Competing with Calgary: A tale of two cities
Canada's most dynamic business centre has overtaken Vancouver
Friday, July 25, 2008
Vancouver Sun
Dan Cayo
CALGARY - This city's magnificent strength is splayed out for all to see when you step onto the observation deck of the Calgary Tower - a 40-year-old, 191-metre landmark on the city's skyline. But so is its significant weakness.
Calgary's strength is the small but dense forest of construction cranes and office towers that you see just to your left as you step off the elevator.
These towers are nearly all new, and chock-a-block with workers who, if they aren't one of the bosses in a fancy office, are apt to be shoe-horned two or three to a cubicle. For this is the pulsing heart of the most dynamic business centre in Canada, one that is starting to find an increasing role on the world stage.
The city's weakness? It is, to be fair, perhaps more evident to a visitor from Vancouver than to those who come from any of the more homogenized North American cities. But to my eyes, it's manifest in the flat skyline everywhere you look except for that narrow arc of downtown. For the most part, this is just another sprawling, single-storey city with lots of pleasantly tree-lined streets, but little in the way of eclectic, energized neighbourhoods that create an urban buzz.
Because, when it comes to building a vibrant place in which to work versus one in which to live, Calgary and Vancouver are polar opposites.
In business, we in B.C. can only envy - we sure haven't figured out how to emulate - what the Albertans are doing. To illustrate the scale of the difference, consider that Calgary has 10 million square feet of downtown office space at some stage of construction - half of Canada's total - while Vancouver has none.
But it's vice versa when it comes to creating a livable urban core - something Vancouver excels at, but Calgary has barely begun to recognize as a goal worth tackling.
If either of these cities ever manages to meld the other's strength with its own, holy moly, what a place it will become.
So, I wondered as I strolled the streets and chatted with Calgarians during a recent visit: What's the magic they have that we don't?
When I voiced this question, most residents responded with a where's-your-turnip-truck stare and a single word: Oil.
Well, yes. B.C.'s petroleum patch may be a big deal to us, but Alberta's is much bigger. They've also been exploiting theirs a lot longer and, even before energy prices went stratospheric, it produced billions and billions and billions in both profits and government revenues. Which is handy when you're looking for a big pile of money to invest.
But Calgary's success is based on more than oil. While all 10 of the biggest (by 2006 revenue) companies head-quartered in the city are all in the petroleum business, seven of the next 10 are not. They include Nova, Agrium and Dow in chemicals, ATCO and TransAlta in utilities, Canada Safeway in groceries, and Canadian Pacific in transport.
A little farther down the list you find sizeable companies like Shaw and Corus in media, Fording in mining, WestJet in airlines, Fluor in engineering, Liquidation World in merchandising, Sovereign in insurance, Royal LePage in real estate, and Jim Pattison in leasing. Plus many more in manufacturing, computers, etc. etc.
As a magnet for new head offices, Calgary leads Canada by the proverbial country mile. It's total went from 68 in 2002 to 109 in 2006 - an astonishing 60.3-per-cent increase, almost three times the pace of second-place Edmonton. And the areas of growth were in things like communications and financial services, not just energy.
Vancouver didn't exactly snooze during this period, but we still managed to lose, at least in relative terms. We went from 74 head offices (six more than Calgary) in 2002 to 80 (29 fewer) in 2006. But that's still a much better record than Toronto, Ottawa or Montreal, which all lost ground.
So back to my question: What, besides oil, does Calgary have that Vancouver (and those other Canadian cities) doesn't?
My first instinct was to look at policy differences, and at costs such as taxes. Certainly, Calgary had a long-time advantage in income tax, although B.C. recently undercut it for low- or middle-income earners. And Calgary has caught up to, in some areas surpassed, Vancouver's sky-high real estate and construction costs.
Municipal taxes are hard to compare because they're applied so differently. But on overall tax, utility and maintenance costs for quality space in downtown, Calgary comes out only a little ahead - an average of $15 per square foot per year, versus $16-$17 here.
According to Bruce Graham, CEO of Economic Development Calgary, the more important advantages are more subtle.
The first thing he notes is that Calgarians love to win, and they applaud business successes. This attracts the players who also like to win, and it gives them encouragement to go farther and faster.
Calgary's downtown is very compact, made even closer-knit by a spiderweb of overhead walkways and underground passages that, combined with free transit through eight blocks of the city centre, facilitate networking. As does the city's intense degree of volunteerism and its spirited social scene.
All of which not only feeds upon, but also fuels, the all-important momentum - the pervasive feeling that pretty well anything can be done here, and a good many things will be.
Not to mention the network of support services - some highly technical like engineering and law firms - that sprang up to meet the needs of the first head offices to locate here, and have grown to accommodate those that continue to come.
I have my own theory on how this momentum got started, and why it took root here rather than some other town - specifically, Vancouver.
Several people I talked to, Graham among them, cited former Premier Ralph Klein's laissez-faire capitalism as a big initial draw that appealed to the kind of people who decide where head offices should go.
Klein's basic view was that government's job is to stay out of the way, a philosophy that endeared him to a great many business leaders.
But in addition to the pull of Klein's appeal, there was also a push from us.
Vancouver - logically the main Western competition as a location for a corporate base - carried extra baggage throughout the '90s, the period when Calgary was really building up its head-office head of steam. While they had red-necked Ralph in charge, B.C. had its succession of pinko premiers - Mike, Dan, Glen and Ujjal - none of whom ever quite cut it with the business crowd.
But if Ralph Klein's open-for-business attitude helped to build the corporate presence in Calgary, his legacy isn't universally seen as an asset in keeping it.
Graham notes gloomily that this legacy includes things like truncated social services, which after years of little attention from the provincial government are sorely strained to cope with the influx of new Calgarians.
Todd Hirsch, formerly a senior analyst with the Calgary-based Canada West Foundation and now senior economist at ATB Financial, goes further in condemning what he sees as the neglect of some key sectors during the Klein years.
"They didn't plan for and invest in future requirements," he said, citing everything from the over-crowded and under-equipped C-Train network that brings commuters to the city centre, to facilities for the arts. And those chickens, he says, are coming home to roost.
"We're not competing any more with Medicine Hat and Lethbridge," he says, cutting to the chase on what almost everyone agrees is Calgary's biggest problem - an acute skills shortage not only in areas like construction, where many migrants can do the job, but in arcane specialties and professions.
"We're competing with places like Barcelona, and other world cities. And we can't do it with just a rodeo and good fly fishing."
Hirsch acknowledges that the new premier, Ed Stelmach, is putting more resources than Klein ever did into the kinds of things that make a city livable, if not great. And the city has a fledgling high-density, pedestrian-friendly neighbourhood, the Beltline, developing just south of downtown, complete with a trendy neighbourhood shopping district on 17th Ave. This former warehouse district already has a solid base of condos, and up to 8,000 more units are planned, some with approvals in place and others not much more than a gleam in a developer's eye.
But Hirsch still thinks Calgary in general - not just the provincial government - tries to do amenities on the cheap.
A case in point, he says, may be the 58-storey HQ that EnCana has a-building. It is to be the largest structure in Western Canada, it's height dwarfing even the iconic Calgary Tower, although it's still just a two-city-block hole in the ground.
The plan for the building is a striking design that has won accolades, and everyone else in Calgary seems eager to show it off to me. But Hirsch says penny-pinching is whittling down its potential grandeur, with economies such as cutting back on a soaring atrium in order to squeeze in more office space.
"So what was supposed to be a remarkable building is now going to be a tall building.
"And that's sort of the story of Calgary. We're like a gawky teenager making some bad choices. ... And we're not building for the next 100 years."
Maybe so. But, whether lofty or prosaic, Calgary is building. Lots of stuff. Fast.
dcayo@vancouversun.com
Visit Don Cayo's blog at
www.vancouversun.com/blogs
CALGARY
Head offices
2002: 68
2007: 109
+60.3%
Head office employment
2002: 16,167
2007: 20,175
+24.8%
VANCOUVER
Head offices
2002: 74
2007: 80
+8.1%
Head office employment
2002: 14,515
2007: 17,852
+23.0%
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So, what does everybody reckon? Personally, I think he is onto something very important here. It closely relates to what will probably be my master's thesis, planning cities as spaces for people and their places. I'll start tackling the issue of the need for more socially sustainable urban planning from a transportation angle, moving away from the emphasis on how to move people between their places using the private-automobile (i.e. increasing traffic flows) in planning. However, in his article Cayo tackles it from an angle that questions the emphasis in urban planning that we are placing on the economy in sustainability. With the help of Mr. Hirsch, an economics instructor at the U of C no less, he reminds Calgary that sustainability includes social elements/factors and responsibilities.
A comparison that I usually make with Europe and North American is fitting for a discussion involving Calgary and Vancouver. In Calgary we plan for a local lifestyle where people "live to work", while in Vancouver they plan for a local lifestyle where people "work towards living".
Btw, props to Hirsch for bringing the Bow into this article. He is truly one of the coolest instructors at the U.
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