City Plan – Economic, Demographic and Market Study City of Edmonton ________________________ This technical study was initiated to inform the development of The City Plan. The technical studies were considered alongside public engagement, modelling and professional judgment to determine overall outcomes for The City Plan. Watson & Associates Economists Ltd. 905-272-3600 May 2, 2019 [email protected] In association with Nichols Applied Management Inc. Table of Contents Page Executive Summary ....................................................................................................... i 1. Introduction ......................................................................................................... 1 1.1 Terms of Reference ................................................................................... 1 1.2 Context ...................................................................................................... 1 1.3 Data Sources ............................................................................................. 2 2. Macro-Economic Trends Influencing Employment and Labour Force Growth ................................................................................................................. 4 2.1 Provincial and Regional Context ................................................................ 4 2.1.1 Edmonton Metropolitan Region Employment Trends and Cluster Analysis ............................................................................ 6 2.2 City of Edmonton Employment and Economic Structure ........................... 8 2.2.1 City of Edmonton GDP Growth ..................................................... 8 2.2.2 Employment Base and Industry Clusters ...................................... 9 2.2.3 City of Edmonton Employment Growth Trends ........................... 11 2.3 City of Edmonton Business Growth Trends ............................................. 13 2.3.1 Business Growth Trends by Sector ............................................. 13 2.3.2 Growth Trends by Business Size ................................................ 14 2.4 Emerging Industry Sector and Labour Force Trends ............................... 15 2.4.1 Trends in Knowledge-based Sectors .......................................... 15 2.4.2 Trends in Industrial Processing ................................................... 16 2.4.3 Trends in Work at Home and No Fixed Place of Work Employment ................................................................................ 16 2.4.4 Potential Impacts of Technology and Automation on Labour Force Growth .............................................................................. 17 2.5 Regional Economic Growth Drivers ......................................................... 18 2.5.1 Long-Term Energy Sector Growth Potential ............................... 18 2.5.2 Diversification of Economy .......................................................... 21 Watson & Associates Economists Ltd. \\FILESERVER\Hdrive\Edmonton\City Plan - Economic Demographic and Market Study\Report\City of Edmonton EDM Study.docx Table of Contents (Cont’d) Page 2.5.3 Strong Regional Long-Term Population and Employment Growth ........................................................................................ 22 2.5.4 Edmonton International Airport (E.I.A.) ....................................... 23 2.5.5 Petrochemical and Basic Chemical Cluster ................................ 23 3. City of Edmonton Non-Residential Market ..................................................... 24 3.1 Edmonton Industrial Market ..................................................................... 24 3.1.1 Edmonton’s Industrial Districts .................................................... 26 3.1.2 Industrial Sector Development Trends ........................................ 28 3.1.3 Recent Development Activity on Industrial Lands ....................... 29 3.1.4 Employment Density Trends ....................................................... 31 3.1.5 Market Rents and Vacancy Rate Trends .................................... 32 3.1.6 Opportunities to Accommodate Development in Industrial Neighbourhoods .......................................................................... 32 3.1.7 Growth Outlook for Key Industrial Sectors .................................. 33 3.2 City of Edmonton Office Market ............................................................... 35 3.2.1 Overview of Major Office Market ................................................. 35 3.2.2 Trends in Development Activity ................................................... 36 3.2.3 Changing Preferences of Office Tenants .................................... 37 3.3 City of Edmonton Retail Market ............................................................... 40 3.3.1 Overview of Regional and Local Retail Market Inventory ............ 40 3.3.2 Development Trends ................................................................... 46 3.3.3 Opportunities to Accommodate Retail Commercial Development in Edmonton .......................................................... 47 3.4 City of Edmonton Institutional Sector ....................................................... 49 4. Historical Population, Demographic, and Housing Trends .......................... 51 4.1 Regional and Local Population Growth .................................................... 51 4.2 Demographic Trends ............................................................................... 54 4.3 Regional and Local Housing Markets ...................................................... 57 4.4 Homeowner Preferences ......................................................................... 60 4.5 Trends in Infill Development .................................................................... 64 4.5.1 Low Density ................................................................................ 64 4.5.2 High Density/Transit Oriented Development ............................... 65 5. City of Edmonton Long-Term Population, Housing and Employment Forecast and Growth Allocations ................................................................... 65 5.1 Forecast Population Growth, 2018 to 2065 .............................................. 66 5.2 Future Housing Growth by Neighbourhood .............................................. 66 5.2.1 Allocation Methods and Key Assumptions .................................. 66 5.2.2 Baseline Market Scenario ........................................................... 69 5.2.3 Full Population Scenario ............................................................. 72 Watson & Associates Economists Ltd. \\FILESERVER\Hdrive\Edmonton\City Plan - Economic Demographic and Market Study\Report\City of Edmonton EDM Study.docx Table of Contents (Cont’d) Page 5.3 Long-Term Employment Growth, 2018 to 2065 ....................................... 75 5.3.1 Forecast Employment Growth by Sector .................................... 76 5.4 Opportunities to Accommodate Future Non-Residential Development ............................................................................................ 79 5.5 Employment Growth Allocations by Neighbourhood ................................ 80 5.5.1 Establishment of 2018 Employment Base .................................. 80 5.5.2 Employment Growth by Neighbourhood, 2018 to 2065 .............. 80 5.5.3 Employment on Industrial Lands ................................................. 83 5.5.4 Major Office Commercial Employment ........................................ 85 5.5.5 Population-Related Commercial Employment ............................. 86 5.5.6 Institutional Employment ............................................................. 87 5.5.7 Total Employment by Neighbourhood ......................................... 87 6. City of Edmonton Long-Term Residential and Non-Residential Land Needs ................................................................................................................. 93 6.1 Residential Land Needs ........................................................................... 93 6.2 Non-Residential Land Needs ................................................................... 94 6.2.1 Industrial Lands ........................................................................... 94 6.2.2 Commercial Lands ...................................................................... 96 6.2.3 Institutional Lands ....................................................................... 97 6.2.4 Potential Capacity of South Annexation Area to Accommodate Forecast Growth .................................................. 97 7. City of Edmonton S.W.O.T. Analysis ............................................................ 102 8. Conclusions .................................................................................................... 105 Watson & Associates Economists Ltd. \\FILESERVER\Hdrive\Edmonton\City Plan - Economic Demographic and Market Study\Report\City of Edmonton EDM Study.docx Executive Summary Watson & Associates Economists Ltd. (Watson), in association with Nichols Applied Management Inc. (Nichols), was retained by the City of Edmonton to prepare an Economic, Demographic and Market Study as input to The City Plan, the City’s new long-term land-use and transportation plan. The results of this analysis are intended to guide decision-making and policy development specifically related to planning and growth management, urban land needs, master planning and municipal finance. The study provides City-wide