5 Key Takeaways from the Economic Recovery Plan Discussion with Minister of Jobs, Economy and Innovation, Doug Schweitzer
On June 2, 2021, McCarthy Tétrault virtually hosted an Economic Recovery Plan Discussion with Doug Schweitzer (Minister of Jobs, Economy and Innovation – Alberta), moderated by John Osler, QC, which focused on Alberta’s Recovery Plan and the look ahead for our economy. This blog highlights the top 5 takeaways from the discussion.
- Alberta is well positioned for a strong rebound in the second half of 2021.
Alberta was already facing significant challenges prior to the COVID-19 pandemic and as we adjust to a new normal, economic recovery is on everyone’s mind. With a clear road map for removing health orders, and almost 2/3 of lost jobs having been recovered, Alberta is well on its way for a successful reopening and recovery. Minister Schweitzer said that for the first time since 2014, he is confident in the future direction of Alberta’s economy. This confidence was evident through his uplifting and optimistic presentation.
- Alberta’s long-term success is rooted in strengthening the traditional economy and diversifying for growth.
The Government of Alberta is committed to building on Alberta’s historical knowledge base in energy and responsible resource development to remain an industry leader worldwide. The Recovery Plan includes the development of new mineral and natural gas strategies as well as investments in clean hydrogen projects.
The technology and film and television sectors offer promising opportunities to diversify Alberta’s workforce and create jobs. For example, the Government has introduced the New Innovation Employment Grant to grow the technology industry and encourage new business in Alberta. According to Statistics Canada, every $1 million of government investment under the Film and Television Tax Credit Program is expected to support approximately 60 Alberta jobs.
The Government has also increased Travel Alberta’s budget by 50% to promote safe travel into the Province, improve amenities for tourism and collaborate with Indigenous communities to highlight Alberta’s culture.
- The three pillars of success: accelerated job creation tax cut, efficient government and strengthening the workforce.
The Government has lowered corporate taxes to 8% – the lowest corporate tax rate in the country. With no payroll or consumption tax, combined with low-income tax, Alberta maintains a strong tax advantage that encourages and attracts investors. Further, with the Biden administration going forward with its Corporate Tax Strategy, Alberta will be among the lowest corporate tax jurisdictions in North America.
Economic productivity requires efficient government. In an effort to reduce government spending to the big province average in Canada, the Government has committed to cutting red tape by 1/3 (with a 16-17% decrease to date) without sacrificing access to services. Minister Schweitzer actively encouraged those with recommendations for making redundant regulations more efficient through the Red Tape Reduction Initiative to come forward with their ideas.
Developing and attracting talent is Alberta’s top priority for strengthening the workforce. In a partnership with Mitacs, post-secondary institutions and employers, the Government is supporting more than 1,200 internships annually. In an effort to reduce barriers for re-entry into the workforce, the Alberta Jobs Now Program is making it more affordable to hire and train new employees by covering up to 25% of wages in the first year.
- For young people, Alberta is the place to be.
The “Alberta Rebound” tells a compelling narrative for young people. Put simply, young people can get ahead in their career’s faster in cities like Calgary and Edmonton, than they can in cities like Toronto or Vancouver. With the average house price in the suburbs at $500,000 and no provincial sales tax, young people can build a successful career while simultaneously saving for retirement earlier.
The COVID-19 pandemic has presented a unique opportunity for employees to have more control over where they live and has shown that working remotely is not only possible, but can be more efficient. Employers may continue to be more creative with workforce deployment which will allow young people to build a life in Alberta while working across the country.
The next generation of entrepreneurs will not be limited to the oil and gas industry. As evidenced above, Alberta has, and continues to, diversify the workforce, creating ample opportunities for young people to build companies that scale quickly and get things done.
- A provincial sales tax will not be implemented to help with recovery.
While understandably on the mind of all Albertans, Minister Schweitzer was quick to declare that a provincial sales tax will not be implemented to help with recovery. Any ideas about Alberta’s response to the Federal Carbon Tax decision is encouraged.
For further information on the Economic Recovery Plan or if you have questions about the impact of COVID-19 on your business, please contact your McCarthy Tétrault trusted advisor.