Boomtown blues - EDM
Boomtown blues
City's success will have everyone digging deeper to make ends meet
May 4, 2007 - Edmonton Sun
By FRANK LANDRY, CITY HALL BUREAU
If things weren't tough enough already, Edmontonians will have to dig even deeper next year to make ends meet.
A new city forecast, released yesterday, shows no end to the boom that has led to a massive labour shortage, sky-high construction costs and a "near-zero" apartment vacancy rate.
City administration warns the frantic growth is taking its toll, creating "major funding challenges" as preliminary work begins on the 2008 civic budget. "The city will face some exceptional challenges in the next year," said Peter Tarnawsky, Edmonton's general manager of corporate business planning.
The report pegs Edmonton's inflation rate at 5% both this year and in 2008. It was about 3% last year.
It warns that ongoing labour shortages will "hamper the ability of developers (and) homebuilders ... to keep pace with the rising demands of the economy."
At the same time, "increases in rental rates, brought on by near-zero vacancy rates in Edmonton's rental market, will increase home expenses."
High energy prices will keep home heating costs and gasoline prices high, the document states.
The city is going to be hit hard on a number of fronts.
Service contracts for things like security work and snow removal are expected to soar between 10% and 30%. The cost of materials like sand, salt and gravel will go up 20%, the document states.
Civic affairs expert Jim Lightbody said it appears the city is softening Edmontonians up for another huge tax hike. He said instead of cranking up spending, city council should cut back on the number of projects it has on the go.
"Perhaps it's not the time to speculate about putting tax dollars into a new arena if we cannot put in the overpass at 23 Avenue and Gateway Boulevard," said Lightbody, a University of Alberta professor.
Coun. Mike Nickel said the predictions of "gloom and doom" were no surprise to him.
"It's a stress we're under as a corporation. No doubt about it," he said.
"That's why we have to be watching for every penny and every point we can leverage out of a dollar."
Despite the dire forecast, Tarnawsky said the boom is not without its benefits.
"There's two sides to it. It's brought tremendous prosperity for the city and region."
The report notes the labour shortage will continue to push wages up.
But Ron Ellis, with Seniors United Now, said that doesn't help people like seniors, many of whom are on fixed incomes.
"It's difficult enough for a family that is actually involved in the workforce," he said.
"But (the boom) creates increased financial stress for anyone on a fixed income."
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Sweet.
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