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3 years after Job Creation Tax Cut, AB has 2K fewer businesses

We’ve seen the worst performance of all the provinces in Canada. So much for being the economic engine of Canada.

Late last month, Statistics Canada released data on active businesses in Canada, and I thought I’d go through it to see how Alberta fared.

The most recent data is August 2022, so keep that in mind.

First, here’s the number of active businesses in each province, as of August 2022.

ON355,763
QC198,992
BC155,369
AB118,012
MB28,315
SK24,900
NS20,392
NB17,306
NL12,595
PEI4,086

Alberta came in fourth place, which shouldn’t be that surprising given that it has the fourth highest population as well.

Now, let’s look at how that number compares to the past. First, over the previous month.

Jul 2022Aug 2022Change% change
ON356,757355,763-994-0.28%
QC199,908198,992-916-0.46%
AB118,277118,012-265-0.22%
NS20,57320,392-181-0.88%
MB28,44128,315-126-0.44%
SK24,97924,900-79-0.32%
NL12,67112,595-76-0.60%
NB17,34117,306-35-0.20%
BC155,402155,369-33-0.02%
PEI4,0964,086-10-0.24%

Between July and August 2022, Alberta saw the third largest decrease in active businesses in the country. The province’s active businesses decreased by 265, from 118,277 to 118,012.

Ontario, which topped the list, saw nearly 1,000 fewer active businesses this past August than they did the month before. PEI, lost only 10 businesses, making it the best performing province in the country

On the other hand, on a percentage basis, Alberta had the third smallest loss, behind only British Columbia and Nova Scotia.

Now let’s take a look at how things changed in each province over the past year.

Aug 2021Aug 2022Change% change
ON344,020355,76311,7433.41%
QC194,817198,9924,1752.14%
BC151,987155,3693,3822.23%
AB117,372118,0126400.55%
NS19,96920,3924232.12%
MB28,03728,3152780.99%
NB17,03917,3062671.57%
PEI3,9364,0861503.81%
SK24,75124,9001490.60%
NL12,50512,595900.72%

Alberta is back in 4th place, which isn’t that much of a shocker, given that we have the fourth largest population, which I pointed out earlier. But it reminds us to keep in mind that 1 month of data may not tell us the entire story.

Since Alberta has the fourth largest population, it makes sense that it’d have the fourth largest increase, in absolute numbers. But what about on a percentage basis, which gives us a more accurate picture of performance?

Over the last year, the number of active businesses in Alberta increased by just 0.55%, which drops the province down right to the bottom.

Of the other provinces, 6 of them saw increases higher than 2% since July 2021. The national average was 2.35%, more than 4 times larger than the increase Alberta saw.

The story is a little better when comparing 2 years.

Aug 2020Aug 2022Change% change
ON315,545355,76340,21812.75%
QC180,967198,99218,0259.96%
BC139,293155,36916,07611.54%
AB109,848118,0128,1647.43%
SK23,29124,9001,6096.91%
NS18,86320,3921,5298.11%
MB26,79628,3151,5195.67%
NB16,34217,3069645.90%
NL12,15712,5954383.60%
PEI3,7254,0863619.69%

Once again, Alberta’s increase of 8,164 active businesses over the last 2 years puts it in 4th place; however, they drop to 6th place on a percentage basis (7.43%), still putting them in the bottom half.

Finally, let’s look at active businesses over the last 3 years:

Aug 2019Aug 2022Change% change
ON349,179356,7576,5841.89%
QC192,902199,9086,0903.16%
BC149,371155,4025,9984.02%
MB27,88128,4414341.56%
NS20,17620,5732161.07%
PEI4,0114,096751.87%
NB17,46617,341-160-0.92%
SK25,11924,979-219-0.87%
NL13,39012,671-795-5.94%
AB119,976118,277-1,964-1.64%

In this case, Alberta falls all the way to last place, joining just 3 other provinces—New Brunswick, Saskatchewan, and Newfoundland and Labrador—who saw decreases in the number of their active businesses.

Compared to August 2019, Alberta still has nearly 2,000 fewer active businesses. The next largest loss was felt in Newfoundland and Labrador, which saw 795 fewer businesses.

The largest increase was seen in Ontario, which has 6,600 more active businesses than they did in August 2019.

On the plus side, Alberta wasn’t in last place for the percentage of active businesses lost: Newfoundland and Labrador took that honour.

Alberta’s lost of 1.64% of its active businesses over the last 3 years put it in second to last place, on a percentage basis.

Here’s another look at the numbers over the last 3 years.

You can see the huge drop in active business in the beginning of the COVID-19 pandemic. Another thing this chart clearly shows is that any growth in active businesses that have occurred during the UCP administration has been entirely recovery growth.

Plus, the number of active businesses was already declining for months before the pandemic-fuelled recession kicked in.

As well, not only are we still nowhere close to where we were 3 years ago, but it seems like what growth we were making has started to plateau. In other words, we may still be a long way off from even reaching the pre-pandemic numbers, let alone the numbers seen prior to the summer of 2019.

Even so, the fact that Alberta has seen the largest loss in active businesses in the country is notable, given that August 2019 was the month after the UCP implemented their so-called Job Creation Tax Cut.

When the UCP announced that they were going to be cutting how much they would tax corporate profits, they promised that it would result in more jobs, that it would encourage companies to move here.

But if we have nearly 2,000 companies shutting their doors, can we really say that the tax cut accomplished what they promised us it would?

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By Kim Siever

Kim Siever is an independent journalist based in Lethbridge, Alberta. He writes daily news stories, focusing on politics and labour.

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