Edmonton has arrived as a national business player
Surging economy, shifting trends are reshaping city's image
Gary Lamphier
The Edmonton Journal
Saturday, December 23, 2006
I love lists. They neatly sum up complex topics in simple point form. Perfect for a 20-inch, end-of-the-year business column.
So here's my list of the top five business trends that are reshaping the Edmonton region as 2006 draws to a close. Merry Christmas and happy holidays, one and all. I'll see you in the new year.
1. Edmonton is (finally) on the map
When I moved here from the West Coast in 2002, my brother Steve, a longtime resident, often described Edmonton as "Canada's best-kept secret."
He was right. Glamour-puss towns like Calgary and Vancouver got way more ink. Still do. Edmonton? It was virtually invisible on the national stage.
But times are changing. Edmonton is now on the map. With a $100-billion oilsands megaboom underway, the capital region's economy is on wheels and the world is rapidly coming to realize it. Thousands are moving here every year, from across Canada and beyond.
Even the political winds are shifting in Edmonton's favour, with Ed Stelmach and his team succeeding Ralph Klein's Calgary-centric crew.
(Note to EEDC: Mark Norris, a key Stelmach backer and former Alberta Economic Development Minister, is now looking for a job. Who better to succeed Allan Scott?)
Fellow Edmontonians, our day in the sun has arrived. Time we lost our victim complex, don't you think? It's just so yesterday.
2. Edmonton is going corporate
For years, Edmonton has been regarded as a private-company town, dominated by family business owners who shunned the spotlight. Many still do.
But the landscape is changing. Many large local firms are now publicly traded. Other family-owned companies are bringing in big institutional investors as shareholders. In short, Big Money has discovered Edmonton.
Firms like Lockerbie & Hole, Fun Sun Vacations and Focus Corp. now have major private equity funds as partners. Others -- Pe Ben, NQL Drilling -- have sold out to major corporate players.
Still others, like North American
Energy -- sold by Edmonton's Gouin family in 2003 -- have gone public. In fact, there are now some 80 public companies in the Edmonton region, triple the level of five years ago.
The professional manager class is taking over. Local owners are exiting. Watch for more corporate deals in the year ahead.
3. Edmonton sheds its "Discountville" label
For a quarter-century, house prices in Greater Edmonton flatlined, on an inflation-adjusted basis, while prices in other large cities soared.
Office rents were among the lowest in North America.
But Edmonton made up a lot of lost ground in 2006. Average house prices jumped by nearly 40 per cent, trailing only Calgary on the national scene. Analysts predict modest further gains for 2007. Office rents also rose sharply while vacancy rates plunged, spurring the first new downtown office redevelopments in years and growing talk of new office construction.
Are rising house prices and office lease rates a good thing? Absolutely. Just ask anyone who has lived or worked in Toronto, Vancouver or Calgary over the past 25 years.
Inflation is an inevitable byproduct of prosperity, even if it does raise affordability issues for some.
Rising land values in the city core and surrounding inner-city neighbourhoods will also draw investment and spur downtown revitalization -- a process that's already shifting into second gear.
4. Edmonton's 'geography' is changing
No, we're not getting any closer to the mountains or the ocean. But Edmonton is no longer perceived as a remote northern outpost. So what's changed, besides our warmer winters? Basic economics.
With oil at $60 US, the oilsands are no longer marginal. They're at the epicentre of Canada's energy future. The 'patch is moving north.
Money and people are flowing with it, including $12.5 billion in oilsands spending in 2007 alone.
No wonder Edmonton International Airport set traffic records in 2006. The region has hit critical mass, with a population of more than one million.
Secondly, with China spearheading global economic growth and Prince
Rupert's new container port skedded to open in 2007, Chinese shippers will be able to access a new, faster rail route to the U.S. midwest, directly through Edmonton.
Presto, Edmonton is poised to become a key North American transportation and distribution hub. Welcome to Port Alberta.
5. City's emergence as a key high-tech/biotech sector
No, there's no local VC fund. Not yet. But it will come. Meanwhile, Edmonton is already home to nearly 90 biotech firms and a cluster of successful software firms, including Matrikon and Upside Software.
More good news: The $86.5 million remake of the long-empty Bay building on Jasper Ave. proceeds apace. Among other things, the University of Alberta's new christened Enterprise Square will house TEC Edmonton, a joint venture of the U of A and EEDC that incubates early-stage tech firms. Along with the newly formed Alberta Council of Technologies, the new National Institute of Nanotechnology, and the Northern Alberta Clinical Trials and Research Centre -- a joint venture of Capital Health, the U of A, and EEDC -- Edmonton is building a formidable base as Alberta's leading tech, biotech, and medical services R&D sector. Commercial success will surely follow.
© The Edmonton Journal 2006
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And don't forget Reason #6: The Return of the Dancing Cop!!!!
Merry Christmas & Happy New Year!!!!
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