ALBERTA'S CREDIT

New Zealand Herald, Volume LXXIII, Issue 22615, 31 December 1936, Page 6

ALBERTA'S CREDIT

TAXES INCEEASED scheme less popular JVHEAT PRICES RECOVERING BY KATHLEEN F-. JONES With tho return of "dollar wheat" to the Canadian prairies, Alberta's little flurry in Social Credit bids fair to pass into history as a brief if hilarious experiment in amateur politics. ,With the Aberhart Government's record of increased taxation, reduced social services and extravagant promises largely /unfulfilled, the electors of Alberta are slowly recovering from the hysteria which swept the Social Credit party into power, and turning their attention to the more practical recovery brought about by sharply increased wheat prices. "When every bushel of wheat produced represented an actual loss, and each year's operations but increased the farmers' liabilities, even such a fantastic scheme as Social Credit as expounded by Mr. Aberhart gained rapid credulence, though few people professed any knowledge of how the proposed dividends were to be paid. To-day, blind faith in the Aberhart promises is definitely on the wane, as evidenced by the recent by-election, which returned a Liberal member to the Alberta legislature, and critics of the Social Credit Government are commanding a wider respect than at any time since the new regime took office. Social Credit in Name Only Perhaps, the most outstanding fact | in regard to Alberta's political adventure is that it is Social Credit in nothing but name, and that it lias both repudiated and been repudiated by the originator of the Social Credit theory •—Major Douglas. Nor has the Alberta Government's one excursion into the realm of monetary experiment added to its reputation. The Prosperity Certificates issued last summer and backed by Dominion currency, borrowed of course from the Federal Exchequer, were promptly presented for redemption by Alberta citizens at the first opportunity, with the exception of a small proportion retained as souvenirs. Faith in the Prosperity Certificates lagged early in their brief career when tho Government itself refused to accept them as payment, or part-payment of provincial taxes, legal fees or at the Government liquor shops. When their rejection at the hands of avowed Social Credit enthusiasts became public talk, Premier Aberhart took advantage of his Sunday radio broadcasts to complain of this lack of faith, though it was well known that members of the legislature had declined to accept them in payment of sessional indemnities. New Sales Tax Imposed Legislation passed by the Aberhart Government to date has not reflected greatly to the credit of the new political party. There has been much highflown talk of social credit and social justice, but very little accomplished toward these ends with the possible exception of the recent debt adjustment legislation and some experimentation in the field of industrial codes and price fixing. When Mr. Aberhart went to Ottawa soon after his election to power in search of a federal loan and returned with Mr. ; Magore as financial advisor to the province, he introduced a new series of taxes which met with very poor reception f from the dividend-seeking Albertans. A sharp increase in income tax 011 the lower salaries with practically no change on the larger incomes was not favourably regarded, but since the majority of Alberta citizens are engaged /in agriculture, and consequently contribute little toward income tax revenues, little protest was registered. jNot so, howevei, with the new two per cent sales tax introduced by the Social Credit Government, for though foodstulfs and various other articles were exempt from this particular tax it bears heavily on the farmer and small wage earner. Also in actual practice this tax often works out much higher than 2 per cent since on any purchase from 16 cents to 50 cents, 1 cent tax is collected, while a purchase of 55 cents to 1 dollar carries a tax of 2 cents. Neither can this provincial sales tax be incorporated into the wholesale price and thus concealed, for the Federal Government levies a sales tax of 6 per cent' to 8 per cent which is added to the wholesale cost, and reserves this form of taxation exclusively for the federal revenues. Every time an Alberta farmer buys a pair of hoots to replace some of his household equipment, he' must add several cents to the purchase price asked by the retailer, arid already this method of increasing the provincial income has become exceedingly unpopular. Social Services Curtailed • A sharp curtailment in the already limited social services granted to Alberta citizens came as a blow to the Government's supporters who had voted the Social Credit Party into power mainly on the promise of increased social services combined with the monthly dividend, particularly to rural residents who urgently require some form of'" Government assistance along these lines. And thus far there is no indication of a restoration of reduced social service grants. Debt legislation, however, has had a beneficial effect on agriculture in Alberta, and continued the work commenced bv the former Tinted farmers of Alberta Party. Under the recent Social Credit debt adjustment all interest has been reduced to 5 per cent, while.on debts contracted prior to 1931. nil interest payments made since that time must be applied against the principal, and the baianice of the debt spread over a period of ten years. Since many agricultural loans and inoi tgages carried interest rates of 8 per cent or even higher, this legislation has definitely provided much-needed relief to the debtridden Alberta farmers and materially reduced , principal payments also. Through tiio medium of the Alberta Debt Adjustment Hoard functioning as a Governmental body, many voluntary debtor-creditor adjustments have been reached, and foreclosures on farm mortgages strictly limited to certain limited cases.

The Changing Situation In sections of Alberta -where an average crop was harvested last year, there is a marked tendency to regard the depression as a thing of the past, and to forget the political panaceas of the past few years in the return to more normal economic conditions. With continued present-dav levels 011 wheat and the beneficial effects of recent debt adjustment, Alberta farmers are justified in holding a reasonable expectation of regaining a fair standard of living, and with this condition less and less importance is attached to the now famous promise of a 25 dollars a month dividend. Just as Social Credit soared to power via the difficulties of the depression, it may also escape fulfilment of its impossible commitments on the crest of returning prosperity, giving way in turn to'a sounder form of government 6uch as it once enjoyed in the early yeajf of the former United Farmers oi .Alberto. Party.