Category Archives: Industry Development

We have a Labour Shortage Problem, Not a TFW Problem

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Twice a week, I used to drive Highway #2 back and forth to Calgary, making my usual stops for McDonald’s coffee on the way down in the morning and Booster Juice on the way back. It was 2007, the economy was booming and we were at full employment. And then one day my trip home was interrupted by the following sign in a very familiar window:

“We’re sorry, but due to a lack of available staff this Booster Juice store will be closing at 3pm.”

Welcome to Alberta, circa 2007.

Fast-forward to 2014 where, having weathered the global financial storm, Alberta is back in the saddle. Full employment, rapid growth, and the same labour shortage problem that has defined the 21st century for our province, and for the Edmonton Region. Except this time around, employers in the food service industry have learned how to access the Federal Temporary Foreign Worker (TFW) Program, in order to get the labour supply they so desperately need.

Looking around today, these business leaders are clearly managing economic growth with much more grace and professionalism than they did seven years ago. That is, until last week when Federal Employment Minister Jason Kenny unexpectedly put a freeze on all new and pending TFW applications in the food service sector.

I fully understand Minister Kenny’s frustration with the arrogance and hypocrisy shown by the Canadian CEO of McDonald’s and I support the need to penalize the handful of companies that are abusers of the program. However, an industry-wide freeze has put the growth of countless small and medium-sized businesses in Edmonton at risk. These are the entrepreneurs, job creators and taxpayers of our city and country. We need Minister Kenny to help reduce this risk, and seize the unique opportunity before him.

Based on the feedback we received from restaurant, hospitality and entertainment leaders over the past three days, the political and economic conditions are primed for Minister Kenny to demonstrate the strong leadership that this issue requires. This can be done through the following approach:

• Ensure the freeze accelerates the review of the TFW program . Don’t allow naysayers to slow down the review. Where there are problems, let us fix them quickly, together, and get things back on the rails. Set a public commitment to have the review completed by a specific date, where the results will be made public and changes communicated;

• Reinforce that abusers of the TFW program will be investigated, audited and, if found guilty, harshly punished. Employers who mistreat their employees should never been given the opportunity to do so again;

• Acknowledge that unemployment is not equally distributed across the country and that the TFWs fill an important labour shortage problem in the Alberta economy which drives economic growth and prosperity for the nation;

• Leverage the discussion on the TFW program as a platform to activate underemployed areas of our country. Let’s address the critical reforms needed to programs such as Employment Insurance – reforms that will enable more inter-provincial migration and the employment of Canadians from across the country; and

• Commit to maintaining a stable policy environment in order to allow our entrepreneurs, business owners and municipal leaders to properly plan and make investments, without the ever-present risk of changing rules and regulations.

I could have spent this blog discrediting the C.D. Howe Institute’s commentary that unfairly attributes increases in unemployment with the TFW program. I could have spent this blog discrediting the Alberta Federation of Labour’s stance that our economy can prevail without an external labour supply. I could have spent this blog talking about the poor timing of this announcement in advance of the summer tourism season where temporary workers are needed most and when TFW families come to visit. And I could have spent this blog talking about our demographics and our inability to repopulate this country without programs that stimulate immigration of new taxpaying Canadians.

But I think what is more important is that Minister Kenny address the significant barriers to inter-provincial migration which get Canadians working, the realities associated with the booming Alberta economy and the challenges to Alberta’s sustainable contribution to the federal system if it does not have access to a global labour marketplace.

It is time to start unifying our nation around economic imperatives.

Minister Kenny’s leadership is needed now.

Abundance vs. Necessity

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Enroute back from Iceland, somewhere over the Atlantic. It’s a beautiful sight, the vastness of our Canadian Arctic, true north strong and free, when compared to a small, isolated island state like Iceland. The contrasts were noticeably obvious, but the unexpected insights were like gifts which I will freely share.

I come back a little embarrassed about our abundance. We are blessed with resources that are the envy of the world – oil, gas, fresh water, rich soil, rivers, streams, lakes, sun, wind, trees, animals, crops, mountains, medicine, education, democracy, rule of law, and stable government – the things of which most only dream.

Visiting the harbour town of Grindavik, we witnessed innovation at its finest. Blessed only with resources of the sea, an abundance of cod and shifting tectonic plates, we were treated to a proud culture of ingenuity and innovation out of necessity. This small town of 2,800 people shared an economic vision based on five areas of excellence:

1. Innovation in Cod Fishing: Higher quality fish through historical salting techniques; excellence in packaging and logistics such that fish can be on a plate in Edmonton within 36 hours of being caught; and a pursuit of innovation by developing 25 uses for cod sub products – from collagen to protein supplements – such that every part of the fish is developed to its highest value before it is exported.

2. Clean Energy Production: Harnessing the power of the volcanoes, earthquakes and shifting tectonic plates, geothermal production has risen to be the dominant source of energy production in the country, and is soon positioned to be sold in export markets. Clean electricity drive energy intensive industries like aluminum shelters, data centres, food processing and industrial greenhouses.

3. Greenhouse Food Production: Capturing carbon dioxide (CO2) from clean energy production and using it as an input into industrial greenhouse food production has expanded the available production of food in what is otherwise a challenging landmass.

4. Barley Biotechnology: Understanding that barley represents one of the most biotech-friendly crops for genetic modification, medicinal experimentation and cosmetic engineering, industrial greenhouse operations, using CO2 and clean energy inputs, is expanding to diversify a product-based export economy.

5. Rejuvenation Ponds vs Tailings Ponds: Silica and clay based water runoff from the geothermal plants has created a series of rejuvenation ponds that are beautifully marketed as healing lagoons for those challenged with ailments and a quest for youth.

This level of closed-loop local innovation with limited resources has enriched the brand of Iceland to be associated with words like clean, beauty, nature, healthy, young, and sustainable. Absolutely Brilliant.

I ask you to take a minute and contemplate the depth of innovation and thoughtfulness we apply in an economy of abundance. And I challenge you to ask whether we are thinking hard enough? We complain that we need more labour and more labour in order to ship more raw commodities – oil, animals, lumber, barley, etc. – for others to process, refine, productize and realize significantly more value. We have much to learn … and so much more value to capture … if we get serious about rewarding innovation and eliminating the very policies and incentives that produce a Banana Republic mentality and the absolute wrong outcomes.

As the Minister of Industry & Innovation outlined the Icelandic economic vision, a gift to us, I can only offer the following wish in return: That as your offshore oil and gas production continues to develop and produces riches yet unknown, I wish that your country never gets complacent through abundance (fat, dumb and lazy) and always maintains your wonderful culture of innovation that has come through necessity.

Indecent Proposal

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I had this great idea. It was 2005 and I wanted to build a multi-plex hockey rink for the City. I assembled a piece of land, structured the financing and partnered with a non-profit operator such that all profits would be cycled back into the operations to keep the cost to Edmonton Minor Hockey as low as possible. It was a beautiful model that would fix the cost of minor hockey for the next 30 years at a price lower than it cost today. Just beautiful.

All I needed was the City to consolidate their operations from adjacent single-pad arenas and guarantee a lease for the equivalent amount. I couldn’t figure out why on earth they wouldn’t support my proposal.

Looking back, I realize I was wrong. So young; so naive.

Last week, the City of Edmonton made a business decision to consolidate office space which facilitated the development of a new tower in our downtown core. They were first approached by an unsolicited proposal that demonstrated the value of consolidating space, as an enabler to a new development. Like me, for the longest time the proponent couldn’t figure out why on earth the City wouldn’t support such a logical proposal.

But the City of Edmonton did the right thing.

It took an extra six months, but the City took the time to issue an RFP (Request for Proposal) and appoint an independent fairness advisor to oversee the process. They knew making a decision, any decision, with a private firm would come with the risk of massive public scrutiny.

Much can be learned from my little story and that of the office tower. Specifically, as we enter an era where public/private partnerships become more common, the private sector needs to understand and respect that whenever public funds (no matter what size) are being used to enable a development (no matter what size), the project will require: (1) a public RFP process; (2) a fairness advisor; (3) full transparency from the private sector proponent.

The City of Edmonton did the right thing, and it is important that the business community understand that the days of full transparency are here to stay. Backroom deals will be publicly scorned. Businesses will shoulder the consequences. And political leaders will wear the judgement. Most importantly, attempts to work around the transparent process harm our reputations and slow down the pace in which novel ideas can be realized in our city.

If we learn to do it right, we will accelerate growth. If don’t, we will live with saga after saga.

Speed of Edmonton

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What is going on out there??

That’s what people keep asking me regarding the traffic situation these days. And I am preparing myself for that question to be asked over and over in the years to come … be it spring, summer, autumn or winter.

Let’s take a look at my back-of-the-napkin math today at lunch:

  • Our 1,200,000 population in the Edmonton region is growing at ~3.9% per year, which means that we are adding ~46,800 new people in the Edmonton region, and adding ~20,000 new cars on our roads … every year. It’s also likely that ~3,500 of those new drivers have never experienced snow before. Yikes!
  • Our $78 Billion economy is growing around ~3.7% per year, which means that we are adding ~14,500 new commercial vehicles on the roads … every year … on top of this year’s additional ~17,000 new commercial trucks carrying products and materials throughout the region each and every day.

Ouch! No wonder we have congestion … and not just in our sinuses.

No wonder expanding our LRT Network is the #1 Priority of Edmonton City Council.

We are not only a winter city … we need to be a student-friendly city, a green city, a fast-moving city, an efficient city, a scalable city, a downtown-friendly city and an affordable city for us to continue to be an economic and entrepreneurial engine for Alberta.

We are a high-cost jurisdiction when compared to many locations. In order for our economy to boom and our businesses to be competitive, we need to focus on the speed at which our people, ideas and goods can move.

Expanding our LRT system is a key investment that accelerates Alberta.

Let’s make it happen.

Nothing. No Force on Earth …

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This is not the blog I was planning on writing.

I was planning to write about the imperative of direct air service in and out of Edmonton that allows the economic engine of Canada to operate at its fullest potential. I was planning to write about the youngest, fastest growing region in Canada that is served by an Edmonton International Airport experiencing the highest growth in all categories among all competitors. I was planning to write about a $78 billion local economy and a 1,200,000 population that is growing at twice the speed of the rest of the country. And I was planning to write about, not just our need but the entire country’s need, for us to have direct market access for people, products and capital if we want our collective economy to grow.

I was going to rant … yes rant … maybe even rage. Rage against decades of protecting our national airline with taxpayer dollars only to have it turnaround and force everyone to fly through Toronto, Calgary or Vancouver. Rage against a protectionist transport policy that prevents new carriers from new destinations with new routes to be easily established to meet growing demand. Rage against airlines cancelling high-demand routes while claiming they are uneconomical. And rage against the very punitive, monopolistic behaviours that prevent Canadian companies from becoming global players, and that prevent Canadian businesses and consumers from having choices.

But I am not.

What I want to write about is the amazing, coordinated, rapid response that can be unleashed when our City and Capital Region comes under attack. A response within 90 minutes between the Mayor’s office, Edmonton Airport, EEDC and the Chamber … that charges out across the country … that links every business, political and community leader in a unified voice … to stand armed and ready to defend any malicious action by any organization against this community.

Nothing … no force on earth … can stop a City whose time has come. And nothing … no flight or pipeline will prevent us from connecting our people and products with the world.

Nothing.