A defiant Alberta premier broke ranks with some of his own senior cabinet ministers Tuesday, declaring that, under his watch, taxes will never increase to help the government escape from its multibillion-dollar deficit and a deepening fiscal hole.
One day after some of his most trusted ministers said both tax hikes and program cuts are needed to redress the province's revenue crunch, Premier Ed Stelmach said his government won't hike personal or corporate taxes, and vowed never to adopt a provincial sales tax.
This is another dog whistle moment - to the extreme right wing base that now seems to have control over the Alberta PC's. It's a signal that under Stelmach, the government is going to get axed down to as small as he can make it.
It shows a disappointing lack of vision and wisdom on his part though. He has just shackled himself to only surviving on existing revenues - by far the majority of which are coming in from a natural resources sector that has been pummeled in recent months.
Stelmach has just taken so many tools off the table, that his government's ability to respond to the economic situation we see today is reduced to two things: borrowing money and cutting services. That's it.
It's a sacred cow in Alberta that we will never have a provincial sales tax. When times have been good, that's been feasible for the government to get away with, and it plays well at the ballot box. What Stelmach, and others, fail to recognize is that a Sales Tax would go a long ways to stabilizing the revenues that the Alberta Government sees.
Unfortunately, Stelmach is playing to his base - he has been more blatantly since the April budget, and it's going to get a whole lot worse in the coming months. Especially when the leadership of the governing party isn't even willing to consider all of the tools that are available to him in addressing the current situation.
Stelmach's approach is going to make the recession in Alberta lot worse, and a lot deeper for longer in short order - purely so he can shore up his support within the party.
Talk about a government being past its "best before" date!