EDMONTON – Alberta’s NDP government has scrapped a plan that was intended to create up to 27,000 jobs this year by rewarding businesses that hired new employees.
The incentive program once hailed by Premier Rachel Notley planned to offer tax credits worth $89 million in the first year for businesses putting new people to work.
Hiring was to be encouraged by refunding 10 per cent of each new employee’s salary to a maximum salary of $50,000.
Economic Development Minister Deron Bilous said employers in the business community just didn’t like the idea.
“In response to a great deal of feedback, we have decided not to proceed with the Job Creation Incentive Plan,” Bilous said in a speech Monday.
The two-year program was to be launched this spring and could have cost the government up to $178 million in total.
Bilous said the NDP will introduce a new plan in Thursday’s budget that is to include $10 million to support innovation and job creation in Calgary and Edmonton.
Alberta’s unemployment rate this spring is just over seven per cent due to thousands of job losses in the slumping energy sector.
Ken Kobly, president of the Alberta Chambers of Commerce, praised the government for listening to the business sector.
The NDP plan would not have been effective, he said.
“The point we were making is businesses will hire when they need staff,” Kobly said. “The important thing to do right now is to get the economy moving _ that will create your jobs for you.”
The organization represents 128 chambers of commerce representing 24,000 businesses.
Kobly said the chambers have also told the government they are concerned about the next step in the NDP’s plan to raise Alberta’s minimum wage to $15 an hour by 2018.
It was increased to $11.20 from $10.20 an hour last October.
The government hasn’t indicated how much the minimum wage is to increase this year.
Kobly said it’s hoped the government will delay an increase or make any change modest enough for hard-pressed businesses to absorb.
“We have an economy that is in the tank right now,” he said.
“As far as creating jobs, look at the cumulative effect of every change that you make in the upcoming budget as it affects business.”
Notley first promised a job creation tax credit scheme one month before the May 5, 2015, provincial election that swept the Progressive Conservatives from power. Her government included the plan in last October’s budget.
Grant Hunter, jobs critic for the Opposition Wildrose, said the New Democrats could have saved themselves a lot of trouble if they had consulted the business community before announcing the plan rather than afterwards.
Hunter said the Opposition is pleased the incentive has been spiked.
“It is fantastic. I’m glad.”