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AB lost 2,300 active businesses since Job Creation Tax Cut

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 September 2022, so keep that in mind.

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

ON356,167
QC199,646
BC154,855
AB117,707
MB28,377
SK24,792
NS20,356
NB17,232
NL12,535
PEI4,102

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.

Aug 2022Sep 2022Change% change
PEI4,1054,102-3-0.07%
NB17,27217,232-40-0.23%
MB28,43028,377-53-0.19%
NL12,61512,535-80-0.63%
NS20,47020,356-114-0.56%
SK24,93624,792-144-0.58%
QC199,872199,646-226-0.11%
AB118,146117,707-439-0.37%
BC155,488154,855-633-0.41%
ON357,181356,167-1,014-0.28%

Between August and September 2022, every province saw a loss in the total number of active businesses. Alberta, however, saw the third largest decrease in active businesses in the country. The province’s active businesses decreased by 439, from 118,146 to 117,707.

Compare that to the 265 loss in active businesses just the month before.

Ontario, which topped the list, saw over 1,000 fewer active businesses this past September than they did the month before. PEI, lost only 3 businesses, making it the best performing province in the country

On the other hand, on a percentage basis, Alberta had the fifth largest loss, ahead of British Columbia, Nova Scotia, Saskatchewan, and Newfoundland and Labrador.

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

Sep 2021Sep 2022Change% change
BC152,410154,8552,4451.60%
AB117,002117,7077050.60%
NS20,03320,3563231.61%
MB28,11428,3772630.94%
PEI3,9344,1021684.27%
NB17,08317,2321490.87%
SK24,77124,792210.08%
NL12,57912,535-44-0.35%

Alberta gained over 700 active businesses over the past 12 months, the second largest increase the country. BC topped the list, with nearly 2,500 more active businesses, and Nova Scotia was in third place with 323.

Newfoundland and Labrador was the only province to see its number of active businesses drop over the last year.

Since September 2021, the number of active businesses in Alberta increased by just 0.6%, which drops the province down to the second smallest increase among all provinces..

Of the other provinces, hald of them saw increases higher than 2% between September 2021 and September 2022. The national average was 1.42%, more than 2 times larger than the increase Alberta saw.

The story is a little better when comparing 2 years.

Sep 2020Sep 2022Change% change
ON322,623356,16733,54410.40%
BC141,720154,85513,1359.27%
QC186,567199,64613,0797.01%
AB111,466117,7076,2415.60%
NS19,14020,3561,2166.35%
MB27,17928,3771,1984.41%
SK23,62024,7921,1724.96%
NB16,61817,2326143.69%
PEI3,7654,1023378.95%
NL12,37312,5351621.31%

Alberta’s increase of 6,241 active businesses over the last 2 years puts it back in 4th place; however, they drop to 6th place on a percentage basis (5.6%), still putting them in the bottom half.

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

Jun 2019Sep 2022Change% change
ON348,824356,1677,3432.11%
BC147,904154,8556,9514.70%
QC192,856199,6466,7903.52%
MB27,85128,3775261.89%
NS20,12820,3562281.13%
PEI3,9584,1021443.64%
NB17,38417,232-152-0.87%
SK25,00324,792-211-0.84%
NL13,36012,535-825-6.18%
AB119,974117,707-2,267-1.89%

I picked June 2019 as the starting point because that was the last month before Alberta’s UCP government implemented their so-called Job Creation Tax Cut. When they implemented it, they claimed it would lead to tens of thousands of more jobs being created.

However, what we see is that since the UCP government cut the tax rate on corporate profits, Alberta had the worst performance in the country, losing nearly 2,300 active businesses.

Only 3 other provinces—New Brunswick, Saskatchewan, and Newfoundland and Labrador—saw a loss in total active businesses, and the next largest loss was 825.

The largest increase was seen in Ontario, which has about 7,300 more active businesses than they did in June 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 1.89% 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 June 2019 was the month after the UCP implemented the 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 2,300 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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