CALGARY OUT FISHING FOR FEDERAL INFRASTRUCTURE BANK, TECH FIRMS
Trade missions are part of the long game where city hopes to attract businesses
The chief executive of Calgary Economic Development has spent the past two days in Ottawa, pitching federal officials on locating the new Canada Infrastructure Bank in this city.
Last week, CED’s Mary Moran and Mayor Naheed Nenshi were in California to lure technology firms to Calgary.
And next week, she’ll join Premier Rachel Notley on a trade mission to Asia.
In 2017, the pursuit of economic diversification for Calgary is a bit like deepsea fishing.
You have to cast the line repeatedly in the hopes of snagging a trophy catch.
But let’s also be realistic: There’s no sure thing when trolling for fish in the ocean.
Alberta’s pursuit of diversification has taken on greater importance since the recession rocked the energy business and thousands of jobs vanished.
At the end of the first quarter, the vacancy rate in downtown Calgary sat at 25 per cent, according to real estate firm CBRE Canada.
With the oilpatch recovery in slow-motion mode, chasing big game like the Canada Infrastructure Bank or tech companies from the San Francisco area is of strategic importance.
First up is the infrastructure bank, with a decision expected in a matter of weeks.
Promised by the Trudeau Liberals in the 2015 election campaign, the agency aims to help finance major capital projects in the country, leveraging privatesector investment from sources such as pension funds.
Moran met Tuesday and Wednesday with officials from the prime minister’s office and other ministries to sell them on Calgary’s merits.
Those include the fact the city has experience putting together large-scale projects and a sophisticated financial services sector that can assemble capital-intensive transactions.
Office rents are relatively cheap. Calgary has a highly skilled workforce that needs jobs.
The bank may only have 25 to 100 employees initially, but will eventually wield some $35 billion in federal investments, which means it’s a prize worth pursuing.
Moran pegs the city’s chances at 30 per cent, as other larger cities like Toronto are in the mix. It’s worth remembering Finance Minister Bill Morneau represents the riding of Toronto Centre, home to the country’s largest banks and pension funds.
“It is an uphill battle,” she said in an interview from Ottawa.
“We keep saying to them, if you put it in Toronto no one will notice. But if you put it in Calgary, it will be like a tickertape parade.”
If the city doesn’t get the agency, it has other targets in mind, such as a recently announced federal Investment Hub, which will strive to attract high-impact international investment to Canada.
The city and province are also trying to snag high-tech companies from the United States that might be looking to relocate or open satellite offices.
Technology firms in the red-hot Silicon Valley are in a competitive battle for talent. It’s an expensive place to operate and companies are having trouble obtaining enough visas for foreign nationals they want to hire, Nenshi told reporters this week.
One firm — with operations in Beijing, New York, London and California — is already preparing to open in the city, he said.
“There are a couple of other pretty big fish that — maybe there’s not a 50 per cent possibility of coming, it might be a 20 per cent possibility — but if they do come, it will be thousands and thousands of jobs,” the mayor added.
The province is also setting its sights on the fast-growing markets of China and Japan.
The premier and Economic Development Minister Deron Bilous will make a 10-day trip to Tokyo, Beijing and Guangzhou beginning next week.
Alberta’s exports to China jumped 16 per cent last year to $3.3 billion; China is now province’s second-largest trading partner.
There are opportunities in Asia for Alberta in agri-foods, tourism, transportation and clean tech, although energy dominates trade.
Gordon Houlden, director of the University of Alberta’s China Institute, said China still has energy security concerns as it gets most of its oil from the Middle East.
He thinks recent federal approval of the Trans Mountain pipeline expansion is a powerful signal to Chinese companies that Canada can get energy infrastructure built, and it may spur investment.
“At the same time we’re pursuing economic diversification for our products, they’re pursuing energy diversification for their industry, just for reasons of security and safety,” said Houlden, who is going on the trip.
All of these efforts make sense, but it’s important to be realistic on how quickly this strategy will take to unfold.
Trade missions like those to Asia or California are part of a long game, which often takes years from initial meetings to inking deals.
“Will Calgary see much fruit in 2017? There’s a good chance not much will happen,” said Adam Legge, president of the Calgary Chamber of Commerce.
“But could we see fruit in 2018 or 2019? Yes, there’s a good chance of that. But that’s why we have to be moderate in our expectations.”
With Calgary’s downtown vacancy rate expected to keep rising, no one should be under any illusion at how long this will take — or that success is a given.
However, a couple of key wins would build some momentum. Landing the Canada Infrastructure Bank, or a few key tech companies, would be great way to start.