The UCP government released the Alberta’s Recovery Plan this week. There are some things I’m glad for, and there are some things, of course, that I think are misguided.
For example, one thing highlighted in the recovery plan is capital spending of over $10 billion, what the province calls “the largest ever capital spend” in Alberta.
Now, I support capital spending by governments. Government spending creates jobs, so if they build projects, we’ll see more workers working.
But here’s what to keep in mind.
This $10 billion is not additional spending. Take this quote from the plan, for example:
Budget 2020/21 includes $6.9 billion for capital projects.p. 17
That $6.9 billion is part of the $10 billion and was already planned. The only details we have on this $6.9 billion is that it includes
- Municipal capital funding
- Money for roads and bridges
- Renewal of education infrastructure (i.e. repairs to schools)
- Funding for family, social supports, and housing
Also already planned was $164 million over the next 3 years through the Alberta Supportive Living Initiative to open new continuing care beds.
However, what is new is the $600 million they plan to spend on large-scale infrastructure projects. They provided few details, but they did say that the projects would occur throughout the province and would include
- Highway twinning
- Projects supporting growth in the agricultural sector,
- Gas line extensions in Northern Alberta
- Treatment facilities for people recovering from addictions
As part of the $10 billion, the government included the $50 million investment in Strategic Transportation Infrastructure Program projects and $150 million in water infrastructure grants, both of which were announced earlier this month and may actually be funded by federal dollars.
They also included $500 million in funding for municipalities to use on infrastructure projects, as well as the $1.5 billion they used to buy stock in TC Energy, which they announced in March.
So, the vast majority of this $10 billion announcement isn’t new funding. They just make it seems as though it is. Plus, there are very few details on which projects most of the funding will cover, so it’s difficult to know how effective it will be at boosting the economy.
They claim it’ll create 50,000 jobs. If it does, that’s great, considering that between July and February—before the pandemic hit—Alberta had lost 52,000 full-time jobs. If you include the jobs lost during the pandemic, that jumps into the hundreds of thousands.
Unfortunately, based on what few details they did included, it seems many of these capital projects will create construction jobs, if any new jobs at all. And construction jobs are totally fine. As someone who’s worked in construction, I can assure you that construction labour is some good, ol’ fashioned honest labour.
The problem, however, is that given the nature of construction jobs being project-based and work crews moving from project to project, the crews on some of these projects may actually include the same workers.
And if that’s the case, the forecast of 50,000 jobs is inflated.
5 replies on “UCP announced $10 billion in capital spending. Here’s why it’s misleading”
Hi Kim. Appreciate the commentary and perspective as usual. Let’s not forget that someone has to conceive, engineer, design, procure and manage construction projects, but if I remember correctly from some of the projects I worked on, the white collar portion was a tiny fraction of the overall project cost. This might summarise it, a few hundred office jobs will create a few thousand field jobs.
Oh, absolutely. Even then, there will probably be some overlap, with the same architects and contractors working on multiple projects. Moreso, those architects and contractors already exist, so the point that it likely won’t be creating 50,000 jobs still stands.
Kenney also claimed he mistitled “Job Creation Tax Cut” would create around 50,000 jobs.
Watch for a news story later today on this.
[…] of the $10 billion was already announced prior to the Recovery […]