Alberta cuts business tax, boosts infrastructure spending to reboot economy

Henrietta Strickland
June 30, 2020

Kenney said there will also be incentives for high-tech companies and other sector-specific initiatives.

The reduction in oil production during the second quarter contributed to the province's economic turmoil.

Other measures include cutting the general business tax rate from 10 per cent to 8 per cent starting on Wednesday.

Alberta's economy was struggling with low energy prices even before the COVID-19 pandemic hit. Meanwhile, retail sales are down 30 per cent and home sales are down 40 per cent since February.

If there's one statistic that sums up our misery, it's Alberta's effective unemployment rate of 25 per cent. The provincial deficit has gone from a projected $7 billion to $20 billion for this year.

Given the current level of economic uncertainty in the province and in the global economy, it will be hard to measure the effectiveness of the tax cuts on job creation, said Trevor Tombe, associate professor of economics at University of Calgary.

The program will create an estimated 55,000 new full-time private sector jobs, and stimulate $13 billion in economic growth, the province said.

"Given the severity of the economic crisis, we must act now", he said during a press conference.

Finance Minister Travis Toews will provide an update on the fiscal state of the province later this summer.

Kenney cut the corporate income tax rate to 10 per cent from 12 per cent after taking office last year, and that figure was to go down to eight per cent in the coming years but it will now be done immediately.

The premier said this is a startling message to business leaders. The imperative, clearly, is to get folks back to work.

"Alberta can be more highly competitive now".

Other reports by Click Lancashire

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