EDMONTON — Alberta has put the legal wheels in motion to cut corporate income taxes by one third.
The changes are part of a bill introduced in the legislature by Finance Minister Travis Toews.
Bill 3, if passed, will see Alberta’s 12 per cent corporate rate cut by one percentage point on July 1, making it the lowest in Canada.
The rate would be reduced by the same amount on the first day of the following three years, leaving it at eight per cent on Jan. 1, 2020.
The bill is part of Premier Jason Kenney’s campaign pledge to reinvigorate the Alberta economy by cutting taxes and reducing regulations.
His United Conservative government has already introduced bills to end the provincial carbon tax and reduce the minimum wage for those under 18.
The UCP says the corporate tax cut will take a bite out of provincial coffers in the short term, but will ultimately provide the incentive for employers to grow their businesses in the Alberta economy, and as a result bring in even more tax revenue in the long run.
After introducing the bill Tuesday, Toews said the planned four percentage point drop is an economic decision, but also sends a statement.
“With the amount of investment that fled this province, we really believed we needed a bold move to attract investment again back into this province,” he said.
“That was the reason why we chose to go right from 12 to eight.
“We (also) recognize that we’re competing for capital not only within the country but within the continent and in fact globally.”
Opposition NDP critic Joe Ceci said the cut is a false economy.
He said similar tax cuts have not driven job growth in other jurisdictions but have led to corporations stashing away savings while governments cut frontline services in health and education to make up the difference.
“It’s a hope and a prayer and it’s based on wishful thinking,” said Ceci.
“Real live examples in other jurisdictions did not result in the kind of return on investment that he (Toews) is talking about.”