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Kenney’s hybrid resurrection of the Albertan economy

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The Kenney Government’s prior inclination for cutting public spending has seemed to come to an end. Or has it? Over the weekend of June 27, the United Conservative Party (UCP) announced their plan to place $600 million of their 10 billion dollar budget on the black, the black being infrastructure projects all across the province intended to get Alberta back to work. The Premier calls the investment the “largest infrastructure build in the province’s history,” according to CBC. The UCP still remains blue at heart, and according to CBC they have said that they intend to lower the corporate tax rate from 10 down to eight percent as a part of their successive lowering of corporate tax rates. The mandate for job creation is two-fold, to create infrastructure and lower the corporate tax rate.

Lowering corporate taxes is especially important to attract companies to come to Alberta and set up shop, especially considering those who have fled in the past year. This also creates more opportunity for companies already within the province to create jobs. Is this fortuitous  enough, or consistent enough, to provide Albertans with opportunity to get ahead? Unfortunately not, according to economists, who stated to the Edmonton Journal that lowering the corporate tax rate doesn’t always mean that jobs will be created, and other factors are involved with employing more people aside from how much a company is taxed, such as global markets and tariffs. 

What difference does it make if they employed people in Alberta and left when things got tough? Or when they leave millions of dollars worth of cleanup from decommissioned rigs, such as the Calgary based Houston Oil and Gas Company. While it may help big Albertan companies, the amount of large foreign companies that will be indulged by this tax cut, via making it cheaper for them to set up shop and profit off of our resources, stinks of political palm greasing. No Albertan Government, blue orange or red, should ever make policies that endorse companies in other countries profiting more than those within our province. This is especially problematic right now because foreign companies can probably afford to employ more people than many of our local companies can right now. The presence of foreign companies having the biggest plates at the table is aptly restated by Matthew Preston of the Alberta Party, who pointed out in the June 29 press release that the plan didn’t say a peep about how it aimed to serve small, Alberta-based businesses. Despite this, the plan still creates a choice for these companies to use more of their money to employ more people, but then this raises the question if they will actually choose to do this.

Leaving companies with the means necessary that our government can provide (via lowering corporate tax) to employ more people is not enough considering the other factors out of their hands that influence the ability for these companies to hire more Albertans. Providing these companies with the opportunity to employ more people might not be enough for this province, because it assumes that it simply will result in more jobs, and it excludes these other factors of global markets and tariffs. It also assumes that lower taxes will result in foreign companies employing more Alberta workers, which is not necessarily the case as they are often motivated by greed and opportunism within our province, and to send more money back to their own countries.

Alberta needs a government that will champion for the opportunities of local people with more direct approaches than solely lowering the corporate tax rate, which is what the Kenney Government is doing by also directing funds towards infrastructure. Despite details being unknown about which projects specifically will be invested in, it will be interesting to see how it develops with these government-funded projects. So this hybrid approach seems good, like both corporations and people are being pleased, but tax cuts for foreign corporations as well makes me skeptical as to what our politicians have to gain from them.

Our coloured currency is no better than carnival currency right now in post COVID-19 times, with only 73 American cents to our dollar today, on July 5. An approach to this new infrastructure project myself — and I’m certain droves of other young Albertans — would like to see and take part in would be a provincially mandated work program, aimed at getting the people of Alberta back to work by building these infrastructure projects. With the Premier calling it the biggest infrastructure project in the province’s history, right during an economic recession, why not follow the Roosevelt idea of employing the unemployed to help build up the province, such as was done with the construction of the Hoover Dam in Nevada, following the Keynesian economic mandate of the “New Deal”. I hope our current provincial government realizes that they have a unique opportunity to make our generation a part of history by putting us to work building infrastructure projects that could become icons within our province for centuries to come. 

If the provincial government can realize this and take advantage of it, we won’t be subject to dependency on foreign companies for employment. Any policy that harbours this kind of dependency promotes brief periods of success in Alberta, but it’s the people of Alberta that are left holding the bag once they shut down. It promotes weakness, and we deserve a government that installs strong initiatives to employ and enrich its own people, not one that panders to wealthy foreigners who want to exploit the resources and by association, the people of our province. We must always ask if our politicians are enabling this.

Image courtesy of rawpixel.

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