ICBA Alberta News

The 2024 federal budget proves Ottawa has learned nothing from Alberta’s remarkable economic success, as the Trudeau Government continues to overspend, raise taxes, bloat bureaucracy, and do nothing to reverse Canada’s withering economic productivity and competitiveness, says the Independent Contractors and Businesses Association Alberta (ICBA Alberta), one of Canada’s largest trade associations.

“Alberta’s economy continues to be the ox that pulls the national cart, but the Trudeau Government hasn’t learned from the success of the Alberta Advantage,” said Mike Martens, ICBA Alberta President, “The federal insistence on overspending is going to burden taxpayers for generations to come.”

Housing was a prime political focus of Budget 2024, but ICBA – Canada’s largest construction association – remains highly skeptical that the Trudeau Government’s spending will do much to move the needle on housing affordability. The supply shortage is so acute that government cannot simply spend its way out of it – it must unleash private sector builders.

“There’s a chance some of the measures in today’s budget will help spur construction of more houses. The problem is that the budget does not address the underlying issues that have caused the housing affordability and general negative economic conditions we face today: increased debt financing and expansion of the size of government,” said Martens. “Until we get those under control, Canada’s economy will not be able to increase the standard of living of the average Canadian.”

The Trudeau Government missed its opportunity to address the inherent systemic problems holding back Canadian prosperity.

“Canada faces a trifecta of closely linked economic problems: stagnant productivity, a pattern of weak business investment, and declining global competitiveness. Unfortunately, there is little in Budget 2024 that tackles these problems in a meaningful way,” said ICBA Chief Economist Jock Finlayson. “Expanding the size and cost of government won’t reverse the negative trends that are weighing on living standards and sapping Canada’s economic vitality.”

By Jock Finlayson, ICBA Chief Economist

Nationally, investment in building construction fell slightly in January 2024. Investment was lower (-1.4% month-to-month change, seasonally adjusted) in the residential segment, while non-residential building investment edged up 0.2%. Stripping out the effects of inflation, total building instruction investment was down by 0.9% in January measured in constant dollar terms.

In January, residential building investment in B.C. dipped by 2.3% from the previous month. In Alberta, residential investment was unchanged. Meanwhile, non-residential building investment fell 1% in B.C. while posting a slim 0.2% month-to-month advance in next-door Alberta.

Note that the residential sector typically accounts for about 70% of all construction investment spending in Canada.

Related data suggest a firming in residential construction activity in Alberta, in particular, with housing starts in February up 17% from the prior month to 48,240 (annualized). That marked the seventh consecutive month of starts running north of 40,000.

Alberta is leading the country in the pace of housing starts. According to ATB Economics, even amid high building costs and still high interest rates, “builders see strong demand for new homes” as Alberta’s population continues to surge. ATB Economics projects that 2024 housing starts will be up 14% over last year’s level.

The picture is more subdued in B.C. The recent B.C. government budget sees housing starts declining by 9% this year.

Recent data on building construction and housing starts confirm that Alberta remains well positioned to top the provincial economic growth charts this year as B.C. struggles to eke out any gains in output and also faces a weaker capital spending profile across much of the private sector.

If the pandemic taught us to better appreciate healthcare and grocery store workers, then the growing housing affordability crisis should be a lesson in the importance of construction workers. These are the people who literally put the roofs over our heads – not to mention the essential products of commercial and industrial construction – and we’ve never had a greater need to build out and better support the productivity of this vitally important workforce. The projections agree on this, and since they’re typically based on current rates of homebuilding, they badly under-estimate the actual need.

A great many Canadians already live with crisis-level housing prices and rents, and we’re rapidly heading that way in Alberta. The only truly effective response is to beef up the construction sector and build more homes. And we need to achieve that despite a rapidly aging construction workforce, in which retirements are set to outstrip current rates of recruitment. Governments are good at setting targets in the face of such challenges, but what counts is following through with the right policy prescriptions and the necessary urgency. In this Monitor, we outline some of the barriers that are getting in the way both of recruitment into the sector, and of enabling construction workers to perform at their best.

And the workforce challenge has even bigger implications than that. As timelines and costs increase, some construction projects just won’t get built at all. Not only does that make housing even scarcer, it effects investment and the broader state of our economy and standard of living. …the growing housing affordability crisis should be a lesson in the importance of construction workers.

There’s much that can be done to improve the situation. But recruitment and training timelines are long. If we want to at least start bending down the curve of housing-price escalation – and keep the dream of home ownership alive for more Canadians – the time to get moving on these solutions is yesterday.

The following op-ed, co-authored by Chris Gardner, ICBA BC President, and Mike Martens, ICBA Alberta President, was first published in Business in Vancouver on March 13, 2024.

British Columbia and Alberta have some things in common. Both are unusually dependent on natural resource-based industries to drive their economies and supply the exports that are vital to sustaining prosperity. Both have been experiencing robust population growth over the last few years. And neither has been well-served by a distant national government in Ottawa with a policy thrust focused more on keeping natural resources in the ground than on harnessing them in an environmentally sustainable way for the benefit of all Canadians.

Recently, B.C. Premier David Eby and Alberta Premier Danielle Smith released their budgets for the coming year, and it is here where it becomes clear that other than sharing a border and natural resource advantages, not much else binds the two provinces together. Perhaps the greatest schism is the difference in the two premiers’ economic vision.

To begin with, Alberta’s updated fiscal plan aims to stay in the black, with small operating surpluses expected over the forecast horizon. B.C. is taking a different path, one featuring unprecedented annual deficits as the NDP government ramps up spending in advance of the fall 2024 election and gives free rein to its ideological inclinations to expand the size and reach of government. The Fraser Institute recently reported that in the three years from the onset of the COVID-19 pandemic in 2020 to Q2 of last year, 94% of net new payroll jobs created in B.C. were in the public sector. This lopsided labour market is one sign of B.C.’s deteriorating business climate.

Returning to the fiscal outlook, B.C. is planning to incur a combined operating deficit of $28 billion from 2023/24 through 2026/27, which is a marked departure from the surpluses posted over most of the preceding dozen years. For its part, Alberta is banking on continued budget surpluses, albeit significantly smaller than the $5.2 billion in black ink projected for the current fiscal year (2023/24).

It is worth noting that Alberta’s surpluses are set to shrink beyond 2023/24 in part because of assumed softer global oil markets – the province garners up to one-quarter of its revenues from energy royalties. Should oil prices trade higher than the government’s forecast, the small surpluses pencilled into Budget 2024 would increase significantly, further strengthening Alberta’s financial position over the medium-term.

Turning to government spending, while both provinces are facing pressure in areas like heath care and housing costs, owing in part to surging populations, the idea of spending restraint is clearly less popular in Victoria than Edmonton. The B.C. NDP government intends to boost expenditures by 8% in 2024/25. In Alberta, expenditure growth next year will come in at roughly half of that figure.

The two provinces have both embraced ambitious capital spending plans, which involve long-term borrowing outside of the confines of the annual operating budget. Total B.C. public sector capital spending will climb to $18-19 billion per year over 2024/25-2026/27. Alberta’s revised capital plan foresees $25 billion being spent on infrastructure and other public sector capital assets in the next three years. Public sector capital outlays in B.C. include borrowing undertaken by large Crown corporations like B.C. Hydro and ICBC – which don’t exist in Alberta.

Alberta also has structural advantages over B.C. and the rest of the country in the form of lower tax rates and lower debt levels. Alberta has no provincial sales tax and a lower business income tax rate (8% vs 12% in B.C.). And Alberta’s public sector debt is roughly 9.3% of GDP and on track to decrease in the coming years, whereas B.C.’s is currently 17.6% of GDP and expected to climb to 27.5% by 2026/27.

Overall, the two budgets suggest Alberta is very well-positioned to continue to lead the country in economic growth, business investment, and wage increases in the next few years. Albertans already enjoy an average GDP per person almost $28,000 higher than the comparable figure in B.C. Alberta should continue to reap the advantages of lower taxes and healthier provincial finances.

The extraordinary growth in government in B.C., combined with its large operating deficits and fast-rising debt/GDP ratio, mean that taxpayers should brace themselves for the inevitability of significant tax hikes and lagging investment and lower incomes in the future.

Chris Gardner is the CEO of the Independent Contractors and Businesses Association, and the president of ICBA British Columbia. Mike Martens is the president of ICBA Alberta.

By Jock Finlayson, ICBA Chief Economist

Canada’s economic prosperity is stagnating, at best. Many readers may feel this, based on their own experiences trying to earn a living or keeping their enterprises afloat. Others may sense it from observing the struggles of their children or neighbours or the health of local small businesses.

This isn’t simply a story about rising inflation and higher borrowing costs since the nadir of the COVID pandemic in 2020-21. It also speaks to deeper problems with Canada’s economy – problems that continue to impede business investment and productivity, and that are now weighing on the growth of real incomes for many households and individuals.

When Justin Trudeau led his Liberal Party to a majority government in 2015, he pledged to support “the middle class and those seeking to join it.” However, judging by the trajectory of inflation-adjusted incomes, his government has done little to bolster the fortunes of the (never-defined) “middle class.”

Consider what’s happened to the total output of our economy—gross domestic product (GDP)—measured on a per-person basis. Because Canada has a rapidly growing population, it’s important to factor in demographic change when looking at how much output the economy produces in any given year. All things equal, an expanding population leads to more production and a higher level of overall GDP because the workforce is larger and adding more people automatically boosts the demand for goods, services, and housing.

But the sad truth is that Canada has been lagging behind many of our peers (including the United States, Germany, Australia and the Scandinavian countries) in increasing GDP per person, which is the most widely used measure of prosperity. Before Mr. Trudeau took office, Canada’s GDP per person roughly matched the average for the developed economies as a group. Since then, a widening gap has opened up with other advanced economies, as noted in a recent article by David Williams of the Business Council of B.C.

After stripping out inflation, GDP per person in Canada has been essentially flat since 2014, as shown in the accompanying chart. Indeed, Canada ranks near the bottom among all developed economies in improving this key indicator of economic wellbeing. Yes, the Canadian economy has been growing over most of the past 7-8 years, but this mainly reflects a larger population and workforce coupled with the impact of inflation. When the GDP figures are adjusted to account for population growth and inflation, Canada is losing ground.

And, unfortunately, there is little prospect of a near-term turnaround. Statistics Canada reports that real GDP per person stood at $56,206 in 2019, before the onset of COVID-19. It dropped sharply to $52,741 in 2020, before rebounding over the course of 2021-22 as the economy reopened. But in 2022, real GDP per person remained below the 2019 figure and was scarcely higher than five years earlier. Last year it fell again, amid faltering economic growth and a rapidly increasing population. And 2024 will see a repeat of 2023’s dismal performance:

How will things evolve in the next several years? Using economic growth forecasts embodied in the federal government’s fall 2023 economic statement, and assuming annual population growth of around 2% for the next half-decade (compared to over 3% in 2023), even by 2027 Canadian real GDP per person—again, the fundamental indicator of how Canadians are faring in economic terms—will remain below its pre-pandemic level and at best be only a smidgeon higher than in 2014.

Most Canadian policymakers—including Prime Minister Trudeau and his cabinet—prefer to ignore the reality of an essentially dead-in-the-water economy that’s no longer generating gains in real incomes and living standards for most of the population. That’s not good enough. Canada has the assets, the people, and the natural resources to do better. While the country has been struggling with low levels of business investment for the past 8-10 years, which helps to explain our very meagre productivity growth, that is a problem that can be fixed with smarter public policy. Canadians should insist that our governments devise and implement sensible pro-growth policies that will drive private sector investment, spur productivity, and thereby help to lift the incomes of families and workers in the coming years.

By Jock Finlayson, ICBA Chief Economist

Statistics Canada has just published its latest report on non-residential capital spending. The release provides new estimates for investment expenditures over 2022-23 and a forecast for 2024, based on a survey of private and public sector organizations completed in the fall of 2023. The two main categories of investment covered are non-residential construction and machinery and equipment. Residential investment is not included.

Last year saw a solid increase in Canadian non-residential investment spending, with total private and public sector outlays coming in at $339 billion, up from $313 billion in 2022 and just $275 billion in the COVID-wracked year of 2021. For 2024, nation-wide investment spending is projected to rise by 4.5% to reach $354 billion. Both the private sector (+4.8%) and the public sector (+3.9%) are on course to dial up capital expenditures this year.

The number one sector for investment in Canada remains upstream oil and gas/mining, with capital expenditures in 2024 set to climb to $61 billion (+4.8%). This follows earlier back-to-back gains over 2022-23. This year, investment in the oil and gas/mining sector will be almost twice as high as it was in 2020. The oil and gas sub-sector is on track for an investment surge of 8.2% in 2024, a finding that underscores the outsized contribution the industry continues to make to Canada’s prosperity. Oil and gas is also – by a wide margin — the country’s leading export industry.

Table 1 provides data on investment outlays by broad industry category. Apart from oil and gas/mining, industries with unusually high levels of capital spending are transportation and warehousing, utilities, and manufacturing. Public administration (government) is also a significant source of investment. Sectors expected to see substantial increases in investment activity in 2024 include manufacturing, utilities, and government (public administration).

Table 1

While private sector capital spending has put in a mixed performance in Canada over the last several years, the public sector has become a bigger part of the overall investment picture. If the Statistics Canada survey results are realized, 2024 will mark the seventh consecutive year of higher public sector capital expenditures, with the sector accounting for approximately 37% of all investment in tangible capital assets. It should be noted that the broad public sector includes public administration, most of health care and education, and government-owned enterprises in industries like utilities and transportation.

Focus on B.C. and Alberta

B.C. and Alberta are both expected to see a dip in investment spending this year compared to 2023, which partly reflects the winding down of a handful of large projects. In B.C., capital outlays will fall by more than 5% while Alberta will experience a very slight decline (less than 1%). Table 2 shows total capital outlays as well as investment in the top five industries for the two provinces. For 2024, B.C. is looking at a sharp drop in investment in the transportation/warehousing sector, which includes the pipelines segment. In contrast, investment in B.C.’s oil and gas extraction/mining sector is projected to be higher than it was last year. Whether this actually happens may hinge on policy- and legal-related developments affecting the upstream natural gas industry in northern B.C. and how quickly planned new mines can be built.

Alberta ranks as Canada’s most capital-intensive province, mainly thanks to the heavy presence of energy-related businesses, and this is reflected in Table 2. Total capital spending is roughly one-fifth higher than in B.C., despite Alberta’s population being 800,000 smaller. Oil and gas extraction/mining represents more than 40% of all non-residential investment spending in Alberta.

Table 2

Overall, the 2024 investment intentions survey is mildly encouraging. Recent studies from the Fraser Institute and the C.D. Howe Institute have found that Canada is badly lagging the United States and many other advanced economies in the level of business investment per worker. Narrowing the investment gap with our principal trading partner will be essential if Canadian policymakers want to avoid a “bad equilibrium” in which Canada falls progressively further behind the U.S. in both productivity levels and real income per capita.

By Jock Finlayson, ICBA Chief Economist

At a time when affordability and the cost of living have emerged as top-of-mind issues for many Canadians, it makes sense to take a quick look at the “other side” of the affordability equation: incomes.

Income comes from a few sources: employment (by far the biggest source), government transfers to families and individuals, and investment and rental income. To get a clear idea of the dollars available to households, we need to deduct direct taxes (income taxes and the employee-paid portion of payroll taxes) and also adjust for inflation when looking at how incomes change over time.

According to Statistics Canada, after-tax income for the typical Canadian household stood at $93,290 in 2022. (Households include both two or more people living under one roof and single individuals.) There are dramatic differences among the provinces on this key measure of economic well-being. Alberta is easily the richest province, with an after-tax household income of $113,572 in 2022 – 22% higher than the national average.  B.C. ranked second, at $99,474. Figure 1 provides the data for all ten provinces, along with how that amount increased between 2018 and 2022 (the figures are not adjusted for inflation). It is worth noting that the least affluent Canadian jurisdictions – Nova Scotia and New Brunswick – have average household incomes less than 70% of that in Alberta.

 

Figure 1:

It is common to group the various sources of household income into two broad categories:

• market incomes, consisting of income from employment, self-employment, and investment and rental income; and,
• government transfers such as EI, CPP, OAS, and social assistance payments.

Employment is the predominant source of market income, generating roughly four-fifths of all such income in Canada. This helps to explain why Alberta is the richest province: it has the highest average wages/salaries in the country. Alberta also leads in labour force participation – defined as the share of the population that is employed or actively looking for work. An additional factor is that Alberta has the highest level of investment per employed person in Canada, which correlates to higher employment incomes. Finally, for most workers and successful entrepreneurs, the income tax burden is lighter in Alberta – resulting in a narrower “wedge” between what people earn on the job and their take-home pay.

Nationally, the typical Canadian household saw after-tax income climb by 17%. Part of this reflects the impact of inflation, which rose significantly in 2021-22 after hovering close to 2% annually for a long period before the onset of the COVID-19 shock. The jump in income also includes the record-high government transfers paid to millions of Canadian households and individuals over the course of the pandemic. When data for the post-2022 period are available, they are likely to show an initial decline in household income given the cessation of the various COVID-related cash transfers to individuals and families.

Politicians concerned about the rising cost of living should not limit their focus to ways to mitigate the effect of these costs on households. They should also pay attention to incomes.  This requires looking at the evolving “business climate” and asking whether it is conducive to attracting the private sector investment and entrepreneurial effort needed to give workers more and better “tools” to do their jobs. Unfortunately, this is an area where Canada has been lagging badly over the last decade, with private sector non-residential capital spending recently falling below three-fifths of the level in the United States measured on a per employee basis (as reported by the C.D. Howe Institute).

Without a turnaround in business investment, it will be impossible to boost productivity — and therefore to put real wages and salaries for Canadian workers on a steady upward trajectory.  Because employment accounts for the bulk of the market income received by Canadian households, creating an economic environment that fosters and supports business investment in productive assets and activities should be a top priority for the federal government and provincial policymakers.

By Jock Finlayson, ICBA Chief Economist

In the waning weeks of 2023, Canadian building permits turned lower, consistent with a stagnant national economy and suggesting a weak hand-off for 2024. Nationally, the value of building permits fell almost 4% between October and November, reaching $10.9 billion in the latter month. All building types – residential, commercial, industrial and institutional — recorded declines.

This graphic depicts the month-to-month changes across the country:

The prairie provinces and Atlantic Canada managed to buck the national trend. The weakness in permits was concentrated in central Canada and B.C.

Table 1 provides more detail on the picture in B.C. and Alberta:

B.C. experienced a second consecutive monthly drop in total permit values. Lower residential permit values were partly offset by a modest uptick in non-residential permits in November. On a year-over-year basis, total permit values were down by 16.1%.

Unlike B.C., Alberta recorded higher residential permit values in November, but non-residential permits fell slightly. And, in contrast to both B.C. and Canada as a whole, total permit values in Alberta were up strongly on a year-over-year basis.

Looking to the major cities in the two provinces, Vancouver had a 11.3% monthly contraction in permits in November while Calgary saw a 14.5% drop and Edmonton boasted an outsized 25% month-to-month gain. On a year-over-year basis, total permit values were 27.5% lower in Metro Vancouver, 5.3% higher in Calgary, and up by 44% in Edmonton.

As for 2024, building permits at the national level are likely to feel the effects of a further slowing of the Canadian economy – although continued brisk population growth and rising public sector capital spending will provide some support to building activity. Alberta is expected to handily outpace B.C. in overall economic growth this year, and this disparity should be reflected in the building permit data over the coming months.

By Jock Finlayson, ICBA Chief Economist

With the release of Statistics Canada’s December 2023 Labour Force Survey, we now have the data to assess the performance of the Alberta job market over the past year. Overall, Alberta fared well, posting the second fastest employment growth among the provinces (only tiny P.E.I. did better – see Figure 1). That said, Alberta’s unemployment rate edged higher in 2023 amid a jaw-dropping influx of newcomers and a rapidly expanding labour force.

Figure 1

2023 Snapshot

December saw a net increase of 6,700 jobs in Alberta, following the addition of 8,900 positions the month before. Recent job gains have been concentrated in the private sector. Less positively, all the new jobs in December were part-time, as full-time employment dipped slightly. Alberta’s unemployment rate rose to 6.3%, up from 5.9% in November.

For 2023 as a whole, Alberta added an impressive 85,000 jobs, equivalent to a 3.6% increase on an average annual basis. The average 2023 unemployment rate inched ahead by 0.1 points to 5.9%. This mainly reflects a 3.7% jump in the size of the labour force, fueled by record levels of international in-migration and significant inflows of interprovincial migrants – including sizable numbers from British Columbia.

Alberta’s employment rate – the share of the population aged 15 and over that’s employed– ended the year at 65.3%, the highest in the country. This speaks to the province’s relatively youthful population as well as the underlying vibrancy of the economy.

Industry Focus

Most Alberta industries boosted their payroll counts in 2023 (Table 1), with the biggest percentage increases coming in natural resources, utilities, accommodation/foodservices, manufacturing, and health care. A couple of industry sectors – surprisingly – saw employment dip last year: education and professional, scientific and technical services. In contrast to the picture in neighbouring B.C., the private sector is driving job creation in Alberta. Note that the job growth data in Table 1 compare employment levels in December 2023 with those in December 2022, while the provincial job growth numbers shown in Figure 1 are annual averages.

Table 1

Employment in the Alberta construction sector advanced by 5.3% last year, amounting to some 12,400 additional positions on a year-over-year basis. Almost 250,000 Albertans are now employed in the construction industry, with the sector accounting for one in ten jobs in the province. Back in 2021, construction employment stood at 226,700. As of Q3 2023, construction had the second highest job vacancy rate of all Alberta industries, a sign that many construction companies continue to struggle to find enough qualified workers.

Conclusion

Judging by most labour market indicators, Alberta had a pretty good year in 2023. Strong net job creation was underpinned by the province’s revitalized energy sector, the need for more workers due to a surging population, a relatively attractive business environment (particularly by Canadian standards), and the expansion of business activity in several industry sectors other than oil and gas (e.g., petrochemicals, agri-food, and advanced technology). ICBA believes most of these motors of job creation will carry into 2024, even if the province’s economy loses a step as Canada stumbles into a probable recession.

Affordable housing is a key component of the “Alberta Advantage”. But there are disturbing signs that we are losing ground on that front – not least among them the fact that more than 60% of Albertans agree with the statement that “owning a home in Canada is now only for the rich.”

 

Our housing prices are still well short of the stratospheric levels of Toronto and Vancouver. But the numbers show that both Edmonton and Calgary are becoming increasingly unaffordable.

 

There’s also a growing realization that something different is at play this time. What we’re seeing isn’t a familiar boom-bust impact of energy prices, but the outcome of a massive imbalance between demand and supply. The data bears this out. Statistics Canada recently reported that Canada’s population growth is faster than all other G7 countries, and that Alberta is leading the pack provincially at 4% annual growth.

To read the latest edition of the Alberta Construction Monitor, click here.

The Independent Contractors and Businesses Association (ICBA), the country’s largest construction association, announced today the appointment of Jock Finlayson as its inaugural Chief Economist. This landmark hiring underscores ICBA Alberta’s commitment to provide its members and the broader construction industry with deep economic insights and expert analysis.

“To land someone with Jock Finlayson’s outstanding reputation as ICBA’s first-ever Chief Economist is very exciting,” said ICBA Alberta President Mike Martens. “Jock’s insight and expertise will help our industry better understand the broader economic trends affecting construction, including fiscal policy, the shortage of people, regulatory creep, declining productivity, and loss of economic competitiveness.”

“Construction is a sector full of savvy entrepreneurs and visionary builders, creating companies and projects that deliver tremendous value to Alberta,” said Finlayson. “It’s an honour to be named ICBA’s first Chief Economist, and to provide analysis and insight for an industry that makes up nearly 10% of Alberta’s economy. A thriving construction sector is vital to the economic health of the province.”

As ICBA Chief Economist, Finlayson will monitor and analyze industry trends, market conditions, and economic factors to provide insights and forecasts relevant to the construction sector. In addition, he will advise ICBA and its members on developments in the business and policy environment affecting both construction and the broader economy, and assist ICBA in strategic planning and public policy advocacy.

Previously, Finlayson served as Executive Vice President and Chief Policy Officer at the Business Council of British Columbia, leading and directing the Council’s work on economic, fiscal, tax, environmental, regulatory, and human capital issues of interest to the largest employers in the province and the wider business community. A former director of the Bank of Canada, he holds a master’s degree in business from Yale University, undergraduate and M.A. degrees from UBC, and an honorary Doctor of Laws from Royal Roads University. See Finlayson’s full biography HERE.

Finlayson’s ICBA work will be housed at http://www.icbaalberta.ca/economics.

Imagine looking at a provincial policy that increased construction costs, reduced bidders, and cut out 85 per cent of an industry’s workforce from being part of building a project – and thinking, “We should try and emulate that model.”

That’s precisely what the Trudeau Government has done with its proposed Investment Tax Credit (ITC), announced in March as part of the federal budget. While the goal of the ITC is to facilitate investment in major projects, the underlying conditions will hamper and needlessly complicate how proponents approach investments in major projects in Canada.

Click here to read more.

This month, ICBA Alberta rolls out our out standing ICBA Wellness program, dev eloped by our partner association in B.C. This reflects the dynamic nature of the trends influencing health and group benefits, which ICBA provides to more than 150,000 people.

ICBA Wellness addresses mental health, something that used to be largely swept under the rug in our sector. Yet with chal-lenging and demanding work, construction workers can be vulnerable to mental health issues and to troubling substance-use outcomes, while at the same time often being reluctant or even fearful to talk about such issues.

To read the latest edition of the Alberta Construction Monitor, click here.

ICBA Alberta has released an election edition of the Alberta Construction Monitor, taking the personalities and politics out of the campaign, and focusing tightly on the two parties’ records in managing the provincial economy, and encouraging fairness, openness and prosperity in the construction and energy sectors.

The right to a secret ballot in union votes, fairness for every company to bid on taxpayer-funded construction projects, cutting red tape, and growing the economy, are four of the metrics the Monitor examines.

To read the election edition of the Alberta Construction Monitor, click HERE.

ICBA Alberta has released the inaugural edition of the Alberta Construction Monitor, a new, quarterly publication providing ahead-of-the-curve information and statistics on the Alberta construction industry and the issues relevant to it.

In the spring edition, statistics show that 1 of every 10 jobs in Alberta is in construction, and the industry contributes 8% of Alberta’s GDP. We also see that 88% of the industry is ‘open-shop’ – not affiliated with a traditional building trades union. ICBA Alberta is proud to advocate for this open shop majority of Alberta’s construction sector.

The Monitor also looks at wages, activity, and other important demographics.

To read the inaugural Alberta Construction Monitor, click HERE.

The following op-ed, co-written by ICBA Alberta President Mike Martens and Alberta Enterprise Group President Catherine Brownlee, first ran in the Calgary Herald on March 23, 2023.

Canada’s economy and its future prosperity are in jeopardy, no thanks to the federal Impact Assessment Act or Bill C-69. Even with a global energy crisis and the world pleading for Canada’s responsibly and sustainably produced natural resources, Canada, according to the Organization for Economic Co-operation and Development (OECD), is on track to have the worst performing economy of the G20 over the next ten years.  Perhaps this dismal forecast reflects the regulatory uncertainty, increased red tape, and resource opposition codified in Bill C-69.  Most disturbingly, as a country, we can no longer make the promise that the next generation will be better off than we are—unless things change significantly.

That is why our organizations – the Alberta Enterprise Group and ICBA Alberta – are in the Supreme Court of Canada, supporting the Government of Alberta and almost all other provinces and territories in their fight against the federal government’s Impact Assessment Act. Canada was already struggling to approve resource development projects before 2019 when the Act came into force; now it is even worse.  

This is most apparent in the case of Liquid Natural Gas (LNG). The USA and Canada stood together on the starting line in 2013, both considering how to launch an LNG industry in their respective countries. A decade later, the USA now stands as the largest exporter of LNG in the world, while Canada remains at least two years away from exporting any measurable volume of LNG. In the time Canada took to approve and build one LNG export facility – LNG Canada in Kitimat, B.C. – the United States approved and built sevenLNG export facilities and has five more under construction with an additional fifteen approved. 

Canada has done such a thorough job of saying “no” and turning away capital and talent through regulatory uncertainty, red tape, and resource opposition—$150 billion in cancelled energy projects alone since 2017—that two years ago, the World Bank ranked Canada 64^th in the world in the time it takes to approve a major construction project. Furthermore, in Canada, in every year since 2014, outbound investment has exceeded inbound investment.  This has had a very negative impact on small and medium sized businesses—including our members—who provide goods and services required by major projects. 

What precisely is it about the federal Impact Assessment Act that discourages capital investment and resource development?

The federal Impact Assessment Act or Bill C-69 replaced a streamlined National Energy Board with the bureaucratic multi-layered Canada Energy Regulator (CER), and the narrow-scoped Canadian Environmental Assessment Agency with the broad-scoped Impact Assessment Agency. In addition, the Act essentially institutionalizes jurisdictional duplication and red tape. For example, a project may have to go through both a provincial review as well as a federal assessment; time limits for review may be suspended at the discretion of the CER, while stakeholder participation is expanded – meaning one no longer needs to be directly affected by a project or even be in the affected provinces to participate in the process. These changes, along with expanded discretionary practices, makes the major project approval process both vague and uncertain, in terms of the criteria to be applied and the time it will take to get a decision.

Investors can be forgiven for thinking that Canada is focused on entrenching regulatory gridlock with the never-ending demands it places on project proponents. Thus, for investors, the risks are too high and the uncertainty too great; meaning, Canada is a bad prospect for investment. 

Canada’s long-term prosperity is at risk if investments are not made today for developing our incredible resources and improving our infrastructure.  Of course, investment should not come at the cost of a healthy environment. We believe we can do both. But robust regulations do not have to mean lengthy and uncertain timelines for assessments and project reviews, or unreasonable environmental and social requirements bound by sticky layers of red tape. Indeed, the current Impact Assessment Act puts everything—environment, social, and governance issues—ahead of economic or employment benefits rather than weighing the trade-offs carefully.

If we wish to establish a framework to strengthen Canada’s economy and future prosperity, then we need a better development regulatory process. This would be a process that appropriately balances the care for the environment we all want with the economic and resource development we need within appropriate constitutional boundaries to ensure prosperity now and for the future. That is why this week, we are standing in front of the Supreme Court of Canada, supporting the Government of Alberta and almost all of the other provinces and territories in opposing this legislation.

CALGARY – The Independent Contractors and Businesses Association (ICBA) is expanding in Alberta, and Mike Martens, one of the province’s top advocacy leaders, has been selected to head up ICBA Alberta, ICBA president Chris Gardner announced today.

Building on the growth of its Alberta group health benefits business which has been offering health, dental and retirement plans to contractors and businesses for nearly a decade, ICBA is rolling out a suite of new services for its members in Alberta.

“Founded 48 years ago, ICBA has grown into the country’s largest construction association with more than 4,000 members and clients and 150,000 people on one of our group health benefit plans,” said Gardner. “Today, I’m proud to announce that we are expanding in Alberta and that Mike Martens has joined us to lead the roll-out and growth of the suite of new member services we will be offering to ICBA Alberta members. Mike is a dynamic, respected advocate, and is focused on growing the construction, building, and resource development industries in Alberta.”

Martens was Director of Public Affairs (Western Canada) for the Progressive Contractors Association of Canada for the past eight years. Working out of ICBA’s Calgary office as ICBA Alberta President, Martens will work with the ICBA Alberta team to expand its member service offering in areas related to advocacy, group health benefits, training, and wellness programs designed for Alberta’s open shop contractors, builders, and entrepreneurs.

Some 88 per cent of the more than 220,000 people who work in Alberta construction make up the open shop sector.

“It’s an honour for me to be able to help build on ICBA’s incredible platform in Alberta,” said Martens. “We’re going to be offering some very exciting services to help merit and open shop construction contractors grow, and we’re going to give them a strong voice in public policy advocacy.”

Over the past few years, ICBA has worked to advance several projects important to growing Alberta’s economy:

• Generated thousands of supportive emails through ICBA’s #Get2Yes petition in support of Alberta energy projects
• Offered a $100,000 reward for information leading to the arrest and charge of the people who attacked the Coastal Gas Link LNG pipeline construction site in northern B.C.
• Produced an international award-winning “Big Gas Pipeline” video that was viewed more than 2 million times on social media
• Intervened in the court challenge to support Alberta’s fight against the Bill C-69
• Intervened in the court challenge against the B.C. Government and supported Alberta’s efforts to get the Trans Mountain pipeline expansion approved
• Wrote op-eds in major Alberta papers supporting the need for Canada to speed up building permits – currently Canada is 64th in how long it takes to approve construction and infrastructure projects

When it comes to federal advocacy, ICBA Alberta is a member of Merit Canada, joining Merit Saskatchewan, Merit Manitoba, Merit Ontario, Merit Nova Scotia and ICBA. Through Merit Canada, this powerful partnership of open shop construction organizations advocates on issues important to open shop contractors in Ottawa.

“Mike and the team at ICBA Alberta will be working to help construction companies grow and support their workers with the best benefits, training and advocacy possible,” said Gardner. “They will be supporting the reduction in unnecessary red tape and the creation the economic conditions necessary to attract investment, build the infrastructure and harness our energy resources in a way that secures our long-term prosperity.”

“I’ve hit the ground running with meetings and introductions, and I can’t wait to share what ICBA Alberta can do to help construction companies,” said Martens. “If you’re a merit-based, open shop construction company doing work in Alberta, send me a note at mmartens@icba.ca and let’s meet to discuss how our association and our services can help you.”

2023

• Fall: Ensuring Plans are Purpose-Built for Today’s Realities
• Spring: Alberta’s Economy is a Construction Economy Too
• Pre-Election: The Right Choice for Construction on May 29