Budget leaves businesses alone


As part of its spring budget, the government decided not to raise corporate taxes.

Many Alberta companies may face large decreases in revenue this year, Finance Minister Robin Campbell told media Thursday, and adding more taxes could lead to business closures and unemployment, triggering a recession.

Opinions on taxing business are divided on the streets of St. Albert. Some people say the government chose well, saving jobs and helping to boost the economy. Others say it’s about time someone taxes those who earn the most, the big oil companies.

“I think our government’s too lenient on the corporations,” said Richard Hatowski. “As soon as something happens here, oops, we are paying for it and the corporations are getting away.”

Gordon Wingrowich says many businesses in the oil and gas sector make a ‘load of money’ and should get taxed. And Bernie McGillis thinks taxing corporations would not affect the job market. Because nobody wants to fire their employees only to rehire them when the economy rebounds, he said.

But there are others who disagree. One man, who preferred to remain anonymous, said taxing business is a bad idea. It’s the second time that he’s been laid off during a recession. And companies are less willing to hire anyone if they have to pay more, he says.

“We don’t need a recession. We don’t need cutbacks. We need to keep everybody working and going,” he said.

Taxing grandmothers

Many people agree with taxing corporations but they forget that businesses are owned and pay the livelihood of real people, said Mark Huson with the University of Alberta School of Business.

If you increase corporate taxes, it lowers the amount of dollars ‘the corporation’ has available to pay to its owners. And owners include everyone who is a shareholder, employee or pensioner, he said.

“If I am a retired person relying on the dividends out of my RRSP and you raise corporate income taxes, well, that is bad for pensioners then,” he said. “You are not taxing these impersonal corporations at all. You are taxing their owners, who could very well be your grandmother.”

Raising corporate taxes is also bad for economic growth, he says. A small business, such as a restaurant, cannot provide the same service or quality with less money. The higher the cost to do business, the more likely the owner struggles and closes, and someone loses a job, he said.

Big corporations will also not hesitate to leave high-tax places. In the United States, businesses have migrated to Oregon, Nevada and Texas for years, because of lower income taxes than in California. “Just as people will sometimes move to a lower tax bracket, corporations will as well,” he said.

Helps small business

While many people think that it’s the wealthy, multi-national corporations that are getting away easy, they forget that Alberta is home to many small and medium-sized businesses, said Lynda Moffat, the CEO and president of the St. Albert and District Chamber of Commerce.

She said if these people can keep their shops open they keep others employed. Raising taxes on businesses would only hurt them when they already “struggle to stay on top of things as it is.”

“Fortunately, the government seems to be determined to keep our economy as healthy as possible without dumping us straight into a recession,” she said. “They seem to understand that it’s business that runs the economy and if you are really going to punish them then the results are not going to be what we need here.”


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