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The spirit of enterprise is the spirit of Alberta.
I know so many small- and medium-sized business owners who took a dream, mortgaged your houses, worked hundred-hour weeks, went through sleepless nights – maybe some of you still are – to start that first business.
I’m sure for many of you that first business didn’t make it. And then you kept dreaming, you kept working and the second or third try. That’s the spirit of enterprise, that’s the Alberta spirit that has turned this province into one of the most prosperous and generous places on earth.
What I think is uniquely distinctive about Alberta within Canada is the entrepreneurial culture, the meritocracy, the newness of this place. We don’t judge people based upon where they were born, or their last name, or how they pray, or things like that. Because – apart from the First Nations people whose presence on these lands for millennia we honour – we’re all relative newcomers in this place. Alberta is, in many ways, a reflection of Canada.
This province has always been a magnet for risk takers and hard workers and dreamers. The values of the Edmonton Business Association really, I think, reflect and represent that.
So, it’s a real pleasure to be here and to thank you for what you do. You don’t hear that often enough from political leaders. Thank you for what you do to create jobs. Most of the businesses represented in the EBA are small. Some of you are medium size. A lot of you are suppliers and provide services to larger businesses in the Edmonton region. But well over 80 per cent of the new jobs in our economy are actually created by small- and medium-sized enterprises, those with 500 or fewer employees.
Another aspect of Alberta’s economy that I think is unique is we go through cycles, and we always do. We always will. We go through cycles in this province and people lose, maybe, conventional employment. We end up with a very high percentage of them going and starting their own enterprises through self-employment. We have by far the highest incidence of self-employment in the Canadian labour market. We have by far the highest number per capita of small businesses in the country. So again, thank you for doing that, for taking those risks to create jobs and opportunities for others.
Folks, I’m here today to say that we’ve been through some tough years recently in our province. Many continue to go through a period of personal, financial and commercial adversity. But I want us to believe together that we are turning a corner, that things will get better. I’ll give you good reasons why, although there continue to be challenges to overcome.
It’s true that in the past five years our province has been through a period of economic decline and then a period of prolonged stagnation. The size of our provincial economy, our GDP, is still not fully recovered to where it was in 2014. Average private sector take-home pay is still below where it was – substantially below where it was – in 2015. And, sadly, we saw the flight of tens of billions of dollars of investment from this province, which drove those numbers.
Of course, beneath those numbers lie the personal stories of so many people who have not only lost their jobs, but in some cases their homes and their businesses. So all of us together, elected leadership, public service, business groups like this, and others must work together as Team Alberta to renew growth and Alberta as the most dynamic economy in the country.
We are trying to do our part through our Blueprint for Jobs. As a government, implementing the commitments that we were elected on nine months ago, including our one-third reduction in the business tax rate in Alberta, the Job Creation Tax Cut. Which some of the country’s leading economists like Professor Jack Mintz, Professor Bev Dahlby, and others estimate will lead to the creation of at least 55,000 full-time, high paying, private sector jobs by the time it is fully implemented in 2022.
Taking Alberta’s business tax rate from 12 points down to eight points, a one-third reduction. Taking us from having the highest business tax rate amongst the major provinces to, by far, the lowest across the country. Indeed, once fully implemented, we will be able to boast to investors that Alberta has the lowest business tax rate in North America with the exception of four U.S. states, and they only beat us ‘cause they have none. No business tax rate. Including Texas. Hard to beat that.
This matters. We will not get this economy rolling again unless and until we restore investor confidence and bring back major capital investment in this province. The economists tell us that is the most efficient way of doing so.
It also paves the way for further diversification of our economy, which we all know that we need. Now, there are two basic paths for government to pursue when it comes to diversification. One is for politicians and bureaucrats to pretend that they are know-it-alls, to take your tax dollars and then to wager them through privileges to select, hand-picked businesses or sectors – picking winners and losers. Sadly, the history of Alberta, the economic landscape of Alberta, has a lot of tombstones of businesses that were massively subsidized by government that failed. That is not a sustainable path to diversification.
There may be in some, I think, very limited circumstances an argument for incentives for investment in particular industries so that we compete on a global scale. I’ll give you one example: upgrading our natural gas feedstock, which is super cheap, to high value-added petroleum products – plastics, petrochemicals, etc.
We’re competing with places like Texas and Louisiana that offer all sorts of incentives. If we want to get in the game, we need programs like our Petrochemical Diversification Program that our government has extended.
Having said that, we believe the best overall path to encourage diversification and restore capital investment in Alberta is to take an all-of-the-above approach to reduce the tax and regulatory burden on all kinds of businesses in all sectors. Then we can see a thousand flowers bloom. We can see the market does what it does so brilliantly without the micromanagement of bureaucracy and government. We will see new opportunities develop.
You know, here’s the good news story that we don’t often hear about – diversification in Alberta’s economy. Our economy today is far more diverse than it has been in the post-war period. Oil and gas as a share of our provincial economy is one-third smaller than it was in 1990. You don’t hear that very much. It’s statistically true.
How could that happen, even during the intervening 30 years when oil and gas grew dynamically in absolute terms? Well, it means that other sectors grew even faster, primarily sectors like services and construction. I know some of you are in those businesses.
What drove massive growth in services and construction? Well, population growth, because our population almost doubled over the same period since 1990. That’s true of greater Edmonton, of Calgary, and the province as a whole. Since the mid-‘80s our population has effectively doubled from 2.6 to 4.4 million people.
So what made that happen? Well, I argue the draw of high-paying jobs, which was fueled primarily by our energy sector. So my view is this. The energy sector, which is sometimes down-talked as some old legacy thing that we should be embarrassed about and we should purposefully move away from – the truth is this. The massive population growth, the high incomes, the high levels of employment, the high levels of entrepreneurship in our modern history have disproportionately been fueled by the development of our resources, with massive investments in research and development, science and technology, which are spinning off into all sorts of great applications in the digital economy, in innovation.
Mayor Iveson is a great champion of the growing tech sector here in Edmonton, and rightly so. But to trace back to its origin the tech sector in this city and this province, much of it came from research and innovation funded by our oil and gas producers in areas like information technology, and green tech, and investments in our universities, including the great University of Alberta.
One of my key messages is yes, our Blueprint for Jobs will focus increasingly on supporting diversification in all sorts of good ways. But to continue to diversify, we need to continue to grow, and to continue to grow, we need to make the most of the resources that we have.
Alberta is blessed to have the third-largest recoverable oil reserves on earth, 178 billion barrels of proven and probable reserves. We come only after Venezuela and Saudi Arabia. That reserve has a notional global market value today of $10 trillion. And it’s true that obviously we’re going through a period of energy transition.
It’s equally true, and there’s a lot of people that don’t seem to grasp this, that we don’t flick a switch in the real world to end the need for the kind of hydrocarbon energy that we are rich in here in Alberta. In fact, the International Energy Agency projects that by the year 2040, two decades from now, the world will see global oil consumption and demand grow by about 10 per cent from 100 to 110 million barrels a day.
But they’ve offered another scenario, what they call basically their Paris Treaty compliant sustainable scenario, where the world makes radical changes in terms of energy consumption and sources. Even in that world in 2040, the top think tank on earth on energy, projects consumption of nearly 70 million barrels of crude a day two decades from now, down only 30 per cent from where we are. We produce four million barrels in Canada, almost all in Alberta. Three million from the oil sands.
Here’s the point. We will be, we must be, part of that future market in the transition period. We must, and we will, demonstrate that we can produce that energy with an ever-shrinking environmental and carbon footprint through innovation, technology, research, and science.
We can and will be – I submit that we already are, but I truly believe that we can be – seen as the world leader in environmentally responsible resource development, while seeing all sorts of other kinds of energy and environmental technology flourish alongside that.
Do you know, since our government came to office in May, we’ve already seen $2.1 billion of new investments in renewable energy in wind and solar, after having eliminated the subsidies and the carbon tax that was there to support them. Guess what? Shocking thing. We created a market without picking winners and losers. We stopped taxing people to fund subsidies, and we’ve seen the largest investments in renewable energy in our province’s history. That is a small indication of where we can and will go in the future.
I talked about the Job Creation Tax Cut to create the best overall conditions to attract investment. That won’t be good enough unless we get on our game in terms of the red tape burden in our province. You know, during the good years, I think in this province, government at least, got a little bit lazy, became complacent and kept layering new rules and regulatory burdens and longer timelines on top of one another. It just gradually accumulated.
We had this self-conception of Alberta, as I said, about being this kind of tremendous entrepreneurial market-based economy. The truth is we ended up being the only province in Canada, according to the Canadian Federation of Independent Business, to get an F on its red tape burden. Provinces like Quebec, which we think is being kind of rules tangled up in government rules, in fact they’re getting an A, one of the things that’s driving their expansive tech sector in that province.
So for me it is critical that we liberate folks like you to do what you do best. This is especially true of small businesses as well as the third sector, charities and non-profits, community-based organizations – groups and businesses that have very limited administrative resources, that don’t have big budgets to go and hire top regulatory lawyers and accountants and so forth to do everything.
You run a business where you literally or metaphorically are the person that cleans the toilet at the end of the night. You don’t have the time to comply with thousands upon thousands of ever-expanding and complicated government mandates imposed upon you, federally, provincially, municipally, and by other agencies.
That is why at the heart of our blueprint for jobs is our red tape reduction initiative. We’ve already passed three red tape reduction bills, one that creates a whole policy framework, sets up a secretariat, created an associate minister to lead this. I know you can make a joke about that. Oh you’re creating a bureaucracy to cut bureaucracy. But that’s how it works in government.
This is a small unit in government, and a minister who’s there to hold all of his colleagues, government ministers, to task on our ambitious goal to reduce by at least one-third the number of regulatory requirements imposed on Alberta’s economy.
If this sounds like just pie in the sky political bunk to you, the truth is it’s been done before with success, right next door in the people’s republic of British Columbia, where the Gordon Campbell liberal government brought in a very similar initiative that we model ours on. Their goal was to reduce by a third the regulatory requirements on B.C.’s economy. In their first term of government they managed to reduce by 40 per cent, and have now been regarded as a model across North America for how to do this, and, they’ve had uninterrupted growth in B.C. since that initiative was launched.
We’re not going to get beat by B.C. when it comes to the freedom of our economy. Our goal is to turn Alberta from the slowest moving in terms of approvals and the most over regulated economy in Canada, to the freest and fastest moving economy in North America. Together we’ll do that.
But we need the help of the Edmonton Business Association. We need the help of you as individual business owners to inform that agenda. You need to tell us when you run into dumb rules that don’t make sense, or procedures that just eat up cost and time. You got to let us know.
We have a red tape reduction website. You can provide your input there. We’ve got a whole crew of people that take those ideas. I know government websites and consultation processes, sometimes people are understandably skeptical about all that. We’ve actually taken ideas brought forward by small business people on that site and turned those ideas into repealing regulations or rules, even introducing legislation and sometimes in a matter of two weeks we’ve turned it around. Which is for government, lightning speed. So please help us help you to lighten the burden to create a greater culture of enterprise in this province.
A number of other things we’ve done. The Royalty Guarantee Act. Alberta spooked a lot of investment with two different royalty reviews in the last 12 years. So we brought in an act to say that there’s going to be absolute stability for energy producers based on the royalties that they had when they started a project.
There’s so much more that we’ll be announcing in today’s throne speech and Thursday’s budget. We’ll be announcing our new Investment Alberta Agency, to take some good people at the provincial department of Economic Development Trade and Tourism and to create an agency, put it on steroids, broadening Alberta’s footprint and presence in key capital markets around the world. More news to follow.
We’re going to have a stronger team of Albertans in key places around the world. First of all, yes, to help with market diversification and trade, but also to focus on incoming investment to Alberta, and that is something you’ll hopefully be able to use in the future.
Another key part of the Blueprint for Jobs is ensuring that we have the labour force that we need for prosperity in the future. Now, there are far too many Albertans out of work right now, and our main occupation is getting them back to work. But one of the challenges I hear from major prospective investors is a looming labour shortage.
Now we are fortunate to have the youngest population in Canada – one of our greatest advantages. But even our population is aging, and there’s a whole generation of boomers in the trades and elsewhere who are about to retire, or who are retiring.
When I talk to major global petrochemical firms about spending north of $10 billion each on operations in the Edmonton region, they say to me – this is no spin. They say to me, at least in two cases they’ve said, your Job Creation Tax Cut has made this decision possible for us, because it’s leveled the playing field against U.S. states where they might otherwise go. Your Petrochemical Diversification Program is helpful. The concierge service you are giving us on solving regulatory problems is great. The pre-approval approach of, for example, the industrial heartland and other areas, is fantastic. And they go down the list.
But, what are the two main objections they raise? One: we are concerned that you will not have the work force to build our plant. We need to hire 8,000 tradespeople to build a $12 billion petrochem plant east of Edmonton. We’re very concerned that if you’ve got the Shell LNG project $40 billion capital expenditure on the west coast, Coastal Gas Link, Trans Mountain, Keystone XL, and maybe other petrochem plants, they just say look, we don’t see the numbers.
I know where we sit now, it’s hard for some Albertans to wrap their heads around this notion. We’ve got too many unemployed folks, especially young men. They’ve been the biggest victims demographically of this stagnation. We need to make sure that we have the skills to attract that investment.
We have this skills for jobs agenda about which I am so excited. It really is an effort to replicate parts of the German dual training system. That’s why we will be creating a NAIT collegiate here, a trades high school, that will be connected to the Northern Alberta Institute of Technology. Eventually we hope to do the same thing in Calgary. It’s in our platform.
It’s why we have quadrupled the support for CAREERS the Next Generation to create high school apprenticeship opportunities. It’s why we’re going to make it easier for trades people to teach in our schools. They don’t have to go and do a master’s degree. They can go and get a quick teachers certification to pass on their skills to the next generation.
It’s why we also call upon you as employers to invest in training. Canada, within the developed world, has the lowest private sector investment in labour force training. We’re at the bottom of the developed world when it comes to businesses investing in that. The government cannot and should not do it all. I urge you, if you have the capacity to hire and train young people, especially if there are formal apprenticeship programs.
As a culture – as a society – we need to convey to young people especially, that there is what the Germans call a parity of esteem between skilled trades and professions, between experiential and academic learning. That’s why we’re doing things like creating a Trades Hall of Fame and a trades high school scholarship for kids who have done great work in high school trades programs.
By the way, trades don’t just mean traditional industrial arts. They also mean computer coding. They also mean green tech. In Germany it’s 350 trades, not just a couple dozen industrial trades, valuable though they are. So those are some of the elements of the Blueprint for Jobs which will be amplified later this week.
But let me say, there’s a second thing those petrochemical companies tell me that concerns them. One is labour availability. The other is regulatory uncertainty from the federal government.
One of the companies said to me last week: I’ve been working so hard on a particular deal – could be $10 billion could be eight thousand construction jobs and two thousand permanent jobs in the Edmonton region. Says your federal government is now considering regulations to list plastics as toxics. Why would we invest in a plastics plant in Canada if you’re going to make the product illegal, or create massive new regulatory burdens for us? Folks, that is just one of the many sorts of barriers that are being erected to job creation in this country.
The devastating decision of the Teck Resources board on Sunday to abandon its planned Frontier mine in northern Alberta is costing us an opportunity at a $20 billion investment, the largest capital expenditure ever in the history of the oil sands. It would have created seven thousand construction jobs, 20,000 permanent operating jobs, hundreds of which would have gone to Indigenous people. Would have created – spun off – an estimated $55 billion in revenue for the Government of Alberta, 12 billion for the Government of Canada, and lots for municipalities.
It was supported by all 14 nearby First Nations, including an enthusiastic unqualified agreement with the Athabasca Chipewyan First Nation Chief, Alan Adam, who had historically been the single biggest critic of resource development in Alberta.
That was in part thanks to our government creation of the Indigenous Opportunities Corporation, backstopped by a billion dollars of Alberta’s faith and credit, designed to facilitate aboriginal co-ownership and financial participation in major resource projects, to help lift our First Nations people from poverty to prosperity by developing the resources that lie below the lands their ancestors first inhabited. That is a moral cause for us.
We have created a new model for Indigenous reconciliation in this province. What our Indigenous leaders are saying is that poverty is not reconciliation. Opportunity and prosperity are the path to reconciliation. Just like all 20 First Nations band councils as elected in northern British Columbia, who have been repeatedly re-elected on a mandate to support the Coastal Gas Link pipeline and LNG Canada.
Folks, I’ve been on the phone with major investors. I had worked on a thing with a major U.S. fund to put $5 billion into an LNG project. I won’t name names for commercially sensitive reasons. That $5 billion project was supposed to have been announced today. I might have been doing that right here. But it was pulled last Friday, because of the blockages on railways and critical infrastructure across the country. That U.S. fund said “We’re not going to risk our shareholders’ money on massive uncertainty.”
Dealing with this petrochemical project, I’m not sure if they’ll proceed now, because they say, “You in Alberta have created the optimal conditions for us, but the uncertainty we’re seeing from the national government…”
The same uncertainty which caused Petronas to cancel a $40 billion LNG project that would have provided a future for our gas producers, that would have massively reduced global greenhouse gas emissions with the single largest foreign direct investment in Canadian history. The same policy setting which killed the Northern Gateway pipeline, which lost Enbridge – an Alberta company - $800 million that would have also enriched First Nations. The same approach which killed Energy East after a billion dollars spent by the Alberta TC Energy that would have realized the dream of energy independence in Canada. I can go down the list.
Look, you know this. I sometimes get criticized for this. That is why I say that we need to fight back against this effort to landlock Alberta. An effort, in part, funded by interest groups outside of Canada, by foreign interest groups. Which is why we have launched an inquiry into the sources of those funds. This is for transparency. Sunlight is the best disinfectant.
The question, the fundamental question I want to know is, why are those groups focused almost obsessively on shutting down the Canadian energy sector when they effectively give a pass to the OPEC dictatorships and Vladimir Putin’s Russia? When they did virtually nothing to stop the doubling of U.S. oil production over the past decade? Much of it under President Obama, who was focused on climate issues. Why is there a double-standard being applied to the liberal democracy – Canada – with the highest environmental, human rights and labour standards. With an admitted flawed and imperfect history with our First Nations people. But with an industry that more and more – and governments that increasingly – are making Indigenous people partners in these opportunities?
I think the reason they’re focused on us is because they know they could never persuade the Russians, the Saudis, the Venezuelans, or for that matter the Americans to leave a barrel in the ground. But they targeted us because we’re nice, we’re Canadians. Folks, we are nice. God bless us for that.
But our history also tells us that we don’t get pushed around. Yes we can and will invest more and more in environmental responsible ways of extracting energy as long as there’s a global demand for it. I’m here to tell you today as the Premier of this province, that we are prepared to do what is necessary to ensure a future for this province’s economy, including women and men, Indigenous people, new Canadians – everyone who depend, directly or indirectly on our energy industry.
I just say, stay tuned on that. I’ll give you a hint. In the early 1970s, Peter Lougheed saw brilliant scientists at the U of A who were developing ways, technologies to extract oil from bitumen. It was thought impossible before that.
But the capital markets weren’t willing to take the risks, the Toronto banks and the foreign funds – they weren’t going to go there. So Peter Lougheed created the Alberta Energy Corporation, which effectively helped to create Syncrude, and the rest is history. A lack of access to capital was met by bold leadership and public participation. Albertans bought shares – it wasn’t just a government owned enterprise. It was a publicly owned enterprise.
So as we see decisions like this being created, as we see regulatory uncertainty, delays and frankly sometimes a hostile policy setting from Ottawa, we will not surrender. We will not be passive. We will do what is necessary, as we’ve done, as I’ve mentioned, with the Indigenous Opportunities Corporation. So stay tuned for that.
You know what, we Albertans, we love challenges. We’re resilient people. We’re tough, resilient people. We get through these things. We have in the past and with each other. We will again to ensure Alberta as a land of hope and opportunity for generations to come. Thank you very much.