Thank you, Mr. Chair and members of the finance committee, for having me here to present to the finance committee to inform the upcoming budget. Above all, our recommendations are for the federal budget to centre on prudence, pragmatism and issues and opportunities that affect competitiveness.
As an introduction, the Alberta Chambers of Commerce is a voluntary federation of 124 community chambers in the province of Alberta, which in turn represent in excess of 25,000 businesses. Alberta's current business environment can be characterized by three things: dropping confidence, rising unemployment and insolvency, and continued uncertainty.
Under dropping business confidence, our provincial chamber network recently launched a major market research program. Here are some of the results.
Last May, 70% of more than 700 business survey respondents indicated that they were greatly or somewhat negatively impacted by federal regulations more than those of any other order of government. Six months later, our next survey received more than 1,000 responses and showed that business confidence in the long-term future of our province had dropped more than 20 points since May, with 54% of respondents having a negative outlook. Only 33% of businesses were likely to recommend setting up or investing in a business in their municipality.
As a chamber of commerce person, you know how it pains me that I have to tell you this.
Under employment, recent numbers show that Alberta's unemployment levels continue to top those of all provinces and territories outside of Atlantic Canada. In the last results, Edmonton came in at 8%, and Calgary came in fifth at 7.1%, .
In regard to issues, as a nation we have an uncompetitive regulatory and tax environment system characterized by growing vulnerability to global trade conflicts. China's blockade of canola, beef and pork exports dramatically impacted Alberta's economy and farmers, escalating fiscal vulnerability to economic slowdown and rising interest rates, yet continuing to spend. A recent Fraser Institute study noted that the federal government will have increased per person federal debt by 5.6% from 2015 to 2019, the largest increase of any government whose time in office didn't include a world war or a recession.
There is continued uncertainty around projects of national significance, such as the Teck Frontier oil sands mine project, which is projected to provide more than $70 billion in royalties and tax revenues. Growing feelings of alienation by western provinces further exacerbate the uncertainty for Alberta businesses.
The arbitrary cap of $60 per person for the fiscal stabilization program is a concern. The premier has requested the difference of what Alberta would have received over 2015-17 during the height of our economic downturn without the arbitrary cap on stabilization transfers. Transferring the $2.4 billion as requested could certainly help ease the tension in western Canada. For reference, this is only 1% to 2% of taxes that have been sent to Canada from Alberta residents over the same time period.
In our main market survey, we asked both business and public respondents about their support for turning off the taps on oil exports to B.C. if the federal and provincial governments continue to delay pipeline infrastructure projects. Of the business respondents, 66% were very or somewhat supportive, and that was even higher amongst respondents in natural resources, energy and utilities. Of the public respondents, 67% were very or somewhat supportive. It's certainly a statistically solid sample of Albertans.
Businesses will be directly affected if a number of options being considered by the Alberta government's fair deal panel are implemented, such as withdrawing from the Canada pension plan.
Here are our recommendations for the budget and policy priorities.
First, take an active role in reducing barriers to internal trade. Recent IMF estimates are that removing internal trade costs could boost the national economy by 4%, or nearly $5,700 for every family in Canada.
Our second recommendation is to modernize the tax system with a full review. We believe that a royal commission is the best approach. In the interim, until that happens, we have suggestions on other policies, such as a modernization of the tax code. For example, updating the VAT to allow companies mining lithium brine—found typically in oil and gas formations—to issue flow-through shares to raise capital would enable the growth of an estimated $85-billion industry. The lithium brine could be used for electric vehicles and electric vehicle batteries, among many other applications, to support diversification within our energy industry.
Next, commit to regulatory streamlining and reducing the overall red tape burden.
Prioritize accelerating the planning and permitting process for northern trade corridors, such as the national northern infrastructure corridor.
One last major recommendation in consideration of the budget is to, please, do no harm and avoid one-size-fits-all approaches. Apply a gaps-based approach to any national pharmacare plan.
One of the other issues that is very important in our province, and not only to home builders, is the amending of the mortgage stress test to allow for regional markets. What we're finding is that not only are home builders affected by this but so are all the attendant industries that support the home-building industry.
Mr. Chair, that is my presentation. I am prepared to answer any questions you may have.