Alberta will spend billions on infrastructure projects, cut its corporate tax rate, establish a new investment agency and introduce a series of targeted incentives for industry as part of a plan to restart its battered economy.
Premier Jason Kenney said his government would spend $10 billion on projects that will immediately create jobs, including health-care facilities, pipelines, schools, drug treatment centres and more.
Kenney said the government anticipates the creation of 50,000 jobs directly tied to the projects across the province.
He said the plan calls for an increase of 40 per cent over planned infrastructure spending announced in its spring budget and said it represents the “largest infrastructure build in Alberta history.”
Of that spending, at least $600 million will be new, large-scale projects that will start construction this summer, but no details were immediately available.
In addition to the spending, Kenney also said his government would speed up the implementation of corporate tax cuts, slashing the rate to eight per cent from 10 per cent starting on July 1. That’s 1.5 years ahead of schedule.
Incentives and more
The plan will offer incentives for the tech sector and startups to employ workers and will funnel $175 million into the Alberta Enterprise Corporation to provide venture capital to startups.
In addition, a new agency, Investment Alberta, will set up international offices and pitch Alberta to potential investors.
Sector-specific initiatives to spur diversification will be unveiled in the coming days and weeks.
There will also be a number of initiatives aimed at reducing regulations and red tape.
Kenney said the moves represent a “plan for a generation of growth” and that if the government does not act quickly, the “fiscal challenges will become insurmountable.”
“Our future is truly at stake,” he said.
Economic hits in province
The province has been battered by oil price wars and the COVID-19 pandemic and has seen its deficit balloon from a projected $7 billion to $20 billion this year.
Its most recent budget was based on oil fetching $58 US per barrel, a forecast critics called rosy at the time, and was rushed through the legislature as a battle between Saudi Arabia and Russia cratered the price and the global pandemic settled on Alberta.
Economists are predicting a severe recession in the once-booming province and even Kenney has warned of “a great fiscal reckoning” to come in a province that has tied its fortunes to the swings of its main commodity.
Kenney warned unemployment could reach 25 per cent.
In March, Kenney announced a 12-member economic advisory panel, including former prime minister Stephen Harper, to provide guidance on the relaunch.
The case in Calgary
Calgary, where Kenney will make the announcement today, has been particularly hard hit over the past few years by an oil price downturn that refuses to rebound.
Its downtown vacancy rate has been hovering around 25 per cent for years now, leaving a big hole in the tax base that is only expected to grow.
Calgary Mayor Naheed Nenshi has said the city will require particular aid from the province and the federal government in order to ride out its current storm.
Kenney said on Monday that the government will aggressively market Calgary, Edmonton and other municipalities as attractive places to set up shop and will be targeting everything from technology companies to the finance powerhouses that call Toronto’s Bay Street home.
He said there is plenty of top-tier real estate that is available and cheap in a territory with less traffic than Toronto and lower taxes as well.