Mali R. Schantz-Feld (Aug/Sep 09)
The region known as western Canada includes the "prairie" provinces Alberta, Manitoba, and Saskatchewan, and the "Pacific" province British Columbia. While the area is often categorized as a single geographic and cultural entity, the four provinces have unique economic development goals and distinct advantages for businesses.
"Companies throughout Alberta are executing their business plans to take advantage of conventional oil and gas and emerging oil sands markets," says Lynn Wyton, senior director, Advanced Industries Unit of Alberta Finance and Enterprise's Industry Development Branch. "In addition, newer niche markets are presenting themselves as sectors as green building products and environmental products and services increase in importance." The agency says a four-point plan instituted by the province to promote economic stability focuses on cutting government spending; drawing on its CAN$17 billion in emergency savings to protect the programs and services Albertans rely on; continuing to invest in public infrastructure to support jobs and the economy; and promoting investment in Alberta and maintaining a competitive business environment.
The investment climate is boosted by a low and competitive tax structure. For example, Alberta continues to be the only province that does not levy a provincial retail sales tax, benefiting both individuals and businesses. Alberta's Premier Ed Stelmach has recently declared there will be no new taxes or tax increases.
Businesses continue to benefit from Alberta's low fuel tax - which, according to Alberta Finance spokesperson Jason Maloney, is the lowest among provinces - as well as the lowest general corporate tax rate and the third-lowest small business rate among provinces; this supports the growth and development of both small and large businesses. Businesses and financial institutions also benefit from not having to pay capital taxes or payroll tax. Alberta also is the only province that does not have a capital tax on financial institutions.
Recent projects include an announcement by Imperial Oil, Exxon's Canadian subsidiary, of an $8 billion Kearl Lake project to mine bitumen. Also, Williams Energy Canada has recently announced plans to build a $300 million pipeline to ship natural gas liquids from northern Alberta to its processing facility 420 kilometers (261 miles) away.
Energy isn't the only industry taking advantage of the opportunities in Alberta. The North Carolina-based home improvement retail chain Lowe's recently filed a development permit application for a large home improvement and garden center in the province.
"Our province's economic success is tied to our ability to bring investment to our province from the global market," says Maloney. The nine international offices - one in Washington, D.C. - facilitated more than 3,300 networking sessions and participated in almost 200 trade shows in 2007 and 2008 to promote trade and investment in Alberta.
Iain Black, Minister of Small Business, Technology and Economic Development, reports that last year, the private sector invested through venture capital programs in 57 new companies, including 31 information technology firms, 15 new life sciences companies, seven energy and environmental technologies firms, three traditional companies (such as consumer and business services and products), and one specialty chemical and advanced materials firm. "Our $90 million B.C. Renaissance Capital Fund is focusing on four key technology sectors: information technology, new media, clean technology, and life sciences," says Black.
One of the fund's venture partners recently led the $10.5 million financing of Ostara Nutrient Recovery Technologies Inc., a Vancouver clean tech company that produces environmentally friendly fertilizer. The Innovative Clean Energy Fund (ICE) supports clean energy technology projects - such as solar, geothermal, tidal, wind, and bioenergy - at the point where their technical and/or commercial viability can be demonstrated in real-world operating conditions.
Adding 300 jobs to the region's growing technology sector, Microsoft Corporation officially opened its first Canadian development center in a Vancouver suburb in March. Pixar Animation is building a 20,000-square-foot facility in Vancouver to produce its short features. Amir Nasrabadi, the studio's general manager, says that the firm chose Vancouver because of its English language speaking capability, its match with the Los Angeles time zone, and the attractive production tax credits. The city's numerous animation studios and quality schools also promise talented employees.
In addition, British Columbia will host the 2010 Olympic and Paralympic Winter Games. As a result of the games, the Royal Bank of Canada is predicting growth of 2.9 percent in 2010, while the Conference Board of Canada, in its spring 2009 outlook, forecast GDP growth of 3.3 percent - the highest rate of growth in Canada.
"Manitoba has one of Canada's most diversified economies, helping to make our province the most stable economic performer in the country," says Greg Selinger, Manitoba's Minister of Finance. "Independent forecasters predict the province's economy will outperform Canada's for the fourth consecutive year."
Traditional and emerging strengths arise from aerospace, life sciences and biotechnology, advanced manufacturing, information and communications technology, renewable energy and green initiatives, and transportation and logistics.
Research and innovation is supported through programs like the Health Research Initiative (HRI), the Manitoba Health Research Council (MHRC), the Manitoba Research and Innovation Fund (MRIF), and the Agri-food Research and Development Initiative (ARDI). Research is ongoing at the Industrial Technology Centre, the Composites Innovation Centre, the Vehicle Technology Centre, the NRC Centre for the Commercialization of Biomedical Technologies, and the Centre for Applied Research and Commercialization at Red River College.
The alternative energy sector is fostering projects in wind, biofuels, geothermal projects, and hydrogen technology. Manitoba is also partnering on a Hydrogen Centre of Expertise, advancing the study of hydrogen applications and other new technologies such as plug-in hybrid cars.
"Manitoba is the only province in Canada to enjoy 17 consecutive years of private capital investment growth," says Andrew Swan, Minister of Competitiveness, Training and Trade. "Over the last three years, private capital investment in the province has been particularly strong, increasing by 42 percent - double the national increase. Recent successes include StandardAero's 80,000-square-foot, $20 million expansion in Winnipeg that will increase turbine-engine overhaul service and add 60 to 120 new employees by the end of 2009, with potential for an additional 150 to 200 by 2014. Additionally a 15-year, $850 million agreement to service engines powering WestJet's 737 next-generation aircraft will result in a $13 million expansion and an expected 250 new employees by 2012.
"StandardAero has its roots here going back to 1911 as Standard Engine Works," says Ian Smart, the company's senior vice president, Airlines and Fleets. "Today we rely on the work ethic and dedication of our employees to develop and deliver world-class services for our customers from around the world. We enjoy mutual support with the Winnipeg Airport Authority and Province of Manitoba to create a business environment where we can deliver on our promise of being a trusted service partner."
In the technology sector, Texas-based EDS is planning a new high-tech service center in Winnipeg, expected to create 1,000 new jobs over the next five years. In the medical sector, Siemens Institute for Advanced Medicine (SIAM) will open a $150 million, 80,000-square-foot facility in downtown Winnipeg's Health Sciences Centre campus, housing up to 300 researchers and technical personnel exploring infectious diseases, neurological sciences and neurosurgery.
In 2008, Saskatchewan led the country in several key economic indicators, ranking first in overall growth in construction, exports, and retail sales. Last year, Saskatchewan experienced the highest investment growth rate in Canada - a 20 percent jump. To keep pace with new growth, the provincial government has committed $2.5 billion to infrastructure projects in the next two years.
According to Ken Cheveldayoff, Saskatchewan's Minister of Enterprise, mineral production totaled $9.7 billion in 2008 and more than $1.2 billion has been spent on exploration in the past five years. Saskatchewan has an abundance of two desired mineral commodities - potash (used to develop fertilizer) and uranium. Cheveldayoff notes that every Saskatchewan potash company has initiated a major expansion project. BHP Billiton is examining the prospect of establishing Saskatchewan's first new potash mine in decades. PotashCorp, the world's largest potash supplier, has infused $1.8 billion in a mine and mill expansion in Rocanville, scheduled for completion in 2012. Another supplier, Mosaic, is spending $3.5 billion to expand three potash operations over 12 years. Up to 50 companies are currently exploring approximately 250 projects in new frontiers such as diamonds, gold, platinum, palladium copper, zinc, nickel and mineralized brines.
The province is also pumped up about oil reserves. Crude oil producer CCRL Refinery in Regina has initiated a $1.9 billion expansion to keep up with expanded production.
Life sciences is another growing sector. In the last decade, the number of life science companies in the province has tripled and employment in the field has doubled. Innovation and research takes place in facilities such as Canadian Light Source synchrotron's new biomedical imaging and therapy facility, Petroleum Technology Research Centre, and University of Saskatchewan's Vaccine and Infectious Disease Organization (VIDO), which is building the International Vaccine Center (InterVac), a $140 million vaccine research and development facility, expected be the largest Containment Level 3 facility in western Canada.
New capital investment in Saskatchewan is expected to reach $14.2 billion in 2009 says Cheveldayoff, who adds that the province lowered its corporate income tax rate by five points in the past two years and eliminated payroll taxes and general corporate income taxes. The government has implemented a competitive royalty tax system on commodities that takes into account price and production fluctuations, and has committed not to raise royalty rates.