Calgary Navigates National Investment Crisis Amidst Push for Lower Wages
New research from the C.D. Howe Institute warns Canada's declining capital per worker could lead to a lower-wage economy, while Calgary implements strategies to attract investment.
Canada faces a significant economic challenge as a decade-long decline in capital per worker threatens to push the nation towards a more labour-intensive, lower-wage economy, according to new research. William B.P. Robson, President and Chief Executive Officer of the C.D. Howe Institute, and Research Officer Mawakina Bafale, co-authored the findings, pinpointing trade tensions, regulation, and growth-stifling taxes as key factors depressing business investment.
National Headwinds and Local Response
The C.D. Howe Institute, widely recognized as Canada's most influential think tank, highlights that a surging United States economy further undercuts Canadian competitiveness and risks widening the gap in living standards. This national trend is echoed by broader economic indicators. Statistics Canada analysis has linked increased regulatory provisions to reductions in GDP and business investment nationally. The Canadian Federation of Independent Business also points to declining private investment amid deteriorating business confidence, reporting a contraction through the third and fourth quarters.
However, Alberta is proactively addressing these concerns. The Alberta government's Budget outlines strategic investments, including maintaining an eight percent corporate income tax rate and expanding the Innovation Employment Grant. Over $4 million has also been allocated to the Alberta Manufacturing Productivity Grant, a pilot program designed to support technology upgrades and new equipment for small- and medium-sized manufacturers.
Locally, Calgary is charting its own course to counter these challenges. Calgary Economic Development emphasizes diversification and innovation, with the Calgary Innovation Strategy aiming to add 187,000 jobs and contribute over $28 billion to the local economy. Data from the Canadian Venture Capital and Private Equity Association shows Calgary ranking third among major Canadian cities for venture capital investment, securing $341 million across 43 deals. While the City of Calgary's Economic Outlook projects local economic growth, it also notes an increased unemployment rate, reflecting a competitive job market amidst strong net migration.
