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Alberta is losing its competitive edge

Author: Paige MacPherson 2017/06/08

This op-ed was published in the June 2017 edition of Oilfield PULSE magazine and is available for other outlets to republish, free of charge.

Every day Alberta businesspeople are getting hit with new reasons to worry that they’re not going to be able to compete and succeed.

There’s a chill going down the spine of business groups who’ve pleaded publicly with the government to extend its consultation period and slow down on its labour legislation review. One proposal on the table is establishing a system wherein unions can form in the work place without allowing workers a confidential vote on the matter. It might be wise to pause and ponder the importance of secret ballots.

While political pandering to organized labour is concerning, it’s just the latest worry facing businesses already hit by increased taxes and regulations, making them a policy victim of the government’s approach: too much, too fast.

Alberta’s NDP government has been busy. It’s already increased business taxes, income taxes, farm regulations, taxes on train fuel and beer, and imposed a massive carbon tax that hits everyone. Rebates and a small business tax cut were introduced to mitigate the impacts, but aren’t substantial enough to outweigh the burden. The government has done this while also increasing the size of the deficit and putting the province on track for record debt levels: over $71 billion by 2020.

One common talking point is that the government is attempting to bring Alberta ‘in line’ with other provinces. But Alberta has long been out of line with other provinces with runaway spending – in fact, Alberta pays more for healthcare than any other province. The government has also made no real reduction to government employee wages, which are higher than the national average and need to be restrained. Even worse, any potential pandering to government employee unions in upcoming negotiations will send the $10.3 billion operational deficit soaring higher.

Perhaps Alberta’s most obvious competitiveness speedbump is the carbon tax.

Carbon tax proponents say they aren’t worried because Prime Minister Justin Trudeau will force all other Canadian provinces to impose a carbon tax of the same level. But Alberta’s tax came in hot before the federal deadline and at a higher rate than is required. While blaming the feds always makes for a convenient talking point, it’s almost as if the Alberta government would have imposed the carbon tax without Prime Minister Trudeau wagging his finger toward the west. 

Meanwhile, not all other Canadian provinces and territories have imposed a carbon tax. While our next-door neighbouring province Saskatchewan dealt a mixture of tax hikes and spending cuts in its budget, Premier Brad Wall is promising taxpayers he will fight a federal carbon tax imposition even if it means going to court.

To the west, it’s still unclear whether British Columbia will accept a $50-per-tonne carbon tax being foisted upon them by Prime Minister Trudeau while eastern provinces are permitted to impose cap-and-trade schemes that may effectively amount to a lower tax rate.

Alberta, instead, has blazed ahead with a multi-billion-dollar tax hike that will increase year after year, framed with friendly talking points, but that won’t make any significant dent in climate change.

When it comes to the carbon tax, provincial comparisons are undoubtedly valuable, but they don’t paint the whole picture. Alberta is not competing with Nova Scotia or Manitoba for the majority of its oil and gas investment and activity. Alberta competes with global jurisdictions. President Donald Trump certainly doesn’t appear interested in a carbon tax and the U.S. plans to slash both regulations and tax rates.

Ultimately, governments should seek to make their jurisdictions the most attractive places to live, work and raise a family. That improves the quality of life for taxpayers by giving them back more of their own money and frees their children from mountainous debt burdens. It also creates economic prosperity, which is good news for revenue-hungry politicians. Alberta, for years, has attracted companies and other Canadians. It’s time to bring back that competitive edge. 


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