AIHA Presents Pre-Budget Submission to Federal Finance Committee

On October 17 we presented to the Federal Finance Committee as part of pre-budget consultations undertaken in advance of the 2019 Federal Budget. Our recommendations include increasing/ accelerating the Accelerated Capital Cost Allowance and modifying the Strategic Innovation Fund and our message to our federal partners is clear:

“Petrochemicals touch every corner of our country and every sector of our economy and we believe that with the right investment conditions, Alberta’s Industrial Heartland has the ability to attract $30 billion in new investment. Every job created in Alberta’s Industrial Heartland creates five more jobs across the broader Canadian economy. That’s good news for all of Canada, but it’s not just about the numbers. Diversifying our natural resources means leading the world in the transition to a low carbon economy.”

Below are our full remarks to the Federal Finance Committee and you can download our full submission by clicking here:

“Thank you Mr. Chair and committee members for this opportunity and welcome to Edmonton.

Alberta’s Industrial Heartland Association is a non-profit economic development organization of five municipalities that represent a 582-square kilometre $40 billion value-add energy cluster here in the Edmonton Metro Region.  Our cluster model minimizes industry’s environmental footprint, makes use of petrochemical by-products and maximizes the benefit for Canadians.

Petrochemicals touch every corner of our country and every sector in our economy.  Petrochemicals create fertilizers for potato crops in PEI or packaging to keep Quebec and Ontario dairy famers’ products fresher longer.  They provide lightweight, durable plastics used in transportation and auto manufacturing to make buses and cars more fuel efficient.  Whether a child visits the BC Children’s Hospital in Vancouver or the Stollery here in Edmonton, they are receiving first rate medical care thanks to petrochemicals that make IV bags and sterile tubing that deliver lifesaving blood and medicine, stethoscopes, aspirin and even diapers. And the tech supercluster in Waterloo wouldn’t exist without petrochemicals that make up over half of the components in smart phones, tablets and computers.

Canada imports $53 billion in petrochemicals each year – mainly to B.C., Alberta, Manitoba, Ontario and Quebec.  We have the resources, the talent and the opportunity to manufacture more of those products here at home.  In fact, we have the chance to attract $30 billion in new investments to Alberta’s Industrial Heartland alone by 2030.  But only if we have a competitive investment climate, and we have some work to do on that front.

The competitiveness gap between Canada and the United States has been growing over the past decade with the introduction of targeted investment attraction programs and tax initiatives south of the border.

The implementation of 100% immediate capital cost depreciation in the U.S. being the most recent and significant measure.  That measure alone is forecasted over a 10-year period to:

  • Increase GDP by 3%
  • Increase capital stock by 8.3%
  • Boost the wage rate by 2.5% and the number of full-time equivalent jobs by 575,000

But for us, it’s not just about numbers, it’s about the contribution to our communities and about the people who depend on these high-skilled, middle class jobs that exist for decades after these facilities are built.  For example, the $200,000 Shell Skilled Trades Centre at Fort Saskatchewan High School will help us get more youth interested in the trades and help close the skills gap.  And Cenovus’ $200,000 donation to 22 libraries and 19 Aboriginal communities will help promote learning and literacy.

Inter Pipeline’s polypropylene facility in the Heartland – the first ever in Canada – is bringing us new technology, construction jobs and much needed work for our local steel fabricators: DACRO and CESSCO.  And for every job created here in the Heartland, five more jobs are created in the broader Canadian economy because of the multiplier effect of the petrochemical sector.

Not only do these investments bring jobs and community benefits, but petrochemical production in Canada from clean natural gas liquids will result in lower global greenhouse gas emissions than if produced elsewhere from oil or coal, and moreover, production of these necessary products at home will reduce the need to import them, further reducing global emissions.  This is the future of our energy economy in Canada and will help lead the world in the transition to a lower carbon economy.  But we have to be willing to work together at all levels of government to ensure the jobs and economic benefits end up here in Canada and not across the border.  With the change in government and, subsequently, environmental policies in the United States – it’s more important now than ever that Canada ensure these facilities are built here where we are environmental leaders.

To that end our recommendations of increasing and extending the Accelerated Capital Cost Allowance and modifying the Strategic Innovation Fund are two measures that can have an immediate and significant impact on our ability to attract investments in Canada.”