A Taxpayer-friendly Agenda?

Responses from Liberal Leadership Candidates to 11 Questions from the Canadian Taxpayers Federation

Scott Hennig Alberta director, Canadian Taxpayers Federation

November 2008 ABOUT THE CANADIAN TAXPAYERS FEDERATION

The Canadian Taxpayers Federation (CTF) is a federally incorporated, non-profit and non-partisan, advocacy organization dedicated to lower taxes, less waste and accountable government. The CTF was founded in Saskatchewan in 1990 when the Association of Saskatchewan Taxpayers and the Resolution One Association of Alberta joined forces to create a national taxpayers organization. Today, the CTF has over 60,000 supporters nationwide.

The CTF maintains a federal office in Ottawa and offices in the five provincial capitals of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. In addition, the CTF has a working partnership with the Montreal-based Quebec Taxpayers League. Provincial offices conduct research and advocacy activities specific to their provinces in addition to acting as regional organizers of Canada-wide initiatives.

CTF offices field hundreds of media interviews each month, hold press conferences and issue regular news releases, commentaries and publications to advocate the common interest of taxpayers. The CTF’s flagship publication, The Taxpayer magazine, is published six times a year. An issues and action update called TaxAction is produced each month. CTF offices also send out weekly Let’s Talk Taxes commentaries to more than 800 media outlets and personalities nationally.

CTF representatives speak at functions, make presentations to government, meet with politicians, and organize petition drives, events and campaigns to mobilize citizens to effect public policy change.

All CTF staff and board directors are prohibited from holding a membership in any political party. The CTF is independent of any institutional affiliations. Contributions to the CTF are not tax deductible.

The CTF’s Alberta office is located at: #202, 10621 – 100 Avenue Financial Building ,Alberta T5J 0B3

Telephone: 1-800-265-0442 Fax: 780-482-1744 E-mail: [email protected]

Web Site: www.taxpayer.com

2 TABLE OF CONTENTS

Introduction 4

Summary of Questions for the Candidates 5

Overall Report Card 6

Grade Summary by Category and Question 7

Candidate Responses 8

Revenue (Taxes) 8 Question 1 8 Question 2 9 Question 3 10

Expenditures (Spending) / Savings 12 Question 4 12 Question 5 13

Accountability / Democratic Reform 15 Question 6 15 Question 7 16 Question 8 17 Question 9 18 Question 10 19

Healthcare Reform 20 Question 11 20

3 INTRODUCTION

In October 2008, the Canadian Taxpayers Federation (CTF) sent each Alberta Liberal leadership candidate 11 questions in four major areas of concern for CTF supporters: Taxes, Spending/Saving, Accountability/Democratic reform and Health care reform.

Each candidate was provided with an opportunity to answer the 11 questions in their own words. Two of the three candidates responded and this document contains their positions.

The purpose of this document is three fold: to raise issues with leadership candidates and the public that may have been flying under the radar (or out of their platforms), to inform our supporters – and others who may be interested in these very important issues – on where leadership candidates stand, and to collect commitments from our future Leader of the Official Opposition to take action on these issues.

The CTF is a non-partisan advocacy organization. It never has and never will endorse a candidate, but in order for readers to quickly digest the candidate responses, each response has been assigned a grade.

Grades

Each response’s grade was determined by taking the average score assigned to that response by a panel of Canadian Taxpayer Federation provincial directors from across Canada.

Each question was asked in a manner in which a positive response would garner a higher grade then a negative response, based on the long-held positions of the Canadian Taxpayers Federation.

Grades are averaged for each of the four categories, to provide a quick guide as to where candidates’ strengths and weaknesses lie, as well as averaged for the entire questionnaire.

The grades range from A+ to F. The grades were then converted into the 4.0 scale (using the grade system) for averaging.

A+ is given for a full commitment F is given for a full rejection of the commitment

Grades ranging in-between are given for partial commitments, openness for re- consideration, for expressing support for the fundamental goal or discussion of alternative or tangential ideas worthy of merit.

4 SUMMARY OF QUESTIONS FOR THE CANDIDATES

Revenue (Taxes)

1. Will you commit to advocate for a reduction in Alberta’s income taxes either through a higher basic personal exemption or reduction in the 10% single- rate? If so, how much?

2. Will you commit to advocate for the elimination of the hidden sales tax and health levy on insurance premiums?

3. Will you commit to oppose new taxation powers for Alberta’s municipalities?

Expenditures (Spending) / Savings

4. Will you commit to advocate for legislation that would cap annual provincial program spending increases at a rate of the combined growth in the inflation and population rate?

5. Will you commit to advocate for legislating a minimum of amount of resource revenues be saved each year? If so, what amount?

Accountability / Democratic Reform

6. Will you commit to advocate for the introduction of fixed election dates for Alberta’s general elections?

7. Will you commit to advocate for legislation giving citizens the right to recall their MLA?

8. Will you commit to advocate for citizens’ initiative legislation giving citizens the right to initiate and vote in a referendum on issues of importance?

9. Will you commit to oppose any law that would limit or ban the free-speech of citizens during election campaigns (gag law)?

10. Will you commit to advocate for a fully-taxable and transparent MLA salary?

Heathcare Reform

11. Will you commit to advocate for giving Albertans the ability to purchase private health insurance to cover costs incurred paying for timely access to medically necessary procedures?

5 OVERALL REPORT CARD

Candidate: Overall Grade:

MO ELSALHY

DAVID SWANN

(Did not submit a response)

DAVE TAYLOR

6 GRADE SUMMARY BY CATEGORY AND QUESTION

Mo Dave David Elsalhy Taylor Swann Taxes Question #1 - Income Tax Cut A- C N/A Question #2 - Insurance Taxes A- C- N/A Question #3 - Municipal Taxing Powers D+ D N/A Taxes Average B C- N/A

Spending / Savings Question #4 - Spending Cap A C N/A Question #5 - Savings B B+ N/A Spending / Savings Average B+ B- N/A

Accountability / Democratic Reform Question #6 - Fixed Election Dates A+ A+ N/A Question #7 - MLA Recall A+ F N/A Question #8 - Citizens' Initiative B- F N/A Question #9 - Gag Laws A A+ N/A Question #10 - MLA Salary A+ A+ N/A Accountability / Dem. Reform Average A- C N/A

Heathcare Reform Question #11 - Health Reform F F N/A

Overall Average B C F

7 CANDIDATE RESPONSES

REVENUE (TAXES)

Question 1: Will you commit to advocate for a reduction in Alberta’s income taxes either through a higher basic personal exemption or reduction in the 10% single-rate? If so, how much?

CTF Fun Facts

earning between $16,168 and $114,505 per year pay less income taxes in British Columbia than in Alberta.  Canadians earning between $27,636 and $79,977 per year pay less income taxes in Ontario than in Alberta.  27% of Alberta CTF supporters picked income taxes as the ONE tax they would most like to see the provincial government reduce (highest of all taxes).

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: I am in favour of raising the personal exemption threshold to at least $20,000 (up from its current $16,161) with a corresponding increase for families with children, to reflect the financial realities of our time and the recent and multiple jumps in the cost of living, experienced most adversely by low income Albertans. Statistics Canada itself pegs its definition of the poverty line (low income cut-off) at more than $20,000. We should also tie this low income exemption to market basket measures or similar indicator, not just index it to inflation, so as to remain responsive to changing economic circumstances.

8 Dave Taylor’s Response: No. I’ll commit to advocating for a competitive tax environment to attract the best talent to Alberta, and to ensure that Albertans benefit from reasonable taxation to provide necessary services. With this in mind, I think our priority must be to focus additional tax breaks for those who are struggling to keep pace in Alberta – low-income earners, people struggling to find affordable housing, and your average working-class family.

Question 2: Will you commit to advocate for the elimination of the hidden sales tax and health levy on insurance premiums?

CTF Fun Facts

 Alberta charges a 2% sales tax on life, accident and sickness insurance premiums and a 3% sales tax on automobile and other types of insurance premiums.  The Alberta government is slated to collect $279-million in insurance sales taxes in 2008-09.  Insurance sales taxes are not shown on the bill received by customers.  7% of Alberta CTF supporters picked income taxes as the ONE tax they would most like to see the provincial government reduce (fifth highest of all taxes).

Liberal Leadership Candidate Responses

9 Mo Elsalhy’s Response: We are on record as being committed to reducing or eliminating all unnecessary, hidden or misleading taxes. We want to perform a full review of Alberta’s current insurance system to ensure that Albertans pay the lowest possible rates. I support eliminating the current tax on insurance premiums but with diligent monitoring to make sure the savings actually end up reaching the consumers and are not simply absorbed by the insurance provider to increase their revenues. I have been a strong advocate for consumer protection and this is one of the areas where work needs to be done. I also believe Alberta should negotiate with other provinces and territories to uniformly eliminate this and other similar hidden or sneaky taxes, across the country.

Dave Taylor’s Response: Not yet. I support open and transparent government. My caucus and I would need to look at this tax, and all taxes, within the context of the full tax environment in Alberta. We can then ensure changes that are made are well thought out, in the correct areas, and sustainable.

Question 3: Will you commit to oppose new taxation powers for Alberta’s municipalities?

CTF Fun Facts

 The CTF estimates an average family of four would pay an additional $911 in taxes each year if a property transfer tax, vehicle registration tax, amusement tax and hotel tax were implemented by Alberta municipalities.  Since 2007 when the Ontario government gave the City of Toronto the power to levy new taxes, Torontonians have been hit with a new vehicle registration tax, land-transfer tax, and garbage tax.  Seven additional taxes have since been recommended by the City of Toronto.

Liberal Leadership Candidate Responses

10 Mo Elsalhy’s Response: Our municipalities are facing increased pressures. Now while they, like any other level of government, have to exercise fiscal restraint and spend taxpayers money wisely, they sometimes have to resort to such "creative" ideas to adequately fund the programs and services they provide. This stems primarily from the federal and provincial governments' unwillingness to adequately fund municipalities for services like policing, roads, snow removal, water and waste treatment, etc. There is one taxpayer and all three levels of government have to cooperate to look after him/her. For Canada and Alberta to engineer huge surpluses on the backs of our cities and towns, asking them to do more with less, is wrong. If the decision is made, however, to grant new taxation powers to municipal governments, I want it to be made clear which new taxes are allowed so it's not a blanket approval, and I want it done in the context of a larger review of the relationship between our cities and towns and the provincial and federal governments in terms of funding formulae and municipal grants.

Dave Taylor’s Response: No. Governments must always be responsible when collecting taxes and investing the public purse in essential services, whether it be at the provincial or municipal level. The ability to tax must also reflect the public’s expectation of that particular jurisdiction to provide services. Municipalities have an expectation to provide various services to Albertans across the province; in each case the residents of those communities should expect any taxes to be levied fairly and spending to occur in a transparent and efficient manner.

11 EXPENDITURES (SPENDING) / SAVINGS

Question 4: Will you commit to advocate for legislation that would cap annual provincial program spending increases at a rate of the combined growth in the inflation and population rate?

CTF Fun Facts

 Since 2003, Alberta’s combined population growth and inflation rate has increased by 33%, while provincial program spending has increased by 73%.  A 2006 Ipsos-Reid poll discovered that 58% of Albertans support a legislated cap on provincial spending.  27 American States have expenditure limitation laws.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: The current government in Alberta spends the most of any provincial or territorial government in Canada, and some people argue they do it because they can and without too much to show for it. We certainly don't need to spend any more but we need to spend wisely and eliminate waste and inefficiency. Legislating spending limits would be one way to do it, but under the current government it is unlikely to happen. Personally and if I am chosen to lead the Alberta Liberals, I am committed to capping annual program spending increases at the rate of the combined growth in population and inflation rates. I also want to highlight the need to perform a thorough core program review to address redundancy and inefficiency and eliminate waste, which are the first steps needed before the cap is put in place.

12 Dave Taylor’s Response: No. The CTF is clearly a strong advocate for responsible spending by government, and I whole heartedly agree that spending by the Conservatives in Alberta is out of control and not done with long-term goals or a strong provincial plan in place. We must eliminate unnecessary government spending, and certainly these savings would afford us an opportunity to utilize this money to address critical needs across Alberta. In addition, by better investing government revenues from sources other than taxes we can ensure that necessary increases in spending can be managed with reduced reliance on tax revenue.

Question 5: Will you commit to advocate for legislating a minimum of amount of resource revenues be saved each year? If so, what amount?

CTF Fun Facts

 Of the $116-billion the province collected in resource revenues over the past 20 years, approximately 47% was spent, 37% went to service and pay off the debt, and only 16% was saved.  96% of CTF Alberta supporters believe the Alberta government should save at least a quarter of all non-renewable resource revenues. 76% believe at least half of the revenues should be saved.  A 2000 CTF study determined that Alberta could have eliminated income taxes in 2015 if the province had saved 50% of all resource revenues – and it was based on $18/barrel oil!

13 Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: The Alberta Liberals went into the 2008 election advocating saving 30% of all non-renewable resource revenues, to be allocated into four endowment funds as follows: - 35% into the Heritage Savings Trust Fund; - 35% into a Post-Secondary Endowment Fund; - 25% into the Capital Fund; - 5% into an Arts, Humanities, and Social Sciences Fund (capped at $500 million).

These numbers may require updating but our commitment remains the same. In addition to this disciplined and principled “pay ourselves first” savings, we pledged to save all year-end surpluses into the Heritage Fund as well to compensate for years of PC negligence. The other area I would legislate is to forbid the raiding of the Heritage Fund for general revenue projects and expenditures. It is intended as a "rainy day" fund and should only be tapped into in extreme emergency situations or in dire economic circumstances, and with full and open debate in the Assembly.

Dave Taylor’s Response: Yes. I will commit to legislating a minimum portion of our resource revenues be saved and invested to provide for the future of our province. It is a critical step in turning finite resources into long-term investments for Albertans, and an effective savings plan will afford us choices in the future to reduce taxes or address critical needs in the province in education, health care, infrastructure.

14 ACCOUNTABILITY / DEMOCRATIC REFORM

Question 6: Will you commit to advocate for the introduction of fixed election dates for Alberta’s general elections?

CTF Fun Facts

 91% of CTF supporters believe Alberta should introduce fixed election dates.  The provinces of British Columbia, Ontario, Newfoundland and Labrador, and Saskatchewan all have fixed provincial election dates, as does the Northwest Territories.  A 2005 Environics poll found that 77% of Canadians would prefer fixed election dates.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: The has been advocating for fixed election dates since 1993, under the late ’s leadership. This is one of our main planks for open and transparent government. With fixed election dates, Albertans would have the peace of mind of knowing when they are going to choose their next government, and it would take away the incumbent government’s ability and advantage to manipulate the timing, leading to more open and transparent governance. It should also make it easier for Elections Alberta to plan ahead and to avoid the errors and failures experienced in recent elections. I will continue to advocate for this as leader of the Alberta Liberal Party.

Dave Taylor’s Response: Yes, I believe that fixed election dates promote open and transparent government. With declining participation rates in elections across the province, all mechanisms that could assist with promoting an engaged citizenry should be explored and I will advocate for fixed election dates.

15 Question 7: Will you commit to advocate for legislation giving citizens the right to recall their MLA?

CTF Fun Facts

 A 2006 Ipsos-Reid poll discovered that 77% of Albertans support introducing a recall law in Alberta.  British Columbia is the only Canadian province to currently have a recall law.  While 20 recall attempts have been initiated since 1995 in BC, no MLA has ever been recalled. (Although one MLA resigned in 1998 before the final verification of signatures, thereby ending the recall process).  83% of CTF supporters in Alberta believe Albertans should have the right to recall their elected officials.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: This has also been a policy that the Alberta Liberal Party has been advocating for since 1993. Should an MLA ignore his/her constituents or fail to live up to their expectations or perform his/her duties in a satisfactory manner or indeed if there's ground for impeachment between elections, the people should have the option to fire him/her before the next election. We can use the process enacted in British Columbia’s Recall and Initiative Act as a model. Under that legislation, an MLA can be recalled after 18 months on the job, provided enough signatures from within the electoral district are collected, and the proper paperwork is submitted to the province's Chief Electoral Officer.

Dave Taylor’s Response: No. We must first focus on improving participation in the initial selection of MLAs – through elections. Voter turnout at elections continues to drop to the point that the majority of Albertans are not exercising their say on who represents them every day in our political system. Adding a recall process should not be our priority at this point.

16 Question 8: Will you commit to advocate for citizens’ initiative legislation giving citizens the right to initiate and vote in a referendum on issues of importance?

CTF Fun Facts

 A 2001 Environics poll discovered 79% of Albertans want citizens’ initiative legislation.  Albertans have citizens’ initiative legislation that allows them to put issues on the ballot, but only at the municipal level.  British Columbia is the only province in Canada that allows for citizens’ initiative at the provincial level.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: Alberta Liberals believe in open, accountable and inclusive government. We advocate the creation of a Citizen’s Assembly on Electoral Reform to study other voting systems, such as proportional representation. We would do this within two years of forming government if Albertans vote us in. A province-wide plebiscite will then follow to gauge everyone's support. All voting systems and other topics/ideas, including referendum initiatives would be up for discussion, and if the citizens deem them appropriate, we would implement the changes without hesitation.

Dave Taylor’s Response: No. Again, my focus is on using our current system more effectively – ensuring that more people are engaged in the election process and that a full discussion on important issues is part of a robust process when picking your MLA and government. When MLAs do their job listening to their constituents, important issues find their way to Legislature and a healthy public debate can accompany their political process.

17 Question 9: Will you commit to oppose any law that would limit or ban the free-speech of citizens during election campaigns (gag law)?

CTF Fun Facts

 72% of Alberta CTF supporters oppose the Alberta government banning or limiting citizen and lobby group advertising during election campaigns (gag law.)  Our current Prime Minister, Stephen Harper, (before he was PM) was the last person in Canada to challenge the Federal government’s gag law in the Supreme Court (Harper v. Canada). He lost.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: I will never support any measure, law or otherwise, that restricts freedom of expression, including freedom of speech, assembly, etc., regardless of whether it's election time or not. Our Charter of Rights and Freedoms offers the guidance and balance necessary to ensure society's good is maintained while allowing individuals to think and express themselves freely. The current PC government wants to enact a gag law to punish labour groups for their anti-Stelmach television ads during the recent provincial election and to prevent them from criticizing the Tories in this fashion in the future. I think we shouldn't pick on just one group or single out an individual target. If we are looking for fairness and accountability, then campaign finance laws, including things like political advertising and donation limits, must be reformed.

Dave Taylor’s Response: Yes, elections are exactly the time when we should be exposed to a wide variety of opinions and encourage a full discussion on the issues.

18 Question 10: Will you commit to advocate for a fully-taxable and transparent MLA salary?

CTF Fun Facts

 Politicians in Alberta can collect one-third of their base salaries as tax-free income.  Only the provinces of Alberta, Quebec and New Brunswick still allow their politicians collect any tax-free salary.  Only politicians in the City of and the Calgary Board of Education have stopped this practice in Alberta and now pay taxes on 100% of their salaries.  80% of Alberta CTF supporters believe that Alberta MLAs and other politicians should no longer be allowed to collect one-third of their salary tax-free.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: The short answer here is yes. I support the removal of the tax-free portion and fully disclosing MLA salaries, benefits and compensation levels. As Leader of the Opposition, I will advocate for such changes to take place. I will also advocate for the establishing of an arms- length, independent committee to set MLA compensation so as to remove MLAs from continuing to decide their own wages. Furthermore, if we gain the trust of Albertans in the next election and become the government, I commit to immediately reducing the Premier's and Ministers' salaries by 10% and those of Parliamentary Assistants (our provincial equivalent to Parliamentary Secretaries in the House of Commons) by 50% and use the savings to fund the Citizens Assembly for the duration of its mandate (two years maximum).

Dave Taylor’s Response: Yes. Transparent government is key to reengaging people in the political process. Similarly, transparent elected representative salaries should be part of an open government and equally available to public comment or opinion.

19 HEALTH CARE REFORM

Question 11: Will you commit to advocate for giving Albertans the ability to purchase private health insurance to cover costs incurred paying for timely access to medically necessary procedures?

CTF Fun Facts

 The Alberta government is currently being sued by Bill Murray (not the comedian) for prohibiting him from purchasing private health insurance to cover his hip replacement surgery.  Dr. Jacques Chaoulli successfully challenged the Quebec government’s prohibition on private health insurance. In their decision, the Supreme Court declared: “democracies that do not impose a monopoly on the delivery of health care have successfully delivered… services that are superior to and more affordable than the services that are presently available in Canada. This demonstrates that a monopoly is not necessary or even related to the provision of quality public health care.”  75% of CTF supporters in Alberta support the establishment of a parallel private medical system to coexist alongside the public system.

Liberal Leadership Candidate Responses

Mo Elsalhy’s Response: The short answer is no. Alberta Liberals believe in a health care system that is accessible to all Albertans, not just the ones who can pay for it. While health care represents one of the biggest portions of our provincial budget, we believe it is a matter of how well we allocate our resources. Through addressing health workforce shortages, managing health system costs, lowering the cost of prescription drugs, facilitating intra and inter-regional cooperation and the sharing of resources, keeping Albertans healthier, and improving continuing care, we will be able to ensure that Albertans will be able to access publically funded services in a timely fashion. We can even reduce our overall per capita expenditure through such inexpensive changes as approving midwifery (yet another Alberta Liberal policy recently adopted by the Tories). People will not want to buy expensive private health care if they find the public system functional and efficient.

20 Dave Taylor’s Response: No. I believe that a public health care system is a cornerstone to a fair and compassionate society. Options to purchase additional health insurance already exist, and some Albertans will continue to exercise those choices. My priority will be to focus on addressing the challenges in our public health care system.

21