Provincial small business tax decrease takes effect

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Chamber says tax cut is not enough

The new year began with a bit of relief to small businesses with a cut to the provincial small business tax.

The tax dropped from three per cent to two per cent on New Year’s Day, which was intended to assist businesses with the newly implemented carbon tax.

Alberta Environment Minister Shannon Phillips said that Albertans have a $7.5 billion tax advantage when taking into account the lack of provincial sales tax and payroll taxes along with low personal income tax and no health premiums. She made the comments in an Edmonton business on Wednesday.

Ken Macrae, the outgoing chair of the St. Albert Chamber of Commerce, said that the tax cut isn’t enough.

“While businesses certainly would welcome a tax decrease I don’t think it will be anywhere near enough to make up for the damage that is being caused by their other programs,” Macrae said.

Macrae was speaking about the implementation of the carbon tax and the raising of the minimum wage. The carbon tax kicked in on Jan. 1 and tacked 4.5 cents per litre on to gas prices and 5.3 cents per litre for diesel fuel. The costs of heat will also increase.

Minimum wage in Alberta is currently the highest among the provinces at $12.20 an hour. It is set to increase to $15 an hour by 2018.

Macrae said it is unrealistic to think the carbon tax and increased cost of labour won’t negatively impact businesses.

Although the tax decrease is welcome, Macrae said it only helps those who are turning a profit. Many businesses who are in the red this year will see no relief, as the tax cut only applies to a business’s profits. Macrae said that there are some local businesses who are already struggling and will continue to struggle.

Macrae said that less government interference, fewer cost increases and the removal of the carbon levy would help businesses succeed in the difficult economic climate.

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Jennifer Henderson

Jennifer Henderson joined the St. Albert Gazette in 2016. She writes about municipal, provincial and federal politics; court and crime; general news and features.