Alberta is falling behind in the race towards the new knowledge-based economy, say proponents of the province’s expanding biotechnology industry.
If greater tax incentives aren’t forthcoming, they say, this province will continue to be passed over by companies looking for a more favorable economic climate.
The Alberta Advantage — which includes the recently-announced $1 billion in business tax cuts starting this spring — still needs tweaking to attract and retain top knowledge workers, particularly in the ultra-competitive biotechnology fields, says Myka Osinchuk, executive director for BioAlberta, an advocacy group for the more than 50 biotechnology-related firms in the province.
“Alberta has had a traditional, resource-based economy. And what we’re looking at now is a shift from the resource-based economy to the knowledge-based economy,” she says. “We’ve got an opportunity to make the shift if we can keep the talent . . . and we are losing it.”
Biotechnology can include any manipulation of biological processes to produce new medical, agricultural and consumer products. Modern biotechnology includes genetic engineering, cloning and other technologies.
Alex McPherson, president and CEO of Biomira, a publicly traded Alberta company specializing in the development of therapeutic cancer vaccines, says both municipal and provincial levels of government in Alberta could be doing more to nurture new-economy growth in this province — like helping attract and develop the lucrative manufacturing side of the biotech business.
“We have a government now under Ralph Klein that says: ‘Government is not in the business of business. There has to be a level playing field,’ ” McPherson, a former deputy minister of health in Alberta, told a recent bioindustry conference in Calgary.
But such a policy allows other provinces to surge ahead of Alberta in offering a honeypot of incentives. McPherson notes Quebec provides “enormous” tax advantages for knowledge workers, including a two-year tax holiday and a writeoff of 61 cents of every dollar invested in research and development.
A recent report by a coalition of national business and financial leaders warned all of Canada is at risk of losing young technology starts to the higher salaries and lower tax levels in the U.S.
“We’ve become very complacent,” argues McPherson. “This province has provided substantial, if not leading-edge infrastructure through educational systems and science and technology granting programs. But there’s a massive gap between the sort of thing done at a research bench and even at the chemical trial bed in a hospital, and the commercialization and manufacturing of product for worldwide markets.”
Alberta is fifth in the country in new growth in the bioindustry sector, behind Quebec, Ontario, Saskatchewan and British Columbia, after being a leader in the early 1980s, confirms BioAlberta’s Osinchuk.
While praising the provincial government for its support of research and development funding, Osinchuk echoes McPherson in saying Alberta has been slow to support commercialization of its bioindustries.
Low taxes don’t necessarily benefit these type of high-tech companies in the short term, she says, as most won’t see any revenues for the first seven to 10 years.
What will catch their attention are the instant incentives like those dangled in other provinces and several American states, including research parks, incubator facilities and lease incentives for new companies to set up shop.
