Earlier this month, Statistics Canada released updated data for business counts in Canada.
The data is released every June and December, and this most recent update is for June 2022. In particular, I was interested in the businesses with employees dataset, specifically how Alberta has performed over the last few years.
According to Statistics Canada, Alberta had 172,594 businesses with employees. That’s the fourth largest number of all the provinces, which isn’t that surprising, given that Alberta has the 4th largest population as well.
Here’s a snapshot of all the provinces in June 2022, from highest to lowest.
Here are all the provinces in order of how many new businesses with employees they saw since December 2021.
|Dec 2021||Jun 2022||Change|
Once again, Alberta is in 4th place, with an extra 2,328 businesses with employees during the first 6 months of the year.
Alberta’s Job Creation Tax Cut at work, right?
Well, let’s look at a few more things before we pop the champagne.
For example, look at June 2022 compared to June 2021:
|Jun 2021||Jun 2022||Change||% change|
Once again, Alberta is in 4th place with the total increase in businesses with employees.
But did you notice something?
While Alberta might be in 4th place when we look at just the absolute numbers, when we compare that number to where Alberta was a year ago, Alberta actually drops down to 7th place, with an increase of just 1.31%.
By comparison, Ontario and BC both passed the 3% mark, and Ontario nearly hit 4%. Even Québec was over 2%.
Watch what happens when we go back to June 2019. This month is significant, because it was the last month before the UCP implemented their so-called Job Creation Tax Cut.
|Jun 2019||Jun 2022||Change||% change|
Despite have the lowest corporate profit tax in the country, Alberta is 1 of 6 provinces that has fewer companies with employees than it did 3 years ago.
Over the last 3 years, Alberta has lost over 4,000 businesses with employees, the largest loss of any province. However, if we look at it on a percentage basis, it was the 4th largest loss.
Now, there are probably plenty of people to rationalize this performance by claiming that it was caused by the pandemic. And I’m sure the pandemic had a significant on Alberta’s economy.
However, there are two things to consider regarding that argument.
First, did BC, Ontario, Québec, and Manitoba not experience the pandemic? Because they saw their business counts increase during the same period.
And second, one would assume that if having the lowest corporate profit tax in the country was supposed to create jobs then such a corporate tax cut should’ve mitigated the effects the pandemic had on business numbers.
On that note, let’s compare Alberta’s corporate profit tax rate to those of the 4 provinces that have seen growth in the number of businesses with employees over the last 3 years.
|3-yr change||% change||Tax rate|
All 4 of the other provinces have tax rates that are significantly higher than Alberta’s. In fact, BC, which had the highest percentage increase in businesses with employees had the largest corporate profit tax rate of all 5 of the provinces (technically, they were tied with Manitoba).
But here’s the kicker: BC’s tax rate is the same as what Alberta’s was before the UCP cut the tax on corporate profits.
Clearly, how low your tax rate is doesn’t seem to affect how many businesses your province attracts.