February 25, 2021

STATEMENT: Provincial Budget builds bridge over troubled waters

Budget strikes the right balance for the moment with focus on vaccination, economic recovery, and beginning the path to fiscal sustainability  

This provincial budget is a bridge from where we stand today, to what Albertans are optimistic will be better times after vaccinations have enabled lives and our economy to return to a more normal level. The Province has outlined three priorities in building this bridge: investing in health care, preparing for economic recovery, and maintaining responsible spending, which match up well with the priorities outlined by the Business Council of Alberta.

“There are two questions Albertans are asking,” says Adam Legge, President of the Business Council of Alberta. “Do we trust this bridge to get us to the other side of this crisis? And do we think it will deliver us in better shape so that we may create the Alberta of the future? We think the answer to both is yes.”

Before the budget, the Council outlined five priorities to build this bridge: vaccination roll out, climate action investment opportunities, training and development support, tech and innovation investment, and a plan to optimize government services. The budget stacked up well against these priorities, here is the detail:

Prioritizing vaccination roll out

Vaccination is the most important component to moving forward on easing restrictions and resuming normal activities. It is the single most important plank in an effective and rapid economic recovery. We need to invest heavily in our COVID-19 testing, tracing, support, and vaccine distribution to protect Albertans and accelerate recovery efforts.

We are very pleased to see $1.25 billion dedicated to COVID-19 support, including expanding health system capacity, PPE distribution, and vaccination administration. This funding is vital to supporting Albertans through this pandemic and helping to accelerate recovery and growth efforts and we applaud the government for this investment.

We must continue to prioritize healthcare workers and vulnerable populations in the early vaccination phases. We also recommend the creation of a plan to administer the vaccine broadly in an effective and efficient way and working with the private sector to achieve speed and scale of vaccination.

Enhancing training and development opportunities for unemployed or precariously unemployed

Alberta continues to have the highest rate of long-term unemployment in the country, which is linked to an atrophy of skills, reduced well-being, and greater difficulty re-entering the workforce.

“In this budget, we were looking to see focused training and development support for those individuals who are facing unemployment or precarious employment,” says Mike Holden, Chief Economist, Business Council of Alberta. “The Province is earmarking $136 million, with more slated to come from the federal government, for a forthcoming jobs program, is certainly a step in the right direction to help address our long-term unemployment challenge but also respond to the ever-changing needs of the workforce.”

We’ll look for details in the coming weeks.

Capitalizing on climate change opportunities

Given our high unemployment and availability of carbon-emissions reducing projects, Alberta should be a destination for an outsized portion in the distribution of the federal government’s forthcoming $100 billion stimulus.

We were looking for this budget to outline a pathway that seizes opportunities to attract investment, enable economic growth, and advance Alberta’s role as a leader in emissions reduction, energy innovation, and future fuels development—to outline a plan that is strategic, ambitious, and material for the energy sector in being a global leader in emissions reduction.

We were pleased to see the budget recommit to a vision and focus on areas including natural gas, Carbon Capture Utilization and Storage (CCUS), petrochemicals, hydrogen, geothermal and other aspects of the energy systems of the future.

The budget also went into some detail about the environment, social, and governance (ESG) performance of Alberta’s natural resource industry and announces the creation of secretariat to focus on ESG matters. This will be key in enabling Alberta, and Canada, to solidify its brand as a world class supplier of ESG-focused natural resources, and we will look for continuing work in this area.

Supporting tech & innovation

Attracting investment and stimulating job creation and economic growth is by far the most effective way to get Alberta on more sustainable financial footing over the long term.

The investments in Invest Alberta ($10 million), Alberta Innovates ($15 million), infrastructure and capital projects ($1.7 billion), and diversification are positive signs of planting the seeds for job creation, investment attraction, and an increasing role for innovation in a vibrant Alberta economy. These can drive the economic growth and job creation that we badly need right now.

The Budget signals a continued commitment to expanding tech and innovation in the province, and we look forward to seeing further work and additional support to create the conditions to enable capital, talent, and customers for global-leading innovation.

Optimizing government services for Albertans

The first and most important goal right now is to support Albertans through the pandemic, and this budget has made COVID-19 support and vaccination an utmost priority. A secondary and longer-term goal should be to look at our fiscal future and optimize the value of public services over the next few years.

“It’s perfectly reasonable for Albertans to expect that they should be able to get similar levels of government services for similar cost to comparable provinces,” says Holden. “Holding the line on certain types of spending and allowing inflation and population to catch up is a reasonable way to bring costs closer in line without a dramatic shock to the system.”

A flat budget or even a reduction in spending does not necessarily mean a reduction in services. It’s possible to reduce spending and deliver services more effectively. Alberta has seen examples of this in the past. It will be important, particularly in areas like advanced education, to ensure that spending reductions are aimed at efficiency and do not affect education delivery or access.

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