Reviewing the government’s economic recovery plan

ATHABASCA-BARRHEAD-WESTLOCK-It is all about putting people back to work and renewing people's confidence, especially those willing and able to invest in the province.

That is what Athabasca-Barrhead-Westlock MLA Glen van Dijken said of the government's stimulus plan to spur long-term economic recovery.

On June 29, Premier Jason Kenney and Finance Minister Travis Toews announced the province would be spending $10 billion on infrastructure projects. 

This is in addition to accelerating (a year and a half ahead of schedule) the corporate tax cut from 10 per cent to eight per cent, which was part of the United Conservative Party's (UCP) election platform, is hoped to create 50,000 jobs.

The tax cut was part of the UCP's election campaign platform and is 1.5 years ahead of schedule. It should also be noted that about $6.9 billion was already earmarked in spring's budget. Of the remaining $3 billion it is unknown how much is new spending and not previously announced. However, the government estimates $600 million will be new, large scale projects with construction beginning this summer.

In the last five months, the province estimates that the economy has lost more than 300,000 jobs and that the official employment rate sits at 15 per cent, but that the real unemployment rate might between 20 and 25 per cent.

"During this time of uncertainty during our economic relaunch, it is paramount that the government sends the right signals to the investment community and that we will partner with them going forward," van Dijken said.

Toes noted at that accelerating the business tax cut would reduce government revenues by $200 to $300 million this year.

van Dijken noted the purpose of the infrastructure spending, which is the largest in the province's history and about 40 per cent above what was previously budgeted for is two-fold.

"We need to put people and companies back to work and to invest in the infrastructure that will help build the province's economy for the years to come. That is why we have decided to fast track some of the needed infrastructure projects in the province."

van Dijken said he has been working with municipalities in the riding to identify shovel ready projects and several have been identified and that announcements would be forthcoming.

He added the projects in the constituency already identified range from wastewater management to transportation improvements.

As for how potential infrastructure projects, besides the infrastructure itself would benefit local economies, van Dijken noted that the majority of it would be through the hiring of local contractors and sub-trades.

When the Town and County This Week pointed out that often in rural communities large construction projects a lot of the work is done by companies outside the immediate area and thus their workers commute a lot of the economic benefits or activity goes with them.

"All the municipalities are looking to put their residents to work as possible," van Dijken said.

He added that if during the tender process it is identified a job is too large for a local company, and an outside general contractor is hired that they would be encouraged to use area sub-trades.

van Dijken said to carry out the infrastructure initiative it will be necessary to add more debt.

"It is from the belief that we will get a return on that investment in the future," he said. "These are all long-term projects that will help our economy not get through this current crisis, but for years come."

Other initiatives in the government’s economic recovery plan

Although the corporate and business tax cut along with the infrastructure spending are the key components of the government's long-term economic recovery strategy include:

• the creation of the Innovation Employment Grant to create high-paying jobs by attempting to lure to critical technology and innovation sector industries;
• investing $175 million into the Alberta Enterprise Corporation to expand access to venture capital for start-ups; 
• creating a new provincial agency, "Creating Investment Alberta" to lead in an aggressive, worldwide campaign to attract job-creating investment; 
• asking the federal government to remove several categories under the temporary foreign worker program to help Albertans gain employment; 
• implementing sector-specific strategies to drive diversification, including in agriculture and forestry, tourism, technology and innovation, aviation, finance and financial technology and creative industries; 
• supporting the performing arts
• the continuation of cutting the amount of red tape faced by business and industry

Barry Kerton, TownandCountryToday.com

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