SATURDAY, NOVEMBER 2, 2019 | THEGLOBEANDMAIL O A
T
he idea that the end of the federal election campaign
might mark the return of some civility and fair-min-
dedness to the Canadian political scene always
seemed like a dubious proposition.
We live in more hyperpartisan times. Politics is a constant
war, waged more than ever by ideologues, especially on the
right. Truth and honesty feel like quaint qualities of a bygone
era. The same can be said for statesmanship and the notion
of a common fight for the greater good.
And so it was when petroleum giant Encana Corp. an-
nounced this week that it was shifting its headquarters from
Calgary to the United States. You knew it was only a matter of
time before Alberta Premier Jason Kenney used the news to
bludgeon his favourite pinata, Prime Minister Justin Tru-
deau.
In an interview with The Globe and Mail, Mr. Kenney laid
Encana’s decision directly at the feet of Mr. Trudeau, suggesti-
ng it was the result of an overarching desire by the Prime Min-
ister and his Liberal government to undermine the Canadian
energy industry.
“It’s about the broader decline [of the industry], which I
think is a deliberate policy of the Trudeaugovernment,” Mr.
Kenney said.
Imagine that. A provincial leader in this country accusing
the sitting Prime Minister of setting out to intentionally de-
stroy an industry at the heart of the country’s economy. The
same Prime Minister who spent oodles of political capital –
not to mention $4.5-billion to buy a pipeline – with the
pledge to spend upwards of $9-billion more to twin it.
Once upon a time, politicians didn’t make those kinds of
reckless and irresponsible allegations without repercussions.
But there won’t be any.
Mr. Kenney knows he can make statements like this and, if
anything, his reputation and stature in his province will only
grow.
This weekend, many Albertans will sit around their dinner
tables stewing over the fact that Encana’s decision to relocate
to the U.S. was “Trudeau’s fault,” when that is completely not
true.
Encana didn’t make this decision because the Trans
Mountain pipeline expansion hasn’t been built. They moved
to get access to a greater pool of cash in the U.S. that wasn’t
available to the company as long as it was headquartered in
Canada.
There are no job losses asso-
ciated with the decision, al-
though reaction to the news in
Alberta left one with the im-
pression that thousands would
be affected.
Exploration and production
companies are in a state of flux
around the world. Virtually all
forms of outside capital fled
the oil and gas sector in Canada
starting with the oil crash in- It forced companies here
to become much more effi-
cient in their operation. There
is a wide belief the same reca-
libration that hit Canada is
now set to rock oil and gas in the U.S.
None of this has to do with the Trudeaugovernment or its
“no more pipelines bill,” as Mr. Kenney calls Bill C-69. That
doesn’t matter to the Alberta Premier. Encana leaving makes
for good domestic politics. It gives him a platform upon
which he can demand more pipelines, demand Catherine
McKenna not be renamed environment minister in the next
cabinet, demand an energy corridor to the east coast com-
mence immediately, demand an urgent meeting of first min-
isters, demand equalization reform.
It’s completely nuts.
Mr. Kenney’s ego is out of control. I’m not sure whether
he’s politicking for his current job or whether he’s establish-
ing his bona fides to take over as federal Conservative leader.
He certainly has become the loudest conservative voice in
the country.
And whether it’s current leader Andrew Scheer or some-
one else who ultimately assumes command of the federal
party, they should be prepared for a long to-do list the Alber-
ta Premier will have waiting for them.
The risk Mr. Kenney runs is overreach. He becomes so ob-
sessed in his demonization of Mr. Trudeau that he actually
creates sympathy for the Prime Minister instead. Because at
some point, people outside of Alberta and Saskatchewan are
going to see straight through the narrative.
They are going to see a provincial premier, who has some
legitimate grievances, attempting to bully the person run-
ning this country (and an old political foe he doesn’t much
care for on a personal level) into acceding to his every wish.
They are going to see someone seemingly more interested
in personal aggrandizement than engaging in the kind of
give-and-take inherent in national deal-making.
And Mr. Kenney needs to understand that deliberately
mischaracterizing the decisions oil and gas companies make
for his own political gain ultimately doesn’t get him anything
other than angrier citizens.
IgnoreKenney:
Encana’smovetothe
U.S.isn’tTrudeau’sfault
GARY
MASONOPINIONEncanadidn’tmake
thisdecisionbecause
theTransMountain
pipelineexpansion
hasn’tbeenbuilt.They
movedtogetaccessto
agreaterpoolofcash
intheU.S.thatwasn’t
availabletothe
companyaslongasit
washeadquarteredin
Canada.Alberta Premier Jason Kenney delivers his State of the Province
address to the Edmonton Chamber of Commerce in the city on
Tuesday.JASONFRANSON/THECANADIANPRESSC
algary’s growing tech sector
has been held up as a way for
the city to shift from an en-
ergy industry that has been stuck
in a downturn for years, but deep
funding cuts from the provincial
government have putthat senti-
ment in doubt.
The city and its economic de-
velopment agency have been try-
ing to attract new tech companies
and the jobs that come with them,
as a means of diversifying Cal-
gary’s economy. The oil sector has
shed tens of thousands of jobs in
the wake of a price crash five years
ago.
Those efforts have been ham-
pered by a lack of higher-end
skilled talent, lower salaries and
preconceptions that Calgary is
cold and remote. As well, even the
best-trained oil-patch workers
don’t necessarily have the skills
needed to quickly transition into
the tech sector.
Lucrative incentives from the
provincial government have
helped offset those concerns,
with the opening of new game
studios and other tech startups
routinely highlighted as proof
that the strategy is working.
However, last week’s budget
cancelled most of those programs
across the province in favour of a
corporate tax cut that tech com-
panies say they have no way to
take advantage of. New compa-
nies to the city say they chose Cal-
gary because ofthose govern-
ment supports, as well as an affor-
dable lifestyle.
“It was a bitter pill for me to
swallow,” said Keith Warner,
whose video-game studio, New
World North, opened earlier this
year and now employs 26 people,
with other positions still unfilled.
“I’ll be honest, I was pretty up-
set.”
Mr. Warner said he set up shop
in Calgary over Toronto after be-
ing enticed by the province’s tax
incentives, as well as the afforda-
ble housing market and proximi-
ty to his company’s headquarters
in Colorado. Now, none of the pro-
vincial funding is available.
The budget, which was the first
for Premier Jason Kenney’s Unit-
ed Conservative government,
outlined more than $1-billion in
cuts over the coming years, in-
cluding the cancellation of a num-
ber of incentives for tech and oth-
er industries.
Those cuts included the elimi-
nation of the Alberta Investor and
Interactive Digital Media credits –
those incentives gave a 30-per-
cent tax credit for investors that
provided equity capital to small
Alberta businesses and up to a 30-
per-cent refundable credit for la-
bour costs, respectively. The gov-
ernment also cancelled three oth-
er business tax credits.
Instead, the province says it is
focusing on a reduced corporate
income tax of 8 per cent over four
years, down from 12 – something
of little use to tech startups that
may go several years without
making a profit.
“During that time that you’re
losing money, as you’re trying to
build your company, then a cor-
porate tax break means nothing,”
said entrepreneur Greg Hart, who
founded Thin Air Games along
with Mr. Warner.
Alberta now lags behind other
provinces in providing incentives
to investors or startups. A major-
ity of provinces have some form
of tax credit or fund, such as the 45
per cent Saskatchewan Technolo-
gy Startup Incentive or the
$200,000 New Brunswick Startup
Investment Fund.
Mr. Warner and Mr. Hart said
Thin Air Games was almost de-
railed this week as investors
threatened to pull out amid the
incentive cuts.
Mr. Hart said the provincial
funding is important for a burge-
oning tech sector looking to allay
investors’ concerns about poten-
tial risks. He said it could take 10 to
15 years for a sector to mature to
the point where it can attract in-
vestment on its own.
“When you’re trying to shift
things, you need to signal what it
is that you want to have happen,”
he said.Still, Mr. Hart said Thin Air
Games will press ahead with plans
to bring 10 fledgling game studios
to the city and fund them for two
years. He acknowledges that the
project will be delayed as the com-
pany seeks other investments.
“We have a powerful ecosystem
growing,” Mr. Hart said.
Since 2006, the number of peo-
ple employed in tech jobs has in-
creased from just shy of 50,000 to
close to 63,000 a decade later, ac-
cording to a 2019 Brookfield Insti-
tute report. That equates to 7.9 per
cent of the city’s work force, a per-
centage second only to Ottawa’s
at 9.8 per cent.
The provincialgovernment has
defended the cancellation of the
tech incentives, saying it prefers
to focus on the broader economy
through corporate tax cuts and
other policies. Economic Trade
Minister Tanya Fir said in a state-
ment that thegovernment is also
developing policies to better at-
tract foreign investment and is
open to working with the video-
game and tech industries about
how that could help.
As the province pulls back its
support for tech companies, the
Calgary Economic Development(CED) agency is launching a $4-
million advertising campaign to
attract more tech workers to the
city, with promises of numerous
outdoor activities and affordable
living. The agency says there are
2,000 vacancies in the sector, a fig-
ure taken from averaging snap-
shots of job listings from websites
such as Indeed.
CED president Mary Moran
says that Calgary’s strengths are in
the application of technology to
existing industries, such as ener-
gy and agriculture, rather than be-
ing a stand-alone sector.
“What we’re not is a pure high-
tech place in Calgary,” she said.
“We’re not like Waterloo or some
of the things that you see in To-
ronto or Ottawa. It’s rare for us to
create companies like Shopify.”
There is also hope that a rising
tech sector could compensate for
layoffs in the energy industry,
which contributed to Calgary’s
high unemployment rate of 7.
per cent in September. Ms. Moran
said she believes skilled energy
workers can easily transition to
tech jobs, making reference to
white-collar professions such as
engineering.
Mr. Warner, the president of
New World North, said the pool of
unemployed workers in Calgary
hasn’t made it easier for his com-
pany to find the right people.
“Sadly, the higher-end skilled
talent does not exist here and so
that’s caused a strain on my
recruitment.”
He added that the workers he
and others in the sector need
aren’t necessarily interested in re-
locating to Alberta’s largest city.
They see Calgary as cold, remote
and lacking a community, al-
though he quickly adds that he
believes those thoughts are un-
justified.
Another challenge is the high-
er-than-average salaries in the en-
ergy sector, which deter the tran-
sition to other professions, ac-
cording to a 2018 Communica-
tions Technology Council report.
The report quotes workers who
are used to earning $150,000 be-
ing offered half that for a junior
developer role.
Mr. Hart, of Thin Air Games,
said more university training isn’t
the answer to that dearth of tal-
ent. Formal schooling might teach
programming languages, but it
doesn’t create the repertoire of
technical skills and the mindset
needed in a fast-evolving tech in-
dustry. He aims to build those
skills through his education orga-
nization, EvolveU.
He’s also concerned that the
province is trying to reignite an
energy industry with a finite time-
line rather than putting resources
into a tech sector that will contin-
ue to grow.
“We can’t afford not to become
at some level a significant player
in [tech], or else we become irrel-
evant and that’s dangerous,” he
said.
“And I don’t think there are
enough people that fully appre-
ciate that.”Programmers Jeroen van Werkhoven, left, and Victor Borges work on a game at New World North video-game
studio in Calgary on Friday. The studio, which opened earlier this year, has faced recruitment issues and its
president says the problem is because of the lack of higher-end skilled talent.TODDKOROL/THEGLOBEANDMAILUCP’scutsarebadnews
forthetechsector
Lastweek’sbudgetcancelledmanyincentivesandprogramsacross
theprovinceinfavourofacorporatetaxcutthattechcompaniessay
theyhavenowaytotakeadvantageofMIRJAM GUESGENCALGARY
EconomicTradeMinister
TanyaFirsaidina
statementthatthe
governmentisalso
developingpoliciesto
betterattractforeign
investmentandisopen
toworkingwiththe
video-gameandtech
industriesabouthow
thatcouldhelp.NEWS |