Just as we all hoped to put the past two-and-a-half years in the rear-view mirror, along comes debilitating increases in the cost of living—runaway energy and food and house prices are making life unaffordable, particularly for the vulnerable among us.1Inflation Expectations Hit Record in Bank of Canada Surveys https://financialpost.com/pmn/business-pmn/bank-of-canada-says-near-term-inflation-expectations-hit-record
Inflation is something most Canadians have never experienced. Sadly, younger Canadians are learning a lesson the rest of us learned the hard way: Inflation hurts. It hurts a lot.2Half of Canadians Who Have a Car Cannot Afford to Fill Their Gas Tank https://www.ipsos.com/en-ca/half-of-Canadians-who-have-a-car-cannot-afford-to-fill-gas-tank?utm_source=The+Hub&utm_campaign=e3199c1e40-EMAIL_CAMPAIGN_2022_07_04_07_21&utm_medium=email&utm_term=0_429d51ea5d-e3199c1e40-460240366&mc_cid=e3199c1e40&mc_eid=c0315500bf
It hurts low-income and vulnerable Canadians the most. Particularly those on income assistance and disability programs, low-income seniors, and working Albertans struggling to get by. In Alberta, Trevor Tombe, our resident economic number cruncher, has estimated that inflation is currently reducing disposable income by as much as ten percent for those with low incomes.3Inflation’s bite is big. Alberta’s capacity to help is bigger https://www.cbc.ca/news/canada/calgary/opinion-inflation-alberta-windfall-revenues-buffer-1.6503349
A ten percent pay cut would be devastating for most of us. But for those on income support, low-income seniors and struggling to get by, it is simply debilitating.
I am running to be the leader of Alberta’s United Conservative Party, and premier of Alberta. I want to be a premier that brings conservative principles to the challenges of today. That means helping Albertans—especially the most vulnerable among us—deal with the real challenges of today. It does not mean tilting at constitutional windmills.
A few years ago, the Alberta government—a government of which I was a cabinet minister—decided to delink critical programs, and the Alberta tax system, from inflation. At the time the Alberta government was running unsustainable deficits and inflation was at historic lows. Spending needed to be controlled. I was in the cabinet at the time and was a part of those discussions. I agree that Alberta needs to control spending.
But the reality is that in the current high-inflation environment, the Alberta government is set to get a windfall not just from rising energy prices, but from the overall rise in inflation. That’s right—Albertan’s pain is the Alberta government’s gain.
Alberta is witnessing the most massive turnaround in its budget in Alberta history. We are on track, according to Tombe, to be running surpluses of one billion dollars per month above the budget forecast.
This provides the Alberta government with an enormous opportunity to cushion the blow of inflation for Albertans.
Which is exactly what I would do.
First, I would, as premier, re-index five critical programs that support low-income Albertans, Albertans on disability, and Alberta seniors. Those programs include Income Support to People Expected to Work or Working; Income Support to People with Barriers to Full Employment; Assured Income for the Severely Handicapped (AISH) Grants; Seniors Benefit and the Seniors Supplementary Accommodation Benefit.
If the inflation rate over this year averages four percent, indexing these programs will cost $116 million this year. If inflation averages eight percent, the annual cost will be double that, $232 million. Fully half of that money will go to AISH recipients.
I was the minister of community and social services when the Alberta government de-indexed AISH. It is no secret that I fought against further reductions. AISH should be indexed to inflation, full stop, and a government led by me will do so immediately. This is the first and critical step in helping these vulnerable Albertans at this time.
Second is to do the same for all Albertans who file income taxes. When we fought the deficit, it made sense to ask all Albertans to do their share. But in a world with high and rising inflation, it makes no sense for the Alberta government to reap a windfall while Albertans are drowning under a waterfall of rising food, energy, and other costs. Reindexing the tax system means not only increasing all the tax brackets, it also means increasing the basic personal and spousal amounts, age amounts, medical allowances, and all the other credits in the tax system. If inflation runs at four percent this will cost $251 million this year. At eight percent it will cost $496 million.
Third, the Alberta government should not just do no harm. It should do some good.
Albertans need relief now.
That is why, should I become Alberta premier, the Alberta government would immediately start writing Affordability Cheques to every Alberta household for $75 per month. Families with children would get an additional $25 per child under 18. And, because rural Albertans drive more and face even higher costs for food, the program will include a supplement for rural Albertans boosting the per-household amount to $90 and per-child amount to $30 per kid.
These Affordability Cheques would cost $225 million per month—just over one-fifth of the unanticipated surplus due to rising energy prices. Funds that belong to Albertans. This leaves four-fifths of that unanticipated surplus for debt reduction, savings, infrastructure, and other priorities.
Incomes for lower-income families with kids will increase by as much as six percent (credit to Trevor Tombe for running these numbers). Together with re-indexing the tax system and re-indexing those five critical programs, low-income Albertans will see significant protection from more expensive groceries, gasoline, and electricity.
Affordability Cheques would be phased out on the same scale as the government will phase out the Fuel Tax Holiday—as the price of oil falls, the program will be reduced. This will be evaluated quarterly.
Alberta is incredibly fortunate to have the energy industry. It not only employs Albertans (including me for over two decades) but through the windfall revenues it produces when energy prices rise, it allows our government to protect our population from the rising cost of living. After all, these dollars belong to Albertans.
Those windfall revenues should do more than reduce our debt, as important as that is. A portion should also be used to protect Alberta families from something many have never experienced—the unaffordable rise in the cost of living from rising inflation.
And as Alberta’s premier, that’s the first thing I would do.
