandate to clean up the fiscal mess without raising taxes. Kenney should take his own advice and immediately cancel this hidden tax grab.

Opinion

MORGAN: It’s time for Joe to go

Cory Morgan writes that other politicians have been driven from office for much, much less than what Joe did.

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With news that the Calgary Police Service has asked the RCMP to begin an independent investigation into Councilor Joe Magliocca’s expense scandal, it becomes clear that it is time for Mr. Magliocca to step aside from his council seat.

Citizens have little patience for well-heeled politicians abusing expense accounts on the backs of taxpayers. In 2012, a $16 glass of orange juice expensed by Conservative cabinet minister MP Bev Oda caused such outrage that Oda eventually resigned in disgrace. It may have been small peanuts and the controversy overblown, but it was a symbol of disrespect to taxpayers, rightly or wrongly. Magliocca’s abuse of his expense account is much worse than anything Oda did.

This wasn’t a one-off – or even an accident – for Joe. A forensic audit concluded that there has been a pattern of personal expense abuse carried out by Magliocca for years. From room upgrades to luxury hotels, to airline seat upgrades, to what appears to be the outright fraudulent efforts to cover up the event hosting expenses by falsely adding names of attendees who were never there, it is clear that Magliocca has a serious and ongoing problem with abusing the taxpayer’s trust. Any private organization would have fired Magliocca years ago.

Conservatives are few and far between on Calgary’s city council. Councilor Joe Magliocca had been considered one of them. That makes Magliocca’s repeated and flagrant abuse of taxpayer’s dollars for his personal benefit all the more odious and damaging. Nothing undercuts calls for fiscal restraint more effectively than hypocrisy. How could or would anybody take Magliocca’s calls for the city to tighten it’s fiscal belt when he has so brazenly gorged on the taxpayer’s flesh himself?

It’s not as if Magliocca wasn’t paid enough as a counselor to begin with. With a base salary of $113,416 plus benefits and pension, along with an already generous expense policy, there was no excuse for Maglioca’s abuse his expense account so flagrantly. It is a slap in the face to taxpayers who are currently wondering how they are going to make their mortgage payments in light of ceaseless city tax increases and who can’t afford to go on vacations, much less lavish ones fully expensed by their employers.

So far Magliocca has been silent and keeping a low profile. Yes, he paid back a few thousand dollars, but that was of course only after he was caught with his hand in the cookie jar. Joe knows he can’t justify this, so I am guessing that he hopes that if he keeps his head low that this will blow over. This is not going to blow over.

At this point, the only acceptable response from Joe Magliocca should be his immediate resignation as a city councilor. This may even serve Joe’s interests in a sense, because if there does indeed turn out to be criminal wrongdoing found and he is convicted, at least some evidence of remorse will have been shown prior to sentencing.

The next best thing at least would be for Magliocca to openly announce that he will not be running in the next election. His brand is befouled and there is no way he could win his seat on council again. It would leave Joe as a lame-duck councillor, but at least the path would be cleared for for principled candidates to begin campaigning to replace him in 2021.

If Magliocca does run again, he could cause damage to the entire outcome of the election. Joe could split the vote with a real conservative and put yet another free-spending councilor at the table at a time when Calgary can least afford one. Magliocca’s presence in the election would likely turn into a sideshow where his ill-behavior is used to try and discredit conservatives running in other wards or even for Mayor.

Joe Magliocca’s political reputation is irreparably damaged even if he doesn’t know it yet. The best thing Joe can do for the city of Calgary now is to step aside. This election is much too important and we can’t allow this circus to keep us all from finally getting the fiscally responsible mayor and council that we so desperately need.

Politicians have been driven from office for much, much less than what Joe did. It’s time for Councilor Magliocca to do the right thing.

Cory Morgan and a columnist for the Western Standard and a business owner in Priddis, Alberta.

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Opinion

BARNES: Albertans deserve the right to make the big decisions in referenda law

Guest column from Drew Barnes says that Alberta’s referendum law should be expanded to allow votes on big constitutional issues.

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Guest opinion column from Alberta MLA Drew Barnes

“I am and I will remain a populist, because those who listen to the people are doing their job.” Matteo Salvini.

At its core the word populism is the action that government policies should be determined by the will of the people, not the will of the elite. Direct democracy is the institutional populism in action.

There is debate over whether populism should be termed as a movement or an ideology. Since the actions of populist engagement can transcend the ideological spectrum, I believe it should be viewed as a movement, that can sometimes manifest itself ideologically. As a movement, populist participation can take place on all points of the spectrum. Ultimately, that is what is wanted from a democratic society – engagement from all points of the spectrum.

Now more than ever, we need a new grassroots-populist approach to politics. Grassroots politics by its nature suggests that it is a movement that is sparked from the bottom-up. Politicians who came from grassroots movements must never forget where they came from, or lose sight of what they came to do. We need more of the bottom-up approach to politics, and make listening to the people that elected us a priority.

This is taking place in some measure here in Alberta. Political party policy processes allow for constituency associations to generate policy proposals for conventions, where they are voted on by the membership. Every party in Alberta – with the exception of the NDP – uses a ‘one member, one vote’ system.

Another grassroots/populist tool is referenda, that when used the right way are a valuable democratic tool. Referendums however, must stay true to their purpose, and the process for bringing them forward must allow for citizens to craft their own – fair – wording on a question. This is not to say that any question – however subjectively worded – that anyone wants to ask should be put to a referendum. Therefore, the rules on the use of referendums must not be overly onerous, nor overly temperate.

Switzerland is a prime example of a country that takes full advantage of referendums, including citizens’ initiative. In their democratic system, referendums can occur up to four times annually. All citizens registered to vote can cast their ballot on issues affecting decisions within both their federal government and their cantons (autonomous provinces). Before each vote, all registered voters receive a package of booklets in the mail which provide details on the coming referendums. Since these referendums began in 1848, just under half of the referendum proposals have passed. Even if they don’t always pass, the process is crucial to starting conversations and keeping citizens involved in debate. Referendums also force political parties to reach beyond partisan lines to reach consensus.

Alberta’s legislature recently passed a bill that guides referendums on non-constitutional matters. While this is a positive step forward, there are issues in this bill that need improvement. 

For example, Albertans initiating a referendum might go through the process of collecting hundreds of thousands of signatures, only to have the cabinet alter the wording the question. While fair wording of the question is critical to the integrity of direct democracy, that issue is not best dealt with by politicians who may have a stake in the result. Instead, clear guidelines should be established in law on question wording, and left to non-partisan officials at Elections Alberta. 

And while the new referendum legislation is a big step forward over the status quo (that is, nothing), it deliberately bans citizens-initiated referendums on constitutional questions. This means that if Albertans wished to force a vote on adding property rights to the Charter of Rights and Freedoms, that they would not be allowed. Similarly, Albertans are barred from forcing a vote on reforming the Senate, equalization, or internal free trade. Ominously, Albertans have no right to force a vote over the heads of the legislature on independence or other forms of sovereignty. 

I believe that Albertans can be trusted with the right of citizens’ initiative on all questions, both constitutional and non-constitutional. 

We trust the people to elect a government to run our systems, so why can’t we trust them to bring their own questions forward? 

Drew Barnes is the UCP MLA for Cypress-Medicine Hat

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Opinion

LETTER: Erin O’Toole isn’t “woke” enough to beat Trudeau in the East

A reader says that Erin O’Toole isn’t “woke” enough to beat Trudeau in the East.

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In this ‘Era of Wokeness” along with the ascension of Black Lives Matter into the public consciousness, I believe that it would be detrimental to the Conservative Party of Canada to have Erin O’Toole as
it’s leader.

Mr O’Toole recently refused to use the word ‘racism’ and did not answer clearly when pressed on whether he believes it even exists. Erin O’Toole will hand the Trudeau Liberals an easy victory during the next election, should he become Tory leader. Canada cannot afford another four years of Justin Trudeau. 

Like it or not, most people in Ontario and Quebec (where all federal elections are ultimately decided owing to their number of allotted seats), are very much ‘woke’ on the issue of racism, as well as
sexism, homophobia, ect. In my experience, this also includes most Conservative Party of Canada voters in Eastern Canada.

Right-wing populism and social conservatism does well in Western Canada – but centrist Red Toryism is all they are prepared to accept in most of Ontario, Quebec and Atlantic Canada. CPC members in Western Canada need to keep this in mind when voting for their next leader. 

CPC members need to be sensible and realistic if they want to win the next federal election. 

Gila Kibner 
Edmonton, Alberta

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