Laying It Out: Déjà vu all over again, but with a very sneaky twist

By Medicine Hat News Opinion on July 4, 2020.

Here we go again.

The UCP is using more “bold, ambitious” action to bolster the economy and it’s going to attract all kinds of investment to Alberta when corporations fall over themselves to move here and take advantage of our competitiveness.

We’re going to build, we’re going to diversify and we’re going to create jobs. Sure, it’s only the 36,000th time we’ve heard this from a government that has accomplished none of the above to date, and sure, the premier tasked the same minds whose bold ambition is known for lining the pockets of anyone but us, but none of that matters because this time it’s going to work. Right?

Well, in a way, it might, and that’s why we need to focus with diligence.

The economic recovery plan, penned by chair Jack Mintz – an economist and board member for Imperial Oil – former prime minister Stephen Harper, nine corporate presidents and CEOs, and one not-so-well-liked union official, was full of fancy talk about long-term strategies and getting Albertans back to work.

For starters, the UCP will inject $10 billion into new infrastructure projects, which sounds great if you ignore the fact that $6.9 billion was already announced, such as $1.5 billion for the Keystone pipeline, or that it includes substantial funding the province received from Ottawa. But building is building.

Highway 3, for example, is finally going to be twinned – albeit not the 75 km stretch between Medicine Hat and Burdett – and that’s something folks in southern Alberta have spent years begging for. The project is relatively inexpensive at $150 million, and it might even lead to the 750 jobs promised for the three-year project, even if those will be temporary and spaced out across the duration.

But regardless of employment limitations, the project is necessary for safety reasons – fatalities on that highway are too common and they are very much preventable – and at this point in the UCP’s governance, we should know when to shut up and take a win. So, for that, I’ll give credit where it’s due.

But aside from a few projects that were desperately necessary long before the pandemic, and a vague promise to develop incentives for various industries, the recovery plan is pretty much centred around the tried, tested and failed concept of lowering corporate taxes.

Instead of the already deplorable plan of lowering the rate to 8% over the next two years, this panel of corporate CEOs and board members decided the time was now to offer this so-called boost to the economy, even acting as if doing it early was some big accomplishment that required more than the stroke of a pen. And while the act is still an obvious and unnecessary gift to themselves of public dollars, the timing is perfect and they know it.

If lowering the corporate tax rate is ever going to look like it works, now is the time. When the UCP first started lowering the rate from the 12% set by the previous NDP government, they clearly weren’t anticipating the months of economic negativity Alberta was about to face. It’s hard to fool people with a corporate tax cut if employment numbers tank soon after.

However, thanks to a global virus, there is a chance unemployment in Alberta is peaking at the moment, which means several folks among the 300,000-plus who lost their job since March will be heading back to work, in some capacity, over the next few months. If the pandemic is truly behind us, employment rates are going to climb pretty fast for a while, and when that happens, you can rest assured the government will be there to tout its competitive tax rate as the main reason.

And, if a second wave comes, which is scarily plausible, they can simply keep blaming Mother Nature (China) for the devastation, never having to answer for any policy decisions that might be good for corporations but bad for Albertans.

It’s still a garbage-for-people economic strategy that sucks public dollars toward a small group of money hoarders, but this time it will be extremely hard to make the blame stick no matter which way employment trends. It’s pretty smart for a group of people running out of ways to fool the public into giving them all the money.

And that’s why we have to stay focused here.

As I wrote in this space last year when the Job Creation Tax Cut took effect, how much we tax the profits of a business has absolutely nothing to do with employment. Jobs are either necessary, or they’re not, and no one with decent business skills hires people they don’t need.

But, if COVID-19 is actually ending, the short-term necessity for jobs is going to skyrocket, and the UCP will be able to say their policies are working. If it doesn’t, it’s the fault of a virus.

This might be the UCP’s smartest implementation of a terrible policy yet, and it has all the makings of working in their favour. If Albertans buy into the idea that corporate taxes are behind any gains the economy makes, the government and their pals will take it as permission to keep siphoning public dollars out of the province.

And the next time the economy goes in the toilet, a slightly older version of Jack Mintz will be there to tell you how much more competitive Alberta would be if we just lower corporate taxes to 6%.

And, sadly, we’ll believe him.