The Alberta Party’s Big Idea Night (and new brand)

By Mack D. Male · May 27, 2011 at 11:02pm

Earlier today the Alberta Party unveiled its new logo and brand package. I’ll admit that I wasn’t an immediate fan of the new logo. Putting speech bubbles inside the provincial shield feels more obvious than clever, at least at first blush. I’ve been thinking about it though, and I actually kind of like how direct it is. The logo conveys its message in a clear and very to-the-point fashion. And I do have to admit that the speech bubble element itself is rather smart, as Chris pointed out:

My favourite part of this brand strategy, is the “Speech Bubble”. The pull-apart element of the logo will become part of how our supporters will be able to make this brand their own. The number of ways that this can become personalized to each member, constituency association, community or neighborhood, are endless.

As I descended the steps at the Shaw Conference Centre tonight on my way to the Big Idea event (I attended as media), I passed a number of volunteers wearing black tee shirts featuring the new visual identity. Set against a dark background, the new logo is definitely attractive. The fonts used are Avant Garde Gothic Bold and Book.

Here’s how the Big Idea Night was described on the Alberta Party website:

Join us for an evening of fast-paced, fun, thought-provoking and inspiring presentations from our members, supporters and friends. Do you have a great idea for our province? An innovative way of doing something? A vision for Alberta in 20 years?

Think “mini-Pecha Kucha”. Each speaker got five minutes to share their “big idea” with no time for questions (but plenty of time for networking afterward). The speakers tonight were, in order of appearance:

Dennis Lenarduzzi – Logo
Everett Smith – Vision 2031: Rewarding civic duty & community service
Danielle Klooster – Community culture by design: Penhold on purpose
Connie Jensen – A few tips for a proactive campaign
Lisa Maria Fox – Brining public to policy
Glenn Taylor – This is my voice
Jesse Row – My big idea
Wade Ferguson – Welcome to Vermillion: accelerating innovation in sustainability

It just so happened that one of the first people I ran into at the event was Dennis Lenarduzzi, Associate Creative Director at Red The Agency. He’s the man behind the new logo, and he shared with me that he was particularly excited to see people using the logo in new ways already. He was also the first presenter tonight, and I thought he did a great job discussing the “common ground. common sense.” slogan and other new brand elements. He emphasized that the logo is for all Albertans, not just the Alberta Party.

Dennis Lenarduzzi

Everett Smith talked about his vision for Alberta, and focused on volunteers. He suggested adjusting taxes to reward Albertans that volunteer. Danielle Klooster talked about community culture, and had an intriguing slide labeled “Bad Stuff in the ‘Burbs”. Connie Jensen suggested Alberta Party members should organize their own “Concerned Citizens for Democracy” groups. She also said she wants to see 40+ seats go to the Alberta Party or she’ll be disappointed! Lisa Maria Fox talked about policy and the public, and spent a bit of time discussing deliberative democracy, crowdsourcing, and other ideas. Glenn Taylor started off by talking about Shane Koyczan and how his poetry slams had inspired him, then he left the stage while he showed a video of Koyczan’s “This is my Voice”. Jesse was a good speaker and had some interesting ideas, such as an American Idol or Star Search-like competition for selecting candidates. Finally, Wade (who’s last name I didn’t catch) talked about Vermillion Canada.

Remember I said to think mini-Pecha Kucha? Tonight reminded me of PKN in both style and content. There was definitely a range of presentations – from solid, on-point ones like Dennis’ to totally-ignoring-the-concept ones like Glenn’s to pitches like Wade’s. I didn’t feel overwhelmed with big ideas. In that respect, I found the evening a little disappointing. Of course it takes guts to get up in front of a crowd and talk for five minutes, so kudos to the presenters for that.

That said, what other political party is embracing this kind of approach? It may not have been perfect, but the Alberta Party’s Big Idea Night is exactly the kind of thing I’d like to see more of. I hope they do it again (after learning from tonight’s experience, of course).

Tonight’s event was the kickoff for the Alberta Party Leadership Convention which takes place all day tomorrow at the Shaw Conference Centre. You can learn more about the candidates here and you can follow along on Twitter using the #abpleader hashtag. You can see the rest of my photos from the evening here.

@AlbertaTheatre – Social Media and the Artist/Patron Relationship

By Mack D. Male · May 3, 2011 at 1:00pm

Late last year, Wil Knoll and I were asked if we’d like to share some thoughts on the evolution of artist-audience interaction for All Stages, a magazine published three times a year by Theatre Alberta. We both agreed, and early this year set about writing it. We ended up having a conversation through email, which Wil turned into the final piece (I think he did a great job of editing it).

We discussed why and how we started using social media in connection with the arts, looked at the current situation in our respective cities, and touched on where things are going.

Here’s an excerpt from Wil:

Wil: The resistance seems to be fading away. In Calgary the major theatre companies and all of the top independent theatre companies have joined up on Twitter. How well they use that opportunity varies. Alberta Theatre Projects won a blogging award last year for their efforts to invite people into the process and behind the scenes. It’s hard to find a theatre company that is not taking a stab at social media in Calgary today.

And here’s my closing statement:

Mack: Gone are the days of the passive theatregoer, who takes in a show, perhaps reads a review in the local paper, and moves on. The tools we have now allow for the theatre patron to be engaged at all stages of a production. Gathering feedback, promoting upcoming events, reaching a demographic not normally tuned into theatre, all of this is possible with the tools. Today arts organizations still have the opportunity to lead the way with using these tools—they are relatively new and continually evolving. In the not too distant future however, patrons will demand it, and organizations will have no choice to but to engage.

That more or less sums up how I feel about the topic! What do you think?

You can read the article on page 4 of the Spring 2011 issue (PDF).

Roundup: The Royal Alberta Museum is moving downtown

By Mack D. Male · April 8, 2011 at 2:15pm

It’s amazing how big news can just seemingly drop from the sky sometimes! Yesterday’s big announcement here in Edmonton was that the Royal Alberta Museum will be rebuilt downtown:

A new comprehensive Royal Alberta Museum will be built in downtown Edmonton starting this year, featuring twice as much gallery space, direct connections to public transit, proximity to the Arts District, and the ability to host major international exhibits and rare artifacts. The new museum will be equipped to showcase both Alberta’s history and its natural wonders, and will be free of the limitations of the current museum site.

The new museum is expected to cost $340 million and is set to open by 2015. Budget 2011 includes $180 million over the first three years of the project, which includes $30 million from the Federal government. Here’s a rough rendering of the building:

For a better look, check out this video from the Province introducing the new concept:

Here’s where the site is located (click here for Street View):

View Larger Map

Lots has been written/recorded about the project already. Here are some of the things I have come across that are worth checking out.

From the Edmonton Journal:

The current museum will stay open for the next four years. Discussions are just starting on what to do with the old museum and the rest of the property in Glenora, although a portion will eventually house a new residence for the lieutenant-governor.

“Right now, I can tell you it’s not going to be condos,” Alberta Culture Minister Lindsay Blackett said. He said it’s “very unlikely” the land will be sold to private developers.

From the CBC:

Stelmach said the museum land could be the future home of the Edmonton terminal for a high-speed rail line to Calgary. Land for a Calgary station was purchased in 2007.

Paula Simons picked up on that as well at The Edmonton Commons and added:

There’s no denying the real attractions of this site. It would be accessible by LRT – especially if the city were to “activate” the dormant LRT stop, known as Future Station, that’s already roughed in under the Brownlee Building. It would be linked to the existing pedway system. It would be a block east of that proposed arena and entertainment district, assuming such a thing actually comes to be built. It would be a way to push attractive development into the Chinatown/Boyle/McCauley area. It would make the Churchill Square/City Hall precinct a true arts centre. And it would be a fabulous companion to the AGA – a tourist draw in the heart of the city core. It might also help to give impetus to develop on the Station Lands site directly to the north – and even integrate with possible plans to turn Mary Burlie Park, just to the north of the proposed RAM site, into a Chinese garden and cultural centre.

From Global Edmonton:

The decision to move to a new location was made because of size constraints at the old location, and because the construction process would have forced the museum to close for a significant amount of time while the construction was in progress. As a result, the province says the cost to build on a new location will be less than the cost of trying to redevelop the old site.

From CTV Edmonton:

This spring, a competitive bidding process will seek out a private sector consortium to design and build the new facility.

Finally, while I like the spirit of David Staples’ latest column, it’s unfortunate that most of the words are dedicated to the arena, not the RAM. Still, it is great news for downtown!

What else have you come across that is worth sharing?

Still Trending Down: Computing-related graduates in Alberta

By Mack D. Male · March 15, 2011 at 7:49pm

If we’re serious about shifting the Alberta Advantage, I think we need to focus on technology. If we really want to be in the sweet spot of adding lots of value, participating in the economy of the future, and being globally competitive, we need smart people who can be creative and innovative in the appropriate sectors and industries. Technology is absolutely going to be at the heart of any sector or industry that will enable us to be world-class and trendsetting, there’s just no question about it.

That’s why this graph absolutely shocked me:

The data comes from the University of Alberta, but I think it is representative of the province as a whole.

The number of students graduating in the fields of Computing Science and Computer Engineering in Alberta is trending downward, with no correction in sight. How can we build the economy of the future when the picture looks like this?

Here’s a bit more detail – with the number of graduates broken out by degree/program:

I haven’t looked, but I suspect enrollment numbers would be similar (that is, I don’t think an incredible number of students register in computing-related programs and then switch out).

Bill Gates has been talking about the need for more students to take up computer science for years now. There’s more demand than supply, even when you factor in immigration. The need for us to stay competitive in this regard is well-documented. It looks like we’re falling further behind.

I don’t know what the answer is. I don’t know how we get more students interested in computer-related degrees. But I do think it is important to consider this data when we talk about the success of our provincial technology sectors, and indeed when we consider shifting the Alberta Advantage.

Economics and more with John Rose, the City of Edmonton’s Chief Economist

By Mack D. Male · January 13, 2011 at 4:30pm

John Rose moved to Edmonton last May to become the City of Edmonton’s Chief Economist. It’s an important role at the City, though it is one that most people know very little about. I sat down with John last week to chat about his new job and to get his thoughts on Edmonton.

John loved geography when he was younger, and wanted to work in a field where he could apply that passion. He settled on urban planning, but while studying at the University of Toronto, switched to economics. He has been in the field ever since, working for the federal Foreign Affairs department in the 1980s in West Germany and South Korea before returning to Toronto to tackle the consulting business. He most recently worked for PricewaterhouseCoopers.

The move to Edmonton was a unique opportunity for John to combine his interests in urban planning and economics. “I’m interested in what drives the economics of municipalities forward.” He brings an outsider’s perspective to the City of Edmonton, something that initially made him wary. “I thought people would just say ‘here’s another Easterner showing up, telling us what to do’, but people have been very welcoming.”

As the City’s Chief Economist, John is responsible for publishing the reports that the City relies on for budget planning and strategy, among other things. Twice a year he publishes a long-range forecast, using a statistical model of Edmonton’s economy that looks both 3 and 10 years into the future. On a quarterly basis, he publishes City Trends, which provides current information on social, economic, demographic, land development, and transportation trends (here’s the PDF for Q3 2010, the latest to be posted to the website).

The City of Edmonton uses economic models developed by The Centre for Spatial Economics (C4SE). Somewhat surprisingly, Calgary and the Province of Alberta also use models from C4SE. The models can be complex, but John said recent technology improvements are making a difference. “In the 80s, you needed a mainframe to drive even the most simplistic models,” he told me. “Now the tech required is ubiquitous.” While acknowledging that economics is abstract – “you can’t touch the economy” – John said technology is increasingly getting rid of the mystique and mystery.

If you look at the Economic & Demographic section of the City’s website, you’ll find that most of the information is out-of-date. John explained that the transition from his predecessor is the cause, but he said to expect changes. “There’s a lot of value in the information and we want to get it out there, we want it in the public realm.” John noted there currently isn’t a way to notify people when new information is posted, but said an internal effort currently underway should change that. Getting everyone on the same page is a major push for his office this year.

John would also like to see a shift toward more regional forecasting. He works with a variety of organizations outside the City of course, including EEDC, the Chamber of Commerce, and the Finance department at the Province, but sees room for improvement. “We already do regional forecasting to a degree, because we do the CMA and extract a forecast for the City from that.” John noted that most statistics are available at the Census Metropolitan Area (CMA) level, and so it makes sense to look regionally when setting up models. “With a larger economic entity, the trends smooth out a little.” John suggested the Capital Region Board might be the logical place to host a regional forecasting effort.

Speaking of the capital region, John said that while 2011 will be a strong year for Edmonton, “most of the growth will take place outside the City of Edmonton proper.” This is partly because the City itself didn’t suffer as large a setback as a result of the recent downturn. “The manufacturing sector took a big hit in Alberta and Edmonton,” a sector largely concentrated outside the city, such as in the northeast. In a recent interview with the Edmonton Journal, John said we should see an annual growth rate of nearly 4% here in Edmonton.

He was also bullish on the province. “Alberta will be ahead of the national economy as a whole in 2011,” John told me. Again, this is due in part to the way the economic slump affected the province. “The impression is that Canada came through it very well, but the truth is the province didn’t.” In 2011, John expects Alberta to post the first or second best provincial growth rate in the country, depending on how Saskatchewan does.

Turning to individual sectors in the City, John told me that construction will show growth, but mostly due to commercial projects. The residential construction sector will be somewhat sluggish because “there’s just not a big demand for a lot of new housing.” FIRE will do well, but John cautions that increased regulation will have an impact. The retail sector will also grow more slowly this year, because people are reluctant to take on more debt and as as a result savings rates are going up. “The consumer-oriented durable component in particular” will grow slowly according to John, because as people buy fewer houses, the need for new vehicles, furniture, appliances, etc. also diminishes.

John talks about trends and forecasts all the time – he has made it part of his job to do interviews, meet people, and spread the word on Edmonton’s economy. He can rattle the numbers off with ease, and is obviously very knowledgeable. As our discussion shifted toward the city more generally, John became more thoughtful. We talked about the common refrain that Edmonton’s head office situation is dismal at best, and John pointed out that the larger question is how to “attract and retain investment, and talent.” He said we should do “exit interviews” with organizations that leave the City, to try to highlight any cross-cutting themes.

I asked John about the push to revitalize downtown, and in particular, about the City Centre Airport and the proposed arena. He called the ECCA redevelopment a “good move” by the City, because making such a large piece of land adjacent to the core largely residential will have a positive impact on our downtown. “The key to developing a vibrant downtown, is to have people living, working, being entertained, doing all those things, in the core.” He doesn’t think a blanket policy on financial incentives (such as the Railtown subsidy) to attract more residents to downtown makes sense, however. “If there’s an area that we want developed in a particular way, then the City could be come active, but otherwise there’s enough opportunity already.” John didn’t take a side on the arena, but said “it depends on how the development takes place” and said his main concern is that “we don’t want to be in a situation of two competing facilities.” He cited the Air Canada Centre in Toronto and the positive changes and increased activity it brought to the area south of Front Street. “It is very nicely integrated into the city.”

I asked John what he missed about Toronto, and he quickly replied “jazz clubs.” He said while the Yardbird Suite is great, there was more variety with regard to venues back in Toronto. John joked that by moving away from Toronto when he did, he avoided the current political drama that is taking place with new mayor Rob Ford. That led us into a discussion about transit, and LRT in particular, something John considers “the urban equivalent of an enabling technology – if you have it, you can do a lot of great things.” Projects such as the LRT expansion “are a big benefit to the local economy” in the short-term and are “vital for the City’s future,” John told me. The real value to the economy is what the LRT enables, rather than the jobs it directly creates. “If you don’t have mass transit downtown, you’re going to have a hard time developing nightlife, for instance.”

I really enjoyed talking with John (and not just because when I asked him if he was now an Oilers fan he replied, “that implies I was a Maple Leafs fan before!”). Stay tuned to his section of the City’s website for future economic updates.

Shifting the Alberta Advantage

By Mack D. Male · January 12, 2011 at 10:00am

The main thing we talked about yesterday at the ONEdmonton forum was economic development. In addition to breakouts and other discussion, we had two informative presentations that I hope to blog about over the next while. In her presentation on Diversifying Edmonton’s Economy, Tammy Fallowfield, EEDC’s Executive Director of Economic Development, touched on shifting the “Alberta Advantage”. Here’s what her slide said:

Remain relatively low tax
Not a low cost environment
Not a surplus of labour
Not a currency ‘bargain’

I think the phrase “Alberta Advantage” means different things to different people, but traditionally our low taxes, low cost of doing business, surplus of labour, and being attractive to investment, have all been considered important aspects. Here are a few notes on each.

Alberta’s low taxes remain a strength. From the Alberta Competitiveness Council’s 2010 report (PDF, 14 MB):

[Taxes and fiscal policy] represents the area of best performance for Alberta, with moderately low tax burdens for both corporations and individuals and a strong government financial position.

Of all the measures that report looks at, Alberta performs the best (unsurprisingly) in taxes and fiscal policy.

What about being a low-cost environment? From the same report:

Within Canada, business costs in Alberta (Edmonton) are lower than Ontario (Toronto), but higher than in each of the other provinces compared. This result is due to Alberta’s strong economy of recent years, which led to a much higher increase in business costs – especially labour, electricity, and facility costs – than seen in other provinces.

I haven’t yet found a good comparison of business costs with regions elsewhere in the world, so let me know if you come across something. I suspect the picture is not as rosy as it once was.

How about our labour force? All across Canada the population is aging, and that (along with our very low fertility rate) is going to lead to labour shortages. Here’s a graph from Alberta’s Occupational Demand & Supply Outlook, 2009-2019 (PDF), that shows this trend for our province:

There are many consequences as a result of this trend, not the least of which is Alberta’s challenge to attract and retain labour. Our taxes will likely also be impacted – an older population means higher costs for health care, and a slow growing labour force means a slow growing tax base.

Let’s look at the Canadian dollar (compared to the US dollar).

The strength of the Canadian dollar has an impact on foreign investment, among other things. As you can see, the dollar has been quite strong in recent years (aside from the dip in late 2008/early 2009), which may not be a good thing for Alberta.

So if being low-cost, having a surplus of labour, and being a relative currency ‘bargain’ are no longer part of the Alberta Advantage, what does that mean?

This diagram comes from the Institute for Competitiveness & Prosperity, based on a presentation that Professor Daniel Trefler of the University of Toronto gave here in Alberta on October 15, 2009. The diagram was originally used to illustrate the shift that China and India have yet to make.

On the same slide that listed the four points above, Tammy included this diagram. That’s the shift we need to make here in Alberta – from being a strong low-cost competitor, to being a strong innovation-based competitor.

How are we going to do that? By making strategic choices. Here’s (more or less) what Tammy showed next:

Tammy went on to talk about the industries that are important for us to focus on here in Edmonton, and a similar exercise would apply for Alberta. I’m not sure if what I have written above is exactly what she was trying to get across, but that’s how I interpreted it.

What do you think about shifting the Alberta Advantage?

Alberta’s Community Revitalization Levy: Proposed Downtown Edmonton Arena District

By Mack D. Male · December 17, 2010 at 9:00pm

This is the third part in a three-part series on Alberta’s CRL.

In the first part of the series, we looked at Alberta’s CRL legislation, identifying how it works and what the process is for creating a new CRL. In the second part of the series, we looked at Alberta’s three existing CRL projects, to get an understanding of how the funding mechanism has been used in the province thus far. Now we’ll look at the proposed downtown Edmonton Arena District, to see how a CRL might be used for that project.

Introduction

I am by no means the first to write about a CRL in relation to the proposed arena. Last month, Andy Grabia of Why Downtown? wrote a popular post on the proposed CRL. The use of a CRL has been a frequently cited potential source of funding since at least August 2009, but it was mentioned long before that actually. Notably, in the City Shaping: Summary Report of the Leadership Committee for a New Sports/Entertainment Facility for Edmonton (PDF) from March 2008, there’s this statement:

There is precedent in Alberta for the use of a community revitalization levy (CRL) for enabling projects such as this.

At the time that statement was made, the Rivers District CRL (the first in Alberta) was less than a year old. The three current CRLs are being used to revitalize large areas, and they are not centered around any specific development like an arena. Only one of them has received full approval and moved on to full implementation. I don’t think it’s fair to say there’s precedent for the use of a CRL to enable the arena project now, and it certainly wasn’t an accurate statement three years ago.

I point this out, because it seems as though that report has formed the basis of many other related decisions in the intervening years. It treats the CRL as if it is a well-known, well-established funding mechanism, which I don’t believe is true. Certainly TIFs have been used elsewhere in North America, but our context here is different.

What’s the potential?

As we saw in part one, there can be significant upside to a CRL, assuming development does occur and property values do rise. We also learned that there are a variety of factors that can affect this.

That same City Shaping report offered some financial estimates on the proposed arena CRL:

We have estimated the potential for $2.5 billion in additional assessment growth representing $20 million in incremental municipal and provincial property tax revenue annually. This estimate was reviewed for reasonableness by the City Assessor.

Back in February, Gary Klassen, GM of Planning & Development at the City of Edmonton, estimated that $1 billion in investment would generate $14 million a year in taxes.

Given that we don’t have another Alberta-based example of a CRL like the one being proposed for the arena, I asked the Katz Group to help me out. Can we really get the economic lift that proponents of the arena suggest? They pointed me in the direction of Columbus, which is the focus of a case study on their website. Nationwide Arena, home of the Columbus Blue Jackets, opened adjacent to the city’s downtown in 2000, in an area that once housed a state prison. A report published in July 2008 by the John Glenn School of Public Affairs found that the Arena District was responsible for stimulating more than $1 billion in investment:

"This is really a model of ways to use an arena to help revitalize downtowns," said Glenn School professor Robert Greenbaum.

The report suggests that the Arena District had a significant impact on jobs in the area:

An increase of more than 50 percent in the number of businesses in the Arena District since 2000. In addition to the Blue Jackets, the district’s 172 businesses include coffee shops, a movie theater and professional service firms. These businesses employed more than 5,000 full- and part-time workers in 2006, and between 2000 and 2006 they generated $1.46 billion in payroll and $6.13 billion in revenue.

And on property values:

Appraised property values in the Arena District increased by 267 percent between 1999 and 2008, compared to a 22 percent increase in property values for the entire downtown area.

I encourage you to read through the report. Of course, the findings are not without dispute. You can read another perspective on Columbus here.

Hypothetical CRL Boundary

Though the City of Edmonton has been working with a conceptual model for the arena CRL, they haven’t shared it publicly. In response to Council’s questions, they did offer some insight, however. The model includes:

300,000 square feet or retail built over 20 years
370,000 square feet of hotel built over 6 years
95,000 square feet of casino built in the first year
1,500,000 square feet of office built over 20 years
1,800,000 square feet of residential built over 10 years

The model assumes natural assessment appreciation of 3% per year, and a 3% increase in municipal and educational taxes per year.

The model suggests that $160 million in incremental taxes could be garnered, $125 million of which could be dedicated to the arena while the remaining $35 million would go to other public infrastructure.

You can download the relevant spreadsheets in PDF here.

As for the conceptual boundary, which also remains private, the following information was shared:

The boundary includes the Aurora project, which they estimate could generate $4.1 million in tax revenue
The boundary includes a redeveloped casino, which they estimate could generate $0.8 million in tax revenue
The boundary includes the EPCOR Tower, which they estimate could generate $5.0 million to $6.8 million in tax revenue

That shows how much more lucrative commercial development like an office tower can be. There’s a risk, however, in that it is quite likely the EPCOR Tower will be completed before a CRL is approved, which means it would generate very little or no lift in property taxes. Remember the baseline assessment is set to December 31 of the year in which the CRL is approved.

I have absolutely no inside information on what the CRL boundary for the proposed arena district might look like, but here’s a hypothetical example:

View Larger Map

You can see the proposed Edmonton Arena District in the middle (the dark part), and the red is the hypothetical CRL boundary. Why did I choose that boundary? A few reasons:

The hypothetical boundary covers an area of 1.4 square kilometers, which is right in the middle of the three existing CRL boundaries.
The hypothetical boundary includes the Aurora project, as well as the EPCOR tower.
It highlights a risk, that the CRL might be located adjacent or very close to the Quarters CRL, potentially affecting the success of both projects.

We should learn more about the City’s model and boundary when City Council meets on January 17, 2011.

Is the timeline realistic?

The Oilers’ lease at Rexall Place expires on June 30, 2014, and the Katz Group has said it has no intention of renewing that agreement. That gives the project a deadline of less than four years. As we learned in part one, the ideal process for obtaining a CRL takes roughly two years, and in part two, we found out that only the Rivers District CRL happened that quickly. Mayor Mandel recently suggested a decision could be made by April 2011, which makes the window of time to obtain funding and complete construction more like three years. It just doesn’t seem likely to happen. Here’s the response from Administration when asked about the timeline:

The Katz group has identified that if an arena project goes ahead it will happen concurrently with development of an office tower in the district. The expected construction window for both the office tower and arena is 18 – 24 months. This schedule for concurrent development is aggressive. For comparison, the current EPCOR office tower project is scheduled to be constructed over 36 months.

It’s certainly possible that a CRL could be approved in the given timeframe, but rezoning, building permits, design, and all the other elements of construction would likely take more time than is available (given the Katz Group’s deadline).

What are the risks?

In Administration’s answers to Council’s questions, they addressed one of the bigger risks of using a CRL to fund the project – the current economy. The answer notes rising office vacancies downtown and declining lease rates, and goes on to say:

A significant component of the Katz Group proposal is the construction of new office and commercial space. This type of space would contribute considerably to the front ending of a CRL area, however, the current market conditions suggest that there is considerable risk if anchor tenants are not committed to the space before construction. The Katz group intent is to attract new business to the City that currently does not have a place in the market. If this is not possible it may result in existing businesses moving from other parts of Edmonton to the new development.

Another answer gave similar information:

A faster assessment lift would occur if the Katz Group was to construct certain developments (i.e. in advance of natural demand) that could increase incremental taxes within the boundary. Unless new tenants are coming from outside Edmonton that otherwise would not locate here, then these incremental taxes (in advance of natural development) may only reflect a shift in tenants from one area of downtown to the other.

Those answers highlight an issue that Scott Hennig of the Canadian Taxpayers Federation has frequently pointed out – the potential that the resulting development isn’t actually new, and is just a shift from other areas of the city. That would have the side effect of taking taxes that would have been in general revenue and locking them into the CRL. Scott told me:

The only way a new hotel (or bar) will get built next to the arena and not just shift demand is if all of a sudden people’s incomes go up (in aggregate, not just say, construction workers) as a result of the new arena and development and therefore they want to use that money to purchase additional products, or if it can be shown that Edmonton’s population will grow faster as a result of the new development, or if you can increase tourism.

It’s an issue that is certainly worth thinking about. How can you prove that a business located in the area specifically because of the arena? How can you prove it wouldn’t have been built elsewhere in the city were it not for the arena? How can you show that tourism increased as a result? How can you show that the arena caused population to grow faster than it would have normally? All of these things are hypothetical benefits that are difficult to prove in practice.

Scott also made a good comment on demand, in response to a question about the arena potentially inducing a housing development that would not have occurred in Edmonton otherwise:

You can be sure that if there was a demand for additional housing to be built, it would get built. The city didn’t use a CRL in anywhere else in the city and houses, condos, apartment buildings, townhouses and other housing still got built over the past 100 years.

Another risk, of course, is that not enough development takes place over the 20 year timeframe of the CRL, leaving the City burdened with the remaining debt.

Sharing The Risk

Both Mayor Mandel and the Katz Group have repeatedly said they want to negotiate a deal that is fair to all parties involved. More specifically, the Katz Group has said:

We seek a functional partnership with the City and a fair balancing of risk between the parties. Neither the City nor the Katz Group should bear risk disproportionately.

Could that sharing of risk apply to a CRL? We know that an important part of the plan for a CRL is to outline how any potential shortfall would be covered. By default, the City would have to cover the debt out of general revenues, taking on all the risk and potentially impacting the services it provides to citizens. Perhaps the Katz Group and the City could agree to share that responsibility, something that Administration has confirmed is an option:

An agreement can be attempted to be negotiated between the parties with respect to the issue of a guarantee to cover debt servicing if projected development does not occur in the CRL area.

Paula Simons has noted in the past that a similar deal in San Diego took place, but at the time the Katz Group wasn’t interested in such an arrangement. More recently they have indicated that such an arrangement could be a part of any negotiations with the City.

Sharing the risk could also refer to the resulting ownership of the project. It is important to recognize that a CRL is public money. Mayor Mandel has stated that if public funding was used to build the arena, there would be “big time say by the city and citizens.”

Transparency

I think both the City of Edmonton and the Katz Group have done a poor job of informing constituents about the CRL thus far, and I’d like to see them both address that shortcoming.

On the Katz Group’s Answers page, there’s a question about public investment that states:

The Community Revitalization Levy (CRL) is drawn from the enhanced tax revenue from the developments in and around the district. The CRL would pay down the city’s loan and then create a revenue stream in perpetuity.

No introduction or link to more information on the CRL. It’s as if “public investment” and “community revitalization levy” are one and the same, whereas the CRL is just one of a variety of public funding options. The City of Edmonton is guilty of jumping the gun as well. The questionnaire that was made available last month included a question about the CRL, without explaining what it is. Handouts were made available at the open houses that took place, but just 300 people attended those – compared to nearly 29,000 responses for the questionnaire. The City has since added a page on the funding model.

The City’s findings from that public consultation reinforce the idea that more education needs to be done. Participants noted that more study on the CRL is required, and that the “concept is very hard to understand.”

I asked Scott Hennig a bunch of questions about the CRL, and one of his comments in response stood out for me:

Unquestionably, the city can spend tax dollars to make certain locations more attractive, or using zoning laws or their land ownership to make certain types of buildings mandatory, but they don’t need a CRL to do that.

I think it’s really important that both the Katz Group and the City of Edmonton are transparent about what the CRL is, what the CRL is not, and how it might be used.

If Council decides a CRL is appropriate, the process of obtaining it needs to be much more open as well – when did you first hear about the Belvedere or Quarters CRL? My guess is not until the discussion about using a CRL for the arena started. That’s unacceptable, given that public consultation is a key component of obtaining a CRL.

Transparency on this issue moving forward is key.

Two Basic Assumptions

Let’s revisit the “two basic assumptions” we identified in part one. Is the arena project worth the risks associated with using a CRL to fund it? Public opinion on this seems mixed. Some people feel that a new arena is unnecessary and will do little to revitalize downtown. Others think the arena is a game-changer, an important catalyst project (as identified by the Capital City Downtown Plan). The truth likely lies somewhere in-between. As for the second assumption – is there a sound expectation that development will occur as a result of the arena? The fear is that we end up with another City Centre debacle, where additional development was promised but never built. The Katz group did not provide specifics, but did try to reassure Council that additional development will take place:

Our dialogue with our consultants and prospective tenants and partners leaves us with a high level of confidence that we will be able to develop a vibrant entertainment district around the arena. We have had substantive discussions with 6 major hoteliers and the level of interest in placing two hotels in the Arena District is very high. We have nine written Letters of Interest from a variety of international, national and local hospitality and entertainment providers and have had numerous other verbal expressions of interest. We have also had promising discussions with potential anchor tenants for the proposed office towers. We are confident that there will be a market within the District for both student residences and condominiums.

Final Thoughts

In this three-part series, we’ve looked at how Alberta’s community revitalization levy legislation came into existence, we’ve examined the impact it can have, and we’ve identified the process that must take place for a CRL to be approved. We also explored the three current CRL projects in the province. Finally, we’ve taken all of that information and applied it to help us understand how a CRL might be used for the proposed downtown Edmonton Arena District. There are opportunities and challenges associated with a CRL for the proposed project, and I think it is clear that there’s a need for more specific information.

The arena project is a moving target of course. We’ll learn much more about the City’s business model framework as well as their thoughts on the use of a CRL at the January 17, 2011 City Council meeting.

Alberta’s Community Revitalization Levy:

Alberta’s Community Revitalization Levy: Rivers District, Belvedere, The Quarters

By Mack D. Male · December 15, 2010 at 1:30pm

This is the second part in a three-part series on Alberta’s CRL.

Armed with a better understanding of Alberta’s CRL legislation, I turned my attention to the three active CRL projects in the province. What are the projects for? Why is a CRL appropriate for them? What can we learn from the projects that will help us when exploring the idea of using a CRL in the future? That’s some of what we’re going to look at in this post.

To quickly recap the process: there is some back-and-forth between the city and the province in establishing a CRL. First, the Lieutenant Governor must approve the regulation, which includes the CRL boundary. Second, City Council must approve the plan & bylaw for the CRL (and these can be done separately). And finally, that plan & bylaw must also be approved by the province. The three projects we’re going to look at are at different stages of that process.

Calgary’s Rivers District

The first specific CRL regulation to be passed in Alberta was for the City of Calgary Rivers District, back in 2006. The Rivers District project was the catalyst for the MGA amendment that made CRLs possible in Alberta.

City of Calgary Rivers District Community Revitalization Levy Regulation (AR 232/2006)

The Rivers District is the furthest along of all the CRLs in Alberta – everything has been approved and the City is well into implementation. It was 2007 when everything was finally approved, so the baseline for tax assessments would have been frozen to the values on December 31, 2007.

It’s worth pointing out that the CRL is just a small part of a much larger project known as The Rivers:

The vision for a revitalized Rivers district is more than a place to live, it is a lively urban destination.

This map shows the area the project covers, and as you can see, it is quite expansive. The idea is to reclaim the waterfront, and to make the area more desirable for development. In addition to infrastructure upgrades, a new riverwalk is in the works (phase 1 is now open actually).

The CRL boundary is large, but it is a small part of the overall project. Here’s what it looks like (KML):

View Larger Map

The boundary covers an area of roughly 1.9 square kilometers (478 acres).

One of the big advantages to using a CRL for the Rivers District is that the City of Calgary owned much of the land within the boundary. That’s important because it means the baseline assessment for those assets would be zero, and there’s lots of potential for getting some of that all-important lift.

I spent some time talking with Kathleen Young, Development Manager for The Quarters Downtown at the City of Edmonton, and found out that she actually worked on the Rivers District CRL! Her knowledge and experience on that project was one of the reasons that she came to Edmonton. You know what they say, it’s a small world.

Kathleen pointed out that the CRL boundary for the Rivers District includes some key developments, notably The Bow (here’s a photo of the building I took back in July). When finished, The Bow will become the headquarters for EnCana, and will be the tallest office building in Canada outside Toronto. Groundbreaking for the project took place in June 2007, around the same time that the Rivers District CRL was approved, which means almost all of the incremental value realized through the development of the building will be captured by the CRL.

To work on The Rivers, the City of Calgary created a wholly owned corporation called the Calgary Municipal Land Corporation (CMLC). They have some great information on the various aspects of the project if you’d like to learn more. CMLC was actually awarded a Canadian Urban Institute Brownie Award in 2008 for the CRL:

The Canadian Urban Institute’s annual Brownie Award recognizes leadership, innovation and environmental sustainability in brownfields redevelopment across Canada. CMLC won in the category of "Financing, Risk Management and Partnership" for our work in the creation of the Rivers District Community Revitalization Levy Regulation. A "made in Alberta" version of the U.S. Tax Increment Financing (TIF)— which is a widely used financing mechanism for redevelopment of brownfield sites in the United States—provides a sustainable source of funding to finance the significant infrastructure development required in the Rivers District for a 20-year period.

It sure looks like the Rivers District CRL will be a success!

Belvedere (Fort Road)

The first CRL regulation to be passed for Edmonton was for the Belvedere redevelopment project, commonly known as the Fort Road Redevelopment project. The project has been in the works since at least 2000, and has evolved quite a bit over the last decade. It was very much in the works before CRL legislation came into effect.

City of Edmonton Belvedere Community Revitalization Levy Regulation (AR 57/2010)

The Belvedere CRL isn’t quite as far along as the Rivers District, but it is nearly there. Kathleen clarified that the borrowing bylaw (14883) has been approved, but the plan bylaw is still in the works. Armed with the $34,250,000 specified in the borrowing bylaw, the City has undertaken much of the infrastructure upgrades planned for the area.

Here’s the CRL boundary for the project (KML):

View Larger Map

The boundary covers an area of roughly 1.3 square kilometers (324 acres).

A unique element of the Belvedere CRL is that the City owns almost all of the land within the boundary. As a result, when they sell the land all of the incremental value will be captured by the CRL, making it much less likely that the City would have to fall back on general revenue to cover the debt.

The Belvedere project is an interesting one. It is unlikely that development would have taken place in the area without the City of Edmonton stepping in to try to make the area more attractive and desirable. Through that lens, the use of a CRL makes a lot of sense. If you think back to the two basic assumptions highlighted in part one, the Belvedere CRL certainly passes the first – it’s worth the risk.

As for the second assumption – there’s a sound expectation that development will occur – that one is less certain. Especially given the challenging economy, it could be a while before anything substantial happens. Having said that, the first sale of the Station Pointe lands last year for $5.2 million is hopefully a sign of things to come (that project received $481,000 in federal funding in August). The redevelopment project is still in the early stages, and Rick Daviss at the City of Edmonton confirmed that at least a couple new conditional deals are in place, so there’s movement.

There’s more information on the Station Pointe project here – it won a Brownie Award in 2008.

You can find lots of background and other information on the Fort Road redevelopment project here.

The Quarters

The newest CRL regulation to be passed was for The Quarters Downtown, a redevelopment project here in Edmonton previously known as the Downtown East redevelopment. I wrote about The Quarters a couple weeks ago, and I’d encourage you to look at that post to get an overview of the project.

City of Edmonton The Quarters Community Revitalization Levy Regulation (AR 173/2010)

As the newest CRL project, The Quarters has the furthest to go before it is ready for implementation. The province has approved the regulation and boundary, and Administration is now working on the plan and bylaw to present to Council. That will happen sometime in 2011, according to Kathleen. Her team wants to make sure they get it right.

Here is the CRL boundary for the project (KML):

View Larger Map

The boundary covers an area of roughly 0.93 square kilometers (229 acres).

The Quarters is a large plan that will proceed in phases. Once completed, it is anticipated that the area will accommodate a population of nearly 20,000 people, up from less than 2500 today. The project is made up of five distinct districts, the jewel of which is known as The Armature.

An important part of any CRL plan is the way in which the City will cover the cost of the project if enough development does not occur. The default fallback is always general revenue, but Kathleen said they are looking at additional funding sources as well, such as government grants.

Kathleen told me that among other things, some of the CRL money will be used for streetscape improvements, some will be used for land acquisition to consolidate parcels for resale, and lots would be used to develop The Armature. The goal is to make that part of Edmonton a much more livable area, and the redevelopment focus is on residential assets.

As I have said before, it is an exciting project for our city! You can learn more about The Quarters Downtown here.

The project will be an interesting one to pay attention to if you’re interested in CRLs, because there are still a number of steps in the process to go.

Final Thoughts

If you’ve made it this far, you should now have a better understanding of the three active CRL projects in Alberta. You can draw your own conclusions, but a few things I wanted to highlight include:

All three boundaries are similarly sized
Infrastructure upgrades and improvements are a major part of all three projects
In the Rivers District and Belvedere, and to a lesser extent in The Quarters, an important consideration is the amount of City-owned land

I think it is important to look at what we already have when trying to understand how a CRL could be applied to future projects. In the next part of the series we’ll do just that, using the proposed downtown arena as our future project.

Alberta’s Community Revitalization Levy:

Alberta’s Community Revitalization Levy: Introduction

By Mack D. Male · December 14, 2010 at 10:00am

This is the first part in a three-part series on Alberta’s CRL.

Recently I decided to start learning more about Alberta’s Community Revitalization Levy (CRL), and I was initially struck by how little information was readily available. I searched and searched but didn’t find much. Maybe that’s because what we call the community revitalization levy here in Alberta is known as tax increment financing (TIF) elsewhere. It turns out that TIF has been available as a public financing method for more than 50 years! The State of California first used the approach in 1952, and now Arizona is the only state in the USA without some sort of TIF legislation.

Here’s how Wikipedia describes TIF:

When a development or public project is carried out, there is often an increase in the value of surrounding real estate, and perhaps new investment (new or rehabilitated buildings, for example). This increased site value and investment sometimes generates increased tax revenues. The increased tax revenues are the “tax increment.” Tax Increment Financing dedicates tax increments within a certain defined district to finance debt issued to pay for the project.

The idea is to use the “lift” generated by the increased tax revenues to pay for the debt that financed the project.

Alberta’s CRL

In Alberta, this legislation is relatively new. Bill 28 received Royal Assent on May 10, 2005 and amended the Municipal Government Act (PDF) to include Division 4 under Section 381, which enables municipalities to create a community revitalization levy bylaw (which must be approved by the Lieutenant Governor in Council).

Since that legislation came into effect, there have been three CRLs created in Alberta (as far as I can tell): Calgary’s Rivers District, the project for which Bill 28 was created, and the Belvedere (Fort Road) and Quarters redevelopment projects here in Edmonton. You can read more about all three projects in part two.

There are a few key aspects of the CRL to be aware of:

The CRL only applies to a very specific area (the CRL boundary).
The tax revenue that contributes to the CRL is split between the City and the Province.
The maximum amount of time a CRL can exist is 20 years, starting in the year when the bylaw is approved by the Lieutenant Governor in Council.
The Lieutenant Governor in Council can approve a CRL bylaw in whole or in part or with variations and subject to conditions.

And don’t be mislead by the name “levy” – the CRL is a tax as defined in the MGA. It’s a funding mechanism, nothing more.

From my read of the Municipal Government Act, there are no rules or restrictions on the type of area that a CRL can apply to. In theory a CRL works best in an area that is “blighted” but the legislation does not enforce this. This was the case in California as well, until it became clear that the legislation was being abused.

What’s the potential impact of a CRL?

I asked Rick Daviss, Manager of Corporate Properties at the City of Edmonton, to help me understand the CRL. He was very helpful and pointed me in the direction of some very useful information.

The first thing we looked was a hypothetical example of the impact of a CRL. Here’s the situation:

Current use: 2.0 acre parcel of land improved with a 30,500 square foot warehouse.
Proposed use: 2.0 acre parcel of land improved with a high rise residential condo development (proposed density of 265 units (RA9), FAR of 3.0, unit value assessed at $200/square foot).

So we’ve got an old warehouse on some land and we want to replace it with a condo. Let’s look at the assessed value:

Current use: $1,525,000 (this is known as the assessment baseline)
Proposed use: $44,431,200

Which gives us an increase in value of $42,906,200. Now let’s look at the tax assessment:

	Before	After	Difference
2006 Municipal Mill Rate	5.7484	5.7484	–
2006 Municipal Tax	$8,766	$255,408	$246,642
2006 School Mill Rate	3.6182	3.6182	–
2006 School Levy	$5,518	$5,518	$0
2006 CRL	N/A	$155,243	$155,243

The mill rate is used to calculate the property tax, and you can think of it as the amount of tax required divided by the amount of tax available. So if the City needs $2 billion in taxes but only $1 billion can be generated based on the assessments, the mill rate is 2. The property tax is then calculated by multiplying the assessed value by the mill rate, and dividing by 1000. So to get $8,766 in our example above, $1,525,000 is multiplied by 5.7484 and then divided by 1000.

Let’s look at the Before column first. The total tax assessment there was $14,284, and the two bottom rows are N/A because we don’t have a CRL in the before case. Both the City and School taxes are calculated the same way: assessed value multiplied by the mill rate divided by 1000. The province gets $5,518 and the City gets $8,766, all of which goes into what’s known as “general revenue”.

Now let’s look at the After column. The total tax assessment there is $416,169. The City tax is calculated the same as before, but now that we have a much higher assessed value, we end up with $246,642 in increased tax revenue. All of this will go to the CRL. The School tax is broken into two, because only the incremental tax revenue will go toward the CRL. So the $5,518 is calculated the same as in the Before case, and this goes to the province. The provincial part of the CRL is calculated as follows: the increase in assessed value ($42,906,200) multiplied by the mill rate divided by 1000. That gives us the $155,243, all of which will go the CRL.

So now you see why the CRL is such an attractive proposition: it looks like we have $401,885 in new tax that we can contribute to the CRL. And this could happen with all developments inside the CRL boundary. There are a number of caveats, however. The first is that the CRL amount will vary from year to year based on the assessment (which makes the economy and depreciation relevant) and on the school mill rate which also changes from year to year. The second is that the type of development is important – City owned properties are tax exempt, for instance. A third is that the City tax revenues as well as a portion of the School tax revenues are dedicated to the CRL, where they would otherwise have gone into general revenue.

How is a CRL created?

Rick walked me through the process of creating a CRL, and I can tell you it sure doesn’t sound like a trivial task. In the best case, Rick estimates it would take just less than two years from concept through to the start of implementation to make a CRL reality. Here’s a high-level overview of the process:

Those five steps would include, roughly:

Administration conducts background research, identifies the potential boundary, comes up with preliminary revenue estimates, and prepares for and asks Council for approval to make a request to the Minister of Municipal Affairs.
The Minister of Municipal Affairs considers the request and recommends an Order in Council for an establishment regulation. This step also includes some back and forth to establish the area and other parameters.
The Lieutenant Governor in Council considers and approves the Order in Council for the area to be established.
Administration conducts more research, holds public hearings, drafts the proposed bylaw, has it reviewed by all relevant departments as well as the province, and acquires Council approval of the bylaw.
The Lieutenant Governor in Council approves the bylaw.

After all that is done, the CRL can proceed. It makes sense to plan for the Lieutenant Governor in Council’s final approval as close to the start of construction as possible, in order to get the maximum possible time under the CRL legislation.

What are the risks associated with a CRL?

As others have pointed out, a CRL is not a risk-free proposition. There are a number of issues to consider.

What if a project does not lead to an increase in property values and does not result in any new development? In this case, there would be no “lift” to pay down the debt of the project. Rick noted that a plan for this kind of scenario needs to be in place before the province will approve a CRL. It can be as simple as the City swallowing the cost of the project, as long as it can specify how it will be paid for. Another option is for a third party to backstop the plan.

Another issue is the potential shift in taxes. Will the project really result in new development – development that would not have occurred in the city otherwise – or is it merely a shift in development, from areas outside the CRL to the area inside the CRL boundary? How would you know, one way or the other?

A related issue is the decrease in general tax revenue. If the property tax inside the CRL boundary is no longer going into general revenue, what does that mean for the services the City provides? In the worst case, you can imagine the entire City being covered in various CRL projects. That would result in zero general tax revenue and thus no way for the City to pay for the services it provides to citizens. What is the impact of one or two CRL projects? That’s less clear. Same goes for the school taxes. A common concern for many people is that they don’t want their school taxes going toward the CRL instead of schools. Of course, in reality the province doesn’t come up with education programs based on the amount of school tax it receives – tax revenue does go into the Alberta School Foundation Fund, but that money is combined with whatever amount of general revenues the province deems appropriate.

Can a CRL really work?

For a CRL to work, Rick says you need to make two basic assumptions:

The project the CRL would be funding is a good thing, and is worth the risk.
There’s a sound expectation that development will occur as a result.

If you think the project is worth the risk, and you’re confident that development will occur as a result of taking that risk, then a CRL can be a good funding source. Rick highlighted the Belvedere (Fort Road) project as meeting this basic criteria: it’s an area that needs to be redeveloped and it’s unlikely that anything would happen without some initiative by the City, plus there’s a good chance that other development will occur now as a result of the City going in and cleaning things up.

Final Thoughts

If you’ve made it this far, you should now have a better understanding of how Alberta’s Community Revitalization Levy came to be, how it works, and what the potential impacts and pitfalls of the legislation are.

In the next part of this series, we’ll look at Alberta’s three current CRL projects in more detail.

Alberta’s Community Revitalization Levy:

Edmonton’s FIRE Industry: $135 billion and counting

By Mack D. Male · December 6, 2010 at 10:30am

Did you know that more than $135 billion is managed right here in Edmonton? I didn’t either until I heard someone an EEDC event I was at mention it in passing. I’m sure we’ve all heard another Edmontonian gripe about our city’s lack of head offices, about how blue-collar we are, but how many people have mentioned that billion dollar stat? Not many is my guess. I decided to learn more.

The acronym FIRE stands for Finance, Insurance, and Real Estate. It’s a big industry, with more than 36,000 employees in Edmonton (roughly 5.5% of our labour force). In 2009, the FIRE industry accounted for $8.7 billion or 18% of Edmonton’s GDP. Employment in the industry has grown 23% from 2007, and GDP created from the FIRE industry has grown 40% over the last ten years (compared to 30% overall).

Those numbers come from Greg Bainbridge and Tammy Fallowfield at Edmonton Economic Development Corporation (EEDC). They were nice enough to help me gain a better understanding of the industry.

I wanted to get a sense of just how big the industry is, compared to other places. As you might expect, it’s difficult to compare Edmonton with a population of around 1 million people to Toronto, which is four or five times our size. Comparing Alberta as a whole makes more sense. That means looking at Calgary and Edmonton together, an idea that both EEDC and the Alberta Economic Development Authority (AEDA) are promoting. Greg told me that “Calgary and Edmonton are complementary financial service centres”, something that is common in other places as well (Dallas/Houston, Geneva/Zurich, Amsterdam/Rotterdam, etc). He pointed me to AEDA’s recent report entitled Building Alberta’s Financial Services Industry (PDF). Sure enough, one of the “strengths we can build upon” listed in the report is the complementary nature of Calgary and Edmonton’s financial services sectors.

The local financial services industry in Calgary has established a reputation as among the world’s best for energy financing. Edmonton’s financial services industry, meanwhile, has established strengths in banking and risk management.

The report makes the point that as a whole, Alberta’s FIRE industry is, well, on fire. From 2004 through 2009, total capital investment in Alberta totaled almost $433 billion. Here’s what the per capita investment looked like across the country in 2009 (the national average was $9,174):

Employment growth in the financial services industry in Alberta has outpaced the national average over the last ten years as well.

We’re not without challenges, of course. The AEDA report cites economic diversification as a key challenge:

Another key challenge is a shortage of skilled labour: “compared to those of other provinces with financial centres, Alberta’s labour force includes the lowest proportion of individuals with post-secondary education.”

That’s a challenge that the industry is tackling here in Edmonton. Greg described the industry as “an industry of human capital, the foundation of which is smart people”. The University of Alberta has a number of programs of course, such as the MBA program, and NAIT offers a risk management program for insurance, but beyond that there isn’t much in the way of FIRE-specific education. Many of the industry’s senior positions have been filled by drawing expertise from elsewhere, and attracting talent has been a major focus of the industry.

That’s one of the reasons that EEDC recently formed the Financial Services Working Group here in Edmonton. Greg told me that the industry has grown quite organically and independently thus far, due at least in part to the government being located here (thinking of AIMCo and ATB, for instance), but that has meant very little coordination or working together (a mission to Toronto in June 2009 focused on recruitment was one of the first tangible examples of working together). The working group, which met for the first time in October, is brainstorming ways to further the industry, and working more closely with educational partners such as NAIT to develop relevant curriculum is a key outcome of that effort.

Continuing education of the industry’s labour force is another goal. Conferences, luncheons, and other events are all being considered. Though the University of Alberta has the only Chartered Financial Analyst (CFA) partnership in Western Canada, there isn’t a strong understanding of the designation in the industry (think of it as the CA equivalent for investment professionals). There are also opportunities to share research being done at the University of Alberta more directly with the industry.

So who are some of the key players in the FIRE industry in Edmonton?

Canadian Western Bank – Formed as the result of a series of mergers & acquisitions, but started in 1984 as the Bank of Alberta. CWB has nearly $12 billion in assets, more than 1200 employees, and has achieved 89 90 consecutive profitable quarters.
ATB Financial – Founded in 1938 under William Aberhart. ATB has more than $25 billion in assets and more than 5000 employees.
Servus Credit Union – Formed as the result of a series of mergers, the largest of which was Capital City Savings, formed in 1987. Servus has nearly $10 billion in assets and more than 2000 employees.
AIMCo (Alberta Investment Management Corporation) – Created by legislation in March 2007. AIMCo manages approximately $71 billion and ranks as one of the five largest institutional investment managers in Canada.
Peace Hills Trust – Established in 1980. Peace Hills has nearly $500 million in assets and over 120 employees.
Peace Hills Insurance – Established in 1982. Peace Hills has more than $270 million in assets and more than 175 employees.
ATRF (Alberta Teachers’ Retirement Fund) – Has been administering a pension plan for Alberta teachers since 1939. ATRF has assets of roughly $5 billion.

These organizations and others in the FIRE industry will play an important role in the future economic growth of our city and province. As the AEDA report states:

The financial services industry is a critical enabler of economic growth, competitiveness, scalability, and productivity. It provides businesses and other industries across the economy with the necessary capital, financial support and advice to pursue opportunities and compete internationally. A robust financial services industry facilitates connections and access to international markets, and helps develop local entrepreneurship, equity, and wealth.

They might be large, but these organizations are also part of the community. ATB Financial, for instance, is a very active community member with thousands of volunteers hours and millions of dollars invested.

The future for the industry looks bright, and initiatives such as the working group should help to take the industry to the next level. Greater engagement with educational partners is important, but the industry will need to make even broader connections to truly succeed. Organizations such as the Edmonton Financial Literacy Society (of which Greg is the chair) can help in that regard. It’s also encouraging to see people like Larry Pollock, CEO of Canadian Western Bank, connect with young professionals like he did at the Emerging Business Leaders’ September meeting.

Edmonton’s FIRE industry is successful and growing, with over $135 billion under management. Remember that the next time someone tells you Edmonton is blue-collar!