Varcoe: Population growth and economic diversification benefit Calgary

Varcoe: Population growth and economic diversification benefit Calgary

Varcoe: Population growth and economic diversification benefit Calgary

There are many positive signs as this year’s Stampede gets underway

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Calgary’s water restrictions are virtually over. WestJet’s brief strike is over.

Oil prices are trading above $83 a barrel and Alberta crude production has just hit a record high.

A massive carbon capture project in Alberta, led by Shell Canada, has just been given the green light. A new $4 billion LNG plant is also moving forward on the West Coast, an Indigenous-led partnership that includes Calgary-based Pembina Pipeline.

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Add to this the fact that the Trans Mountain expansion is already underway, and the new $500 million BMO Centre expansion is simply exceptional.

It’s a pretty good way to kick off the world’s greatest outdoor show, as witnessed by the huge crowds who attended the First Flip pancake breakfast in downtown Calgary on Thursday.

“It’s been a long time since we’ve had weather like this,” said George Brookman, president of digital imaging and printing company WCD Inc. and a former chairman of the Calgary Stampede, while attending the breakfast.

“This is the largest crowd here, the most optimistic feeling I’ve had in at least six or eight years.”

Brookman noticed the line for pancakes and coffee was already two blocks long when he arrived at the event at 7 a.m.

“I always joke that when the price of oil goes above $80 we are going to have a big stampede. But in reality it is much more than that,” he said.

In fact, it is.

Deborah Yedlin, executive director of the Calgary Chamber of Commerce, said the city has changed over the past decade after oil prices fell. The economy is more diversified, though still reliant on energy.

Over the past two years, new arrivals from other provinces and countries have also arrived in Calgary, drawn by the jobs, relatively affordable housing and quality of life.

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“It’s vibrant. I think there’s also a sense of relief that we’re past the water restrictions and can enjoy Stampede the way we want to,” Yedlin said of the optimism.

“This is the busiest stampede I can remember in 30 years.”

But it’s not just a hunch. Much of the economic data is clear across Alberta.

First Flip Breakfast to open Stampede
Crowds at the First Flip breakfast on Stephen Avenue in downtown Calgary on Thursday, July 4, 2024. Steven Wilhelm/Postmedia

The city’s population increased by more than 95,000 people, or 5.9 per cent, over the 12-month period ending last July. Over the same period, Edmonton’s population increased by 4.1 per cent, or more than 60,000 people.

During the first three months of this year, Alberta continued to lead the country in population growth as more people moved here from outside Canada and from other provinces.

A survey released by the Angus Reid Institute this week says nearly three in 10 Canadians are considering moving out of their province due to high housing prices.

If they decide to stay in Canada, Alberta is their top destination: 18 percent say they are considering Wildrose Country.

Population growth continues to fuel the province’s economy as Alberta outpaces other parts of the country.

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“The opening of Trans Mountain … the approval of new (liquefied natural gas) pipelines on the West Coast makes it look like everything is going swimmingly,” Premier Danielle Smith said in an interview Thursday on the sidelines of the breakfast.

“And it’s not just traditional industry. There’s investment in all the new industries… I feel like we’re at a tipping point where anyone with career aspirations in any profession can move to Alberta.”

Danielle Smith before the stampede
Premier Danielle Smith gives a ‘Yahoo!’ at the first Flip Breakfast on Stephen Avenue to celebrate the start of the Calgary Stampede on Thursday, July 4, 2024. Brent Calver/Postmedia

A recent forecast from ATB Economics says the province’s economy is expected to lead the country with GDP growth of 2.5 percent this year and 2.7 percent in 2025.

Improved market access for oil producers with the start of the Trans Mountain expansion, increased housing construction and an initial easing of high interest rates should play in the province’s favour, says ATB deputy chief economist Rob Roach.

Alberta’s total oil production averaged a record 3.7 million barrels per day in May, up 7.4 percent from year-ago levels, ATB said.

Major projects such as Shell Canada’s approval of its new Polaris carbon capture project last week northeast of Edmonton and the advancement of the Cedar LNG project (with plans to export natural gas from Western Canada to customers in Asia) are also positive indicators.

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Total employment is expected to rise by three percent this year, although the unemployment rate is forecast to rise to an average of 6.6 percent in 2024 as the population grows, according to ATB.

“Alberta’s economy — and Calgary’s economy — is getting back on track,” Roach said.

“It is good because it feeds on itself.”

Calgary Tourism CEO Alisha Reynolds, Calgary Stampede CEO Joel Cowley and Calgary Economic Development President and CEO Brad Parry pose at the BMO Centre in Calgary on Thursday, July 4, 2024.
Calgary Tourism CEO Alisha Reynolds, Calgary Stampede CEO Joel Cowley and Calgary Economic Development President and CEO Brad Parry pose at the BMO Centre in Calgary on Thursday, July 4, 2024. Steven Wilhelm/Postmedia

Economists and business experts agree that unlike previous economic recoveries and growth phases, Alberta’s improved situation is not due solely to rising commodity prices.

Growth in agriculture, aviation, construction, technology and energy transition areas (including carbon capture, hydrogen and renewables) are providing a stable foundation for expansion.

“Growth is high, strong, but not as fast as it was in the early 2000s. So it looks buoyant, optimistic, but also more sustainable,” added Adam Legge, president of the Alberta Business Council.

Meanwhile, a new report from commercial real estate firm CBRE shows that the office vacancy rate in downtown Calgary stood at 30.3 per cent in the second quarter of the year, unchanged from the first quarter but down from 31.5 per cent a year earlier.

CBRE said subleased space continues to decline, falling to 10.7 percent, its lowest point since the fall of 2014. That figure peaked at about 45 percent in 2015, after global oil prices fell.

“With signs of a stronger economy, companies are taking their subleases off the market and using them themselves… or their leases are expiring,” said Greg Kwong, regional managing director at CBRE.

“It is a good signal.”

In fact, there are many positive signs as this year’s Stampede gets underway.

Chris Varcoe is a columnist for the Calgary Herald.

[email protected]

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