Insights & Analysis

September 10, 2021

Alberta’s Priorities for the Next Government of Canada

On September 20, 2021, Canadians will go to the polls to elect their next federal government.

For Alberta, there are two main areas that need to be the focus of discussion in this election and must become key priorities for the next government. The first is short-term issues related to COVID-19 management and the transition from pandemic to endemic. This includes the emerging discussion of immunity certifications or “vaccine passports,” transitioning off income supports, and bolstering short-term economic recovery. These are not easy challenges to navigate. They are divisive and will require a clear vision and tough decisions.

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Vaccinations have already emerged as an issue in this election campaign. While opinions differ on what approach to take, we believe that this subject is so fundamentally important and potentially divisive that certain elements of it should transcend politics. We therefore call on all parties to adopt a joint statement that:

  • Agrees on a broad set of shared principles and policies on vaccination requirements, immunity certification, and other related issues; and
  • Commits to uphold them and refrain from politicizing those principles during the election and beyond.

This does not mean that parties cannot disagree on the details. It does mean, however, that this issue is important enough that we need to build trust and move forward together. 

The second area is broader and even more significant in the long term—a growth agenda. Canada needs a compelling and clear plan to build a stronger, more competitive, innovative, and dynamic national economy. These priorities are critical to building a better future for Albertans and all Canadians. They are necessary requirements for addressing our looming fiscal sustainability problem. And they are central to addressing our most important challenge—transitioning to a low-carbon future in a way that increases, rather than takes away from, our economic and social prosperity.

BCA’s top priority is making life better, by building a prosperous and dynamic Alberta within a strong Canada. With that overarching goal in mind, we believe the following three themes need to be central to this campaign and our next federal government’s mandate:

    1. Building an innovation economy to support long-term growth;
    2. Investing in Alberta’s low-carbon future; and
    3. Addressing long-term unemployment and workforce transition.

Each of these is discussed below. Our aim is that all political parties embrace these priorities and, that whichever party forms Canada’s next federal government, they will work with the Business Council of Alberta, and Albertans more generally, to develop and execute a vision that addresses these challenges and enables Alberta to continue to play an important role in driving sustainable economic growth and prosperity for all Canadians.

1. Building an innovation economy to support long-term growth

The average Canadian earns barely more than they did five years ago. To end wage stagnation and get incomes growing again requires that Canada address its long-standing innovation, productivity, and competitiveness challenges in order to compete in a global economy which highly values new ideas, innovation, and technology. These factors—the creation and adoption of new ideas and technologies—are essential to unlocking Canada’s potential, and to enable opportunity for the next generation.

What can Canada do to lead in innovation and growth? Progress needs to be made across three fronts.

Improving Canada’s business environment

Canada has a dwindling global reputation as a place in which to do business. This perception is supported by the data: Canada’s position on the World Bank’s Ease of Doing Business Index has declined from 4th in 2007 to 23rd in 2020. Certain indicators within the index paint a picture of inefficiencies which inhibit businesses’ competitiveness and ability to innovate.

To improve the health of the business environment, Canada needs to build a more robust, dynamic, and efficient regulatory environment. As we have previously noted, there are empirical examples of how Canada can make significant strides; for instance, Germany and Denmark have created an independent oversight agency which assesses the impact of business regulation on the economy in order to help governments to prioritize reform efforts to increase speed, transparency, and accountability.

Canada’s inefficient regulatory environment is one of the fundamental challenges limiting both our competitiveness, and our ability to reach our environmental goals.

Attracting capital and talent

To create a competitive economy that supports income growth for Canadians, Canada will also need to develop its skills for now and the future. Key programs such as work integrated learning, micro-credentialing and ongoing initiatives to skill and train Canadians are essential. We will also need to attract individuals internationally with the skill sets needed to support innovation. Immigration has a critical role to play as an invaluable infusion of skills and dynamism that our province needs to fill in existing gaps. Immigration is, and always has been, an enormous net benefit for Canada. Additional effort in ensuring greater skill development and workforce participation among Indigenous peoples, immigrants, youth and persons with disabilities is greatly needed.

In Alberta, technology is a critical growth opportunity, with burgeoning expertise in artificial intelligence, big data, energy tech, and unmanned systems. However, persistent labour shortages weigh on the growing industry.

Canada will need to attract capital for global-leading innovation to occur. Long before COVID-19, Canada struggled with declining business investment. Specifically, in the five years pre-pandemic, non-residential business investment in Canada fell by nearly 21%. Canada needs a plan to reverse this trend. This means not only improving the regulatory environment as noted above, but also creating the most competitive and attractive policy framework for investment.

Commercializing good ideas

Another contributor to Canada’s lacklustre performance on productivity and innovation is its poor track record in commercializing and scaling good ideas and innovations. Canada has relatively few patents compared with its peers, and, with a few notable exceptions, relatively few success stories in growing globally recognized firms.

Canada will need to make big investments in programs and independent institutions that can help businesses test, pilot, and commercialize innovative ideas. The most recent federal budget took some steps in this direction—most notably with the enhancements to the Strategic Innovation Fund. What is missing, however, is a focused, cohesive and coordinated approach to innovation and commercialization. This approach will require enhanced integration between provincial and federal governments in driving shared objectives; and using their collective policy and procurement strength to help commercialize and scale good companies and ideas.

We encourage full adoption of the Industry Strategy Council’s “Restart, Recover and Reimagine Prosperity for All Canadians” recommendations. This approach should span beyond election cycles, seek to tackle the world’s biggest challenges, play to Canada’s strengths, and, ultimately, increase the standard of living for Canadians. We encourage overhaul of Canada’s innovation policy approach to protect intellectual property to enable data strategies, and to ensure Canada’s top innovations remain in Canada for the benefit of this nation’s entrepreneurs and communities.

2. Investing in Alberta’s low-carbon future

Climate change is one of the most important issues in our lifetime. To do its part to limit global warming, Canada has made ambitious commitments to reduce GHG emissions from 2005 levels by 2030 and to achieve net zero emissions by 2050.

The magnitude of this challenge cannot be overstated, especially given the fact that so much of Canada’s—and especially Alberta’s—present prosperity is tied to carbon-intensive activities. By the time the next federal government takes office, Canada’s 2030 emissions targets will be eight years away. Whichever political party wins the coming election, it will need to make rapid progress on reducing emissions and do so in a way that protects and creates jobs, drives economic growth, does not unfairly impair any single region or sector, and positions Canada to succeed in a low-carbon future.

By virtue of its resource endowments and unique industrial structure within the federation, Alberta has historically been an important driver of economic growth, but also accounts for a full 38% of Canada’s total GHG emissions. This means Canada cannot achieve its climate goals and economic recovery without a significant, meaningful, and concerted focus on Alberta.

What should this focus look like?

An approach to climate action that reflects differences in the federation  

First, it must recognize that one-size-fits-all solutions do not work in a country like Canada. Even policies like carbon pricing, which economists generally agree is an effective approach, can be discriminatory when not all provinces have access to the same emissions-free energy sources.

The principle of fairness is essential in crafting policy, ensuring equitable treatment that does not unfairly burden any one sector of the economy, or region of the country.

Maximizing near-term abatement and longer-term investment

Second, it must distinguish between near-term abatement opportunities and longer-term investments towards net zero. Meeting our revised Paris Agreement commitments will require significant new federal investments and supportive policies to enable and accelerate the implementation of commercially ready technologies and abatement measures to bend the curve on emissions today. That means a strong focus on:

  • rapid implementation of carbon capture, storage and utilization (CCUS) and direct air capture (DAC);
  • supporting investments in renewable energy;
  • enabling research and investment in new energy opportunities like biofuels and renewable natural gas;
  • exploring means to continually reduce the net carbon emissions associated with the electricity sector that works for Alberta’s unique energy market; and
  • developing an LNG export strategy that allows clean-burning Canadian natural gas to substantially displace higher-emission fuels abroad.

This also includes new policy and investments to meaningfully include Indigenous peoples as partners in economic opportunity and stewarding the environment. Government policy should further empower and enable Indigenous peoples to participate in low-carbon and carbon-reduction projects, working with the structures already in place in Alberta such as the Alberta Indigenous Opportunities Corporation.

Improving Canada’s regulatory processes

Most importantly, as mentioned above, it means overhauling Canada’s regulatory and approval processes to dramatically accelerate the time it takes to get shovels in the ground on emissions-reduction investment projects. Canada ranks 34th of 35 for OECD countries in time required to obtain a general construction permit. We have eight years left to meet our Paris targets. Bloated approval timelines could consume nearly half of that time before any new project even breaks ground.

Creating a longer-term vision

At the same time, meeting our 2050 net zero target will require long-term vision and support for technologies and initiatives that show promise today, but are not yet sustainable for broad commercial adoption. These include, among others:

  • a historically unprecedented focus on clean tech innovation in Alberta;
  • enabling the development of blue hydrogen and related infrastructure;
  • supporting research and development of small modular reactor technology and geothermal energy; and
  • assisting the scale up of lithium mining in Alberta to help produce batteries.

We must embrace the concept of an “all-in” approach to carbon reduction, recognizing that we need consumer emission reductions and overall abatement today, as well as breakthroughs for the future. This means rejecting the false idea that these two strategies are in any way conflicting, when in fact they are mutually supportive, and essential for our collective success.

Even in a low-carbon future, Alberta has tremendous assets and opportunities. The next federal government should view Alberta not as the obstacle to its climate commitments, but as the solution—the place through which we meet our short-term emissions targets and develop our assets for long-term economic growth and prosperity.

3.  Addressing long-term unemployment and workforce transition

Albertans are struggling more than other Canadians to find work. In a province used to labour shortages, we are now facing one of the highest unemployment rates in the country—8.5% as of July. But the challenge is even greater than the headline number suggests. A full 27% of unemployed Albertans have been without a job for at least 12 months—by far the highest proportion in Canada.

There are two key trends which will need to be addressed to ensure Albertans—and all Canadians—are able to realize their full potential. 

The first is a global issue. Automation and technology are changing not only the types of jobs available, but the skills required to do them. While many jobs could be phased out, there remain thousands of vacancies in other areas. Industries like innovation and technology, agriculture, and forestry are all experiencing labour shortages, unable to find people with the right skills to fill vacant positions.

The second trend is more Alberta-specific. Canada, like the rest of the world, is transitioning to a low-carbon future. While this transition will create job opportunities in new and emerging industries, it also creates considerable uncertainty for the future of high-paying energy sector jobs in Alberta.

Canada’s next government needs to make transition-related training and skills upgrading a top priority—to both position the country for success in an innovative, low-carbon future and also to help displaced workers. Furthermore, employment and training initiatives that focus on improving outcomes for Indigenous peoples, immigrants, youth, and persons with disabilities can play a key role in ensuring that unemployed Albertans facing barriers can be full participants in the economy and address labour shortages.

To ensure Albertans are not left behind, we must capitalize on emerging opportunities while minimizing the disruptive impacts. To do this, we must create multiple pathways for people, and communities, who find themselves most affected. In particular, two changes will be crucial:

Adapting our post-secondary institutions

We must equip affected workers with the right skills for the jobs of the future. That means post-secondary education and skills training must provide not just relevant, but adaptable skills. It means training, upskilling, and reskilling displaced workers through micro-credentialling, experience-based learning, and certifications which adults can reasonably participate in and benefit from while still upholding other responsibilities. Most importantly, it means taking stock of the skills and expertise Albertans have and identifying opportunities to adapt and transfer those skills into other occupations. Finally, we must also consider creating greater pathways to entrepreneurship for those wanting to take a different journey.

Targeting those most at risk of displacement

Federal funding for skills training—whether through the Workforce Development Agreement or any transition supports—needs to prioritize the regions and workers most affected by change or climate policy. Dollars should be allocated not based on population size but rather based on need. That means a focus on Alberta and energy sector workers in particular.

Moreover, just transition cannot be about the wind down of a sector. It must be viewed as part of an evolving future of work through automation, streamlining and reducing emissions. Policy and funding for displaced workers cannot simply be about pivoting workers out of energy sector roles into other jobs. It must be about presenting workers affected in multiple sectors with a suite of options and enabling them to choose their own path forward. That might include:

  • retraining support for another role with their current employer;
  • education and skills upgrading for a career change;
  • supporting workers’ efforts to start their own company; and/or
  • career counselling and matchmaking.

Finally, to the extent possible, federal transition supports should minimize any negative impact on workers’ wages. Transition supports should include elements like the “suitable employment” provisions in the Employment Insurance program whereby job opportunities may not be considered suitable if they place the individual in a less favourable financial position.

Conclusion

Canada has a long road ahead on the journey to pandemic and economic recovery. But we also need to lCanada has a long road ahead on the journey to pandemic and economic recovery. But we also need to look to the future—to take the steps today to start building the Canada we want tomorrow. During this election campaign, we invite all political parties to think big and to think long-term. Let’s bring Canada together, building bridges across the nation, ensuring prosperity, and creating a future for Canada that can be an example to the world. Let’s make this election about big ideas—about a collective and inspiring vision for Canada. A vision to build a more sustainable, innovative, and prosperous future for all Canadians.   

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