The gasoline tax holiday is a winner for drivers and very popular but who doesn’t like government handouts! Yet all Albertans need to realize how expensive this program actually is and its ineffectiveness in delivering meaningful help to struggling families.
According to Trevor Tombe, University of Calgary much-quoted economist, this tax holiday will reduce the government’s revenues by three per cent or approximately $1.3 billion every quarter. If the gasoline tax holiday is extended through December, the cost of this program would be upwards of $3.9 billion.
Struggling families are those who struggle to find affordable housing and, in increasing numbers, are regulars at charity food banks.
Struggling families are those who can’t afford their tuition debt, childcare costs, utilities, dental care and prescription medications for themselves and their children.
The multi-billion-dollar gasoline tax holiday advantages those who drive the most. Lower income people tend to purchase less fuel and use public transportation hence benefit the least. They also have little discretionary income in which to alter their spending during inflationary times.
Tombe’s research concluded that families with incomes less than $30,000 are expected to save around $70 from a three-month gasoline tax holiday, while households with incomes over $150,000 can expect to save around $220.
We are not all ‘struggling families’ but we have committed to forego, by the end of September, over $2.6 billion in government revenues on the assumption that we are.
Targeted help from the government to struggling families through enhanced income support programs, cash rebates or direct support to food banks would have been much less expensive and much more effective for those Premier Kenney’s said he was helping—struggling families.
A struggling family is not one who may have had to forgo their motorhome trip to PEI and instead holiday closer to home, or fill their hummer to go back and forth to their downtown law office.
The UCP government knew this, or at least did, when they introduced their childcare program targeting low-income families.
Current UCP leadership candidate and former Children’s Services Minister Rebecca Schulz said at the time, “These investments will make a big difference for families but we know that this targeted approach will also actually make sure dollars go to parents and kids who need it and really have an impact on economic recovery.”
Affordable housing is a significant piece for struggling families, pre-inflation and even more so now. People living in precarious housing situations are an economic drag on the economy. Yet it is chronically underfunded by both the federal and provincial governments.
The Alberta government has committed a mere $250.4 million a year for affordable housing over five years. Yet they are wilfully throwing away $1.3 billion every three months for a tax-free holiday on a targetless program helping anyone who drives.
Governments are masters at buying our votes but that doesn’t make it right or wise. Political leaders are elected as stewards of the collective whole. In Alberta the lost opportunity costs of $2.6 billion, and likely much more, could have been effectively targeted to struggling families facing food and housing insecurity.
But, that’s not how an opportunist politician or government thinks or acts.
The UCP gasoline tax holiday to help ‘struggling families’ is akin to non-targeted radiation treatment for cancer. Scatter it everywhere and hope some of it hits the cancer cells, versus pin-point targeting to just attack the cells of concern.
Too bad, everyone in the UCP government had forgotten former Minister Rebecca Schultz’s words when she announced the government’s childcare investment, “this targeted approach will also actually make sure dollars go to parents and kids who need it.”
Brenda Schimke
ECA Review
