Varcoe: Constant talk of bad economy, Wexit paints unattractive picture of Alberta
|calgaryherald.com 13 Dec 2019 at 13:51|
The sharp focus on the province’s economic tribulations and grievances within the federation seem like a good way to call attention to some persistent problems.
Raising these issues can shine a spotlight across the country and, potentially, find solutions to issues such as progress on pipelines — but it also carries risks.
It could make investors more nervous about the uncertainty ahead, create more pessimism about the state of the economy and even drive away prospective companies or talent from coming here.
That certainly appears to be the case with Toronto-based technology firm Wattpad, which selected Halifax over Calgary to be its second headquarters.
The company declined to talk about why Calgary wasn’t chosen, but as The Logic site reported this week, Wattpad sent a response to Calgary Economic Development that raised concerns about Wexit, as well the province’s recent elimination of business tax credit programs it could have used.
I suspect a loss of incentives had more to do with the tech firm’s final decision than worries about western alienation, but that misses the bigger point.
When companies aren’t interested in coming here, we need to pay attention to all of the reasons that are a disincentive, not just ones that are convenient to blame.
Allen Lau in the Toronto offices of Wattpad. In Halifax, the company will have a temporary home in the Volta incubator hub. Supplied
And when the CEO of one of the largest companies in the province starts raising similar concerns, it’s time to listen.
Now, there are valid reasons for Albertans to feel frustrated with the federal government and other provinces that seem intent on blocking resource development or delaying energy infrastructure that could create jobs and attract investment.
But when the head of the country’s second-largest airline speaks out about his concerns — representing a company that employs 7,584 people in this province, having just invested $50 million to build a hangar in Calgary for its new Dreamliner jets — it shouldn’t be dismissed.
Mayor Naheed Nenshi said the city competes for corporate offices all the time, but in recent months, it’s become more challenging to attract businesses and skilled employees.
“They often ask about the political environment here and say … do I want to go to a place where everyone is so angry all the time? And what kind of environment will that be to helping grow my business,” Nenshi said Tuesday in an interview.
“We don’t usually have people explicitly say that is keeping us from coming there, but certainly it is a question that’s raised quite often.”
If we focus on how profound our problems are, without talking about the advantages we have — a well-educated workforce, low taxes, a high quality of living — we risk having others focus on that, too.
Colleen Collins, vice-president of the Canada West Foundation, said companies invest where they see certainty, noting Quebec experienced an exodus of businesses in the 1980s amid growing separatism sentiment.
“I don’t think we should overplay the Wattpad experience, but I also think people do need to understand the talk of separatism has consequences,” she said.
There are also worries the economic pessimism is starting to permeate the province.
Sims raised the issue of the economy and where it’s headed, saying the concerns are understandable but risk putting too much focus on the gloom.
Alberta faces headwinds, but “this is not as significant as major turbulence. And if we’re not careful, we will start using the language of a depression rather than a recession,” the WestJet CEO added.
In fact, a new poll conducted by ThinkHQ Public Affairs found Albertans’ perception of the economy has deteriorated sharply since the summer.
An online survey of 1,206 Albertans, conducted Dec. 3-6, found 86 per cent of respondents believe the economy is weak or very weak right now, up 11 percentage points from June — its lowest point since January 2016.
Just 23 per cent believe the economy will get better over the next year, while 43 per cent think it’s going to get worse, and 34 per cent say it will remain the same.
It’s starting to impact how Albertans feel about their financial situation. Asked whether they will be better or worse off financially in the next year, only 14 per cent said their personal situation would improve, while 34 per cent thought it would get worse.
“When times tighten up and people start feeling pensive about the economy, that’s when their pocketbooks are a little more difficult to open,” said pollster Marc Henry of ThinkHQ. “It’s sort of a self-fulfilling prophecy.”
There’s no denying the economy is struggling, as more than 65,000 Calgarians were unemployed last month.
Calgary-based real estate firm Strategic Group announced Wednesday it is embarking on a reorganization , after successfully seeking creditor protection for 56 of its 171 commercial properties.
Strategic CEO Riaz Mamdani said the company has been battling a negative economy — including high vacancy rates and falling rents — for five years.
“We are impacted by people’s pessimism, by the lack of consumer confidence, by the lack of investment confidence,” he said.
However, there are also signs of growth, such as Cenovus Energy this week by more than 20 per cent.
The Conference Board of Canada is projecting the city’s economy will expand by two per cent next year. And while there have been layoffs recently, Calgary has the highest employment rate in the country among the largest cities.
Times are challenging and Albertans have genuine reasons to be concerned.
But if the only message people outside the province hear is that we’re in big trouble and it’s getting worse, more businesses will start to pay attention, and perception could soon become reality.