Where Credit is Due

Every time I tell the Edmonton story, from Hangzhou to Helsinki, from roundtables of 10 to audiences of 1100, people are fascinated how we evolved the Edmonton brand and engaged our whole community in the process. They ask, “How did you guys do it? How did Edmonton manage its way through the recession so well? How did you evolve the brand in such a short period of time? How did you grab the attention of the media? How did you rise so fast in the rankings?”

Every time I’m asked, I stop and give pause, and I share an important story that seems to be forgotten – a story that gives credit to those who took the risk to fundamentally change the face of our city.

Five years ago, our city was at an impasse. City Council was divided over whether a downtown arena would generate the economic benefits that were being claimed, and Edmontonians were divided as to whether a partnership with Daryl Katz could be trusted and whether it would be in the best interest of our city.

Five years later, we should all be celebrating. What’s been accomplished in downtown Edmonton is a model for public / private partnerships that has attracted envy from cities across North America, and has transformed the mindsets of local and institutional investors looking to invest even more into the Edmonton economy.

Edmonton has forever changed.

And, no one wants to change back.

The partnership between the City of Edmonton and the Katz Group sparked $5.5 billion in new investment, created over 30,000 new jobs, generated over $750 million in new taxes, increased residential density by 20%, added 15% more restaurants and bars, all while improving the brand and reputation of our city and the pride of Edmontonians.

And Daryl Katz delivered. What was originally a $100 million commitment (subject to commercial efficacy) in the Arena Master Agreement has now turned into more than $2 billion of personal investment in our downtown. And he kept investing in Edmonton while oil prices plummeted and margins were squeezed, building confidence in our city as we told this story around the world. Katz Group delivered the tallest tower in western Canada (Stantec Tower), the Edmonton Tower, the JW Marriott Hotel, Rogers Place Arena, the Winter Garden (Ford Hall) with excellence, and they continue to invest with more buildings planned in our near future.

Yes, these investments result in a return for the Katz Group, but they also carry significant commercial risk. The bigger winner in this partnership has been the City of Edmonton. With the ICE District development already at 75% of the original 20-year projection, and trending better than ever expected, the Community Revitalization Levy (CRL) has generated property tax revenue from new development and rising property values that has allowed the City of Edmonton to green light more than $230 million in new capital investment projects in the downtown core – a direct result of the arena partnership. That’s huge after only three years, and it puts the City’s investment of public tax dollars in the downtown arena project into a very positive view.

But we are not done. Downtown is not done. Edmonton is not done. Partnerships like these need to continue in order to accelerate our growth, to create a city that is built on excellence and to position us as an exciting city to watch. Additional partnerships are needed to continue investing in our public spaces, like a world stage Plaza in front of Rogers Place, public art on our streets or new hotels attached to our conference centres. Partnerships work, the CRL works, and they should form the foundation for the next phase of our downtown vision.

City of Edmonton and Katz Group is a partnership between City Builders. No party could have created what’s been created on their own. It took cooperation, trust, wisdom, vision and courage. And we need more as we keep growing.

So, as I reflect back on the past five years, on the shoulders which carried us through the recession and on the foundation which helped us shape our brand, I give credit to the City Builders behind the City/Katz Partnership, and I encourage us all to continue investing in, and honouring, these partnerships for years to come.

Canada’s Budget for Edmonton Businesses

Last night at dinner, the discussion on the federal budget was deafening. Everyone was focused on the escalating debt and the deficit, all with spirited and good intention. But beyond the big looming debt number, not one business owner knew much about the details … the details of which are actually quite interesting.

Edmonton-based businesses have never cared much about the Federal Budget, and I totally respect the reasons why. Budgets have been for government folks, easterners, institutions and non-profits. Why would the federal budget come up in conversation, aside from taxes? What does the budget have to do with my business making money? How is the budget relevant to our day-to-day free-enterprise lives.

Part of me would love to continue asking those questions. But part of me knows that the world is changing and it’s not the smartest strategy to be left behind.

Every Edmonton-based business should read Budget 2017. I don’t mean read to simply find their new personal or corporate tax rates. But read it to understand the underlying policy and directional changes that will shape our country for the next decade or more. Budget 2017 doesn’t do much for the energy sector or for our current economic downturn, but the budget is unusually specific about the path forward and the emerging sectors that are expected to move Canada’s economy ahead.

Read it and engage; or ignore it and be left behind. Because in it, Budget 2017 has significant positive implications for Edmonton – Canada’s 5th largest, youngest, fastest growing municipality – that is being recognized as a major hub for new federal investment.

Beyond the significant support for affordable housing and predictable long-term investment for transit and infrastructure, as successfully championed by Mayor Don Iveson, this budget focused on building our economy through the solid combination of innovation and job creation. Of specific interest to Edmonton-based businesses should be:

  • $400 million over three years to be made available through the Business Development Bank for a new Venture Capital Catalyst Initiative to increase last-stage venture capital available to Canadian entrepreneurs (who submit proposals);
  • $1.4 billion in new financing support for Canada’s cleantech sector (equity finance, working capital and project finance) to promising clean technology firms who want to grow and expand;
  • $125 million to fund a pan-Canadian Artificial Intelligence collaboration between Montreal, Toronto-Waterloo and Edmonton, with UofA’s AMII (Alberta Machine Intelligence Institute) recognized as one of the leading programs in the world;
  • $950 million over 5 years to support a small number of business-led innovation “superclusters” that have the greatest potential to accelerate economic growth;
  • 10,000 new Co-op positions for STEM (science, technology, engineering, math) students;
  • Priority sectors for investment will include Advanced Manufacturing, Agri-food, Cleantech, Digital Industries, Health and Biological Sciences and Clean Energy Resources;
  • $7.8 million over two years to implement a new Global Talent Stream under the Temporary Foreign Worker Program, as part of the Global Skills Strategy;
  • No changes to capital gain taxes or taxes on stock options, which will benefit the tech sector;
  • $50 million over two years for teaching initiatives to help children learn to code; and
  • $37.5 million per year funding made permanent to Destination Canada, Canada’s national tourism marketing organization, to continue its strong collaboration with industry partners to maximize the impacts of its marketing campaigns to draw in more tourists from abroad.

Now, I’m typically one of the first people to call for balanced budgets. However, if a fiscal stimulus and low interest rates are required to keep our national economy on a positive growth curve, which they are, then these are the areas that have the ability to stimulate a long-term change to business innovation and competitiveness which we so desperately need across the nation.

The programs listed above are very much in line with our priorities at EEDC, through our Investment & Trade, Tourism, Startup Edmonton, Tec Edmonton, Edmonton Research Park and Shaw Conference Centre teams. And these are our teams that connect with local businesses on a daily basis to help Edmonton-based companies understand and benefit from these new programs and sources of funding.

Fiscal stimulus and support programs are needed across the country for our businesses to grow and evolve, adopt new technologies, access new talent and new markets and improve competitiveness. It is part of a larger transition we need to be embracing, otherwise others will and folks like my dinner guests will be left behind.

Please take time to become informed, and see each of these programs as opportunities for your business. Once informed, please connect with us at EEDC to help connect you with some of these new opportunities.

http://www.budget.gc.ca/2017/docs/plan/toc-tdm-en.html

http://www.budget.gc.ca/2017/docs/bb/brief-bref-en.html

http://www.budget.gc.ca/2017/docs/speech-discours/2017-03-22-en.html

Structure Follows Strategy

It has been a long time since Alberta had a Ministry of Economic Development & Trade, and it is long overdue. The announcement by Premier Notley last Thursday brought cheers from many across the province, as we can now establish focus and resources towards our most pressing economic issues:

  1. Building a culture of risk-taking and entrepreneurship in businesses big and small;
  2. Developing revenues, trade and investment from beyond our borders;
  3. Unlocking the value of our resource assets in mutually beneficial ways; and
  4. Leading an innovation system that is relevant and respected across Canada.

We have been talking about these four simple priorities for years as part of our provincial strategy; however, the ministerial structure never followed the strategy and past ministries lived through endless leadership changes and budget uncertainty.

This was a much needed change and, when led by a strong Minister, Deputy Minister and Premier’s Advisory Committee on the Economy, I believe we are now off to a great start.

The old models of economic development, diversification and innovation have not brought success or change, and I look forward to working with this new ministry to compete and win in today’s marketplace.

I am often hard on our government because I have high expectations. This is a timely and prudent move, and I compliment this kind of thoughtful stewardship.

I look forward to helping bring back our excellence.

Why Are We Waiting?

There’s a nervousness growing on the streets and in the conversations happening in our coffee shops across Alberta. There is concern and angst among people who are typically risk-takers, adventurers and entrepreneurs.

And it’s becoming infectious. And it’s becoming concerning.

Alberta has a long history of an unusual economy – filled with highs and lows, droughts and floods, journeys and discoveries. It’s been a land of opportunity between periods of hardship, and our culture of camaraderie and cooperation has prevailed when times were most tough. And we’ve always fought through it, together.

Optimism is a key virtue of living here, as is hard work. There is no room for entitlement, and pointing fingers and complaining leaves you sitting very alone. If something needs fixing, we fix it. If something needs doing, we do it. And if someone needs help, we help them. It’s pretty simple.

So why has developing a budget and a policy framework become so difficult?

In today’s world of economic uncertainty, our individuals, families, businesses, farmers and non-profits all need some help, some guidance, some direction in terms of what they can expect … such that they can plan and make decisions that positively affect their future.

Instead, we’re playing politics and waiting for a federal election before taking care of our own?

That’s certainly not the culture that’s made us successful. That’s certainly not how we build our province. And that’s certainly not any form of leadership.

People expect more. And when you can taste fear hovering in the air … people need action.

Let’s see some leadership and some action … please.

Relative Advantages at Risk

Like many, I watched both the Canadian and U.S. political debates last week. And like many I shook my head at the shameless pursuit of these potential leaders to get their media sound bites, as opposed to the much needed presentations of progressive economic, environmental and social policies that will advance our respective nations.

In Canada, I blame that on the debate format that allowed for multiple microphones to be on at the same time. In America, I blame that on the presence of Donald Trump.

But as the various caricatures struggled for air time, one thing became incredibly obvious:

Canada’s opposition leaders are on a path to creating an uncompetitive, bureaucratic, socialist state while opposition leaders in the United States are passionately committed to making the American economy the most entrepreneurial, innovative and competitive economy in the world.

And this should concern Canadians.

It should concern us because the advantages Canada has built up during the Obama Administration are at risk, and at risk of reversing rather quickly.

Advantages are relative. And, just as Canada has been successful in the attraction of business, people and investment relative to the U.S. over the past eight years as the Obama Administration was increasing debt, deficits, taxes and bureaucracy … we risk losing our advantage if we start doing the same.

For me, there are only three ballot questions:

  • Do we want to be a high-tax or a low-tax jurisdiction?
  • Do we want big government or small government?
  • Do we want to be a social welfare nation or a globally competitive nation?

I don’t advocate for any one political party – they all have their faults – but I do love my country and all of her potential. We have the world’s second largest land mass with a well-educated and peaceful population and an economy that is inter-connected and inter-dependent from coast to coast. We have the strongest banking system on the globe and a quality of life that ranks us consistently among the Top 5 nations, and consistently considered the most desirable country in the world.

Yes, we have massive work to be done in the areas of Indigenous rights, environmental stewardship, infrastructure investment in our cities and safe energy production and distribution. But, these next steps in Canada’s evolution can only be done on the back of a strong economy where Canadians are all productively working with small, medium and large scale competitive companies and on projects that will build a stronger nation.

From what I saw at the debate the other night, the Canadian opposition leaders are enamored with the Obama Administration, while the American leadership hopefuls are enamored with what we currently have in Canada.

America needs change.

In Canada, we should be seeking improvement … not change.