Alberta is cutting business taxes, pumping billions into infrastructure and making a full court press to lure jobs from Toronto, Montreal and elsewhere to rebound from the COVID-19 pandemic.
“We’re going to be placing a huge emphasis on finance and financial technology,” Kenney said Monday in Calgary.
“All of those banks and insurance companies down on Bay Street that are paying way more taxes. Their workers are paying way more taxes. They are paying way more for rent. They’re fighting Toronto traffic.
“We’re going to be telling them that they can save money for their shareholders, for their workers, for their operations by relocating financial and fin-tech jobs to places like downtown Calgary, downtown Edmonton.”
Kenney said they will also target companies in other locations such as Montreal, Houston and New York as his province works to dig out of a cratered provincial economy caused by the pandemic and by a global oil price war that sent profits into a tailspin.
Alberta has flattened the curve on COVID-19 and has reopened much of its economy, albeit with health safety conditions, and Kenney said now is the time to get the economy back on its feet.
This year’s budget deficit is expected to balloon from $7 billion to $20 billion.
Kenney announced an immediate $10 billion will be spent on a range of infrastructure projects, including roads, health-care facilities, and schools to create construction jobs, with spinoff benefits to other service providers.
Kenney said this investment is expected to create 50,000 jobs.
He called it the “largest infrastructure build in Alberta history” and the biggest in the country on a per-capita basis. Kenney said it was a 40 per cent increase from what was initially announced in the provincial budget.
Kenney cut the corporate income tax rate to 10 per cent from 12 per cent after taking office last year. That figure was to go down to eight per cent in the coming years, but Kenney announced it will be done this week. That makes it four percentage points lower than key competitors such as British Columbia.
Albertans already have the lowest tax regime in Canada and pay no sales tax.
He also announced “largely a suspension of Temporary Foreign Worker program” in order to prioritize jobs for Albertans, an acceleration of the job creation tax credit, $174 million to the Alberta Enterprise Corporation “to expand access to venture capital for early stage startup companies, and the creation of Investment Alberta — a new agency to lead a campaign to attract world-wide investment.
There will also be an Innovation Employment grant to encourage high-tech companies and investment. The grant replaces tax incentives put in place by the previous NDP government, which Kenney scrapped on the grounds the incentives were too narrowly focused.
Details on this fund, and other sector-specific initiatives are expected in the coming days.
NDP Opposition Leader Rachel Notley said the $10 billion will help as a short-term “shock absorber” but called Kenney’s other ideas unimaginative, adding the corporate income tax cut didn’t bring back jobs before the pandemic, and won’t bring them back after.
“There’s very little new that is in here and it proves that this government is already out of ideas,” said Notley.
Ken Kobly, head of the Alberta Chambers of Commerce, said the announcement delivers critical aid.
“The measures announced today will help business operators get back on their feet so they can begin rebuilding our economy,” he said.
The plan is a marked departure from the laissez-faire economic platform Kenney championed and won on in the election. Kenney chastised then-premier Notley’s NDP at the time for heavy spending on infrastructure and on day-to-day operations, saying it would cripple future generations with unsustainable debt.
Since then, as the oil and gas economy has been slow to recover, Kenney assumed a more direct interventionist approach.
In March, his government agreed to provide $1.5-billion, plus a $6-billion loan guarantee, to Calgary-based TC Energy Corporation, enabling the completion of the KXL pipeline.
Finance Minister Travis Toews said Monday that “there’s good debt and bad debt.” Bad debt, he said, is borrowed money for operations while good debt invests in infrastructure that in turn lures businesses to the province.
“This is an incredible ditch that we have to get through, and so it warrants a significant investment,” said Toews.
“Our future is truly at stake,” Kenney said. “We must save lives and livelihoods.”
Toews said this was just a snapshot on how the pandemic has impacted the economy. He said the province would provide a more detailed look at the impact “later this summer.”
In March, Kenney announced a 12-member economic advisory panel — including former prime minister Stephen Harper — to provide guidance on the relaunch.
— With files from Global’s Emily Mertz
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