NDP must focus on improving competitiveness

Both the premier and her finance minister were not shy in expressing their disdain for last week’s federal fiscal update. One cannot blame them, given the lack of focus on dealing directly with the oil price differential that even the prime minister himself described as a “crisis.”

One big thing the fiscal update had going for it was the focus on Canada’s competitiveness — something that was glaringly absent from the federal budget. Even Alberta Finance Minister Joe Ceci acknowledged that, in particular, the new accelerated capital cost allowance “improves our competitiveness.”

The NDP’s enthusiasm for competitive-enhancing measures would be somewhat more impressive if they themselves were pursuing them. Unfortunately, the question of Alberta’s competitiveness has not received nearly the amount of attention it should have from this government. As with its federal counterpart, better late than never is better than never at all, but it does not absolve the Alberta government for its inattentiveness to this matter.

That’s not to say that nothing at all has been done to try to address Alberta’s competitiveness. Just last week, for example, Premier Rachel Notley announced that oil and gas drilling would be added to the list of tradeexposed industries exempt from the carbon tax — a change that is retroactive to the start of 2017. It’s a laudable step, to be sure. But this is a piecemeal approach to a bigger issue.

Previous Alberta governments made it a point to study and report on Alberta’s competitiveness. This has not been a priority for the current government. One of its first and most regrettable decisions as a government was to increase Alberta’s corporate tax rate. No thought was given to how that might affect Alberta’s competitiveness.

Moreover, little thought has been given since then to the question of Alberta’s overall tax burden and tax mix or whether our own tax reform might be in order so as to enhance competitiveness and attract investment. Ignoring this has been a very deliberate policy choice.

There have been repeated calls for the government to adopt a competitiveness-enhancing strategy but to no avail. The Calgary Chamber, for example, pleaded with the government to use its spring budget to focus on competitiveness and to look at ways of reducing the burden that taxes and regulations have placed on Alberta businesses.

The Canadian Association of Petroleum Producers released a set of recommendations in September aimed at enhancing the competitiveness of Alberta’s oil and gas sector.

Specifically, CAPP has called for a requirement to make competitiveness a key consideration in the decision-making processes of each ministry working with the energy sector, to have the Alberta Energy Regulator work with industry to streamline the regulatory process, and to ensure energy-intensive, trade-exposed sectors are effectively shielded from government climate policies.

The Alberta government has shown a willingness to tinker in these areas. What is the downside in a much more aggressive approach?

It’s fair to point out the obvious hypocrisy in the prime minister using the word “crisis” but not acting as though a crisis actually exists. But then it’s also fair to point out the obvious hypocrisy in the Alberta government criticizing a fiscal update that prioritizes competitiveness when it has failed to do so.

It’s almost certainly true that an honest assessment of Alberta’s competitiveness would mean acknowledging the fact that certain NDP policies have been counterproductive in this regard. As such, the government may be loath to admit such a thing on the eve of an election campaign. On the other hand, failing to ensure Alberta is as competitive a jurisdiction as possible may be even more politically damaging.

Alberta is in a precarious place at the moment. We need a serious effort to root out policies that might be holding us back.

Alberta is in a precarious place at the moment.