Annual Chamber of Commerce Update Jan. 15, 2020

Annual Chamber of Commerce Update Jan. 15, 2020

Annual Chamber of Commerce Update Jan. 15, 2020 "Slow-lobalization" January 2020 Agenda 1. Review of our economy GDP and business drivers. 2. Importance of Oil and gas plus now petrochemicals. 3. Macro view of the world economy – oil outlook 4. Micro view – what it means to us in Strathcona County 5. New projects in Strathcona County 6. Trends for new economic drivers 7. Summary and projections. 1/15/2020 2 Components of GDP US – 2018 Canadian GDP 2018 • Consumer Consumption 69% • Consumer spending 58% • Investment 18% • Investment 18% • Government spending 17% • Government consumption 20% • Exports – imports -5% • Government Investment 4% • Exports – imports 0% 1/15/2020 3 Canadian Exports Exports to US $102.33 billion Crude petroleum $71.59 billion Ethylene Polymers $8.5 billion Other $16.5 billion Meats bovine $1.4 billion 1/15/2020 4 Economic Outlook Consensus: Alberta and Canada 2020 • BMO 2.0% • RBC 1.7% • ATB 0.9% • Conference Board of Canada 2.0% • Government of Alberta 2.7% (ESNA conference) • Scotia Bank 2.4%* (Oct. 2019) • BDC 1.7% • City of Edmonton (Economic) 1.4% 1/15/2020 5 BDC Canada View 1/15/2020 6 1/15/2020 7 Energy Consumption by sector 1/15/2020 8 1/15/2020 9 1/15/2020 10 1/15/2020 11 1/15/2020 12 Tax rate dollar increase 2020 Tax Percentage Revenue (%) Split: Non- 64 Residential Residential 36 Tax Increase: 2019 0.83 2020 1.21 2021 1.88* 2022 1.61* 1/15/2020 13 * Projected by Council Projected Tax Increase Region • City of Edmonton 2.08 % • Morinville 2.0 % • Ft. Saskatchewan 0.44 % • Parkland County 2.1 % • Sturgeon County 1.18 % • City of Red Deer • Lamont County • City of Lethbridge • Redwater 4.55% • Lethbridge County • Spruce Grove 3.5% • City of Calgary 0.7 % • Stony Plain 3.8% – Shifting taxes to residential 52% 7.5 increase • Leduc County 0.0 % – Business 48% • City of Leduc 0.27 % 1/15/2020 14 Impact of tax rate for site selection Amazon 1,000,000 sq. ft. Projected: Leduc $1.6 million Edmonton $3.24 million Strathcona $1.94 million County 1/15/2020Source: Edmonton Real Estate Conference 2019 15 Business Conditions Alberta • Minimum wage $15.00 per hour • Holiday pay schedule for workers • Impact of carbon tax on delivery's for goods and services • Workplace safety workplace committee’s • Impact of home delivery by Uber Eats, Skip the Dishes and others • Retail rental rates and business tax impact • Insurance costs for 2020 increasing • New competition and different business models • CFIB Business Barometer for Alberta December 38.3% Canada was 55.3% • Businesses which have shutdown: Wild Wings, Red Robin, Tony Roma’s, Payless Shoes, Rona, Town Shoes, Hunters, Shoeless Joes 1/15/2020 16 National Post Survey Jan. 2020 1/15/2020 17 CENSUS 1/15/2020 18 Population 98,044 70,618 urban 27,467 rural 99,600* 20161/15/2020 census results 19 Strathcona overview 20 Work commute 65% 50% Residents Non-residents 20161/15/2020 census results 21 Average Household Income $160,655 $ 50.7% of total households in Strathcona County had income of $125,000 or higher Average Income of Economic Families $188,347 20161/15/2020 McSweeney report 22 Demographic information 1/15/2020 23 Demographic information 1/15/2020 24 Active Listings 1/15/2020 25 26 26 Centre in the Park 1/15/2020 27 Remedy Café Savona Now Open 1/15/2020 28 My Savona www.salvigroup.com 1/15/2020 29 Emerald Hills Shopping Centre 1/15/2020 30 Recent Trends - Demographics 1/15/2020 31 Sandman Signature and Chop Steakhouse 1/15/2020 32 Market Updates • 120,000 square feet of 2019 office absorption 1/15/2020 33 New and Upcoming 1/15/2020 34 Retail Sales Gap Recommendations 1/15/2020 35 Bremner & Local Employment Area • On Sept 10, council passed 2nd and 3rd reading and voted to adopt the Bremner & LEA Area Concept Plan (ACP) • 20km2 area, 80,000 resident capacity, 40 year projected build-out • Developers can now approach Strathcona County to develop Area Structure Plans (ASPs) 1/15/2020 36 Development Concept Bremner 1/15/2020 37 Oil Pricing is complicated Exchange value $US 56.20 = $Cdn 73.39 Average YTD $US 58.81 = $Cdn 76.80 1/15/2020 38 Refinery Western Canada With delay in production for NWR until 2020, 69% of total refinery capacity is in Strathcona County 1/15/2020 39 Reducing GHG by Refinery's Shell Scotford Imperial Oil Suncor 1/15/2020 40 Trans Mountain Update 1/15/2020 41 Pembina has purchased Kinder Morgan Canada Dec. 16, 2019 1/15/2020 42 Vision for AIHA 1/15/2020 43 Alberta's Industrial Heartland: Economic Impact 1/15/2020 44 Major Projects in the AIH • Heartland Petrochemical Project • Three projects in SC portion of $4.1 billion the AIH going through study • CKPC and Pembina PDH and PP • Total value of the projects over $5.4 billion capital $12.0 billion • NW Refinery turn around and • Project in other parts of the AIH final work $250 million in the range of $3.0 billion - • Alberta Carbon Capture Line $5.0 billion $500 million • Suncor investing $1.4 billion to • Enbridge Line 3 operating and low carbon power cogeneration affecting volumes from SIA and in Ft. McMurray AIH • Imperial Oil (Exxon Mobil) Aspen • TC Energy Keystone XL project in Wood Buffalo 75,000 bpd in-Situ 1/15/2020 45 Heartland Petrochemical Interpipeline 1/15/2020 46 Heartland Petrochemical Complex • https://www.youtube.com/watch?v=2phsi56cSG4 1/15/2020 47 NW Refinery 1/15/2020 48 CKCP and Pembina $5.4 billion* 1/15/2020 49 Alberta Carbon Trunk Line - $500 million 1/15/2020 50 Trends for the “Connected Age” Connected Technology Innovation • Wearables • Quantum computers • Home • 3-D printing becoming more • Automotive accessible • Technology for cities and • Smarter, more affordable infrastructure 5-G robotics in use • Drones • Autonomous and connected Bricks and clicks vehicles generate excitement • Internet purchase and returns • Augmented Reality (AR) • Omni channels for purchase • Artificial Intelligence (AI) • Online purchase and pick up • Block chain 1/15/2020 51 Opportunity and Challenges • Edmonton Global now operating • Electrical Pricing • Alberta Industrial Heartland • USMC Agreement- to be ratified – NWR Phase Two ? by US Senate and Canada – Others ? • Other international trade • Renewable energy agreements: Comprehensive • Budget for 2020 GOA and Progressive Agreement for • Geopolitical Trans-Pacific Partnership (CPTPP); Canada-European Union Comprehensive Economic and Trade Agreement (CETA) • Interprovincial trade agreements 1/15/2020 52 Projects for 2020 1/15/2020 53 Response for challenging times • ATB response for Agriculture Accounts • Corporate taxes being reduced by 1% per year for total of 4% • Red tape reduction by Provincial and Municipal governments • Supply chain workshop on March 19, 2020 Dow Centre Ft.Sask with partners from 4:00 pm till 7:00 pm. Companies confirmed: Shell, Dow 1/15/2020 54 We will see growth in 2020 in the range of 2% GDP Summary for Strathcona County Housing prices will remain firm pricing around $450,000 for single family dwelling (sfd) Rents will be competitive around $1500 to $2000 per month with more choices. Our economy is starting to show signs of diversification especially in value added products. There will be more petro chemical projects announced in 2020. 1/15/2020 55 Contact For further information, contact Strathcona County Economic Development & Tourism: Gerry Gabinet, Director Stephen Rausch, Acting Manager Industrial 780-464-8257 Development Senior Business Development Specialist [email protected] 780-464-8241 [email protected] Shane Olson, Acting Director EDT Commercial Development Manager Richard MacDonald, Small Business & Tourism 780-464-8269 Specialist [email protected] 780-416-6757 [email protected].

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