Why Calgary, and why now?

On March 20, I had the honour of speaking to the Calgary Construction Association for their annual AGM and 75th anniversary celebration. Here is the transcript of my speech, titled “Why Calgary, and why now?”.

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Thank your for inviting me here this evening.

On behalf of the City of Calgary, It’s truly an honor to be here speaking here tonight to an association that is so significant to our cities economy.

Let me introduce myself to you. My name is Jeff Davison, and I am the City of Calgary Councillor for Ward 6.

A little bit of background about me -- Prior to this job, I worked in and around Oil and Gas. I have a bit of a different background from just about everyone else on council. I really do approach issues with the big picture in mind.

I was elected in 2017 under a mandate to bring a business perspective to Council and focus on what is the most pressing issue facing us right now – the local economy.  

I say the economy, because I believe that without a strong economic climate in our city, we don’t have the job creation needed to sustain growth over the long term.

When people ask me “why did you get into politics in the first place”, I only have to give them one reason.  My kids.  My wife and I are blessed to have three wonderful children, and I want nothing more than for them to grow up with opportunity – opportunity like I had, in the Calgary that I remember growing up in.

Back then, we overcame a much similar economic situation both locally and nationally – but we built a City that began boom, and that was filled with prosperity. And that’s what we need to get back to.

Since being elected with a focus on the economy, I am very fortunate to serve on Calgary Economic Development’s -- Board of Directors -- as Council’s representative.

Through Calgary Economic, I am fortunate that I am helping oversee things like the Opportunity Calgary Investment Fund – the $100 M fund being used to attract and retain new business to our Downtown Core.  But it’s important to remember, this fund alone will not fix our economy. It will take many levers being pulled – but this is one tool in our toolbox that I feel is significant and definitely sets Calgary apart.

I’m also the Chair of the City’s Event Centre Assessment Committee – not only are we considering a new home for the Flames, but we are looking at creating an Entertainment and Cultural District in East Victoria Park - one where Calgarians can live, work and play - 365 days of the year.

So now that you know a little bit about me – let’s get to why I am here.  The message I have for you today considers the question, “Why Calgary, and Why Now?”

Yes, times are extremely tough, and that’s going to be a theme tonight. But, we have a lot to look forward, and I believe a new majority on City Council have taken some important steps to turn the ship and get our City back on its feet again.

And that includes working with the visionaries, builders and industry leaders in this room tonight.

Part 2: Calgary’s Economy – By the Numbers

Let’s take a minute to look at some of our economic numbers – because I believe these numbers are a good indication of where we have come from - where we are now – and in what direction we are heading.

Our unemployment rate remains stubbornly high – it currently sits at 7.3 percent, compared to 4.5 percent in 2014. In 2016, it was as high as 10.3 percent – so comparing now and then, this is a sign that things are gradually improving.

However, we’ve got a long way to go – Calgary currently holds the highest unemployment rate among the major Canadian Cities.

The same could be said about our downtown vacancy rate – which sits at 26 and a half percent, or the value of the building permits being released – down to $5.3 Billion, compared to $7.2 Billion in 2015.

But let’s take a minute to consider our GDP and the role the construction industry plays in our economy.

In 2018, the City’s GDP was $114 Billion Dollars – and construction alone made around 7% of this.

Compare this 30 years ago - in 1987 the City’s total GDP was about $48 Billion, and Construction made up just under 5% of this. So if we look over the long-term, the trend is up and our Economy is gradually diversifying. This is really not the case for a lot of major cities.

In 2018 – the construction industry had just over $8.0 Billion of impact on our City’s GDP – a trend that is projected to rise.

By 2021, the Conference Board of Canada predicts that the Construction industry will grow to have an $8.6 Billion-dollar impact on Calgary’s GDP – a rise of about 7 percent from 2018 numbers to 2021.

More people are working in construction than ever before – 5.5 percent of the population was employed in the industry in 1987 – compared to 8.3% this year – that equates to roughly 70 thousand people in our city.

When all is said and done, in 2018 Calgary’s population increased by over 21,000 people.

Concepts of narrative

So as we step back - even in a prolonged and economic downturn, people are still coming to Calgary because they see this place as one of significant economic opportunity.

Why it is so important that we start changing the way we talk about Calgary.

Of course, there are economic difficulties we face right now – part of the problem is the way our story is being told, a negative narrative that has resonated throughout the investment community and is now costing us the ability to attract capital and opportunities to our city.

In my opinion, there are a couple urgent steps we must make to change that narrative and begin to set ourselves up for success.

First, we need to get focused on creating investor confidence, both locally and abroad.

And second, we need to do a much better job of building public trust (at all levels of government) – because this directly impacts my first point on narrative.

We need to start talking about our City as a place that isn’t “can do” -- but rather -- “will do”. Because at the end of the day, we must continue to create made-in-Calgary solutions, especially in our current provincial and federal political climate.

Part 3: Opportunities for the Construction Industry

1.    Community Growth – the Approval of 14 New Communities

Even with our economic challenges, Calgary continues to grow. Our population is continuing to increase, and City Council has acted with this in mind.

Which is why, we approved the development of 14 new communities.

Together, these 14 new communities could add more than 18,000 single-family homes and 9,000 multi-family units.

This is an important decision that Council made – it reflects the improving economic and population growth numbers, while allowing the marketplace to balance growth.  Let me be clear. This is something the market should handle, not the politicians.

This market approach to responsible growth allows us to prepare for the future in a way we can handle.

That future includes this industry – after all, it is the stakeholders in this room who will be developing and constructing our new communities.

Again, when we consider investor confidence is key to our survival, the decision to remove growth management overlays is the right step to providing some assurances investors require in order to grow with us.

 

2.    Entertainment and Cultural District – BMO Expansion and the New Event Centre

Our City’s motto is Onward – and we’re making investments that deliver on this motto.

There’s one project right now I am particularly proud to be heading - the City’s new Event Centre.

There’s something to be said about “place” and why it matters for our City. Fundamentally, the spaces we create for Calgarians are what define us as a City.

Take for example, the success of the new Central library – Love it or Hate it. On its opening weekend, over 52,000 people flocked to it to see what has been constructed.  To date, the library has received almost a million visits.

Getting back to creating place, one of the challenges we have with our downtown is that it was built to be a “corporate” downtown. With the exception of pockets along 8th and 9th Avenue, after 5PM the core effectively shuts down until the next working day.

Truly, what Calgary lacks is a central location for people to live, work and play.

And that’s exactly what we’ve proposed with the new Entertainment and Cultural District.

Primed with over $2 Billion worth of private sector investment, the District, upon-build out, will generate significant tax revenue for the City on land that hasn’t made a dime in decades.

Here exists the potential partnership between us as the City and with the construction industry. We estimate that the build out of a new Event Centre alone in Calgary will create up to 1,500 construction jobs.

Fundamentally, yes, the Event Centre would be a new home for the Flames. But this isn’t primarily about a hockey deal.

This is about a deal for a facility where you’ll take your kids to watch their favorite team play, or watch a concert with your partner. A place where you’ll be able to unwind, and enjoy the community and culture of this City. A place where you’ll go for your favorite festivals.

This is about a deal that would see the development of a new District, anchored by a new Event Centre and the BMO Expansion.

This is about the development of a District that includes residential, new restaurants, new bars, retail and significant public festival spaces for all Calgarians to visit 365 days of the year.

And yes, this is also about a deal that would address a downtown vacancy problem – providing a catalyst, a community anchor that would encourage investor confidence in our City, and create buzz around Calgary as well as internationally.

Some have asked – how can you even consider a new Event Centre, given our economic situation?

To them, I say – this is precisely why we are considering this project right now.

Make no mistake – the downtown vacancy rate and unemployment numbers require our full attention. But we must consider capital projects that expand our tax base and not the tax rate.

Projects that create significant jobs, and change the narrative in this city in a way that is beneficial to all Calgarians.

I also want to take a moment to address the other mega projects the City is considering – namely, construction of the Arts Commons building and a potential new Field House.

Council granted conditional approval and has essentially earmarked $1.4 Billion to fund the four mega projects over the next 10-15 years.

In order to be fully approved over time, each project will have to go through a rigorous assessment process to determine whether or not they make economic sense. In no way, did Council issue four blank checks.

We will manage these projects in a fiscally responsible and economically sustainable way.

 

3.    BMO Expansion

Work is already being done to get the Cultural and Entertainment District going. Just last week, it was announced that the Federal Government would commit $166 Million to the BMO Expansion project.

This is in line with the same funding secured by the Province and committed by the City – for a grand total of $500 Million. We’ve now ratified the project at Council, and anticipate that this project will be shovels in the ground this Spring.

As I said before – these two together will attract hoteliers, restaurants, retail and more.

There are positive implications to this for the construction industry – it is expected that the project will create up to 1,500 jobs during construction.

I fundamentally believe the BMO Expansion, when coupled with the Event Centre – are two projects that work hand in hand to attract new investment in this new district.

We also have to consider how mega-projects like BMO really help diversify our economy. We know travel and tourism are extremely important and significantly beneficial to our City.

In 2025, Calgary will host the Rotary International Conference – we expect 40,000 people to come specifically for that conference alone.

Expanding the BMO Centre will turn the facility into a tier 1 convention space. This allows us to attract more events and visitors than ever before.

This expansion is also important because right now, we are turning down 11 to 14 large conventions per year. A new facility stops that.

4.    X Games

And we’re seeing other events shape up as well. Last week, it was announced that the Winter X-Games will be held in Calgary in 2020, 21 and 22.

It is estimated that these Games will bring 75,000 spectators to Calgary, and provide a $75 Million boost to our City annually.

The Games will be co-hosted by the Stampede and Winsport – allowing us to create a new legacy – an extreme legacy – in Winter sport.

Events like these put us actively in front of the world, and showcase the best of what Calgary has to offer.

So when we go back and consider the importance of the Entertainment and Cultural District – we’re already executing that plan to attract new and innovative events to Calgary!

Part 4: Conclusion

As I wrap this speech up, I want to leave you with a sense of confidence and optimism about our City.

And if anything, that after about 8 years, there is a renewed sense of vision and leadership on Council.

We have a lot to be proud of here: The City of Calgary is a dynamic, rapidly growing, culturally enriched and economically vibrant city of over 1.2 million people.

With a young population that is home to more than 240 different ethnic origins, Calgary has been recognized on a global scale.

Calgary is ranked fourth on the Economist's World's Most Livable Cities for 2018 and was recently recognized as one of the 52 Places To Go in 2019 by The New York Times.

Yes – times are tough. Unemployment is still too high for our comfort level, and the revenue short fall and the vacancy rate we have remain challenging.

But we must not look back – we must push forward and continue to be a “will do” city.

There is no silver bullet solution for all of our challenges – but it is the people, the industry and the community that have made this place thrive for as long as it has. And as a City, we must continue to support and invest in industry and community.

Whether it be through the expansion of new communities, or the build out entire districts and mega projects, the construction industry has an important role to play in the revitalization of this City.

Let me be clear – Calgary is open for business! And as long as I am around, it will continue to be.

Together and with some solid leadership, I firmly believe we can create the best Calgary for all of us – Right here, and right now.

Thank you very much for your time this evening.