This one isn’t going to make me popular (even my wife disagrees with me), but here goes: Alberta should have a provincial sales tax.
It’s well-worn ground, I know, and some Albertans have a zealot’s attachment to the notion that the absence of a sales tax makes Alberta great, but as public policy a PST simply makes too much sense to ignore. And the business community should get behind it.
For evidentiary backup, I turn to the late Robert Ascah, a former chair of the Institute for Public Economics at the University of Alberta and a long-time research fellow with the Parkland Institute. In 2022, Ascah edited and wrote several chapters of a book called A Sales Tax for Alberta: Why and How, which is available for free on the Athabasca University Press website.
It’s a fulsome read, but here is the short version: A sales tax is a stable source of revenue, especially when compared with resource royalties, personal income tax and corporate income tax; This is particularly important in Alberta, where swings in the price of oil can have an outsized influence on revenues and incomes; The mechanisms of a sales tax are well understood; The cost to raise a dollar of sales tax is much lower than for other taxes; A sales tax captures wealth and spending that other taxes miss.
Some contributors to A Sales Tax for Alberta also looked at the social, moral and environmental benefits of such a tax, finding that a sales tax could help fund public programs in times of economic downturn, and it could support the province as the world turns toward a low-carbon future.
Alberta’s political culture, however, is widely hostile to taxes in general and a sales tax in particular. Politicians fear electoral defeat should they ever advocate for the tax (although, as journalist Graham Thomson notes in his chapter of the book, many politicians have floated the idea, including then-premier Jim Prentice in 2015 and current premier Danielle Smith in an op-ed in the Calgary Herald in 2020).
Personally, I would say put new tax dollars in general revenue and use them to lower the deficit, support the province’s health care and education systems and invest in the Heritage Fund. Alberta could do all this and still be the lowest-taxed jurisdiction in the country by a wide margin, should we so choose.
But pitching a sales tax as more tax might be a bridge too far for the voting public. So how about this (and this is where the business lobby should get onboard): reduce corporate and personal income taxes by an amount equal to whatever the sales tax brings in. Switch the tax burden to consumption instead of productive activities like work and entrepreneurship. It would be a different tax source, not an additional one, and would burnish Alberta’s reputation as a good place to do business.
Alberta has advantages over just about every jurisdiction in the world: a young, well-educated, entrepreneurial and gainfully employed population; fabulous natural resources even beyond oil and gas; affordable homes; stunning and vast landscapes; a strong sense of identity and place.
Many things make Alberta great. Not having a sales tax isn’t one of them.
This article appears in the April 2026 issue of Edify
