Competitivness Council Moving Alberta Forward

8/6/2019 Competitivness Council Moving Alberta Forward

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Alberta Competitiveness Council

MOVING ALBERTA FORWARD MAY2011


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ii | Alberta Competitiveness Council Moving Alberta Forward

CONTENTS

MESSAGE FROM THE CO-CHAIRS ...................................................................................... i

EXECUTIVE SUMMARY .........................................................................................................ii

BACKGROUND ................................................................................................................... 12

Enhancing Albertas Competitiveness ........................................................................... 12

Why Competitiveness Matters ....................................................................................... 12

The Competitiveness Pyramid ....................................................................................... 14

The Alberta Competitiveness Council ............................................................................ 15

The Task Team Process ................................................................................................. 16

OVERALL FACTORS OF COMPETITIVENESS .................................................................... 18

AGRICULTURE GRAINS AND OIL SEEDS ....................................................................... 26

FINANCIAL SERVICES ........................................................................................................ 32

MANUFACTURING .............................................................................................................. 38

PETROCHEMICALS / CHEMICALS .................................................................................... 44

MOVING FORWARD TOGETHER ....................................................................................... 49


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Alberta Competitiveness Council Moving Alberta Forward |

MESSAGE FROM THE CO-CHAIRS

A competitive Alberta promotes and enables uture growth and prosperity in the province or current and

uture generations. Improving Albertas competitiveness is a shared responsibility between government

and private business and industry.

In 2010, the Alberta government created the Alberta Competitiveness Council to look at ways to improveAlbertas ability to compete in a global economy. A more competitive economy benets all Albertans by

creating more sustainable and stable economic growth that improves living standards and quality o lie.

The Alberta Competitiveness Council consists o government and industry leaders. Together, we identied

actions needed to increase Albertas competitiveness in general, as well as in our specic sectors:

Agriculture Grains and Oil Seeds;

Manuacturing;

Financial Services; and

Petrochemicals/Chemicals.

The Councils work included developing a ramework or measuring competitiveness to compare Albertasperormance with that o other jurisdictions. This benchmarking study ound that Alberta has a sound

oundation or competitiveness specically, living standards, economic well-being, and taxes and scal

policy. In some areas, however, Alberta has room or improvement, primarily in relation to investments in

research and development, productivity growth and innovation.

Focusing on the ndings rom the benchmarking study and based on consultations with industry, the Council

determined the priority actions to improve Albertas competitiveness. The recommendations are practical

and through collaborative partnerships, they will be implemented with meaningul results.

The work o the Council has never been about implementing a single major initiative nor has the Councils

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 or a prosperous uture.

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 dierence.

Honourable

Ed Stelmach

Premier

Bob Brawn

Chair, Alberta Economic

Development Authority


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ii | Alberta Competitiveness Council Moving Alberta Forward

Executive Summary

Albertas competitiveness matters.

Competitiveness is essential or maintaining Albertas

high quality o lie. A competitive economy attracts

industries and investment to the province, which create

jobs and opportunities or Albertans. A competitiveAlberta also leads to healthy and strong communities.

Businesses that call Alberta home make important

contributions to their communities, and they help

nance public services like education, health,

inrastructure, and environmental protection.

Our provinces competitive position, anchored by our

abundant natural resources, has uelled our growth

and prosperity over the past decade.

However, our continued prosperity is not assured.

Alberta aces a growing number o competitors, and

shiting economic orces stand to impact our uturesuccess. We cannot rest on our past success and

passively expect opportunities to keep coming

to our province.

Simply put, there are other places in the world that

are competing or the same investment, jobs and

opportunities.

Alberta will not be complacent.

We must all work to enhance our provinces

competitiveness government and industry,

academics and investors, and employers

and employees.

In that spirit, and as part o theAra Cii

Ac, the Government o Alberta established the Alberta

Competitiveness Council.

The purpose o the Alberta Competitiveness Council

is to analyze Albertas competitive position relativeto national and international competitor jurisdictions,

and to identiy actions that will sustain and improve

Albertas competitive position.

Consisting o Members o the Legislative Assembly

and business leaders, the Council represents a strong

collaboration between government and industry. This

refects the act that both government and industry

have complementary roles to play in achieving the

shared objective o sustained prosperity.

Benchmarking AlbertasCompetitiveness

In December, 2010, the Council released its Rr

Cii: Ara 2010, which benchmarked

Albertas perormance relative to 14 other national

and international jurisdictions.1

The report measured Albertas position on 60 indicators

across the entire provincial economy, using the

ramework o the Competitiveness Pyramid.

In the Competitiveness Pyramid, the bottom layer

is the bedrock: a series o human and naturalcharacteristics within every jurisdiction. Generally

these change only incrementally over time, i at all.

The bedrock comprises characteristics such as the

location, climate, natural resources, political and legal

systems, and social or cultural aspects o society.

The oundation layer is composed o the key structural

areas upon which a competitive environment is built.

These are actors that government is primarily responsible

or shaping. They include taxes and scal policy,

regulation, transportation and inrastructure, human

capital and education, and access to capital markets.

Competitiveness is the condition

created when government, industry

and Albertans work together to pursue

sustained prosperity.

Alberta Competitiveness Council

Report on Competitiveness: Alberta 2010

1 The report is available at http://www.fnance.alberta.ca/

competitiveness.


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Alberta Competitiveness Council Moving Alberta Forward | ii

As depicted in the Pyramid, these actors enable

innovation, which is continually required or any

competitive environment. Innovation is developing new

and better ways o doing things like investing in new

machinery and equipment, or adopting more eective

processes. While government can create conditions

that enable innovation, industry has the primary role

in pursuing and deploying innovation.

Innovation promotes productivity. Productivity gains

are essential to sustained prosperity a balance

o social, economic and environmental outcomes

the result that matters or Albertans.

Alberta ranks well in terms o sustained prosperity.

The provinces Gross Domestic Product per capita

an internationally accepted measure o a jurisdictions

overall standard o living is the highest among all

comparator jurisdictions. Our province also scores well

on the Index o Economic Well-being2, which considers

environmental and social measures o well-being such

as equality o income distribution and risks o poverty

and illness.

In addition, Alberta ranks highly on several oundation

actors, such as competitive taxes and inrastructure.

However, there are a number o areas where Alberta

has opportunities or improvement.

To sustain our provinces economic growth, Alberta

must improve its productivity growth. This will require

greater innovation rom industry.

To support industrys ability to innovate, our province must

have a strong oundation or competitiveness. Industry

and government must work together to shape the actors

that will provide a competitive business environment.

The Result for AlbertaSustainable growth in living standards

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 Outcome

Better use of resources

The BedrockHuman characteristics: demography, society (political and legal system, culture, social infrastructure)

Natural characteristics: natural resources, location (distance to markets, land base, climate)

2 From the Centre or the Study o Living Standards.


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Overall Factorso Competitiveness

Based on the results o the benchmarking report,

and through conversations with industry leaders and

representatives, the Alberta Competitiveness Council

has identied a number o priority areas that require

urgent attention by government and industry throughoutthe entire economy:

Labour market development

Albertas single greatest challenge to competitiveness

is labour supply. The recent global downturn relieved

some pressure in the provinces labour market, but a new

period o labour shortages is ast upon us. Companies are

already reporting diculty sourcing the workers they need.

This time around, the labour shortage will be structural and

sustained, driven by demographic orces such as an aging

population. Alberta will not be alone. Other developedeconomies are acing the same challenges and will be

competing aggressively or the same workers. Alberta will

ace an ongoing battle or talent, both skilled and unskilled.

Industry will need to adapt their business models,

and deal with labour shortages as the new normal.

Albertas experiences with labour shortages during the

last economic boom have taught us lessons. Our province

must do all it can to develop, attract, and retain workers

here at home, rom across Canada and rom around

the world. There is no single solution to this challenge.

It will require a variety o strategies and continued

collaboration between industry and government in areas

such as engaging populations under-represented in the

workorce (such as Aboriginals, mature workers, and

people with disabilities), workorce training, immigration

policy, and education.

ACTIONS: InCReAse pARtICIpAtIon And

employment of gRoups undeR-RepResented

In the AlbeRtA eConomy.

mAke It eAsIeR to employ tAlent fRom

otheR pARts of CAnAdA And AbRoAd.

Productivity and innovation

Alberta has a productivity problem. Our provinces

productivity growth is weak compared to that o other

jurisdictions.

Productivity growth is critical or Albertas competitiveness,

given the tough labour market challenges the province

will ace. With labour supply unable to meet uture

demand, we will need to produce greater value rom

each hour o work. We must improve productivity

throughout the entire economy, to keep pace with

and exceed that o other jurisdictions.

To do this, Alberta needs to be innovative we must pursue

new and better ways o doing business. The Government

o Alberta has created an environment that encourages

innovation through its tax and scal policies, and through

investments in education and research. Industry must make

use o that environment and examine ways o enhancing

their innovation and productivity.

Innovation can come in many orms, but it requires

nothing short o a culture change. Truly innovative and

productive companies will be those that have strong

leadership and management, oster creativity and risk-

taking, have a qualied workorce, and demonstrate

entrepreneurial spirit.

ACTION: leveRAge pRoduCtIvIty

And InnovAtIon netwoRks.

Transportation, inrastructure,and access to markets

Alberta companies depend on access to high-quality

and reliable transportation systems to enable the fow o

people, goods and services. Maintaining and enhancing

Albertas transportation and inrastructure will be critical

or supporting Albertas long-term competitiveness.

Industry and government must work together to enhance

the eciency and eectiveness o transportation modes

commonly used by Alberta businesses trucking,

rail, and air. In addition to much-needed regulatory

improvements, our transportation systems must benet

rom strategic, long-term planning.


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Enhancing transportation is also essential or expanding

Albertas access to international markets. Currently,

Alberta is highly dependent on U.S. markets, which

poses economic risk to the province. Alberta must

expand the number o sizeable customers or its goods

and services. With some o the worlds largest and most

diverse markets, Asia presents a signicant growth

opportunity or Alberta businesses.

As Alberta works with industry to expand its linkages

with Asian markets, the ports o Vancouver and

Prince Rupert will have increased importance. Alberta

must continue to work with British Columbia and

Saskatchewan through the New West Partnership3

to enhance the ability o Western Canadian rms to get

their products to Asian markets using the Asia-Pacic

Gateway inrastructure.

ACTION: move hIgheR-densIty modules

to AlbeRtA oIl sAnds pRojeCts.

Regulatory competitiveness

Regulation is essential to a well-unctioning economy,

assuring environmental sustainability, and creating

a sae and just society. But outdated, duplicative,

and uncoordinated rules can also impose unnecessary

compliance costs. For business and industry, this can

lower eciency and productivity, resulting in competitive

disadvantages.

Alberta must have eective regulatory systems that

achieve public interest goals in an ecient and aordablemanner. To this end, the Government o Alberta has

a long-standing commitment to a government-wide

regulatory reorm program to improve the eciency

and eectiveness o Albertas regulatory systems.

The program advances a quality-based approach or

improving regulation, which ocuses on the impacts

on stakeholders, including burden reduction.

The participation o stakeholders and businesses in the

regulatory process is an important part o building an

eective system. Businesses need to be able to ully

understand the regulatory environment in which they

operate. Their eedback can help identiy specic

areas where regulatory complexity is hampering

competitiveness and help work towards solutions

that continue to protect the public interest. Increased

coordination among regulators and other governments

(municipal, provincial, ederal) is also required to enhance

opportunities or growth, investment and trade.

ACTION: estAblIsh meAsuRes to RegulARlyAssess AlbeRtAs RegulAtoRy peRfoRmAnCe.

Enhancing SectorCompetitiveness

The benchmarking report marked the beginning o

an ongoing, annual process to enhance Albertas

competitiveness and generate sustained prosperity.

This year, the Alberta Competitiveness Council was

mandated to examine actors impacting the provinces

overall competitiveness and our sectors o Albertas

economy: Agriculture Grains and Oil Seeds, Financial

Services, Manuacturing, and Petrochemicals / Chemicals.

The Council established a task team or each o these

sectors, as well as a task team dedicated to examining

the overall actors o competitiveness.

Building rom the analysis o the benchmarking report,

each task team consulted with industry representatives and

stakeholders in these our sectors. The task teams also

consulted with other government advisory bodies such

as Alberta Economic Development Authority and Alberta

Innovates. Inormed by this input, each task team identied

issues impacting Albertas competitiveness in each sector,

and developed a series o key actions aimed at addressing

those issues and enhancing the sectors competitiveness.

The key actions are designed to be timely and practical

solutions that can be readily implemented. They are

intended to address specic competitiveness pressures

acing each sector, and to realize demonstrable

improvements in the near-to-medium-term (i.e., within

ve years). They are deliberately limited in number,

ensuring they can be implemented with the resources

available, and will complement ongoing eortsby industry and government to better position our

province or sustained prosperity.

3 Inormation about the New West Partnership is available at

http://www.international.alberta.ca/645.cm


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Agriculture Grains and Oil Seeds

There are signicant economic opportunities ahead or

Albertas grains and oil seeds sector. Estimates suggest

the worlds population will increase to about 9.3 billion

people by 2050, up rom about 6.9 billion in 2010, led by

growth in developing countries.4 Over the next ew decades

increasing prosperity among consumers will lead to rising

demand or imports o ood and agricultural commodities.

These developments oer opportunities or Albertas

grains and oil seeds sector. However, the sector aces

some hurdles. Certain areas o agriculture policy remain

challenging, including the lack o marketing choice or

wheat and barley. As in other agriculture sectors, ewer

members o newer generations choose to enter grains

and oil seeds arming. The cereal grains sector is also

alling behind in productivity improvement compared

to crops such as corn, soybeans and canola.

To capitalize on uture opportunities, Albertas grains and oil

seeds sector must continually enhance its competitivenessthrough research and innovation, market access and

market development, rural renewal, and improved policy,

regulatory and institutional systems.

ACTIONS: ContInue to suppoRt mARketIng

ChoICe foR wheAt And bARley.

Adopt And AdvAnCe polICIes thAt enAble A

moRe CompetItIve And InnovAtIve IndustRy.

AttRACt fARmeRs fRom oveRseAs.

develop And suppoRt pIlot InCubAtoR fARms.

AddRess the fundIng And goveRnAnCe model

foR gRAIns And oIl seeds ReseARCh And

InnovAtIon foR AlbeRtA And westeRn CAnAdA.

Financial Services

The nancial services industry is one o Albertas key

growth sectors, contributing over $8 billion to the provinces

economy.5 Strong energy prices and signicant

investments in oil sands development have resulted in

a remarkable expansion o the nancial services industry

during the past decade. Albertas nancial services industry

has strong growth prospects, and numerous strengthsit can leverage and build upon. Now is an opportune

time or Alberta to capitalize on these strengths.

The world-class niche strengths o Albertas nancial

services industry are not as internationally well-known

as they could be. Alberta needs to be top o mind

or nancial services rms, skilled workers in the sector,

or those managing large pools o capital. Alberta also

needs to enhance the development, attraction and retain

retention o skilled nancial services talent.

To ensure the sectors continued growth and

competitiveness, government and members othe nancial services industry will need to work

in partnership to address these issues.

ACTIONS: estAblIsh An IndustRy-goveRnment

fInAnCIAl seRvICes seCtoR gRoup.

develop And Implement A bRAndIng And

mARketIng stRAtegy foR AlbeRtAs fInAnCIAl

seRvICes IndustRy.

develop, AttRACt, And RetAIn fInAnCIAl

seRvICes tAlent.

Manuacturing

Alberta oers many advantages to manuacturing

companies. However, geographic and demographic

realities present challenges to manuacturers

in the province.

5 Statistics Canada, November 2010 estimates or 2009,

in chained (2002) dollars.4 United Nations Population Division.


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Alberta Competitiveness Council Moving Alberta Forward | vi

Alberta manuacturers in some cases ace higher costs

and longer lead times than manuacturers in competing

jurisdictions due to Albertas northern and landlocked

location. This industry also aces diculty recruiting

and retaining workers a challenge compounded by

the dominance o Albertas oil and gas industry, which

competes or many o the same workers. Manuacturers

also ace pressures rom ever-evolving market dynamics,

including: the emergence o new global supply chains,

increasing competition rom lower-cost international

markets, and the rising value in the Canadian dollar.

Enhancing the competitiveness o Albertas manuacturing

industry requires urgent attention to two major drivers:

people and productivity. These drivers are highly

interrelated; without qualied people, manuacturers

cannot keep pace with developments that will make

them more productive in the uture. Action on both

ronts is required to enhance the manuacturing

sectors competitiveness.

ACTIONS: stRengthen pRoduCtIvIty AlbeRtA

thRough An InCReAsed Role And owneRshIp

by IndustRy.

undeRtAke A demonstRAtIon pRojeCt to

fACIlItAte moRe employeR-suppoRted tRAInIng.

Petrochemicals/Chemicals

Alberta is Canadas leading producer o petrochemicals,

and the petrochemicals/chemicals industry represents

signicant value-adding activity in Albertas economy.Today, Albertas industry includes our ethane-cracking

plants, including two o the worlds largest. Albertas

industry also has key advantages over its main

competitor, the U.S. Gul Coast, including newer and

more ecient acilities and historically lower prices

or ethane eedstock.

Despite these advantages, the industrys long-term

competitiveness and viability is now at risk due to

dwindling eedstock supplies, due to changes in the

natural gas marketplace and the maturity o Albertas

conventional gas elds. Although current and uture

natural gas production outside the province oer potential

sources o ethane, regulatory uncertainty threatens

Albertas ability to capitalize on these opportunities.

To remain competitive and viable, industry and government

must work together to obtain more ethane at competitive

prices by enhancing regulatory certainty, improving policies,

and leveraging Albertas inrastructure advantages.

ACTIONS: enhAnCe the InCRementAl ethAne

extRACtIon pRogRAm.

leveRAge And enhAnCe the AlbeRtA nAtuRAl

gAs hub.

ChAmpIon RegulAtoRy CeRtAInty to ImpRovethe extRACtIon And pRoCessIng of nAtuRAl

gAs lIquIds In the pRovInCe.

Going orward, the Alberta Competitiveness Council

will monitor Albertas progress in implementing the key

actions at the sector level and across the economy.

The Council will also consider research and other

inormation to identiy a new series o economic sectors

or task team examination.

Working together industry, government and all Albertans

we will build on our current competitiveness, and positionAlberta or even greater success in the new global economy.


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Alberta Competitiveness CouncilActions to Enhance Competitiveness Summary Table

ACTION IMPLEMENTATION STAGE

oveRAll fACtoRs of CompetItIveness

1. Increase participation and employment o groups

under-represented in the Alberta economy. Update and implement the provinces bii a

ecai trr wrrc strategy.

Target initiatives to increase the participation o these Albertans.

Initiated

Government departments, training institutionsand employers are working together to update

and develop new strategies.

2. Make it easier to employ talent rom other parts

o Canada and abroad.

Accelerate advocacy eorts with the ederal government,

with the goal o improving immigration policies and programs.

Implement Alberta Economic Development Authoritys

baaci Ara wrrc report.

Initiated

Alberta government and businesses are

providing input on ederal reviews on

immigration.

Alberta government is taking action on

oreign qualication recognition, including

perormance measure targets or 2015.

3. Leverage productivity and innovation networks.

Maximize the use o resources and networks provided by

organizations such as Productivity Alberta through increased

awareness and stronger promotion.

Identiy new economic opportunities and commercialize

innovative technologies through the work o the Alberta

Innovates system, industry and other government

organizations.

Initiated

Expanded Productivity Alberta programs

and services in the past year.

Alberta Innovates organizational structure

implemented in 2010.

4. Move higher-density modules to Alberta oil sands projects.

Increase weight limits to provide the sae transportation

o higher-density modules along Albertas main high-loadcorridor rom the Edmonton region to the Municipality

o Wood Bualo.

Initiated

Feasibility assessment o a heavy load corridor

between industry and Alberta Governmentunder way.

5. Establish measures to regularly assess Albertas regulatory

perormance.

Dene measures to assess and validate regulations

as eective and ecient.

Initiated

Assessment o potential measures under way

with Albertas Regulatory Review Secretariat.


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AgRICultuRe gRAIns And oIl seeds

6. Continue to support marketing choice or wheat and barley.

Utilize every avenue and opportunity to consult and

coordinate with other western provinces and the ederal

government to advance the marketing choice le so Alberta

armers are able to sell their grains to whomever they choose.

Initiated

Alberta government motion made in support

o ederal action on marketing choice.

Alberta Grains Council serving as an advocacy

body or producers.

7. Adopt and advance policies that enable a more competitive

and innovative industry.

During ederal/provincial/territorial negotiations, champion a

position or Growing Forward 2 that calls or policies, programs

and services important or long-term competitiveness.

Initiated

Federal/provincial/ territorial discussions

ongoing. New agreement in place in 2013.

8. Attract armers rom overseas.

Develop and implement a strategic plan or attracting

immigrant armers to Alberta.

Initiated

Cross-ministerial eort in development.

Inormation or use by international arm media

being developed.

9. Develop and support pilot incubator arms.

Leverage opportunities or new crop development.

Initiated

Business case or incubator arms, including

potential locations, in development by Alberta

Agriculture and Rural Development.

10.Address the unding and governance model or grains

and oil seeds research and innovation or Alberta

and western Canada.

Explore ways to address gaps in Research and Development

unding or cereal grains.

Work within the New West Partnership to establish shared

approaches with B.C. and Saskatchewan.

Planning

Preliminary review and inormation gathering

underway.

fInAnCIAl seRvICes11.Establish an industry-government fnancial services

sector group.

This group would support the growth o the nancial

services industry by monitoring issues and inorming

regulatory/policy decisions.

Initiated

Discussions on governance and unding

between industry and government under way.

12.Develop and implement a branding and marketing strategy

or Albertas fnancial services industry.

Take advantage o global recognition o the stability and

integrity o the Canadian nancial system and Albertas

competitive tax policies.

Planning

To be completed by industry-government

nancial services sector working group.

13.Develop, attract, and retain fnancial services talent.

Fostering the expansion o the Alberta Finance Institute.

Increase the talent pool available to the nancial services

industry in the province.

Initiated

Discussions on the expansion o the Alberta

Finance Institute underway with stakeholders.


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mAnufACtuRIng

14.StrengthenProductivity Alberta through an increased role

and ownership by industry.

Move prcii Ara rom a government entity to a not-

or-prot business model to enable a greater role or industry

and better use o/access to prcii Ara resourcesand services.

Initiated

Governance and nancial structures under

development. First stage o transer targeted

or completion by June, 2011.

15.Undertake a demonstration project on employer-supported

training.

Implement a program that assesses employer / employee

training needs and targeted support through employer-

supported training programs.

Initiated

Funding arrangements established. Pilot project

parameters in development.

petRoChemICAls / ChemICAls

16.Enhance the Incremental Ethane Extraction Program.

Alleviate the growing shortage o ethane supplies by making

program changes to increase adoption and uptake by industry.

Encourage more ethane extraction rom o-gases that result

rom bitumen rening or upgrading

Complete

Program changes announced March, 2011.

Industry commitments made March, 2011.

17.Leverage and enhance the Alberta Natural Gas Hub.

Develop the concept and relationships needed to capitalize

on the extensive inrastructure and state-o-the-art

complexes in Alberta with western Canadian and other

jurisdictions.

Planning

Consultation with sector stakeholders set

to begin.

18.Champion regulatory certainty to improve the extraction

and processing o natural gas liquids in the province.

Develop policy statement arming the governments

commitment to acilitating value-added development in theprovince, to guide regulation and developments in upcoming

National Energy Board (NEB) hearings.

Initiated

Policy development and required approvals

to pursue intervener status or NEB hearings

in process.


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Alberta Competitiveness Council Moving Alberta Forward | 11

Background


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We must ensure Alberta provides a climate

where entrepreneurship, innovation,productivity, and investment thrive.

Background

Enhancing AlbertasCompetitiveness

Albertas competitive tax system, investments in

essential programs, services and inrastructure,

and abundant natural resources all contribute to our

substantial economic growth and current prosperity.

However, this does not mean that Albertans uture

prosperity is assured. A growing, rapidly changing

and increasingly interconnected world is giving rise

to economic orces that will impact our province.

Alberta aces increased competition rom within

Canada, North America, and rom around the world.

Each day people and companies make decisions about

their uture where to work, where to live and raise

their amilies, where to invest or expand, and whereto seek new opportunities. Whether they choose Alberta

is directly infuenced by how competitive our province

is and continues to be.

To ensure Albertans can enjoy long-term prosperity,

the province must work to maintain and enhance its

competitiveness. We must ensure Alberta provides a

climate where entrepreneurship, innovation, productivity,

and investment thrive.

Competitiveness is not just the concern o economists

or investors. It is in everyones interest or Alberta to be

as competitive as possible government and industry,

academic institutions and leaders, and individual

Albertans who work every day to advance the prosperity

o the province.

By ocusing on competitiveness we will maintain

and improve our quality o lie and uphold the values

important to Albertans.

There are several initiatives with the goal o ensuring

Albertas prosperity or uture generations. These include:

prir Cci r ecic sra

Established in 2009 and comprised o globally

recognized business leaders and experts, the

Council has provided a long-term vision and starteda conversation on how Albertans can shape a uture

that builds on the provinces strengths and values,

while taking it in exciting new directions.

erizi I In early 2010, as a response

to changes in the energy marketplace, Alberta Energy

outlined and led a series o initiatives to position

Alberta as one o the most competitive jurisdictions in

North America or upstream oil- and gas-development.

Ara Cii Iiiai Introduced in the

summer o 2010, theAra Cii Ac

brings together government, industry, and Albertansto develop a shared strategy to measure and improve

the provinces overall competitiveness.

Aia Air Cci Established by theAia

Air Cci Ac, the Council will examine ways

o expanding business, education, and cultural

linkages between Alberta and Asia, to develop

new markets and opportunities or our province.

Why Competitiveness Matters

Sustained prosperity is created when government,

industry, and Albertans work together to pursuea common objective a competitive economy.

Sustained prosperity is about improving the standard o

living and quality o lie or all Albertans. While good jobs

and income are important elements or a high quality o

lie, sustained prosperity is not measured only in terms

o economics. It is also about the things we value as a

society including positive health outcomes, a rst-rate

education system, and a clean and healthy environment.

Prosperity is typically represented in terms o the

Gross Domestic Product. While this is one important

quantitative measure o prosperity, to be trulyprosperous Alberta needs to achieve a balance

o social, economic, and environmental outcomes.

Our provinces ability to improve and invest in those

areas depends on maintaining and enhancing our

long-term competitiveness.


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We can expand the Gross Domestic Product by workingharder or working smarter.

Working harder means increasing the total labour eort

in the economy. This is accomplished by expanding

the workorce or by working longer hours. Realistically,

neither approach provides the right answer, particularly

in light o Albertas current labour orce participation and

changing demographics. Alberta has one o the highest

levels o labour eorts in Canada there is limited room

to increase participation in the Alberta workorce.

An aging population and continuing pressures in the

labour market will mean that Albertas standard o living

cannot be sustained solely by increasing total labour eort.

The alternative is or Albertans to work smarter by

generating more economic activity per hour worked.

This means increasing Albertas productivity. By increasing

productivity we can maintain and enhance Albertas

global competitiveness, which can urther improve

our standard o living and sustain our uture prosperity.

Through innovation, there are virtually no limits on how

productive we can be.

Innovation is the key to developing new and improvedproducts, services, and processes or a global marketplace.

No single actor causes innovation to occur, but a variety

o actors help to oster innovation and attract investment

to the province. Our capacity to innovate depends on

having the right combination o skilled people, nance,

inrastructure, strong management and leadership,

and many other actors.

The role o government is to ensure that policies and

programs refect the values o Albertans and establish

a competitive business climate. Industry must lead

by creating jobs, seizing economic opportunities, and

investing in innovation and productivity. Creating the

right mix o policies and actions requires a partnership

between government and industry to reach our shared

objective o sustained prosperity.

The interrelated nature o these concepts is depicted

in Albertas Competitiveness Pyramid. The pyramid

provides a ramework or examining Albertas

competitive position and developing initiatives

to enhance Albertas long-term competitiveness.

QC

MB

ON

BC

AB

SK

FIN

WA

MN

OR

CO

TX

QLD

GDP per capita, US$ at PPP (LHS) Real GDP per capita annualgrowth rate, 2003-2008 (RHS)

GDP per capita (2008) and real GDP per capita growth (2003-2008)

RealGDPpercapitagrowthrate

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

GDPpercapita,

US$atPPP

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

NOR ID


16/52


The Competitiveness Pyramid

In the pyramid, the bottom layer is the bedrock: a series

o human and natural characteristics within every

jurisdiction. Generally, these change only incrementally

over time, i at all. The bedrock comprises characteristics

such as the location, climate, natural resources, political

and legal systems, and social and cultural aspects

o society.

The oundation layer is composed o the key structural

areas upon which a competitive environment is built.

These are actors or which government is primarily

responsible, including: taxes and scal policy, regulation,

transportation and inrastructure, human capital and

education, and access to capital markets.

As depicted in the pyramid, these actors enable

innovation, which is required continually or any

competitive environment. Innovation is developing

new and better ways o doing things such as

investing in new machinery and equipment, adopting

more eective processes, training skilled labour,

or undertaking research and development activities.

While government can create conditions that enable

innovation, industry has the primary role in pursuingand deploying innovation.

Innovation promotes productivity. Productivity gains are

essential to sustained prosperity a balance o social,

economic, and environmental outcomes the result that

matters or Albertans.

The Result for Alberta

Sustainable growth in living standards

The EnablerNew and improved products, services

and processes for a global marketplace

Industry in partnership with government

The FoundationFactors that shape the

business environment

Government in partnership with industry

The Outcome

Better use of resources

The BedrockHuman characteristics: demography, society (political and legal system, culture, social infrastructure)

Natural characteristics: natural resources, location (distance to markets, land base, climate)


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The Alberta Competitiveness Council

The Alberta Competitiveness Council was established

in May, 2010, through theAra Cii Ac.

The Alberta Competitiveness Council was charged with

implementing the directions outlined in the Act.

The purpose o the Alberta Competitiveness Council

is to analyze Albertas competitive position relative

to national and international competitor jurisdictions,

and to identiy actions that will sustain and improve

Albertas competitive position.

The Council represents a strong collaboration between

government and industry.

For this rst year, the Council included task teams

mandated to examine our sectors o Albertas economy

and the overall actors o Albertas competitiveness.

Each task team is co-chaired by a Member o the

Legislative Assembly and a senior representative rom

industry, working together to analyze issues and develop

actions or enhancing Albertas competitiveness.

This approach recognizes that industry, government and

all Albertans must engage in ongoing dialogue and work

together to create the right mix o policies and actions

to generate prosperity.

While the Government o Alberta can take certain actions

to improve the oundation (i.e., the provinces business

climate), Albertas long-term prosperity also dependson industry taking corresponding actions to maximize

the opportunities aorded by that climate and improve

competitiveness.

On an ongoing basis, government and industry must

build consensus on what is required to generate

sustained prosperity and then get on with the job

o supporting innovation, improving productivity,

and empowering our workorce.

In December, 2010, the Council released its Rr

Cii: Ara 2010, which examined Albertas

competitive position and benchmarked its perormance

relative to 14 other national and international jurisdictions.

Using the ramework o the Competitiveness Pyramid, thereport measured Albertas position on 60 indicators across

the entire provincial economy.

Comparator Jurisdictions

Canada: British Columbia,Saskatchewan, Manitoba, Ontario,

and Quebec.

United States: Colorado, Idaho,Minnesota, Oregon, Texas, and

Washington.

International: Finland, Norway,and the State of Queensland, Australia.

Government Co-Chair Industry Co-Chair

Council Co-Chair Premier StelmachMinister Snelgrove (alternate)

Bob BrawnAlberta Economic Development Authority

Agriculture (Grains and Oil Seeds) Mr. George GroeneveldMLA, Highwood

Dr. Christoph WederSpiritView Ranch

Financial Services Ms. Janis Tarchuk

MLA, Ban-Cochrane

Mr. Greg Turnbull

Partner, McCarthy Ttrault

Manuacturing Mr. George RogersMLA, Leduc-Beaumont-Devon

Mr. Larry Kaumeyer

President, Almita Manuacturing Ltd.

Petrochemicals / Chemicals Mr. Ray PrinsMLA, Lacombe-Ponoka

Mr. Val MiroshPresident, Mircan Resources Ltd.

Overall Factors o Competit iveness Mr. Cal Dallas

MLA, Red Deer-SouthMr. Les LaRocquePresident, Botting & Associates Alberta Ltd.


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The report provides a baseline set o measures that will

enable evaluation o the provinces competitive position now

and in uture years, while also considering the our economic

sectors that were identied as priority areas o work or

the rst year o the Alberta Competitiveness Council:

Agriculture Grains and Oil Seeds;

Financial Services;

Manuacturing; and


These sectors were selected based on their roles in the

provinces economy and the opportunities to improve

Albertas competitive position in each o them. They were

also selected to complement Alberta government-led

initiatives ocusing on other sectors (e.g., oil sands,

oil and natural gas) to ensure a broad scope o Albertas

economy benets rom examination. Additional sectors

are expected to be reviewed in uture years.

The Task Team Process

Building rom the analysis o the benchmarking report,

each Council task team examined one o the our economic

sectors and the overall actors o competitiveness.

As part o this examination, each task team consulted

with industry representatives and stakeholders in the

sector, and with other government advisory bodies

such as Alberta Economic Development Authority

and Alberta Innovates.

Inormed by this input and analysis, each task teamidentied issues and actors impacting Albertas competitive

position in the sector. They then developed a series

o key actions aimed at addressing these issues and

enhancing the sectors competitiveness.

The key actions developed by the task teams are

designed to be timely and practical solutions that can

be readily implemented. They are intended to address

specic competitiveness pressures acing each sector,

and to realize demonstrable improvements in the

near-to-medium-term (i.e., within ve years). They are

deliberately limited in number, ensuring they can be

implemented with the resources available, and willcomplement broader initiatives already underway

by government and industry.

The key actions refect the importance o a shared

responsibility by both government and industry in

enhancing the provinces competitiveness or the

betterment o all Albertans.

While industry must act on its own accord, there

are powerul incentives to take action on increasing

innovation, improving productivity, and enhancing

competitiveness. Companies in Alberta will continueto ace growing competition rom other domestic and

international players. Those taking action today will

better position themselves to conront the realities

o tomorrows economy and marketplace.

About This Report

This report summarizes the ndings o the Councils

task teams:

Overall Factors o Competitiveness;

Agriculture Grains and Oil Seeds; Financial Services;

Manuacturing; and


Each chapter describes Albertas competitive position

in a sector, and identies actions or government and

industry that aim to address the competitiveness

pressures o that sector. For each area, sector-level

benchmarks are also outlined to enable ongoing

evaluation o Albertas competitiveness in each sector.

These will complement the indicators in the Councils

benchmarking report, oering a more complete picture

o Albertas competitiveness at the sector level.


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Overall Factors o Competitiveness


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Overall Factors o Competitiveness

The results o the December, 2010, benchmarking

report indicate that Alberta is perorming well

against comparator jurisdictions both nationally

and internationally. Alberta rates either above average

or average in the majority o the measures.

Alberta ranks well in terms o sustained prosperity.

The provinces Gross Domestic Product per capita

an internationally accepted measure o a jurisdictions

overall standard o living is the highest among all

comparator jurisdictions. Among Canadian comparator

jurisdictions, Albertans benet rom the highest personal

income ater tax.

Our province also scores well on the Index o Economic

Well-being, developed by the Centre or the Study o

Living Standards. This index considers measures o well-

being beyond economics, including environmental and

social measures such as equality o income distribution,and risks o poverty and illness.

Albertas strongest rankings are in the areas o taxes and

scal policy. Residents and businesses in the province

benet rom the lowest overall tax burden o any

jurisdiction in Canada. This is one o several important

oundational actors needed to attract investment and

support economic growth.

Moreover, Albertas net nancial assets are strong,

thanks to our signicant natural resources and provincial

policies relating to debt nancing. The provinces public

nances are not burdened with high debt servicing costs.

While demonstrating Albertas competitive strengths,

the benchmarking report also revealed a number o areas

where Alberta has opportunities or improvement.

Albertas GDP growth has been primarily driven by

increased labour eort brought about by high levels

o labour eort rom individual Albertans and high

population growth rom interprovincial and international

migration. However, Alberta will not be able to sustain its

economic growth solely by increasing total labour eort.Aging demographics and slower workorce growth place

practical limitations on this approach.

To sustain our provinces economic growth, Alberta

must improve its productivity. This will require greater

innovation rom industry.

To support industrys ability to innovate, our province must

have a strong oundation or competitiveness. Industry

and government must work together to shape the actors

that will provide a competitive business environment.

It is important that Alberta takes a strategic approachto enhancing its competitiveness. Alberta need not be

a leader in every measure o competitiveness, but rather,

ocus its resources and actions or the greatest eect.

Based on the results o the benchmarking report,

and through conversations with industry leaders and

representatives, the Alberta Competitiveness Council has

identied a number o priority areas that require urgent

attention by government and industry. Strategic actions

in these areas will benet all sectors o the economy, and

will eectively enhance Albertas overall competitiveness.

LABOUR MARKET DEVELOPMENT

Having the right workers with the right skills at the

right time is essential or our provinces long-term

competitiveness. Limited access to labour can result

in uncompetitive labour rates and missed economic

opportunities or the province.

Albertas single greatest challenge to competitiveness

is labour supply.

Alberta experienced a period o labour shortages during

the last economic boom. The recent global downturn

relieved some pressure in the provinces labour market,but with a return to economic growth Alberta is already

entering another period o labour shortages. Several

companies are reporting diculty in sourcing labour,

especially companies in the energy sector.

To sustain our provinces economic growth,

Alberta must improve its productivity.


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This is going to be a continuing challenge or our province.

Although Alberta has one o the youngest workorces

among comparator jurisdictions, the provinces

population is aging. Thousands o baby boomers will

leave the workorce over the next two decades.

Alberta will not be alone in acing this challenge. Developed

economies around the world ace similar situations,

driven by similar demographic realities, and they will becompeting aggressively or the same skilled labourers.

In the years ahead, Alberta will ace an ongoing battle

or labour.

Industry will need to regard labour shortages not

as a temporary anomaly, but as the new normal.

Companies will need to examine their business models

and determine how they will adapt to an economy

with a persistent labour shortage.

At the same time, to mitigate labour shortages our

province must do all that it can to develop, attract,

and retain the skilled workers our economy requires.

Industry and government will need to work together

to expand our provinces labour market.

At home, we must ensure the provinces education system

equips Albertans with the skills and ideals required to

build a creative and competitive economy o the uture

including skills such as nancial literacy, community

engagement and entrepreneurial spirit. This will require

all levels o our system to work together to develop

programs that train individuals who are well equipped

to meet the needs and expectations o the workplace.

Alberta has taken important steps in transorming the

provinces education system to help ensure all students

are inspired to achieve success and ulllment as engaged

thinkers and ethical citizens with an entrepreneurial spirit.7

The Competitiveness Council is encouraged by this and

stresses that it must continue as a top priority or action.

Albertans must be ully engaged in the workorce. While

employers oten struggle to nd workers, there remainAlbertans who are without employment. Aboriginal

Albertans a population that is young and growing

could make up a signicant portion o Albertas labour

orce. Similarly, mature workers are a growing cohort

with valuable experience. Albertans with disabilities

and youth oten struggle to nd a meaningul place

in the Alberta economy.

Feedback rom the Alberta Employment and

Immigrations2010 miir wrrc fr8

conrmed that successul employment or these

Albertans depend on several actors appropriateeducation and training, connection to the right job

opportunity, and the willingness o employers to consider

them as potential employees. Given the prosperity

o Alberta, and the resulting workorce shortages,

these Albertans must be ully engaged and share

in the provinces economic prosperity.

ACTION: InCReAse pARtICIpAtIon And

employment of gRoups undeR-RepResented

In the AlbeRtA eConomy.

Alberta Employment and Immigration is working withother government departments, training institutions and

employers to implement targeted workorce strategies and

initiatives to increase the participation o these Albertans.

Albertas single greatest challenge

to competitiveness is labour supply.

Companies will need to examine their

business models and determine how they

will adapt to an economy with a persistent

labour shortage.

7 Inspiring Action on Education: https://ideas.education.alberta.ca/

engage/previous-initiatives/inspiring-action.aspx

8 Inormation on the Ministers Workorce Forum: http://www.employment.

alberta.ca/BI/12568.html


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The Alberta Competitiveness Council supports

the eorts o government to update the provinces

bii a ecai trr wrrc strategy,

and the implement the recommendations in Alberta

Economic Development Authoritys baaci Ara

wrrc9,10 report. Other strategies such as the fir

nai, mi a Ii wrrc pai Iiiai

will also eed into this process.

Realistically, these eorts will only take Alberta so ar.

To help meet our labour orce needs, our province

will increasingly need to attract and retain workers

rom outside the province. Industry and government

must build on initiatives such as the Alberta Immigrant

Nominee Program and the Temporary Foreign Worker

program. Since immigration alls outside provincial

authority, it is essential that industry and the Government

o Alberta provide clear inormation and direction

to the ederal government to ensure these programs

meet provincial needs.

One opportunity warranting attention is the ability

to attract workers rom the United States. Faced with

relatively higher unemployment, workers in the United

States are looking or economic opportunities. Many

have the skills required by Albertas economy. Seizing

this opportunity will require the ederal government

to reduce the regulatory burden and to work with U.S.

counterparts to acilitate the movement o workers

across the border.

As we look beyond our borders or workers, Alberta

communities have an important role in welcoming and

integrating newcomers to help smooth the challengesthat many immigrants ace when moving to Alberta.

By ostering robust settlement services and welcoming

communities, Alberta can establish itsel as a avourable

place to re-settle, making the province more attractive

to workers, innovators, investors, and entrepreneurs

rom around the world.

Alberta will continue to ace sti competition rom other

jurisdictions or the same skilled workers. I there are too

many barriers to coming to Alberta, skilled workers will

go elsewhere. Given the critical importance o labour

supply to our competitiveness, our province must do

what it can to make it easier or workers to choose

Alberta over other destinations. Albertas recent

experiences with labour shortages provide lessons

on how industry and government can eectively act

to help mitigate uture shortages.

ACTION: mAke It eAsIeR to employ tAlent fRom

AlbeRtA, otheR pARts of CAnAdA And AbRoAd.

Industry and the Government o Alberta must accelerate

advocacy eorts with the ederal government, with

the goal o ensuring ederal immigration policies and

programs meet provincial needs. In particular, there must

be a ocus on ways to reduce delays in processing time

and broadening access to immigrants who have theskills and abilities our economy needs. Adaptations to

the Temporary Foreign Worker and Alberta Immigrant

Nominee programs can help improve the ability o Alberta

rms to strategically engage the labour resources needed

to grow their businesses. Attention must also be given to

oreign qualication recognition, so that qualied skilled

workers, in a wider range o occupations needed, who

come to the province can participate ully in the economy.

Action on labour mobility agreements to improve

access and movement o workers rom other parts

o Canada also remains important. Cooperation

between industry, ederal and provincial jurisdictions

is critical or standardizing credentials across Canada

and or determining equivalencies to Alberta

occupational standards.

PRODUCTIVITY AND INNOVATION

Alberta has a productivity growth problem.

Productivity is about the better use o all our available

resources including our land, natural resources,

labour, and capital resources. Labour productivity is the

single most important determinant in maintaining andenhancing sustained prosperity.

Productivity is especially critical, given the tough labour

market challenges our province will ace. With labour

supply unable to meet uture demand, we will need

to produce greater value rom each hour o work.

9 The AEDA report can be ound at: http://aeda.alberta.ca

10 The report, Connecting the Dots: Aboriginal Workorce and Economic

Development, can be ound at: http://employment.alberta.ca/BI/3282.html


23/52


Alberta has a high productivity level compared

to most other jurisdictions. However, the provinces

productivity growth over the past decade has been

slower compared to the United States and other

international jurisdictions, which negatively impacts

on Albertas global competitiveness.

To remain competitive, Albertas productivity growth must

improve across the entire economy. It must keep pacewith and exceed the productivity o other jurisdictions.

Productivity growth should concern all Albertans

government and industry, academics and investors,

and employers and employees. We need to grow our

productivity i we wish to maintain our standard o living.

Productivity gains can be achieved in many ways,

including: improving the business environment; ostering

innovation; increasing capital intensity (machinery

and equipment, and inormation and communications

technology); enhancing inrastructure; and strengthening

human capital.

A key to improving Albertas productivity is the use

o innovation employing new approaches, products,

technology, and tools to generate more value or the

same amount o eort. There are many ways to innovate.

While people oten think o innovation in terms o major

technological leaps, innovation can come in the orm

o incremental changes that aim or continuous

improvement. For example, the simple idea o stacking

two containers on top o each other on railway cars

served to double productivity o that mode o transport.

The Alberta government has created an environment that

encourages innovation through its tax and scal policies,

and investments in advanced education and research,including initiatives throughAra Ia.

It is up to industry to make use o that environment and

examine ways o enhancing productivity and innovation.

Companies are best suited to understand their business

models and to adopt new ways o thinking, managing,

and operating.

There are many approaches companies can take,

depending on their economic sector and the nature

o their individual businesses. These include investing in

machinery, equipment, and technology, and in investing

in their workers to enhance skill sets.

What is required, however, is nothing short o a culture

change. Truly innovative and productive companies will

be those that have strong leadership and management,

oster creativity and risk-taking, and demonstrate

entrepreneurial spirit.

To compete, Alberta companies will need to reignite

the entrepreneurial spirit or which they have long been

known. Industry must take stock o the reality that they

are no longer competing within Alberta or North America,but competing with the world.

ACTION: leveRAge pRoduCtIvIty

And InnovAtIon netwoRks.

Initiatives that help Alberta businesses access

knowledge and resources are essential in developing

the leadership capabilities, process improvements,

and investments in machinery and equipment that

will enhance innovation and productivity.

This includes the work o prcii Ara11,which oers a variety o resources, including an online

diagnostic tool that owners and managers can use

to assess productivity.

Alberta Advanced Education and Technology has also

made improving innovation perormance a priority,

through itsAci pa: brii tc mar,

and the creation o theAra Ia corporations.

The Competitiveness Council welcomed eorts to develop

Albertas innovation and productivity connections.

Alberta needs to maximize use o the resources

and networks these organizations are providing.

To compete, Alberta companies will need

to reignite the entrepreneurial spirit for

which they have long been known.

11 Inormation about Productivity Alberta can be ound at:

http://www.productivityalberta.ca/


24/52


TRANSPORTATION, INFRASTRUCTURE,AND ACCESS TO MARKETS

Alberta companies depend on access to high-quality and

reliable transportation systems to enable the fow o people,

goods, and services. The age and extensiveness o Albertas

transportation and inrastructure is a competitive advantage.

The Government o Alberta has built on this advantage inrecent years by placing strong emphasis on inrastructure.

Signicant investments have been made to provincial

highways and major corridors to increase eciency,

including the development o ring roads around Calgary and

Edmonton and twinning o Highway 63 to Fort McMurray.

Important public inrastructure investments are also

being made in the schools and hospitals our province

needs. Alberta continues to lead all Canadian provinces

in government inrastructure investment per capita.

Electricity transmission and supply is another

inrastructure issue o great concern to Alberta industries.

To be competitive, Alberta companies require stable,

reliable and cost-competitive electricity supplies. Critical

electrical transmission upgrades are needed i Alberta isto continue to grow and prosper. Albertans have many

strong views on these issues, and they all have a stake

in the outcome. Alberta needs a transmission plan that

includes staging o inrastructure investments, strong

oversight, and best practices in tendering contracts

to minimize uture increases in electricity costs.

An unchangeable reality acing Alberta businesses is the

provinces geographical distance rom major markets.

Consequently, total transportation costs aced by Alberta

companies are generally higher than those aced by

companies in comparator jurisdictions, particularly the

United States.

However, when considered on cost-per-mile basis, it has

been ound that the primary modes o transportation

trucking, rail, and a combination o surace transport

and ocean containerization oer generally competitive

rates. As a proportion o the total value o delivered cost,

transportation costs do not dier widely between Alberta

and other jurisdictions, and are not a signicant source

o competitive disadvantage.

Maintaining and enhancing Albertas transportation

and inrastructure will be critical or supporting Albertas


Trucking is the key mode by which Alberta manuacturers

obtain access to North American markets. Rail is an

important mode or the movement o bulk goods, while

air service is used mainly or high value or time sensitive

products. Industry and government will need to work

together to enhance the eciency and accessibility

o these major modes o transport.

One key opportunity is to harmonize trucking regulations

across Canadian provinces and along Albertas major

trade corridors in the United States. Dierences in

these regulations orce shippers to conorm to the

most restrictive regulatory regime, undermining the

ability o Alberta shippers to reach key markets. Greater

standardization o weights and congurations that

are similar to Albertas current system, including the

use o long-combination vehicles, will improve the

competitiveness o Albertas exporters.

There are also opportunities to enhance rail service.

While rail services available to Alberta shippers aregenerally satisactory and have transit speeds competitive

with U.S. railways, there is room to improve weekly

consistency and service reliability. Federal legislation

proposed in March, 2011, into which the Alberta

government provided input, would oer shippers new

measures aimed at improving the perormance o the

entire rail supply chain. Industry and government will

need to continue advocating or rail service improvements.

Improvements to air service are also a priority. Industry

and government must continue to urge the ederal

government to move orward with negotiating Open

Skies agreements. These agreements would improve

access to air transportation options or Albertans and

Alberta businesses.

Maintaining and enhancing Albertastransportation and infrastructure will

be critical for supporting Albertas



25/52


Long-term planning will also help ensure Alberta

businesses benet rom ecient and reliable

transportation services and inrastructure. Alberta

Transportation is developing a 40-year strategic transit

transportation plan. This plan will guide investments

or the provinces economic and social growth in an

environmentally sustainable way.

Enhancing transportation will improve Albertas accessto international markets, which must be a priority or

both industry and government.

Currently, Albertas economy is highly dependent on U.S.

markets. Recent U.S. economic weakness demonstrates

how this situation poses economic risk to our province.

Market diversication is just as important as product

diversication. From a competitive standpoint, it makes

sense or Alberta to have several sizeable customers or

its goods and services. With some o the worlds largest

and most diverse markets, Asia presents a signicant

growth opportunity or Alberta businesses.

With the enactment o theAia Air Cci Ac,

the Alberta government has signalled its commitment

to establish Albertas linkages with Asia, including

priority markets such as India and China. Industry will

have an important role in helping build and leverage

those linkages to bring about new and greater economic

opportunities or Albertans.

As Alberta seeks to expand its linkages with Asian

markets, the ports o Vancouver and Prince Rupert will

have increased importance. It is in the national interest

that western Canada has improved port capacity

whether by pipeline or rail which will open the door

to Asias rapidly growing markets. Alberta must continue

to work with British Columbia and Saskatchewan through

the New West Partnership to enhance the ability o

western Canadian rms to get their products to Asian

markets using the Asia-Pacic Gateway inrastructure.

ACTION: move hIgheR densIty modules

to AlbeRtA oIl sAnds pRojeCts.

As Albertas energy production has shited increasinglyto capital-intensive oil sands projects, heavy construction

has become routine in the Athabasca oil sands area.

Most o the modules used in the construction o oil

sands projects are abricated in the Edmonton region

and shipped over the provincial highway network.

However, there are concerns that resource developers

will be nancially enticed to abricate modules oshore

and ship them to the oil sands via the United States.

This creates additional challenges or Albertas industry.

Currently, weight limits or the transportation o modulesin Alberta are set at 345,000 pounds. However, much

o the existing inrastructure along Albertas main

high-load corridor north o Red Deer may be able

to accommodate weights o up to 500,000 pounds.

In act, loads that are heavier than current limits are

oten shipped along this corridor when they are

deemed indivisible. Alberta Transportation permits

these shipments on a case-by-case basis.

A heavy module has the same dimensions as a standard

module, but can accommodate up to 155,000 additional

pounds o weight. The use o heavy modules allowsor design optimization and reduces the total number

o modules required. These improvements also will

minimize the labour required in the eld, improving

worker saety by shiting construction processes rom

the eld to the abrication yard. This can reduce overall

project costs by up to 5 percent. In the context o

multi-billion dollar oil sands projects, these savings

are signicant.

This presents an opportunity or Alberta to establish a

competitive advantage in transportation and inrastructure.

An assessment o the heavy module corridor rom the

Edmonton region to oil sands projects will be undertakento determine the easibility o increasing module weight

limits rom both an inrastructure and saety perspective.

REGULATORY COMPETITIVENESS

Regulation is essential to a well unctioning economy,

promoting environmental sustainability, and creating

a sae and just society. But outdated, duplicative,

and uncoordinated rules can impose unnecessary

compliance costs. For business and industry,

this can lower eciency and productivity, resulting

in competitive disadvantages.


26/52


Eective regulatory systems are those that achieve

public interest goals in an ecient and aordable

manner. There are many ways to achieve this,

including: minimizing compliance costs or business,

developing evidence-based policy, and enhancing public

understanding o the law. Improving the way regulations

are developed and managed are among the best ways

that governments can promote economic development,

investment, and trade.

The Government o Alberta has a long-standing

commitment to a government-wide regulatory reorm

program ocused on producing the desired outcomes

in an ecient manner. This approach places a strong

emphasis on the ongoing review o regulation to assess

the impacts o regulation on stakeholders, including work

towards burden reduction.

The reorm program includes the use o sector-specic

reviews. The Regulatory Enhancement Project12,

or example, is pursuing enhancements to Albertasregulatory ramework or oil and gas. The goal is

to develop a regulatory system that will protect

the environment and public saety and support the

conservation o Albertas resources, while ensuring our

province is one o the most attractive places in North

America in which to invest in energy development.13

In instances where there are multiple regulators in

a single sector, opportunities exist to improve the

coordination and consistency o regulations. With

respect to trade and investment, Alberta is pursuing

better regulatory co-operation through several initiatives,

including the New West Partnership Agreement betweenAlberta, British Columbia, and Saskatchewan.

There are also opportunities to work with municipalities

in a similar ashion to support competitiveness. While

each municipality must have the ability to pursue local

approaches that refect local needs, priorities, and

issues, there is considerable benet in strengthening the

consistency o approaches. This would provide greater

predictability or business and urther support Albertas


Improving the eciency and eectiveness o regulatory

rameworks is an ongoing process, and work is aimed

at pursing regulatory improvements that encourage

long-term competitiveness and quality-o-lie results

by ocusing on the outcomes o regulation.

Industry also plays an important role here. Companies and

industry groups can participate in the process to help bring

about greater eciency and eectiveness by identiyingspecic areas where regulatory complexity or conusion

is hampering competitiveness.

ACTION: estAblIsh meAsuRes to RegulARly

Assess AlbeRtAs RegulAtoRy peRfoRmAnCe.

The Government o Alberta is improving the eectiveness

and eciency o Albertas regulatory environment

through a quality-based approach.

Comprehensive measures are needed to assess and

validate regulations as eective and ecient and

to understand how these eorts support Albertas

competitiveness.

For several reasons, regulations vary signicantly rom

one jurisdiction to another. Consequently, it is challenging

to compare a given set o regulations against those o

another jurisdiction.

More useul and meaningul measures are those that can

be used to assess improvements in Albertas regulatory

ramework over time, as a result o specic reorm

initiatives. Examples o measures include: A quality-based assessment o regulatory

impact analysis;

Estimations o direct compliance costs to businesses

rom regulation; and

Indicators such as the World Bank Doing Business

Indicators, which consider the requirements applying to

small and medium businesses through their lie cycles.

Perormance measures or evaluating regulatory

quality will guide work to enhance Albertas regulatory

competitiveness, and will be examined as part o the

Alberta Competitiveness Councils benchmarking eorts.

12 Inormation about the Regulatory Enhancement Project is available athttp://www.energy.alberta.ca/Initiatives/RegulatoryEnhancement.asp

13 The Regulatory Enhancement Project did not include an examination

o First Nations consultation processes. The Government o Alberta

is currently engaged with First Nations in a review o Albertas First Nation

Consultation Policy on Land Management and Resource Development

and associated guidelines and is committed to consulting with First Nations

in accordance with this policy. The government is committed to ullling

its legal obligations to First Nations.


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Agriculture Grains and Oil Seeds


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AGRICULTURE GRAINS AND OIL SEEDS

Albertas armers are stewards or 52.1 million o

Albertas 157.7 million acres o land. They produce

massive exportable volumes o wheat, malting barley,

canola seed, eld peas, and oats. Some have also

diversied into dierentiated products such as small

grains and organic grains. Under this initiative, the taskteam has ocused on the grains and oil seeds sector.

There are signicant economic opportunities ahead or

Albertas grains and oil seeds sector. Estimates suggest

the worlds population will increase to about 9.3 billion

people by 2050, up rom about 6.9 billion in 2010,

led by growth in developing countries.14 Over the next

ew decades increasing prosperity among consumers,

particularly in developing and emerging economies such

as China and India, will lead to rising demand or imports

o ood and agricultural commodities.

These developments will mean new customers and risingdemand or grains and oil seeds products. To capitalize

on those opportunities, however, Albertas grains and oil

seeds sector must continually enhance its competitiveness

through research and innovation; market access and

market development; rural renewal; and improved policy,

regulatory, and institutional systems.

Some o the actors that aect the grains and oil

seeds sector, such as transportation and regulatory

competitiveness, are not restricted to the sector and

can be addressed in a broader solution. There are also

a number o sector-specic issues (discussed below)

that require attention. The Council has identied anumber o actions to address these issues enhance

Albertas competitiveness in grains and oil seeds.

AGRICULTURAL POLICY

As an area o shared jurisdiction, agriculture policy is

set by both the ederal and provincial governments.

National policy rameworks in the area o agriculture

are established through negotiation between the

ederal, provincial, and territorial governments and

implemented through a series o agreements between

the governments. The ederal government partially unds

the costs o these agreements and demands a certain

degree o comparability in agriculture programs and

services between jurisdictions. Alberta and some other

provinces have negotiated some regional fexibility

in the design and delivery o their programs.

Despite this collaborative approach and policy evolution

since the mid-1990s, certain areas o agriculture policy

remain challenging. For instance, the bulk o government

unds remain devoted to income stabilization programswhich are not particularly eective. By comparison,

insucient attention is being paid to areas such as

research, inrastructure, skill enhancement, and business

adaptation, which are needed to enhance the sectors


14 United Nations Population Division.

Summary statistics grains and oil seeds

2005 2006 2007 2008 2009 Average

Farm Cash Receipts

($ billions)

2.8 3.1 4.2 6.2 5.3 4.7

# o Employees

(thousands)*7.7 8.3 7.9 9.0 10.0 8.6

% o Alberta GDP 2.6 2.2 2.2 2.6 2.1 2.3Value o Exports

($ billions)

2.1 2.7 3.4 5.3 4.7 3.7

* Excludes milling


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Federal legislation and policy concerning the marketing

o wheat and barley continues to present a major barrier

to industry competitiveness. Alberta producers and

shippers o wheat and barley products should be ree

to sell their grain and products to whomever they wish,

including the Canadian Wheat Board i they so choose.

Individual armers know what is best or them to maximize

returns, and must have the reedom to engage and tradewith customers in domestic and international markets

on their own terms. The success o Alberta producers

in growing and marketing canola, pulses, and oats

all non-board crops demonstrates that marketing

choice would enhance Albertas competitiveness

in wheat and barley.

ACTION: ContInue to suppoRt mARketIng

ChoICe foR wheAt And bARley.

While there are no easy solutions to the challengeo ederal marketing restrictions in wheat and barley,

the issue remains a priority or Alberta.

The Government o Alberta will continue to work with

the Alberta Grains Council to advocate or marketing

choice or Albertas wheat and barley producers.

The government will utilize every avenue and

opportunity available to it to consult and coordinate

eorts with other western provincial governments

and the ederal government to advance the Marketing

Choice le so Alberta armers are able to sell their grains

to whomever they choose.

ACTION: Adopt And AdvAnCe polICIes thAt

enAble A moRe CompetItIve And InnovAtIve

IndustRy.

In terms o general agricultural policy, the Government

o Alberta will advocate or policies and programs that

will enhance the sectors long-term competitiveness

through ederal-provincial negotiations. The current

ederal-provincial agriculture agreement, called gri

frar, expires in 2013. Negotiations are under way

or its replacement, gri frar 2.

The Competitiveness Council supports Alberta

championing a negotiating position calling or policies,

programs, and services important or the industrys

long-term competitiveness. This includes:

Strategic emphasis on programs aimed at

research and innovation, market access, business

development, ood saety, crop and animal health,

and environmental stewardship, which will help thesector adapt and compete in the long term;

Within the

Documents

Competitivness Council Moving Alberta Forward