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ICBA Alberta News

Published July 15, 2024 at 9:00 a.m. 

ICBA ECONOMICS: Canada’s
‘Productivity Emergency’

By Jock Finlayson, ICBA Chief Economist
Earlier this year, the Senior Deputy Governor of the Bank of Canada took the unusual step of
publicly referring to Canada’s stagnant productivity as an “emergency.” And recently, Bank of
Canada Governor Tiff Macklem reinforced that sobering message by describing lagging
productivity as the country’s “Achilles’ heel”.

Boosting productivity is the only way to deliver durable increases in incomes and improvements
in overall living standards. It is therefore alarming that Canada has been failing make gains on
this core indicator of prosperity. Indeed, from 2019 through the end of 2023, the level of overall
productivity in Canada diminished slightly, while advancing by a hefty 6% in the United States
over the same period (Figure 1).

Productivity is the amount of “output,” or gross domestic product (GDP), the economy produces
using a given level and mix of “inputs.” Labour is one such input, and most public discussions of
productivity focus on this measure – “labour productivity “ – which is defined as GDP per hour
worked. It can be estimated for the entire economy or for specific industry sectors. In the
Canadian construction industry, for example, labour productivity in 2023 was $48.60 per hour,
adjusted for inflation using 2017 dollars. By comparison, labour productivity across the entire
Canadian economy was $63.60 per hour, meaning productivity in the construction sector is
below the all-industry average. There are good reasons for this, including the highly fragmented
nature of the sector and the fact that about 80% of contractors have 25 or fewer employees.

Over time, there tends to be a fairly tight linkage between productivity in an industry, on the one
hand, and the wages and non-wage benefits paid to employees in that industry, on the other. In
other words, the most productive industries, on average, pay their workers more, an empirical
relationship that is supported by Canadian research. As noted in a recent RBC Economics report,
productivity growth is “essentially the only way that business profits and worker wages can
sustainably rise at the same time.”

Until approximately the year 2000, Canada generally held its own against the United States on
measures of productivity in the broadly defined “business sector” (consisting of industries where
government, in some capacity, is not the dominant supplier of goods or services). Since then, we
have been steadily losing ground vis-à-vis the U.S., as shown in Table 1. As a consequence, by 2022
labour productivity in Canada’s business sector stood at only 70% of the U.S. benchmark, down
significantly from around 90% of the U.S. level in the early 1980s.

Table 1

An expanding U.S.-Canada productivity gap has negative implications for future gains in real
wages and incomes in Canada, versus those in the United States. This raises the risk of everwidening disparities in investment per employee, the returns on the acquisition of credentials,
and entrepreneurial wealth creation on our side of the border, compared to our principal trading
partner and competitor for investment dollars.

Lifting Productivity

Turning around Canada’s lacklustre productivity performance is a key challenge for policymakers
and business leaders alike. There is no silver bullet that will quickly solve the problem of
chronically sub-par Canadian productivity growth. However, a review of recent Canadian
economic studies and related policy commentaries suggests a five-pronged approach will put
the country onto a better productivity growth trajectory:
1. Increase business non-residential investment in productive assets and activities. Canada scores
poorly by the standards of other advanced economy jurisdictions on overall business capital
investment, including investment in the important categories of 1) machinery, equipment and
advanced technology products; 2) intellectual property; and, 3) research and innovation.

2. Increase investment in trade-enabling infrastructure such as ports, highways, railways and
other transportation assets that link Canada with global markets and facilitate the efficient
movement of goods and services within the country.

3. Overhaul federal and provincial tax policy to strengthen incentives for capital investment,
innovation, entrepreneurial wealth creation, and business growth.

4. Streamline and reduce the burden of increasingly complicated and costly government red
tape and regulations affecting all sectors of the economy – including natural resources,
construction, manufacturing, and infrastructure development.

5. Foster and nurture competition across the Canadian economy, and scale back the extent and
role of government monopolies and government-sanctioned oligopolies that stifle competition
and deter the entry of new businesses in currently protected domestic markets.

These five recommendations underpin ICBA’s current advocacy efforts aimed at federal and
provincial government officials and elected representatives.

For more analysis from Jock, please watch www.icbaalberta.ca/economics, our ICBAIndependent.ca news portal, or our ICBA social media feeds (LinkedIn, Twitter).

Published July 4, 2024 at 9:00 a.m. 

ICBA Economics Mid-Year Update

ICBA Chief Economist Jock Finlayson has just released a mid-year update on economic conditions in Canada, with a specific focus on British Columbia and Alberta. The analysis is sobering. By most measures of economic performance, Canada has been losing ground relative to peer jurisdictions. This is starting to show up not only in the economic domain, but also in areas like declining housing affordability, a faltering health care system, and challenges on our streets and communities. This report offers insights that are important for strategic planning, long-term forecasting, and business development.

I encourage you to read this piece, recognizing that with our abundant resources, preferred geographic location, and talented workforce, Canada and all our provinces can and should be doing better.

Mike Martens, ICBA Alberta President

By Jock Finlayson, ICBA Chief Economist

Economic developments have unfolded largely as we predicted in our end-of-2023 outlook and 2024 forecast. Global economic conditions remain choppy, with overall growth a bit stronger than expected when the year began. Canada’s economy continues to underperform amid still-high borrowing costs, rising numbers of financially wobbly consumers and businesses, stagnant productivity, and weak private sector investment.

Of particular concern, per capita economic output (real gross domestic product per person) is still falling in Canada and now sits about 3% below the level recorded back in 2019. In the last decade, this basic measure of prosperity has basically flatlined – an unusual and alarming picture. We have lost significant ground – not just compared to our own history, but also vis-à-vis the United States, where per person GDP climbed by 7% over the same period.

Canada’s well above-average population growth has played a key role in dampening gains in per capita GDP. Most advanced economies have population growth rates between 0 and 1% per year; Canada’s population jumped by a head-spinning 3.2% in 2023 and is set to climb by around 3% this year. Last year, Canada added a city the size of Calgary to its existing population.

Because output is growing more slowly than the number of Canadian residents, GDP and income per person are trending lower, against the backdrop of an essentially moribund national economy. Canada is failing to translate immigration-fueled population growth into improvements in living standards, average real incomes, or business dynamism.

The good news is that inflation is easing. After surging almost 7% in 2022, the all-items Consumer Price Index (CPI) increased by a more moderate 3.9% (annual average) last year. For 2024, RBC Economics predicts a further drop, to 2.4%. Decelerating inflation is setting the stage for lower interest rates, with the Bank of Canada delivering an initial cut in its short-term policy rate in June. This suggests the conditions may be in place for a much-needed pickup in economic growth over the next year. However, Canadians will continue to face the legacy of higher prices for many goods and services after the inflation scare of 2021-23. Figure 1 shows the cumulative increase in prices for several items included in the CPI over the five years ending in April 2024.

Figure 1

RBC Economics sees Canada’s real GDP expanding by a tepid 1% this year, on the heels of an equally underwhelming 1.2% advance in 2023. But like other forecasters, RBC projects an acceleration in economic activity in 2025, with real GDP growing by 1.8%. This modest turnaround will be supported by lower interest rates, a stronger housing sector, and the growth-augmenting effects of a cheap Canadian dollar. That said, Canada is staring at serial declines in GDP per person over most, if not all, of the 2023-25 period. As a result, we are set to fall further behind the U.S. on this core indicator of economic success.

 

Sluggish B.C.

Current economic conditions in the two western-most provinces are a picture of contrasts. As of mid-2024, Alberta is leading the country on several performance metrics, while B.C. is lagging. That said, last year B.C. did manage to outpace its neighbour in economic growth, with real GDP edging ahead by 1.6% vs. 1.5% in Alberta. In part, this reflects significantly faster growth in public sector spending and hiring in B.C. – something that can juice the economy, but not for long. It is also due to a normalization of energy markets last year, following sharp increases in oil and natural gas prices in the wake of Russia’s invasion of Ukraine in early 2022. (In 2022, Alberta’s economy grew by a hefty 5% vs 3.8% in B.C.) This underscores the fact that although Alberta’s economy is diversifying, energy still dominates the province’s export portfolio and occupies a central position in its broader industrial mix.

Both provinces have seen outsized population growth over the past three years, driven by fast-rising immigration and – in Alberta’s case – soaring net in-migration from other provinces, including B.C. (Last year, about 35,000 people left for B.C. for next-door Alberta, even as B.C.’s overall population continued to increase due to international in-migration.)

In 2024-25, economic growth in B.C. will be dampened by subdued consumer spending as debt-burdened households pull back on discretionary expenditures. British Columbians, saddled with the heaviest debt loads in the country, have been disproportionately impacted by higher mortgage and other borrowing costs over the last two years. ICBA Economics estimates that $375-400 billion of residential mortgages will need to be re-financed in B.C. over 2024-26, in most cases at higher mortgage rates. This is sure to crimp consumer spending.

B.C. retail sales actually fell in nominal terms last year – a worrisome development at a time of above-average population growth and still-elevated inflation. Consumer spending will stay notably soft in 2024 before posting an underwhelming rebound in 2025.

British Columbia’s merchandise exports have been trending lower on a year-over-year basis, after hitting record highs in 2022. Fortunately, exports should get a lift in 2025 as LNG production comes on-line and lumber and other commodity prices tick higher.

B.C.’s job market should continue to chug along, bolstered by a still-expanding public sector, pockets of strength in the private sector economy, and a growing population. However, the frenetic pace of public sector hiring in recent years is unsustainable. Moreover, the province’s unemployment rate has been moving higher and is expected to rise further over 2024-25 as labour force growth outpaces net job creation.

Capital spending is an area of economic weakness for B.C. The construction phase of four major energy-related projects – totalling cumulative capital spending of almost $100 billion – is now winding down, removing what had been an important source of economic and job growth over the past seven years. B.C. does not have another $100 billion of large projects to fill the gap. There is some upside potential in energy – including additional LNG projects – and mining, but overall non-residential investment will be hampered by a deteriorating business climate, high land, space and construction costs, and mounting challenges in accessing Crown land and resources in a province where the government controls what happens on 95% of the land base.

Finally, recent developments in B.C.’s public finances are troubling. The NDP government is planning for a string of large operating budget deficits along with a costly capital spending plan. The net result is an historic rise in the province’s net debt-to-GDP ratio over the next few years – a trend which has already prompted the downgrading of B.C.’s credit rating. The yawning gap between provincial spending commitments and revenues suggests the current government will likely impose sizable tax hikes if it is returned to office in the October 2024 election – a prospect that may have a negative effect on business and consumer confidence.

As Figure 2 shows, the B.C. economy – increasingly reliant on an expanding public sector to keep afloat – will lag Alberta’s (see next section).

Figure 2

Alberta Better Positioned

The outlook is considerably brighter in Alberta, with the economy poised to kick into higher gear after a generally sluggish 2023. Importantly, household and business costs are less strained than in B.C., and government policies pose less of a headwind to private sector investment and business expansion. This makes Alberta a relatively more attractive location for people to live and in which to operate and grow a business.

Alberta’s energy output is setting new records as oil production and exports ramp up, bolstered by the completion of both the Trans Mountain Pipeline expansion as well as previously sanctioned oil sands projects. The start-up of LNG production in British Columbia will provide a further boost to the province’s energy sector.

Unprecedented inflows of people from international and Canadian jurisdictions have lifted economy-wide spending and spurred demand for housing as well as commercial and industrial space. Alberta resembles B.C. in this respect, but its demographic growth is even more pronounced – in the year ending July 2023, the province added 184,000 residents, equivalent to an annual growth rate of 4.1%. Population growth is likely to slow somewhat from this blistering pace in 2024-25 but remain higher than the national average.

ATB Economics predicts a “jump in residential investment this year as the construction industry struggles to keep up with soaring demand.” Looking at capital spending broadly, the Alberta government counts some $154 billion in projects either at/very near completion or underway across multiple economic sectors, including upstream energy development, downstream energy-based industrial activity (e.g., the huge Dow Canada petrochemical project), “alternative” energy (e.g., hydrogen, carbon capture/storage), transportation and logistics, manufacturing, agri-food, multi-family residential construction, and the public sector.

As always, oil and natural gas prices and trends in global and North American energy markets will significantly shape Alberta’s economic prospects going forward. For now, oil prices remain “constructive” for the province, according to ATB Economics, while natural gas markets have been weaker over the last 12 months. Looking ahead, natural gas production will benefit from the start-up of LNG production in B.C. ATB Economics projects the volume of Alberta’s oil and gas exports will rise by 5% this year and by 3% in 2025.

Finally, Alberta’s relatively healthy public finances are another positive. The province is avoiding operating deficits and is keeping the debt/GDP ratio in check, supported by substantial revenues generated by the large energy sector. Unlike in B.C., residents and business owners in Alberta have little reason to fret about the risk of major near-term tax increases to close a record provincial government budget deficit.

Figure 3 summarizes our outlook for the Alberta economy, which should be among the top-performing provinces in the next two years.

Figure 3

For more analysis from Jock, please watch www.icbaalberta.ca/economics, our ICBAIndependent.ca news portal, or our ICBA social media feeds (LinkedIn, Twitter).

Published June 27, 2024 at 9:00 a.m. 

Update on Job Vacancy Rates… in Construction and Across the Wider Economy

By Jock Finlayson, ICBA Chief Economist

Signs are multiplying that the once red-hot Canadian job market is cooling, fast.

The unemployment rate has been creeping higher over the last year or so as steep interest rate hikes implemented over the course of 2022-23 increasingly take a toll on consumer spending, investment and housing market activity. Relatedly, the number of job vacancies per unemployed person has been trending lower.

Data on “job vacancies” – defined as the number of job openings as a share the total labour force — confirm the story of a softening job market. As Statistics Canada recently noted: “Job vacancies fell by 24,300 (-3.6% q/q) in the first quarter, marking the seventh consecutive quarterly decline” from the record high vacancy count registered in the second quarter of 2022. Measured relative to the unemployment rate, job vacancies are also dwindling, with two unemployed persons for every job vacancy in the country in Q1. Meanwhile, the number of payroll jobs in Canada stalled in the first three months of 2024, providing more evidence of an essentially moribund national economy.

Among broad occupational groupings, vacancies fell in areas most relevant to the construction industry – trades, transport and equipment operators (-5.8% in Q1 on a quarter-to-quarter basis)). Vacancies in this category peaked at 195,000 in the second quarter of 2022. Year-over-year, vacancies in trades, transport and equipment occupations are down by 25.6%.

Among industries, the job vacancy rate in Q1 stood at 4.2% in the Canadian construction sector, down from a peak of 7.1% in the second quarter of 2022.

The provinces of B.C. and Alberta have experienced the same trend toward fewer vacancies as Canada as a whole.

In B.C., the average all-industry job vacancy rate peaked at 6.8% in mid-2022 and fell to 4.0% in the latest reading (Q1 2024; not seasonally adjusted). Within the construction sector, the vacancy rate dropped from 10.6% to 5.8% over the same period. It is worth noting that construction continues to experience a higher vacancy rate than the overall B.C. economy.

Alberta’s economy-wide job vacancy rate was 3.4% in Q1, significantly lower than in mid-2022. In construction, as in B.C. the vacancy rate in Alberta is higher: 5.3% in Q1, although that is materially lower than the record 7.4% posted in the second quarter of 2022.

The data for B.C. and Alberta indicate that the construction industry continues to face above-average challenges in filling vacant positions and sourcing an adequate supply of qualified labour.

Published June 7, 2024 at 11:00 a.m. 

Energy – The Number One Driver of Canada’s Exports to the World

By Jock Finlayson, ICBA Chief Economist

Energy sits at the heart of Canada’s export economy, even though some federal policymakers and provincial governments appear to be discomfited by that fact.

In recent years, energy has supplied 20-25% of Canada’s total international exports (goods plus services combined), with crude oil, refined petroleum products, and natural gas making up the lion’s share of Canada’s energy-related shipments to other countries. Table 1 shows the shares of various industries in Canada’s export basket as of 2022:

Over time, energy has taken on added importance as Canada’s number one export sector, reflecting higher oil production volumes, rising exports, and still-robust global demand for fossil fuels (which provide over 80% of the world’s primary energy). Based on millions of barrels of oil equivalent (boe), Canadian conventional oil and gas production rose from 4.5 million boe per day in 2015 to 5.4 million/day last year, with most of the additional output exported. With the completion of pipeline expansion projects and the looming start-up of liquified natural gas (LNG) production on the west coast, oil and gas are set to play an even bigger role in Canada’s economy and export portfolio over the rest of the decade.

A 2024 modelling study by S&P Global Commodity Insights predicts a further jump in conventional oil and gas output of between 0.5 and 1.0 million boe/day by 2035, assuming the federal government doesn’t impose draconian caps on activity in the sector as part of its climate policy agenda. Based on that scenario, S&P estimates that production, capital and operating spending in the conventional oil and gas industry will add up to $1.3 trillion to Canada’s gross domestic product by 2035. This forecast is premised on a modest (8%) increase in output and steady declines in the sector’s greenhouse gas emissions-intensity due to efficiency measures, advances in technology, greater use of carbon capture, and other factors.

To illustrate the outsized contribution that energy currently makes to Canada’s overall prosperity, the Coalition for A Better Future recently estimated that without exports of oil, natural gas and other energy goods, Canada’s cumulative trade deficit with the rest of the world – which stood at $130 billion in the decade ending in 2023 – would have ballooned to $1 trillion. Thanks to energy-related production, Canada garners $200-230 billion of additional export receipts each year. This substantial stream of export earnings furnishes the means to pay for imports, supports hundreds of thousands of high-paying jobs across the country, and generates many tens of billions of dollars of extra revenues for Canadian governments.

In Canada’s case, it is worth noting that energy reliably produces the largest trade surplus of any sector, by a wide margin – with the surplus poised to increase over the rest of this decade and possibly beyond as oil and gas output and exports expand. Table 2, taken from the Coalition for A Better Future’s 2024 Scorecard Report, shows the trade surpluses/deficits recorded in broadly defined Canadian industry sectors over the latest 12-month period. Energy posts by far the biggest trade surpluses:

Table 2: Canadian Trade Surpluses/Deficits by Industry
12 month moving average to May 2024 (Cdn $Billions)

Trudeau government ministers and senior officials are keen to talk up (and to subsidize) Canadian non-fossil fuel energy industries, like (carbon-free) electricity, biofuels, and hydrogen (production of which currently is almost non-existent in Canada). However, except for electricity, these segments of the Canadian energy sector are very small in size and export little. And while “clean tech” goods do hold economic promise, today they comprise less than 1% of Canada’s international exports.

When it comes to energy exports, the reality for Canada is that oil, natural gas and related products dominate the picture — and will continue to do so for the foreseeable future.

Published June 6, 2024 at 11:00 a.m. 

Senate Standing Committee on Energy, the Environment and Natural Resources

Opening Remarks by Jock Finlayson, Chief Economist, Independent Contractors and Business Association

Thank you for the opportunity to appear before the Committee today on behalf of the Independent Contractors and Businesses Association (ICBA). ICBA is the largest construction association in Western Canada, with 4,000 members and client organizations as well as a sizable and steadily growing health and employee benefits business that currently provides extended health, insurance and retirement services to over 170,000 Canadians.

Construction has a vital role in moving Canada forward in a fast-changing, increasingly competitive world. It is the country’s fifth largest industry and accounts for 8% of employment – almost 1.6 million jobs. In 2023, construction investment spending amounted to more than a tenth of Canadian GDP. The construction industry’s contributions to economic prosperity and community wellbeing became more apparent in the last few years as citizens, policymakers and business leaders were forced to grapple with the consequences of supply chain bottlenecks, infrastructure “deficits,” a nation-wide housing shortage, and escalating building and development costs.

The foundation for Canada’s prosperity traditionally has rested on hard work, resilience, entrepreneurship, fairness, and sensible public policy. In the decades since the Second World War, Canada leveraged these assets to build one of the world’s most successful countries. However, stresses in our economy are raising concerns about Canada’s ability to compete and generate long-term prosperity. As documented by the C.D. Howe Institute, the Fraser Institute, and the OECD, among others, Canada is losing ground to peer jurisdictions on many core metrics of economic well-being – including GDP per person, productivity growth, business start-ups, business investment per worker, and overall competitiveness. In terms of government regulation, we have earned a reputation as a complex and costly jurisdiction in which to develop large-scale projects in industries ranging from transportation, mining, and energy to many categories of private and public sector infrastructure.

For a country with Canada’s advantages and resources, that’s not good enough. We need to do better, particularly at a time when our population is expanding, the geopolitical environment is deteriorating, energy costs have become a major concern, and Canadian policymakers are striving to reduce carbon emissions while also expanding electricity production and transmission and kick-starting the development of a domestic critical minerals industry.

The Committee is examining proposed changes to the Impact Assessment Act (IAA). Like many business groups, ICBA had grave reservations about the IAA when it was adopted by the current government in 2019. We intervened in the Supreme Court of Canada’s review of the IAA, in support of the legal position of the government of Alberta and certain other provinces. The court found parts of the IAA unconstitutional, owing to significant jurisdictional overreach by the federal government.

Bill C-69 (Division 28 of Part 4 of the budget implementation Act)

The government’s response is a package of amendments to the IAA included in its 663-page omnibus budget bill that the Senate is now considering. We do not believe the amendments will fix the problems with the IAA.

According to one of Canada’s leading law firms, “the proposed amendments offer minimal changes, and may leave the IAA once gain ripe for constitutional challenges.”1 While the changes will modestly narrow the scope for federal involvement in project assessments, they are expected to give rise to new uncertainties and confusion for proponents and provincial governments interested in advancing industrial and infrastructure development in their jurisdictions.

ICBA is not necessarily opposed to the very limited IAA amendments in the 2024 budget omnibus bill, and in this brief presentation we offer no specific comments on the proposed changes to the Act. Instead, we wish to emphasize the need for a more significant overhaul of project assessment and environmental permitting in Canada. This is essential if Canadian policymakers are serious about addressing the country’s “infrastructure deficits” and committed to moving forward with plans to achieve “net zero” by 2050.

The current Canadian project assessment regime – along with some of those maintained by the provinces – inhibits private sector investment, hinders industrial and infrastructure development, and will slow efforts to build a low-carbon economy. As noted in a recent policy analysis:

“It has not been easy for Canadian companies to plan and complete major projects…recently. Hydroelectric dams, pipelines, mines, rail hubs, and port expansions…are inherently complex and tough to build….policy has made these projects extraordinary hard to get approved, let alone completed in our…country.”

The federal government, in advancing he IAA, claimed that the updated system for considering proposed projects would foster greater certainty and result in improved timeliness. The evidence so far indicates that these goals have not been met, as documented in a 2023 report from the Canada West Foundation.4 The federal government itself seemed to acknowledge that Canada has a significant problem with major project development. The Minister of Natural Resources has repeatedly complained that it shouldn’t take 12-15 years to develop a new mine. In its 2023 budget, the government pledged to release a “concrete plan” to improve regulatory and permitting processes by year-end. That goal wasn’t met. The 2024 budget included promises to reform the regulatory system to accelerate major project development. The amendments to the IAA in the budget omnibus bill are part of that commitment.

These amendments, if passed and implemented, are unlikely to make a material difference to the business climate surrounding project development in Canada.

Private sector interest in investing in large industrial and infrastructure projects has dwindled since the mid-2010s. Natural Resources Canada reports a substantial decline in the “major projects inventory” that the department maintains. The decline is not limited to the oil and gas industry; it extends to mining, electricity and other natural resource industries.5 According to government statistics, the number of projects completed dropped by 36% between 2015 and 2023.

There are of course various reasons for this concerning trend; policy and regulation are only part of the explanation. But it is hard to avoid the conclusion that investors and corporate decision-makers in some key economic sectors have become less keen on Canada as a jurisdiction in which to deploy capital for new projects. This is particularly true in the natural resource and infrastructure industries. That should worry us all. Natural resources make up around half of Canada’s total exports of goods and services combined. In Western Canada, they supply 70-85% of international exports (depending on the province). As a trade-dependent nation, Canada also relies heavily on world-class infrastructure to move goods and to connect our industries and workers to global markets. We should be looking to establish assessment and permitting systems that enhance the commercial success of our leading trading industries and allow significant projects to proceed in a timely manner. On this score, Canada continues to fall short.

Published June 4, 2024 at 9:00 a.m. 

Productivity: A Crisis Now Firmly on our Doorstep

We pride ourselves in Alberta on our capacity to create businesses and industries, and to provide much of the foundation of our national economy. Certainly we see that drive and delivery in our construction sector.

But the hard fact remains that Canada as a whole is experiencing a long, slow decline. On productivity growth and other key measures of well-being and competitiveness, we are increasingly coming up short among our global peers and competitors. The alarm bells are ringing louder, with many commentators calling on government and industry to re-double efforts to generate productivity growth. It’s in all our interests since, as a Bank of Canada official recently put it: “Ultimately, higher productivity helps the economy generate more wealth for everyone.”

So what’s behind our dismal growth performance? According to the OECD, business investment in Canada from 2015 to 2023 ranked 44 out of the 47 most advanced economies. And last year the C.D. Howe Institute reported that for every dollar an American business spends on training, technology and
capital – essential ingredients of innovation – a Canadian company invests 58 cents.

Investment capital is also being taxed and regulated away, and opportunities missed. Canada has a huge competitive advantage in highly in-demand natural resources, as we well know in Alberta. But visiting leaders from Germany, Greece, Japan and Poland have recently received a cold shoulder from Ottawa at the suggestion that Canada supply them with much-needed energy.

Small wonder that private sector job creation in Canada has often been weak while the size of government has ballooned.

We need governments at all levels willing to harness our talent, ambition and resources to grow our economy. And with about 20 per cent of construction workers expected to retire over the next five years, innovation and labour productivity need to be especially front and centre for contractors.

Fortunately, technology and innovation are changing and improving the way we design and build buildings. That will help meet the need to get more housing and infrastructure in place fast and efficiently. What we also need, however, is an economy-wide focus on enabling and driving productivity growth.

Read The Alberta Construction Monitor – June 2024 HERE.

Published May 24, 2024 at 1:45 p.m. 

Calgary Public Opinion on the Trades

The Independent Contractors and Businesses Association Alberta (ICBA Alberta), a chapter of the country’s largest construction association, today released results of a new poll about careers in the construction trades. The poll shows nearly 50% of Calgarians have a positive view of working in the trades and would recommend a career in the trades to others.

In light of severe shortages of such tradespeople, and more than 7,000 vacancies in Calgary alone, this is encouraging news.

“I’m encouraged by these results and hopeful we can make progress to recruiting more youth into fulfilling careers in construction,” said ICBA Alberta President Mike Martens. “When we think of problems like affordable housing and deteriorating living standards, one of the issues holding the country back is not having enough skilled tradespeople. I’m hoping this is another early sign we can turn things around.”

Recently the Government of Alberta released its first quarter of 2024 construction labour report, showing that 12,000 more people were working in construction in March of 2024 compared to the same period last year. At the same time, domestic and international immigration to Alberta is reaching historic levels. However, CIBC Economics reports that only 2% of new permanent immigrants to Canada enter the construction trades.

“Our aging population is pushing us over a demographic cliff, so Alberta needs immigration, but we need to find the right balance,” said Martens. “We must do a better job of identifying the skills gaps we are facing (doctors, nurses, technicians, teachers, and trades people) and recruiting the people with the skills to power our economy to come to Canada.”

As a leading sponsor of apprentices, a provider of more than $200,000 in bursaries per year, and a deliverer of 900 professional development courses, ICBA supports businesses who are ready to hire new workers.

“We represent the open shop, merit construction sector, the small and medium-sized contractors that make up 88% of the construction industry in Alberta,” said Martens.

Read Calgary Public Opinion Survey HERE.

Published May 16, 2024 at 1:45 p.m. 

ICBA ECONOMICS: The Industrial Composition of the Alberta Economy

 

By Jock Finlayson, ICBA Chief Economist

Amid the daily deluge of economic news – much of it focused on topics such as job growth, housing markets, the impact of innovative technologies, and government budgets – it is easy to lose sight of a basic but important fact: the economy is made up of distinct industries. Most of these industries, in turn, are populated by profit-seeking business enterprises which, collectively, underpin and drive the bulk of all economic activity.

In both the U.S. and Canada, statisticians categorize industries based on the North American Industry Classification System (NAICS). The NAICS divides the economy into hundreds of narrowly-defined, specific industries. For economists, it is common to group these into 19 or 20 aggregate categories, each of which contains multiple individual industries. Construction is one example of an aggregate industry category under the NAICS, along with manufacturing, health care, retail trade, etc.

We can use the NAICS analytical framework to help us understand the structure and evolution of the economy over time. This post looks at Alberta’s industrial structure through the NAICS lens.

The accompanying table shows the percentage shares of Alberta’s economic output (gross domestic product at 2017 prices) accounted for by the principal NAICS-defined sectors as of 2023. Here, the economic output of a given industry means the “value-added” attributable to that industry. “Value-added” is measured as the difference between 1) the selling prices of the goods or services produced by an industry, and 2) the cost of the “inputs” used by that industry to produce those goods or services. Because public sector industries generally don’t operate with market-determined “selling prices,” a different approach is used to estimate their “value-added” contribution to economy-wide output.

A few interesting points emerge from the data presented in the table.

One is the wide variation in the “size” of the 19 aggregate NAICS categories, ranging in Alberta’s case from more than 18% of GDP for the biggest sector (mining and oil/gas extraction) to less than 0.5% for the smallest (arts, entertainment, and recreation).

Second, Alberta’s economy has become increasingly services-oriented, with service-producing industries now comprising more than three fifths of GDP, up from 55% two decades ago. Goods producing industries – including construction – are responsible for the rest. Because of the outsized role of the energy sector in Alberta, goods-producing industries occupy a larger place in its economy than is the case elsewhere in Canada.

A final point: despite what some people may believe, Alberta remains overwhelmingly a “market economy,” in the sense that the vast majority of GDP is generated by and in the private sector. Together, the three main “public sector” industries – public administration (capturing all levels of government), education, and health care – represent less than 16% of GDP, and a portion of this actually captures private sector production (e.g., private education; dental and physiotherapy services). This means that substantially more than four-fifths of all economic output in Alberta comes from the broadly defined business sector.

A few key industries…

Mining and oil and gas extraction ranks as Alberta’s number one industrial sector (18.4% of GDP) under the NAICS framework. This is not surprising, given that the energy sector (driven by upstream oil and gas) supplies most of the province’s exports and boasts very high levels of productivity (GDP per hour) compared to other industries. Even so, mining and oil and gas extraction is less dominant today than it was in the early 2000s, when it made up more than one-quarter of Alberta’s GDP.

Real estate, rental and leasing services (11.5% of GDP) is the second biggest NAICS industry cluster. It consists of businesses engaged in renting, managing, leasing or otherwise allowing the use of property, buildings and other tangible assets (like vehicles and equipment), as well as businesses which act as intermediaries in the sale/rental of real estate or provide services such as appraisal. It does not include business involved in the construction of buildings or land assembly/development.

Manufacturing’s share of Alberta’s GDP has been relatively stable since the early 2000s, in contract to the pattern in other provinces where the sector has dwindled in size. Manufacturing produced 8.3% of Alberta’s economic output in 2023. Within the manufacturing category are dozens of individual industries, including several — like petrochemicals, lumber, pulp and paper, and food manufacturing — that are focused on the further processing of Alberta-origin primary resources.

Construction emerges as Alberta’s fourth largest industry, directly responsible for a little over 8% of total output. Under NAICS, construction has three principal sub-sectors – building construction, heavy civil and engineering construction, and speciality trades contractors – which at a more granular level are divided into 29 individual construction-related industries.

Among the broad NAICS industry sectors dominated by government, health care and social services is the biggest (6.6% of GDP in 2023).

Other aggregate NAICS sectors that produce at least 5% of Alberta’s economic output are transportation and warehousing; professional, scientific and technical services; wholesale trade; and public administration.

Understanding the structure of the economy is a vital task for business analysts and policymakers alike. One often sees elected officials breathlessly lauding the purported growth potential of very small industries – “clean tech” being a recent example. As a matter of basic arithmetic, even if tiny industries grow rapidly, their small size will limit the quantum of “extra GDP” that results. At the same time, there is a tendency among some policymakers and media commentators to ignore or discount the economic contributions of large industry sectors like oil and gas, construction, manufacturing, and wholesale trade. Over time, this kind of blinkered vision can undermine the growth potential of the entire economy.

ICBA ECONOMICS: An Update on Major Project Investment in Alberta

By Jock Finlayson, ICBA Chief Economist

The completion of the $34 billion Trans Mountain pipeline expansion project marks a milestone for both the country and the Western Canadian oil industry – Canada’s number one generator of export earnings. Since 2017, almost 30,000 people have worked on the project, which will triple the volume of oil that can be moved on the expanded pipeline and give Canada a much-needed outlet to sell into offshore markets.

The hefty capital spending on TMX was divided between Alberta and B.C. Now that it’s finished, it is timely to ask about the outlook for other major project investment. In this blog, I focus on Alberta. A subsequent ICBA Economics post will summarize the pattern of current/proposed project investment spending in British Columbia.

Alberta Leads the Pack

Alberta has long punched above its economic and demographic weight within Canada, particularly when it comes to business investment. It is, by a wide margin, the most “investment-intensive” province, meaning that non-residential investment in productive capital, measured on a per worker basis, far outstrips the Canadian average. At the same time, Alberta also leads the country in productivity (GDP per hour worked).

Statistics Canada’s 2024 update on investment spending confirms that Alberta continues to lead the pack. As shown in Table 1, Alberta accounted for one-fifth of Canadian non-residential capital spending in 2023, while being home to roughly 12% of the country’s population. This year, Alberta’s share of Canada-wide investment is expected to dip slightly but will stay close to 20%. In large part, this reflects the outsized role and dynamism of the energy industry within the Alberta economy. Indeed, the broadly defined energy sector is responsible for more than two-fifths of all non-residential capital spending in the province.

Comparatively high levels of non-residential investment, in turn, bolster Alberta’s position as Canada’s most affluent province, as judged by GDP per person. Alberta also ranks first in Canada in average incomes – both pre-tax and after-tax.

Focus on ‘Major Projects’

The data in Table 1 capture various forms of non-residential investment spending – in buildings and other structures, machinery and equipment, advanced technology products, and for the repair and maintenance of existing capital assets. Investment in “major projects” represents only a sub-set of total capital spending outside of the housing sector. A key characteristic of project-related investment is that the associated capital spending typically takes place over a period of years, not all at once or within a given calendar year.

The Alberta government keeps track of actual, planned and proposed capital projects valued at $5 million and more, covering both the public and private sectors. The most recent count shows more than 600 individual projects involving – assuming they all proceed – $150 billion of capital spending. Many of these are already underway (some are essentially completed); others are planned and have in some cases received the government permits required to commence construction; while others have been “proposed” but at this point are best treated as “possible/aspirational” rather than confirmed. In practice, a non-trivial number of “proposed” projects never advance.

In the discussion below, I have grouped the projects into different categories. Note that residential building projects are excluded. In addition, only projects with defined capital budgets are identified; numerous other “planned/proposed” projects are not listed because they lack estimates for capital spending.

  • Energy projects: Alberta is home to more than $40 billion of significant current/planned energy projects (not including the just-completed TMX expansion) encompassing oil and gas, pipelines, electricity generation and transmission, and emerging energy subsectors. The biggest ones ($500 million plus) are listed below, along with the estimated capital spending and the status of each project:
    • Pathways Alliance Carbon Capture, $16.5 billion, Proposed (2025-30)
    • Greenlight Electricity Centre, $4.5 billion, Proposed
    • Suncor Base Mine Extension, $4.4 billion, Proposed
    • Mildred Lake Oil Sands, $3.3 billion, Proposed
    • Aspen Oil Sands, $2.6 billion, Proposed
    • Value Creation Heartland Upgrader, $2.0 billion, Proposed
    • Air Products Hydrogen & Liquefaction, $1.6 billion, Underway (2022-24)
    • Meadow Creek SAGD project, $1.5 billion, Proposed
    • Suncor Power co-gen facility, $1.4 billion, Underway (2024 completion)
    • Luna Solar (two phases), $1.4 billion, Proposed
    • Christina Lake Oil Sands Expansion, $1.3 billion, Proposed (2024-26)
    • Heidelberg Carbon Capture, $1.2 billion, Underway (2026 completion)
    • Genesee Power Plant Gas Conversion, $1.2 billion, Underway
    • Future Energy Renewable Gas/Ethanol, $1.2 billion, Proposed (2024-26)
    • Kearl Oil Sands, $750 million, Underway (2025 completion)
    • Strathcona Renewable Diesel Refinery,  $720 million, Underway (2025 completion)
    • Aira Solar, $700 million, Proposed
    • Ranier Solar Farm, $700 million, Proposed
    • Homestead Solar, $600 million, Underway (2026 completion)
    • Saamis Solar Farm, $600 million, Proposed
    • Peace Pipeline expansion, $530 million, Underway (2025 completion)
    • Jurassic Solar/Battery Storage, $500 million, Underway (2024 completion)
    • Brooks Solar Farm, $500 million, Underway (2024 completion)
    • Buffalo Plains Wind Farm, $500 million, Underway (2024 completion)
    • Chapel Rock/Pincher Creek Transmission, $500 million, Proposed
    • Marguerite Lake Compressed Energy, $500 million, Proposed
  • Other major private sector projects: There are several major non-energy projects underway or planned in Alberta. The biggest are listed below.
    • Telus infrastructure upgrades/expansions, $19 billion, Underway/ongoing
    • Dow’s Fort Saskatchewan complex, $11.6 billion, 2024-29 completion
    • Taza Mixed Use development, $4.5 billion, Proposed
    • Northern Petrochemical facility, $2.5 billion, Proposed
    • MDF Production Plant, $800 million, Proposed
    • MDF and Fuel Pellet Plant, $790 million, Proposed
    • McCain Foods Coaldale facility, $600 million, Underway
    • Hinton Pulp Mill expansion, $585 million, Underway (2027 completion)
    • Clear Hills mining project, $300 million, Underway
  • Major public sector projects: Like other provinces, Alberta is also advancing a suite of public sector projects in areas such as transportation infrastructure, health care and education facilities, and social and seniors’ housing. The largest current public sector capital projects (over $400 million) — excluding those that are housing-related — are listed below.
    • Edmonton-Calgary High Speed Rail, $9.0 billion, Proposed
    • Green Line LRT, $5.5 billion, Commencing 2024
    • Valley Line West LRT, $2.7 billion, Underway
    • Red Deer Hospital, $1.8 billion, Planning underway
    • Calgary-Banff Rail Link, $1.5 billion, Proposed
    • Calgary Events Centre, $1.2 billion, Proposed
    • Yellowhead Trail Freeway, $1.0 billion, Underway
    • Capital LRT line expansion, $1.0 billion, Proposed
    • Edmonton-Calgary Hyperloop, $688 million, Proposed
    • DND Military Fighter Squadron facility, $525 million, Underway
    • Calgary Arts Commons Project, $450 million, Commencing 2024

Conclusion

Apart from those listed in this post, Alberta has hundreds of other smaller projects “on the books,” totalling more than $50 billion in planned investment spending. Most of these have commenced or are sure to advance, adding materially to total construction-related capital spending in the province in 2024 and beyond.

In looking at trends in and levels of investment, Alberta remains a busy place. The energy industry has revived after taking a temporary hit during the COVID shock. The rebound has occurred even though the current Canadian public policy mix serves as an obstacle to growth and capital spending in most segments of the energy sector. Energy-related projects sanctioned several years ago continue to come on-line, boosting Alberta’s production of crude oil, petrochemicals, and natural gas. The outlook for energy will be key to investment patterns in Alberta over the balance of the decade. Further gains in output and exports are expected at least until 2030; thereafter, the picture gets murkier. Alberta’s oil and gas sector is at the forefront of the “energy transition” and will be investing heavily to increase efficiency and lessen the industry’s carbon footprint going forward.

Strong population growth is also an important driver of investment – both in the housing sector and across the wider economy. Alberta’s rapidly expanding population automatically increases the demand and need for office and commercial space; roads, bridges and rapid transit service; education and health care facilities; water, wastewater and other municipal infrastructure; and much else besides. In common with Ontario and B.C. – Canada’s two other fast-growing provinces – Alberta faces a significant infrastructure deficit that governments will be struggling to address in the next 1-2 decades, if not longer.

Published April 16, 2024 at 1:45 p.m. 

Trudeau Budget Ignores Lessons of the Alberta Advantage: ICBA

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.”

Published Mar. 26, 2024 at 10:00 a.m. 

ICBA ECONOMICS: Sluggish Building Construction in Most of Canada

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.

Published Feb. 14, 2024 at 11:00 a.m. 

ICBA Construction Monitor: Building and Making the Most of an Invaluable Workforce

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.

Published Mar. 14, 2024 at 11:00 a.m. 

ICBA OP/ED: A Tale of Two Provinces – One Leading Canada, the Other Lagging

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.

Published Mar. 13, 2024 at 9:00 a.m. 

ICBA ECONOMICS: Canada’s Prosperity has Flatlined since 2014

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.

Published Mar. 6, 2024 at 12:00 p.m. 

ICBA ECONOMICS: Canadian Investment Spending – Updated Estimates for 2023 and a Preliminary Forecast for 2024

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.

Published Feb. 21, 2024 at 12:00 p.m. 

ICBA ECONOMICS: Income Trends Key To Creating Affordability

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.

Published Jan. 17, 2023 at 10:00 a.m. 

ICBA ECONOMICS: Building Permits Slowing as Economy Softens

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.

Published Jan. 17, 2023 at 10:00 a.m. 

ICBA ECONOMICS: Job Data Shows the Alberta Advantage Advances

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.

Published Nov 22, 2023 at 9:00 a.m. 

AB Construction Monitor: Growing Housing Price-Income Gap Threatens the Alberta Advantage

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.

Published Oct. 4, 2023 at 10:00 a.m. 

ICBA Appoints Jock Finlayson as First Chief Economist

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.

Published Sept. 26, 2023 at 9:00 a.m. 

ICBA (BC & AB) OP-ED: Playing Monopoly with Public Projects and Taxpayer Money

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.

Published Sept. 26, 2023 at 9:00 a.m. 

AB Construction Monitor: Ensuring Plans are Purpose-Built for Today’s Realities

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.

Published May 16, 2023 at 10:25 a.m. 

ICBA Alberta Releases Election Edition of the Alberta Construction Monitor

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.

Published April 11, 2023 at 11:00 a.m. 

ICBA Alberta Releases Inaugural Edition of the Alberta Construction Monitor

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.

Published March 23, 2023 at 10:00 a.m. 

Op/Ed: Why ICBA Alberta is Fighting Bill C-69

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 64th 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.

Published March 9, 2023 at 10:00 a.m. 

ICBA Alberta was launched today, with a new president and a suite of services and advocacy initiatives designed to support open shop, merit-based construction.

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.”