Alberta Budget 2016 Pre-speech Press Conference with Joe Ceci
On April 14th, the NDP released the Alberta Budget for 2016. The initial budget numbers came as a shock to many, as the present government proposes to spend a total of $58bn over the next few years with the expectation to balance the budget by 2024. Even though this sounds like an incredibly high number and the NDP might be freewheeling with tax payers money, the spend is both necessary and crucial to the province’s long-term survival.
The following video is the pre-speech press conference with Financial Minister Joe Ceci where he explains what to expect in the 2016 budget while fielding questions by the press from across the province.
The Alberta Jobs Plan
So what does this all mean? What is the Alberta Jobs Plan? Simply put, it is a plan to stimulate economic growth which will create short and long-term jobs through both the public and the private sectors. Keep in mind, that it’s not the governments job or position to directly create jobs and put people to work. It’s up to the people of Alberta, entrepreneurs and workers, to collaborate together to create these opportunities. Here are two key highlights:
Infrastructure creates jobs
Trade workers have been heavily affected by the oil price shock. As the private sector scrambled to manage costs, contractors, typically skilled-trades workers, were the first to go. Infrastructure spending by the provincial government ensures that there are job opportunities in the short-term for these people and their families. This includes the construction and maintenance of roads, bridges, buildings, water facilities, and more. Alberta’s NDP announced that it is investing $34.8bn over the next 5 years for these projects.
The landscape in Alberta is going to look very different when we finally land on the other side of this downturn. This means that workers may have to look to other industries for these job opportunities. The over-bloated wages that once came from the bullish Oil and Gas industry may be a thing of the past for quite some time. Firms within the Oil and Gas industry in this province are now looking at ways to become more efficient in the long-run. This mandate for production efficiency means less potential job opportunities as a result of organizational restructuring in addition to the adoption of new processes and technologies.
Many workers may have to make a lateral shift in their career path or head back to school as a potential avenue for future job opportunities. The Alberta Jobs plan supports both of these scenarios. The competition for talent between the provinces diversified interests and the Oil and Gas industry in Alberta is winding down for the duration of the province’s economic recovery. These lateral shifts by potential employees will help fill gaps that companies in the province’s varying industries which have been desperately needed for some time. In addition, the improved infrastructure will mitigate bottlenecks that choke business growth for future generations. This part of the Alberta budget is forward thinking by the current administration.
Small businesses need capital to grow
There are two schools of thought when it comes to funding a business. The first, and typically a knee-jerk reaction with many new entrepreneurs, is the injection of capital from a financial institution. Money from Angel Investors, Venture Capital (VC) firms, and banks can quickly help a company get from point A to point B. The second source is from customers. Without getting into the nuances of which path an entrepreneur should take and when it’s important to know that Alberta has been behind the proverbial eight-ball in this space. Only recently the new provincial government, in conjunction with both the 2015 and the 2016 budgets, recapitalized the Alberta Enterprise Corporation with $50m. This organization injects capital into VC firms that operate in Alberta and works to connect entrepreneurs with investors.
Unlike the province’s neighbours to the west, Alberta has never really had to listen to outcries from minority industries like life sciences, high-tech, film, television, video games, aerospace, or petrochemicals. For more than a decade, oil has supplied the brunt of what Alberta needed for its revenues. At least from a perception standpoint. It’s interesting to note that there are 10 other sectors that when combined, comprise the majority of Alberta’s GDP. However, staying focused on such a heavy specialization in this economy for such a long time has held the province back in comparison to the evolving business and technology landscape in both national and international markets. If one takes a few minutes to google the search term “unicorn” it will quickly become clear that Alberta entrepreneurs are missing out on a number of opportunities in many other industries and markets. Though in the last 10 years Alberta has produced some of Canada’s largest acquisitions as a result of our technology industry that largely went unnoticed.
British Columbia, Saskatchewan, and Ontario all have provincial investor tax credit programs. The Alberta Jobs plan is announcing a $90m investor tax credit program by the provincial government. The goal of this program is to entice investors to inject capital into small and medium sized businesses with less risk. There are a plethora of amazing startups and growing companies throughout or province that need this type of incentive. Organizations such as the A100, Startup Edmonton, Innovate Calgary, Startup Calgary, and District Ventures, are all working towards helping some of these rising stars enter global markets with their innovative new solutions.
The more successful these companies become, the more jobs are created as a result of their success. These jobs can be both indirectly and directly related depending on the given scenario. Not long ago, Robots and Pencils, just one example based in Calgary, was hiring for a Human Resources management position to help manage its human capital growth. This fast growing company is constantly looking for new creative talent to fill its ranks and is just one of the many increasing opportunities in the province. Less than five years ago, the company made a capital investment to purchase a building that the company now calls its headquarters. The renovations to the building and all the paperwork that went into that investment also made impacts to Alberta’s GDP. Growing private sector companies like this in Alberta creates more job opportunities and helps diversify the province’s economic interests.
The Diversification Plan Alberta has been waiting for
There’s so much more in this plan that will help Alberta become an attractive region for businesses to migrate, start, and thrive in the province. Everything from encouraging education, Small business support programs, capital investment credits, diversification incentives, and infrastructure projects will all help the private sector create the jobs that current and future Albertan generations need. Now that the plan has been laid out, it’s up to both the provincial government and the people of Alberta to get this engine rolling. The budget is only the first step in building a strong foundation. Creativity and resourcefulness of the Alberta people will be a key driver to this success.
For more details about the Alberta Jobs Plan as a component of the Alberta 2016 Budget, visit the 2016 budget section of the Alberta website.