Blindsided by a pandemic and an unprecedented crash in oil prices, the Alberta government has launched a $10 billion hail Mary stimulus package meant to spur creation of 50,000 jobs by fast tracking infrastructure spending and corporate tax cuts.
Premier Jason Kenney, in a June 29 statement, said the Alberta Recovery Plan is ”a bold, ambitious long-term strategy to build our province, to diversify our economy, and to create jobs.”
The government, Kenney said, will launch a series of large-scale infrastructure projects this summer at a total cost of $612 million. These projects are designed to create at least 2,500 jobs and have been chosen to improve long-term economic growth and to encourage investment across the province.
These include the twinning of highways, projects in the agricultural sector and gas line extensions for northern residents.
The government has not released specific details on where or when the new projects would start.
The stimulus package also includes a reduction in the corporate income tax rate to 8 per cent, 18 months sooner than the province had originally intended, which, the Premier said, gives Albert an advantage in Western Canada’s economy.
“When Alberta’s corporate income tax rate hits 9 per cent, British Columbia’s corporate income tax will be 50 per cent higher at 12 per cent.,” Kenney noted.
The government claims the cuts will create an additional 55,000 jobs by 2022 and attract $4 billion in investment annually, starting in 2023.
The plan also offers incentives for the tech sector to employ workers and will funnel $175 million into the Alberta Enterprise Corporation to provide venture capital for tech startups, according to a government release.
The incentives will be welcomed and desperately needed in Alberta, according to the Conference Board of Canada, which estimated in a June forecast that the province would see the jobless rate spike to 17.4 per cent by the second quarter of 2020.
“Even though the second half of the year will see an improvement, more than 130,000 jobs will be lost across the province in 2020,” the Conference Board stated in its forecast.
Alberta’s real GDP will decline 6.8 per cent this year as the economy suffers through the COVID-19 pandemic and the measures put in place to contain it, according to the report, which also cautions of a growing provincial deficit.
“ This recession will set the Alberta economy back years. Real GDP won’t return to its 2014 high until the fourth quarter of 2022,” the Conference Board suggests.