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 GriffithsPartner, SIOR, CCIM
Chad is a partner with NAI Commercial Real Estate and focuses on the Greater Edmonton area. Chad entered the industry in 2004 and has completed over 400 commercial transactions with clients ranging from small, local companies to large institutional owners. Chad has been a top 15 producer with NAI Canada-wide since 2013.
Ryan BrownPartner, BCom, SIOR
Ryan is a partner with NAI Commercial Real Estate in Edmonton and is currently ranked nationally as one of NAI's top advisors. Having executed in excess of $100 Million worth of sales transactions and over 2 Million square feet of lease transactions, Ryan has developed a firm understanding of asset evaluation and an aptitude for building design, functionality, and long-term practicality.
Darcie is a licensed Commercial Real Estate Agent in the Province of Alberta with a focus on the Edmonton market and its surrounding areas. Darcie accomplishes custom solutions for her clients through her personable nature and results driven attitude. Darcie can help if you are looking to invest in commercial real estate or are looking for representation for a sale or lease transactions.
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