Invest in workers instead of tax breaks to attract employers

In a recent comment on my Facebook page, my friend Lane Anderson of London Road Media said the following:

“Attracting business by having the lowest tax rates is just so obviously bad. Instead, attract businesses wanting to contribute to a great place to live!”

Three months ago, Jason Kenney, the Alberta premier, did just that: lowered the corporate tax rate in Alberta so much that, as of this past July, it’s the lowest corporate tax rate in Canada and lower than 44 American states.

And they promoted it as a positive thing.

Never mind the fact that lowering tax rates doesn’t lead to economic growth. After all, since companies are taxed based on income and lower tax rates mean higher profits, no one will hire more people just because their profits are higher: consumer demand must already exist to justify hiring more workers. Otherwise, the workers will produce products that the company won’t be able to sell.

So instead of attracting companies to our province or city through low taxes, why not try attracting them through a better social environment?

Invest heavily in public and postsecondary education, then tell potential employers that we have the best educated workers.

Invest heavily in public health, then tell potential employers that we have the healthiest workers.

Invest heavily in public utilities, then tell potential employers that we have the most reliable and affordable public utilities.

Invest heavily in public transportation infrastructure, then tell potential employers that we have the most reliable and efficient road, rail, and air transportation networks.

Invest heavily in eradicating poverty and homelessness, then tell potential employers that we have the least amount of crime.

Invest heavily in the arts, culture, and recreation, then tell potential employers that we have the highest quality of life.

Invest heavily in combating air, water, and ground pollution, then tell potential employers that we have the cleanest environment.

Invest heavily in compact city design and non-vehicle transportation, then tell potential employers that we have the shortest commute times and that workers have more leisure time.

And so on.

Don’t convince companies to move here through financial incentives. Convince them by having the best workers.