Both the federal and provincial budgets this year mark a significant change. The big headline, of course, was the remarkable Alberta provincial budget. For first time since 2014-15, a balanced budget is on the horizon.
This is an historic accomplishment. Yes, to a substantial degree the Kenney government was rescued by rising oil and gas royalties and a resulting corporate tax windfall. However, dig a little deeper and you see that the government did some heavy lifting by holding the line on spending more than most other governments. The government has held spending increases in line with inflation and this has made a significant difference. More surprising is they managed this kind of restraint during a pandemic while significantly boosting health spending.
Of course, the biggest challenge for Alberta industry in the near term is labour shortages. This is the case across Canada, but it promises to be especially severe here at home with an oil gas sector gaining traction and drawing from an already shallow labour pool.
Alberta Budget 2022 acknowledges this makes some significant commitments that should help over the long-term. They’ve committed $171 million over the next three years to expand enrolment in post-secondary programs focusing on technology, finance, energy, health care and innovation. They are also investing $30 million to enhance apprenticeship programs and partner with Women Building Futures and CAREERS: The Next Generation.
There is also an additional $47 million over three years in capital funding and $25 million over three years in operating funding to expand collegiate programs and charter schools, with particular attention on expanding opportunities in science, technology, engineering and mathematics (STEM).
Highlights from the federal budget included some strategic commitments aimed at stimulating innovation and investment. We were pleased to see several measures designed to improve Canada’s innovation and investment performance, including the creation of a Canadian Innovation and Investment Agency. However, its mandate will need to be clear, agile and align with industry needs if the agency is to deliver on its promise of improving investment growth in manufacturing.
Ninety per cent of Canadian manufacturers say they are experiencing supply chain disruptions that are affecting their ability to produce and sell products. New measures announced in the budget, such as the National Corridors Fund to Facilitate the Movement of Goods, the development of industry-led solutions to make supply chains more resilient and the elimination of red tape to make supply chains more competitive could prove helpful.
Unfortunately, the federal budget did not offer any substantial measures to address ongoing and acute labour shortages in manufacturing, even though the sector is currently facing a record-high 81,000 job vacancies.
Recently announced changes to Temporary Foreign Worker Program are welcome but more solutions were expected in the budget.
The federal and provincial budgets signal a return to “normal” as we emerge (hopefully) from the worst of the pandemic. There’s a line of sight to balanced budgets provincially and reduced national deficit nationally, with some targeted investments in key areas. Significant challenges remain, but federal and provincial governments seem to be emphasizing key areas needed for long-term recovery.
Canadian Manufacturers & Exporters (CME) is the voice of Canadian manufacturing. CME represents more than 2,500 companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.
