Open letter: Calgary Chamber 2024 Budget Submission to the Government of Alberta

December 6, 2023

The Honourable Nate Horner, E.C.A., M.L.A.

President of the Treasury Board and Minister of Finance

Dear Minister Minister Horner,

The Calgary Chamber commends the government’s ongoing efforts to address the province’s most pressing economic challenges. By introducing initiatives that alleviate labour shortages and skills gaps, position Alberta as a leader in sustainable energy solutions and ensure a diversified and resilient economy, the province has played a critical role in our continued prosperity. Moreover, by responding to these challenges through the creation of economic opportunity, the province has highlighted our ingenuity and illustrated why Alberta is expected to lead Canada for GDP growth nationally. However, leveraging our success requires continued focus, strong fiscal leadership and collaboration between governments and the private sector to ensure Alberta can weather an uncertain economic and geopolitical future.

Third-quarter data released as part of the Canadian Survey on Business Conditions underscores many of the challenges Budget 2024 will need to address, with cost-related challenges remaining the most pervasive. Locally, 58 per cent of Calgary-based businesses cited rising inflation as their primary concern over the next quarter, with an additional 39 per cent of businesses concerned about rising input costs and 36 per cent concerned about interest rates and debt costs. Persistently higher costs is the primary reason why business optimism declined by 3 per cent from the previous quarter in Calgary, falling in line with the national average of 66 per cent. When viewed holistically, this data underscores the need for Budget 2024 to create the conditions for businesses to succeed and to overcome rising costs.

With this scenario as a backdrop, and in consultation with our membership, we are pleased to provide the attached submission to the Ministry of Treasury Board and Finance detailing insights and recommendations from Calgary’s business community. We encourage the Ministry to:

Focus on measures that address rising costs, maintain fiscal prudence and reduce red tape, ensuring long-term financial stability and upholding Alberta’s reputation as an economically stable and secure jurisdiction for businesses and investors.
Reinforce Alberta’s economic strengths while continuing to invest in economic diversification to ensure the province’s future competitiveness. This requires the province to support traditional industries while also bolstering investments in post-secondary institutions and organizations that support emerging sectors, such as Alberta Innovates. Moreover, the province must continue to foster the regulatory conditions necessary to ensure the competitiveness of emerging sectors.
Position Alberta as a magnet for talent and investment. Supporting newcomers entering Alberta’s labour force and prioritizing an equal-opportunity labour market are critical for business growth. This also includes re-investing in post-secondary education. The success of the ‘Alberta is Calling’ campaign means the province will need an additional 30,000 post-secondary seats by 2030 to meet demand.
Invest in infrastructure that supports civic vibrancy, resilient supply chains, and market access to facilitate talent attraction and retention while reducing costs for businesses. We have an extraordinary opportunity to grow our economy by adding value to our resource and agriculture production and exporting our products to new and growing markets.

The government’s ongoing work in support of businesses has created a path to short and long-term economic growth. We believe implementing the above recommendations will help to ensure this path remains strong and positions Alberta to take advantage of the opportunities of today and tomorrow.

The Calgary Chamber of Commerce would be pleased to collaborate with you, your team, and the Ministry, as you develop Budget 2024. Thank you in advance for your consideration. We look forward to continuing to work with you and your team to accelerate Alberta’s economic growth.

Sincerely,

Deborah Yedlin

President & CEO   

Calgary Chamber of Commerce   

Recommendations for inclusion in Budget 2024

Budget 2023 advanced several key investments critical to supporting Alberta’s business community. Such investments included fostering vibrant civic spaces, supporting the continued revitalization of the province’s tourism industry, and ensuring affordable access to public transit – all of which are critical to the success of Calgary businesses. Additionally, the province’s strong fiscal management, including the decision to leverage our $2.4 billion surplus to pay down taxpayer-supported debt and invest in the province’s long-term financial stability through contributions to the Heritage Savings Trust Fund, demonstrated a strong commitment to the economic prosperity of future generations. This fiscal stewardship, coupled with strategic investments, will be essential to maintaining our reputation as an economically stable jurisdiction for businesses and investors.

Building on this strong foundation, the Calgary Chamber continues to advocate for initiatives that further support the business community, including:

Measures that support fiscal prudence, address rising costs and reduce red tape

Calgary businesses continue to face an uncertain economic future as costs continue to rise, reflected by the Q3 2023 Canadian Survey on Business Conditions. To support businesses in addressing these challenges and mitigating their impacts, we encourage the government to:

Prioritize the repayment of taxpayer-supported debt, invest in the Alberta Heritage Savings Trust Fund and further invest in economic diversification to mitigate fluctuations in resource revenue. This includes continuing efforts to reduce Alberta’s net debt to GDP ratio from the forecasted 10 per cent to 8 per cent.
Maintain competitive and predictable tax rates by ensuring the current corporate income tax rate remains no higher than eight per cent and eliminating the small business tax.
Work with businesses and other levels of government to reduce the cost burden of electricity and natural gas by reviewing Alberta’s electricity pricing system, including the regulated rate option.
Invest in the development of additional housing stock. This includes supporting municipalities in accessing funding available under the Federal Housing Accelerator Fund and providing supplemental financial support to ensure housing affordability across the province.
Work with the City of Calgary to discuss broad municipal financial reform. This includes evaluating regulatory changes and other options to provide municipalities with new tools for resource revenue and flexibility around the use of existing revenue.
Review all government spending, identifying potential efficiencies in recurring spending or potential areas where funding can be reduced without harmful impacts to existing or planned business and social supports.

Reinforce Alberta’s economic strengths while continuing to invest in economic diversification and future competitiveness

Alberta’s economic strengths have fostered a climate of entrepreneurship and innovation, with businesses across sectors making substantial investments in the new and emerging technologies essential to sustained economic growth. Looking ahead, Alberta needs an all-of-the-above approach; the province will need to reinforce our traditional strengths, ensure there is adequate support available for new and emerging industries offering future growth opportunities, and continue to implement policies and regulations that solidify Alberta’s positions as Canada’s most competitive business jurisdiction. To achieve this, we encourage the province to:

Invest in Alberta’s economic strengths and emerging industries

Prioritize the implementation of stackable investment tax credits (ITCs) that match proposed ITCs available federally, including for clean technology, hydrogen, carbon capture utilization and storage, clean electricity, and manufacturing. ITCs should be technology and resource agnostic, ensuring market driven solutions are preeminent.
Leverage the Alberta Petrochemicals Incentive Program (APIP) to invest in low-carbon energy initiatives, and their associated infrastructure, within the Calgary region, similar to the $160 million investment in Air Products.
Develop incentives and policies that advance regional biofuel production, including sustainable aviation fuel, allowing Alberta to leverage its agricultural expertise to become competitive with the United States Clean Fuel Production Credit.
Expand the Alberta Film and Television Tax Credit to include post-production activities, further incentivizing filming in Alberta by supporting the full value chain in the film and television industry.
Re-prioritize the allocation of revenue generated by the province’s 4 per cent tourism levy to Travel Alberta, ensuring there is a sustainable stream of funding that directly supports regional tourism and can be leveraged by destination management organizations to support their operations.

Leverage technology and innovation as an economic accelerator

Engage Alberta venture capital firms and angel investors to identify and implement compelling financial incentives that de-risk their investments in early-stage companies, encouraging more Albertan investors to invest locally.
Review and amend the province’s procurement tools to streamline processes, ensuring procurement is accessible, easy to understand and easy to participate in for early-stage companies.
Support the establishment of “wet lab” spaces across Alberta, providing opportunities for early-stage companies across a range of industries to arrive at proof of concept and develop viable products within the ecosystem in which they operate.
Provide Alberta’s post-secondary institutions with additional, targeted funding to support research and development programs in sectors of emerging economic importance. This includes funding for the associated infrastructure necessary to conduct advanced research and trial emerging technologies or products.
Work with other level of government to establish a Federal-Provincial-Territorial table on digital policy. This group should focus on engaging government departments, industry regulators, and private businesses to collaboratively develop digital policies that support digitization across economic sectors.

Position Alberta as the jurisdiction of choice for domestic and international talent

According to the Q3 2023 Canadian Survey on Business Conditions, 31 per cent of Calgary businesses see labour-related challenges as their primary business obstacle over the next quarter. Recognizing the long-term success of Alberta’s economy is premised on ensuring businesses have access to the talent and skilled trades they require to grow, we encourage the government to:

Advance immigration initiatives and provide support for newcomer settlement

Address obstacles newcomers face in receiving Canadian equivalency for the credentials acquired abroad. This includes leveraging funding available through the federal Foreign Credential Recognition Program and expanding the mandate of the province’s International Qualifications Assessment Secretariat to evaluate and certify the skills and knowledge newcomers have acquired through work and life experience.
Advocate for increases to the provincial nomination limit, an extension of the time workers can remain in Canada, and reductions to the cost of performing a Labour Market Impact Assessment to the federal government.

Foster an inclusive and equal-opportunity labour force

Ensure Alberta’s youth and those looking to re-skill have opportunities to develop skills and gain valuable work experience by working with businesses to identify the financial support required to create or enhance work-integrated learning opportunities that facilitate their access to emerging local talent.
Support the City of Calgary’s ongoing work to address issues of public safety and social disorder through a $9.5 million contribution towards Calgary Transit’s Community Outreach Team and Mobile Crisis Response Teams.

Invest in infrastructure that supports civic vibrancy, resilient supply chains, and market access

Prioritizing investments that develop and modernize key civic infrastructure, such as public transit, entertainment complexes and public spaces are crucial for talent attraction and retention. Additionally, investments that bolster infrastructure connectivity with domestic and international markets are critical for economic efficiency and investment attraction. To ensure Alberta’s infrastructure supports economic growth and resilience, we encourage the government to:

Support the modernization and enhancement of civic spaces

Provide financial support for office conversions to market and non-market housing and for post-secondary institution campuses and residences, recognizing the City of Calgary has exceeded funding currently available.
Support the exploration, development and expansion of public transportation infrastructure. This includes $53 million for the Blue Line LRT expansion, $225 million for the Airport Transit Connector and $166 million for the North Central Bus Rapid Transit project, to enhance intra-city connectivity and position Calgary as an international convention destination and jumping-off point for regional tourism.
Support key public infrastructure in Calgary, by contributing $33 million towards Olympic Plaza revitalization and $70 million towards Arts Commons Phase 2 Resident House. Moreover, contribute $127 million towards the Foothills Multisport Fieldhouse, providing year-round sporting infrastructure to Calgarians and positioning the City as a destination of choice for national and international sporting competitions.

Invest in infrastructure that supports supply chain resiliency and expands market access

Prioritize investments in supply chain infrastructure, including rail and regional manufacturing capacity, that ensure businesses can import, export, or produce the goods and services they require to operate, grow, and expand.
Work with the federal government to establish and implement a National Supply Chain Strategy, recognizing the ongoing cost and lengthy timeline challenges facing many businesses.
Work in partnership with the other provinces and territories to reduce barriers to internal trade, such licensing, transportation, and labour mobility restrictions. Additionally, work in partnership with other orders of government, Chambers of Commerce, and businesses to develop a domestic trade accelerator initiative focused on increasing domestic trade volumes and reducing barriers to internal trade.

Implementation of these recommendations within Alberta’s Budget 2024 ensure the province continues to support the growth of a robust and resilient provincial economy by addressing persistent or emerging issues that threaten businesses continued success. As the voice of Calgary’s business community, the Calgary Chamber is committed to working collaboratively with the Government and the Public Service to advance these priorities.

December 6 2023