Earlier this month, the Alberta NDP released their Competitiveness, Jobs & Investment Strategy.
This new strategy promises $1.027 billion in new and ongoing spending every year that the party says will lead to tens of thousands of new jobs. The catch, of course, is that they need to win the next election first.
Their new strategy centres around 4 existing government initiatives, 4 new initiatives that the party had previously announced, and 3 brand new initiatives that the party unveiled when they announced the new strategy.
These initiatives are a mixture of tax breaks and government grants.
The 4 existing programmes that Alberta NDP plan to continue are as follows:
|Base Alberta Petrochemical Incentive Program||$230 million|
|Film and Television Tax Credit||$70 million|
|Innovation and Employment Grant||$74 million|
|Alberta Indigenous Opportunities Corporation||$8 million|
Originally announced by the NDP in 2016 as the Petrochemicals Diversification Program, the programme was rebranded by the UCP as the Alberta Petrochemical Incentive Program in 2019. It provides grants to companies to attract investment in new or expanded market-driven petrochemical facilities.
In 2019, the UCP government abolished the the Screen-Based Production Grant, which the NDP had introduced just 2 years prior. Then they replaced it with the new Film and Television Tax Credit. Originally, they had placed a $10 million cap on it, but they removed the cap last year.
The Innovation and Employment Grant came into effect nearly two years ago and provides qualifying companies with a grant of up to 20% toward qualifying research and development expenditures.
The UCP government announced the Alberta Indigenous Opportunities Corporation in November 2019. It’s a government-owned corporation that invests in Indigenous-owned endeavours in the Alberta’s natural resources, agriculture, transportation, and telecommunications sectors.
The funding outlined by the NDP mirrors spending in the current budget year.
Here are the 4 initiatives the NDP had previously announced.
|Reinstate the Alberta Investor Tax Credit||$30 million|
|Interactive and Digital Media Tax Credit||$30 million|
|Agriculture Value-add Incentive Program||$60 million|
|Alberta Venture Fund||$200 million|
The Alberta Investor Tax Credit was a 30% tax credit for qualified individuals or corporations who invest in eligible Alberta small businesses doing research, development, or commercialization of new technology, new products, or new processes. The UCP cancelled the programme in 2019, and the NDP plan to bring it back.
The NDP brought in the Interactive Digital Media Tax Credit in 2018 when they were still in power. It offered a 25% credit on wages, salaries, and bonuses paid to employees working to create interactive digital products, such as video games. The UCP cancelled it the following year, and the NDP announced this past summer that they intend to bring it back, if elected. Alberta’s newest premier, Danielle Smith, however, recently asked the minister of technology and innovation, Nate Glubish, to explore a digital tax credit proposal.
This past July, the NDP announced that if they’re elected next year, they will create an Alberta Value-Add Incentive Program that provides financial incentives to build or expand agricultural value-add facilities in Alberta. The exact form of the incentive — loan guarantees, grants, or tax credits — would be determined by a task force.
In the spring, NDP economic development and innovation critic Deron Bilous introduced Bill 203, which would’ve created the Alberta Venture Fund to establish an advisory council and venture capital fund managed by the Alberta Enterprise Corporation (AEC) to invest in early-stage companies, startups and scale-up in the tech sector. However, the UCP squashed the bill in the committee stage. If reelected, the NDP would reintroduce the bill.
Finally, here are the 3 programmes that the NDP announced with the release of their new strategy:
|Alberta’s Future Tax Credit||$250 Million|
|Supercharged Alberta Petrochemical Incentive Program||$70 Million|
|Performance Fast Pass & Navigators||$5 Million|
Alberta’s Future Tax Credit would be a refundable tax credit of 20% on capital investment in new emerging sectors, as well as an incremental refundable amount of up to 10% for new capital investment that generates key outcomes, such as high-skilled job opportunities, new technological capacity in Alberta, or new sectoral skills and know-how. The NDP claim it will lead to 20,000 new jobs.
While Alberta already has a petrochemical incentive programme, which I highlighted above, the NDP want to expand it to include new eligible feedstocks (e.g., recycled plastics) and to include endproducts. The also want to reinstate partial upgrading into the program, which the UCP government had removed. They claim this will lead to 27,000 new jobs.
Finally, the NDP want to provide special regulatory treatment to select companies with the Performance Fast Pass & Navigators. Under this programme, companies that demonstrate historic and ongoing compliance with regulations will receive the “the best and fastest” regulatory services.
And when we add up all the spending, it comes out to $1.027 billion a year, as I indicated earlier. Now, some of that money is annualized, which means the NDP had a total funding figure in mind, then averaged it out over the term of the programme. But they never provided the full amounts, just the annualized amounts, so these figures could vary year to year.
Also, they provided jobs figures for only Alberta’s Future Tax Credit and the supercharged Petrochemical Incentive Program, a total of 47,000 jobs. Presumably, they anticipate their other programmes and initiatives would lead to other jobs, but they didn’t bother to include their predictions for those ones.