Yesterday, 27 October 2015 the newly installed Government of Alberta delivered their first budget.
There were three themes to the budget: economic diversification, stabilizing funding for public services and a plan to return to fiscal balance. We were encouraged to see an overall limit to borrowing capped at 15% of GDP, revenue predictions based on commodity prices in line with private sector predictions and a 15% increase to capital spending for infrastructure. Now our focus is with those aspects of the budget that will contribute to Calgary’s ability to deliver on the Economic Strategy for Calgary.
First and foremost, we need to take note of the new Ministry for Economic Development and Trade which was announced last week. This new Ministry is a positive move for the government and enables better collaboration, centralized resources and, we believe, will deliver higher impact in the short, medium and longer term. Economic diversification and working together to draw investment to Calgary and Alberta are at the core of our business plan.
Calgary Economic Development is one year into the implementation of building on our energy: The 10-year Economic Strategy for Calgary. Along the way we continue to engage stakeholders who are grappling with our current economic reality. We have been reprioritizing and adding tactics to build a stronger, more resilient economy for the future. The Business Plan for the Ministry of Economic Development and Trade suggests the “creation of economic strategies and policies to provide an overarching framework that identifies competitiveness challenges and sector opportunities for growth and investment” is a priority for the Ministry. We are ready and willing to help in the development of economic development strategy for the province. I should also say that we have had the opportunity to meet Minister Bilous and look forward to working with him in advancing our mutual objectives with the Economic Development and Trade file.
Within the budget we are encouraged to see the following points to build on our economic strengths, support diversification and attract investment:
In the future, we look forward to seeing additional details as to how the government will enhance access to capital for businesses throughout the business life cycle.
Building on our energytakes a holistic approach to economic development. While we do believe the new Ministry for Economic Development and Trade will be helpful, it cannot be forgotten that several other Ministries are directly engaged in economic development or play a crucial role in building the environment for economic development to take place. Beyond the Ministry of Economic Development and Trade, the departments of Energy; Agriculture and Forestry; and Culture and Tourism are directly engaged in developing economic opportunities for Albertans. As such we need to take note of the following priorities within those business plans:
Further, the departments of Education; Advanced Education; Jobs, Skills, Training and Labour and Infrastructure create the environment to support economic development in Alberta. The budget includes an additional $4.5 billion over previous commitments to capital infrastructure spending to address deferred maintenance for schools and health care facilities as well as projects to address past and future population growth including multimodal transportation systems to serve all Albertans. This will be helpful in redeploying engineers and construction workers that have been displaced from the energy industry.
This budget prioritizes preparing a workforce for a diversified 21st century economy, puts in place strategies to bring marginalized people, including recent immigrants and indigenous people, into the workforce. We need to be sure we are developing, retaining and attracting the skills that will be needed in the future. Building leading edge educational programming, enhancing employer engagement in workforce development as well as plans to recognize qualifications of people coming from outside Alberta will all assist in achieving these goals. We will watch future budgets for investments to capacity specifically to post-secondary institutions which have high turn-away rates.
The 10-year Economic Strategy for Calgary includes actions related to poverty alleviation, shared prosperity and building vibrant communities. This budget provides support to low income families and works towards poverty alleviation supporting the efforts of the Calgary Poverty Reduction Initiative. The Alberta Child Benefit and additional support to seniors should assist in this regard.
We are happy to see any focus on job creation but we have concerns with respect to the Job Creation Incentive Program which allows companies to access a $5,000 grant to cover the costs of ‘new’ jobs. We would like to see clarity regarding the definition of new job and would prefer that job creation programs focus on productivity and innovation leading to economic growth and diversification.
A strategic plan and business plans for each ministry accompanied this budget. As we have learned with building on our energy the implementation of strategies and business plans evolve over time as we learn more and have a greater understanding of which actions are leading to positive results. We expect that greater detail will be revealed as the Government of Alberta’s business plans are implemented; however, we are optimistic the measures in this budget will support the goals of the Economic Strategy for Calgary: purposeful diversification, shared prosperity and building strong communities.