Canada/COVER

On Top of the World

Calgary is a powerhouse of the 'new' West

MARY NEMETH February 24 1997
Canada/COVER

On Top of the World

Calgary is a powerhouse of the 'new' West

MARY NEMETH February 24 1997

On Top of the World

Canada/COVER

Calgary is a powerhouse of the 'new' West

MARY NEMETH

Calgary is a city of sleek glass office towers and sprawling communities, a place where the sun usually shines and the wind usually blows. It has a freshness about it, a vibrancy, a sense of confidence and newness. It likes to see itself as a place on the edge of the frontier, where people put greater stock in enterprise and moxie than they do in fine manners or old-school ties, where cowboy hats bob unremarkably past pin-striped suits downtown. It is also conservative, some-

Calgary is a powerhouse of the 'new' West

times even a bit parochial. It has one of the youngest, most highly educated populations in the country. And yet when a local theatre company stages a play with gay themes and nudity—even a Pulitzer Prize-winning one—it sets off something of a tempest. And when winter drags on and cars begin to rattle and bounce along snow-rutted residential streets, some Calgarians pen indignant letters of complaint to the local newspapers. But others—fervent fiscal conservatives—write to cheer the city’s austerity. Who needs snow plows, anyway? There will always be another warm chinook wind to melt the snow—or another oil price hike, another rally on the market, another world event

to raise spirits, like the Olympics or perhaps an Expo this time.

The confidence is palpable. Calgary is booming—creating jobs, building houses, expanding the economy at break-neck speed. It is an ideal economic backdrop for an incumbent government—especially since growth in Calgary and the rest of Alberta have helped Premier Ralph Klein and his budget-cutting Tories deliver a $2.2-billion surplus in 1996-1997, according to the provincial budget announced last week. Klein seized the moment to call a provincial election, in the wake of recent polls showing his party with a commanding lead (page 20).

But regardless of the judgment of Alberta voters, the

Setting the fiscal pace for Central Canada

Klein government’s deep spending cuts have already had far-reaching ramifications—emboldening Ontario and Quebec to join the budget-battling brigade.

That Alberta is setting the fiscal pace for Central Canada is in itself remarkable—a signal of the West’s growing political influence. The region certainly has more economic clout than it used to—and a new sense of its own importance. Even the so-called have-not provinces of Saskatchewan and Manitoba have been gaining ground (page 22). Of late, British Columbia, the most-ballyhooed of the western provinces, has seen its booming economy slow down. Alberta is now expected to grow even faster than its western neighbor—but both have enormous potential. Although British Columbia and Alberta account for only 20 per cent of the Canadian population, they produced nearly half the new jobs in the country last year. Mighty Ontario produced most of the rest. ‘Toronto will still remain the dominant city,” says David O’Brien, chairman, president and CEO of CP Ltd., which moved its principal executive offices to Calgary last year. “But the West will be much more powerful in the Canadian context in the next 20 to 40 years than in the previous period.”

In Calgary, a city riding the peak of the western wave, many locals still traumatized by the bust that followed the last rush of success refuse to speak the boom word. One of the local newspapers even ran a front-page headline explaining how the city is only “bustling,” not booming. And this boom is indeed less dramatic than the last— construction cranes are absent where once they cluttered the downtown skyline. Still, Calgary is the economic heart of a province that has outperformed the Canadian economy in every year since 1990 except one, according to Informetrica, an Ottawa-based economic research and forecasting firm. Half a century after drillers first hit oil near Leduc, Alta., setting the province on a course towards prosperity, most forecasters are now predicting that Alberta will either lead Canada or come a close second to a resurgent Ontario in 1997.

The Conference Board of Canada puts overall GDP growth in

Alberta at 3.2 per cent in 1997, compared with a national rate of 2.9 per cent. John McCallum, the Royal Bank of Canada’s chief economist, says that while all of Canada will benefit from low interest rates, Alberta has the added advantage that the provincial government seems to have finished with budget cutting. The province also enjoys a prosperous farm economy and strong oil prices. And diversification into areas like petrochemicals and high technology, along with reductions in the cost of oil recovery, mean that Alberta is less vulnerable to an oil price drop than it used to be. “I think that Canada will lead the Group of Seven in growth in the next couple of years, that Alberta will be number 1 in Canada—and Calgary is at the core of Alberta,” says McCallum. “So it kind of puts Calgary on top of the world.”

That might explain the optimism with which Calgary is pursuing its bid to host a world Expo in 2005, a brazen challenge to a larger Expo proposal from Japan—and a clear effort to re-create some of the excitement of Calgary’s 1988 Winter Olympic Games. That same enthusiasm is evident in the city’s lifestyle. By dint of geography as well as inclination, Calgary fosters outdoor activities—hiking or skiing in the nearby mountains, or running, cycling and in-line skating along the 330 km of pathways that snake through town.

On soft summer evenings, it is a common sight—fishermen silhouetted against the golden glow of the setting sun as they wade in the Bow River running through the heart of the city. In winter, dreams of the big one are confined to stores like Country Pleasures, where enthusiasts browse among the rods and waders and the walland-a-half of feathers, hooks and other paraphernalia waiting to be fashioned into flies. Jim McLennan is an author and part owner of the store. And he maintains that there is no other trout stream of the Bow River’s quality near any other city of Calgary’s size. “The wonderful luxury about living here,” says McLennan, “is you can go

home and read the newspaper, put the kids to bed and go out and fish for an hour at 8:30 or 9 o’clock. Avid fly fishermen in other parts of the world are very jealous of that.”

Some of those outsiders are moving in—although fly-fishing is not the only reason. The biggest draw is employment: Calgary created 22,600 new jobs last year. And the population grew to 767,059, a jump of 18,000 over the previous year. Debbie Collins, 38, a Canadian Pacific Railway employee, moved from Montreal with her sixyear-old daughter, Deseray, when her company transferred west. She is impressed by what she calls a basic trustworthiness in Calgary, citing the honor system on the city’s light-rail transit. (Authorities trust passengers to buy tickets, although they do some spot checks as well.) ‘You would never in a million years get that back east,” Collins says. She also likes the friendliness of neighbors and the city’s general sense of confidence. “It’s insidious,” she says, “this sense that we’re a happening place. It reminds me a lot of Montreal in the early ’70s—a place to be proud of.”

Signs of Calgary’s flourishing economy are everywhere:

• The city is now second only to Toronto as a corporate head-ofgsg. fice centre. It is home to 92 of The Financial Posts top 750 firms, listed by 1995 revenues. Toronto has 118.

SL • Calgary has the lowest unemployment rate of any major centre

■ Î in Canada, just 6.5 per cent. The national rate is 9.7 per cent.

■8 »Oil prices outstripped all expectations in 1996, when Canadian

■ I crude oil at Edmonton averaged $21.44 (U.S.) a barrel. Although oil ÜHë prices have dipped recently, crude was trading around $26 in De-

cember—the highest prices since the Persian Gulf War of 1991. s • Corporate income tax receipts in Alberta grew by 28 per cent “ in the 1995-1996 fiscal year. And for the first time ever, manufac| turers paid more of that corporate tax than did the mining and oil § wells sector.

I • On the residential front, Calgary had a 1.5-per-cent apartment vacancy rate, according to a fall survey by the Canada Mortgage and Housing Corp. And per capita, it had the most single family housing starts of any large Canadian centre last year.

Even office space is being soaked up. As local businesses expand and new ones arrive, an office vacancy rate that ran as high as 20 per cent in the early 1990s has now tumbled to just 9.7 per cent—four points lower than the average in major Canadian markets, according to Royal LePage Commercial Inc. Calgary Mayor AÍ Duerr argues that lifestyle has a lot to do with the growth in the highly mobile technology sector. ‘You’re seeing it in the United States,” he says. ‘You’re seeing people moving out of Southern California to the Phoenixes and Denvers, the midsize cities. And they’re doing it for lifestyle reasons.”

Calgary has also diversified into fine chocolates, furniture-making— even its very own railway. CP Rail moved about 800 employees from Montreal, Vancouver and elsewhere in North America to the city. The principal

executive offices of its corporate parent, CP Ltd., soon followed. Chairman O’Brien says both entities moved because the bulk of their business happens to be in Western Canada. But the companies, he adds, also had to pick a site where they could attract and retain staff. “There’s no question there is an image of Calgary being less cosmopolitan than, say, a Toronto or Montreal—indeed it is less cosmopolitan,” says O’Brien. “But for many people, it offers advantages that outweigh that.”

On the plus side, O’Brien cites “a good family lifestyle,” easy transportation, enough arts and entertainment, and lower housing costs and tax rates than some other centres. All but one of the 20 railway executives took up the offer to move. “So that’s a pretty good batting average,” O’Brien says. ‘You have to recognize that some people were based in Vancouver and they might have viewed that as Lotusland—except when they got their paycheque here and they realized that a lot of it stayed with them.” O’Brien, who moved from Montreal himself in the late 1970s, says Calgary was “kind of the new rich boy in the 1970s and early ’80s.” But the city, he adds, has “gradually grown up to its status.”

In fact, the new players like CP Rail have helped shape a corporate landscape much changed since the last boom. Those were the days when premier Peter Lougheed ruled the province, when oil was first transforming Calgary from a sleepy Prairie community to a high-flying power centre. Oil fed a cocktail circuit abuzz with tales of fortunes made and spent. It spawned the gleaming office towers downtown and produced the government revenues to finance the light-rail transit system, major road developments and the purchase of large tracts of public parkland. And yet the boom led, inexorably, towards a bust of the early 1980s—a traumatic period of bankruptcies and mass layoffs.

Combined with a federal high interest rate policy designed to cool an overheated central Canadian economy, that bust also “forced a model of rationalization on Calgary,” says Mayor Duerr. “A lot of the downsizing or right-sizing, whatever the

current jargon is, that most other parts of Canada are just learning about, started really in Alberta in 1982.

And when we had the national recession in the early 1990s, Alberta didn’t suffer very much because we had been through it all.” The oil industry has indeed become much leaner even as it has diversified internationally, expanding operations from Tajikistan to South America and Asia. And that, in turn, seems to have had an impact on local tastes—even tastes in food. The local culinary scene, once confined to steak houses, fancy hotels and a few Chinese or Italian restaurants, has become more cosmopolitan. It has happened partly because Calgary grew big enough to support variety, partly because the restaurant scene nationwide has responded to immigration and changing eating patterns—and partly because of the international operations of the oilpatch. “If you go out to an Indonesian restaurant,” says local CBC restaurant reviewer John Gilchrist, “you see 60Ä$r-old oil engineers there because they worked in southeast Asia, tnfjje familiar with the food.” That does not mean Calgarians have forsaken the steak supper— or the Wild West mythology that gives the city a unifying self-image. Its most tangible manifestation is the Stampede, the 10-day rodeo and fair held in early July, when everyone from oil executives to bank tellers don jeans and cowboy boots. (“I had heard you could wear jeans, but I didn’t know you had to,” said one Montreal transplant “mortified” to discover she was the only one in her office building in regular business dress her first day of Stampede.) There are also Western bars in Calgary like Ranchman’s—a hangout for urban cowboys as well as real rodeo riders—and bronze cowboy sculptures in the poshest oil company offices. Not all of it is mythology, either. Evidence of the city’s true Wild West heritage can be found at the Glenbow Museum downtown, in a room that sports photos of early ranchers, bits of barbed wire and wooden boards blackened with cattle brands. The first cowboys in the area were Americans, mostly Texans, hired by large lease-holders in the 1880s to drive herds of range cattle from Montana or Wyoming to Alberta, says Hugh Dempsey, Glenbow’s affable 67-

year-old chief curator emeritus. Ranching was primarily focused in the Alberta foothills back then, and early visitors to Calgary remarked on the cowboys in their chaps and spurs jangling through town. As early as 1923—when the Calgary Exhibition incorporated what had been until then only an intermittent Stampede into an annual event—organizers realized that Calgary could cash in on its unique link to ranch life. “They brought the chuckwagons and were making flapjacks downtown, with cowboys riding through the crowds, roping pretty stenographers,” says Dempsey. “It was all part of an image of the Calgary past.” But as time went by, Dempsey adds, it also began “drawing from the romance of Hollywood movies and pulp fiction.” Beyond the colorful trappings, Calgary embraced some genuine western values that endure today. According to University of Calgary political scientist Roger Gibbins, there is “a spirit of independence or self-reliance and, somewhat paradoxically, a commitment to the community, a belief in voluntarism—the historic symbol for this is the barn-raising.” That legacy has translated into almost a social obligation. According to the Coalition of National Voluntary Organizations, 39.6 per cent of Albertans volunteer, more than in any other province. About 8,000 Calgarians helped stage the Winter Olympics, and another 1,700 work year-round on the Stampede. Rosemarie Enslin, a public relations consultant, phoned a local agency last December to offer to help serve dinner for the homeless. “I couldn’t believe it, I had to take a reservation,” she says. “I think the first available date was February or March.” At the same time, the climate in Calgary is so entrepreneurial that it pervades even the nonprofit sector. Susanna Koczkur, executive director of the Connection Housing Society of Calgary, which helps individuals and families facing housing crises in Calgary’s tight rental market, used to work in Toronto and Winnipeg. She was surprised at first at how the traditional charity approaches failed in Calgary—“you hold a raffle and no one buys a ticket.” But it is not that people are

greedy, she says—just that Calgarians better understand a relationship based on business principles. Now, she views Connection as part of the business world. ‘You’re selling a sad story,” she says frankly. ‘You’re selling a solution, and you are asking them to trust that you will be the vehicle to that end.” Koczkur says she expects that the ongoing boom will mean even more funds flowing to nonprofit agencies willing to work in partnerships with business. But the good economic times are not automatically alleviating the poverty that Koczkur’s group and others are encountering. The Calgary Inter-Faith Food Bank Society gave out 39,548 hampers last year, a 33-per-cent increase over three years earlier. And the local dropin centre has seen its clientele increase by 70 per cent £ in 2 V2 years. Advocates for the poor cite a variety of ¿ factors, including government cutbacks to welfare 1 and other support programs. Good economic news, a they say, is drawing job seekers from other provinces, “ and some new arrivals are simply not able to step in£ to high-tech jobs. Others point out that growth in employment among the young is not keeping up with the economy. Even some families with jobs are finding that Calgary’s boom is passing them by. Beverly Nelson’s husband works as a welder. But she says that she recently had to quit her job as a beautician because they cannot afford day care for their two young boys on what she was earning. Now, she says that her family has to move out of their apartment because they cannot afford their rent—more than half her husband’s take-home pay. Nelson, 25, says she expects that builders will make money in a booming housing market and that landlords will be able to charge higher rents. But for her family, Nelson says, the boom will have a more significant impact on their cost of living. “I think the only thing this boom will do,” she says, “is make the rich richer and make the struggling struggle even harder.” It is a sober reminder that economic good fortune is not evenly distributed and the rising costs associated with a boom can leave some people worse off. Some social advocates are calling for more support for education and training programs. And groups like Calgary’s dropin centre are hoping to find a way to spread the wealth by starting up their own businesses; they even have some local business leaders lined up to help advise them on how to do it.

All this, of course, presumes that the economic growth will continue—and Calgarians recall all too vividly when it came to a screeching halt. This time, the growth is not quite so rapid, or so dependent on a single commodity. A cautious optimism prevails. No one expects the city to displace Toronto in economic, not to mention political, might. But the nation’s centre of gravity is shifting perceptibly westward. And when the pendulum comes to rest, Calgary seems destined to be one of the nation’s new powerhouses. □