Professional Documents
Culture Documents
MAY 2011
MOVING ALBERTA FORWARD
CONTENTS
EXECUTIVE SUMMARY..........................................................................................................ii
BACKGROUND.................................................................................................................... 12
Enhancing Alberta’s Competitiveness............................................................................ 12
Why Competitiveness Matters........................................................................................ 12
The Competitiveness Pyramid........................................................................................ 14
The Alberta Competitiveness Council............................................................................. 15
The Task Team Process.................................................................................................. 16
FINANCIAL SERVICES......................................................................................................... 32
MANUFACTURING............................................................................................................... 38
PETROCHEMICALS / CHEMICALS..................................................................................... 44
In 2010, the Alberta government created the Alberta Competitiveness Council to look at ways to improve
Alberta’s ability to compete in a global economy. A more competitive economy benefits all Albertans by
creating more sustainable and stable economic growth that improves living standards and quality of life.
The Alberta Competitiveness Council consists of government and industry leaders. Together, we identified
actions needed to increase Alberta’s competitiveness in general, as well as in four specific sectors:
ÆÆ Agriculture – Grains and Oil Seeds;
ÆÆ Manufacturing;
ÆÆ Financial Services; and
ÆÆ Petrochemicals/Chemicals.
The Council’s work included developing a framework for measuring competitiveness to compare Alberta’s
performance with that of other jurisdictions. This benchmarking study found that Alberta has a sound
foundation for competitiveness – specifically, living standards, economic well-being, and taxes and fiscal
policy. In some areas, however, Alberta has room for improvement, primarily in relation to investments in
research and development, productivity growth and innovation.
Focusing on the findings from the benchmarking study and based on consultations with industry, the Council
determined the priority actions to improve Alberta’s competitiveness. The recommendations are practical –
and through collaborative partnerships, they will be implemented with meaningful results.
The work of the Council has never been about implementing a single major initiative nor has the Council’s
work been about major spending commitments. It is about moving in the right direction and taking concrete
steps to improve competitiveness and doing so without delay. Most importantly, it is about collectively
responding to challenges and keeping our province on track for a prosperous future.
We would like to thank the many individuals who shared their knowledge and provided their support as we
prepared this action plan. We commend the collaborative approach used to arrive at this plan. By working
together as equal partners, recognizing that actions must occur in both the public and private spheres,
we will make a difference.
The Outcome
Better use of resources
The Enabler
New and improved products, services
and processes for a global marketplace
Industry in partnership with government
The Foundation
Factors that shape the
business environment
Government in partnership with industry
The Bedrock
Human characteristics: demography, society (political and legal system, culture, social infrastructure)
Natural characteristics: natural resources, location (distance to markets, land base, climate)
As depicted in the Pyramid, these factors enable In addition, Alberta ranks highly on several foundation
innovation, which is continually required for any factors, such as competitive taxes and infrastructure.
competitive environment. Innovation is developing new
and better ways of doing things – like investing in new However, there are a number of areas where Alberta
machinery and equipment, or adopting more effective has opportunities for improvement.
processes. While government can create conditions
To sustain our province’s economic growth, Alberta
that enable innovation, industry has the primary role
must improve its productivity growth. This will require
in pursuing and deploying innovation.
greater innovation from industry.
Innovation promotes productivity. Productivity gains
To support industry’s ability to innovate, our province must
are essential to sustained prosperity – a balance
have a strong foundation for competitiveness. Industry
of social, economic and environmental outcomes –
and government must work together to shape the factors
the result that matters for Albertans.
that will provide a competitive business environment.
Alberta ranks well in terms of sustained prosperity.
The province’s Gross Domestic Product per capita –
an internationally accepted measure of a jurisdiction’s
overall standard of living – is the highest among all
comparator jurisdictions. Our province also scores well
on the Index of Economic Well-being2, which considers
environmental and social measures of well-being such
as equality of income distribution and risks of poverty
and illness.
Action: Move higher-density modules This year, the Alberta Competitiveness Council was
to Alberta oil sands projects. mandated to examine factors impacting the province’s
overall competitiveness and four sectors of Alberta’s
economy: Agriculture – Grains and Oil Seeds, Financial
ÆÆRegulatory competitiveness Services, Manufacturing, and Petrochemicals / Chemicals.
Regulation is essential to a well-functioning economy,
assuring environmental sustainability, and creating The Council established a task team for each of these
a safe and just society. But outdated, duplicative, sectors, as well as a task team dedicated to examining
and uncoordinated rules can also impose unnecessary the overall factors of competitiveness.
compliance costs. For business and industry, this can
Building from the analysis of the benchmarking report,
lower efficiency and productivity, resulting in competitive
each task team consulted with industry representatives and
disadvantages.
stakeholders in these four sectors. The task teams also
Alberta must have effective regulatory systems that consulted with other government advisory bodies such
achieve public interest goals in an efficient and affordable as Alberta Economic Development Authority and Alberta
manner. To this end, the Government of Alberta has Innovates. Informed by this input, each task team identified
a long-standing commitment to a government-wide issues impacting Alberta’s competitiveness in each sector,
regulatory reform program to improve the efficiency and developed a series of key actions aimed at addressing
and effectiveness of Alberta’s regulatory systems. those issues and enhancing the sector’s competitiveness.
The program advances a quality-based approach for
The key actions are designed to be timely and practical
improving regulation, which focuses on the impacts
solutions that can be readily implemented. They are
on stakeholders, including burden reduction.
intended to address specific competitiveness pressures
The participation of stakeholders and businesses in the facing each sector, and to realize demonstrable
regulatory process is an important part of building an improvements in the near-to-medium-term (i.e., within
effective system. Businesses need to be able to fully five years). They are deliberately limited in number,
understand the regulatory environment in which they ensuring they can be implemented with the resources
operate. Their feedback can help identify specific available, and will complement ongoing efforts
by industry and government to better position our
province for sustained prosperity.
To capitalize on future opportunities, Alberta’s grains and oil To ensure the sector’s continued growth and
seeds sector must continually enhance its competitiveness competitiveness, government and members of
through research and innovation, market access and the financial services industry will need to work
market development, rural renewal, and improved policy, in partnership to address these issues.
regulatory and institutional systems.
ACTIONS: Establish an industry-government
actions: Continue to support marketing financial services sector group.
choice for wheat and barley.
Develop and implement a branding and
Adopt and advance policies that enable a marketing strategy for Alberta’s financial
more competitive and innovative industry. services industry.
Enhancing Alberta’s There are several initiatives with the goal of ensuring
Alberta’s prosperity for future generations. These include:
Competitiveness ÆÆ Premier’s Council for Economic Strategy –
Alberta’s competitive tax system, investments in Established in 2009 and comprised of globally
essential programs, services and infrastructure, recognized business leaders and experts, the
and abundant natural resources all contribute to our Council has provided a long-term vision and started
substantial economic growth and current prosperity. a conversation on how Albertans can shape a future
that builds on the province’s strengths and values,
However, this does not mean that Albertans’ future while taking it in exciting new directions.
prosperity is assured. A growing, rapidly changing
ÆÆ Energizing Investment – In early 2010, as a response
and increasingly interconnected world is giving rise
to changes in the energy marketplace, Alberta Energy
to economic forces that will impact our province.
outlined and led a series of initiatives to position
Alberta faces increased competition – from within Alberta as one of the most competitive jurisdictions in
Canada, North America, and from around the world. North America for upstream oil- and gas-development.
Each day people and companies make decisions about ÆÆ Alberta Competitiveness Initiative – Introduced in the
their future – where to work, where to live and raise summer of 2010, the Alberta Competitiveness Act
their families, where to invest or expand, and where brings together government, industry, and Albertans
to seek new opportunities. Whether they choose Alberta to develop a shared strategy to measure and improve
is directly influenced by how competitive our province the province’s overall competitiveness.
is and continues to be.
ÆÆ Asia Advisory Council – Established by the Asia
To ensure Albertans can enjoy long-term prosperity, Advisory Council Act, the Council will examine ways
the province must work to maintain and enhance its of expanding business, education, and cultural
competitiveness. We must ensure Alberta provides a linkages between Alberta and Asia, to develop
climate where entrepreneurship, innovation, productivity, new markets and opportunities for our province.
and investment thrive.
Why Competitiveness Matters
We must ensure Alberta provides a climate Sustained prosperity is created when government,
where entrepreneurship, innovation, industry, and Albertans work together to pursue
a common objective – a competitive economy.
productivity, and investment thrive.
Sustained prosperity is about improving the standard of
living and quality of life for all Albertans. While good jobs
and income are important elements for a high quality of
life, sustained prosperity is not measured only in terms
Competitiveness is not just the concern of economists of economics. It is also about the things we value as a
or investors. It is in everyone’s interest for Alberta to be society – including positive health outcomes, a first-rate
as competitive as possible – government and industry, education system, and a clean and healthy environment.
academic institutions and leaders, and individual
Albertans who work every day to advance the prosperity Prosperity is typically represented in terms of the
of the province. Gross Domestic Product. While this is one important
quantitative measure of prosperity, to be truly
By focusing on competitiveness we will maintain prosperous Alberta needs to achieve a balance
and improve our quality of life and uphold the values of social, economic, and environmental outcomes.
important to Albertans. Our province’s ability to improve and invest in those
areas depends on maintaining and enhancing our
long-term competitiveness.
$70,000 3.5%
$50,000 2.5%
$40,000 2.0%
$30,000 1.5%
$20,000 1.0%
$10,000 0.5%
$0 0.0%
AB
NOR
CO
TX
MN
OR
QLD
FIN
ON
BC
ID
MB
QC
SK
WA
GDP per capita, US$ at PPP (LHS) Real GDP per capita annual
growth rate, 2003-2008 (RHS)
We can expand the Gross Domestic Product by working Innovation is the key to developing new and improved
“harder” or working “smarter.” products, services, and processes for a global marketplace.
No single factor causes innovation to occur, but a variety
Working harder means increasing the total labour effort of factors help to foster innovation and attract investment
in the economy. This is accomplished by expanding to the province. Our capacity to innovate depends on
the workforce or by working longer hours. Realistically, having the right combination of skilled people, finance,
neither approach provides the right answer, particularly infrastructure, strong management and leadership,
in light of Alberta’s current labour force participation and and many other factors.
changing demographics. Alberta has one of the highest
levels of labour efforts in Canada – there is limited room The role of government is to ensure that policies and
to increase participation in the Alberta workforce. programs reflect the values of Albertans and establish
An aging population and continuing pressures in the a competitive business climate. Industry must lead
labour market will mean that Alberta’s standard of living by creating jobs, seizing economic opportunities, and
cannot be sustained solely by increasing total labour effort. investing in innovation and productivity. Creating the
right mix of policies and actions requires a partnership
The alternative is for Albertans to work smarter by between government and industry to reach our shared
generating more economic activity per hour worked. objective of sustained prosperity.
This means increasing Alberta’s productivity. By increasing
productivity we can maintain and enhance Alberta’s The interrelated nature of these concepts is depicted
global competitiveness, which can further improve in Alberta’s Competitiveness Pyramid. The pyramid
our standard of living and sustain our future prosperity. provides a framework for examining Alberta’s
Through innovation, there are virtually no limits on how competitive position and developing initiatives
productive we can be. to enhance Alberta’s long-term competitiveness.
The Outcome
Better use of resources
The Enabler
New and improved products, services
and processes for a global marketplace
Industry in partnership with government
The Foundation
Factors that shape the
business environment
Government in partnership with industry
The Bedrock
Human characteristics: demography, society (political and legal system, culture, social infrastructure)
Natural characteristics: natural resources, location (distance to markets, land base, climate)
The Alberta Competitiveness Council was established On an ongoing basis, government and industry must
in May, 2010, through the Alberta Competitiveness Act. build consensus on what is required to generate
The Alberta Competitiveness Council was charged with sustained prosperity and then get on with the job
implementing the directions outlined in the Act. of supporting innovation, improving productivity,
and empowering our workforce.
The purpose of the Alberta Competitiveness Council
is to analyze Alberta’s competitive position relative
to national and international competitor jurisdictions, Comparator Jurisdictions
and to identify actions that will sustain and improve
Alberta’s competitive position. Canada: British Columbia,
The Council represents a strong collaboration between Saskatchewan, Manitoba, Ontario,
government and industry. and Quebec.
For this first year, the Council included task teams United States: Colorado, Idaho,
mandated to examine four sectors of Alberta’s economy
Minnesota, Oregon, Texas, and
and the overall factors of Alberta’s competitiveness.
Washington.
Each task team is co-chaired by a Member of the
Legislative Assembly and a senior representative from International: Finland, Norway,
industry, working together to analyze issues and develop and the State of Queensland, Australia.
actions for enhancing Alberta’s competitiveness.
labour shortage.
While people often think of innovation in terms of major Initiatives that help Alberta businesses access
technological leaps, innovation can come in the form knowledge and resources are essential in developing
of incremental changes that aim for continuous the leadership capabilities, process improvements,
improvement. For example, the simple idea of stacking and investments in machinery and equipment that
two containers on top of each other on railway cars will enhance innovation and productivity.
served to double productivity of that mode of transport.
This includes the work of Productivity Alberta11,
which offers a variety of resources, including an online
diagnostic tool that owners and managers can use
To compete, Alberta companies will need to assess productivity.
to reignite the entrepreneurial spirit for
which they have long been known. Alberta Advanced Education and Technology has also
made improving innovation performance a priority,
through its Action Plan: Bringing Technology to Market,
and the creation of the Alberta Innovates corporations.
Enhancing transportation will improve Alberta’s access Currently, weight limits for the transportation of modules
to international markets, which must be a priority for in Alberta are set at 345,000 pounds. However, much
both industry and government. of the existing infrastructure along Alberta’s main
high-load corridor north of Red Deer may be able
Currently, Alberta’s economy is highly dependent on U.S. to accommodate weights of up to 500,000 pounds.
markets. Recent U.S. economic weakness demonstrates In fact, loads that are heavier than current limits are
how this situation poses economic risk to our province. often shipped along this corridor when they are
deemed indivisible. Alberta Transportation permits
Market diversification is just as important as product
these shipments on a case-by-case basis.
diversification. From a competitive standpoint, it makes
sense for Alberta to have several sizeable customers for A heavy module has the same dimensions as a standard
its goods and services. With some of the world’s largest module, but can accommodate up to 155,000 additional
and most diverse markets, Asia presents a significant pounds of weight. The use of heavy modules allows
growth opportunity for Alberta businesses. for design optimization and reduces the total number
of modules required. These improvements also will
With the enactment of the Asia Advisory Council Act,
minimize the labour required in the field, improving
the Alberta government has signalled its commitment
worker safety by shifting construction processes from
to establish Alberta’s linkages with Asia, including
the field to the fabrication yard. This can reduce overall
priority markets such as India and China. Industry will
project costs by up to 5 percent. In the context of
have an important role in helping build and leverage
multi-billion dollar oil sands projects, these savings
those linkages to bring about new and greater economic
are significant.
opportunities for Albertans.
This presents an opportunity for Alberta to establish a
As Alberta seeks to expand its linkages with Asian
competitive advantage in transportation and infrastructure.
markets, the ports of Vancouver and Prince Rupert will
An assessment of the heavy module corridor from the
have increased importance. It is in the national interest
Edmonton region to oil sands projects will be undertaken
that western Canada has improved port capacity –
to determine the feasibility of increasing module weight
whether by pipeline or rail – which will open the door
limits from both an infrastructure and safety perspective.
to Asia’s rapidly growing markets. Alberta must continue
to work with British Columbia and Saskatchewan through
the New West Partnership to enhance the ability of Regulatory competitiveness
western Canadian firms to get their products to Asian Regulation is essential to a well functioning economy,
markets using the Asia-Pacific Gateway infrastructure. promoting environmental sustainability, and creating
a safe and just society. But outdated, duplicative,
Action: Move higher density modules and uncoordinated rules can impose unnecessary
to Alberta oil sands projects. compliance costs. For business and industry,
this can lower efficiency and productivity, resulting
in competitive disadvantages.
As Alberta’s energy production has shifted increasingly
to capital-intensive oil sands projects, heavy construction
has become routine in the Athabasca oil sands area.
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ain
US
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Fr
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180
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(bushels per acre)
100
80
60
40
20
0
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US Corn – up 30% Barley – up 7% Wheat – up 20% Canola – up 43%
5-Year Average 2006-10 vs. 1991-95
The canola research and development experience The stagnation of public funding for basic agronomic
provides one example of a funding model that has shown research and germplasm development is one of the
success. However, many stakeholders have pointed factors that have made it less attractive for breeders
to the hurdles of replicating the canola experience to engage in cereals variety development.
in grains. True enough, this model would have already
been adopted were it workable in grains. The other factor that influences varietal development is
the assurance of returns on investment dollars through
The task team has considered various models that are the protection of intellectual property rights. The yield
used in different jurisdictions to encourage research and growth performance of canola and U.S. corn reflects
innovation in the grains sector. One novel approach that the higher degree of private involvement in research
could be adapted for the western Canadian context is and innovation from which those crops have benefited.
that of the Australian Grains Research and Development
Corporation. In this model, which has been in place Historically, universities and government research
for two decades, producers are part of the solution in operations dominated plant breeding. This model is no
meeting the funding needs for research and innovation. longer as effective or responsive as newer models, where
In return, producers have significant control over private companies invest in developing new varieties in
the funds and prioritization of the activities including return for premium prices they charge producers for their
research and development and market development. seeds. This new model of crop variety development has
out-performed the old model. Western Canadian farmers
The Australian Grains Research and Development have voted with their seeders by maximizing the acres
Corporation experience offers a conceptual model planted with canola and reducing acres planted with
that could effectively address Canada’s research and cereals such as wheat and barley.
innovation gap in cereal grains. While more detailed ÆÆ As part of championing the western Canadian
analysis would need to be undertaken on how to adapt research and innovation framework, the Government
aspects of the model, including financial mechanisms, of Alberta will promote new mechanisms that will
the task team believes this conceptual model offers great improve the attractiveness of investment in plant
promise not only for Alberta, but other western provinces breeding in the cereals sector.
as well.
ÆÆ In order to anchor research and innovation for the Here again, Australia offers a model that could be
grains and oil seeds sector in Alberta on a sustained adapted for the Alberta and western Canadian context.
and long-term commitment, the Government of This model assures returns on private investment in
Alberta through the Ministry of Agriculture and Rural varietal development through end-point royalty, rather
Development will engage industry stakeholders and than charging upfront premium prices. The Australian
other western provinces to champion and develop model also enables farmers to save seeds. While aspects
a western Canadian research and innovation of this model would need to be examined in detail,
framework for the sector. The framework would including financial mechanisms, it provides a conceptual
provide a governance structure and stable funding framework for further consideration.
approach, and focus on basic research, agronomics
Improving the attractiveness of research will help
and extension, and market development.
drive innovation and productivity improvement,
ÆÆ Importantly, the framework would engage producers in helping to enhance the long-term competitiveness
contributing to and directing research and innovation of Alberta producers.
priorities. It would also recognize the important
role that government and academic and research
institutions play in basic scientific research that
underpins plant development and commercialization.
7% 4%
6%
Compound Annual Growth
4%
2%
3%
2%
1%
1%
0% 0%
Alberta Canada Alberta Canada
FSI GDP Total GDP FSI Employment Total Employment
The financial services industry is one of Alberta’s key 12 jurisdictions for employment growth in financial
growth sectors, contributing over $8 billion to the services,16 and second of 14 jurisdictions for sector GDP
province’s economy. The industry has largely grown growth. However, in 2009, Alberta ranked 13th of 14
around servicing the transaction and financing needs of jurisdictions on the sector’s share of GDP, and 12th of 14
the energy sector. Strong energy prices and significant on the sector’s share of total employment. This suggests
investments in oil sands development have resulted in a Alberta’s financial services sector has room to expand.
remarkable expansion of the financial services industry
during the past decade. With almost $74 billion of capital A robust and competitive financial services industry
investment expected in Alberta this year alone, the sector is important to Alberta’s future economic success.
appears poised for additional growth. The industry has strong growth prospects. Alberta is
competing with jurisdictions across Canada and around
Under the competitiveness initiative, the financial the world to attract and retain global financial services
services industry is composed of four subsectors: firms, talent, and capital. Given the importance of
banking and credit, investment banking, fund financial services and capital to overall economic growth,
management, and insurance. this competition is fierce.
As part of its analysis, the task team benchmarked Alberta’s financial services industry has a number of
Alberta’s competitiveness in financial services against a strengths it can leverage and build upon. The province
number of jurisdictions, including leading global financial is home to the headquarters of a number of financial
centres.15 From 2004 to 2009, Alberta ranked first among institutions, including Canadian Western Bank, Servus
Credit Union, ATB Financial, and the Alberta Investment
Management Corporation (AIMCo), one of Canada’s
largest and most diversified institutional investment fund
managers. In addition, fully 75 percent of the top 20
global investment banks have offices in the province.
15 Alberta was compared against British Columbia, Ontario, Quebec,
Colorado, Texas, Norway, and New Zealand.International jurisdictions
that are home to global and transnational financial centers (Illinois,
Massachusetts, New South Wales (Australia), New York, Singapore,
and Switzerland) were also included to provide a reference of how
Alberta compares. 16 Data on employment growth was unavailable for Norway and Singapore.
Summary statistics
2005 2006 2007 2008 2009 Average
Revenues 13.8 16.3 15.7 16.8 12.1 14.9
(in billions of dollars)
# of Employees 47.2 51.4 51.6 53.7 41.4 49.1
(thousands)
% of GDP* 2.8 3.1 2.9 2.9 2.3 2.8
Value of Exports 5.1 6.2 7.7 7.9 5.8 6.5
(in billions of dollars)
*
Excludes Primary Metals (no estimates available)
Summary statistics
2005 2006 2007 2008 2009 Average
Revenues 27.3 28.5 29.3 32.2 22.6 28.0
(in billions of dollars)
# of Employees 19.7 18.8 19.4 17.9 17.8 18.7
(thousands)
% of GDP 2.9 2.7 2.6 2.4 2.1 2.5
Value of Exports 7.8 8.4 8.7 9.7 6.8 8.3
(in billions of dollars)
Yet another possibility is to import ethane from sources One of Alberta’s key competitive advantages in natural
outside the province, or extract ethane from natural gas and natural gas liquids is the province’s extensive
gas as it is transported through Alberta from other infrastructure and state-of-the-art complexes that
jurisdictions. Natural gas production projects in include natural gas processing, pipeline, storage and
British Columbia, Alaska, and the Northwest Territories trading systems. Alberta currently transports up to
offer potential sources in the future. This will depend 17 billion cubic feet per day of natural gas to domestic
on Alberta’s ability to position itself as an attractive and United States markets through a network of pipelines
and competitive location for extraction of ethane and infrastructure.
and other natural gas liquids.
Alberta has become one of the major natural gas centres
in North America, and is a major price setting location.
Action: Enhance the Incremental Ethane The Alberta natural gas trading price is one of the
Extraction Program. continent’s leading price-setting benchmarks.
ÆÆ Implement a new regulatory convention to provide This issue is significant at a time when Alberta’s
a framework that is attractive to all interested petrochemical producers are concerned about access
jurisdictions (including western provinces, the federal to feedstock supplies. Unless and until the natural gas
government, and other gas producing areas such as liquids ownership issue is resolved, the sector is hampered
the Canadian north and Alaska); and by regulatory uncertainty. Producers of natural gas and
ÆÆ Develop the concept for a natural gas liquids trading natural gas liquids need to know how feedstock supplies
hub in Alberta. will be extracted, marketed, and sold in the province
and whether they will be able to capture a greater share
of the value-added components of the natural gas
stream. Certainty of these issues is essential to avoid
the risk that producers will simply transport their
products through Alberta and sell them elsewhere.
Email: competitiveness@gov.ab.ca