Premier Jim Prentice opened the door to a progressive tax Wednesday as the province faces slumping revenues because of falling oil prices.
While Prentice pledged to post a budget surplus in 2014, he left open the possibility of changes to Albertaâ€™s 10-per-cent flat tax for 2015.
â€œAt this point, that discussion has not yet happened. Iâ€™m not saying it will never happen, but that discussion has not yet happened and we are wrestling with where oil prices are going to settle out,â€� Prentice said.
â€œI think everyone in this province knows … that oil prices of $75 per barrel represent a very significant reduction in terms of the revenue of the Alberta government if it persists for an entire fiscal year.â€�
Last year, the Alberta government earned more than $9 billion from royalties, roughly one-quarter of the provinceâ€™s budget. With each one dollar dip in the price per barrel of oil, the province loses roughly $215 million in revenues.
The province is set to release its second-quarter fiscal update next week, but the effect of falling oil prices wonâ€™t be felt until the third quarter update.
â€œI think everyone wants to see what happens with oil prices. Iâ€™m not alone in this respect. Iâ€™m trying to be guarded in terms of protecting the interests of our province and taxpayers in our province,â€� Prentice said.
Earlier Wednesday, Prentice faced a series of pointed questions about potential changes to Albertaâ€™s tax structure from Wildrose Leader Danielle Smith.
Without addressing the flat tax, Prentice said during question period that he will maintain Albertaâ€™s â€œlow tax advantage and no sales tax in this province.â€�
NDP Leader Rachel Notley said the province needs to find a way to stabilize its revenue. The NDP has long advocated for a progressive tax system in Alberta.
â€œAt the end of the day, we have a tremendously wealthy province with an incredibly great resource that most other jurisdictions donâ€™t get to rely on and it doesnâ€™t make sense that our government canâ€™t manage that with stability and with an important investment in the future,â€� Notley said.