13 November Edmonton powers ahead due to its economic diversity
Edmonton powers ahead due to its economic diversityEdmonton powers ahead due to its economic diversity While most of Alberta’s economy continues to adjust to lower oil prices, Edmonton’s economy continued to show resilience, even in the face of lower oil prices. As a testament to the city’s diverse portfolio, Edmonton has continued to create jobs throughout 2016 – adding 2,700 jobs to the labour force. Although oil is an important industry to Edmonton’s growth, primary industries only contribute 7% to Edmonton’s GDP. Edmonton’s most important industries are Finance /Real Estate, Trade and Technical/Management Services as shown below;
In fact, very few of Edmonton’s major employers are in the oil industry. The largest Edmonton private employers are focused on professional services, retail and financial services (see table below)
Edmonton’s largest private employers
Stantec 12,700 Professional Services www.stantec.com
Katz Group 8,600 Wholesale and Retail Trade www.katzgroup.ca
The Brick 6,100 Wholesale and Retail Trade www.thebrick.com
Finning Canada 5,393 Wholesale and Retail Trade www.finning.ca
ATB Financial 5,250 Financial Services www.atb.com
PCLConstruction 4,500 Construction www.pcl.com
Epcor Utilities 2,749 EnergyTransmission/Distribution www.epcor.ca
Servus Credit Union 2,148 Financial Services www.servus.ca
Canadian Western Bank 2,044 Financial Services www.cwbank.com
Liquor Stores N.A. 2,010 Wholesale/Retail Trade www.liquorstoresna.ca
Many companies are still expanding their workforces in Edmonton, specifically Stantec, Champion Pet Foods and Gilead Sciences.
Founded in Edmonton in 1954, Stantec is now a 22,000-employee global design company, is Edmonton’ largest employer and is expanding at a breakneck pace. In 2016, gross revenue increased by 50% to CAD$4.3billion to make it a top 10 global design firm. Stantec provides various design services including water systems design, architectural design and engineering. The Stantec Tower, western Canada’s largest tower will open in 2018. Champion Pet Foods, Canada’s largest independent pet food producer will be adding 200 jobs and it has just begun construction of a new facility in western Edmonton, that will cost more than $200 million and increase exports to over 85 countries.
Biotech giant Gilead Sciences has invested $100 million to expand its campus in northeast Edmonton. The California-based biopharmaceutical company, which currently employs roughly 300 people in the city, intends to increase local headcount to 430 people. With the University of Alberta providing a steady stream of life science graduates, Edmonton sees life sciences as one of its key growth industries. ReDev’s Palisades plaza in Edmonton houses medical diagnostics centres which compliments the local surgery, pharmacy and dentist, providing everyday healthcare to the residents.
In all three examples above Stantec, Champion and Gilead show the diversity of the Edmonton economy and show why it has been more resilient than the rest of Alberta to the downturn in the oil industry.
Edmonton doesn’t just have a thriving non-oil private sector. As the seat of the Albertan provincial government, many government offices and companies owned by the Crown are based in Edmonton. Around 20 to 25% of the Edmonton workforce has a job in the public sector. This includes direct employment by the provincial government and jobs in health care and education, according to John Rose, the chief economist for the City of Edmonton. During the downturn in 2015/2016, the public sector and healthcare hired 14,000 people, which helped balance the 15,000 jobs lost in construction. It is the balance of this stable public sector and the growing non-oil private sector that balances the oil sector. This gives Edmonton the stability in tough times that other cities don’t have.
Even in the oil sector, Edmonton’s workforce is focused on current production, not the planning of new projects. Even as oil prices have dropped, oil production in Alberta continues to increase, mostly serviced by Edmonton’s oil and gas blue collar workforce. The Albertan government forecasts oil sands output will rise from 2.5 million bpd in the 2016-17 fiscal year to 3.3 million bpd in 2019-20. The Suncor, the Fort Hills project, will start production in 2017 and rise to 194,000 barrels per day through 2018.
Owners of ReDev Properties strip plazas have been a prime beneficiary of Edmonton’s economic diversity. ReDev is Edmonton’s biggest owner of strip or community plazas. Its properties contain tenants that provide everyday needs goods and services to the local community. Edmonton’s long-term economic stability and high wage rates, has led to high levels of immigration and given Edmonton, Canada’s highest population growth rate. The more people in the local area to ReDev plazas, the greater the demand for local everyday goods and services like hairdressers, coffee, doctor’s clinic, dentist, pharmacy, banking, etc.
Even when the economy is not performing well, local people still shop for every day needs products from their local plaza. Investors around the world including Asia, have become owners of direct stakes in ReDev’s existing malls. From the malls profits owners receive an immediate income and then the opportunity of a capital gain upon resale of the mall in about 6 years’ time. With over 33 projects and 16 resales, ReDev owners have received more than 10% pa returns. The long-term stability and diversity of the Edmonton economy has allowed ReDev owners to realize long-term investment gains.
Contact: Stephen Janson: [email protected]