MLA Report: Dumping money on inflation is like dumping gas on a fire

By Drew Barnes on July 15, 2022.

With the summer now underway, Alberta’s political class is finally emerging from the legislature and reconnecting with the public. Far too many professional politicians and their staffers are just now realizing something I have been begging them to take seriously for more than a year now: regular, working class folks are struggling to make ends meet, let alone get ahead.

Affordability is now the No/ 1 issue facing families and communities. Runaway inflation and coinciding interest rate hikes are poised to drive our economy into recession.

Unlike the cyclical recessions we have grown accustomed to, the next downturn can be directly linked to government policies instituted over the past two years. The rise in inflation became inevitable once countries around the world, including Canada, convinced themselves that public debt doesn’t matter. They chose to print hundreds of billions of dollars and dump it directly into the economy, devaluing every dollar that you and your family worked so hard to earn.

At the same time, our federal and provincial governments embarked on a shortsighted greenhouse gas crusade, instituting a series of policies and taxes specifically designed to make your life less affordable.

Carbon taxes are driving up the cost to produce and transport every consumer product, not to mention the heat, the electricity and the transportation necessary for the proper functioning of a modern society. Here in Alberta, the government has been quick to blame Ottawa even while hiking its own industrial carbon tax. The hypocrisy of the Kenney administration knows no bounds.

Now, in light of the sudden realization that the public is fed up, the premier and the insiders seeking to replace him are scrambling to announce various policies to fight inflation. Most of these policies amount to blatant vote buying, while skirting the real issues that landed us in this predicament to begin with.

The looming recession we face in the coming months is different than the ones we have experienced in recent years. 2022 is not 2008. Borrowing money to dump into the economy by way of stimulus spending and subsidies will only drive inflation higher. It doesn’t take a firefighter to tell you that you can’t extinguish a blaze with gasoline.

To relieve pressure on Albertans, the best alternative is to eliminate policies that make our lives more expensive. There are many ways to do so; here are a few:

• Scrap carbon taxes: Carbon taxes have proven to be the most inflationary form of taxation ever imposed on Albertans and Canadians, full stop.

• Stop the government from profiting off your inflation-driven misery by ending the hidden bracket creep tax. Provincial income taxes need to be indexed to inflation. The Kenney government chose to de-index in 2019, and that was a blunder. Admit this readily apparent failure, adjust course, and move on.

• Raise the basic personal exemption on provincial income taxes. This is the easiest and quickest way to help most Albertans.

• Cancel the provincial small business tax. Saskatchewan and Manitoba have done so already. Recessions begin on Bay Street and recoveries begin on Main Street. Let’s help the little guy get ahead for a change.

• Stop allowing government gatekeepers to protect their friends at our expense, and encourage competition in all sectors. A good starting place is in the insurance sector, which has seen rate hikes far exceeding inflation in recent years.

• Let’s start getting the little things right: From fixing persistent backlogs in processing land titles, to lifting the horrendous red tape burden on employers, there are dozens of things government can do to bolster our economy without spending taxpayer money.

Basic logic tells us you shouldn’t fight inflation with inflationary policies, but that’s exactly what far too many campaign-minded politicians are currently promising. They are panicking and reaching for a gas can to dump on a fire.

Instead, let’s look for common sense alternatives that relieve pressure on Albertans, while rebalancing the economy so the little guy can get ahead.

Drew Barnes in an independent MLA for Cypress-Medicine Hat

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