While Vancouver and Toronto both have a rapidly growing and important tech sector, what has happened to Calgary?
In 2019 Jason Kenney’s Alberta government introduced sweeping changes to a variety of incentive programs – introduced by the previous government – that were aimed at diversifying Alberta’s economy.
Looking at Statistics Canada’s studies of these key Industry Classifications for 2017 and 2018 – Alberta was in desperate need of diversification.
Of course this study is a bit of a blunt instrument. For instance, it is likely that a significant percentage of of employment in Alberta’s knowledge-based industries were engaged in servicing the oil & gas industry. So Calgary’s high tech sector is performing even more poorly than it would seem from the figures above.
So you’d think that encouraging diversification would be a priority. Instead they eliminated measures to attract knowledge-based industries. They actually killed all of the incentives:
Bill 20, the Fiscal Measures and Taxation Act, 2019 received Royal Assent on December 5, 2019, and Alberta’s Scientific Research and Experimental Development Tax Credit (SR&ED) is being eliminated. For more information, see Special Notice Vol. 5 No. 54, Budget 2019 Elimination of Corporate Tax Credits.
Bill 20, the Fiscal Measures and Taxation Act, 2019 received Royal Assent on December 5, 2019, and the Alberta Investor Tax Credit, Community Economic Development Corporation Tax Credit, Capital Investment Tax Credit, and Interactive Digital Media Tax Credit are being eliminated. For more information, see Special Notice Vol. 5 No. 54, Budget 2019 Elimination of Corporate Tax Credits, or the Budget 2019 Tax Plan.
Instead they focused on “the Alberta Tax Advantage”…
New investment is looking for returns. Shaving a few basis points off an already low tax rate doesn’t encourage new investment in a failing economy. It rewards existing businesses with more profits – and governments with decreases in revenue.
Now it appears that, instead of recognizing the need to transition from their dependence on oil & gas in the light of climate change, they are doubling down on a failing investment in a declining industry.
This is what amateur investors do. It has long been understood by investment professionals that diversification is the key to mitigate risk. Instead Jason Kenney’s “United Conservatives” are doing the opposite and were attempting to intimidate the rest of Canada to support the Teck Frontier project.
Why is it that we give the current batch of conservatives any credence at all on economic issues?
When times are bad they tighten the reins, deepening the recession. When it comes to climate change, they dispute what most economists agree is the most cost-effective way to transition from a carbon-based economy – i.e. a carbon tax.
They don’t believe in conservation – in spite of their name. They seem to believe in the preservation of a way of life that disappeared thirty or forty years ago – before we knew any better. They confuse Adam Smith’s “invisible hand” with the “hand of God” and conduct themselves accordingly.
This current crop of conservatives are my late father’s people. He called them “Christian Fascists” – and had to run away at the age of 17 to go to university – which they didn’t believe in. I must summon all the strength from my savage, heathen heart to resist them. Or at least I’ll have to kill some blog posts from one of my company’s websites – and substitute this one.
(Note: Canada’s current tax incentives for R&D were introduced by a “Progressive Conservative” government that apparently didn’t believe in fairy tales – or the hateful, divisive and racist rhetoric that the current crop of ‘social conservatives’ seems to prefer.)