CANADA

Riding out of the slump

Gordon Legge July 16 1984
CANADA

Riding out of the slump

Gordon Legge July 16 1984

Riding out of the slump

CANADA

Gordon Legge

Calgarians last week celebrated their city’s 100th anniversary with the ritual Wild West exuberance of the Stampede and a muted sigh of relief that a prolonged economic slump appeared to be ending. From the grandstands overlooking the renowned chuck-wagon race track to the 1,200-seat Silver Slipper beer hall, the celebrants were clearly in a positive frame of mind. The 72nd instalment of the Stampede helped to establish the mood, but so did guarded optimism about a return to prosperity. Said Bruce McDonald, director of the Calgary Economic Development Authority: “Our busts are better than booms anywhere else in the country.”

Calgary’s economic ups and downs during the past decade have rivalled the wildest ride on the Stampede midway, but for most of its history the trend has been upward. The city experienced booms based successively on cattle, real estate and oil since it was founded as a frontier outpost of the North West Mounted Police. Barely a generation ago Calgary was a modestly prosperous Prairie city known for the Stampede and for being Canada’s oil capital. Then, in the wake of the 1973 Arab oil embargo and the subsequent energy crisis, the city began a period of explosive growth as Canada endeavored to find and devel-

op new sources of oil and natural gas. By 1981 about 2,500 people a month were arriving in Calgary. New office towers sprouted. And in 1981 alone, more than $2.5 billion in construction permits were issued.

Then, with brutal abruptness, the growth stopped. The worldwide recession combined with high interest rates and the impact of Ottawa’s 1980 National Energy Program to send the city into a sharp economic decline. As activity slowed, unemployment soared, and the population began to shrink. In the past two years Calgary’s population has declined by about 3,300, to its current level of 620,000. Said Rupert Laviolette, an unemployed pipe fitter who was taking home $2,000 a month at the height of the boom: “A person never figured it was going to go down that bad.”

Today, construction cranes that stretched above the city only a few years ago have disappeared. Ivory, gold and ebony office towers shimmer in the summer sun alongside abandoned construction sites which the city is currently landscaping. And 22 per cent of the city’s existing office space—a total of 5.6 million square feet—is vacant. Despite those signs of slump, Calgary is slowly beginning to stage a comeback. “Calgary has come down from its period of euphoric madness and overoptimism,” said Frank King, chairman of the organizing committee for the 1988 Winter

Olympics, which the city will host. “Now it’s living a normal life.”

The city’s municipal government, led by Mayor Ralph Klein, now is working to diversify the local economy and make it less dependent on the fickle fortunes of the oil business. Calgary is planning a campaign to attract companies in the food and communications industries to a city that, according to Canadian Business magazine, already houses the head offices of 55 of Canada’s top 500 firms and 19 of the country’s fastest-growing companies. Unemployment in Calgary still was running at the uncomfortably high level of 11.5 per cent in June, but that was down from 13.5 per cent in May. At the same time, retailers reported that Calgarians were stepping up their purchases of clothing, cars and restaurant meals. And oil industry activity, the single largest factor in Calgary’s economic life, was increasing, with a total of 268 drilling rigs at work across the province in March, 120 more than in the same month last year.

Last week the Stampede opened with spectacular fanfare as it always has—in good times and bad. During the boom, some Calgarians contended that the city was becoming too cosmopolitan for its residents to continue dressing up in Wild West costumes once a year. But they received little support for their views. “This is something to be proud of,” said Stampede general manager Donald Jacques. “No matter what has happened during the past year, the Stampede means good times.