“Edmonton – Where’s the Boom?”
By Graham Hicks
January 17, 2023
We live in strange times here in Edmonton.
Every other time we went through high energy price cycles – when oil was running between $100 Cdn to $130 Cdn - Edmonton boomed.
Restaurants and clubs were opening every week, packed from the moment they opened their doors. The fun zones of the city – Old Strathcona, the west end of downtown – pulsed with energy. Money gushed through town. If you wanted a job, you got a job. Well-paying too.
At times Edmonton and Calgary led the country in rising real estate prices, low vacancy rates and expensive rents.
It’s been a year now – since the start of 2022 - that oil and gas prices had the big rebound.
But the city still seems to be in a post-pandemic lethargy. Pedestrians in the party zones are few and far between. A depressing number of quality restaurants have gone out of business. The “for lease” signs in their windows persist.
We weep for the downtown – which, after decades of effort and ignited by the opening of the downtown Rogers Place (home of Connor McDavid and the Oilers) and the surrounding Ice District in 2016 – looked healthier than it had for decades.
Four steps forward, now two steps back. Once again, parts of the downtown have slipped back into being scary places, particularly at night.
And yet … there’s probably no better place in Canada for young families to live. Edmonton-based companies, increasingly diversified, are willing to pay near-Vancouver/Toronto salaries for qualified professionals.
A 3,000 sq. ft. detached home in the ‘burbs here costs the same as a small, one-bedroom condo in Toronto or Vancouver. Jasper and the Rockies are a 3.5-hour drive away.
The city has a stellar reputation for its schools, recreational facilities, and a medical system that, once you’re in, is one of the best in the country. Its quality of life – the performing arts, professional sports teams, etc. – is excellent and affordable. Everything is within a half-hour drive.
So why isn’t there an oil-fueled 2022/23 boom?
Follow the money.
Previous booms were fueled by massive oil-sands expansions. Thousands upon thousands of skilled workers would descend on Fort McMurray to build massive new open-pit mines and processing plants plus dozens of smaller underground oil extraction facilities. For their R&R the young workers came to Edmonton, a 4.5 hour drive, to party, party, party and spend, spend, spend.
Then a series of hammers came crashing down.
In 2014, global oil prices dropped like a rock, barely stirring for seven long years. At the same time, the oil sands were painted by environmentalists as global carbon polluters of the worst kind.
It’s an unfair rap – the oil sands have made huge strides in environmental friendliness, but it’s never enough. Oil-sand expansion is politically impossible. Proposed new pipelines and plants have been stopped by those convinced our oil and gas is part of the problem, not part of the solution, to global warming.
In this boom, the big oil sand companies - Suncor, CNRL, etc. - have chosen to re-invest smaller amounts of money in making current facilities cleaner and more efficient. They are learning to live within a pipeline system that may grow by 100,000 barrels of oil a day, not millions of barrels as was once envisioned.
Profits are flowing, by way of dividends, back to long-suffering shareholders and to the Government of Alberta, now receiving billions more in royalties as tax-deferrals come to an end. But the government doesn’t party on the streets, nor do retired investors.
Other factors that mitigate against a boom are consistent with Canada’s other cities of one million or more. (Edmonton’s population, as of 2021, was 1.1 million, rising to 1.5 million when surrounding municipalities are included.)
The whole country seems to be in a bad mood, as we all cope with rising interest rates.
There’s a nation-wide COVID hangover. Individuals are still reluctant to gather for fear of germs.
Having poured billions into fighting COVID, all three levels of government are currently restraining spending, other than carbon-cutting incentives.
How much is reality, how much is perception?
The downtown and inner city neighbourhoods may not be in the greatest of shape. But on Edmonton’s outskirts and surrounding towns, suburbs are prospering and growing by leaps and bounds.
Are younger generations truly staying at home, surrounded by movie-theatre quality televisions and streaming services for their entertainment, or is it simply the retired baby boomers are not going out?
I arrived in Edmonton as a young journalist in 1978, at the height of that decade’s oil boom. Downtown Edmonton was one big construction zone, as office towers replaced landmark historic buildings.
In a spray of champagne, the posh Four Seasons’ Hotel had just opened. The manager of its Darlings’ Disco would not allow members of The Eagles into his disco post-concert. “I don’t care what bird you are,” he is alleged to have said, “nobody comes into this club wearing jeans.”
My generation is coloured by that context, by the assumption, as Prince sang, that everybody would party in good times until 1999.
Perhaps we’ve simply learned – especially our kids as they raise our grandchildren – that life can be good with family and friends, in a comfortable, middle-class city that steadily grows, through the ups and downs and rarely in the spotlight, by a few percentage points a year.