NDP government promises jobs plan in the fall

The NDP government is promising a new job creation strategy this fall, but its pledge of a tax credit for employers who hire new staff is drawing mixed reviews.

With the Alberta economy battered by low oil prices, unemployment has been on the rise for the last three months, increasing to six per cent in July.

At a weekend NDP rally ahead of the Sept. 3 Calgary- Foothills byelection, Premier Rachel Notley noted the economic uncertainty in the province as she reiterated her commitment to a jobs plan to be released this autumn.

“People are worried about their jobs, they’re worried about the sustainability of the economy, they’re worried about what happens with the price of oil and it makes perfect sense that they would,” she said Sunday.

Notley said the debate this fall will include the job creation tax credit promised by the NDP in the spring election campaign.

The proposal, which the NDP said was modelled on a U. S. tax credit used by the Obama administration, would see the government refund 10 per cent of the salary of a new employee, to a maximum salary of $ 50,000. During the campaign, the NDP said the plan would cost $ 89 million and create 27,000 jobs.

Finance Minister Joe Ceci said Sunday there will be a number of economic development initiatives brought forward in the coming months, with the tax credit expected in the budget that will be released after the legislature resumes sitting Oct. 26.

“The promises we made in the campaign platform are the promises that we keep and we’re anxious to keep all of those promises this fall. With budget 2015 you’ll be seeing more on those specific initiatives,” said Ceci, noting the government is also looking at ways for new businesses to have greater access to capital.

The rookie government has come under fire from some in the provincial business community for policies implemented since it has taken office, including a hike to corporate income tax and a minimum wage boost that will see it rise by $ 1 this fall, to $ 11.20 per hour, as part of an overall plan to increase it to $ 15 by 2018.

Amber Ruddy, Alberta director of the Canadian Federation of Independent Business, said the higher minimum wage is putting hiring for some businesses on hold, so a job creation plan would be welcomed.

“There needs to be something on the other side of the ledger to counter- balance these other policies,” said Ruddy, one of a number of business representatives who were to meet with Jobs Minister Lori Sigurdson on Monday.

Ruddy said she wants to see more details about the actual tax credit plan, noting there could be administrative issues with the policy.

But Ron Kneebone, an economist at the University of Calgary’s School of Public Policy, said the tax credit idea is “wrong- headed.”

Kneebone said the plan raises potential problems, such as high administration costs, the government subsidizing successful businesses and companies finding ways to game the system in how they designate new hires.

He said $ 89 million isn’t enough to deal with the scale of the economic problem facing Alberta because of oil that is well under $ 50 US a barrel.

The government would be better off targeting its dollars to groups who need assistance in gaining employment, such as people with disabilities, said Kneebone. As well, the government should move quickly to resolve policies that help fuel economic uncertainty, like the planned royalty review, he said.

“Removing uncertainty is the biggest thing any government can do,” he said.

Wildrose MLA Grant Hunter said he wouldn’t necessarily object to the tax credit if the NDP government hadn’t already raised taxes and the minimum wage, taking away the incentive for businesses to hire.

“I just don’t understand it. It’s circular reasoning almost,” he said Monday.