The Alberta government expects its new fiscal plan to create 100,000 private-sector jobs over three years thanks in part to a tax cut for small businesses and tax credits for investors.
The NDP's jobs strategy blends government intervention with free market principles by directing cash toward certain areas, such as clean technology, as well as cutting the tax. The government will lower the income tax rate on small businesses to 2 per cent from 3 per cent on Jan. 1, 2017, according to the 2016-17 budget released Thursday.
The government called the document, which is heavy on debt and light on cuts, "The Alberta Jobs Budget."
The NDP also rolled out two tax credits worth a combined $165-million over two years designed to lure investment in the province. The government earmarked another $85-million, including cash for training programs, as part of its $250-million jobs package.
Premier Rachel Notley introduced a strategy in October to create jobs through tax credits, but her government has since overhauled its jobs plan. Her government is steadfast that it will not trim costs by cutting public-sector positions such as nurses and teachers. Further, the NDP remains committed to its $34-billion infrastructure spending plan.
Deron Bilous, the Minister of Economic Development and Trade, told reporters 50 per cent of the new jobs forecast will be a result of the government's infrastructure stimulus plan. Finance Minister Joe Ceci said the NDP's jobs plan will create permanent positions.
"There will be construction jobs. There will be service industry jobs. There will be technical jobs," he told reporters before tabling the budget in the legislature. "If you're making investments in your businesses through tax credits or getting money from people through tax credits and you're going to be expanding your business, I anticipate that those will be full-time, quality paying jobs."
The two tax credits are designed to give Alberta companies access to capital. The Alberta investor tax credit creates "an incentive" to invest in small-and-medium-sized businesses. The second, known as the capital investment tax credit, is meant to serve as "an incentive for the first-time acquisition of new or used property in value-added agriculture, tourism infrastructure, culture, manufacturing, and processing industries," according to the text of Mr. Ceci's budget speech.
The Alberta Enterprise Corp. will have $25-million to spend on spurring "innovation, growth and employment" in areas such as clean technology, the government said in a statement. Another $35-million has been set aside to attract and support new businesses and pursue regional economic development ideas, and $25-million will be directed toward apprenticeship and training programs.
The Wildrose Party approved of the government's decision to cut taxes for small businesses, but said the budget's carbon levies, such as new fuel taxes beginning in 2017, offset any potential benefits.
"We were very pleased they took the Wildrose proposal on [tax cuts]," Official Opposition Leader Brian Jean told reporters. "But clearly the carbon tax … will make things much worse and will frankly negate any reduction in the small business tax."
David Plante, a vice-president with Canadian Manufacturers & Exporters, said 17,000 manufacturing jobs have evaporated in Alberta over the last year and a half, and Thursday's budget does not address his industry's concerns.
"This plan is two steps forward, one step back," he said. "We have a hell of a way to go. We need to stem the tide of losses before we can talk about growing again."
Alberta's unemployment rate sits at 7.1 per cent, and the government expects an average of 8 per cent in 2016. The jobless rate was 5.6 per cent a year ago.
The Calgary Chamber of Commerce applauded part of the government's jobs strategy. The investor tax credit "is one of the most effective policy measures our province can take to strengthen Alberta's economic prospects moving forward," the organization said in a statement. "This program will help improve the productive capacity of Alberta's economy, get private capital off the sidelines, provide promising businesses with the working capital they need to grow, and create good-paying jobs."
The government expects the 2016-17 deficit to total $10.4-billion, assuming the North American benchmark price for oil averages $42 (U.S.) per barrel during the fiscal year.
With a report from Justin Giovannetti