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.

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:

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.