Alberta to cut corporate tax rate to combat economic downfall

Premier’s provincial spending plan expected to create 50,000 jobs Alberta Premier Jason Kenney says Alberta could see its unemployment rate hit 25 per cent.

EDMONTON—Step 1 in Jason Kenney’s plan to save Alberta KK from the economic straits im- f posed by a pandemic and a global oil price war will be to cut gg the corporate tax rate. t During a news conference Monday, Alberta’s premier said the corporate tax will be dropped from 10 per cent to eight per cent by the beginning of July, making Alberta the least taxed province in Canada. “We really do mean business,” Kenney said. The cut was part of a range of investment initiatives laid out by Kenney, including an additional $2 billion in spending targeted at infrastructure projects. The province now has $10 billion in total set aside for construction projects such as schools, roads, overpasses, waterways, long-term-care homes, hospitals and bridges. The pot of money is expected to create 50,000 jobs this year, said Kenney. Due to the oil price war between Russia and Saudi ww Arabia running parallel to the AA pandemic, Alberta currently counts 330,000 unemployed. The corporate tax cut was originally planned to take place over several years — going from 12 per cent in 2019 to eight per cent in 2022 — but that has now been sped up. The government

has previously predicted the cut would create 55,000 jobs. “Our commitment to have the lowest taxes for job creators isn’t just some aspirational, out-there-in-the-future, BS target — it’s real and it’s right now,” Kenney said. There’s also a cultural events program that the province will use to boost music, performing arts and other events that have been affected by the pandemic. Kenney also said there would be new money in grants and venture capital for the technology sector and start-up companies. More details on these initiatives will come later, he said. The province is creating “Invest Alberta,” a corporation that will travel the world trying tt to attract investment in the province. “They’re going to go out there and make sure that companies know that I think they’re being kk irresponsible if they don’t consider moving operations to Alberta,” Kenney said. Alberta’s official unemployment rate is pegged at 15.5 per cent, but factoring in the amount of people who have left aa the workforce over the past sev- t eral months, the real number is likely closer to 20 per cent, said Finance Minister Travis Toews. Kenney added that, in the fu- KK ture, the unemployment rate t could climb as high as 25 per cent. The Alberta government is facing a reckoning after rolling out its 2020 budget plan based on projections of $58 as the

price of a barrel of oil. That budget had a plan to balance the books by 2023. The price of oil now hovers around $35 per barrel and even dipped into a negative value in April.

Toews said the province will have a fully mapped fiscal update soon. He called the COVIDVCOVID-19 pandemic “much more ttthan just a speed bump along t the road” and said investment by the province would be needed.

Moshe Lander, an economist at Concordia University in Montreal, described the infrastructure investment plan as one with “a complete lack of vision.”

“It’s just going to end up requiring qq payback at some point in the form of higher taxes or lower government spending,” he said.

If the infrastructure spending results in 50,000 jobs, those will likely only be temporary, Lander said.

“I guess temporary jobs aren’t a bad thing,” he added. “But that’s not the bold vision that he presented this to be. This is a stopgap to just keep the economy from flatlining.”

The corporate tax cut isn’t going to move the needle toward more investment, either, he added.