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Ralph’s Revenge: A Provincial Sales Tax Referendum

“He who controls the past controls the future.  He who controls the present controls the past.”

 

–       George Orwell, 1984

 

With all the discussion lately about the upcoming March 7th budget, and the difficult financial straights our province now navigates, I find myself thinking about Ralph Klein and how history will mark his place in the story of Alberta.

 

 

Reflect on the many layers of irony in our current situation for a moment.  Ralph Klein, King Ralph, today finds himself deep in a thickening and inescapable fog of dementia, unable to speak, let alone defend himself.

 

Defend himself from whom?

 

Those who accuse him of shortsightedness: former opponents, indeed some former friends and colleagues, and some who weren’t even alive or living in Alberta when Klein’s government first went to work in the mid-1990s.  According to this worldview, “The Alberta Advantage” was no advantage at all, and Ralph Klein’s fervor for eliminating deficits, the debt and lowering taxes left Alberta with a litany of systemic financial trouble.

 

To some, everything from an “infrastructure deficit”, to “boom and bust” revenues, to the “bitumen bubble” somehow seem to find their root with Ralph Klein, and as a result, they say its now time for Alberta to have a grown up conversation about sales tax.

 

Whether you think Klein is a hero or a villain, when it comes to a provincial sales tax, he cannot be accused of imprudence.

 

In fact, almost 20 years ago, he knew this day was coming, and set up a fiscal firewall to ensure that a conversation about sales tax would remain just that – talk.

 

Flashback to 1995; It was the height of the furor over Klein’s spending cuts, and incidentally, the last time sales tax was ever given serious consideration in this province.

 

A freshly minted Premier in his first term, Ralph Klein fires a missile over the bow of the Opposition.  In February 1995, the 3rd Session of the 23rd Legislature, Premier Ralph Klein introduces Bill 1 – The Alberta Taxpayer Protection Act.

 

Signed into Law in May 1995, the Act states:

 

“A member of the Executive Council may introduce in the Legislative Assembly a Bill that imposes a general provincial sales tax only if, before the introduction of the Bill, the Chief Electoral Officer announces the result of a referendum conducted under this Act on a question that relates to the imposition of the tax.”

 

The legislation is still on the books today, and for supporters of a provincial sales tax in Alberta, it is the most lethal of poison pills.

 

How lethal?  According to a new ThinkHQ Public Affairs poll (Sales Tax Feb 2013conducted between February 12 – 16 with 1214 Albertans, nearly three-quarters (72%) of Alberta voters would vote against imposition of a sales tax if a referendum were held tomorrow.  Only 17% of those interviewed say they would vote in favor of a sales tax, while 11% are either uncertain or wouldn’t vote.  The Public Will rarely gets much clearer than that.

 

But the Alberta Taxpayer Protection Act is a 20-year old law; perhaps there is a belief in some circles that it is time to amend or repeal it to clear the way for a sales tax…following more conversations of course.

 

Unlikely.  Having placed the power of approving a sales tax in the hands of voters, an attempt to circumvent this authority would be certain death at the polls for a governing party.  In our February survey, 73% voters say they would disapprove of eliminating a sales tax referendum – 62% strongly disapprove.  Meanwhile only 20% say they would be in favor of taking the sales tax referendum law off the books.

 

Without uttering a single word on our current financial predicament, the Taxpayer Protection Act speaks volumes about Ralph Klein’s views and what his place will be in Alberta’s history.

 

Much like today, historians a hundred years from now will chronicle Ralph Klein’s accomplishments as good or ill according to their own perspectives.  But one thing is certain; Klein is, and will always be a titan in Alberta politics.

 

One of Klein’s most powerful and unique strengths as a politician was his relationship with voters.  He was a consistently popular Mayor and Premier during good times and bad, and that popularity was based on trust.

 

He trusted voters, and voters trusted him – even when they didn’t necessarily agree with him.

 

Premier Klein was infamous for changing his mind, admitting when he or his government had made a mistake.  He was able to do this because of his faith in voters.  He believed that if he admitted a misstep, voters would forgive him, and tell him to get back to work.

 

And without fail, they did.

 

The Alberta Taxpayers Protection Act is a perfect example of Klein’s confidence in the common sense of the electorate, and it is a legislative legacy that will endure in Alberta.  On this issue at least, Albertans will have the final say.

 

Asked if the province should introduce a sales tax today – voters say no.

 

Asked if the government should eliminate the need for a referendum before introducing a sales tax – voters emphatically say no.

 

Some may aptly consider this Ralph Klein’s revenge on those who now accuse him of shortsightedness.

 

Marc Henry is president of ThinkHQ Public Affairs Inc., an Alberta-based government and public relations strategy and public opinion research firm. 

 

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