Tag: economy

The way to get a recession in Edmonton

John Rose, Chief Economist at the City of Edmonton, started his presentation at the Edmonton Real Estate Forum earlier this month with a bit of humor. “There are two kinds of forecasts,” he told the packed room. “Lucky and wrong!” He finished it on a much more serious note, saying “the way to get a recession in Edmonton is to have the provincial government make cuts.”

Edmonton Real Estate Forum

The general message from Rose was that because Edmonton’s economy is more diversified than Calgary’s or the rest of Alberta, we have handled the downturn better than those locations. “Lethbridge might be the only other jurisdiction that is less reliant on energy than Edmonton,” he said. But, there are reasons to be less optimistic about future growth.

Our unemployment rate went up during the economic downturn “primarily because our labour force grew faster than we could generate jobs,” Rose said, pointing to the increase in migration from other regions that fared worse. It has since gone down to 6.6% but that’s not necessarily a good thing. “The unemployment rate in Edmonton has been going down for exactly the wrong reason,” Rose said. Over 11,000 people have left the labour force in the last 12 months. “Nearly all the job gains we saw in 2017 have been eliminated in the first quarter” of 2018, Rose said. “Education, manufacturing, health care, and professional services have all gained jobs,” he said, while “trade, retail, public administration, transportation, and warehousing have all lost jobs” in the Edmonton area.

public sector employment

As the above chart shows, Edmonton’s public sector workers, which includes those in government, health, and education, make up about 25% of our workforce. The data hasn’t been updated yet for more recent years, but based on data from the 2016 census as well as the provincial Labour Force Statistics report for April 2018, I believe the trend holds.

You can see that the public sector makes up a larger part of Edmonton’s workforce compared with Calgary or the rest of the province. Which means that cuts to public administration, health care, or education hit Edmonton harder than the rest of the province.

So what’s a likely reason the government would need to make cuts? Though Edmonton may be diversifying away from oil, Alberta as a whole is still dependent.

Rose spoke for a while about the price of oil, and it’s impact on the province. “While we have seen North American and Global oil prices accelerate,” he said, “it is only recently that we have seen any benefit from that in Alberta.” He explained the difference between the Brent (the global benchmark price), WTI (the North American benchmark price), and WCS (the Alberta benchmark price), and noted the price discount we’re experiencing “due to export capacity constraints.”

WTI vs WCS

“We are now producing more oil than we can move due to limited capacity,” he said, “which is why the pipelines are so important.” Rose said he was shocked at the speed with which energy companies began to cut back due to the decline in oil prices a few years ago, in contrast with Ontario where he spent most of his career. There he said the economy is “much more like an ocean liner, it’s slow to turn.”

WTI vs WCS

“Oil production in North America is at record levels,” Rose said, “and given our inability to move product out of Alberta, there’s a real risk of oil prices continuing to decline, which would put the provincial government in an even worse position.” That could force it to look to cut costs, which could have a very negative impact on Edmonton’s economy.

Provided that doesn’t happen, Rose expects Edmonton’s economy to do quite well. He expects the unemployment rate to continue to drift downward over the year. “Population growth will continue but at a slower rate,” he said. Vacancy rates at about 7% have driven rental rates down, and thanks to a potential overbuild of single family homes in 2015, “there might be too much inventory”, helping to keep prices in check. “Low inflation will boost real incomes for Edmonton residents as average weekly wages are rising again,” he said.

Rose forecasts that Edmonton and the region “will grow more rapidly than Alberta and Canada” through 2023. Let’s hope he’s lucky, not wrong.

The two oil-related charts above come from Alberta Energy. Canada is the fourth largest producer and third largest exporter of oil in the world, with the oil sands accounting for 62% of Canada’s oil production, according to Natural Resources Canada. There’s more on Alberta’s energy industry at the National Energy Board.

Mayor Don Iveson calls on Edmonton investors to get in the game

In his State of the City address (available here in PDF) yesterday at the Shaw Conference Centre, Mayor Don Iveson said there are four crucial “pipelines” that must be established in order to actively shape Edmonton’s economic future. The “export” pipeline, the “investment” pipeline, the “talent” pipeline, and the “innovation” pipeline are what we need for growth in Edmonton.

2018 State of the City Address

Most of what Mayor Iveson told the packed room was simply a rehash of ideas he and other local leaders have been sharing for years, updated to use the startup language of the day. What was different this time was the very specific audience he was speaking to. It wasn’t a speech for all Edmontonians, or for community leaders, or even for the business community. Yesterday’s speech was targeted squarely at local investors.

“As it stands right now, we don’t have enough local investment committed to our local innovation ecosystem,” Mayor Iveson said. He noted that too much local money is being sent out of the city to be invested elsewhere. “I’d like to change that dynamic.”

We need Edmonton’s investor class to get engaged

Mayor Iveson started by describing Edmonton’s investor class:

“It doesn’t always look like one might expect. It’s not always dressed in bankers’ suits. It’s not always flashy like in other cities. It’s more reserved and quiet. But it’s deeply committed to this community.”

“A lot of you are in the room today,” he said. “You’ve built your companies in dynamic and creative ways, you employ thousands of Edmontonians and you are proud to call this city home.” Mayor Iveson outlined three key reasons why the investor class should invest locally:

  1. “This is very doable,” he told them. “A lot of early-stage companies in Edmonton don’t require cash in the millions.” Instead, typical seed funding requirements are in the tends of thousands.

  2. “More local, private investment will give our innovation ecosystem more rigour.” Compared to institutional investors, private investors put “a premium on commercial viability and outcomes.”

  3. “Investing in the growth of local companies means actively shaping Edmonton’s economic future.” He appealed to their love of Edmonton. “You care about what happens to this community over the long run.”

“There must be a willingness from our community to place some bets on local innovations, on local entrepreneurs, on local talent,” Mayor Iveson said.

There are billions of dollars under management right here in Edmonton, but startup funding remains elusive. As one example, AngelList currently shows 16 investors from Edmonton with only 11 of those having actually made investments. Mayor Iveson mentioned just one seed fund by name, Panache Ventures. The situation is much better than it was back in 2006, but to say there’s room for improvement would be a huge understatement.

“I recognize I’m asking a lot of you, especially in this fragile economic climate,” he said. “But this is Edmonton’s moment, and your city needs your engagement and support more than ever.”

We need a bigger startup funnel

Noting that Startup Edmonton currently assists about 65 companies per year in their startup phase, Mayor Iveson said “we need to drastically increase the number of companies coming into the ecosystem funnel.” By this time next year, the mayor wants “to at least double the number of start-up companies that are assisted on an annual basis.” To do this, he will be asking City Council and both public and private sector parterns “to make sizeable investments” to help expand the size of the startup funnel.

This is a familiar refrain locally, especially in the tech sector. Increasing the number of startups in Edmonton is of course the whole reason for Startup Edmonton, an initiative that Mayor Iveson has long been a supporter of. Many other initiatives in recent years have focused on increasing the number of local entrepreneurs. Even in last year’s State of the City address, Mayor Iveson talked about the need “to focus on how we take local start-ups to the next level — to zero-in on adopting a scale-up mindset and build a scale-up community that helps our small enterprises grow confidently.”

This time, Mayor Iveson reiterated the importance of local investment. Edmonton needs more than just more companies, he said. “It also needs larger amounts of early-stage capital to help our entrepreneurs go from start-up to scale-up and beyond.”

Mayor Don Iveson

We need to hustle

One of the key messages Mayor Iveson focused on was the need to hustle. “Edmonton has experienced incredible external pressures before, and we have always managed to adapt and get by,” but that’s not good enough anymore, he said. Recent trips to San Francisco and Asia showed the mayor just how hard we need to work just to keep up, let alone get ahead. “From the moment you hit the ground in these places, the hustle is on.”

We have heard this before. When Brad Ferguson took over as President & CEO of EEDC in 2012, he was already sounding the alarm about complacency, calling it “our number enemy.”

This time though, the mayor got a bit more specific. “Today, we have one of the best AI research institutions in the world but we risk being outspent and out-hustled by other provinces and other cities,” he said. While there’s a role for government, “there’s also a significant role for local investors and philanthropists.”

We’re a world leader in the science of artificial intelligence, and we need to aggressively build on that.

We need a bigger talent pipeline

More talent is going to be critical for Edmonton’s growth. “We know we have work to do in terms of developing skilled talent — both locally grown, and talent that we attract from elsewhere,” Mayor Iveson said.

Again, this is not new. At the EEDC Impact Luncheon in January 2016, Brad Ferguson told the crowd that “the most important thing we can do is continue to invest in talent.” In September 2014, the Edmonton in a New Light event touched on the same ideas – be less humble, go tell the world, attract people and investment – but used different language. “The opportunity before us is to let the rest of the world in on the secret of why we’re all here,” Mayor Iveson said at the time.

The mayor did announce yesterday a new partnership with EEDC and LinkedIn “to do a deep dive on Edmonton’s talent landscape” to better understand “the kinds of skills we’re missing to grow our innovation ecosystem.” Based on that, the City will craft “an Edmonton story that is compelling, honest and attractive” and that highlights “the incredible quality of life we have here.” Plenty has been written about our city’s branding efforts and missteps, so while I applaud a more data-driven approach, I find it hard to believe this time will be different.

2018 State of the City Address

We need to sell to the world

Mayor Iveson said that for sustained growth in Edmonton, we need more businesses with a focus on exports. “Companies that aren’t satisfied to stay local, but want to scale up and take their product or service to customers around the world,” he said, and cited Stantec, PCL, Yardstick, Showbie, and BioWare as examples of local companies that “opened global markets through relentless quality and ambition.”

This focus on global should be very familiar by now. Shortly after he won the 2013 election Mayor Iveson started using some new language, “innovative” and “globally competitive” in particular. And even then Mayor Iveson was talking about solving local problems and exporting the solutions to the world:

“As problem solvers, we can do our business cleaner, greener, cheaper, faster and safer – and sell those solutions to the world. This is how we will ensure that Edmonton will compete globally, and endure long into the future, no matter the price of oil.”

He mentioned the new direct flight to San Francisco as one of the ways to enable more exports. “Although we’re in a digital world, the face-to-face meeting is still a vital commodity when it comes to engaging advisors, connecting with partners and making deals,” he said. The flight will be “a tremendous enabler for more Edmonton-made businesses, with global ambitions, to reach beyond Canada.”

We need to use the City as a lab

After talking about the challenges the City faces, Mayor Iveson said “I want to take the burgeoning community of technology minds in our backyard and unleash them on those City problems.” Earlier this month he introduced a motion to have City Administration outline a draft policy or program to make this a reality. And he said he would pursue a “Startup in Residence” program to connect startups with local government.

As early as 2009 the City was trying and failing to accomplish this goal, first with the Leveraging Technical Expertise Locally program. In his 2015 State of the City address, Mayor Iveson talked about Open Lab, “a new partnership with Startup Edmonton that aims to solve municipal challenges in a more entrepreneurial way.” It sounded promising, but it has gone nowhere, and the City even took down its web page about the program.

“Let’s actively shape Edmonton’s economic future by leveraging our local tech talent to help make our established companies become as competitive and innovative as they can be,” the mayor said. He talked about his idea for an “Innovation Hub” downtown, a place to bring together “entrepreneurs, service providers, mentors, investors, talent and business experts in an environment specifically designed to encourage the creation and growth of companies.” In contrast to the manufactured office parks seen elsewhere, the mayor promised it would reflect “Edmonton’s lifestyle where innovation, entrepreneurship, the arts, creativity and vibrant urban life intersect.”

Mayor Don Iveson

Growing Edmonton’s economy is the focus

Mayor Iveson made growing the economy a key election promise last year, so it makes sense that economic development was his focus for this year’s State of the City. Earlier this month he released a report on the Mayor’s Economic Development Summit, and his remarks yesterday built on that. Again, none of the ideas are particularly new, but perhaps by better involving local investors they’ll have a much greater chance of success.

“Edmonton is ready for this,” the mayor said. “Ready to get off the bench and play at a global level.”

Recap: Edmonton’s Economic Impact Luncheon 2016

EEDC hosted its annual Impact Luncheon at the Shaw Conference Centre on Tuesday. Last year’s event featured Premier Jim Prentice and took place during a more positive time for Alberta’s economy – looking back now it seems like so long ago. A lot has happened over the last year, and to say the landscape in Alberta today is different would be a major understatement.

I think EEDC CEO Brad Ferguson showed great leadership during Council’s budget deliberations a couple months ago, requesting a 2% cut to EEDC’s budget. “Going into 2016, it could be one of the hardest years in Edmonton’s history,” he said at the time. No City-owned organization or branch had ever requested a decrease.


Photo by Brad Ferguson

Board Chair Barry Travers welcomed everyone to the event, and said that EEDC is “committed to doing more with less.” He reiterated that EEDC is focused on achieving $175 million in economic impact. After lunch, emcee Carrie Doll read a story about Edmonton. “Amidst a year of economic headwinds, this resilient city pushed forward once again,” she read. The story was full of feel-good statements like “this is a city of beauty, a city that’s engaged, a city that is alive 52 weeks a year.” I think many in the room felt it was inspirational, but it was perplexing to me. “It’s time to say goodbye to the Edmonton that once was, and hello to the Edmonton that now is.” What does that even mean?

In delivering his keynote address, I thought Brad did a great job of balancing the necessary realism of the current economic situation with the upbeat cheerleading that goes along with being CEO of the City’s economic development organization. He acknowledged that the next 2-3 years are going to be difficult for everyone, then continued:

“But in three years, if we are united and do this properly, this city and province will emerge even stronger than it’s been in the past, an economic powerhouse for our country, an incredible place for the next generation of Albertans to be born into, and a place where everyone will again want to come in search of an abundance of opportunity.”

Brad started globally and worked his way to the local context. “The world around us has lost its compass,” Brad said, explaining that the current period of time is unique because of high debt levels, the fast pace of technological change, and geopolitical tensions. He noted that “using debt to stimulate growth is incredibly addictive for politicians” but that it is citizens who end up paying the price. Global growth has stalled, he said, and that means “demand for commodities grinds to a halt.” He touched on oil, saying that the supply at the moment seems endless. And he talked about “an incredible time of volatility and anxiety, all around the world.”

Next Brad turned his attention to Canada. Though he again scolded politicians for being addicted to debt, he talked about how personal debt has escalated in recent years, despite the fact that middle income wages “have been relatively stagnant since 1995.” This has led to the “Age of Anxiety” as Brad called it, in which “people and families are doing everything possible and are still unable to make ends meet.”

Although he criticized some of the Province’s recent decisions, including “a delayed royalty review and a substantial amount of new provincial debt and new interest payments”, Brad said he wasn’t blaming Rachel Notley or her government. “They inherited 10 years of drunken-sailor euphoria that came after the Klein years,” he said, “which was the last time we made hard decisions about size of government, debt repayment and government program spending.”

More importantly, Brad placed blame on himself and everyone in the room, “We…didn’t do our job over the past 10 years of euphoria and we didn’t hold our government to account.” Regardless of who’s in power, Albertans need to question their political leaders and get more involved. But he didn’t let the current government completely off the hook. “It doesn’t matter what political ideology was campaigned on, our government has a responsibility to steward this province forward for the best interest of Albertans and future Albertans.”


Photo by Carrie Doll

Last year, Brad highlighted ten themes “that would strengthen our economy over the long term.” This year, he highlighted five calls to action:

  1. Entrepreneurship
  2. Export & Trade
  3. Energy Innovation
  4. Tourism, Conferences, and Major Events
  5. Leadership in Public Service

On entrepreneurship, Brad said “the most important thing we can do is continue to invest in talent.” He said the entrepreneurial ecosystem in Edmonton is “working exceptionally well” but noted that health innovation, agrifood, and a shared maker space are all areas that we could improve upon.

“Export & Trade are essential parts of the wealth creation formula,” Brad said. He encouraged local business leaders to speak up about the TPP, saying “we generate about $50 billion per year from TPP countries.” He also talked about pipelines and logistics and said “everyone has a role in making these opportunities come to life.”

“Our energy future is all about innovation,” Brad said, highlighting five challenges that we should be focusing on: CO2-Free Emissions, Enhanced Oil Recovery, Carbon Capture & Storage, Clean Coal, Safest Pipelines in the World. He said it doesn’t make sense to shut down or phase out one of our competitive strengths in exchange for “making green infrastructure investments in which we have no competitive advantage.”

Though he noted that EEDC has been working with Northlands to “end the 30-year old discussion of how we can best market the city under one banner,” most of what Brad said about major events and tourism was a repeat of last year. “Major events create an energy, rhythm and pulse in a city” he said, repeating last year’s message nearly word-for-word. It seems to be that civic leaders love to talk about Edmonton’s major events strategy, yet I have never seen one articulated.

“In this country we have three levels of government with the risk of introducing a fourth at the regional level,” he said. I assume he’s talking about regional government, and he argued effectively against it. “We can barely afford the multi-tiered system that we have, and we certainly cannot afford it becoming more engorged.” He talked about government becoming more efficient and less bureaucratic.

My favorite part of his remarks came when Brad talked about the complicated system of economic development and innovation organizations, saying “the level of duplication and inefficiencies is astonishing, with no overall leadership, coordination in planning or true accountability for results.” He called for an overhaul of the system, and extended an invitation to work with the other organizations to “reshape the economic development and innovation system to what is needed for our future, and leave behind the ineffective systems and structures of our past.” I hope Brad’s colleagues take him up on the offer.

Brad finished with this: “I believe this province will regain its potential, and out of this extended period of darkness, better days will come.”

Overall I think he delivered a thoughtful speech. With clear calls to action, some thought-provoking statements, and a personal touch, I think Brad had a big impact on everyone who listened. Let’s hope that other civic leaders follow his lead and do their part to help Edmonton emerge stronger from the downturn that is ahead.

What does Alberta’s Budget 2015 mean for Edmonton?

Today was budget day in Alberta. Budget 2015 is being called “a bad news budget” but it could have been much worse. There are tax and user fee increases, cuts to spending (including the first cut to health spending in 20 years), and a new “Health Care Contribution Levy”, and still Alberta’s deficit will grow, to a record $5 billion this year. On the other hand, infrastructure spending seems to be mostly intact, programs for the most vulnerable have not been cut, Alberta retains its tax advantage, and the Province is taking some baby steps toward getting us off the energy price roller coaster. Here is Dave’s take.

Budget 2015

There’s a lot of truth to the “government town” label that people often apply to Edmonton, so any Provincial cuts are going to have an impact. According to the City’s chief economist John Rose, 22% of Edmonton’s employment is related to health care, education, or public administration.

Still, Rose said in recent weeks that Edmonton as a whole would weather the storm better than others in Alberta. From his Labour Force Report issued on March 13:

“Although the impact of lower oil prices is evident in some sectors, the diversity and depth of
Edmonton’s economy has insured that employment continues to grow in Edmonton and that the
City remains a very attractive location for those seeking new opportunities.”

So what does Budget 2015 mean for Edmontonians and for Edmonton?

Highlights

Here are some of the key takeaways from the budget that I think are relevant to Edmonton:

  • For 2015-2016, Alberta Health Services (AHS) faces a decrease of $286 million or 2.1% and will need to cut nearly 1,700 positions
  • The budget includes $926 million in capital spending for health-related “capacity expansion projects” in Calgary and Edmonton
  • There is $50 million over at least two years to renovate emergency rooms in Calgary and Edmonton (specifically the Misericordia, Grey Nuns, and Royal Alexandra hospitals)
  • The budget promises than 300 new restorative care beds in Calgary and Edmonton
  • Post-secondary institutions face $114 million in cuts
  • Campus Alberta institutions (which includes the University of Alberta) are facing a 1.4% operating grant reduction in 2015-2016 and a 2.7% reduction in 2016-2017
  • School boards will receive no money for more students and must cut 3% from non-instructional costs
  • The Province says that “most” school projects announced in 2013 and early 2014 will open in 2016-2017
  • Family and Community Support Services, which helps to fund more than 60 agencies and 80 programs in Edmonton, will be maintained at $76 million.
  • Funding for police remains the same
  • Capital spending of $1.1 billion for the next 5 years includes $124 million for NAIT expansion and $120 million for NorQuest downtown
  • GreenTRIP funding remains intact, which means the first portion of the Valley Line LRT will continue to move ahead
  • MSI funding will remain stable, even if it is more of a loan than a grant
  • The smart fare proposal from Edmonton, St. Albert, and Strathcona County is still “under consideration”
  • The budget contains no funding for the proposed Galleria project

Discussion

Certainly the health care sector is going to take a hit and that will have some impact on Edmonton. The Province maintains that we can get the same quality of service for less, while critics disagree and suggest the effect of this budget won’t be felt only by those at AHS who lose their jobs but also by Edmontonians in need of care. “The time has come for us to start looking at how we can do things in a more efficient manner,” said Health Minister Stephen Mandel. “I don’t think Albertans should have to pay 20 and 30 per cent more for things.”

In addition to the cuts in health-related spending, the budget also introduces the Health Care Contribution Levy, which will apply to individuals with taxable income greater than $50,000 per year. There’s a sliding scale from $200 to $1000 depending on your income bracket. This tax takes effect on July 1, 2015, and applies to roughly 1.1 million Albertans.

The health-related surprise though was money for hospitals, especially given recent suggestions that Edmonton facilities need more than $225 million in maintenance and repairs. The previously announced funding for emergency room upgrades will help in that regard.

It’s not clear how many cuts the education sector will face, but clearly the 3% reduction is going to have an impact. A lack of new funds to deal with growth will likely also mean larger class sizes. At the post-secondary level the cuts are much smaller than many expected.

While there is no provincial sales tax, there are increases to personal income taxes. If you make more than $100,000 per year your tax rate will increase from 10% to 11.5% (phased in over three years) and if you earn more than $250,000 your tax rate will rise to 12% when fully implemented (Edmonton’s media family income is about $100,000). We know that nearly 10,000 employees of AHS earn at least $100,000 a year, which means if they aren’t among the job cuts, they will face increased personal income tax. Though it likely won’t be those who make the most that face the cuts. According to the Herald, Mandel’s own department will spend 18% more than last year.

For most Edmontonians, increased taxes, fines, and user fees will be felt immediately. Gas taxes are increasing by 4 cents to 13 cents per litre. Cigarette taxes are increasing by $5 to $45 for a carton of 200. A bottle of wine or spirits will cost 16 cents more, and a 12-pack of beer will cost 90 cents more. Fines for speeding and other traffic offences are increasing by an average of 35%. Marriage licenses are increasing by $10 as are birth and death certificates.

There is some good news for the most vulnerable Edmontonians. There will be no reductions to child care subsidies for low-income families, nor are there any reductions to the Alberta Seniors Benefit income support. The budget will also accommodate growth for AISH and Persons with Development Disabilities. Starting July 1, 2016 there will also be a new Alberta Working Family Supplement refundable tax credit on earnings up to $41,220. Funding for FCSS, which supports many Edmonton agencies, will be maintained.

On infrastructure there’s mostly good news. Or at least a sigh of relief that important projects will continue moving forward, like the Valley Line LRT which the Province previously committed to.

Responses to Budget 2015

From Mayor Don Iveson:

“The city of Edmonton and Alberta municipalities faired reasonably well on this budget, all things considered – certainly compared to what we all heard and were concerned might be coming,” Iveson said.

“The numbers are fairly small and speaking to our chief economist just now, it may have a small effect on Edmonton’s growth, but we’re talking a decimal to Edmonton’s GDP, not a side-swipe,” Iveson said.

“We can work with the dollars provided,” said Iveson.

From Doug Goss, char of the University of Alberta’s board of governors:

“The message is clear — we all have to find new ways of doing business, we have to be a little more creative,” said Goss.

From Indira Samarasekera, President of the University of Alberta:

“This is a very good outcome,” said Samarasekera, “much better than many were expecting. The provincial government is facing financial pressures, but they’ve demonstrated they understand the importance of post-secondary to Alberta’s future.”

President Samarasekera will address the campus community at a forum on March 31.

From Michael Janz, Edmonton Public School Board chair:

“We’re going to see more students arriving at the school doorsteps with no new money provided to educate them,” he said. “I don’t think this is a good news budget for Edmonton public schools.”

From Marilyn Bergstra, vice-chair of Edmonton Catholic Schools:

“The budget cuts will make it increasingly difficult to support all of our students, particularly our most vulnerable, as well as the new students that are coming to our district,” she said.

From Helen Rice, President of the Alberta Urban Municipalities Association (AUMA):

“Sufficient funding for infrastructure is vital to address the deficit that has continued to grow across the province, and to provide for new infrastructure requirements to meet our obligations to citizens,” said Rice.

“Given the current economic climate, now is the time to secure funding to meet infrastructure needs when prices are falling and the availability of resources to work on projects is increasing,” said Rice.

The reaction from the business community appears to be more mixed.

Budget 2015

Budget 2015 Details

Here are all the budget-related news releases:

Here is the budget presentation from Robin Campbell, Minister of Finance:

You can also download the budget speech in PDF here. You can access the full list of budget documents here.

Recap: Edmonton’s Economic Impact Luncheon 2015

“Never waste a good crisis,” EEDC President & CEO Brad Ferguson told the hundreds of Edmonton business leaders gathered today at the Shaw Conference Centre for EEDC’s annual Impact luncheon. He channeled local business pioneer Frank Spinelli and said “it’s what you do in the good times that determines how well you perform in the bad times.” He argued that Edmonton and EEDC in particular have done a lot of great things over the last two years when times were good and that means the year ahead won’t be as bad as many anticipate.

A short while later, Premier Jim Prentice took to the stage and disagreed. “It is what we are going to do in the bad times that will determine how successful we’re going to be in the good times,” he said. The Premier talked about the need to change both the income and expense side of the equation, and cautioned that all Albertans will have a role to play in making it through a difficult time.

So which is it? Well, it’s probably a little bit of both. The feeling I was left with after today’s luncheon is that Edmonton has been doing the right things and will weather the coming storm better than the province as a whole.

impact 2015

Mayor Don Iveson brought greetings to start the event and offered his two cents on the economic situation, saying “there’s no reason to panic.” He said the Edmonton economy is becoming more resilient as it becomes more diverse and that “our city’s entrepreneurial spirit has never been stronger.”

The mayor also took the opportunity to call upon the Province to keep Edmonton in mind as it tries to address a shortfall in revenue. “City building, I believe, is Province building,” he said. Later, Premier Jim Prentice referred to the comment and said, “I couldn’t agree more with that.”

Before the keynote began, EEDC showed their Build It Here video, highlighting the fact that it can be customized for businesses to use in their own materials.

Keynote

Brad Ferguson delivered the keynote address today, which you can read online. He began by talking about 2014, calling it “a great year”. There was a lot of euphoria in 2013 and throughout most of last year, so EEDC asked itself a key question:

“What should an economic development authority do when it is not in the job creation business? What should we do in the good times that will help us when the economic cycle turns?”

And with that in mind, the organization focused on ten themes throughout 2014 “that would strengthen our economy over the long term.”

  1. Direct Flights
  2. External Marketing
  3. Downtown Density
  4. Entrepreneurial Ecosystem
  5. Foreign Investment
  6. Event Attraction
  7. Regional Collaboration
  8. Unified Voice
  9. National Positioning
  10. Building the team at EEDC

Brad talked about the way EIA and EEDC are working together so effectively now, which resulted in the KLM flight. He discussed the new approach to tourism and marketing. He mentioned the big announcements that were made recently and said “more than anything else, 2014 will be remembered as the year of downtown.” He talked about the importance of event attraction, saying that big events “create a rhythm and a pulse and an energy that builds excitement and confidence.” He praised the mayor’s leadership in the region and on speaking with a unified voice. And he referenced the many newspaper and magazine articles that have been popping up across the country talking about Edmonton’s transformation.

Brad had a lot of praise for his colleagues. “I am extremely proud of the team we have built at EEDC.” He said the organization has reduced the portion of its operating budget that comes from the City, from 43% when Brad took over to 38% today. Brad said they’re on track to reduce that even further to 33% by 2017.

He then talked about oil prices and what they mean for the economy. If you want to understand the roller coaster, read this passage:

“If we look back over the last 7 years: In 2006-2007 this place was on fire, the world economy was expanding, oil prices were high, and everything was rocking. Until in March 2007 Bear Stearns collapsed and in September of that same year Lehman Brothers collapsed, the biggest financial collapse in recent history. The price of oil went from $140 to $40 (a $100 dollar drop) in six months than then settling around $58 which created a population boom scenario in Alberta and in Edmonton starting in 2010, 2011 and 2012 when the WCS (Western Crude Select) pricing traded at a significant discount, now known as the Bitumen Bubble, followed by 2013-2014 where the price rose again to $95-$100 range while the world started to rebound, and then half way through 2014 the price started to dramatically drop as the global economy started to pick up, which has us moving from a budget crunch which can be addressed into a competitiveness crunch that is more structural and tends to last for quite some time.”

He did not mince words, saying “our revenue model at the provincial level continues to fail us.” Brad said he sympathized with the Premier though, as he inherited this problem. Still, he cautioned that unless we make changes now, we’ll be experiencing the same revenue volatility in the 2020s, 2030s, and 2040s. “It’s time to be humble being from Alberta,” Brad said. “And it is time to have a serious conversation about our financial picture and to make incremental changes to our tax structure.”

Brad predicted that in Edmonton, the year ahead will be better than most people are predicting. He said we’ll outperform Calgary, and while the Province’s budget will capture the headlines, “there are many positives in front of us that cannot be forgotten.”

He urged attendees to do more than hope for a return to $100 oil prices. “We’re planning for a very competitive world and we need to operate with more intention than ever before.”

Q&A with Premier Prentice

After the keynote, Premier Jim Prentice joined Brad on stage for a fireside chat, sans fire. “This is a world class city, with world class leadership,” he said. He disagreed with Brad about the good times/bad times point-of-view, then said that “this year will be about leadership and confidence.” Premier Prentice predicted that 2015 will be a challenging year, but also a transformational one.

The Conference Board of Canada has predicted that Alberta will experience a recession in 2015, but Premier Prentice disagrees. “We are tough, we are resilient, we are entrepreneurial, we have the capacity to get through this, and we will get through this.”

At times the Premier seemed to be doing exactly what Brad cautioned against – hoping for a return to $100 oil. “The best solution for low oil prices is low oil prices, they will come back,” he said at one point. At other times, he was very clear that action was necessary. “People have had enough of the roller coaster,” he said. He has struck a new budget committee and confirmed that “everything is on the table.”

The Premier was also very honest about the challenges faced by the Province. “We have not done a good job with our public finances,” he said. “We have been living beyond our means.” He said that needs to change, and that “we are living on resource revenue that properly belongs to our children and our grandchildren.” He said the amount we spend in Alberta on health care “is not sustainable” and added that “we’re going to have to contain expenditures as we move forward.”

Premier Prentice did not shy away from the topic of taxation, either. Asked if the market is ready for a conversation about it, the Premier replied, “I certainly hope so.” He suggested that most Albertans probably don’t support the idea of a provincial sales tax, but did say that now is the time to discuss it. “We welcome the views of all Albertans on taxation,” he said. “Now is the time to speak up about this.”

Perhaps thinking ahead to the budget, Premier Prentice talked about what to expect. “First and foremost we need a fiscal plan than Albertans can look at and have certainty,” he said. And knowing that the roller coaster cannot continue, “it has to be a ten year plan.” He said that oil “may always be the family business” but said that diversification is important.

Given the opportunity to offer some closing thoughts, Premier Prentice said “you don’t win a bigger lottery than to be an Albertan.” He ended on an optimistic, hopeful note. “This is a remarkable province and we have a remarkable future.”

Extra Notes

EEDC Board Chair Barry Travers brought greetings on behalf of the board of directors, and introduced all of his colleagues. The event was hosted by Grant Ainsley and featured a giant Twitter wall powered by Freeman Audio Visual and SAM that received rave reviews from attendees. Everyone received a copy of “Navigating Your Economic Future in Edmonton: A Guide for Business Leaders”. The entire event was livestreamed by the Edmonton Journal, which you can watch here.

For additional context on this story, check out the following posts:

Edmonton in a New Light

Tonight local business leaders gathered in the EPCOR Tower to celebrate a changing city. Construction is happening all over downtown Edmonton, our population is rapidly increasing, and our economic growth is the envy of most other jurisdictions around North America. It’s time to shed our humble past and proudly talk about the new Edmonton, we were told. It’s time to “think positive, talk proud, and speak loud.” It’s time to see Edmonton in a new light.

Edmonton in a New Light

Mayor Don Iveson, EPCOR CEO David Stevens, EEDC CEO Brad Ferguson, and Westin General Manager Joumana Ghandour all took turns at the podium to share their story and their thoughts on why this is such an exciting time for Edmonton. “There’s a transformation happening here,” Mayor Don Iveson told us in a speech that sounded a lot like the ones he gave on the campaign trail during last year’s election. “Edmonton is humble, sometimes to a fault,” he said, “but that’s changing.”

Edmonton in a New Light

The invitation for the event called it the “EPCOR Edmonton Business Leaders Reception”. I expected it to be similar to the 120th anniversary event that EPCOR hosted back in 2011, with brief remarks and a tour of the 28th floor balcony. But this event was much more bold and confident. Guests were invited to “celebrate Edmonton with EPCOR”:

“The opportunity for Edmonton to shine has never been better. Join our city’s business leaders as we begin the task of putting Edmonton in a new, dynamic light for the world to see. EPCOR President & CEO David Stevens and Brad Ferguson of EEDC invite you to a reception and viewing of the major construction projects in our downtown core from the 28th floor balcony of EPCOR Tower.”

In addition to the speeches, guests were treated to a sneak peek at some of the digital assets that EEDC and Make Something Edmonton have been working to create. “Edmonton is a billion dollar brand,” Brad Ferguson told us. “We just haven’t put much effort into it until now.” EEDC is working on the whitelabel video project and other assets so that Edmonton businesses can incorporate consistent messaging into their own brands and communications. The new storytelling tools are expected to be available early next year, some for a modest fee.

Edmonton in a New Light

EEDC is also planning to run targeted ad campaigns in select cities with a goal of attracting students, young couples, and offices to Edmonton’s growing downtown. “We’ve got to fill up all these new buildings,” Brad joked.

After the speeches were done, guests were invited to head up to the 28th floor balcony for a tour of the many construction projects happening around the EPCOR Tower. Here are some photos from above:

Edmonton in a New Light
The Edmonton Arena District

New Royal Alberta Museum Construction
New Royal Alberta Museum

Edmonton in a New Light
Fox & Ultima residential towers

New City Office Tower Construction
EAD Office Tower, which will be home to the City of Edmonton offices

Edmonton in a New Light
The new arena takes shape

Blatchford
Blatchford in the distance

Tonight’s event was undoubtedly a cheerleading session. So might consider it a call-to-arms for the local business community, an opportunity to say ‘get on the train now before its too late’. But unfortunately this sales pitch lacked the all important ask. There was no mention of next steps, beyond the “speak proudly about Edmonton” message and the promise of digital assets to help tell our city’s story. It felt a little incomplete.

That said, this is absolutely an exciting time for Edmonton, and it’s great that our city’s leaders are willing to stand up and say so. Not with the empty, meaningless, and outlandish claims of the past – “Edmonton is the best city, in the best province, in the best country in the world!” – but with a much more Edmontonian approach. “Something big is happening here, we can feel it, and we’re going to start talking a bit more about it.” We’re becoming a little less humble, and that’s a good thing.

Edmonton in a New Light

“The opportunity before us is to let the rest of the world in on the secret of why we’re all here,” Mayor Iveson said. It’s a message that those in the room should already know, but a little reinforcement doesn’t hurt. Hopefully tonight was the first in a series of nudges to get them to do something about it.

You can see more photos here.

A vision for the future of transportation in Alberta

The Province is currently working on a new long-term transportation strategy for Alberta. Over the last two months, public discussions have been held throughout Alberta and in the spring, an online survey will be released.

“This Strategy – which will focus on all forms of transportation, connections and ways to move people and products – provide an overarching vision for Alberta’s transportation system over the next 50 years. It will also help guide government decisions on transportation investments, policies and programs.”

That’s a big challenge. But it’s exciting to consider!

Since I missed the meeting here in Edmonton, I took a look at the feedback form. It includes a number of questions that aim to capture what the public thinks about the strategy. One of the first deals with the proposed vision for the Transportation Strategy for Alberta:

“A world-class transportation system that is safe, sustainable and innovative, and that supports Alberta’s economy and quality of life.”

I suppose there’s nothing wrong with that, but it just seems rather bland, doesn’t it? It’s very expected. And phrases like “world-class” are just meaningless. The proposed vision is also incredibly similar to others. For instance, here is Transport Canada’s vision:

“A transportation system in Canada that is recognized worldwide as safe and secure, efficient and environmentally responsible.”

Needless to say, I’m not a fan of the proposed vision. It doesn’t tell me anything about what transportation in Alberta will look like in the future, especially as you could credibly argue that it reflects the current state of Alberta’s transportation system.

welcome to alberta
Welcome to Alberta by Magalie

What could it be instead? Well let’s consider the context.

The shift from rural to urban has been dramatic in Alberta. According to the 2011 federal census, more than 56% of Albertans now live in population centres larger than 100,000 people in size, and 83% live in urban areas of any size (compared to 81% nationally). We’re an urban province now more than ever. The economic power of cities cannot be ignored.

We know that vehicles are dangerous. According to the World Health Organization, “road traffic injuries are the eighth leading cause of death globally, and the leading cause of death for young people aged 15-29.” Here in Alberta, traffic fatalities have declined significantly from 2007 through 2011, but there are still too many of them. We also know that vehicles have a negative impact on the environment. They contribute to global warming, they contribute to smog, and they take up an incredible amount of land that could otherwise be used more productively.

There are lots of other factors to consider, but I think these are the two most important. Reducing our dependence on vehicles and recognizing the importance of cities should be central any vision of the future of transportation in our province. Unsurprisingly, the two biggest cities in Alberta have already recognized this.

Our neighbours to the south have the Calgary Transportation Plan, which says:

The decisions made today about where and what to build will affect Calgarians for 100 years or more – just as decisions made in the past affect us today. Going forward, the transportation system must perform a wide variety of roles and consider the context of surrounding land uses, be they natural or manufactured. It must provide more choice for Calgarians – realistic choices that are convenient, affordable and attractive. These choices include walking, cycling, transit, high occupancy vehicles (HOV or carpooling) and single-occupant vehicles (SOV).

Here in Edmonton, we have the Transportation Master Plan, The Way We Move. It is even more aggressive:

We are building a 21st century city, shaping an Edmonton that will meet the needs of our diverse and growing urban and regional population. Growing environmental concerns, acknowledgment of the ongoing investment needed to maintain our transportation infrastructure and the rapid growth of our city demand a shift in transportation priority setting. It is a shift from single passenger vehicle use to more public transit; from building outward to a compact urban form. From an auto oriented view of transportation to a more holistic view of an interconnected, multi-modal transportation system where citizens can walk, bike, bus and train efficiently and conveniently to their desired location.

I recognize that Calgary and Edmonton have a completely different context and set of challenges than the rest of the province does, but I think their transportation strategies are informative. Let me also say that I don’t think creating a vision statement is easy. I know a lot of hard work, thought, and difficult discussions are needed to come up with them. That said, I’ll take a stab at it.

Here’s my attempt at crafting a stronger vision for the future of transportation in Alberta:

An innovative and sustainable transportation system that emphasizes high occupancy vehicles and strengthens the global competitiveness of Alberta’s urban areas.

What do you think?

EEDC looks to deliver “monumental value” with new energy, identity, and purpose

When Brad Ferguson took over as President & CEO at Edmonton Economic Development Corporation (EEDC) in the summer of 2012, he knew things had to change. Even though Edmonton’s economic growth remained strong, many leaders throughout the city felt that EEDC could be doing more. Even City Council had begun to lose confidence in the organization, with Councillor Caterina going so far as to suggest that EEDC be shut down if its fortunes weren’t turned around. Brad insisted he was fired up and ready to do the work of remaking the organization.

Brad Ferguson

He wasn’t kidding. The organization today has changed dramatically from the one Brad took over. He opened his speech at last week’s 2014 Impact Luncheon with that context:

“I stood at this podium one year ago knowing a lot had to change. Our organization had lost the confidence of City Council and lost relevance with the business community.”

“I can stand here today proud of the work we’ve done and the changes we’ve made in the last twelve months.”

Over the last year EEDC has clarified its purpose and approach, revamped its brand and visual identity, brought in fresh leadership, and has started to dramatically shift the internal culture of the organization.

Edmonton Economic Development is changing the way it does business. “The culture of winning is what we’re building,” Brad said.

New Purpose & Approach

To bring greater focus to the work of the organization, EEDC has clarified its primary objective:

To ensure the Edmonton Region outperforms every major economic jurisdiction in North America consistently over the next 20 years…regardless if the price of oil is $140 or $40.

That’s a big departure from the organization’s previous (though fleeting) goal statement, which was to become one of the world’s top five mid-sized cities by 2030. It’s a shift from aspirational hyperbole to measurable outcomes, from uncertain ROI for stakeholders to an assured local impact.

In the next three years, Edmonton Economic Development needs to transition from “monumental change” to “monumental value” created for the City of Edmonton.

EEDC’s new website and its 2014-2016 Statement of Intent detail how the organization is evolving to deliver greater value and achieve its objectives. Importantly, EEDC’s strategic direction references the City of Edmonton’s plan on economic development known as The Way We Propser. Rather than duplicating effort or taking different approaches, EEDC envisions itself contributing to the City’s efforts in seven ways. “These seven roles can best be accomplished outside the City of Edmonton, and provide Edmonton Economic Development with a platform for delivering significant value to the economic growth strategy for the City of Edmonton.”

It’s remarkable how little EEDC’s structure has changed since it was formed two decades ago. The four separate organizations that came together have always remained highly visible – the Shaw Conference Centre, Edmonton Tourism, the Edmonton Research Park, and Economic Development. The new approach doesn’t completely move away from those historical silos, but it does make a start.

Edmonton Economic Development will be structured as a conglomerate of six divisions, each with their own expectation of performance and accountability.

The six divisions are:

  • Enterprise Edmonton
  • Edmonton Tourism
  • Shaw Conference Centre
  • Build Edmonton
  • Brand Edmonton
  • Corporate Services

Build Edmonton is slated to be approved and established by April, and will take over ownership of the Edmonton Research Park. Corporate Services is an internally-focused division and one of its key goals will be to earn Top Employer awards by 2015.

Brand Edmonton is perhaps the area of the new EEDC that is most in flux. Sometimes mentioned as a division and other times mentioned as a priority, Brand Edmonton will build on the work of Make Something Edmonton to provide brands, campaigns, and plans for building Edmonton’s brand locally and around the world. While the details about how Make Something Edmonton will continue are still being worked out, it’s clear that EEDC will play a significant role in it’s future (for instance, interim executive director Mary Sturgeon has already moved over to EEDC’s offices). It’s a recognition of the fact that EEDC has a key role to play in telling Edmonton’s story.

Priorities and performance measures for each division have been identified and shared publicly in the Statement of Intent, which speaks to both the competitiveness and accountability that Brad is trying to encourage throughout the organization.

Overall, the 2014-2016 period will be defined by “performance” in a way that will forever differentiate the expectation of Edmonton’s economic development organization.

Forget what you think you know about economic development organizations!

New Brand Identity

One of the most visible ways EEDC is changing is of course it’s new brand identity. EEDC last underwent a major change in 2004, when the name Edmonton Economic Development Corporation was announced on May 7. The organization had been known as Economic Development Edmonton prior to that. Then President Allan Scott said the change would “clearly emphasize what we sell: Edmonton.” The following week, EEDC moved into its current offices at the World Trade Centre (they had been at the Shaw Conference Centre before that).

Now EEDC has dropped the word “Corporation” from its public brand. Though officially (on paper) still known as Edmonton Economic Development Corporation, the public-facing brand will simply be Edmonton Economic Development. Much as Apple dropped “Computer” from its name back in 2007 to better reflect its new business strategy, the change at EEDC brings clarity to the organization’s direction. The emphasis is now clearly on economic development, rather than bureaucracy.

More visually, EEDC worked with DDB Edmonton to develop a new logo for the organization and its divisions:

“Our logo reflects Edmonton Economic Development’s vibrant new culture. It is bold, confident and energetic. Its graphic expression tells the story of big ideas transformed into tangible economic progress for Edmonton.”

Here’s the old logo compared with the new one:

EEDC Logo Before & After

Kevin Weidlich, VP of Marketing & Communications at EEDC, told me that “the old look and feel was inconsistent with the direction” that the organization was headed. When he joined in March 2013, he found himself struggling to explain to friends and family what EEDC does. “I realized that lots of energy was focused on ourselves instead of on our clients”, he told me. “Our brand architecture caused that confusion.”

Howard Poon, DDB’s Design Director, had this to say about the new look:

“What we’re doing with this identity is showcasing EEDC’s vibrant new culture, the entrepreneurial spirit. We’re telling the story of how this organization takes big ideas and transforms them into progress for Edmonton. It’s all about energy and momentum.”

The vertical grey line is viewed as the anchor, representing the organization’s established, grounded and trusted team of experts. The green and gold rays are said to be “bursting forth from the anchor” and they represent “the entrepreneurial dreams, ideas, and actions Edmonton Economic Development transforms into reality.” Green and gold are also seen as a nod to Edmonton’s heritage.

Two of EEDC’s divisions have new logos too, Enterprise Edmonton and Edmonton Tourism.

EEDC Logo Before & After

I remarked that the new logos all looked a bit abstract. The DDB design team (which included David Landreth and Adnan Huseinovic) chose that approach because they felt “it better reflects EEDC’s innovative mindset.” Howard said “a literal symbol or icon doesn’t effectively capture the organization’s personality.”

Helene Leggatt, President of DDB Edmonton, spoke positively about working on the project with EEDC. “There seemed to be a unified sense of purpose,” she told me. It can be tricky with multiple stakeholders to get consensus, but she found everyone at EEDC to be really well-aligned. The project took just 10-12 weeks, from start to finish. “They’re pushing more innovative thinking,” she said. “There’s new energy, new focus, and real fire at EEDC.”

Shaw holds the naming rights on the Shaw Conference Centre until 2016, so that logo remains untouched. Though the new EEDC website still highlights just three divisions, other material frequently mentions Build Edmonton and Brand Edmonton too. I think we can expect a logo for Build Edmonton later this year. Brand Edmonton, on the other hand, is currently envisioned as “a new suite of Edmonton Economic Development brands.”

The voice of EEDC is also evolving. The words “leadership”, “entrepreneurship”, “innovation”, and “competitiveness” permeate the language that EEDC now uses to express its mandate. The new brand guidelines say the tone of voice should be smart, inspiring, sincere, confident, and active.

As a result, the work being produced by EEDC now is less corporate and much more confident. Take the vision statement:

Edmonton, Canada’s economic and entrepreneurial powerhouse: A great northern city filled with unlimited entrepreneurship, education and energy that is a beacon toward which people who crave opportunity will come.

You’d be forgiven if the use of the word “powerhouse” surprised you. Elsewhere in the Statement of Intent you’ll find words like “unstoppable” and “scalable”. These words and phrases are used by energetic organizations like Startup Edmonton, not arms-length municipal bodies! That’s the new brand voice in action.

EEDC also launched a new website at IgniteEdmonton.com. The website doesn’t replace Edmonton.com, but it has become the corporate home of the organization. Plans are still being fleshed out, but it is likely that Edmonton.com will become consumer/tourist-focused. I asked Kevin about the choice of the word “ignite” and he said it perfectly captured the new direction of EEDC. Indeed the new brand guidelines use it to describe EEDC as “the spark that ignites success.”

New Energy

If you’re thinking that all EEDC has done is put on a fresh coat of paint, think again. From its divisional structure to its individual employees, EEDC’s internal changes have been significant.

At the 2014 Impact Luncheon Brad noted that 36% of EEDC’s employees have been with the organization less than a year, and 24% are in new roles or are doing things that didn’t previously exist, which means a full two-thirds of the organization is fresh. The organization’s makeup has changed demographically too. Just 12% of EEDC’s employees are baby boomers, while 42% are Generation X and 46% are Generation Y. They have also achieved a 52-48% male-female split.

One of the first new leaders to come on board was D’Arcy Vane, a director of Enterprise Edmonton. In early 2013, he was joined by Glen Vanstone who was previously the Director of Business Innovation at EIA. Kevin Weidlich came on as VP of Marketing & Communications, followed by Maggie Davison just a couple of weeks later as the VP of Tourism.

In April 2013 Derek Hudson joined to take on the role of Chief Operating Officer. In July 2013, Ken Chapman joined as Executive Director of Northern Initiatives. He was previously the Executive Director of the Oil Sands Developers Group, and he brings relationships and experience that EEDC has long lacked.

These are just a few of the new faces at EEDC. As noted, many existing EEDC employees have moved into new roles at the organization too. For instance, Tammy Pidner has taken on the role of Chief Evangelist.

I asked Kevin what the mood was like as a result of all the change. “Many of the new hires have brought skillsets that never existed in the company before,” he said, noting it has increased EEDC’s capacity. He cited Euna Kang, EEDC’s Creative Manager, as someone who has enabled EEDC to do more in-house than ever before.

“The level of excitement in the company now is palpable,” he told me.

Monumental Value?

When I interviewed Brad after he was just a month or so into the job, he already had a clear picture of the direction he wanted EEDC to go. “I want to fundamentally up the value of the organization to the community and to the City of Edmonton,” he said at the time.

The first step in achieving that was revamping the organization. EEDC today is focused, energized, and confident. But change is easier to bring about than increased value is (let alone monumental value). That’s the challenge facing Brad and everyone at EEDC over the next couple of years – translating all of the positive changes of 2012 and 2013 into results.

One of the things EEDC will need to do to find success is avoid distractions. While important, spearheading the work of image and branding for the city has historically been fraught with peril. Likewise, it can be easy to get drawn into the current political hot potato of the day or to start defining economic development too broadly. Focus is one of the most important things that EEDC has found over the last year, and it would be wise not to lose it.

It is often said that culture trumps strategy, but culture is much more difficult to change than strategy is to develop. New divisions, new logos, and new faces – none of these things come easily, and all are important elements of changing the organization’s culture. EEDC recognizes the challenge:

Developing the right corporate culture is a major undertaking that began in August 2012 and is developing into a strategic asset of Edmonton Economic Development that can never be measured on a balance sheet.

Getting the culture right isn’t the only hill to climb. EEDC will need to rebuild confidence in the business community and earn the trust of our new City Council. All of these things will take time and dedication because they require action. Fortunately, taking action appears to be something that the new EEDC is very good at. Brad promised changes, and he delivered.

Edmonton Economic Development’s mission is “to inspire a culture of entrepreneurship, innovation and competitiveness that forever differentiates our city.” If that wasn’t enough to make you a champion, the new energy and approach that Brad has brought to EEDC should be. The next few years are shaping up to be monumentally exciting.

Recap: Edmonton’s Economic Impact Luncheon 2014

“This is a new Edmonton, with a new mayor, a new confidence, and a new energy,” EEDC President & CEO Brad Ferguson told attendees of the sold-out 2014 EEDC Impact Luncheon today. Hundreds of Edmontonians, including a large number of political dignitaries, filled the Shaw Conference Centre for EEDC’s annual state of the economy. Brad wasted no time in reiterating a message he has been consistently delivering since taking over a little over a year ago. “Our ability to compete and to be different has never been more important,” he said.

Impact 2014

Deputy Premier Dave Hancock brought greetings from the Province of Alberta, and made note of the number of his colleagues that were in attendance. “There are so many of us here, because we believe that the partnership that we have with EEDC, with the City of Edmonton, and with the Capital Region, is so important.”

Mayor Don Iveson also brought opening remarks. “Right now our city is one of the best places in the world to take a risk, launch an idea, or start a business,” the mayor said. “There is a renewed sense of optimism here in Edmonton.”

After lunch, it was on the main event. You can listen to Brad’s entire speech here:

“Last year was a great year,” Brad said. “Our objective was to outperform every other regional economy in North America, and we did.” He highlighted our city’s economic performance and rosy outlook through a series of measures:

2013 2012 Change
GDP $81.675 billion $78.286 billion +4.3%
Population 1.2 million 1.15 million +3.9%
Net Jobs 19,700 26,500 -34.5%
Unemployment 4.8% 4.4% -0.4%
Inflation 1.1% 1.3% -0.2%
Building Permits $3.0 billion $2.5 billion +22.6%
Major Projects $220.0 billion $193.5 billion +13.6%

Obviously the increased GDP, population, and jumps in the number of building permits issued and major projects identified are positive. Brad noted that although the number of jobs created in 2013 was actually down, context is needed. “One out of every ten jobs created across the country was created here,” he told us.

Brad opened his speech with another measure, of course. Last year he rated Edmonton’s efforts on image and branding at 1.5 out of 10. “I didn’t want to understate the work that needed to be done,” he confessed. It was one of the catalysts for the major changes that EEDC has undergone over the last year. His ranking today? With some input from Councillor Sohi, 2.5 out of 10. “We have a long way to go, but it’s a 66.6% improvement over last year!”

Though Edmonton had a strong year in 2013, the future is even brighter. “We’re anticipating us contributing $2.1 trillion of economic contribution to the country” over the next two decades, Brad told the audience. A large reason for this, is development related to the oil sands. But for all the good work going on, Brad said we need to do more.

That led to his core takeaway for the day:

“The only way forward is to embrace the mantra of: cleaner, greener, safer, faster, cheaper. We need to build our industries and build our entrepreneurs, and activate the country in doing so.”

Embracing that mantra is what will lead to the next wave of innovation, key to diversifying our economy, Brad told us. “The oil sands and the industrial supply chain are the platform of which we get to diversification.” And now is the right time, because our capabilities have caught up with our ambitions. “There’s nothing holding us back.”

Brad went on to connect this opportunity with Edmonton’s place in the country. “We can’t do it alone,” he said. “We need to open up the access point and invite the rest of the country to participate.”

With that, Brad described five big priorities for the year ahead:

  1. Alert the world to the energy in Edmonton
  2. Attract & active those seeking opportunity
  3. Enhance & expand our influence as an economic powerhouse
  4. Diversify by using our strengths as a platform for innovation
  5. Operate as one interconnected, interdependent region

On that last point, he noted “that doesn’t mean amalgamation all the time.” Instead, Brad called for relationships and partnerships with other communities.

“Gone are the days where things happen to us,” Brad declared. “Our strategy is sound, our success lies in our ability to move forward with intention.” It was a confident conclusion to an excellent speech.

Impact 2014

Once again the Edmonton Journal livestreamed the event. You can watch part one here, and part two here.

The luncheon was also an opportunity for EEDC to launch its 2014-2016 Statement of Intent:

The decade ahead will be one where competitiveness will take on a whole new meaning in everything we do. Alberta is expected to continue as a high-growth jurisdiction in a low- growth world, making Edmonton a prime location for the attraction of business, investment and people. Global demand for resources will drive opportunities for capital expansion, while also attracting an aggressive assortment of new competitors in search of a share of the local market. These realities will have significant impact on our local economy, and the role of an effective economic development agency has never been more important.

You can learn more about EEDC and what they have planned for 2014 at their new website. You can read my recap of last year’s event here.

Recap: Edmonton’s Economic Impact Luncheon 2013

Today more than 900 local leaders filled Hall D at the Shaw Conference Centre for EEDC’s Economic Impact Luncheon. It was Brad Ferguson’s first luncheon as the new CEO of EEDC (you can read my interview with Brad here). Peter Silverstone, Chair of EEDC’s Board of Directors, told us that Brad wanted to go big with the luncheon this year. I think it’s safe to say he delivered, and not just because of the giant screen that dazzled everyone in attendance.

eedc impact luncheon

The program began with remarks from the Province and City. Minister of Finance Doug Horner was on hand to bring greetings from the provincial government. He sounded positive, declaring that Alberta would remain Canada’s growth leader, but also realistic. “You’ve heard over the past few weeks about the province’s fiscal challenges,” he said. “You’re going to hear more.” Next up was Mayor Stephen Mandel, and he too sounded upbeat, calling Edmonton “the most entrepreneurial city in the country.” Both men talked about the incredible opportunity that Alberta affords.

Brad followed the dignitaries and he brought a more even tone to the event. He delivered EEDC’s Statement of Intent for 2013-2015, which you can download here. The highlights are that EEDC intends to:

  • “Refocus and re-engage the organization” and will “get back into the industry development business.”
  • Become the change they want to see in the marketplace, which means being competitive vs. complacent.
  • “Fundamentally change the value we deliver to the market.”
  • Bring clarity and confidence in the structure of the organization.
  • Redefine stakeholder relationships within the economic development system.

There’s also a section on “being accountable” that reads:

We believe strongly in building a performance-based culture, and will be working throughout 2013 to build a reporting process of transparency and accountability. To build high-performance business units, each division will focus on its objectives, goals, strategies, and measures – a change from the past to a future focused on a new level of predictable performance. 2013 will be a year of transition, new leadership, new processes and new accountabilities.

Of course the big highlight is the new organizational objective:

To ensure Edmonton and the Capital Region outperform every major economic jurisdiction in North America consistently over the next 20 years – no matter if the price of oil is $40 or $140.

That objective is all Brad, and it speaks to his commitment to competitiveness.

Reading through the longer version of the Statement of Intent, it is clear that major change is on the way for EEDC in 2013. The section on EEDC’s divisional approach makes clear that each division, from the Shaw Conference Centre to Edmonton Tourism, must be held accountable and perform well. It also opens the door for one or more of those divisions to leave EEDC, something that has been discussed with growing frequency. “We are organized to maximize operating efficiency, with proactive orientation and resource allocation along with clear exit strategies…” Furthermore, the list of priorities highlights that alignment with the City of Edmonton and an organizational restructuring is on the way. Perhaps EEDC needs to become a leaner organization in order to execute on its new objective (for the record, I believe it does).

EEDC Impact Luncheon 2013

Here’s what Brad said in the press release for today’s luncheon:

“We are upfront and clear in outlining what we are about and what we will do this year,” says Ferguson. “Edmonton is a great northern city with unlimited entrepreneurship, education and energy — we will be a beacon toward which people who crave opportunity will come.”

Far more interesting is what he said during his remarks. Here are a few quotes I made note of:

  • “When the head of EEDC and the Mayor are in sync, great things can happen. When they are disconnected, the city perishes.”
  • “The self-esteem of Edmontonians is just as volatile as the price of oil, and that has to change. Our self-esteem issues must be conquered.”
  • “When the going gets tough, the tough gain market share. Now is our time.”
  • “We need to have less bravado about Alberta and more about our contribution to the country.”
  • “We need to start talking about what the premier isn’t talking about – and that’s a stable revenue framework.”
  • “I can promise you we’ll never fail because we didn’t try hard enough, or because we lost focus.”

Brad talked about why Edmonton is Canada’s economic and entrepreneurial powerhouse, but he also highlighted some of the dark cloud he sees looming. The message was the same one he has been reiterating since he took the job: we cannot be complacent. It wasn’t all so heavy though. Brad also joked about possibly needing to save the Oilers again, and remarked that we may or may not have a new mayor in October (which I don’t think was meant to be funny, even though the crowd nervously chuckled). He finished with a call-to-action: “come build it here.”

The guest speaker was former Suncor Energy CEO Rick George. He shared some thoughts on Alberta and the future we have ahead of us. Though he touched on some of the topics discussed in his book, Sun Rise: Suncor, The Oil Sands And The Future Of Energy, he didn’t get into too many details about the oil sands. He did challenge everyone to look far down the road, echoing Brad’s earlier call for a plan for Alberta. Rick described himself as “a hopeless optimist” and said we need both optimism and imagination to succeed. “Without optimism, there’s little room for contrarianism and the outside-the-box thinking needed to turn the corner,” he said. Everyone in attendance took home a copy of Rick’s book.

I loved the giant screen and the reorientation of the stage at today’s event. As we ate lunch, images and factoids about Edmonton’s past and present danced across the screen. The event was live-streamed, and it sounds like that was a big success. There was a lot of discussion about the event on Twitter too, using the #yegimpact hashtag, and that always makes these things more interesting.

Most of all I enjoyed the refreshing approach that Brad brought to today’s luncheon. Even, measured, realistic, honest. Sure there are plenty of reasons to be optimistic, but that doesn’t mean there aren’t risks. We can’t take our eye off the prize.

Want to compare to years past? You can read my recaps of previous EEDC luncheons here: 2012 Annual Luncheon, 2012 Economic Outlook Luncheon, 2011 Annual Luncheon, 2010 Annual Luncheon, 2010 Economic Outlook Luncheon.

Keep an eye on this URL for speaking notes, video, and other materials from today’s luncheon. Be sure to follow @EEDC and @EEDC_BRAD on Twitter for updates.