Edmonton’s Economic Impact Luncheon 2014

On January 14, 2014, Brad Ferguson delivered EEDC's 2014 Statement of Intent to Edmonton business leaders.

Posted by Brad Ferguson on

Introduction

Last October, a month after I started at EEDC, I was sitting in Council chambers. It was Councillor Sohi’s turn to ask questions about our plans and budget for the upcoming year. He leaned into the microphone and said, “Mr. Ferguson, on a scale of 1-10, how would you rate the image and reputation of our city?” I paused for a moment, thinking about my new role as supposedly the cheerleader for the city, the manager of first impressions, the guy who is supposed to market our city to the world … and before I knew it, I opened my mouth and the truth came out. 1.5 out of 10, sir. 1.5 out of 10.

As I was leaving council chambers Vinesh Pratap from Global TV grabbed me and asked, what made you say 1.5? Why not 2? And I looked at him and said, “Vinesh, I didn’t want to understate the work that needs to be done.”

Reality Check

I stood at this podium one year ago knowing a lot had to change. Our organization had lost the confidence of City Council and lost relevance with the business community. And I said I wanted to come back in one year’s time to be accountable for our results.

  • At my first meeting with our shareholder, in January, Councillor Tony Caterina walked up to me after my presentation and said, “Six months ago I put a motion on the floor to close down this organization. I sincerely hope you get it going in the right direction before the next Annual General Meeting in 6 months.” Nothing like a little pressure to kick things off.
  • At my first Leadership Team meeting, with all our Director-level people and above, I walked in the room, sat down and passed out one cue card to each of the 30 people around the table. I asked everyone to write down the three most important things that need to be done for the benefit the organization, now. We sat quietly for 10 minutes, I collected the cue cards, and I ended the meeting and walked out. When I got back to my office, I went through the cards, which I brought here today. And almost unanimously they said. “Focus the organization, clean out the organization, rebuild the organization.
  • At my first town hall meeting with all our staff, after I gave some background on myself … I asked if there were any questions. Silence. Then, this one guy at the second table back, white shirt, pink tie, black glasses, Brent Beatty, one of our great tourism sales managers today, raised his hand and asked, “How long are you here for?” which is exactly the right question to ask because on behalf of the entire staff he was saying “if you’re committed, we’re committed.”

And I stand here today, proud of the work we have done and the changes we have made in the last 12 months … but those changes could not have happened without total, absolute and unfettered support from City Council and Mayor Mandel, our Board and Chair Peter Silverstone, the Leadership Team who gave us permission to make the changes, and a great group of employees who desperately wanted to be encouraged and inspired to get out there and help build us a great city.

So to all of those people, I first want to say “thank you” because we couldn’t have accomplished what we did, at the speed that we did, without you.

Positive Changes

To give you an idea of the changes we have made, right now 36% of our people have been with EEDC for less than one year. Another 24% on top of that are in new roles that didn’t exist a year ago. That means 60% of our organization is either new, or doing new things. Through the process we inverted the traditional pyramid of a public service entity, and we are now 12% boomers, 42% Gen x and 46% Gen Y with a 52/48 split between male and female.

The result is an organization that is fresh, young, inspired and female friendly … the kind of culture we want working as the sales and marketing arm of the city.

And I couldn’t be more proud of them.

We were able to attract some great people to the organization … people like Maggie Davison as our VP Tourism who has rebuilt her team, re-established relationships with Edmonton Destination Hotels and re-connected with Travel Alberta with the goal of establishing Edmonton the favorite destination for those in the west and in the north.

People like Glen Vanstone and Michael Powell positioning us back as the logistics, transportation and manufacturing centre for Alberta. Or Darcy Vane who is working to make sure Edmonton is the hospitality, sports, entertainment and retail centre in the west. Or the addition of Ken Chapman and Adam Sweet who have sharpened our focus on the north, specifically being in better economic relation with Ft. McMurray, Yellowknife and those communities north of 60 degrees. Together are team worked on over 60 projects which resulted in over $1.5 billion of capital expenditures in the Edmonton region in 2013 … all while our internal changes were going on.

People and culture make the difference in our city, and our organization need to embody that culture. And our latest survey results say that 88% of businesses believe we are going in the right direction, and 98% say that we are delivering significantly more value than we did 12 months ago.

And when you add Chris Lumb from TEC Edmonton (#1 Business incubator in Canada and #17 in the world), Ken Bautista from Startup Edmonton (leading model being rolled out in cities across Canada), Reg Miley (Airport), James Cumming (Chamber), Don Hickey (UofA) or Jodi Abbott (NorQuest) and our MLAs from the province or James Rajotte and Mike Lake at the federal level, you realize that economic development is definitely a team sport. We’ve built a great team that wants to help. And the culture of winning that we are building here is resulting in calls and emails from foreign investors, conference organizers, tour groups, entrepreneurs and people in this room saying what incredible effort our people are giving, and they are noticing that Edmonton is working harder to help their businesses than ever before.

Sponsor Acknowledgment

A few companies step up and return the favor and help us put on events like this … companies like Deloitte, Gilead, Stantec and CGI who represent four very different sectors of our economy, and who are each enormous contributors to our community.

I’d like to specifically thank Deloitte, not just for stepping up and being our lead sponsor today, but also for working with Edmonton companies on becoming many of Canada’s 50 Best and for leading the charge on productivity improvements in our local companies.

Results

Last year was a great year. Our objective was to outperform every other regional economy in North America … and we did.

  • Our GOP was over $81 billion growing at 4.3% versus a average of 2.1% across North America.
  • Our population in Edmonton is 840,000, or 1.2 million in the Edmonton region, growing at 3.9% per year which is about as fast as you can grow in a mature economy without having infrastructure falling too far behind.
  • One in 10 new jobs in Canada was created in the Edmonton region, resulting in 36,500 new full time positions, resulting in our unemployment rate trending at 4.8% which is SO% lower than the average across the country.
  • We are sitting on about $3.0 billion in building permits, we hit 10,634 new housing units in 2013, which is 12% higher than the number of units started in 2012 and marks the highest number of starts over the last 12 years.
  • And we have $220 billion in major projects planned or announced that will continue to drive our economy over the next 10 years.

And bringing that down a level, we look forward to a new arena breaking ground in the spring, construction on a new downtown museum, NorQuest College’s expansion, two new hotels, two new office towers, and a vibrancy that should double the number of residents in the downtown core over the next 7 years.

But probably the most important accomplishment, the change that we see and feel most, is a new sense of confidence and self-esteem and connection that people have embraced with their city.

And when I travel to Toronto or Montreal or New York … or when celebrities like Bruce Croxan from Dragons Den or at last night’s Justin Timberlake concert, I meet with people who look at me and wave their fingers and say, “something is happening in Edmonton. Not sure what it is, but something’s changing,, and it’s all good.”

And that, Councillor Sohi, is what leads me to believe that we may now be a 2.5 out of 10.

This is A New Edmonton … with a new mayor, a new confidence and a new energy.

And all of you are out there telling the story.

We are no longer the boom/bust economy of the 1970s, 1980s and 1990s. Over the past 12 years, as the oilsands have moved from exploration-based activities to manufacturing-based activities, our growth has become much more predictable, and our volatility has been replaced with confidence.

We were a city known as the northern node of the Calgary-Edmonton corridor that now understands that it is actually at the epicenter, the confluence, of the Calgary-Edmonton and the Edmonton-Ft. McMurray Corridor, two of the most powerful economic corridors in North America. And when you add on Grande Prairie, Ft. St. John, Co ld Lake and Yellowknife and the North, and imagine pipelines to the east, to the west and to the south, and a CP line and a CN line, Edmontonians realize that they are uniquely positioned at the epicenter of the industrial supply chain for goods and services originating out of western Canada.

And when you extrapolate that out over the next two decades, we are anticipating a $2.1 trillion economic contribution, generating $378 billion in taxes for the country, producing 905,000 new jobs in Alberta and 126,000 jobs across the country and procuring $117 billion in goods and services from other provinces … we are sitting on an unprecedented opportunity … if we get it right.

The Challenge Before Us

And what do I mean by that?

As I travel and see what is going on at MIT, Harvard, Stanford, Berkley, and witness what is happening in some of the best business incubators in the world, I realize that some of the smartest, most well capitalized people in the world wake up every morning and set out to prove what we do here is wrong.

And that is a very real threat … and that is much more powerful than the Neil Yong Quest for Relevance Tour.

If we look at GHG Emissions: Canada represents 0.5% World Population and produces 2.0% Global GHGs, of which 0.14% come from the oilsands, which has been reduced -26% per barrel since 1990 … but that is not good enough.

If we look at our use of fresh water, as we shift from now 97% of our activity toward In Situ production which as you can see reduces our water use per barrel dramatically, and that water is 80%-95% recycled and draws only 0.6% flow from the Athabasca River, the world is telling us that it is still not good enough.

If we look at our physical footprint, in Canada we have 3,200,000km2 of boreal forest, 142,000km2 of which is located in the Oil Sands area, of which 4,800km2 are zoned to be developed for industrial use, and 715km2 contain mining operations … but it isn’t good enough.

And if we look at tailings ponds, which are a combination of water, clay, sand and a small amount of residual oil. We have 176km2 of tailings ponds of which, by law, 100% must be reclaimed. We are currently spending over $1 billion per year in Research & Development and have reduced the number of years it takes to reclaim from 50 years to 7.7 year … but guess what … it’s still not good enough.

The only way we become “good enough” is if every company doing business with the energy sector, every company in the industrial supply chain, every company in this room embraces the mantra of doing things cleaner, greener, safer, faster, cheaper. And I don’t mean producing a sustainability report at the end of the year which has really just become a marketing document; rather, I mean baking it right into our collective mission statements … we’re here to make widgets that make the oilsands cleaner, greener, safer, faster, cheaper.

Innovation Platform

This reality presents a historic challenge for us as a community. No different than 50 years ago the challenge was to develop the science and technology to extract value from the oilsands. Today our challenge is “How do we (1) extend the life; (2) extract the value; and (3) export to market this trillion dollar, trillion barrel resource we have been blessed with” while at the same time “creating a whole new generation of entrepreneurs and Canadian-based, global companies”.

And what an opportunity. The oilsands and its industrial supply chain is a trillion dollar platform for innovation, that should spawn new technology companies in the areas of monitoring and detection sensors, robotic manufacturing, advanced coatings and wear technologies, data analytics, micro and nanotechnology materials, wireless devices, biomaterials and compounds, water technologies, construction technologies, unmanned vehicles … all those things we talk about when we talk about diversifying the economy, all needed to make our energy industry and industrial supply chains cleaner, greener, safer, faster, cheaper.

How do we diversify our economy … that’s how.

For the first time in history, our capabilities have begun to catch up with our ambitions.

Nation-Building

And we can’t do it alone. It can’t all happen here. We need to open up the access point and invite the entrepreneurs, scientists, researchers and innovators in from McGill, UofT, MacMaster, Queens, UBC … and throw out a series of grand challenges that not only extends the life of our trillion dollar, trillion barrel resource … but also brings together a country with a national imperative that impacts us all … and at the same time creates a whole new generation of entrepreneurs.

And guess what? If we can do it in the energy sector, we can also do it in healthcare, education and the public service … the three biggest industries that have yet to be radically disrupted by technology. We need to build our industries and build our entrepreneurs and activate the country at the same time … that’s economic development and that’s wealth creation.

Our problems need to become Canada’s problems, and an opportunity for the nation to participate in. Not only does it unleash the brainpower and ingenuity from across the country, it also puts us on the same team for those little things like market access.

Looking Forward

At EEDC we have five themes that will take us into the years ahead, and I hope you will agree with me that these are priorities:

  1. Alert the world to the energy in Edmonton
  2. Attract and activate those seeking opportunities
  3. Enhance and expand our influence as an economic powerhouse
  4. Diversify by using our strengths as platforms for innovation
  5. Operate as one interconnected, interdependent region

Gone are the days where things happen to us. Our strategy is sound. And our success lies in our ability to move forward with intention.

At EEDC we have done a lot of heavy lifting to make sure we embody the culture and spirit needed to move Edmonton forward. The book on your table is not only a statement about how we work, but it also a promise and a standard that we want you to hold us to.

But it is your turn. It is your businesses that need to embrace the innovation challenge that lies ahead of us, part of our collective imperative.

I hope you are up for it. Our team is here to support you. But we need to move beyond talking about it, and we need to start living it … because it is those that embody it … that will be the leaders of tomorrow.

Thank you very much.

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