Sin Taxes Biggest Income Generator For Alberta

Calgary, Alberta, Canada (AHN) – Partly because of tax collection from what are considered sin products, Alberta was able to raise $34.6 billion for the first quarter of the fiscal year. Levies from gaming and lottery raised $1.3 billion and from liquor $700 million.

In contrast, royalties from natural gas reached only $1.9 billion, which is much lower compared to $6 billion collected in 2006.

The combination of sin taxes and natural gas royalties, however, still failed to raise sufficient funds for the cash-strapped province. Alberta reported on Thursday a budget deficit of $4.76 billion.

Robert Williams, coordinator of the Alberta Gaming Research Institute, acknowledged the province’s heavy reliance on alcohol and gambling taxes more than its natural resources is worrisome and alarming. Large amounts of gambling taxes are collected in Alberta because its residents spent an average of $951 per person for gambling activities in 2009. The average is the highest among Canadian provinces.

Alberta officials, however, defended the collection of a large amount of taxes from sin products and services because the income from liquor is returned to the general fund and levies from gambling are allocated to various groups and agencies in Alberta.

Other Canadians also are increasingly being hooked on gambling. According to reports, five Canadian provinces spent more than $405 million on token prices for casino losers. Among the items given were watches, theater passes, limousine rides and hotel accommodations.

Because of these “comps,” losing bettors keep on coming back to the casinos and other gambling spots, including those run by provincial governments, as they are made to feel they are still big winners even if they actually lost thousands of dollars in wagers.

While some governments have taken steps to curb gambling addiction with the allocation of funds for treatment, research and prevention of problem gambling, the amount spent dwarfs the amount casinos spend on marketing and promotion of gambling sites, half of which are allocated to token gifts.

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