One idea being discussed by the Alberta Next panel is the collection of all personal income taxes, rather than having Ottawa do it, and the Western Standard takes a closer look at the pros and cons of the topic.Currently, Albertans file and pay their personal income taxes through the Canada Revenue Agency (CRA). The CRA then remits the portion of those personal income taxes back to the Alberta government.Alberta businesses, on the other hand, file and pay their provincial corporate taxes directly to the provincial government, unlike Quebec, which collects both personal and corporate income taxes directly from its residents, bypassing the CRA.Should Alberta follow suit?Collecting our own taxes comes with startup and ongoing administration costs. However, it would create jobs for Albertans, says the panel in a video on its website.“Under Canada's constitution, levying and collecting taxes is an area of provincial jurisdiction, and Alberta could transition over the coming years to collecting our personal income taxes as we do with corporate taxes now,” according to the video..‘ALBERTA HAS AN OTTAWA PROBLEM ’: Smith, panel hear from the public in Edmonton.While Alberta currently sets its own tax rates and credits, its treatments and definitions of income are largely tied to Ottawa, limiting the flexibility to implement effective and competitive tax policy, the panel argues.“We saw this recently when the federal government changed the rules on capital gains for doctors and other professionals, and Alberta was effectively forced to follow those same rules as they related to provincial personal income taxes,” according to the video.“If Alberta were to collect its own taxes, we could tailor our entire tax framework to better reflect our economic realities and provincial policy goals, while declining federal changes to certain portions of tax policies that detrimentally affect provincial income tax policy. This could open the door to streamlining calculations and simplifying provincial income taxes for Alberta residents, creating jobs and economic opportunity at home.”DrawbacksEstablishing a personal income tax collection agency requires a commitment from Albertans and the government, says the panel, which estimates it would take up to five years to build the staffing and necessary systems.Second, it requires a significant financial investment. The estimated cost to build Alberta's own tax agency ranges from $750 million to $1.5 billion over several years..Political scientists say UCP members' demand to vote for Alberta independence ‘inevitable’.“Once operational, the system could cost up to $750 million annually and require hiring as many as 5,000 new public employees. These are substantial expenses that must be weighed against the benefits,” according to the video.Quebec’s own tax collection model has proved to be costly to the province, said Moshe Lander, an economics professor at Concordia University.Lander also warns of a costly transition, as Alberta would need to build its own infrastructure.Alberta’s push to take over tax collection from Ottawa stems from the desire to handle equalization payments, according to Lander.The third drawback is complexity, as taxpayers and businesses would need to file separate federal and provincial tax forms. The panel says online filing would make things easier..EXCLUSIVE: UCP members propose party vote on Alberta independence.Businesses and Albertans working in different provinces will also be faced with complications throughout the year, according to the panel.So far this summer, two town halls have been held in Edmonton and Red Deer, where hundreds of attendees took part.Some attendees agreed with Alberta taking over taxes from Ottawa at the town hall in Edmonton.Among the questions that were brought forward was how to retain Alberta’s low tax rate.“The Quebec tax system actually charges a 15% tax on every sale in the province. In Alberta, we only pay 5%, which is just GST. In the event that we make an Alberta collection agency, how are you going to make sure that we retain our tax competitiveness in regards to the tax system we're going to build?” asked an attendee..Michael Binnion, president and founding shareholder of Questerre Energy, who’s a member of the panel, said in response:“Why would you have two tax forms, and why would you go to the extra trouble? But, all that's where I started. I've changed my mind before,” he said.“I will say I think that it's a great idea to have our own tax system here and our own tax forms, with a zero tax rate, so you don't pay anything. I think that would be a solid answer to this problem.”“But I will say, just back to this idea of self-government, that I think the fact that Quebec can manage its own money, police itself, and collect its own taxes, gives it a lot more political clout in the country than what Alberta has. And so, I will finish that. I did change my mind. I do think it's worth it for us to be able to demonstrate we can govern ourselves.”The Western Standard reached out to the NDP's office for comment on the topic.The six topics that will be discussed throughout the summer are federal transfers and equalization, Alberta Pension Plan (APP), constitutional changes, provincial police force, immigration, and tax collection.Albertans will have the opportunity to decide on these topics as a referendum is coming in 2026.The next Alberta Next panel is set to take place in Edmonton on August 14.
