Download state of the economy 2014

STATE OF THE ECONOMY 2014
Economic Factors Impacting St. Albert and Region
TABLE OF CONTENTS
HIGHLIGHTS4
A Welcome from Economic Development........................................................................................ 5
Research Methodology...................................................................................................................... 5
0. GLOBAL ECONOMIC IMPACTS
6
Global Events and Their Impact on Canada’s Economy................................................................. 6
1. KEY ECONOMIC INDICATORS
7
Gross Domestic Product.................................................................................................................... 7
Consumer Price Index.....................................................................................................................10
Foreign Exchange Rate (Canadian Dollar versus US Dollar).........................................................12
2. ENERGY INDICATORS
13
Crude Oil Prices...............................................................................................................................13
Natural Gas Prices...........................................................................................................................16
Gasoline and Diesel Prices.............................................................................................................17
Exports.............................................................................................................................................19
Imports.............................................................................................................................................21
3. POPULATION AND LABOUR
22
Population Growth...........................................................................................................................22
Population Growth Driver: Migration..............................................................................................24
Labour Force....................................................................................................................................26
Businesses.......................................................................................................................................29
2
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
4. CONSTRUCTION INDICATORS
31
New Housing Starts.........................................................................................................................31
New Home Prices.............................................................................................................................33
Building Permit Value......................................................................................................................34
Average House Size.........................................................................................................................36
5. PROPERTY MARKET ACTIVITY
38
Residential Property Market...........................................................................................................38
Municipal Tax Split...........................................................................................................................40
Industrial and Commercial Property Market..................................................................................43
Industrial Property Market..............................................................................................................44
6. INNOVATION ENVIRONMENT
46
Investment in Research and Development....................................................................................46
Capital Region Innovation Ranking................................................................................................49
Major Projects in Alberta and the Capital Region.........................................................................51
7. CONCLUSION
52
An Overview......................................................................................................................................52
Looking Forward..............................................................................................................................52
REFERENCES53
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
3
HIGHLIGHTS
• Canada’s Gross Domestic Product (GDP)
grew at an estimated 3.2% in 2014, while
Alberta’s GDP grew at about 3.7%.
• In 2013, Alberta’s GDP grew at around
4 times the rate of Quebec’s GDP, while
maintaining a similar fraction of Canada’s
overall GDP.
• Canada’s Consumer Price Index (CPI) is
expected to drop to 0.4% in 2015, before
settling in around the 2.3% mark by 2016.
A similar CPI value is expected for Alberta
(2.4%) in 2016.
• The Canada to United States (US) exchange
rate was about $0.85 CAN per US dollar in
quarter four of 2014, down in response to a
strengthening United States economy.
• The price of crude oil took a tumble in the
third and fourth quarters of 2014, reaching
five-year lows of $55/US barrel for West
Texas Intermediate (WTI) crude at the end of
the year.
• Natural gas prices in Alberta are expected
to hold steady at around $3/GJ to $4/GJ
for 2015 and into the next few years.
• Exports share of Canada’s total gross
domestic product has been holding steady
at around 30% over the last four years.
• Growth in the dollar value of imported goods
and services into Alberta has levelled off at
around 5% as of 2013.
• Edmonton’s annual population growth
came in at 3.7% in 2014, and has been
consistently above both the Canadian and
Albertan average, driven by strong inmigration.
• Trade, Construction, and Health Care and
Social Assistance were the key labour
force industries employing Alberta (and
Edmonton) residents in 2014.
• The metric of St. Albert’s business licences
per 1,000 residents was significantly higher
than Edmonton’s value for 2014.
• Total monthly residential building permit
construction value in Alberta surpassed the
$1 billion dollar mark in 2014.
• Edmonton area single family dwelling
housing starts are expected to remain at just
above the 6,000 units per year mark into
2016.
• Non-residential Construction Price Index is
on the rise across many major Canadian
cities, with the highest levels existing in
Edmonton and Calgary.
• Canada’s research and development
spending as a fraction of GDP has been in
steady decline since 2008.
• Edmonton periphery was ranked the 2nd
best place to start and grow a business in
2014.
• Major projects in Alberta are currently worth
an estimated $204 billion (in progress or
planned).
4
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
INTRODUCTION
A Welcome from Economic Development
The Economic Development Division at the City of St. Albert is
committed to serving the business community at large by helping
St. Albert retain and expand its non-residential sector. Various
factors can impact the growth of businesses, from local weather to
far-reaching events beyond regional borders. The purpose of this
report is to inform and educate the business community about
economic factors which impact St. Albert and the surrounding
region’s economy. Understanding the economic environment on
a fundamental level can help to prepare businesses for future
economic climates, and successful planning based on reliable
information can ultimately lead to prosperity and growth for
forward-thinking enterprises.
It is our mission in the Economic Development Division to
support St. Albert businesses in such a way that fosters growth,
innovation, and success. The State of the Economy 2014 Report is
presented on behalf of the City of St. Albert to give businesses the
information they need to successfully plan for their future.
Research Methodology
All research for this report was conducted by internal City of
St. Albert staff. Data sources were queried to obtain the most
up-to-date information possible at the time of report creation.
Great care was taken to present the data in the most meaningful
and intuitive fashion possible. When applicable, intricacies of the
data sets are explained with reasonable depth. Data sources,
background research documents, and sources of indicator trend
interpretations and forecasts are fully documented in the report’s
References section.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
5
0
GLOBAL ECONOMIC IMPACTS
Global Events and Their Impact on
Canada’s Economy
The year 2014 saw many global events straining the predictability
of the world market. Early in the year, tensions between Russia
and Ukraine pushed oil prices up past $110/barrel while the world
held its breath. In the second half of 2014, reports of weakerthan-expected growth in China and Europe (combined with a glut
of supply from the United States shale production) pushed oil
prices down past $60/barrel. With the recent plummet of oil prices
in the last two quarters of 2014, Alberta’s economy faces new
uncertainty in 2015. The Alberta government relies on revenues
from oil sands royalties to supplement its infrastructure budget,
and the budget for 2015 was based on a forecast of oil prices at
$95/barrel. As a primary driver of Canada’s growth coming out of
the recession, the Alberta economy is a topic of much importance
to both Canadians and Albertans alike.
The United States continues to pull itself out of the recession,
posting 2.4% real GDP growth in 2014. With the announcement
of the Federal Reserve putting an end to its quantitative easing
program, interest rate increases in the United States are imminent.
Lagging that change, the Bank of Canada will likely increase
their key lending rate, ending their longest-standing rate freeze
since the 1950s. An interest rate increase could have a negative
impact on the housing market as potential homeowners find
themselves with a reduced capacity to afford increased payment
sizes on mortgages.
Regardless of what the year 2015 brings, Canada needs to keep a
close eye on the events of the global economy in which it resides.
From oil prices to environmental disasters, the variables affecting
the strength of the Canadian economy are as numerous as they
are unpredictable. Businesses in Canada need to be diligent in
monitoring current global economic trends in order to prepare
themselves for the business environment of tomorrow.
6
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
KEY ECONOMIC INDICATORS
1
Gross Domestic Product
The Canadian economy is influenced by many variables; the
cost of natural resources, the vitality of the manufacturing and
construction industry, transportation network strengths, trading
interactions with other countries, and the policies created by
elected governments. A key measure of economic health is the real
Gross Domestic Product (GDP). This measures the total annual
production of goods and services of a region.
Canada, Alberta & Edmonton Real GDP Growth
8.00
FORECAST
PERCENTAGE (%)
6.00
4.00
Canada
Alberta
2.00
Edmonton
0.00
- 2.00
- 4.00
- 6.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
YEAR
Figure 1.1. Canada, Alberta, and Edmonton real GDP growth. Source: Statistics Canada, Enterprise Edmonton.
Forecast: Government of Alberta, Scotia Bank.
Figure 1.1 shows the real GDP growth for Canada, Alberta and
Edmonton from 2002 to 2013, as well as the forecasts for 2014
and 2015. Canada’s GDP growth for 2013 was around 2.7%, while
Alberta’s GDP growth came in at closer to 3.9%. At the regional
level, Edmonton’s GDP growth was 4.2% in 2013. While the 2014
and 2015 forecasts are calling for a convergence of GDP growth
from all levels to meet at around 3.5%, Alberta and Edmonton
are currently enjoying above-average GDP growth relative to
other provinces and cities. The recent downturn in oil prices may
negatively impact GDP growth in 2015, which means consumers
and businesses alike will be anxiously awaiting the first quarter’s
GDP numbers for 2015.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
7
The intimate relationship between the economies of Canada and
the United States (US) is clear when the GDP growth of the United
States is examined (compare Figure 1.2 to Figure 1.1). The United
States has managed a GDP growth of around 2.3% for the last few
years, and experienced a GDP contraction similar to Canada during
the peak of the recession in 2009. The most recent forecasts for
the United States GDP growth is around 2.3% for 2015, so barring
any further shocks to the global economy, North America should
continue to move in the right direction in the upcoming years.
This could be good news for St. Albert businesses that have been
putting off expansion into the export market in post-recession
Canada; the time to ramp up shipments of Canadian goods and
services to our recovering consumer market to the South may be
near.
United States Real GDP Growth
5.00
4.00
PERCENTAGE (%)
3.00
2.00
1.00
0.00
- 1.00
- 2.00
- 3.00
- 4.00
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
YEAR
Figure 1.2. United States real GDP year-to-year change over the last twelve years. The overall trend is very similar to the pattern
seen in Canada’s GDP growth, highlighting the inter-connectedness of the two economies.
Source: United States Department of Commerce, Bureau of Economic Analysis.
8
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 1.3 shows the ten Canadian provinces (with territories
excluded due to their low GDP contribution) and their respective
shares of the Canadian GDP in 2013 represented by the horizontal
axis bar width. Ontario, Quebec, Alberta, British Columbia, and
Saskatchewan account for just over 90% of the total Canadian
GDP. On the vertical axis, the height of the bar represents the
growth of that province’s GDP relative to the previous year.
This figure shows just how important Alberta is to the Canadian
economy; although Alberta only makes up around 20% of the total
Canadian GDP, its GDP growth rate was about four times faster
than Ontario or Quebec’s growth rate in 2013.
Percentage of Canada’s 2013 GDP versus Provincial GDP Growth
8
% GDP GROWTH
6
4
2
NFL PEI
ON
QC
AB
BC
SK MB NS
NB
0
0
25
50
75
ON
QC
AB
BC
SK
MB
NS
NFL
NB
PEI
100
% CANADA GDP
Figure 1.3. Provincial share of the overall Canadian GDP in 2013 represented by width on the horizontal axis, plotted versus
their individual GDP growth in 2013 on the vertical axis.
What it means for St. Albert:
All of the data from the months leading up to the drop in oil prices indicate an Alberta economy with
a fair bit of momentum, which may hopefully carry it through the recent downturn in crude oil prices.
Despite the pull-back on some oil sands projects, there are a large number of other infrastructure
projects in the works in Alberta. St. Albert is situated next to a primary labour and population hub in
Alberta (Edmonton), and is more or less situated between another two main hubs; Fort McMurray
and Calgary. This optimal location and tight connectivity with the Capital Region, combined with the
recently annexed land slated for non-residential development in St. Albert and recovering Canadian
economy all indicate the potential for steady growth in St. Albert’s future.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
9
Consumer Price Index
Consumer Price Index (CPI) measures how the cost of an average
consumer’s basket of goods changes over time. The change in
CPI from year-to-year can be used as a measure of inflation for the
region where the prices of those goods was measured. The eight
major “items” in the CPI basket are: “food”, “shelter”, “household
operations, furnishings and equipment”, “clothing and footwear”,
“transportation”, “health and personal care”, “recreation,
education and reading”, and “alcohol and tobacco”. The current
target for the Government and Bank of Canada is 2% inflation, the
midpoint of the control range (1% to 3%). Maintaining inflation (or
CPI growth) at a low, predictable rate allows Canada to create an
environment for sustainable economic growth. Global economic
events, trade relationships with other countries, and internal
Canadian political events can all impact the health of the CPI over
time.
Consumer Price Index Year to Year Changes for Canada, Alberta and Edmonton
YEAR-TO-YEAR CHANGE (%)
6
FORECAST
5
4
Canada
Alberta
3
Edmonton
2
1
0
-1
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
YEAR
Figure 1.4. Consumer Price Index year-over-year growth for Canada, Alberta, and Edmonton.
Source: Statistics Canada, forecast for Alberta and Canada from TD Economics (January 2015).
10
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 1.4 shows the year-to-year change in CPI for the national,
provincial, and regional economy. Canadian CPI growth tends to
be more moderate than the provincial or regional growth, usually
lying somewhere in the 1% to 3% range. Recently, Canada’s CPI
growth has dropped a few percentage points from a local high of
about 3%. TD Economics forecast as of January 2015 predicts a
bit of a decline towards the 0.4% level in 2015, before Canada’s
CPI returns to the mid-2% level in 2016. Alberta and Edmonton
have historically both followed a very similar trend to each other,
which is not surprising given that Edmonton contributes to a
decent portion of Alberta’s overall economy. Forecasts call for
the Edmonton Census Metropolitan Area (CMA) inflation to settle
around the 1% mark into 2016, with Alberta’s CPI growth taking a
nosedive in 2015 due to decreased oil prices, then rebounding in
2016 to near 2.4%.
What it means for St. Albert:
Steady, predictable CPI growth around 1% is good news for Capital Region businesses, which need
to be able to plan for the increased cost of doing business in the near future. In a global market with
so many uncertainties, a stable, moderate inflation environment can be an alluring condition for
international investment.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
11
Foreign Exchange Rate
(Canadian Dollar versus US Dollar)
The Loonie: CAN/USD Exchange Rate
1.20
EXCHANGE RATE (USD per CAN$)
1.00
0.80
0.60
0.40
0.20
YEAR
Figure 1.5. The Canadian dollar versus United States (US)
dollar foreign exchange rate. After reaching equality (par)
in the years following the recession, the Canadian dollar has
recently dropped to around $0.85 USD, although the average
value for 2014 was $0.91. Source: CanadianForEx.
Figure 1.5 shows the fifteen-year trend for the Canadian dollar foreign exchange rate relative to the
US dollar. After reaching a maximum of par (equal) with the American dollar in 2011 and 2012,
the exchange rate has begun to decrease. Factors relating to this decrease definitely include the
increasing strength of the US economy, and a decrease in global oil prices. Although the average
for 2014 was closer to $0.90 per US dollar, the last quarter of 2014 saw the Canadian dollar sitting
around $0.85 per US dollar.
What it means for St. Albert:
For Alberta companies dealing in the export industry, this is potentially good news, especially for
producers of goods destined to the United States. For consumers, it is likely to lead to an increase in
prices of goods and services that rely on imported materials, as the increase in costs of imports get
passed along to the end consumer.
12
2014
2012
2013
2010
2011
2008
2009
2006
2007
2004
2005
2002
2003
2000
0.00
2001
Canada’s economy is an open, trade-reliant
market. The price of the Canadian dollar, or
“the Loonie”, relative to other external currencies
is extremely important, as it is directly tied to
the amount of goods and services that are
brought into, or sent out of Canada. If the
Canadian dollar depreciates relative to say,
the United States dollar, it will make Canadian
goods (and services) cheaper for American
companies, and this can increase the demand
for Canadian products. Many variables impact
the exchange rate, from the average price of
commodities in foreign markets, to the Canadian
inflation rate. Although the Canadian exchange
rate in turn influences a great deal of other
economic indicators, a general rule of thumb
is that a “weaker” loonie can benefit exporting
companies, and a “stronger” loonie can benefit
importing companies.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
ENERGY INDICATORS
2
Crude Oil Prices
One of the top economic news stories of 2014 was the
plummet in the price of crude oil in the third and fourth quarters.
A combination of factors lead to the decrease in the price of oil.
First, tight-oil plays in the United States (extraction of oil from
shale reserves through new drilling techniques) contributed to an
increase in North American output. Output also increased from
countries recovering from recent military conflicts (Libya and
Iraq). This increase in output occurred at the same time as growth
weakened in European and Asian markets (Germany and China to
name two) which stunted international demand for oil. Historically
the Organization of the Petroleum Exporting Countries (OPEC)
has mitigated these drops in oil prices by restricting supply, but
Saudi Arabia (a primary producer in OPEC) announced a decision
in November of 2014 to maintain current output, in a bid to
retain their market share of crude oil sales relative to the United
States. The combination of increased international supply and
weakened demand has sent oil prices plummeting. This has direct
consequences for the province of Alberta, which relies partially on
oil royalty revenues for government funding.
WTI Spot Price - Annual Average Price of Barrel of Oil
120.00
US $/BARREL
100.00
80.00
60.00
40.00
20.00
0.00
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
YEAR
Figure 2.1. West Texas Intermediate (WTI) Crude oil prices (annual average), 20-year trend.
Source: Energy Information Organization.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
13
West Texas Intermediate (WTI) crude oil is often used as a
benchmark for crude oil prices in North America. This high-quality
crude is refined primarily in the south-west and mid-west refineries
of the United States, and is often compared along side Brent
Crude (from Europe) and Western Canadian Select (WCS) crude
oil from Alberta. Figure 2.1 shows the average annual price of WTI
crude oil, in US dollars per barrel. As the world’s economy heated
up in the early 2000s, oil prices began to rise as demand for oil
increased around the globe. After peaking in 2008 at around
$100US/barrel, oil prices dropped significantly in 2009 as the
recession took hold. Oil prices quickly rebounded, beginning their
ascent upwards again before levelling off around $95-$100US/
barrel in 2011. Conflicts in oil-producing countries kept the supply
low and prices high from about 2011 until mid-2014, when WTI
prices began to tumble from a summer high of around $105US/
barrel all the way down to $55US/barrel by the end of the year.
Oil prices are expected to recover in late 2015 and into 2016.
Price of Western Canadian Select (WCS) vs West Texas Intermediate (WTI) Crude
120.00
US $/BARREL
100.00
WTI
(Texas)
80.00
WCS
(Alberta)
60.00
40.00
20.00
0.00
2009
2010
2011
2012
2013
2014
YEAR
Figure 2.2. Price of Western Canadian Select Crude Oil (Alberta) versus the price of Western Texas Intermediate (Texas) Crude
Oil from 2009 to 2014. Source: Alberta Economic Dashboard.
14
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 2.2 shows the price of Western Canadian Select (WCS)
crude (primarily from Alberta oil sands) versus the price of WTI
(from Texas) over the last six years. Crude oil from bitumen is
harder to obtain, and then harder to refine, when compared to
“sweet light” crude oil from conventional wells. This results in a
differential in prices per barrel. The difference in price (per barrel)
for WTI versus WCS ranges from around $10US/barrel to $25US/
barrel. A smaller differential between the prices for the two types
of oil is desirable for sellers of WCS. Alberta has been experiencing
a slightly cushioned blow from the dropping price of oil because of
a shrinking differential, as well as a weaker foreign exchange rate.
What it means for St. Albert:
For St. Albert businesses involved in the oil and gas industry, the dropping price of oil is less-than-ideal
news. For consumers who purchase oil-derived products, there is temporary relief in commodity costs.
This may lead to a temporary boost in overall consumer spending on retail goods, although in the long
run the overall Alberta economy will likely suffer, and this impact will be felt by all Albertans as jobs
related to oil sands projects begin to decrease. The forecast looking into the future is uncertain; most
predict that oil prices will bottom out somewhere in the $45-$55US/barrel range, before climbing back
up to the $80US/barrel range and stabilizing over the next few years. Given this scenario, businesses
in Alberta will need to adapt to the lower cost of oil, and work on ways to shrink the differential
between WTI and WCS, perhaps by finding new ways of getting Alberta oil to international markets.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
15
Natural Gas Prices
Alberta accounts for roughly 70% of all natural gas produced in Canada. Alberta Energy states that
about 16% of natural gas burned in Alberta is used to heat dwellings and businesses. The other 84%
of natural gas used in Alberta is consumed by the transportation sector, for electricity generation, and
other industrial uses. Natural gas plays a key role in Alberta’s energy export market, and fluctuations in
the prices of natural gas can impact the operating costs of businesses, as well as the cost of keeping
resident’s houses warm during the harsh Alberta winters.
Price of Natural Gas in Alberta (CAN $/GJ)
NATURAL GAS PRICE (CAN $/GJ)
Figure 2.3 shows the average
annual price of natural gas,
in $CAN/Gigajoule. Natural
gas prices reached record
highs during the height of
the economic boom (20052008) but have come down
to below $4 CAN/GJ levels in
recent years (2009-2014). An
increase in hydraulic fracking
(and horizontal drilling) has
allowed the United States to
increase their production of
natural gas, leading to a glut of
supply in North America which
has suppressed prices. Prices
are forecast at the $3.5-$
4.0CAN/GJ level for the next
five years (gasalberta.com).
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
YEAR
Figure 2.3. Average annual price of natural gas in Alberta, per gigajoule.
Source: Alberta Energy.
What it means for St. Albert:
The steady forecast for prices of natural gas going into the next five years means businesses should
be able to budget accurately for the costs of heating their facilities. For businesses which consume
natural gas for other purposes (such as transportation), the low cost of natural gas is a positive story
as it leads to reduced operating costs. For residents of St. Albert, it could mean predictable heating
bills over the long term.
16
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Gasoline and Diesel Prices
For consumers and businesses alike, the price of transportation
fuel is often a necessary expenditure. The cost of fuel makes up
about 5% of total consumer costs every year, according to the
Statistics Canada calculation of Consumer Price Index. Lower costs
of gasoline or diesel often means more money kept in the pockets
of consumers when they visit a fuel pump. For businesses in the
trucking industry, the cost of diesel can have a large impact on
operating costs (and profit margins) each year.
Transportation Fuel (Gasoline and Diesel) Price for Edmonton CMA
INDEX (2002 = 50¢/L)
150.0
125.0
Gasoline
Diesel
100.0
75.0
4
3
14
T1
OC
R
AP
T1
OC
2
13
R
AP
1
12
T1
OC
R
AP
T1
OC
0
11
R
AP
9
10
T1
OC
R
AP
T0
OC
8
09
R
AP
08
7
T0
OC
R
AP
T0
OC
AP
R
07
50.0
Figure 2.4. Gasoline and diesel prices for Edmonton CMA. Source: Statistics Canada.
Figure 2.4 shows the gasoline and diesel prices for Edmonton
CMA. Plotting the monthly data can show just how turbulent
transportation prices are month to month. After rising sharply at
the end of the boom, and then plummeting during the recession,
fuel prices have been steadily rising over the last few years. The
recent drop in oil prices has seen gasoline prices fall also, which
has given consumers a bit of a break at the pump. However, the
long term negative consequences of low oil prices on the Alberta
economy will eventually come to weigh on consumers as the
overall economy growth slows. The low price of transportation fuel
may provide a boost to the transportation industry, as demand
for fuel is driven up by the low costs, and the costs of shipping
materials is reduced.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
17
What it means for St. Albert:
The businesses in St. Albert involved in the transportation industry will enjoy the low costs of
transportation fuel, as the operating costs for their businesses are reduced. Likewise, consumers will
get a break at the gas pumps from low gasoline and diesel prices. When oil prices begin to increase
again, the costs of transportation fuel will increase as well. Businesses and consumers need to make
sure they do not get too comfortable with these low gas prices, and plan appropriately for potential
market shifts that could see the price of fuel increase. In the meantime, it is often wise to put saving
derived from low fuel prices away for safekeeping in case of periods of above-average fuel prices in the
future.
18
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Exports
Canada’s Exports by Province,
Jan - Nov 2014 ($CAN, Billions)
180
160
140
120
$CAN BIL
100
80
60
40
20
Br
it
ish
Al
be
rta
Qu
eb
ec
Co
lu
m
Sa
bi
a
sk
at
c
At
h
ew
la
nt
an
ic
Pr
ov
in
ce
s
M
an
ito
ba
Te
rri
to
rie
s
0
On
ta
rio
Exports play a large role in the Canadian
economy, accounting for roughly 30% of the
country’s gross domestic product in recent
years. The export market is impacted by factors
such as demand for Canadian goods, relative
strength of the United States’ economy, and
production capacity domestically, to name just
a few. The export market can sometimes be
difficult to predict, especially for individual subcategories such as energy, agriculture, and retail
goods. Examining the provinces and territories
individually (Figure 2.5) shows Ontario, Alberta,
and Quebec taking up the top three spots in
terms of total dollars of goods exported, as of
Nov 2014 (year to date totals). Alberta accounted
for about 25% of all of Canada’s exports in 2014.
Figure 2.5. Canadian provinces export market ranking,
by dollar value of exports. Source: Statistics Canada.
In terms of total share of Canada’s GDP over time, the export industry was around 38% in 2004, and
sunk to a low of about 29% in 2009, before slowly leveling off at around 30% over the last four years.
Exports Share of Canada’s GDP
37.39
36.14
35.25
32.69
EXPORTS/TOTAL (%)
38.21
2004
2005
2006
2007
2008
28.98
29.50
30.17
30.15
30.29
31.30
2009
2010
2011
2012
2013
2014
Q1 - Q3
YEAR
Figure 2.6. A ten-year perspective of the export industry’s share of total Canadian GDP over time. Source: Statistics Canada.
Figure 2.6 shows the trend for export’s share of Canadian GDP over time. Recent years have seen
the trend holding steady at around 30% market share. The export industry is likely to continue playing
a large role in the Albertan (and Canadian) economy in the years to come. The 2014 value was
calculated from the first three quarters data on exports and total GDP for Canada.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
19
Alberta’s Exports, 2003 to 2014 ($CAD Billions)
120
100
Exports, Non-Energy,
$ BIL
Exports, Energy,
$ BIL
$CAD BIL
80
60
40
20
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
YEAR
Figure 2.7. Alberta’s exports (in billions) divided into energy and non-energy (Government of Alberta).
Figure 2.7 shows Alberta’s exports over the last
eleven years categorized between energy based
exports, and non-energy based exports. It is
shown that a large portion of Alberta’s export
growth comes from the energy industry, with only
around 25% of exports coming from non-energy
goods in 2013. The export industry in 2013
totalled $103.3 billion dollars, nearly double its
value from ten years prior.
What it means for St. Albert:
For St. Albert businesses, the take home message may be that the export industry is an integral part
of the Alberta economy, and its market share appears poised to hold steady in coming years. Energy
continues to account for a large fraction of total exports, with the vast majority of the energy products
bound for the United States. Diversification of the export industry can reduce the susceptibility of the
Alberta economy to boom and bust cycles of the energy market.
20
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Imports
In contrast to exports, total imports give an idea about what a
province needs for externally produced goods and services that it
is unable to provide internally. When calculating provincial Gross
Domestic Product values, the import of goods and services from
other provinces and countries is tracked by Statistics Canada.
Figure 2.8 shows the year-to-year changes in total amount of
goods and services imported into Alberta from other provinces
and countries. A negative value shows a decrease relative to
the previous year in the total dollar value of goods and services
imported. After peaking in 2005 at around 13%, the growth in
imports began a steady decline, ultimately shrinking in size in
both 2008 and 2009. In 2010, the dollar value spent on imports
jumped back up to just over the total from 2007, before settling
down near the 5% to 6% level in recent years.
Annual Change in Alberta Imports of Goods and Services
YEAR-TO-YEAR CHANGE (%)
15.00
10.00
5.00
0.00
- 5.00
- 10.00
- 15.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
YEAR
Figure 2.8. Alberta’s expenditures on imported goods and services (year-to-year changes) over a ten year period.
Source: Statistics Canada.
What it means for St. Albert:
For St. Albert businesses, imports can be an indicator of reliance on external goods and services,
which may differ in prices or availability relative to local sources from year to year. The less a province
imports, the more self-sustaining it becomes. A totally diversified and self-sufficient region would
require little or no imported goods or services from external suppliers. In principle, this is very difficult
to achieve, as no single area is able to provide all of the necessary raw products required by both
consumers and manufacturers. Shopping locally can help reduce Alberta’s reliance on the goods and
services from other provinces and countries.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
21
3
POPULATION AND LABOUR
Population Growth
Population growth is a crucial indicator for any region. People are
the natural resource that drive the labour force, the economy, and
the culture that defines a region. If a population is decreasing, it
may be a sign that something is amiss in that region that is driving
people away. On the other end of the spectrum, rapid population
growth can lead to a strain on existing infrastructures, an
increase in crime, and an increase in traffic congestion while the
government struggles to keep up with increasing levels of required
resident services.
Figure 3.1 shows population growth as a percentage for Canada,
Alberta, Edmonton, and St. Albert. At the macro level, Canada’s
overall population growth has remained rather consistent over the
last twelve years, averaging about 1.1% growth annually. It also
exhibits very low variance about the 1.1% growth average, rarely
straying more than 0.1% off the average value.
Population Growth: Canada, Alberta, Edmonton and St. Albert
4.50
4.00
GROWTH (%)
3.50
3.00
Canada
2.50
Alberta
2.00
Edmonton
St. Albert
1.50
1.00
0.50
0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010
2011
2012
2013
2014
YEAR
Figure 3.1. Population growth for Canada, Alberta, Edmonton CMA, and St. Albert over a thirteen-year period.
Source: Statistics Canada, St. Albert Municipal Census.
Relative to Canada’s growth, Alberta’s population growth shows
a bit more fluctuation, but it also sustains much higher levels on
average. Despite suffering a slight slow-down in growth during
the recession, Alberta’s population growth reached boom-level
22
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
highs of 3% in 2013. The average for Alberta over this period is
around 2.3% annually. Edmonton’s population growth curve follows
Alberta’s trend-line very closely; this is expected since Edmonton
makes up a significant fraction of Alberta’s population. Since about
2006, Edmonton has enjoyed growth that is consistently above
the Alberta average for each year. All of the provincial and regional
growth trends relative to Canada’s growth speaks to the strong
economy of Alberta (and Edmonton) coming out of the recession.
However, the recent downturn in oil prices presents a significant
risk to Alberta’s economic and population growth in 2015.
PERCENTAGE (%)
At the local level, St. Albert has
St. Albert’s Share of Capital Region Population
seen an average population
growth of around 1.4% over the
7.00
last thirteen years. This is well
6.00
above the Canadian average,
5.00
but below Edmonton and
Alberta’s average. The small
4.00
drop in population growth
3.00
between 2010 and 2012
2.00
may have been due to space
constraints in St. Albert’s
1.00
housing stock, as well as weak
0.00
economic conditions in Canada
2002
2004
2006
2008
2010
2012
2014
overall. In terms of relative
YEAR
share of the Capital Region’s
population, St. Albert has held
Figure 3.2. St. Albert’s share of the Capital Region population over time. The trend
is holding steady at around 5%, with a minor decrease seen over the last ten years.
steady at around 5% over the
last thirteen years. Figure 3.2
shows St. Albert’s share of the Capital Region population over time. Since 2002, St. Albert’s relative
share of the Capital Region population has dropped about three quarters of a percentage point.
Going forward as St. Albert is able to offer a greater diversity of housing stock, and increase the land
available for single family dwellings, this percentage share may begin to tick upwards in future years.
What it means for St. Albert:
For St. Albert, population growth has historically been steady and predictable. Periods of low
housing stock can temporarily hinder population growth, while years following new neighbourhood
developments can show average to high levels of population growth. Steady population growth is good
for planning purposes; it creates predictable patterns of required increases in service levels and new
infrastructure. Steady, predictable growth is also beneficial to St. Albert businesses, as it allows for
business planners to match supply and demand in a low-volatility environment.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
23
Population Growth Driver: Migration
One of the key drivers of Alberta’s healthy population growth in
recent years has been migration. Generally, there are two types of
in-migration; international, and interprovincial. Figure 3.3 shows
Alberta’s total net in-migration over the last fourteen years. The
curve follows an up-and-down pattern as incoming migrants react
to market conditions. In 2013, Alberta experienced previously
unseen levels of in-migration, as international and interprovincial
migrants alike flocked to Alberta to take advantage of the strong
job market. It is expected that as the market cools, the net
migration will begin to drop off from the record highs seen in 2013
to more historic-average levels.
Alberta Net Migration, International and Interprovincial (Annual Totals)
120,000
100,000
PEOPLE
80,000
60,000
40,000
20,000
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
102,465
YEAR
Figure 3.3. Alberta net migration (international and interprovincial) over the last fourteen years. Source: Statistics Canada.
Figure 3.4 shows the breakdown for international versus
interprovincial net in migration for Alberta. That is, Figure 3.4
shows what percentage of the total incoming migrants to Alberta
were from other provinces, and what percentage came from other
countries. The overall trend indicates that international migrants
are starting to occupy a greater share of Alberta’s total migration
as time goes on (when compared to interprovincial migrants). This
type of information is useful for businesses looking to fine-tune
their marketing techniques to attract new customers. It can also be
useful for those in the housing industry that need to understand
the profile of the “average” new resident to Alberta.
24
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Percentage Distribution of International vs Interprovincial Migration into Alberta
100.00
90.00
80.00
PERCENT
70.00
% Migration
Interprovincial
60.00
% Migration
International
50.00
40.00
30.00
20.00
10.00
20
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
0.00
YEAR
Figure 3.4 Percentage distribution of international vs interprovincial migration into Alberta. Source: Statistics Canada.
What it means for St. Albert:
By understanding the drivers of population growth, the City of St. Albert can plan for future residents
in a way that sustains existing service levels. It can also allow for effective resident and business
attraction strategies. For St. Albert businesses, understanding the growth of both St. Albert and the
Capital Region is paramount for effective business planning. Knowing the current and future customer
base for a business can allow for adequate service and product planning.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
25
Labour Force
Figure 3.5 shows the year-to-year change in the total size of the
labour forces for Canada, Alberta, and Edmonton. There is a
similar behaviour in the labour force data when compared to the
population data: Canada overall exhibits smaller growth rates, but
also smaller fluctuations. As the region examined decrease in size
(Alberta, then Edmonton) the variability in growth may increase,
but so does the overall growth rate. For the period observed
in Figure 3.5 (2004 to 2014) Canada’s average annual labour
force growth was 1.2%, Alberta’s was 2.5%, and Edmonton’s
was 2.8%. The curve for each region’s labour force size is related
to population size. Labour force shows the working portion of
the population, so it is impacted by both changes to the total
population, as well as changes to the fraction of the population
that is able to work. All three regions (Canada, Alberta, and
Edmonton) suffered a contraction in 2009, and then rebounded
back to pre-recession levels of labour force growth between
2012 and 2014. St. Albert specific labour force data is not as
readily available; information is derived from the federal census
data which occurs every five years. Between 2006 and 2011, St.
Albert’s labour force grew by 0.8% annually.
Total Labour Force Growth: Canada, Alberta and Edmonton
7.00
YEAR-TO-YEAR CHANGE (%)
6.00
5.00
4.00
Canada
3.00
Alberta
2.00
Edmonton
1.00
0.00
- 1.00
- 2.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
YEAR
Figure 3.5. Total labour force size year-to-year change for Canada, Alberta, and Edmonton. Source: Statistics Canada. The last
data point (2014) was based on the year-to-date average size of each labour force as of November 2014.
26
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Table 3.1 shows the five largest labour force groups (by NAICS code) for each region. The data for
Canada, Alberta, and Edmonton is from 2014, while the most recent data available for St. Albert was
from 2011 (National Household Survey). The key point to take away from this table is the importance
of Trade, Construction, Health Care and Social Assistance, and Professional, Scientific, and
Technical Services at all levels, from national right down to the Capital Region. Alberta and Edmonton
both have the same top four ranked NAICS categories by size. St. Albert differs slightly from the larger
regions, showing an increased importance on the public administration category. In 2011, St. Albert’s
share of the Edmonton economic region’s labour force was about 5.3%, a little bit higher than the
population share of the Capital Region.
St. Albert
RANK
Canada
Alberta
Edmonton
1
Trade
[41 44-45]
Trade
[41 44-45]
Trade
[41 44-45]
Trade
[41 44-45]
2
Health care and
social assistance
[62]
Construction
[23]
Construction
[23]
Public
administration
[91]
3
Manufacturing
[31-33]
Health care and
social assistance
[62]
Health care and
social assistance
[62]
Health care and
social assistance
[62]
4
Professional,
scientific and
technical services
[54]
Professional,
scientific and
technical services
[54]
Professional,
scientific and
technical services
[54]
Construction
[23]
Construction
[23]
Forestry, fishing,
mining, quarrying,
oil and gas
[21 113-114 1153
2100] (11,12)
Manufacturing
[31-33]
Educational services
[61]
5
(2011 Data)
Table 3.1. The top five North American Industry Classification System (NAICS) labour force industries for each region (by size).
Canada, Alberta and Edmonton data is from 2014, St. Albert’s data is from 2011. Source: Statistics Canada.
Figure 3.6 shows an estimate of the average
weekly earnings for Canada, Alberta, and
residents of the Edmonton CMA in 2014. The
difference in average weekly earnings in Alberta
and Edmonton relative to the rest of Canada may
be a key contributing factor to the high levels of
in-migration experienced in recent years. Wages
in Alberta are being driven up by the tight job
market, which has seen unemployment in the
4% to 5% range for the last three years.
Average Weekly Wages (Estimate) in 2014
$1,144.86
$1,282.69
$933.55
Canada
Alberta
Edmonton
Figure 3.6. Average weekly earnings (estimated) for Canada,
Alberta, and Edmonton in 2014. The data used to create this
chart was the average from January to September 2014 of
monthly wage estimates. Source: Statistics Canada.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
27
What it means for St. Albert:
Overall, Alberta and Edmonton are experiencing healthy population and labour force growth compared
to Canada overall. This is due to the strong economies of the Western provinces as North America
pulls itself out of the recession. This strong labour market is also driving up wages in Alberta relative
to the rest of Canada, which may be a leading or lagging driver of the population growth. Businesses in
St. Albert can benefit from the close connection to the thriving Capital Region, and the overall strength
of the Alberta economy and population growth. However, St. Albert differs slightly in the industries
that employ the majority of its residents, placing a greater emphasis on Public Administration and
Education Services, as compared to Alberta overall. It is this same difference in labour force, with
a greater emphasis on public administration and a low proportion of oil and gas workers, that may
somewhat insulate St. Albert’s labour force from oil-price related shocks to the job market. Overall,
Trade, Construction, and Health Care and Social Assistance are key industries in Alberta, Edmonton,
and St. Albert. The Alberta labour force, especially in resource-dependent regions, may experience
some interesting shifts in 2015 in response to decreases in oil prices, and subsequent cut-backs on
oil sands projects.
28
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Businesses
The number of business licences can be used as a proxy of non-residential economic strength for
a region. Although the total number of business licences does not tell you how successful or large
the businesses are, in general an increase in the number of business licences is desirable. Creation
of new businesses (as registered by an increase in business licences) shows the non-residential
component of an economy is expanding, which helps to provide the necessary services for a growing
population. Increase in the non-residential component of an economy can also help offset residential
taxes.
Figure 3.8 shows the total number of business
licences in St. Albert from 2008 until 2014,
as measured by the average of the monthly
recorded business licences each year. St. Albert
maintains a healthy number of business licences
relative to its resident base. Figure 3.9 shows the
total number of business licences (in Edmonton
and St. Albert) per 1000 residents. St Albert has
about twice as many business licences per 1000
residents as compared to Edmonton. Despite
St. Albert only having around one tenth of the
total number of business licences of the City of
Edmonton, it has a comparatively large number
of businesses when comparing it to the total
number of St. Albert residents.
City of Edmonton Business Licences
BUSINESS LICENCES
32,000
31,000
30,000
29,000
28,000
27,000
26,000
2011
2012
2013
2014
YEAR
Figure 3.7. Total registered business licences in the City of
Edmonton (Open Data Portal).
City of St. Albert Business Licences
3,300
BUSINESS LICENCES
Figure 3.7 shows the average number of
business licences in the City of Edmonton from
2011 to 2014. The data was obtained from
the City of Edmonton’s Open Data portal; the
values are the average of the monthly number
of business licences recorded. Edmonton shows
healthy growth in the total number of business
licences; about 1000 new licences per year on
average.
3,200
3,100
3,000
2,900
2,800
2,700
2008
2009
2010
2011
2012
2013
2014
YEAR
Figure 3.8. Total registered business licences in St. Albert.
Source: City of St. Albert Business Licensing.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
29
BUSINESS LICENCES /1000 RESIDENTS
City of St. Albert Business Licences
60
50
40
Edmonton
St. Albert
30
20
10
0
2011
2012
2013
YEAR
2014
Figure 3.9. Number of business
licences per 1000 residents for
Edmonton and St. Albert from 2011
to 2014.
What it means for St. Albert:
Overall, St. Albert shows a steady number of total business licences, with heavy growth tapering off
after 2010. In terms of business licences per 1000 residents, St. Albert maintains a much higher
average as compared to Edmonton. This may speak to the large number of business services available
to the average St. Albert resident. Combining both Edmonton and St. Albert business licences shows
there is a sizeable business community to service the Capital Region.
30
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
CONSTRUCTION INDICATORS
4
New Housing Starts
Housing demand is strongly tied to Canada’s overall economic
condition. The dropping oil prices present a significant downside
risk to this growth. Coming out of 2015, a number of factors are
expected to slow the demand for housing, and new housing starts
should begin to gradually ease. The first factor that may lead to
a slow down in housing starts is the large inventory of completed
and unabsorbed units that currently exists in the market. This
glut is expected to drive builders to slow the pace of activity in
order to better manage inventory levels across Canada. Another
variable is Canada’s aging population; the 25-34 age cohort has
experienced slower population growth than other age cohorts,
which is expected to reduce the number of first-time home
buyers in 2015 relative to previous years. Also, the affordability of
housing is expected to decrease as growing house prices outpace
improvements in employment and earnings. Finally, it is expected
that the Bank of Canada will eventually increase their interest rate
from its 2014 value of 1.0%, and as a result mortgage rates will
be driven upwards as well. This interest rate increase is expected
to come in the second half of 2015, and could drive down the
demand for housing as the average consumer’s purchasing power
is diminished.
Canada and Alberta Housing Starts
250,000
200,000
DWELLING STATS
150,000
Canada
Alberta
100,000
50,000
14
13
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
20
02
0
20
Figure 4.1 shows Alberta’s
housing starts in relation to
Canada since 2002. Alberta’s
housing starts have remained
steady, averaging roughly
35,500 housing starts per
year. However, in 2015 Alberta
is expected to see a reduction
in housing starts activity due
to anticipated declines in net
migration and employment
growth, combined with
competition from the
resale market.
YEAR
Figure 4.1. Number of dwelling starts for Canada and Alberta. Source: Canadian
Mortgage and Housing Corporation (CMHC).
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
31
Edmonton CMA Housing Starts
18,000
16,000
14,000
DWELLING STATS
Figure 4.2 shows Edmonton’s
housing starts have been
steadily climbing upwards out
of the ditch caused by the
2009 recession. However,
both single-detached and
multi-family housing starts are
expected to moderate over the
next three years as builders
scale back production to
manage rising inventory levels.
12,000
10,000
8,000
6,000
4,000
2,000
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
YEAR
Figure 4.2. Number of dwelling starts for Edmonton Census Metropolitan Area.
Source: Residential Building Activity Report, CMHC.
PERCENTAGE
Figure 4.3 provides an
St. Albert Share of Edmonton CMA Housing Starts: 13 Year Trend
illustration of St. Albert’s
7.00
overall share of the Edmonton
6.00
CMA housing starts. Over the
TARGET: 5.2%
past thirteen years, St. Albert
5.00
housing starts have averaged
4.00
AVERAGE: 3.9%
3.9% of the total Edmonton
3.00
CMA housing starts. Despite
2.00
an up-and-down pattern, the
linear trend-line is fairly flat for
1.00
St. Albert’s share of Edmonton
0.00
2002
2004
2006
2008
2010
2012
2014
CMA’s housing starts. The
YEAR
City of St. Albert’s target for
its share of Edmonton CMA’s
Figure 4.3. St. Albert Share of Edmonton CMA Housing Starts.
housing starts share is 5.2%,
Source: CMHC data, City of St. Albert Department of Taxation and Assessment,
St. Albert Municipal Census.
which is the average value
of St. Albert’s population
relative to Edmonton over the last fifteen years. The target is represented with a red line in Figure 4.3.
Aggressive and effective resident attraction programs, as well as new neighbourhood developments
can help increase St. Albert’s new housing starts.
What does this mean for St. Albert?
In the short term, the Edmonton CMA’s housing starts may slow due to the large inventory of both
new and resale housing available as well as unfavorable market conditions brought on from dropping
oil prices. Counter-acting this trend, housing starts in St. Albert should remain healthy as new
neighbourhood developments come online, diversity in housing stock is increased, and new resident
attraction techniques are deployed.
32
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
New Home Prices
The new house price index (NHPI) tracks changes in contractors’
prices of new residential homes, relative to prices at a certain
point in time. Within Alberta, the disparity of new housing prices
varies greatly between the two major centres: Edmonton and
Calgary. Figure 4.4 shows that in October 2014, Calgary’s new
housing price index had reached a score of 110, indicating
that housing prices were 10% higher than they were in 2007.
Conversely, Edmonton’s index score was at 91, indicating that new
house prices are less expensive now than they were during the
peak of the housing boom in 2007. It is expected that Edmonton’s
new house price index score will increase as the number of new
residents entering Edmonton outpace that of Calgary.
New House Price Index (NHPI) for Calgary and Edmonton
120
115
INDEX 2007 = 100
110
Calgary
105
Edmonton
100
95
90
85
80
JAN 07
JAN 08
JAN 09
JAN 10
JAN 11
JAN 12
JAN 13
JAN 14
JAN 15
YEAR
Figure 4.4. New House Price Index for major Alberta population centres, Calgary and Edmonton. Source: Statistics Canada.
What does this mean for St. Albert?
Relative to new house prices in 2007, the Calgary NHPI has increased about 10%, and Edmonton’s
NHPI in about 10% lower than in 2007. Low prices for new houses in Edmonton, relative to Calgary,
may be one of the reasons that the Edmonton region has been experiencing strong population growth
recently. A low new house price index, coupled with high wages, makes the Capital Region an attractive
destination for incoming migrants from other provinces and countries. With new developments and
housing diversity options in St. Albert, the city may see a greater share of Capital Region population
growth in coming years.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
33
Building Permit Value
BUILDING PERMIT VALUE ($ MIL)
Building permits are a sign of economic activity to come, and are often used to gauge the level of
new investment in local infrastructure. The total value of building permits is an excellent indicator for
predicting future economic
activity. Figure 4.5 shows the
Total Building Permits in Canada
total value of building permits
6,000
in Canada for both residential
5,000
and non-residential structures.
Residential building permits
4,000
continue to hold strong most
Residential
3,000
likely a result of increasing
Non-residential
number of migrants into
2,000
Canada. The majority of growth
in the non-residential building
1,000
permits is largely attributed
0
to activity in the commercial
OCT 10
OCT 11
OCT 12
OCT 13
OCT 14
sector.
YEAR
34
Figure 4.5. Total Building Permits in Canada, both residential and non-residential.
Source: Statistics Canada.
Total Building Permits in Alberta
1,200
BUILDING PERMIT VALUE ($ MIL)
Figure 4.6 shows residential
and non-residential building
permits in Alberta from October
of 2010 until October 2014.
The monthly form of the data
shows the wide variability of
building permit values within a
year. Overall, both residential
and non-residential building
construction values show
healthy increases during
the five-year period. Home
builders in Alberta are taking
advantage of the steady
increase in population which
is a direct result of record
numbers of incoming migrants.
If the incoming migration to
Alberta begins to level off in
coming years, the number of
residential building permits
may grow at a slower rate
relative to recent years.
1,000
800
Residential
600
Non-residential
400
200
0
OCT 10
OCT 11
OCT 12
OCT 13
OCT 14
YEAR
Figure 4.6. Total Building Permits in Alberta, both residential and non-residential.
Source: Statistics Canada.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 4.7 below illustrates the total building construction value, as
registered by building permits, for St. Albert. Building construction
values in St. Albert ebb and flow, but overall there is positive
growth over the last five years. The linear trend line, shown in
black in Figure 4.7, indicates that the quarterly level of building
construction value has almost doubled in St. Albert since 2010.
It is expected that building permit values will continue to increase
steady into 2015 and then moderate going into 2016, as Alberta’s
provincial migration slows down.
Total Building Construction Value in St. Albert
BUILDING PERMIT VALUE ($ MIL)
80
70
60
50
40
30
20
10
0
Q1
Q2
Q3
2010
Q4 Q1
Q2
Q3
Q4
Q1
Q2
2011
Q3
2012
Q4
Q1
Q2
Q3
2013
Q4
Q1
Q2
Q3
Q4
2014
YEAR
Figure 4.7. Total building construction value as measured by building permits in St. Albert.
Source: City of St. Albert Planning and Engineering Department.
What does this mean for St. Albert?
Building permits are useful for determining how well a municipality is performing in terms of
encouraging business investment. The higher the number (and value) of business permits, the better
the municipality is doing in terms of business growth. If the provincial economy and migration levels
manage to hold steady or trend slightly upwards in coming years (albeit at potentially slower rates), the
number of building permits can be expected to increase as well. If oil prices continue to fall and other
provinces begin to pick up steam, Alberta may see its building construction value growth level out in
the coming years.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
35
Average House Size
Average household size is an indicator of family structure within
the community. Larger house size typically means a community
has more families (with children), and less retired, empty nesters.
An increasing number of occupants per house (on average) can
speak to a need for starter homes for families. Reduction in the
number of people per household can speak to an increased need
for apartments and smaller dwelling types. Figure 4.8 below
illustrates the average household size for each of the four dwelling
types within St. Albert. St. Albert has a steady trend of household
size for both single family and duplex / fourplex dwellings. The
community is currently witnessing an increase in household size
for both townhouse and apartment sizes.
AVERAGE NUMBER OF PEOPLE
PER HOSUEHOLD
Average Household Size in St. Albert (Municipal Census)
3.5
3
Single Family
2.5
Duplex / Fourplex
Townhouse
2
Apartment
1.5
1
2008
2010
2012
YEAR
36
2014
Figure 4.8. Average household
size in St. Albert, as measured by
the reported number of people per
dwelling. Source: City of St. Albert
Municipal Census.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 4.9 illustrates St. Albert’s housing starts, divided into single
family dwellings and semi-detached homes, plotted alongside
apartments, condominiums, and senior homes. Of notable interest
is the recent spike in apartment and rental condos in 2013 that
was significantly higher than single family dwelling starts. This
increase in higher density dwelling starts may hint about future
St. Albert population growth, as well as changes to overall levels of
neighbourhood densities.
St. Albert Housing Starts - Historical Trend
700
600
Single Family,
Semi Detach
Dwellings
UNIJTS BUILT
500
400
300
Apartment,
Rental Condos,
Senior Homes
200
100
0
1990
1994
1998
2002
2006
2010
2014
YEAR
Figure 4.9. City of St. Albert housing starts, single family and semi-detached shown against apartments, condominiums, and
seniors homes. Source: City of St. Albert Taxation and Assessment Department.
What does this mean for St. Albert?
The increase in housing starts for both rental condos and apartments indicates that more people are
residing in these types of dwellings. This likely reflects the response of builders to the market demand
for these types of dwellings. Overall, the total number of dwelling starts in St. Albert has shown healthy
growth coming out of the 2008–2009 recession.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
37
5
PROPERTY MARKET ACTIVITY
Residential Property Market
Economic conditions in Canada are forecast to gradually improve
in the short-term and lead to modest increases in employment
and average earnings, which should support housing demand in
Canada overall. Economic growth is projected to continue in all
three Prairie Provinces, although dropping oil prices present a
significant downside risk. Net migration into Alberta is projected to
have peaked in 2013 and should moderate in coming years due to
improving economic conditions outside this region. Elevated supply
levels relative to demand in some markets will also impact new
residential construction.
Figure 5.1 below shows the expected number of single detached
housing units within the Edmonton CMA. Employment growth,
rising wages, low mortgage rates and relatively low inventory on
the competing resale market have supported growth over the last
few years in this segment. Growth is expected to continue, albeit
at a slower pace, through 2015. Slower employment growth,
coupled with increased selection on the competing resale market,
will reduce the pace of expansion in 2015. In 2016, the singledetached market will moderate slightly, as mortgage rates slowly
rise and the number of listings in the competing resale market
moves higher.
Edmonton CMA Single Detached Housing Starts Forecast
7,000
HOUSING STARTS
6,000
5,000
4,000
3,000
2,000
1,000
0
2008
2009
2010
2011
2012
2013
2014f
2015f
YEAR
Figure 5.1. Edmonton single detached housing starts, historical and two-year forecast.
Source: CMHC, Edmonton Market Outlook Fall 2014.
38
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
2016f
Figure 5.2 below shows the expected number of multi-family
housing starts within the Edmonton CMA. Although demands
remain strong, supported by elevated migration, employment
gains, and a low vacancy rate, builders are pulling back housing
starts to ensure that supply levels remain manageable.
Edmonton CMA Multi Family Housing Starts Forecast
10,000
HOUSING STARTS
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2008
2009
2010
2011
2012
2013
2014f
2015f
2016f
YEAR
Figure 5.2. Edmonton multi-family housing starts, historical and two-year forecast.
Source: CMHC, Edmonton Market Outlook Fall 2014.
What does this mean for St. Albert?
The Edmonton Capital Region is expected to feel the impacts of economic slow down over the next
two years. Expansion of single detached housing units is expected to slow down in 2015 and into
2016 as mortgage rates slowly rise and the number of listings in the competing resale market moves
higher. Multi-family housing is also expected to slow down over the same time period as builders pull
back housing starts to ensure that supply levels remain manageable. This slow down in the Capital
Region may be moderated slightly by new developments and housing diversity increases in St. Albert in
coming years.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
39
Municipal Tax Split
Figure 5.3 shows the municipal tax split comparison for selected
communities across Alberta. St. Albert’s current tax split is 82%
residential and 18% non-residential. The City’s estimated tax split
if all known area structure plans (ASPs) are “built-out” would be
72% residential and 28% non-residential. Currently, the City is
planning over a twenty-year period to formally develop these plans.
The municipal tax burden of residents is offset in municipalities
that have high machinery and equipment tax levies. Wood Buffalo,
Strathcona County, and Fort Saskatchewan all have relatively high
levels of non-residential machinery and equipment levies in their
municipal tax split.
Tax Comparison: Alberta Communities Levy Breakdown, 2014
29%
60%
43%
57%
Non-Residential Levy
Residential Levy
23%
37%
ty
20%
40%
n
50%
20%
51%
59%
59%
62%
62%
63%
30%
68%
74%
76%
40%
82%
50%
Non-Residential Levy,
Machine + Equipment
20%
32%
50%
70%
49%
41%
41%
38%
38%
37%
80%
32%
26%
24%
90%
18%
100%
10%
o
uf
fa
l
dB
oo
Co
un
W
th
co
na
ew
a
ry
ch
ka
t
as
rt
S
Fo
St
ra
on
lga
Ca
rie
mo
nt
Ed
ee
r
Pr
ai
de
Gr
an
t
Re
Ha
dD
ge
ne
M
ed
ici
rid
c
Le
th
b
e
du
Le
ie
mr
os
Ca
rd
r
Ai
ro
ve
eG
Sp
ru
c
St
.A
lb
er
t
0%
Figure 5.3. Municipal tax split comparison for various Alberta municipalities. Source: 2014 Tax Rate Bylaw Documents.
40
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Residential Taxes
Figure 5.4 below shows the five year average municipal tax
increase for residential properties across Alberta. St. Albert
continues to be a leader across major Cities with the second
lowest average tax increase over a five year period, falling second
to Strathcona County. These averages are from the 2011 to 2015
tax years, and the data is taken from news stories published on the
internet. This information is considered unofficial, and to be used
for general comparative purposes only.
Five Year Average Municipal Tax Increase Comparison - Residential
7.60%
8.00%
7.00%
5.84%
6.00%
5.00%
4.22%
3.73%
3.64%
3.58%
3.28%
2.67%
1.00%
2.29%
2.00%
3.23%
3.00%
3.46%
4.00%
ry
lga
Ca
mo
nt
on
r
Ed
c
ee
dD
Re
du
Gr
ce
ru
Le
e
ov
rie
rd
Sp
Ai
th
br
id
ge
rie
ai
an
de
Pr
mr
Gr
Le
e
os
t
Ca
er
lb
St
.A
St
ra
th
Co con
un a
ty
0.00%
Figure 5.4. Five Year Average residential municipal tax increase comparison, from 2011 to 2015. Source of Data: Tax increase
information is taken from news stories as published on the internet. Information is considered to be unofficial and is for
general comparative purposes only.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
41
Non-Residential Taxes
While the residential taxes are applied to dwelling units in a
community, the non-residential taxes are applied to the businesses
located in that community. Just as residential tax rates can be a
deciding factor in a family’s decision to move to a community, nonresidential tax rates (and other business taxes) can weigh into a
business’ decision about where to locate their enterprise.
Non-Residential Mill Rate Comparison,
Edmonton CMA Communities in 2014
20
18
16
MILL RATE
Figure 5.5 provides an
overview of the comparison
of non-residential mill rates in
the Edmonton Capital Region.
St. Albert’s non-residential
mill rate is slightly higher than
the other communities in the
Capital Region, but significantly
lower than Edmonton’s, which
has the highest non-residential
mill rate in the region.
14
12
10
8
6
4
2
0
St. Albert
Spruce Grove
Leduc
Edmonton
Strathcona
County
Figure 5.5. Non-residential mill rate comparison for selected Alberta
municipalities. Source: 2014 Tax Rate Bylaw Documents.
What does this mean for St. Albert?
St. Albert’s taxable assessment ratio is expected to shift to increase the percentage of non-residential
from 18% to 28%, while decreasing the residential assessment from 82% to 72%. Over the next
twenty years significant growth is expected across the Edmonton Capital Region, and St. Albert is well
positioned to capture its fair share of that growth. Competitive non-residential mill rates coupled with
a high resale residential property market may provide lucrative opportunities for future investors in
St. Albert.
42
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Industrial and Commercial Property Market
Alberta is currently the most expensive province in Canada to build
industrial and commercial infrastructure. Figure 5.6 shows that
non-residential construction costs have been increasing steadily
in Alberta since 2010, although they are expected to stabilize
moving into 2015. Both Calgary and Edmonton lead the country for
cost of non-residential construction. In both cities, non-residential
construction costs are approximately 70 to 75% higher than they
were in 2002. This is likely a by-product of the strong Alberta
economy coming out of the recession, which drives up the price
of construction as various infrastructure and oil-sands projects
compete for resources.
Non-Residential Construction Price Index,
Major Canadian Cities
190
180
INDEX (2002 = 100)
170
Calgary
Edmonton
Ottawa
Toronto
Vancouver
160
150
140
130
120
Q3'10
Q3'11
Q3'12
Q3'13
Q3'14
YEAR
Figure 5.6. Non-Residential Construction Price Index for five major Canadian cities. Source: Statistics Canada.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
43
Industrial Property Market
Maintaining an adequate supply of industrial land is fundamental for providing local businesses the
space they need to grow and prosper. This then increases the employment opportunities available
for the community and region. Industrial and commercial development provides the key to creating
balanced and sustainable communities. The Economic Development Division at the City of St. Albert
is focussed on increasing non-residential investment in the community. This provides high quality
employment opportunities for local residents, spin-off economic opportunities for local business, and
positive fiscal benefits for the City.
Moving into 2015, land supply in Northwest Edmonton is extremely limited, which is driving users
out of Edmonton’s city limits in search of industrial space. Figure 5.7 shows the historical levels of
industrial development in St. Albert, as well as current inventory and projected level of industrial
development. Based on this information the inventory of industrial development in St. Albert is
expected to increase by 2.4 million square feet by 2020.
City of St. Albert
Estimated/Projected Industrial Development (1970-2020)
7,000,000 ft²
Projected Inventory 5,723,790 sq ft
6,000,000 ft²
5,000,000 ft²
Existing
4,000,000 ft²
Current Inventory (2013) 3,317,514 sq ft
3,000,000 ft²
2,000,000 ft²
1,000,000 ft²
0 ft²
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Figure 5.7. Historical and projected industrial development in St. Albert from 1970 to 2020.
Source: City of St. Albert Economic Development Division.
44
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
New
Commercial Market
The Western Provinces continue to drive Canada’s retail growth, fueled by their resource-driven
economies. Healthy employment and wage increases are expected to generate strong 2013 to 2014
year-over-year sales growth across all retail categories. In a review of all major Canadian retail markets,
Edmonton, Halifax, and Calgary remain the top three retail markets in terms of shopping centre supply
per capita.
Figure 5.8 shows the historical levels of commercial development in St. Albert as well as the current
inventory and projected level of commercial development to the year 2020. Based on this information
the inventory of commercial development in St. Albert is expected to increase by over 2 million square
feet by 2020.
City of St. Albert
Estimated/Projected Commercial Development (1970-2020)
7,000,000 ft²
Projected Inventory 6,100,927 sq ft
6,000,000 ft²
5,000,000 ft²
Current Inventory (2013) 3,863,427 sq ft
4,000,000 ft²
3,000,000 ft²
2,000,000 ft²
1,000,000 ft²
0 ft²
1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
1,000,000 ft²
Existing
New Commercial
New Retail
Figure 5.8. Historical and projected industrial development in St. Albert from 1970 to 2020. Source: City of St. Albert Economic
Development Division.
What does this mean for St. Albert?
Non-residential construction costs are expected to stabilize moving into 2015 which should have
positive impacts on the number of both industrial and commercial development projects within
St. Albert. The City of St. Albert has identified significant developments in both the industrial and
commercial property markets into the long-term which will assist in increasing non-residential
development within the community. Increasing the level of non-residential development will help to
reduce the tax burden of the residential component.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
45
6
INNOVATION ENVIRONMENT
Investment in Research and Development
The Organization for Economic Co-operation and Development
(OECD) collects a comprehensive data set on research and
development spending for countries across the globe. An industry
standard for measuring research and development investment
is Gross domestic Expenditure on Research and Development
(GERD). By calculating how much each country spends on research
and development relative to its total gross domestic product, one
can get an idea about how much of a country’s total monetary
spending is being pumped into research and development (R&D).
For the most recent dataset available (2012), Canada ranked
23rd out of 38 total countries, when ordering the largest GERD as
percentage of GDP (stats.OECD.org).
Table 6.1 shows the top five
ranked countries with respect
to fraction of research and
development spending as
a percentage of total GDP.
These countries appear to
be smaller, import-heavy
countries that rely on
innovation to supplement
their economy when natural
resource development is a
less prominent feature of the
overall GDP.
46
RANK
Country
GERD/GDP (%)
1
Korea
4.36
2
Israel
3.93
3
Finland
3.55
4
Sweden
3.41
5
Japan
3.35
Table 6.1. Countries with the highest spending on research and development,
as a percent of overall GDP in 2012. Canada ranked 23rd out of 38 total countries.
Source: OECD.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Figure 6.1 shows the percentage of total gross domestic product
in Canada that is spent on research and development. This
includes research and development funding for natural sciences,
engineering, social sciences, and humanities for all sectors. The
trend is a troubling one for those in the innovation business.
Despite making healthy gains from 2004 to 2008, the spending
on R&D as a percentage of total GDP started its decline in 2009,
and has been dropping ever since. This is possibly due to Canada’s
reliance on natural resource extraction in the hard times coming
out of the recession. These industries rely less on R&D spending
than other industries such as manufacturing or professional,
scientific, and technical services. To give an impression of the
magnitude of spending on research and development, in 2013
the total Canadian GDP was $1.7 trillion, and the amount of
expenditures on research and development was $30.7 billion.
Canada’s R&D Expenditure as Percentage of Total GDP
2.00
GERD/GDP (%)
1.95
1.90
1.85
1.80
1.75
1.70
1.65
1.60
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
YEAR
Figure 6.1. An eleven-year trend showing Canada’s gross domestic expenditure on research and development as a percentage
of total gross domestic product. (Note: 2014 GDP total for Canada was taken as the most recent annualized data point
available, Q3 2014). Source: Statistics Canada.
The low ranking of Canada relative to other developed countries,
combined with its decreasing emphasis on research and
development spending is troubling as it may imply Canada is
losing a competitive advantage in the global marketplace, where
innovation is a key driver of growth and new forms of prosperity.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
47
Alberta’s R&D Expenditure as Percentage of Total GDP
1.40
GERD/GDP (%)
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
YEAR
Figure 6.2. Alberta’s gross domestic expenditure on research and development as a percentage of total GDP. Source: Statistics
Canada.
Figure 6.2 shows the gross domestic expenditure on research and
development in Alberta as a percentage of total gross domestic
product. While Alberta’s trend is holding a bit more steady in
recent years as compared to Canada’s decreasing trend, Alberta
also spends much less (fractionally) on research on development,
when compared to Canada. In the last ten years, Canada’s
GERD to GDP percentage was in the 1.75-1.95% range, while
Alberta’s was in the 1.00-1.20% range. Part of the issue behind
the decreasing (or steady) investment in research in development
trend coming out of the recession may be that companies are
holding out on innovation investment to save money in case of
another economic downturn.
What it means for St. Albert:
The overall ranking of Canada with regards to GERD and total expenditure on research and
development numbers may be disheartening to some; however, there is also the potential for
great opportunity here. The businesses invested in innovation that do succeed are that much more
important to their respective industries, because of the relatively small amount of money being spent
on R&D. When spending on research and development increases again in the future, the lean, efficient
companies who were able to weather the storm will be able to grow and expand with an edge over
up-and-coming new companies. Often, hard times can drive increases in efficiency and productivity,
as businesses struggle to protect their bottom line from poor economic conditions.
48
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Capital Region Innovation Ranking
The Canadian Federation of Independent Business (CFIB) released a report in 2014 on the
top entrepreneurial communities in Canada. This report calculates an entrepreneurial index
(a higher score representing a better place to start and grow a business in 2014) for 120
Canadian communities, and then ranks them from highest to lowest. This index is calculated
from fourteen metrics falling into three broad categories; entrepreneurial presence, perspective,
and policy. The list of top ten major communities (CMA population over 150,000) lists
Edmonton Periphery as #2, just behind Calgary Periphery (#1). Edmonton Periphery includes
the communities of Strathcona County, St. Albert, Parkland, Spruce Grove, Leduc, and a few
other small surrounding municipalities. The City of Edmonton comes in at 6th place, and the
City of Calgary takes the 9th spot. The full list of the top ten major communities is given in
Table 6.2. Many western communities are represented in this list, giving the impression that
the Prairie Provinces are incubating an environment of business growth and creation.
RANK
Community
Index Score (/100)
Change from 2013
1
Calgary Periphery
70.8
+3.2
2
Edmonton Periphery
68.1
+3.9
3
Saskatoon
64.1
-2.9
4
Regina
61.6
+0.7
5
Kelowna
61.2
+1.9
6
City of Edmonton
60.7
-0.2
7
Toronto Periphery
59.7
-4.7
8
Guelph
59.4
-0.2
9
City of Calgary
59.1
+4.0
10
St. John's
58.0
-0.1
Table 6.2. Top ten best communities to start and grow a business in 2014, CMA population over 150,000.
Source: CFIB Report, 2014.
What it means for St. Albert:
Considering the list of top places to start and grow a business looks at many communities from all over
Canada, the high ranking of Edmonton Periphery (which includes St. Albert) and the City of Edmonton
speaks volumes about the entrepreneurial potential of the Capital Region. Even at the provincial level,
having so many Alberta communities on the lists suggests that Alberta is a great place in Canada to
create and expand a business. Combined with the rich natural resources in the Western provinces, the
potential for St. Albert residents and businesses to capitalize on this growth environment is enormous.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
49
Quadrant Map for Top 10 Places to Start a Business in 2014
(CMA >150k, CFIB Ranking)
Average Change +0.56
72
Calgary Periphery
COOLERS
LEADERS
Edmonton Periphery
INDEX SCORE (/100)
67
Saskatoon
Average Index 62.3
62
Toronto Periphery
Regina
Edmonton
Kelowna
Guelph
Calgary
St. Johns
57
AT RISK
52
-5
GROWERS
- 2.5
0
2.5
5
INDEX CHANGE RELATIVE TO 2013
Figure 6.3. Top ten best communities to start and grow a business in 2014,
visualized in a quadrant map. Average values for the top ten communities
determine the middle quadrant lines. Source: CFIB Report, 2014.
Figure 6.3 shows the same data as Table 6.2, except visualized in a quadrant map. The average
values for the top ten best communities determine the middle lines (average index change for the
vertical line, average index score for the horizontal line). This quadrant map, when read from top to
bottom, shows the ranking by index score. When read from right to left, the quadrant map ranks the
communities in the top ten from greatest index increase to lowest. This quadrant map emphasizes
both the high ranking, and high growth of the Calgary Periphery and Edmonton Periphery on the
ranking list.
50
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
Major Projects in Alberta and
the Capital Region
The Government of Alberta keeps an inventory of the major
projects that are completed, planned, or in the works. These
projects can be commercial, retail, infrastructure, pipeline, oil and
gas, among many others. The Inventory of Majors Projects (IMAP)
tool is produced by Alberta Innovation and Advanced Education,
and allows a visualization of the projects planned or underway in
Alberta.
Figure 6.3. Major projects in Alberta, Edmonton, and St. Albert between $5 million and $15 billion (IMAP 2014).
Copyright: Government of Alberta, reproduced for educational purposes.
Figure 6.3 (left) shows the balloon-map of major projects in Alberta
(current, completed, planned) as of 2014. The sum of the costs of
the projects sits at around $204 billion. Filtering the map to drill
down to the Edmonton area (centre image) reveals a total of 129
projects, with a collective price-tag of $20 billion. Finally, focusing
on St. Albert, (Figure 6.3, right) shows six recorded projects in this
price range, totalling $250 million. The larger of these projects
include the new AGLC warehouse off the Anthony Henday, and the
Grandin Park Plaza Redevelopment.
What it means for St. Albert:
This comprehensive list of the projects underway in Alberta, Edmonton, and St. Albert should fill both
residents and businesses in the Capital Region with excitement. Projects mean growth; in the form
of jobs, new residents, and money flowing through the economy. For the opportunity-savvy business
owners of St. Albert, these projects can indicate potential for enterprise creation, as well as business
expansion.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
51
7
CONCLUSION
An Overview
Coming out of the 2008–2009 recession, Alberta has been the driving force of Canada’s recovery,
posting consistently strong gains in both GDP output and job creation. With overall Canadian growth
(as measured by inflation) expected to finally reach the 2.0% mark again in coming years, the future
of Alberta and the Capital Region is bright. Despite market turbulences that may drive economic
conditions up or down at any given snapshot in time, the overall forecast for expected growth is
positive for Alberta and the Capital Region. Being well-connected to the Capital Region, St. Albert
is poised to receive its fair share of this growth in coming years. With any change to the economic
conditions, be it upwards or downwards, there is opportunity for business owners to benefit. Innovation
and value are derived from exploiting changes in the market; a steady market is often a stagnant
market. Whether decreasing prices of oil are driving new cost-saving innovations in the resource
industry, or increasing migration levels are providing the housing industry with a boost, it is the
movements in the economy that generate new ideas and products. St. Albert enjoys a prime location
at the geographic centre of the strongest provincial economy in Canada, in a country that is starting to
tick along at a decent pace once again coming out of the recession. The ever-increasing globalization
of the world market provides opportunities that were unimaginable by previous generations, and
Alberta holds a strategic advantage on the world stage to capitalize on these opportunities.
Looking Forward
The interpretations of the individual and overall trends in this report may vary from person to person.
Each individual holds their own unique perspectives, biases, and opinions about the world, especially
in matters political and economic. However, one idea that has gained considerable traction in the
increasingly digital world is the power of using data to make evidence-based decisions. When, in the
past, a business owner had to rely primarily on “gut instinct” to make business decisions, they are
now able to take advantage of a wide array of data sources to understand their economic environment
on a whole new level. Understanding and monitoring the economic situation allows a business
owner to make better decisions about business planning, which leads to more effective growth and
ultimately, prosperity.
52
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
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(Canada GDP Estimate), 2014.
2. “Government of Alberta Fiscal Plan
Economic Outlook”, (Alberta GDP Estimate),
2014.
3. “Alberta Economic Dashboard”, http://
economicdashboard.albertacanada.com/,
Government of Alberta
4. Statistics Canada, http://www.statcan.
gc.ca/start-debut-eng.html, Government of
Canada
5. “Labour Force Analysis of Selected
Neighbouring Communities”, Economic
Development Division, City of St. Albert
6. “St. Albert and Surrounding Area
Employment Environment Analysis”,
Economic Development Division, City of St.
Albert
7. “Monetary Policy Report, Bank of Canada,
October 2014. (CPI section)
8. www.canadianforex.ca, Canada US Foreign
Exchange Rate
9. “The Exchange Rate”, Bank of Canada, 2012
10. “Alberta’s International Exports by Industry,
10-Year Review, 2003-2013”, Government of
Alberta, July 2014
11. “Export and Trade, Alberta exports”,
Government of Alberta (Figure 1.7 and
1.8), http://albertacanada.com/business/
statistics/export-and-trade.aspx
12. http://www.energy.alberta.ca/OurBusiness/
Gas.asp, “Natural Gas Intro”, Government of
Alberta, 2014.
13. “Housing Market Outlook, Canada Edition,
Fall 2014”, Canada Mortgage and Housing
Corporation (CMHC).
14. “Housing Market Outlook, Edmonton CMA,
Fall 2014”, Canada Mortgage and Housing
Corporation (CMHC).
15. “Prairie Region Highlights 2014”, Canada
Mortgage and Housing Corporation (CMHC).
16. Statistics Canada, Investment, Science and
Technology Division. June 2013 to May 2014
Custom Tabulation.
17. “Canadian Business Patterns”, Statistics
Canada, June 2014.
18. “City of St. Albert Future Industrial Land
Study”, prepared by Miller Dickinson Blais,
May 2011.
19. “Edmonton Industrial Q3 2014 Report”,
Colliers International, 2014.
20. National Retail Report Canada, Fall 2014.
21. “OECD Science, Technology, and Industry
Outlook Report”, OECD 2012.
22. “Entrepreneurial Communities”, Canadian
Federation of Independent Business,
October 2014.
23. IMAP 2014, http://albertacanada.com/
business/statistics/inventory-of-majorprojects.aspx, “Inventory of Major Projects”,
Alberta Innovation and Advanced Education.
State of the Economy 2014 • Economic Indicators Impacting St. Albert and Region
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