by: Jody Sinnema (Edmonton Journal)
EDMONTON - A new report written by two advocacy groups says changes to Alberta's tax regime could bring in an additional $1.2 billion to $2 billion to fight child poverty while still keeping the province the lowest tax regime in Canada.
Bill Moore-Kilgannon, executive director of Public Interest Alberta, said if the province is to keep its promise to end child poverty by 2017, it must come up with detailed calculations on how it will be done, such as the ones in Moore-Kilgannon's report From Words to Actions.
The report, co-authored by John Kolkman of the Edmonton Social Planning Council, said the province can earn up to $2 billion more each year by increasing corporate taxes to 1990s levels and increasing income tax on people earning $150,000 or more. If the provincial corporate income tax rate was increased to 12 per cent - which is equivalent to Saskatchewan's rate, up from the current 10 per cent, and still lower than the 15.5-per-cent rate in the 1990s in Alberta - the province would bring in $1 billion more, reads the report, to be officially released Tuesday at the Bissell Centre.
If individuals earning $150,000 or more were taxed at 14 per cent, instead of the current 10 per cent, Alberta would raise an additional $700 million. That gets bumped up to $1 billion if Alberta mirrored Saskatchewan, where everyone earning more than $122,589 gets taxed at 15 per cent.
All of that money could help families in poverty by:
- Implementing a new Alberta Child Benefit of $1,200 per child (value: $200 million);
- Introducing full-day kindergarten for vulnerable children (value: $100 million), and;
- Implementing a living wage for contracted services (value: $150 million). The report says increasing minimum wages to $13 per hour with benefits or $14.50 without - up from the current $9.95 per hour, the lowest in Canada - would cost the government nothing.
"The premier made a promise in the heat of the last provincial election to eliminate child poverty by 2017," Moore-Kilgannon said. "We are quite concerned about the government's poverty reduction strategy not being substantive enough to have a serious impact on achieving the premierâ€™s promise."
When the government released the 2013 budget in February, Premier Alison Redford said there would be no new taxes this year, and rejected a sales tax. Moore-Kilgannon said the government has told him its poverty-reduction strategy will be released in spring 2014.
"The government is putting themselves in a box when they say they won't address the revenue problem," Moore-Kilgannon said. "By their own admission, the next closest tax jurisdiction to Alberta is British Columbia. If we had the same tax structure as them and I'm not arguing for that we would bring in close to $11 billion. It's not as if they don't have options."
About one in every 10 children - or about 84,000 Albertan kids - were living below the low-income measure poverty line in 2011. The report notes that 28 per cent were in homes led by single mothers and 60 per cent lived in homes where one or more persons work full-time the entire year.
"There's this notion that, 'Oh, there's nothing we can do,' " Moore-Kilgannon said, referring to deficit budgets and provincial debt that has been accompanied by government cutbacks. "Alberta can absolutely afford a real poverty reduction strategy."
Recommendations to reduce child poverty:
$200 million to create new Alberta Child Benefit of $1,200 per child.
$50 million to index Alberta Works and Assured Income for Severely Handicapped subsidies to changes in living costs. Also allow recipients to earn $500 per month before clawbacks.
$150 million to implement living wage for contracted services.
$75 million to enhance working income tax benefits.
$100 million in additional affordable housing investment.
$50 million to fully fund rent supplements.
$100 million to introduce full-day kindergarten for vulnerable children
$100 million investment in child care, early childhood development and child protection.
$100 million to reduce class sizes and increase access to post-secondary institutions.
$50 million to improve bursaries for low-income post-secondary students.
$25 million to increase support for Family and Community Support Services.
TOTAL: $1 billion in additional yearly investment