We’re going to bury the lead a bit here. Before we get to our blog post for the week, we want to highlight that we are eternal optimists and are proud to live and work in Edmonton. We’re happy to say we’re from Alberta and we sing the Canadian anthem as loud as we can, whenever we can.
That said, our article this week is about some challenges facing businesses in Edmonton and across the province.
The big news of the week was the Federal Court of Appeal halting construction of the Trans Mountain pipeline until more consultations can be conducted. Not only will this impact oil & gas companies across Alberta (and by extension the province as a whole), it also sends a poor message to investors and companies that might have otherwise looked to start new projects.
On the labour front, minimum wage will be increasing to $15 / hour come October 1st. It’s not just minimum wage earners that will see a bump in wages, as employees earning that amount right now will likely be expecting increases as well.
Although Alberta is still coming out of a deep recession, the rest of Canada has fared quite well, resulting in the Bank of Canada raising the benchmark interest rate 4 times since last summer. This naturally makes debt more expensive, putting strain on companies with high leverage and discouraging new investment in the process. Raising rates has been designed, in part to cool housing markets in Vancouver and Toronto, but has a sweeping effect across the whole country.
Locally, Edmonton businesses have been saddled with ever-increasing municipal spending (which is funded in large part due to non-residential property taxes). For example, Antrim Industries, a south Edmonton manufacturer, highlighted this week that their property taxes have risen from approximatley $20,000 / year in 2000 to $78,000 / year currently. It’s difficult for companies to grow and invest in their businesses when they are seeing nearly 400% increases in their taxes over an 18 year period.
A local advocacy group, Prosperity Edmonton, is looking to the City of Edmonton to put a freeze on spending increases for the upcoming year. With the City about to embark on a 4 year budget cycle, Prosperity Edmonton is looking to reverse a pattern of spending continuously outpacing inflation and population growth.
Again, we stress that we’re optimistic for the future. There are signs that the market is improving, but all layers of government should ensure they are supporting and not hindering this provincial recovery. Let’s keep Edmonton great.
Chad is a partner with NAI Commercial and has finished as a top 15 producer Canada-wide for the past three years. Chad owes his success largely to his commitment to uncompromising client representation, his active involvement in the real estate and business communities and a lifelong pursuit of continuous learning.
Ryan is a partner with NAI Commercial Real Estate in Edmonton. He is currently ranked nationally as one of NAI’s top advisors in Canada. Having completed his Bachelor of Commerce majoring in Finance, his eye for detail and great understanding of the numbers associated with any business decision makes him an asset to his clients while providing them the highest level of service.
Darcie began her career in Commercial Real Estate after completing her studies in Business Administration. Her personable nature coupled with a results-driven attitude is a perfect match for customers. Darcie understands the importance of delivering a custom, accountable solution for her clients.
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