Talk to the Customer

When sales were down and anxiety was rising, my ol’ boss George Goeders at Procter & Gamble used to say to me, “You can’t solve it by sitting in here, get out there and go talk to the customer.”

Words to remember. Thank you, George.

That is why this past week was so refreshing. During continued decline of the stock market and energy prices, our two Edmonton Liberal MPs, Randy Boissonnault and Honourable Amarjeet Sohi, were busy out talking with customers – the right thing to do.

Eight roundtables held at the Shaw Conference Centre plus three others exposed the ideas and concerns of business owners, union employees, entrepreneurs, youth, academia, local government and local families. The MPs came well prepared, the attendees came well prepared, and the dialogue was rich, focused and on point for today’s realities.

And these weren’t the “I’m from the government and I’m here to help” kinda consultations. These were well prepared, well facilitated, well organized engagement sessions where there was an openness to new ideas and an understanding that no one knows all the answers.

What was interesting was that although our MPs desperately want to help and roll out some magical program that solves everyone’s economic problems, there was a greater understanding that the real role of government is really to create the environment where entrepreneurship and investment can best flourish.

Keeping taxes low, eliminating unnecessary regulation, opening new markets, promoting the Canadian brand, reducing the size of government and hiring entrepreneurial thinking people into the public service all create that environment where people want to invest and take risks … things that consistently employ people and create wealth.

It is a powerful motivator when government leaders are promoters of economic growth and prosperity, and powerfully concerning when they sit behind closed doors alone trying to figure out how to squeeze more tax from the system.

Getting out and taking to customers always results in better solutions.

Thank you, Randy and Amarjeet for kicking off your leadership with the right approach.

The King is Dead; Long Live the Queen

The grumpiness is deafening. The astonishment is mind-numbing. And the continued entitlement is unbelievable. No different than the morning after Iveson was elected as Mayor, no different than when snowboards were first allowed on ski hills, and no different than when women were finally allowed in the spike bar at the Mayfair.

Gasp! This place is going to hell and these young folks don’t have a clue how to run this place.

Welcome to the new Alberta. Average age, 36.

The new Alberta has come off being the strongest economic region in North America for the past ten years and a lot of people have made a lot of money – which is a good thing. We’ve been the lowest tax jurisdiction in North America, with a royalty structure that has promoted investment and the development of our resources at an unprecedented rate.

But that same policy environment has created a hyper-inflated economy when oil prices are high and a deficit-debilitated budget when prices are low – which has been confirmed through two economic summits as a bad thing. So if citizens, business leaders and economists all want to have a more balanced approach to growth and development going forward, then looking at incremental changes to these taxation and royalty policies is certainly not incomprehensible.

It just really upsets those who are used to getting their way.

Enter Kevin O’Leary, with his made-for-reality-TV personality, shouting fears that Alberta will be dragged into the abyss, will be filled with unions, and will be brought to its knees because it voted in the NDP.

While his blue suit and sharp tongue work on network TV, he embarrassingly proves himself and other crony colleagues out of touch with the fact that our resource assets remain incredibly valuable, our carpenters, electricians, plumbers, nurses, boilermakers and other unions are not invading, and we have a long history of never, ever, being brought to our knees.

The change in government was not some freak event. Over 72% of Alberta voters expressed their desire for change, expressed who they are and expressed what matters most to them – things like good governance, sustainable growth, fiscal management, transparency, and engagement.

Alberta still represents the same abundance of opportunity. And like any good company, the shareholders have expressed their desire to make incremental changes along with a restructuring to the board, in hopes of creating more value. In short, they lost confidence in the King, and they elected the new Queen. The grumpy guys may not like it, but all the rhetoric in the world won’t change a thing. It’s time now to pull together, make the necessary changes, and continue to be the highest performing economic region in North America for the next 20 years.

Upgrading our Strategy

I used to struggle with the number of hours kids spend playing mindless video games. Minecraft, Farmville, Tropico, Settlers …. there seems to be an endless supply of, and demand for, non-violent nation-building games.

I used to think they were wasting their time. But I have come to develop great hope that they in fact are developing the skills to run our province with much greater foresight than previous generations.

Think about it. If you were given this wonderfully productive piece of land called Alberta, what would you do? What would you build? How would you create a society so productive and so prosperous that you would be the envy of the world?

Imagine digging a hole in the northeast part of the province and discovering what is now the Oil Sands – an endless supply of thick, dark, peanut butter like substance worth trillions of dollars. Would your first move be to build a railroad or pipeline and ship it out of here? Or would you build upgraders and refineries, petrochemical facilities and manufacturing factories that allowed you to control the market on everything from jet fuel to fertilizer to plastic toys?

Imagine planting a farm in southern Alberta and you were able to produce high quality Durham wheat. Would your first move be to harvest the crop and put it in rail cars to be shipped to a pasta plant in Italy? Or would you consider building your own pasta company, under a Canadian brand that exports and competes worldwide?

Imagine raising cattle on some of that land. Would your first move be to sell your young cattle to someone across the border who will beef them up before sending them to a slaughterhouse? Or would you consider building your own beef processing plant, a steak & hamburger restaurant chain or Alberta BBQ beef skewers which are exported to China.

Just daydreaming here … but you get the point.

Occasionally, opportunities present themselves to re-start the game, and to make better decisions. Over the past decade, building value-added upgraders and refineries didn’t make a lot of financial sense as margins were better from existing refineries south of the border. But now as labour becomes more available, input costs come down, the Canadian dollar falls, technologies are improved, risk of building upgraders/refineries have been mitigated, and neighboring provinces refuse unrefined products through pipelines, it’s time to think strategically and make some nation-building investments.

We can keep shipping stuff out of here and shipping out our wealth in the process. But these video-game-addicted kids are telling me that’s not the best way to win the game.

Growing On Up

When the new Stantec tower was announced and most people gasped at the concept of a 62 floor tower in downtown Edmonton, Darren Durstling from WAM Development Group beautifully stated, “Just to give perspective, our lowest floor of residential starts where the Pearl ends.” … “We’re not competing with existing condominium products on the market, we’re introducing an entirely new echelon that the city has never seen.”

Edmonton’s growin’ on up.

When I went to Toronto last week to meet with Brad J. Lamb, aka the Condo King, who is launching Jasper House on Jasper & 106th Street behind the Boston Pizza, he eloquently stated, “We’re bringing something brand new to the Edmonton market, a 36-story, 260 unit high-design development where average unit sizes will be 725 sqft. We’re introducing a vibrant mixed-use concept at street level that will be new for some, but very familiar to many who travel to other major metropolitan centers.”

Edmonton’s growin’ on up.

What’s fantastic about these and other developments underway in the downtown core, is the fact that we are shedding the era of stamp-it-out condo kits and bringing a wide variety of choice to the marketplace. Some appeal to our growing student population. Some appeal to retirees. Some to empty-nesters. Some to singles. Some to investors. But together they bring density to the downtown core and embrace a culture of diversity that makes Edmonton so welcoming.

Speaking of investors, remember that each project represents an opportunity for Edmontonians to get involved, I’ve seen pricing for some of these new products ranging from $300K to $3M which creates investment opportunities for some people out there to actually invest in something that they can drive by every day.

So over the coming months, keep your eye out for open houses and information sessions. They’re fun nights out that get you aware of what’s happening in your downtown. Brad J. Lamb is launching his Jasper House project on Thursday night. I’m sure he’d welcome some of you interested people (see: JasperHouseCondos) for information and contact information) at the Art Gallery from 7pm-9pm for the launch.

Cheers.

Drunk on Dependence

There’s nothing like a good market meltdown and commodity collapse to get people talking about our economic stability. Oh wait, we’re not talking about it … at least not yet.

Six years ago, the price of oil went from $140 to $40 in six months. We seem stunned and aghast when our budget forecasts didn’t materialize, although history shows that predicting the price of oil is harder than predicting a winning lottery number. Blame it on a Bitumen Bubble. Blame it on the Middle East. Blame it on the USA commercializing our fracking technologies. Blame it on our lack of diversification. Blame it on us being landlocked. Blame it on our economists. Blame it on whoever or whatever you want.

I blame our budget instability squarely on our dependence on resource royalties, our unstable revenue model and our inability to plan properly for the future.

Yes, the future. Our current taxation policy is punishing future generations … the generation who will look back on our era and ask, “Grandpa, do you think it was smart to spend all the non-renewable resource revenues on yourselves every year, without asking people to pay for things they were using?”

To which I will likely respond, “Hey, it was a really good party until the free booze ran out. In fact, we invited all our friends from other provinces to the party and didn’t charge them either. But the liquor cabinet’s bare now, so why don’t you get to work and start replenishing it? ‘Cause your grandpa needs another drink … Remember who built this great province, dammit!”

Over the past two years we have had two economic summits where some of the best and brightest had the courage to call for stability in our revenue line. At the same time, Jack Mintz presented a revenue-neutral plan to eliminate personal income tax for 70% of Albertans and lower corporate taxes to the lowest in Canada, while implementing an 8% consumption (sales) tax. The Alberta Advantage was being talked about. The Alberta Advantage was almost within grasp.

Shhh … crickets.

How do you legislate a balanced budget without control over your revenue line? How do you provide long-term predictable funding for schools, universities, hospitals and municipalities without a long-term predictable revenue model?

It’s time to slay the dragon. It’s time to lose the historical pride of “we’re the only province without a sales tax” and start managing the province for our future generations.

Or do we not need to worry about them?

“Ahhh, don’t worry, oil at $80 is simply a dip. It’ll come back? Hey Boy, get over here and pour your old granddad another drink, dammit.”