PAUL WELLS July 28 2008


PAUL WELLS July 28 2008



It's so rich and so fun, surely someone is going to spoil the party


The little meeting room at FirstEnergy Capital Corp. where Brett Wilson sat down with me was a bit of a jumble, but a cheerful jumble. A table along one wall was groaning with bric-a-brac from The Dragons’ Den, a CBC reality show in which budding entrepreneurs ask real-life investors to put their own money into embryonic business projects. The

investors can be a bit leery: it’s real money out of their real pockets that these rookies are looking for. There weren’t a lot of deals in the first season. Then Wilson joined the cast.

“My exposure is $5 million for 22 deals,” he said, munching a lunchtime banana. It turns out that to crank up the metabolism of The Dragons’Den, all the producers needed was a Calgarian.

I visited Calgary for the last three days of Stampede. The pace of deal-making was dizzying. Of course the pace of deal-making was dizzying on my last extended trip to Calgary, fully three years ago. But that was an eternity by Alberta standards. Everything kept barrelling along while I was away. Over

hamburgers at an Earl’s, a friend casually described for me a whirlwind of coming and going in the oil and gas sector and lamented that the international board of a company he’d co-founded had decided to sell out eight months ago, when the value of the company was only $400 million. “I’m sure we’d be at a billion now if we’d stayed in,” he said.

There’s money everywhere. Alberta’s unemployment rate has been hovering down near three per cent. In 2007 Calgary had the highest wages and salaries per employee ($57,940) in the country. It logged the fastest annual income growth over the previous decade, and today it is home to more millionaires per capita than any other city in Canada. The most persistent barrier to even faster growth is a chronic labour shortage.

The deal-making bug that made FirstEnergy and other homegrown financial services boutiques major local players is now drawing some of the biggest names in global finance, like France’s Société Générale and Goldman Sachs from the U.S. Last month the semi-annual state of the economy review from Calgary Economic Development said the city is fast becoming a global financialservices powerhouse. But it’s not just Calgarians who are saying so. One report from the Toronto Financial Services Alliance frets that Calgary is “attracting available resources and potentially diminishing Toronto’s emi-

nence as the financial centre of the nation.”

The surprise, then, was that with oil at $140 and natural gas rebounding, the mood in Calgary’s executive suites remains nervous and unsettled. “Times are good for now, but people are really jittery,” said another friend of mine, who belongs to one of the city’s most prominent families.

If it’s possible to put a finger on this unease, it seems to have two sources. One is the fear that fate can deal a bust as easily as a boom, and that governments seem to be no help. The other is the dawning realization that Calgary needs to be about more than deals if it is going to grow much further.

Brett Wilson views both the frenzy and the consternation with a certain detachment,


because in recent years he has devoted more and more of his time and money to philanthropy. Fie has sworn to give away the bulk of his fortune to assorted causes. But he remains a creature of the energy industry and he shares its preoccupations.

Wilson remains upset at two government decisions. Stephen Harper’s federal Conservatives abandoned a campaign promise to “preserve income trusts by not imposing any new taxes on them.” When Harper reversed course on trusts in 2006, $25 billion in market value was destroyed and Wilson lost “tens of millions of dollars.” A year later, Alberta Premier Ed Stelmach jacked up the royalty fees for developing in oil and gas. “A

populist move and a mistake,” Wilson said.

Mind you, then commodities prices went for a balloon ride that shows no signs of ending. Wilson and every other Calgary millionaire made back the money they’d lost and then some. But they’re still hurt that ordinary Albertans didn’t come to the defence of the province’s golden geese when government fiat threatened them.

So there is lingering concern about the next government decision, whatever it might be. The oil-patch executives and other prominent Calgarians I talked to were willing to at least entertain the idea of putting a market price on carbon, whether through taxes or some other mechanism. But I sure didn’t hear a lot of sympathy for Stéphane Dion’s “Green

Shift” plan to tax carbon at the wholesale level and put the money into income-tax cuts and social programs. Many Calgarians are quite sure the taxes will be paid in the oil patch and the benefits delivered everywhere else but.

Now, readers might have trouble mustering a lot of sympathy for a city and a sector that is beating the country in growth while griping about government decisions that haven’t put a dent in that astonishing wealth creation. I sure did. But there is another side to this year’s Calgary, a more generous and creative side, another way of realizing that the unfettered production of $140 oil isn’t life’s only goal.

On the Stampede fairgrounds, where executive suites and platinum seats sell out long before the lower-priced seats for the rodeo competitions, the big festival’s president and CEO said the suite parties and the catering bills aren’t quite as lavish this year. “There’s almost a slight sense of, ‘Maybe I won’t be quite as ridiculous as I was last year,’ ” George Brookman told me.

This, too, is a common sentiment. I kept running into people who were taking concrete steps to share their wealth with the broader community, through philanthropy, cultural projects, or simply a willingness to work a little less frenetically and smell the roses. “Yeah, you do hear that,” Brookman allowed, before adding, “I’ve never been one of those guys, though.”

Brett Wilson has been organizing Stampede parties for FirstEnergy Capital since the mid-1980s. The first brought in $12,000 for various charities. This year Wilson told his exclusive invite list they wouldn’t have to buy

tickets to the FirstRowdy party—but they were expected to bring chequebooks. Wilson raised $225,000 for charity in one night.

“It’s a very community oriented place,” Jack Mintz said. Mintz is one of Canada’s foremost economists, and he moved here several months ago to help open an ambitious new School of Policy Studies at the University of Calgary. He is unabashed in his enthusiasm for his new home. “People really talk to each other and there’s a real view that we could solve the problems here and keep government out.” He mentioned the Calgary Committee to End Homelessness, whose chairman is TransAlta CEO Steve Snyder. Its plan is to add private money to $1.8 billion from every level of government to pay for a total of $3.2 billion in housing and support programs. “The main point is that the initiative came, not from the government, but from this group of people,” Mintz said.

So philanthropy is fashionable in Calgary these days, but so is a sense that go-go commodity capitalism can’t be a city’s only raison d’être. Calgary Economic Development’s semi-annual report says the city’s economy is “slowing down nicely” from the “frenetic”

pace of2006, and it gives telling details about why slowing down might be nice. First there’s that labour shortage. “Calgary is essentially at the wall of employment growth,” the report says, and there is “very little room to grow without improvements in areas such as child care, elder care, changes to pension legislation and changes to immigration practices and processes.”

The other side is a relatively new housing glut. “In the span of 18 to 24 months, Calgary has moved from a sellers market... to a buyers market where supply greatly exceeds demand,” the report says. A construction boom has outpaced the flow of people into the city.

Why? In almost comically pressing tones, the City of Calgary’s Economic Development


Strategy says it’s because the city hasn’t done enough to attract “creative, innovative people.” Those people “choose their location based on a city’s livability, vitality and quality of life.” And so far, “in many ways, we aren’t keeping up.”

This new emphasis on “quality of life and quality of place” is, apparently, all that can save Calgary from the dingy fate depicted in the development strategy: “Another large North American city competing for business and people. Virtually indistinguishable from Denver, Houston or Minneapolis.” Shudders.

Only in Calgary would slowing down and smelling the roses be so freaking urgent. “We have to act now,” the strategy document says. “Before another city with a clear vision and

imaginative citizens finds its own leg up to seize and hold the global position that could— and should—be ours.”

Are you listening, Calgary? Put down that briefcase! Pick up that latte! Put your heels up now! IT’S TIME TO KICK SOME QUALITY-OF-LIFE ASS!!!

Fortunately, in this as in many things, the heart of the New West shows signs of being up to the task. Just about everyone I talked to mentioned Lance Carlson, who was out of town while I was there but who has worked hard to get Calgary thinking of itself as a creative capital since he moved there from Los Angeles in 2005 to become president of the Alberta College of Art and Design. Projects along those lines are gathering steam. Andrew Mosker, the executive director of the Cantos Music Foundation, showed me the extraordinary collection of vintage keyboard instruments, from harpsichords to synthesizers, in the foundation’s collection. In May the city gave Cantos the contract to revitalize the King Edward Hotel, a century-

old landmark whose blues bar used to be one of Ralph Klein’s favourite haunts, as an ambitious new concert space and music museum.

Just off 11th Ave. the nine-month-old Weiss Gallery, which concentrates on 19th-century art and on modern artists who work in those classic traditions, has joined a half-dozen other galleries in one of the most impressive clusters of art galleries in any Canadian city. The Weiss Gallery’s elegant portraits and sculptures might not look like part of the key to keeping the Calgary boom going, but it really is true that man does not live by bread alone. Nobody has been smarter or luckier than Calgarians at making a living. Now they have begun turning the same spirit toward getting a life. M