Good morning, Mr. Chair. Thank you for the invitation to speak this morning.
For those of you who are visiting Alberta, welcome to Alberta. To those who are coming home and are from Alberta, welcome home.
By way of introduction, my name is Ken Kobly, and I'm the president and CEO of the Alberta Chambers of Commerce. With me is Don Oszlie, our current chair.
The Alberta Chambers of Commerce is a federation of 124 community chambers in Alberta that represent in excess of 22,000 businesses in the province. That makes us the largest business organization in Alberta. Fully 80% of those members are outside the metro Edmonton and metro Calgary areas, so we have a very diverse membership group. Our policy process is grassroots driven. Our policies are proposed by community chambers and then adopted at our annual general meeting, so they tend to reflect the desires and concerns of our member communities, as well as their members.
We currently have in excess of 60 policies in our policy book, ranging from the obligatory tax policies to very diverse policies on child care and border issues. We also have a policy on reintroducing an accelerated capital cost allowance for the oil sands. It was a little bit tough to pick which policies to present today.
We are aware that a viable and prosperous country depends not just on income taxes and corporate taxes--so again, the reason for our diverse policy base. Our policies are available on the website, should you choose to go and take a peek at them. They're fully public, as are the responses we've received to date from governments.
Our submission is generally about indexing of thresholds. Thresholds have been introduced, and the track record has been that they haven't been amended for quite a number of years to reflect changes in reality, prices, and the economy.
We have four examples that we've chosen to highlight in our submission. One is the GST rebate for new housing purchases, which was introduced in 1991 and hasn't changed since then. When it was introduced, houses below $350,000 were eligible for a GST rebate. The policy was that new homes priced between $350,000 and $450,000 were deemed to be luxury homes, so the rebate would start to reduce and be totally phased out at $450,000.
In a number of parts of our communities in Alberta a new house costing $450,000 would not be considered a luxury home. In particular, in northern communities such as Fort McMurray, that range is even further aggravated. I'll give you an example. Currently in Fort McMurray, $440,000 would not get you a new, single family house. It would get you either a condo or a 40-year-old manufactured home. This is an example of a threshold that was introduced and not amended. The policy that initially brought it forward is completely out of whack with economic realities today.
The second threshold that was introduced and has been amended but needs to be reviewed on an annual basis is the capital gains exemption for small business corporations' sale of shares and for farm property. Most small businesses consider their business assets to be their pension plans or their RRSPs for their eventual retirement. It was most recently updated in 2007, but prior to that the capital gains exemption was not reviewed for 19 years.
The third example is the luxury auto threshold. It currently sits at $30,000. Bear in mind that these vehicles are used for individuals in their business endeavours to earn taxable income. While we agree with the general policy that luxury vehicles should not be available for write-off, certainly we need to ensure that these numbers remain reasonable. The last change to that was nine years ago.
The last one is the small suppliers threshold for GST. It was introduced at $30,000, again when GST was enacted. It's been 18 years since that was amended, and we suggest it be raised to $75,000.
Thank you, Mr. Chairman.