Session C2 2:10pm ONE SIZE DOES NOT FIT ALL: UNDERSTANDING THE FACTS & FALLACIES BETWEEN EDMONTON & CALGARY AND HOW THEY ARE PERFORMING IN TODAY S ECONOMY Moderator: Greg Guatto, President & CEO, Aspen Properties Speakers: Craig Dickie, President, Walton Development and Management LP Deana Haley, Vice President, Business Development & Workforce Innovation, Calgary Economic Development Glen Scott, Senior Vice President, Real Estate, Katz Group Cory Wosnack, Principal, Avison Young
Calgary Real Estate Forum October 25, 2016 Calgary Economic Development s collaborative energy makes us a conduit, connector and catalyst Calgary.
economy
Major Canadian Cities Comparison Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada 2016 Forecasted GDP Growth 4.0% -1.4% -2.1% 1.7% 3.4% 1.7% 1.6% 1.5% CMA Population 2,504,340 1,363,277 1,439,756 304,975 6,129,934 1,332,001 4,060,692 35,851,774 (July 1, 2015) 2015 Population Growth 1.2% 2.4% 2.4% 2.0% 1.3% 1.2% 0.8% 0.9% Unemployment Rate 4.9% 7.7% 9.5% 5.2% 7.1% 6.4% 7.6% 7.0% (September 2016) Participation Rate (September 2016) Employment Growth 80,800-6,700-17,600-600 7,900 8,600 7,000 138,800 (12 months ending September 2016) 6.3% -0.9% -2.2% -0.4% 0.2% 1.2% 0.3% 0.8% Full-Time Employment Growth (12 months ending September 2016) Part-Time Employment Growth (12 months ending September 2016) 66.6% 72.3% 73.3% 72.8% 66.3% 68.9% 66.1% 9.4% 8.4% 13.1% 3.3% 4.6% 8.6% -0.3% 65.7% 5.5% -3.1% -4.7% -1.5% -0.4% 0.0% 0.3% 0.3% 2.6% Provincial Average Weekly Earnings (July 2016) $912.72 $1,109.22 $1,109.22 $974.44 $973.09 $973.09 $875.18 $953.22 Source: Conference Board of Canada, Statistics Canada
Annual Forecasted Real GDP Growth Rates Across Canada 4.5% 3.5% 2.9% 3.3% 3.1% GDP Annual Growth Rate 2.5% 1.5% 0.5% -0.5% 2.0% 2.6% 2.2% -1.5% -2.1% -2.5% 2016F 2017F 2018F 2019F 2020F Edmonton Calgary Canada Source: Conference Board of Canada
Calgary Forecast GDP by Industry 2016 (2007 $ Millions) 2020 (2007 $ Millions) Total change 2016-2020 (%) Goods-Producing Industries 50,095 57,374 12.7% Manufacturing 5,533 6,221 11.1% Construction 8,297 9,373 11.5% Primary and utilities 36,266 41,780 13.2% Services-Producing Industries 62,704 68,133 8.0% Transportation and warehousing 5,152 5,694 9.5% Information and cultural industries 3,133 3,402 7.9% Wholesale and retail trade 9,038 9,770 7.5% Finance, insurance and real estate and leasing 18,290 19,847 7.8% Business services 10,732 11,516 6.8% Personal services 4,354 4,796 9.2% Non-commercial services 8,849 9,780 9.5% Public administration and defence 3,157 3,327 5.1% All Industries 112,799 125,507 10.1% Source: The Conference Board of Canada
Small Businesses per Capita Across Canada 45.0 40.0 39.1 39.2 35.0 36.5 35.3 33.4 30.0 30.1 28.0 25.0 24.9 20.0 15.0 10.0 5.0 0.0 Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada Source: Statistics Canada, June 2016, Less Than 50 Employees (Per 1,000 Population)
Business Bankruptcy Rates Across Canada 2.50 2.00 1.50 1.00 0.50 0.00 Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada Source: Office of the Superintendent of Bankruptcy Canada, 2015, (Per 1,000 Businesses)
Labour Supply & Demand
10% 9% Unemployment Rate Across Canada 9.5% 8.7% 8% 7.7% 7.6% 7% 6% 5.8% 6.0% 7.0% 7.1% 6.9% 6.3% 6.4% 5.9% 7.1% 6.9% 7.0% 5% 4.9% 4% 3% 2% 1% 0% Vancouver Edmonton Calgary Toronto Ottawa Montreal Saskatoon Canada September 2015 September 2016 Source: Statistics Canada
76% 74% 72% Labour Force Participation Rate Across Canada 74.1% 73.3% 73.3% 72.6% 71.3% 70% 69.1% 69.7% 69.1% 68% 66% 66.8% 67.2% 66.6% 66.8% 65.9% 65.6% 65.7% 64% 64.2% 62% 60% 58% Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada September 2015 September 2016 Source: Statistics Canada
Annual Employment Growth 14.0% 13.1% 12.0% 10.0% 8.0% 9.4% 8.4% 8.6% 6.0% 6.3% 5.5% 4.6% 4.0% 3.3% 2.6% 2.0% 0.0% -2.0% -4.0% -0.9% -3.1% -2.2% -0.4% -1.5% 0.2% -0.4% 1.2% 0.0% 0.3% 0.3% 0.8% 0.3% -0.3% -6.0% -4.7% Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada Total Employment Growth Rate Full-Time Employment Growth Rate Part-Time Employment Growth Rate Source: Statistics Canada, September 2015 - September 2016
80,000 70,000 Components of Population Growth Across Canada 66,697 60,000 50,000 40,000 30,000 28,988 35,311 34,666 20,000 10,000 0-10,000-20,000-30,000 8,599 15,224 12,732 10,069 11,834 9,893 8,545 5,385 6,185 2,596 4,377 5,206 2,619 1,212 480-4,395-2,729-3,616-10,683-22,751 Vancouver Edmonton Calgary Toronto Ottawa Montreal Natural Increase Net Interprovincial Migration Net Intraprovincial Migration Net International Migration Source: Statistics Canada, July 2015
Changing Employment Picture 3,000 2,000 Calgary CMA Monthly Net Jobs Gained or Lost by Industry (August 2016 - September 2016) 2,100 1,500 1,600 1,900 1,000 0-1,000-2,000 0 600 300-900 -1,400-100 0-200 400 400-1,100-3,000-4,000-5,000-4,600 Agriculture Forestry, Fishing, Mining, Quarrying, Oil and Gas Utilities Construction Manufacturing Trade Transportation and Warehousing Finance, Insurance, Real Estate and Leasing Professional, Scientific and Technical Services Business, Building and Other Support Services Educational Services Health Care and Social Assistance Information, Culture and Recreation Accommodation and Food Services Other Services Public Administration Source: Statistics Canada
Changing Employment Picture 5,000 4,000 Edmonton CMA Monthly Net Jobs Gained or Lost by Industry (August 2016 - September 2016) 4,300 3,000 2,000 1,000 0-1,000-2,000-3,000 0 1,200 1,200 800-2,800-900 -2,000-1,200-700 800 600-1,500-100 -2,300 300-4,000 Agriculture Forestry, Fishing, Mining, Quarrying, Oil and Gas Utilities Construction Manufacturing Trade Transportation and Warehousing Finance, Insurance, Real Estate and Leasing Professional, Scientific and Technical Services Business, Building and Other Support Services Educational Services Health Care and Social Assistance Information, Culture and Recreation Accommodation and Food Services Other Services Public Administration Source: Statistics Canada
LabourSupply Available occupations anticipated to grow in demand nationally over the next 5 years Financial Auditors Accounting Clerks Information Systems Analysts Lawyers Business Management Consultants Computer Programmers Civil Engineers Mechanical Engineers Purchasing Agents Electrical Engineers Power Engineers Geoscientists Architects Natural and Applied Scientists Geological Technologists Petroleum Engineers Financial Analysts Biologists Investment Brokers Land Surveyors Database Analysts
Labour Demand ICT is outpacing all job growth by 4:1. Canada will need to fill 182,000 ICT professional positions by 2019 (17,300 for Alberta). - ICTC, 2015
Labour Demand Finance, Insurance, Real Estate and Leasing will grow by 1.6% annually, reaching 4.8% of total employment in 2019 and gain 68,100 jobs by 2024. - Government of Alberta, 2016; Statistics Canada, 2016
Labour Demand The Logistics sector in Alberta will grow by about 7,470 workers from 2016 to 2025. - APGC, 2016
Labour Demand Manufacturing accounts for 6.1% of total employment in Alberta, employment will grow by 1.1% annually and account for 6.5% of total employment by 2019. - Government of Alberta, 2016
Labour Demand The Oil and Gas sector will have 28,025 to 36,240 net hiring requirements in Canada from 2017 to 2020. - PETROLMI/ENFORM, 2016
Labour Demand Clean Tech (including Renewables) will employ anywhere from 76,000 to 100,000 Canadians directly by 2022, up from 55,600 jobs in 2014. - Analytica Advisors, 2016
Areas of focus Sector Opportunities Transportation & Logistics Agribusiness Renewables Clean Technologies Manufacturing Information, Communication & Technology Creative Industries Digital Media Financial Services
Tax Advantages British Columbia Alberta Saskatchewan Ontario Quebec Provincial Sales Tax 7% 0% 5% 8% 9.975% 2015 Provincial Personal Income Tax 5.06% - 14.7% 10% - 15% 11% - 15% 5.05% - 13.16% 16% - 25.75% 2016 Provincial Corporate Income Tax (General) 11.0% 12.0% 12.0% 11.5% 11.9% 2016 Provincial Corporate Income Tax (Small Business) 2.5% 2.0% 2.0% 4.5% 8.0% 2015 Provincial Payroll Tax (Employer Health Premiums) 0% 0% 0% 0.98% - 1.95% 2.7% - 4.26% 2015 Local, Provincial & Federal Gasoline Tax 42.17 /L 23 /L 25 /L 24.7 /L 33.2 /L 2015 Land Transfer Tax 1% - 2% 0% 0% - 0.3% 1% - 4% 0.5% - 1.5% 2016 Health Care Premiums $0 - $150 $0 $0 $0 - $900 $0 - $660 2016 Total Effective Tax Rates 35.3% 30% 31.9% 34.1% 41.3%
Thank you Deana Haley, VP Business Development & Workforce Innovation dhaley@calgaryeconomicdevelopment.com calgaryeconomicdevelopment.com 731 1 st St. SE Calgary, AB T2G 2G9 Facebook.com/calgaryeconomic Twitter.com/calgaryeconomic Youtube.com/calgaryeconomic LinkedIn.com/calgaryeconomic
The Real Estate Markets How do they Differ? How are they Performing?
Comparing CBD Office Space Available vs Occupied Space Square Feet 45M 40M 35M 30M 25M 20M 15M 10M 5M 0M 3.12M 15.33M Edmonton 9.47M 32.36M Calgary Occupied Available Source: Colliers International/CBRE Note: New supply being delivered: Edmonton: 1.7M sq.ft Calgary: 2.3M sq.ft
Calgary Downtown Absorption & Vacancy since 2004 Absorption Vacancy 2,700,000 20.00% 2,200,000 1,700,000 1,200,000 15.00% 700,000 200,000 10.00% 300,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (YTD) 800,000 5.00% 1,300,000 1,800,000 0.00% Source: Colliers International/CBRE YTD Absorption Calgary (1.89M) sq.ft
Edmonton Financial Absorption & Vacancy since 2004 400,000 Absorption Vacancy 12.00% 300,000 10.00% 200,000 8.00% Absorption 100,000 6.00% 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 4.00% 100,000 2.00% 200,000 0.00% Source: Colliers International/CBRE YTD Absorption Edmonton (239K) sq.ft
Comparing Overall Industrial Space Available vs Occupied Space 140M 120M 100M 5.76M 9.40M Square Feet 80M 60M 40M 108.85M 121.91M 20M 0M Edmonton Calgary Occupied Available Source: Colliers International/CBRE Note: New supply being delivered: Edmonton: 2.2M sq.ft Calgary: 1.4M sq.ft
Comparing Overall Industrial Space % Vacant 8 7 6 5 4 3 2 1 0 Historical Vacancy Rates 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Edmonton Calgary YTD Absorption Edmonton 1.08M sq.ft Calgary (887K) sq.ft Source: Colliers International/CBRE
Retail
Land Development / Residential
WEST EDMONTON MALL Completion Time: 20 years Phase 1: September, 1981 Phase 2: September, 1983 Phase 3: September, 1985 Phase 4: 1999 Age: 35 years Parking for 20,000 vehicles plus 10,000 overflow Most recent upgrade completed in 2014 Features: Amusement Park Waterpark Indoor Pool Ice Rink Hotel Recreation Centre Three radio stations 100 + Restaurants and Eateries
DOWNTOWN EDMONTON JASPER AVENUE 1930 2009 Population grows from 77,500 in 1930 to 606,000 in 2009
DOWNTOWN EDMONTON CONSTRUCTION Downtown Edmonton 1971 to 1990 41 Construction Projects 2.40% 4.80% Downtown Edmonton 1991 to 2011 5 Construction Projects 0.02% 34% 56% 0.08% Residential Office Hotel Sports Residential Office
2011 Live - Work - Play Construction completed on the EPCOR building Increased migration to the inner city with less reliance on cars People want to live where they work Decrease in household size resulting in a significant increase in lone person or 2 person households Resources to attract people and people to attract resources Movement towards more eclectic and unique collection of businesses and services Core communities attracting a younger population (median age is 25-38 years) Population in the downtown core has doubled since the turn of the century and projected to triple by 2030
LRT Expansion 1.4B University Expansion $200M Arena $600M Block K $100M EPCOR $300M (Est.) Royal Alberta Museum - $400M Hotel - $400M Stantec Tower $700M Edmonton Tower $400M Art Gallery $50M
DOWNTOWN EDMONTON VALUE OF BUILDING PERMITS ISSUED 600000 500000 400000 300000 200000 100000 0 2013 2014 2015
ICE DISTRICT EDMONTON EAST VILLAGE CALGARY 49 Acres of Community Space 2.4 Billion in development attracted to the community 6.8 million square feet of development 2 hotels Over 30 contiguous acres in downtown Edmonton 2.65 Billion in investment 1.3 Million sq. ft. of office space 320,000 sq. ft. of retail space JW Marriott hotel tower with 344 Guest Rooms and 24 floors of premium Condos above Rogers Place Arena Ford Hall with 24,000 sq ft space for public/private events 73 acres of Park Space Phase I - 1200 Residential Units 3,900 condos and townhouses Total 11,000 new residents over 10 years Phase II - 3000 Residential Units Total 10,600 new residents over 4 years