COCHRANE— Minister of Finance Travis Toews was in Cochrane on Wednesday (Aug. 19), to discuss the Alberta Government’s plans for economic recovery within the province.
Toews outlined the early plans the United Progresive Conservatives (UCP) had for the province in June 2019, when they took office. The goal then was to grow the economy, reduce corporate and business taxes, and start a “four-year effort” to reduce restrictive regulations.
The UCP also promised to balance the budget in its first term.
“We also committed to Albertans that we were going to balance the budget in our first term,” he said. "When we took office and started the job that I had, and started going through the numbers with the department that I realize, we realized that we wouldn’t be able to hold spending flat.”
He said his team came up with a plan to reduce spending by just under three per cent over four years, which would get them back to a balanced budget.
“And then COVID hit,” he said. “I can say this, from a fiscal standpoint, the world has changed for the province of Alberta. From an economic standpoint, the world has changed for the province in Alberta.”
Toews said that looking at the year over year numbers in terms of energy investment, non-energy investment, drilling activity, building permits, goods exports and retail and vehicle sales— The data indicated that all of those economic indicators were up “very significantly” over 2019.
“We really believed that 2020 was going to be a turn around year in the province,” Toews said.
As COVID ramped up, Toews said the effects on the province’s economy were hit by three challenges.
“This was the largest contraction of the global economy since the great depression. It was a collapse, an unprecedented collapse, of energy prices, brought on by, well effectively, demand destruction globally, along with a price war between the Saudi’s and Russians. And the third piece of it was that we were actually fighting a pandemic in the province,” he said. “And we all know the economic consequences and costs that affected.”
He noted that as a province, Alberta has been very successful in dealing with COVID-19 and the UCP credited the actions of Albertans for that success.
He called the situation in Alberta with regards to COVID-19 “imperfect, but very successful.”
Toews acknowledged that, although Alberta’s handling of the pandemic has been largely successful, there is still a long road ahead.
“We’ve got weeks and months ahead of us, and we’ll eventually get herd immunity or more than likely find a vaccine,” he said. “Until we get to one or the other, we’ll have to deal with it, and we’ve got to make responsible choices.
“We need to be responsible, but not fearful."
Early on, the UCP government appointed an economic recovery council, tasked with choosing the best path forward for Alberta.
The council is made up of “very experienced, prominent Albertans who bring a diversity of skillsets and experience. A common denominator is that they all have proven to be great leaders in times of adversity,” Toews said.
The foundation of the recovery plan, Toews said, is to ensure that Alberta is in a position to facilitate economic growth.
“Ultimately, we believe that we have to, as we emerge from COVID and every jurisdiction competes for capital investment, Alberta need to disproportionately attract capital and investment into our economy and our province. That will ultimately drive the recovery,” he said.
The best way to do that he said, is to ensure Alberta has the most competitive business environment possible.
The philosophy behind that decision is the belief that Albertans, not the government, are responsible for creating wealth within the province.
“Governments really don’t create wealth, and when they try to do it, they make a mess of it,” he said. “It’s individual Albertans and Albertan businesses that will step out and take risks, be innovative and creative, and create wealth, not just for themselves and their families, but for our population in the province as a whole.”
To achieve that goal, Toews said that the government would be expediting its reduction in the business tax rate from 10 per cent to eight percent.
The changes go into effect on July 1, 2021.
“We wanted to send a message to the global investment community that Alberta is open for business,” he said.
The UCP will also be “doubling down” on red tape reduction in the province, he said.
“We’ve not made as much progress as I would like to have seen on red tape reduction,” Toews said. “I never believed that regulatory modernization, reducing red tape, would be as difficult as it has been. For every regulation, even nonsensical regulations, there is a great defender of it."
He noted that now is the time to capitalize and bring changes to the province.
“Folks we can not waste this crisis,” he said. “We have to double down, remove any regulation that does not serve a purpose, and those that do serve a purpose that are inefficient we need to modernize.”
The UCP will also invest in “key” infrastructure pieces in the province. The purpose of the investment was two-fold, he said— To provide Albertans with jobs and to provide value and create wealth for Albertans.
He said he believes that the infrastructure projects the UCP has chosen to invest in will attract capital investment to the province.
Toews admitted that he is not a fan of “ big government job creation programs," describing it as, "burning money in the back yard."
The projects include improvements to transportation corridors, wastewater and Water for Life projects.
Toews also noted that the UCP is examining several different sectors, and looking for opportunities to expand Alberta’s industries, including tourism, agriculture and technology while supporting the foundational sectors that are already established in the province.
“Governments, effectively, can do very little to diversify the economy, but they can do a lot to prevent it,” he said. “We’re working to get out of the way so our economy can diversify.”
The government’s full recovery plan can be found online at Alberta.ca/.
