Hundreds of truckers joined the Truck Convoy in Nisku on December 19, 2018 to support the oil and gas industry in Alberta.Larry Wong / POSTMEDIA NETWORK

By GRAHAM HICKS

What a contradictory year 2018 has been for metropolitan Edmonton’s business community.

On the one hand, Edmonton entrepreneurs are growing super frustrated.

For the fourth year in a row, they’ve been double-clutching through non-stop muck, barely making any progress, seeing profit margins drop from 10 or 20 per cent to two-to-three per cent, dipping into the red ink for longer and longer periods of time. The doors are staying open, but barely.

The big truck convoy protest out at Nisku earlier this week, 2,000 trucks strong, gave shape to that  frustration. The ‘S’ word — separation — no matter how hypothetical, is working its way back into the political conversation.

On the other hand, there’s growing resiliency and resolve.

The small-to-medium sized enterprises (SMEs), knowing inertia will be their death, are re-tooling, automating, selling and marketing across Canada and into the USA.

This column checked back with Edmonton manufacturing companies we visited last January that were not dependent on the oil patch.

They’ve had a decent 2018.

“We made back three-quarters of what we lost the previous year,” reports Blaine MacMillan, president of Cowan Graphics. Sales were up 11% from 2017, employment rebounded from 100 to 125 workers.

MacMillan attributes the recovery to small, positive steps, “getting hungrier” in seeking out cross-Canada opportunities. Ever-growing sales to the USA now total five per cent of Cowan’s revenues. A couple of major local events (requiring Cowan signage) came along this year, after no such events in 2017.

A few years ago, Heritage Frozen Foods re-invested in a new plant and state-of-the-art automated perogy-making equipment, including machinery invented in-house. The investment has paid off. Heritage, which makes an astounding three million Cheemo perogies a day, was up 14% over 2017, in both revenue and production. (For regional potato-growers, Heritage is their No. 1 customer.)

“We’ve had healthy growth through our existing sales outlets, new grocery outlets and institutions (i.e. hospitals),” says president and CEO Joe Makowecki. “The facility is starting to be too small again. Our biggest challenge has been getting our product to market. Down east, there’s a shortage of truck drivers.”

Outfits like Heritage and Cowan are bringing “resilience” to the local economy. And let’s not forget that Edmonton  emerged in 2018 as a hot spot (greenhouses/research/sales & marketing ) for the new legal marijuana market.

But while thousands of metropolitan Edmonton enterprises got by in 2018, paying their bills, their taxes, providing jobs and expanding into national markets,  the overall growth was offset by  that slowly starving gorilla in the closet — the oil and gas extraction, processing and transportation industries.

“Our concerns haven’t changed,” says Patrick Rabby, president of specialty oilfield valve manufacturer Hi-Kalibre Equipment. “So many issues — pipelines, taxes, investment, regulation — need to be addressed. Ultimately, we need ports and pipelines to get back to work.

“For our business, we need to be close by our customers. And our customers are increasingly in the U.S.A., not Canada.”

That said, 2018 was a recovery for Hi-Kalibre from the industry’s wretched 2016 and 2017.  “We re-hired 20 workers, bringing our labour force back up to 70. But we are still 30 per cent below where we were in 2014.”

There’s another very fat gorilla in another closet, especially compared to the emaciated oil/gas one: Out-of-control provincial government spending.

Shortly after the New Democrats came to power in 2015, the term “17 per centers” came into play, being the 17 per cent of the provincial workforce employed directly (civil service) or indirectly (education, health, agencies) by government — hence paid for by taxes.

Today, in three short years, that percentage has grown — according to the Alberta government’s own 2017 breakdown of employment by sector, to 23 per cent.

The 23 per centers have saved the Edmonton economy — half of our families seem to have at least one government-paid breadwinner with benefits, pensions, health plans, holidays and job security.

But no matter who is elected this coming year, the largesse can’t continue — not when the provincial debt has catapulted from nothing in 2014 to $50 billion today.

Unless Premier Rachel Notley wants to leave her children with unimaginable debt, serious government restraint  will have to happen.

Even the possibility of public sector layoffs will be catastrophic to the city economy. The vast middle class will simultaneously stop spending.