With Alberta's surging economy, Danielle Smith's blame-Ottawa strategy is in question | Canada News Media
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With Alberta’s surging economy, Danielle Smith’s blame-Ottawa strategy is in question

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Todd Hirsch was the Calgary-based chief economist of ATB Financial and is the author of The Boiling Frog Dilemma: Saving Canada from Economic Decline.

Alberta Premier Danielle Smith was elected to lead the UCP last fall by blaming Ottawa for everything. Ottawa has strangled our energy sector! Ottawa has destroyed our economy! Ottawa has robbed Alberta’s wealth and has given it all to Quebec! (These aren’t direct quotes, but they certainly come close.)

Yet now making such claims is embarrassing when, in fact, Alberta’s economy is roaring ahead and leading the country in growth.

As Albertans march to the voting booths this spring, the brimming provincial economy is creating a Catch-22 dilemma for the incumbent United Conservative Party and its messaging.

The Conference Board of Canada is forecasting Alberta to lead all Canadian provinces in GDP growth in 2023 and 2024. According to its most recent projection, released last fall, Alberta will expand by 3.5 per cent this year and 2.4 per cent in 2024.

More up-to-date forecasts by the major banks suggest somewhat lower growth rates than the Conference Board, owing mostly to the hikes to borrowing costs since last autumn. Still, almost all of the major forecasting teams are suggesting Alberta will lead the country in economic expansion.

Higher oil prices have generated a massive windfall surplus for the provincial government. And a tech boom is helping to fill up the enormous gaps in commercial real estate. Since the downturn in energy prices going back to 2015, vacancy in Calgary’s shiny office towers spiked to 30 per cent. This is now falling.

One of the most reliable indicators of economic good times – interprovincial migration – has kicked into high gear. In the third quarter of last year, nearly 33,000 people from other provinces moved to Alberta, while fewer than 14,000 left, leaving a net increase of more than 19,000. In perspective, Alberta’s net interprovincial population gain has been higher on only one occasion (in the third quarter of 1980). Most of the current net increase is because of people leaving Ontario (plus-8,645) and British Columbia (plus-5,960).

For all of the economic good news and an election less than four months away, you’d think the governing UCPs would be celebrating. But this time around, the economy is creating an interesting plot twist.

The UCP would love to both take credit for the economic renaissance, and at the same time blame Prime Minister Justin Trudeau for the economic catastrophe. But the two assertions cannot both logically hold true.

For sure, there’s almost no one in Alberta who would suggest the federal government hasn’t repeatedly fumbled the ball. Even Alberta’s opposition NDP is saying that Ottawa’s “Just Transition” plan to evolve jobs in the energy patch needs to be scrapped and rethought with input from Alberta. And the mention of Bill C-69, which overhauled Canada’s environmental assessment laws, will send many Albertans into a fit.

But with the fastest growing economy, highest average weekly wages and strongest inflow of migrants, most Albertans actually aren’t that angry about the economy. Most surveys show voters in the province are far more concerned with the state of the health care system than they are furious about the economy.

That wasn’t the case during the last provincial election. In 2019, Albertans were suffering through a fourth year of recession. The slogan “Jobs. Economy. Pipelines” swept Jason Kenney’s newly minted UCP into power that year.

But in 2023, the slogan “Trudeau has destroyed our economy!” simply won’t do. Albertans are smarter than this. The economy will play a role, as it always does. But the UCP needs to be extremely careful playing the economy card.

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

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