New investment agency critical to our future

Premier’s role will be the key ingredient, Carlo Dade writes.

Given the dire economic straits in Alberta, the announcement of the creation of a new Crown corporation, Invest Alberta, begs the question of whether the province can afford this.

A better question is whether it can afford not to.

If the province is going to attract foreign investment to diversify the economy and create jobs, then it’s going to have to do more than just talk about competing and wait for suitors to arrive as in the oil and gas boom days. The province now needs to invest resources and political capital — and go out and make the case to potential investors, in person, just as our competitors have been doing.

In this reality, Invest Alberta Corp. recently announced by the government is a significant and necessary step in the right direction.

In April 2019, the Canada West Foundation produced a report for the government on the competitive landscape for investment attraction among Western Canada’s closest competitors — western U.S. states. While Alberta’s cities have been willing to fight grizzlies to bring in investment, the province has not been as aggressive. Calgary Economic Development, for example, had roughly double the staff of the previous government’s first attempt at creating an investment attraction agency. The contrast with our competitors to the south was even more striking.

All American states have state-level investment attraction entities, some government, some public-private, but all have more staff and the ability to use those resources to move at the speed of business, not at the speed of the bureaucracy. Hence the need for a Crown corporation. U.S. state operations also have vastly more political support. In most states, the chief investment attraction officer is the governor. Or the governor chairs the private-public body, or the agency sits, often literally, in the governor’s office.

In a world where others were sending the head of government to pitch and welcome investors, Alberta had been sending assistant deputy ministers (if we were lucky) and bureaucrats.

Alberta does not have to match everything that U.S. states do, such as throwing money to attract business. The province already has a strong competitive business environment compared to its U.S. rivals. More than lower taxes, U.S. companies start with a roughly US$10,000 per employee per year savings just in healthcare costs. Canada’s better-than-nafta trade agreements and economically sensible work visa and immigration policy further distance Alberta from regional competitors. The province’s quality of life and its affordability — and ability to enjoy it without fear of being shot — further distinguish the province from its U.S. competitors. The goal is to attract companies that see competitive value in what we treasure and pay dearly for, not companies that will demand ever-lower taxes and flee at the first offer of a few cents a year in lower taxes.

Alberta is not Louisiana and has no need to act like it.

But all of this needs to be explained, in person, to investment decision-makers in London or Tokyo or Houston.

While Invest Alberta is a giant step in the right direction, there is more that can be done.

In its search for a CEO for the new agency, consideration should be given to naming the premier, even if only titularly. Premiers often take cabinet portfolios, being in charge of the investment attraction agency would be no different and it would send the most powerful of signals.

The new Invest Alberta needs to be given room to make mistakes and grow.

One theme that emerged from our research was the state of constant experimentation and innovation with U.S. agencies.

That the province will not get it completely right with this first iteration is not a sign of failure; it’s the nature of the business.

Finally, the province will need to use Invest Alberta for business retention. The tools, intelligence and skills to attract companies are the same as those for keeping companies here. But that only happens if the agency keeps that mission front and centre.

All American states have state-level investment attraction entities ...