2. 1 The Rise of Western Canada Presented By: Jason Clemens, Director Fiscal Studies and the Centre for Entrepreneurship & Markets

3. 2 Economic Prosperity Takes Hold in Western Canada

4. 3 Economic Prosperity Shifts West: Economic Growth (2006)

5. 4 Economic Prosperity Shifts West: Economic Growth (2007)

6. 5 Economic Prosperity Shifts West: Economic Growth (2008)

7. 6 Real GDP Per Capita (2005)

8. 7 Economic Prosperity Shifts West: Employment Growth (2006)

9. 8 Economic Prosperity Shifts West: Employment Growth (2007)

10. 9 Economic Prosperity Shifts West: Unemployment Rates (2006)

11. 10 Economic Prosperity Shifts West: Unemployment Rates (2007)

12. 11 Economic Prosperity Shifts West: Gross Business Investment (2001-05)

13. 12 Gross Investment vs Expected (2005)

14. 13 Gross Investment vs Expected (2005)

15. 14 Interprovincial Migration (2005)

16. 15 Prosperity in Western Canada  strong GDP growth  increasing per capita incomes  strong employment growth (job creation)  low unemployment  attracting investment & people

17. 16 Investment & Economic Development: Secret of Success of the West

18. 17 Two Approaches to Economic Development  competitive tax rates  incentive-based tax structure  cost-effective regulations  adequate infrastructure  broad-based free trade  optimal government  preferential tax rates  subsidies & other support  asymmetric regulations  targeted free trade  expanded role for government Create the Right Environment ActiveParticipation

19. 18 Size of Government: Pillar 1  Size of government compared to the economy matters.  Western provinces have succeeded in reducing the size of government.

20. 19 Provincial-Local Government Spending as a Share of the Economy (2005)

21. 20 Federal Government Spending as a Share of the Economy (2005)

22. 21 Total Government Spending as a Share of the Economy (2005) Includes federal, provincial, and local government spending.

23. 22 Provincial-Local Size of Government (1990-2005)

24. 23 Taxation: Pillar #2  The amount we collect (burden) matters.  The manner in which we collect it (mix of taxes) also matters.  Consensus in the West for less and better taxes.

25. 24 Western Canada: Reduce and Reform Personal Income Taxes  BC (2001):  25% across-the-board reduction  AB (2000):  Canada’s only single rate tax  SK (2001):  reduced rates and increased the thresholds at which they apply

26. 25 Western Canada: Where We Stand 25% 20% 15% 10% 5% $30,000$60,000$100,000 Federal SK BC AB

27. 26 Western Canada: Reduce and Reform Business Taxes  BC (2001):  CIT reduced from 16.5% to 12.0%  Eliminated general CCT  AB (1999):  CIT reduced from 15.5% to 10.0%  CCT completely eliminated  SK (2006):  Reducing CIT from 17.0% to 12.0%  Eliminating CCT for most firms

28. 27 Provincial Investment Climate Report  Based on 6 years of survey data (1998-2004) of money managers  Includes 7 sections:  Corporate income taxes;  Fiscal prudence;  Personal income taxes;  Infrastructure;  Corporate capital taxes;  Labour regulation; and  Regulatory burden

29. 28 Provincial Investment Climate Index: 2006 Results

30. 29 Free Trade: Pillar #3  April 28 th, 2006 – TILMA  Free trade agreement between AB and BC covering products, services, investment, and labour  Fundamental improvement on previous agreement (AIT)

31. 30 Rise of the West: Not Just Commodities…Smart Policies  Smaller, focused government  Incentive-based tax relief (personal and business)  Regulatory streamlining  Reduced government sector  Free trade