Last week I had my views expressed in the Calgary Sun on building an Alberta economy that can survive drops in the price of and thrive in the many years to come:
It’s been a difficult year for Alberta: over a hundred thousand job losses, homes being listed at the fastest rate in over a decade, the use of social services up across the board, and provincial government revenues down almost $10 billion.
Facing the reality that low oil prices are becoming the new normal, how does Alberta survive, revive our competitiveness, and continue to thrive in the global economy?
To regain the strength in our energy industry one thing is clear — Canadian oil, without access to the Atlantic and Pacific Oceans, will continue to be sold for the lowest price in the world. I ask Albertans — is there any country in the world that wouldn’t ensure access to export markets for its products? International market access is and will continue to be the number one issue holding back Alberta and Canada’s economy.
As we address energy market access, there are structural economic issues Alberta must take action on immediately to revive our competitiveness. Our province no longer enjoys the tax advantage it once did. To attract new business and capital Alberta must be the lowest personal and corporate tax jurisdiction in Canada, and one of the lowest in North America. As we regain our tax advantage, we need to aggressively eliminate the regulatory red tape facing business and citizens. Jurisdictions that reduce regulatory burden increase economic activity and having watched my father run a small business, I know Albertans are over-regulated. Our provincial government should adopt a “one-for-two” law, similar to the “one-for-one” law I sponsored federally, that requires the government to remove two regulations for every one they add. Doing this will put us back on the path to competitiveness.
But surviving and competing will not be enough to ensure Alberta can thrive in the new global economy. To thrive in the long term, Alberta will need to build a robust economy that will grow even when the price of oil crashes. To do this, we must create the right environment for innovation and entrepreneurship. According to a 2015 report by the Conference Board of Canada, Alberta was 15th out of 26 jurisdictions when it came to innovation. Unless we begin to ensure Alberta has the necessary infrastructure that innovation thrives on we will fall behind in productivity and emerging industries. Building an infrastructure backbone for innovation will provide the economic engine our province thrives on for generations to come.
Currently, there is no focus in Alberta’s efforts to innovate; there are three research intensive universities and over six provincial or municipal innovation councils. These groups are competing for funding when what we really need are focus, coordination, and prioritization. This siloed approach by entities mandated with innovation is an example of a broader problem – there are barriers and fiefdoms preventing cooperation among business, government and academics that must be eliminated.
No transition to a culture of innovation is possible without strong and focused support for the research capacities of universities. Take a look around the world: Silicon Valley and Stanford or Boston and Harvard/M.I.T. The Alberta government needs to immediately commit an additional $1 billion (money we must find) to research in targeted areas where we already excel or areas where we can gain a competitive advantage. Through this funding we can build existing strengths in nanoscience and quantum computing while striving to grab a meaningful position in exploding fields such as microbiomes and artificial intelligence.
Once funds have been committed, let’s merge government councils mandated with innovation and appoint an Alberta Innovation Champion to drive an innovation agenda. This champion will develop the road map by working with the merged innovation councils, post-secondaries, business, and government to capitalize on ideas that matter. I believe taking these steps will help to create an innovation economy that thrives globally.
Alberta can and will weather the downturn in energy prices, but the question is whether we will build an economy that survives the next downturn. To survive we need market access — to revive we must be competitive — and to thrive we must be an economy centered on diversification and innovation.