Okay, it might be a stretch connecting Mark Zuckerberg to Edmonton’s commercial real estate market, but stick with us for a minute.
During his congressional hearing, Mark Zuckerberg was asked a terse question: “Will you commit to changing all the user default settings to minimize to the greatest extent possible the collection and use of users’ data?”
It was a poignant question, which Zuckerberg answered by describing it as a “complex issue that…deserves more than a one-word answer.”
In other words, he couldn’t possibly answer yes or no. If he says no, congress (and people in general) would assume Facebook held no regard for privacy. It would be anyone’s guess on to what congress would impose had he said no. If he said yes, the very essence of the business model would be irrevocably compromised. Facebook makes money by selling targeted ads to users. How could it go to the “greatest extent possible” to eliminate the collection of this data if it’s very business model relies on it? It was a great question, but handled strategically by Zuckerberg.
Enter John Horgan. As Premier of British Columbia, Horgan theoretically could have been asked if he would go to the greatest extent possible to protect the environment. Horgan, a former pulp mill employee, would answer with a resounding yes.
As an illustration to his commitment to going to the greatest extent possible, Horgan has made it a campaign promise to block Kinder Morgan’s expansion of the Trans Mountain pipeline. Even though the opposition to the pipeline has been rejected by the courts, and the fact that Prime Minister Justin Trudeau has approved and continues to endorse it, Horgan is defiant to the jurisdictional reach of the federal government.
Not only is this pipeline important to Alberta, it has been described as being in the national interest of Canada. Right now the spread between Western Canadian Select and West Texas Intermediate (sometimes called the Heavy Crude Discount) is flirting with an all time high. This spread hurts companies in Alberta, from upstream to midstream to downstream, and to some extent businesses across the province. It’s of little surprise then that this pipeline offers a lot of hope for a province coming out of the worst recession in decades.
This topic naturally brings up a very important question: should the economy take a priority over the environment?
While John Horgan believes emphatically that it shouldn’t, this is a similar question to the one Mark Zuckerberg was asked, and it is also a complex topic.
We’ll also show there’s a classic case of misdirection happening. First, one must look at the basic economic principle of supply and demand. Horgan is looking to cut off the supply of heavy oil being transported by way of pipeline, but in the process is completely ignoring the demand side of the equation. If we make the reasonable assumption that BC will still require oil for the foreseeable future, and if it is successful in throttling the supply from Alberta, that oil will simply be procured from other places. It’s noteworthy that many of these other oil producing nations have lesser emission reduction standards than Alberta. Furthermore, IPIECA (a global oil and gas industry association for environmental and social issues) states that “the oil and gas industry operates in some of the most challenging locations in the world, and can face complex human rights-related issues.” Issues of human rights and worse pollution aside, it’s safe to say that oil needs in BC will be met with an oil supply, coming from somewhere.
And here’s the next point, BCer’s are still purchasing hundreds of thousands of gas guzzling vehicles. Of all the vehicles bought in BC last year, only 1.37% were plug-in electric. A lot of people in BC are concerned about oil sands and a pipeline, but compared to those who bought cars last year, only a tiny fraction actually made an effort to combat the demand side of the equation.
Metaphorically, there are a number of people in BC who want to eat hot dogs, but not think about how they’re made.
Diving in even deeper, a report by Star Metro revealed that BC is Canada’s worst offender at allowing untreated sewage to enter our rivers and oceans. In an op-ed by Danielle Smith, she highlights that BC is responsible for “45 billion litres of sewage filled with toxins, heavy metals, microplastics, pharmaceuticals, bacteria and pathogens being dumped into clean water.” Here are a few more points directly from Smith’s article:
“How about the ongoing problems from the Mount Polley mining disaster? That’s where the mine’s tailings dam broke and spewed 24 million cubic metres of mining waste into adjacent lakes and rivers.
And who will clean up the toxic mess left behind in B.C.’s 1,800 abandoned mines?
What about current polluters? The top 10 polluters in B.C. are spewing out nitrogen oxides, sulphur dioxide, volatile organic compounds and particulate matter; all of which can impact human health and aggravate respiratory conditions.
The Prince George Pulp and Paper and Intercontinental Pulp Mills are the biggest polluters of water with sulfur and manganese. Teck Metals Ltd. emits lead, selenium and arsenic.”
So the question for John Horgan can be revised: Are you opposing the pipeline – and ignoring the fact that it has already been determined to be in the national interest of Canada – to take attention away from your own environmental misdeeds?
We have described in the past how dependent Edmonton’s commercial real estate market in on the price of oil. Our local and provincial economy is coming out of the recession but the Trans Mountain pipeline plays a meaningful role in the extent of the recovery. We’re hopeful – and optimistic – that reasonable minds prevail and the pipeline proceeds as planned.
Opinions contained herein are solely of the authors and do not reflect the views or opinions of any company or organization. View full disclaimer here.
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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