The federal Fall Economic Update on November 21, 2018, showed progress to improve the Canadian business operating environment, but fell short in addressing the country’s most significant competitiveness and market access issues. The Chamber was encouraged to see that competitiveness was a focus for the federal government, but more action is needed to increase Canada’s attractiveness to investors globally.

Prior to the Fall Economic Update, the Calgary Chamber advocated for a reduction in the corporate income tax rate to bring Canada more in line with the United States, but the government instead chose to introduce tax exemptions and write offs. These exemptions include full and immediate expensing of machinery and equipment used in the manufacturing and processing of goods as well as some, but not all, clean energy equipment. All of which will reduce costs for new business investments in Canada.

It also included an “accelerated investment incentive” allowing businesses to write off a larger share of the costs of new assets in the year of the investment. This incentive will apply to businesses of all sizes, in all sectors, and apply to assets including computers, software, office equipment, and fiber optic cables. This was very encouraging.

In addition to tax exemptions and write offs above, the government committed to spend $1.1 billion over the next six years to assist Canadian businesses access new markets, with the goal of growing Canada’s overseas exports by 50 per cent by 2025. This includes funding to help small and medium-sized firms explore new markets, allowing them to take advantage of newly forged trade agreements.

The fall update also made a commitment to remove trade barriers within Canada. There are four specific areas that are being targeted: transportation of goods, food regulations and inspection rules, regulations in the construction sectors, and greater trade in alcohol. Trade liberalization within Canada was recommended by the Chamber to government in advance of the 2018 federal budget and we are encouraged to see this included.

While these are good first steps, the Calgary Chamber will continue to advocate for business-friendly policies to all levels of government, specifically those that address competitiveness, lagging productivity, regulatory inefficiencies, and a lack of market access for all industries.

The current uncertainty around building major natural resource projects in Canada is resulting in a chill on foreign investment, international companies divesting from Canada, and contributing to the lack of competitiveness in Canada’s business environment. The country needs a regulatory system that provides certainty, predictability, and is science-based. Bill C-69 does not accomplish these objectives and will make continue to make it more difficult to attract investment to Canada.

The Calgary Chamber provided a joint submission with the Canadian Chambers of Commerce for the government to consider before writing new legislation, but Bill C-69 does not adequately address the concerns that were raised in the submission. The Chamber has heard from many stakeholders that if Bill C-69 is implemented as it stands, it is unlikely that companies will make further investments in Canada.

On behalf of the business community the Calgary Chamber submitted a letter to the Senate recommending Bill C-69 be sent back to the House of Commons for further amendments that should be developed in consultation with the business community.

The re-negotiation of NAFTA and the introduction of tariffs by the United States (U.S.) on steel and aluminium further increased uncertainty. The resolution to this that came in the form of the U.S., Mexico, and Canada Agreement (USMCA) and is good news for Canadian businesses and providing much needed certainty.

The Calgary Chamber provided updates to the business community throughout the negotiations along with hosting a webinar with trade experts, and a submission to the federal government detailing how we believed Canada should respond to the U.S. tariffs. An overview of the USMCA can be found here.

The agreement did not result in the removal of the steel and aluminum tariffs and the Chamber will continue to advocate that the government refrain from implementing any retaliatory tariffs. Instead, we will pursue our case through the World Trade Organization (WTO), explore new market opportunities for Canadian business, offer “concessions” on existing Canadian protections, continue to support export expansion program, and promote and advocate the benefit of free trade within the U.S. through our existing relationships with stakeholders and individual states.

Uncertainty around the future of the Trans Mountain pipeline expansion on Canada’s west coast escalated during British Columbia’s (B.C.) provincial election in 2017. As part of the agreement with the Green Party that allowed the NDP to form government, both parties committed “to employ every tool available to the new government to stop the expansion of the Kinder Morgan pipeline.” This started a dispute between Alberta and B.C., which created significant uncertainty. As a result, Kinder Morgan determined the political risk to continue with the project was too high, forcing the federal government to step in and purchase the expansion project.

A full timeline of the dispute is available on the Chamber website and highlights the underlying issues of internal trade barriers within Canada.

In May, the Calgary Chamber, together with the Edmonton Chamber and the Greater Vancouver Board of Trade, hosted “The Federation Flight”. The one-day summit highlighted issues that went beyond a single project and brought together a coalition of over 100 B.C. and Alberta business leaders, Indigenous, community and labour leaders in Edmonton to demonstrate the support for internal trade, business-to-business relationships, and the need to restore investor confidence. The aim was to show the continued cooperation between Canadian businesses of different provinces – regardless of what is going on between governments – and the need to ensure that investments in all industries do not face significant political risks.

The Calgary Chamber will continue to seize every opportunity to advocate for industry, internal trade, and to promote the interests of our business community. Since the government sent the Bill to the Senate, the Chamber has provided recommendations to the Standing Committee and has been working with industry leaders, as well as other Chambers of Commerce, to reduce the regulatory burden and increasing uncertainty that has come as a result of Bill C-69.

Leading up to legalization, the Calgary Chamber worked with the municipal and provincial government to ensure that a business-friendly approach was taken for the Cannabis industry.

The City’s roles and responsibilities include developing the bylaws and policies that regulate businesses operating within city limits, regulating public consumption, educating Calgarians, and enforcing each level of government’s regulations.

The province’s role in regulating the recreational market is focused on developing and overseeing wholesale and distribution, regulating sales and consumption, providing tools for law enforcement, and developing a framework for business to ensure safety on roads and in workplaces. Early in the development process, the Chamber recommended that the Alberta Government adopt a private retail store model which was implemented by the province.

We also provided opportunities for employers to learn how cannabis legalization would impact them, and what steps were needed to ensure their businesses were ready for legalization, by hosting workshops and a webinar with experts in the field.

In December 2017, the Calgary Chamber released our Layered Cost Assessment that outlined how policy changes, layered on from all levels of government increase costs for business. The report highlighted three key areas through which Calgary Businesses were negatively affected by costs stemming from a myriad of policy initiatives. In a short period of time, minimum wage increases, rising municipal property taxes, and Alberta’s Carbon Levy all worked together to increase the costs to Calgary businesses.

Through our survey of businesses the Chamber found that these additional costs to small and medium-sized businesses had unintended consequences for Calgary’s broader community. These included layoffs and fewer future job opportunities, higher prices, fewer funds for business owners to invest and scale up their business, potential investments flowing to other jurisdictions, business closures, and double impact to low-income earners.

In late 2018, Alberta’s minimum wage was raised to $15 an hour, representing a 47% increase over three years. The vacancy rate and depreciation of the value in the downtown core has continued to create a shift in the tax burden to businesses in other regions of Calgary. Finally, the Carbon Levy has now increased to $30/tonne, as of January 2018. Although the current provincial government has expressed this will not increase in 2019 as previously stated. Minimum wage increase, increasing property taxes, and Alberta’s Carbon Levy has amplified Layered Costs on the business environment.

The Calgary Chamber will continue to advocate to all levels for government to consider the effects of layered costs on business.

In 2018, the Alberta government introduced a new Occupational Health and Safety Act (OHSA), which outlines minimum standards for workplace health and safety, as well as the roles and responsibilities of all parties in the workplace. The new OHSA defined four new work site parties and their responsibilities and expanded the obligations of existing work site parties. The legislation included new definitions of harassment, psycho-social hazards, and clarifies that all forms of violence, including sexual and domestic violence.

Before the OHSA came into effect (June 2018), the Calgary Chamber hosted a workshop and highlighted the effects the legislation would have on business.

With companies in Alberta producing 190,000 barrels a day more than what can be shipped using existing pipeline and rail capacity, the Government of Alberta took steps to protect the sale of oil and such a steep discount, and on December 2 announced an 8.7% legislated reduction of oil production (325,000 barrels a day) in the province. This comes shortly after the government announced the purchase of rail cars to add the capacity to move 120,000 barrels a day.

The Calgary Chamber continues to advocate for increased market access for Alberta’s industries. The requirement of government to step in to stabilize the market is a warning sign that governments at all levels have failed to address the competitiveness issues impacting Canada. This further underscores the need for governments to act with conviction to eliminate the barriers to growth and investment.

Building off our work in 2017, the Calgary Chamber advocated for non-residential property tax relief in 2018. This program – known as the 2018 Municipal Non-Residential Phased Tax Program (PTP) –capped 2018 municipal business property tax increases to 5 per cent and benefited close to 7,500 business properties while providing $41 million in tax relief. The 2017 and 2018 PTP illustrates how the Chamber’s advocacy directly benefited business in Calgary.

However, impacts from the loss of value of non-residential properties downtown continue to put tax pressure on businesses outside of the core. In fact, this year the City first indicated it could only keep the non-residential tax cap at an unacceptable 25 per cent in 2019.

After recommendations from the Chamber for the City to use all levers at their disposal to keep business taxes down, the City took a first step in late November to bring that cap to 10 per cent. However, the Chamber sees the City’s measures to shift some of the growing tax burden from the non-residential to the residential tax base, further efforts to find operating efficiencies and a continuation of the PTP program as only a starting point to further rate reductions.

The Chamber is encouraged that City Council has highlighted five potential solutions to be discussed in early 2019;

• Creation of a small-business assessment class
• Continuing shift from non-residential to residential
• One-time money to manage the transition
• Advocacy with Federal and Provincial governments
• An examination on reserves and other funding sources which maybe available

We look forward to working with the City to find both short- and long-term solutions to the problem and the Calgary Chamber will continue to advocate for and support the City in finding initiatives to reduce the costs of doing business in Calgary.

Throughout the bid process for the 2026 Olympics and leading up to the plebiscite, the Chamber maintained our role as your podium of record by engaging with the business community and hosting webinars from both sides, to aide with inform the business community. The Chamber remained neutral through this outreach and discussion process but supported a disciplined bid that would showcase and grow commerce in Calgary.

On November 13, Calgarians voted not to pursue a bid for the 2026 Olympic and Paralympic games. The Chamber believes that the city and business community emerged stronger as a result of the debate that took place around it.