Prentice says new Alberta health levy to be progressive fee, not flat rate

EDMONTON – Premier Jim Prentice says Alberta’s new health-care levy will not be a flat rate, but will instead be a progressive-pay model.

Prentice said he won’t duplicate the system used for the old Alberta health premiums.

“You can view (the new fee) as a progressive measure,” Prentice told reporters Wednesday. “The former health-care premium was essentially a payroll tax. It was viewed as a very regressive structure and one that was actually quite punitive on the economy and on people.”

He said the details of the health levy will be revealed when Finance Minister Robin Campbell introduces the 2015-16 budget in the legislature Thursday.

Prentice has said the budget and an accompanying 10-year plan will reset the financial baseline for how Alberta spends, saves, and raises money.

He has said such a transformational document requires a mandate to implement and Prentice is expected to call an election in the coming days or weeks.

The budget will also provide solutions, said Prentice, to insulating Alberta’s day-to-day spending from the wild swings in oil prices. Depressed prices are expected to drain $7 billion from the treasury this year.

Alberta will join Ontario and B.C. as the only provinces that charge specific fees for health care.

Alberta charged health-care premiums for 40 years until they were cancelled by the Tories in 2009.

Families were charged $1,056 a year and individuals $528 per year, putting about $1 billion into government coffers. Many Albertans, however, had those fees paid for by employers under benefit plans.

The Alberta government also paid those fees for its employees, dropping the $1 billion take by about one-third.

The budget will also detail any departmental spending cuts.

Last month, Prentice and Campbell said there would be five per cent spending cut across the board which, when inflation and population growth were added in, amounted to a nine per cent cut.

But in a TV address to Albertans Tuesday, Prentice didn’t mention the cuts, only saying the government would be “holding the line” on spending.

Prentice wouldn’t clarify further Wednesday, but said its critical budget changes happen in a “balanced way” rather than drastic steps in a single year.

“Every person we have spoken to who is an economist or involved in these matters (said) that we should not move too quickly because we will trip the province into a recession,” said Prentice.

Opposition parties have criticized the health levy as unfair and ineffective.

Wildrose Leader Heather Forsyth told the house Wednesday afternoon that more health dollars won’t solve long waiting lists and a lack of care beds, adding that the Tories have a history of reckless spending on offices, perks, and failed reform initiatives.

“It’s a PC waste and mismanagement tax,” said Forsyth.

NDP Leader Rachel Notley said it’s wrong for Prentice to add health-care fees while also pledging that he won’t hike corporate income taxes in the next budget.

“This waiting-room tax is a tax on families while profitable corporations get off scot-free,” said Notley.