Socio:Economic Forecasts 1997 -2002 City of Edmonton
April 1997
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SOCIO-ECONOMIC FORECASTS 1997 - 2002 CITY OF EDMONTON
Prepared by the City Forecast Committee April 1997 THE
TY OF
imonton
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton
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*Members of City Forecast Committee
At
Jong Huang (Chairman) Senior Economist Planning and Development Department
Brian Boles Manager of Planning & Evaluation Community Services Department
Dana Oikawa Senior Economic Advisor Edmonton Power
Steve Friedenthal Social Planner Community Services Department
Rick Hersack Director of Research Economic Development Edmonton
Rod Keith Parks Planner Community Services Department -
Alan Brownlee Supervisor of Forecasting Transportation and Streets Department
Sgt. John Fairweather Community and Organizational Support Edmonton Police Services
Patrick Walters Economist Planning and Development Department
Carmen Sparrow / Gary Care Planning Analysts TELUS Communication (Edmonton)
Nila Chowdhury Senior Budget Consultant Office of Studies & Budget
Don Pilling Fire Protection Engineer Emergency Response Department
Susan Ancel Director of Planning & Distribution Aqualta
Bev Burke Manager of Personnel Services Human Resources Department
Christina lonescu
Bob Mills
Cost and Value Analyst Corporate Services Department
Department Controller Asset Management & Public Works Department
For more information contact:
Jong Huang,
phone: 496-6068; fax: 496-6028 email: jhuang@gov.edmonton.ab.ca Patrick Walters, phone: 496-6070; fax: 496-6028 email: pwalters@gov.edmonton.ab.ca
Prepared by: City Forecast Committee, April 1997
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 6.5% and then to 6.0% from 2001 to 2002 because the domestic and foreign deficits are erased, providing the Bank of Canada with the ability to lower interest rates.
EXECUTIVE SUMMARY Economic Growth
The value of the Canadian dollar is expected to appreciate from US$0.73 in 1996 to US$0.75 in 1997 and US$0.77 in 1998, as the Canadian economy continues to benefit from improvement in its domestic and foreign deficits. However, the political uncertainty in 1999 over Quebec's future will cause the exchange rate to fall to US$0.73. With political stability restored in 2000, the currency is expected to resume its upward trend and average US$0.77 in 2000 and US$0.79 in 2002.
J. The growth in Canada is expected to rise from 1.6% in 1996 to 3% in 1997 and 1998. Higher interest rates, continued fiscal restraint from federal and provincial governments, and political instability associated with a Quebec referendum can be expected to hold growth to 2.0% in 1999. Nationally, economic growth is expected to rebound to 3.0% annually from 2000 to 2002. E
The growth in Alberta is expected to improve to 3.6% in 1997. in response to low interest rates, more stable provincial government expenditures, firming energy prices, increased exports, and increased investment in the energy and resource sectors. The provincial economy will grow at 3.8%
Oil and Gas m Oil prices are expected to decline to around
US$20.50 per barrel in 1997 from US$22.34 in
in 1998. as construction begins on several major
1996 because of weaker world demand and increased world production. Thereafter, a gradual increase in world demand should support a steady increase in prices to around US$21 in 1998-99. However, the possible development of a major new oil field in the former Soviet Union in 2000 will substantially increase world oil production, causing the oil price to drop to US$20 before it recovers to US$21 in 2002.
resource projects. By 1999, the growth rate will drop to 3.5%. as higher interest rates and lower oil prices produce a negative effect on aggregate demand. T
The mining and forestry, manufacturing, construction. and transportation industries are expected to have an above-average growth rate over the forecast period. Therefore, these industries will experience an increased share of the total output over the period.
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Interest Rates and Exchange Rates The Prime rate is expected to stay low in the first quarter of 1997 and increase by the second quarter. averaging 6.5% for 1997 and 7% for 1998 as economic growth continuously improves. The political uncertainty in Canada with the Quebec referendum, along with the rising short-term interest rates in the United States, will cause the prime rate to edge up to 7.5% in 1999. By 2000. the forecast assumes that political stability will be restored in Canada. As a result. the prime rate will decline to
Prepared by: City Forecast Committee, April 1997
The continued growth in the Canadian and U.S. demand for natural gas is expected to keep gas prices high at around $1.60 per GJ in 1997. Starting in I 998. the expansion of pipeline capacity into Eastern Canada and Midwest U.S. markets should moderate domestic competition in Alberta, resulting in gas prices rising steadily to around $2.20 by •
2002.
Labor Market I
As the Edmonton region benefits from strong investment in northern Alberta, the Edmonton labor market is expected to improve significantly. Total
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton population in 2002, down from 73% in 1993. The population in the 65+ age group is projected to rise to 12% in 2002 from 10% in 1993.
employment in the region will increase at a rate of 9,000 per year from 454,000 in 1996 to 509,000 in 2002. The unemployment rate will continue to drop from 8.5% in 1996 to 5.5% in 2002. m The goods-producing industries will experience above-average employment growth whereas the government-supported service sector will have below-average growth over the forecast period.
Inflation •
Inflation will remain low at 2.5% to 3% over the forecast period as the economy continues to experience excess capacity.
Construction Sector Social Forecasts m Several recently announced resource related and general construction projects will have a significant impact on the construction sector in Alberta and the Edmonton region. This, together with low interest rates and increased employment, will substantially boost housing construction activity in the Edmonton region. Therefore, housing starts are expected to increase to the range between 3,900 and 4,300 units per year in the region and 2,400 to 2,500 units in the City over the forecast period.
m The growth (29%) of the 75+ age group over the forecast period will see increased demand for health services and supportive housing; social isolation may become an issue. This will occur at the same time as services for seniors are being reduced. E
x Both apartment and office space vacancy rates will decline gradually over the forecast period as economic activity and employment opportunity continue to improve, resulting in higher positive net migration.
The increases in the numbers of the 15-19 age group will present challenges for Edmonton's school boards and result in increased propertyrelated crimes.
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The improved economy, increasing numbers of jobs. and provincial and federal child tax credit developments for the working poor, will result in a decrease in the depth of pdverty. •
Population Change
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The S407 million decrease in health and social transfer funding to Alberta (between 1995 and
1998) is resulting in more specific targeting of
I The population growth will be modest. Net
services to those most in need. This will reduce the availability of preventive services, delivered and funded by the City, to middle and higher income. groups.
migration for the Edmonton Census Metropolitan Area (C.M.A.) is expected to rise from 5.600 -
persons in 1995 to the range of 4,000 to 5.000 persons per year over the forecast period. The City will receive about two-thirds of the region's net migration. Edmonton's population is expected to increase at an average rate of 1.1% per year from an estimate of 616.300 in 1996 to 657.600 in 2002. The population in the Edmonton C.M.A. will rise from 862.400 in 1996 to 921,700 in 2002. m The population will continue to age. The population group under 45 years will account for 66% of total
Prepared by: City Forecast Committee, April 1997
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The reductions in social and health services, resulting from government restructuring and decreased funding, will continue to shift more of the burden of care for seniors and other vulnerable groups to the community and family members.
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton m The decreasing crime rates, the trend of the 1990s, has slowed. Increasing'n imbers of the 75+ age group and burdens on family for care will result in elder abuse becoming a more significant issue.
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m Evidenced by a decline in recreation participation rates, Edmontonians are expressing that they have less discretionary time for recreation and leisure pursuits.
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m However, over the same period, the public sector must deal with: • • • •
IMPLICATIONS OF THE FORECASTS
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Business Sector
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Over the forecast period, Edmonton's business community is expected to benefit from: • low inflation, •
increased spin-off activity from a number of
stabilized oil prices and gradually improved gas prices.
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continued fiscal restraint at the provincial and federal government levels, funding for education that grows at less than the rate of inflation, a health care system weakened by cuts and consolidations, municipal revenue shortfalls, modest increase in population, with an increasing proportion of seniors,_ families that are placed under greater stress, due to high youth unemployment and cutbacks in services to seniors, stable to slightly rising child welfare case loads, and
higher interest rates.
recently announced energy and resource-
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related projects, a modest recovery in housing construction,
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improved employment and income growth,
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modest population growth, supported by a major influx of military personnel, and the improvement in employment outlook.
However, during the same period, Edmonton businesses are likely to face: •
higher interest rates over the next few years,
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continued weakness in consumer spending, as individuals attempt to re-build depleted savings or reduce debt, and adjust to lower paying jobs and lingering concerns about job security.
Government and the Public Sector
Families and Individuals m Over the forecast period, Edmontonians are expected to benefit from: •
greater employment opportunities,
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continued relatively low interest rates for purchases of homes or other major items,
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decrease in the depth of poverty for the working poor.
m However. Edmontonians must also deal with: •
providing more care for aged relatives,
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potential for more space shortages in high schools,
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a health care system weakened by deep funding cuts, and
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fewer supports for families.
M Over the next few years, Edmonton's government and public sector will benefit from: • the improved economic outlook for the province and the increase in employment opportunities. •
low inflation, and
Prepared by: City Forecast Committee, April 1997
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton INTRODUCTION' PE
This report provides a forecast of major economic and social indicators for the years 1997 to 2002. The forecast will be used as a reference for the preparation of the 1998-2002 Capital Priorities Plan and the 1998 Operating Budget. Civic departments could use this document for preparing departmental business plans or strategic plans. In addition, other public agencies, citizens and businesses could use the forecasts for planning purposes.
m The City Forecast Committee undertakes monitoring and forecasting activities throughout the year. The forecast report is prepared semi-annually, one in the spring and the other in the fall.
However, as the U. S. economy presses against its capacity by exhibiting strong growth, inflationary pressures are likely to be ignited. The forecast assumes that the U.S. Federal Reserve will move to raise short-term interest rates in 1997. As a result, the economy will slow in 1997 in response to a tighter monetary stance by the U.S. Federal Reserve. I The forecast assumes that the U.S. economy will slow to 2.0% in 1997. It will rebound to grow at 2.5% in 1998 and 3.0% annually from 1999 to the end of the forecast period.
CANADA The Canadian economy will grow moderately in
response to slower American economic activity,
PART 1: ECONOMIC FORECAST
lagging consumer conftdence, and continued fiscal
UNITED STATES
m The Canadian economy grew by 1.6% in 1996, down from 2.2% in 1995. Economic activity was driven by exports to the U.S. as domestic demand remained weak. Consumer spending was restrained by job insecurity and high levels of consumer debt. Economic growth was further hampered by public and private sector restructuring.
As Canada sends 80% of its exports to the U.S., economic changes in that country will have significant implications for the Canadian economy. LE.
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After six years of expansion, the U.S. economy continues to show considerable strength as it grew by 3.9% in the final quarter of 1996. The average growth rate for 1996 was 2.5%. Despite the unemployment rate hovering around 5.0%, inflation remains modest.
I The City Forecast Committee provides this information in good faith but it accepts no warranty nor accepts liability from any incorrect, incomplete or misleading information, or its improper use.
Prepared by: City Forecast Committee, April 1997
restraint in the short term.
m The Canadian economic activity is expected to increase to 3.0% in 1997 and 1998. With interest rates at relatively low levels, businesses and consumers can be expected to restructure their debt at reduced rates. This should reduce business costs and increase personal disposable income. As a result, sales of interest sensitive items such as cars and homes may benefit. In 1999, the forecast assumes that there will be a referendum in Quebec. This will result in short term political instability in Canada and cause international money markets to place a higher
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton premium on investing here. Higher short term interest rates should re.duce aggregate demand and result in economic growth falling to 2.0% in 1999.
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The forecast assumes that political stability is restored by 2000. Thus, Canadian economic growth is expected to rebound to 3.0% in that year and remain at that rate for the rest of the forecast. The growth profile for the Canadian economy will resemble that of the U.S. since
provided the Bank of Canada with the ability to ease monetary conditions. Thus, the prime rate was lowered to 6.1% in 1996 from 8.7% in 1995. It is expected to increase slightly to 6.5% in 1997 as the Bank of Canada tightens the money supply in response to rising short-term interest rates in the United States. By 1999, the prime is expected to rise to 7.5% as the Canadian economy experiences short-term political instability and the Bank of Canada is forced to raise short-term interest rates to defend the Canadian currency. With the return of political stability the prime rate is expected to decline to 6.5% in 2000 and then 6.0% from 2001 to the end of the forecast. The short-term rates will be kept low towards the end of the forecast because the domestic and foreign deficits are erased and this provides the bank of Canada with the ability to set a monetary policy independent of the United States.
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Prime Lending Rate
the economy will continue to be dependent on exports to the United States. The economy will
receive modest support from consumer spending in the short-term, as Canadians attempt to rebuild savings that were depleted by declining real wages. In addition, consumers will continue to suffer job insecurity, as public and private sectors continue to restructure. Further into the forecast period, declining interest rates and better job prospects will convince consumers to loosen their purse strings. Aggregate domestic demand will be boosted by increased government spending, as Governments that have controlled their finances, re-invest in the economy.
Canada's remarkable performances at lowering inflation, and cuffing its foreign and domestic deficits have combined to make Canada an attractive place to invest. As a result, the Canadian dollar appreciated during 1996 and
Prepared by: City Forecast Committee, April 1997
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The Canadian dollar averaged US$0.7334 in 1996, up slightly from US$0.7288 in 1995. The exchange rate appreciated sharply during the period September 1996 to November 1996; rising from US$0.73 to US$0.75 as foreign investors were impressed by Canada's strong economic fundamentals. The sharp increase in the exchange rate provided the Bank of Canada with the ability to further cut short-term rates. The forecast calls for the dollar to average US$0.75 in 1997 and US$0.77 in 1998 as the economy continues to benefit from
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton improvement in its domestic and foreign deficits and easing of risks associated with the possible separation of Quebec from Canada. However, the political uncertainty in 1999 over Quebec's future in Canada causes the exchange rate to fall to US$0.73. With political stability restored in 2000, the currency resumes its upward trend and averages US$0.77 in 2000 and US$0.79 in 2002.
lower interest rates and the concomitant increase in consumption will merely offset the reduction in non-residential construction. As a result, the economy will grow at 3.5% in 20002001 and 3.2% in 2002. Economic Growth 5
Alberta & Edmonton MAlberta D Edmonton
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Notwithstanding the much anticipated return of
Iraqi crude to world markets in December
• ALBERTA The Alberta economy will out perform the national economy, as it benefits from strong investment in the resource sectors.
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The provincial economy grew at 2.4% in 1996 up from 2.3% in 1995. Economic growth. in Alberta, is expected to increase to 3.6% in 1997, in response to low interest rates. stabilizing provincial government expenditures. firming energy prices, increased exports, and strong investment in the energy and resources sectors. Economic growth will increase to 3.8% in 1998 as construction begins on several major resource projects. By 1999, the growth rate will drop to 3.5% as higher interest rates and lower oil price produce a negative effect on aggregate demand. By 2000, some projects are completed or nearing completion and thus,
Prepared by: City Forecast Committee, April 1997
1996,. severe winter weather and low inventories combined to drive oil prices up sharply at year end. With West Texas Intermediate (WTI) trading in the U.S.$25 to $26 per barrel range throughout much of December, the average price for 1996 rose to U.S.$22.34. However, a break in the weather in January 1997 saw the re-emergence of market fundamentals and a decline in prices. Weak growth in world demand, increased production gains in non-OPEC countries, continued lapses in OPEC discipline and the full impact of the "new" Iraqi supply are expected to soften the WTI price to around U.S.$20.50 per barrel in 1997. Thereafter, the price outlook will be shaped by a gradual increase in world demand and the possible development of a major new oil field in the former Soviet Union. Consequently, the current forecast calls for prices to firm somewhat in 1998 and 1999, before softening again in 2000 with the assumed introduction of substantial new volumes of non-OPEC oil.
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton
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Budget and announced by the Alberta Government in November, 1995, is expected to stimulate about $25 billion investment in oil sands projects by 2020. These projects, if all proceed, will create about 44,000 new jobs; a majority of the jobs will be in Alberta.
1.1111111111111N111 m Faced with too much shut-in gas and insufficient pipeline capacity to move it to the strong U.S. Midwest market, Alberta gas prices suffered from increased domestic gas-on-gas competition and remained weak throughout much of 1996. However, with the onset of frigid temperatures in November, gas prices rose sharply, raising the annual average price to $1.54 per GJ. Over the coming year, the resurgence of the more accessible U.S. West Coast markets and the reduced Alberta storage levels caused by the prolonged cold spell are expected to sustain gas prices beyond the winter months. Moreover, starting in 1998, the addition of expanded pipeline capacity to the Eastern and Midwest markets should moderate the level of gas-on-gas competition within the province. Therefore, continued growth in Canadian and U.S. demand is expected to prompt a further increase in natural gas prices to around SI.60 per al in 1998, with prices rising steadily thereafter to around $2.20 by 2002. Despite efforts at diversification, the provincial economy will continue to rely on energy and forestry developments. Reduction of the machinery and equipment tax, contained in the 1996-97 Alberta Budget, will continue to stimulate investment in the province. The change of the royalty and tax regimes to a uniform and generic measure for the oil and gas industry, contained in the 1996-97 Federal
Prepared by: City Forecast Committee, April 1997
E The following are some major resource related projects that are proposed or under construction, which will have a significant impact on economic activity in Alberta and the Edmonton region: I. Imperial Oil plans to spend $1.3 billion to expand its in-situ operation at Cold Lake between 1996 and 2000. Shell Canada plans to spend $1 billion on the development of a mine and extraction plant in the Fort McMurray area. Construction will commence in 1998. and finish in 2002. 3. Suncor plans to spend $320 million over a three year period on the expansion of its operations at Fort McMurray and $336 million on a new oil sands project. 4. Syncrude expects to spend $2 billion over the next ten years on oil sands development. 5. Grande Paper Alberta plans to construct a $900 million pulp and paper mill in the Grande Prairie area.
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 12. Broken Hill Properties plans to build a $750 million diamond mine in the North West Territories. The mine should create 1,000 construction jobs and 830 permanent jobs over the mine's 25 year life span.
6. Dow Chemical Canada plans to spend $200 million to expand its ethylene plant at Fort Saskatchewan, which could create 400 to 500 construction jobs. 7. Nova and Union Carbide plan to invest $825 million expanding the existing ethylene production complex at Joffre; Union Carbide plans to build a $270 million polyethylene plant at Prentiss (near Joffre) over the next four years. These two projects are expected to create 900 construction jobs and 230 permanent jobs.
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8. Nova plans to spend $400 million on another ethylene derivatives plant at Joffre. Work is expected to commence in 1998 and last unto 2000.
Alberta's personal saving rate has dropped almost in half since 1985. As a result, consumer spending will be restrained as individuals attempt to re-build their savings or reduce their debts. The provincial economy will be mainly driven by exports of petrochemicals, manufactured goods, forest products and energy products to the U.S. and investment in the resource sector. The goods-producing sectors and the private-service-producing sectors will experience above average growth. The forecasts assume that the worst of the
provincial cuts are over. As a result, government restraint will not retard economic growth.
9. Alberta BioClean Fuels plans to spend $535 million on the construction of an automotive fuel additive plant in Strathcona County. Construction is expected to last from 1997 to 1999.
Alberta Savings Rate 20
10. AT Plastics Inc. plans to spend $120 million to expand its Edmonton polymers plant. Construction will be completed in 1998. The expansion will create 50 to 200 construction jobs. When completed, the plant will employ 40 additional full-time workers and increase its production by 70%.
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11. Diashowa-Marubeni International Ltd. proposes to invest $900 million to construct a lightweight coated paper mill with an annual capacity of 300,000 tones. This project is expected to create 300 direct jobs and 2,000 person-years of employment during construction. They are also planning to upgrade their High Level sawmill for value added lumber production and a wood chipping facility to process coniferous pulp logs.
Prepared by: City Forecast Committee, April 1997
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Net migration to Alberta from other provinces and countries is expected to average 20,000 persons in 1997, up from 18,000 in 1996. In 1998 and 1999, the provincial unemployment rate will be lower than the national rate as the Alberta economy will have an above average performance. Therefore, net migration should increase to 22,000 in each year. Net migration
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 3. The move of 3,500 military personnel and their families to Edmonton Garrison from Calgary and Chilliwack will be facilitated by $100 million for construction at the Base. The Edmonton Garrison is expected to have an annual economic impact of $500 million in the region.
should fall to18,000 in 2002, as the pace of employment growth slackens.
Net Migration Alberta
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4. The Edmonton Concert Hall Foundation is spending $41.5 million to construct the Francis Winspear Centre for Music. Construction is expected to be completed in 1997.
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EDMONTON The Edmonton region's economic growth will mirror the province's as the region benefits from investments in resource-based activity in Northern Alberta.
1.1 In addition to the investment projects in the energy and forestry sectors, as mentioned in the preceding section, the following construction projects will have significant impact on the Edmonton Economy over the next five years:
I. TransAlta Enterprises will spend $73 million to build a garbage composter plant at Clover Bar over the next three years. This project will generate 400 construction jobs and 50 permanent jobs. 2. The provincial government and the City will spend about $70 million in 1996-98 to extend Anthony Henday Drive from Stony Plain Road to Yellowhead Trail and Whitemud Drive from 17th Street to Highway #I4.
Prepared by: City Forecast Committee, April 1997
5. The consolidation of all scheduled passenger flights at the Edmonton International Airport and construction of the terminal in 1997 is expected to increase traffic from 1.9 million passengers to about 2.7 million at the airport. The construction of the airport will cost $170 million to $250 million over the next five years. 6. Camrose Development Ltd. is planning to build a $250 million retail complex on a 300 acre site at 23 Avenue and Calgary Trail. About 3,500 construction jobs will be created over the next five years. The project is expected to start in early 1997. 7. A multi-use $18 million building complex is being built by Reminton Development Corp.
in a west Edmonton industrial park between 181 Street and 184 Street. 8. Carlson Projects North has started building a warehouse distribution center in the west end of Edmonton. About 50 construction jobs will be created. They are also constructing a $2.3 million hotel complex„ in Sherwood Park. 9. Fonorola and Ledcor Industries will be hiring 90 workers based in Edmonton to lay a fiber optic network from Edmonton to
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Toronto along the CNR tracks. The project will cost $120 million. 10. Cambridge Shopping Centers Ltd. is planning to spend $8 million to improve Southgate Mall and another $2 million to renovate Heritage Mall.
Population growth will be modest. OE
11. Dorsett Hotels and Resorts International plans to spend $22 million to convert the Cambridge Building at Jasper Avenue into a 183 room Radisson Plaza hotel. 12. The Bay Building at Jasper Avenue will be renovated to house Alberta World Trade Center and Craig Broadcasting System's new TV station. The station will cost $9 million and create 135 permanent jobs. 13. The Federal/Provincial Municipal
Infrastructure Program will be extended for one more year under which the City is estimated to get $25 million for public works which will create 400 jobs in 199798.
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The net migration to the City of Edmonton was estimated at -3,300 persons in 1996 up from -11,000 in 1995 and -12,000 in 1994. Over the forecast period, the regional and provincial unemployment rates are expected to decline relative to the rest of Canada as labor market conditions improve in the province. In addition, continued fiscal restraint in the rest of Canada will combine with improved Alberta labor market conditions to attract would be job seekers from other provinces to Alberta and the Edmonton region. Net migration to Edmonton is forecasted to total 3,000 annually from 1997 to 1999 and decrease to 2,500 annually for the rest of the forecast period. Similarly, net migration for the Edmonton
Census Metropolitan Area (C.M.A.) is expected to average 5,000 persons annually from 1997 to 1999 and decline to 4,000 persons annually, for the rest of the forecast.
Edmonton Net Migration
14. CAE Aviation was awarded a $135 million contract by the Canadian Department of National Defense for avionics updates of CC130 Hercules Aircraft.
City and C.M.A. fl
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15. Telus Corporation is spending $30 million on the construction of a fiber optic network in Edmonton's Rhatigan Ridge and Greenfield neighborhoods. Construction is expected to be completed in 1997. 16. All Weather Windows is building a $10.3 million factory for manufacturing windows and doors at 184 Street and Yellowhead Trail. It will employ about 1,000 people.
Population
Prepared by: City Forecast Committee, April 1997
Edmonton's population declined from 627,000 in 1993 to 616,400 in 1996 as negative net migration exceeded positive natural increase. However, the expected positive net migration will result in population growth over the next six years. Edmonton's population will increase by 1.1% per year from an estimate of 616,400 in 1996 to 623,900 in 1997 and 657,600 in 2002.
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton
Population in the Edmonton C.M.A. will also rise by 1.1% a year from 862,400 in 1996 to 873,200 in 1997 and 921,700 in 2002.
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Population Distribution My of Edmonton 01993 1_ IN2002
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Edmonton Population City and C.M.A.
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0-14 15-24 25-34 35-44 45-54 55-64 65+
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Output 93 94 95 96 97 98 99 0 Year
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Continued government restraint will act as a drag on the region's overall performance in the short-run. Activity in the goods-producing and private service-producing sectors will be supported by energy and forestry developments. In addition, the transfer of 3,500 military personnel to the Canadian Forces Base in Edmonton will add a further stimulus to the Edmonton economy
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The total value of all goods and services in the Edmonton economy is expected to grow by 3.6% in 1997, as the region benefits from strong investment activity in northern Alberta. The forecast assumes that the Edmonton region would continue to function as the trade and
E The average age of the City's population will
continue tc climb as the "baby b6omers" (those born between 1947 and 1967) age. The population in the under 45 age group is expected to account for 66% of the population by 2002 down from 73% in 1993. The changing demographic composition will have important implications for the real estate market, since the percentage of the population in the 25-34 age group (first time home buyers) is expected to fall while that in the 35-44 age group (move up market) is projected to remain constant. The share of the population aged 15-24 (labor market
entrants) is expected to be 15% by 2002, the same as 1993. The population share in the 0-14
service center for the oil and gas industry and northern Alberta. As the planned projects enter
age group (elementary school) is expected to decline from 21% in 1993 to 19% by 2002. Finally, the percentage of individuals in the 65+ age group (retirees) is projected to grow to 12% in 2002 from 10% in 1993.
the construction phase in 1998 and 1999, economic growth is expected to increase to 3.8% and 3.7% in each of those years, respectively. The pace of economic growth will slacken to 3.0% by 2002 as projects are completed. M
Prepared by: City Forecast Committee, April 1997
The forecast expects total output in the Edmonton region to increase by 23.0% between 1996 and 2002. Mining and forestry(37.2%), manufacturing(27.2%), construction(30.9%), and transportation(36.0%) industries are expected to
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton produce above average growth rates. As a result, these industry experience an increase in their share of total output over the forecast period. Whereas, agriculture(10.4%), trade(21.0%), finance(22.3%), community, personal and business services(15.5%), and public administration(12.4%) will grow at or below the overall growth rate and their share of total output should decline.
The forecast expects total employment in the Edmonton region to increase by 12.1% from 1996 to 2002. Mining and forestry(26.1%), manufacturing(22.1%), construction(19.4%), transportation(18.0%), and trade(16.7%) industries are expected to have above average growth rates. Consequently, these industry divisions will increase
their share of total employment over the forecast period. The remaining industry divisions should grow below the regional average and should suffer a decline in their share of total employment.
Labor Market
Employment growth should exceed labor force growth as the region benefits from economic activity in northern Alberta. The total employment in the Edmonton C.M.A. was estimated at 454,000 persons in 1996. an increase of 1,000 over the 1995 estimate. The forecast calls for employment to grow by 9,000 persons to 463,000 in 1997, as the region benefits from strong investment in northern Alberta. By 1998, total employment will average 472.000 persons and this will increase to 509,000 persons by 2002. z
The employment growth in the region will track that in the province. The goods producing industries will experience above-average growth rates whereas the government supported service sector will grow below average.
Prepared by: City Forecast Committee, April 1997
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Share of Total Employment Edmonton C.M.A.
40
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530
• 2002
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The unemployment rate is expected to fall to 8.0% in 1997, down from 8.5% and 8.9% in 1996 and 1995, as employment growth outstrips labor force growth. The forecast expects employment growth to be slightly larger than labor force growth throughout the forecast period. As a result, the unemployment
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton rate should continue to decline to 5.5% by .,• , 2002. 3 2.5
Unemployment Rate 12
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4
Inflation Rate - CPI Edmonton C.M.
• • • •IllII••II• •• •• • • II • • • 94 95 96 97 98 99 0 1 2 Year
2 0 94 95 96 97 98 99 0 1 Year
2
Construction Inflation Inflation will remain low over the forecast period as the economy experiences excess capacity.
The recovery in the construction sector will continue in 1997 and for the rest of the forecast period. 35
I
The economy, over the forecast period, is expected to experience positive growth. However, the growth will not cause undue inflationary pressure because the economy will continue to experience excess capacity. In addition, a stronger Canadian dollar should keep imported inflation low. Therefore, Edmonton's inflation will rise modestly to average 2.5% in 1997 from 2.2% in 1996. The
rate is expected to increase to 3.0% in 1998 and 1999 before declining to 2.5% by 2002. As a result, the region's inflation rate remains within the Bank of Canada's target range of I% to 3 % .
The construction activity in Edmonton, during 1995 and 1996, was restrained by excess supply in both residential and non-residential markets. High levels of housing construction in 1993 coupled with weak demand stemming from relatively high interest rates, lagging employment income growth, and low population growth resulted in a large inventory of unsold houses. As interest rates fell sharply in 1996, home ownership became very affordable and as a result, the sales to listing
ratio for re-sale housing increased to 49% in 1996 from 38% in 1995. The number of re-sale homes sold in 1996 increased by 30.2% to 11,566 units, as buyers took advantage of low interest rates and affordable house prices. The arrival of the final batch of military personnel at CFB Edmonton, in 1997, should add to the demand for off-base civilian housing. The building permit values increased to $407 million in 1996 from $371 million in 1995. This reversed a four year trend of declining permit values. The forecast calls for building
Prepared by: City Forecast Committee, April 1997
•
• 13
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton permit values to range between $450 and $550 million in 1997 and iiicrease to between $500 and $600 million per year over 1998-2002.
addition, a significant amount of industrial space is obsolete and in need of upgrade. The same applies to the institutional sector where the Edmonton Public School Board reports that it requires about $80 million to upgrade 37 aging schools.
Building Permits City of Edmonton
m
Edmonton's housing starts totaled 1,935 units in 1996, up 42 units from 1995 but well below the 1993 level of 4,235 units. The increase in
building activity in 1996 stopped a three-year decline in housing starts. With an improvement in investment intentions, low interest rates, positive net migration and a stronger labor market, housing starts should increase between 1997 and 1999 to 2,500 units annually. Housing starts will fall to 2,400 units annually over the rest of the forecast period. Total housing starts in the Edmonton C.M.A. was 3,638 units in 1996 up 556 units from 1995. The forecast expects housing starts to total 4,300 units in 1997 and decrease to 4,000 units annually in 1998 and 1999. By the end of the forecast period, housing starts will decline to 3,900 units. In the non-residential market, construction activity was concentrated in the industrial sector, where the average vacancy rate was 6.5% in 1996 up from 6.2% in 1995. This activity was driven by strong demand for warehousing space by firms active in northern Alberta. Construction activity in the industrial sector should continue in 1997 as the inventory of industrial space remains relatively low. In
Prepared by: City Forecast Committee, April 1997
Real Estate Market Both apartment and office space vacancy rates will decline. go
The apartment vacancy rate averaged 7.6% in October 1996, down from 10.2% and 8.9% in 1995 and 1994. This skips a six-year trend of rising vacancy rates. The reduction in the vacancy rate is attributable to positive net migration and the conversion of apartments to condominiums.
m Edmonton's vacancy rate is forecasted to average 6.0% in 1997 and trend downwards to 4.0% by 2002 as Edmonton experiences improved labor market conditions and positive net migration. z The vacancy rate in the downtown office market increased marginally to 16.9% from 16.3% in 1995. The downtown office market in 1996, benefited from provincial economic growth as the number of businesses in this area
14
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton increased from 2,093.:. 2,238. However, this growth was not enough to completely offset the negative effects of public and private sector restructuring on the office market. Consequently, the office market experienced its sixth consecutive year of negative absorption.
Vacancy Rate 18
City of Edmonton
DApartment 111Office Space
15 512 • 9
•
III
rrr
• 6
Office Space Absorption
3
City of Edmonton
0
90 91 92 93 94 95 96 97 98 99 0 1 2 Year
Edmonton Forecast Risks There are downside risks to the forecast. The downtown office market will be affected by the possible conversion of current office space to other uses as owners attempt to add value to their properties. The expected conversion of the Centennial Building to a senior citizens condominium and the planned conversion of the Cambridge Building to a hotel are examples of this. It is also expected that space will be released to the market as public sector leases expire. This should place upward pressure on the vacancy rate in the short term. I
The forecast calls for the downtown vacancy rate to fall to 15.5% by December 1997 and then decline continuously to 13.0% by 2002 as the downtown experiences positive absorption rates.
•
The forecast assumes that the worst of the public and private sector restructuring is over. If these organizations continue to restructure the forecast should be revised downwards.
•
If world oil prices fall far below US$18 over the forecast period, the planned investment in the energy sector will be significantly curtailed and provincial government budget revenues will be reduced. As a result, economic activity in Alberta and Edmonton will be slower.
The Canadian forecast assumes that interest rates will stay relatively stable over the forecast period. This assumption could be violated by the following events:
I. fear of higher inflation rates in the U.S.; 2. continued political uncertainty over the future of Quebec; 3. a much lower than forecast Canadian dollar; and
Prepared by: City Forecast Committee, April 1997
1
5
•
.
.
.
•
•
Socio-Economic Forecasts, 1997- 2002, City of Edmonton • a higher than forecast federal budget deficit. m Any or a combination of these events will exert pressure on the Canadian dollar and thus force the Bank of Canada to increase interest rates. Higher than the forecast interest rates will curtail economic activity and result in a lower growth rate.
'There are upside risks to the forecast. Unexpected increases in provincial revenues may allow the Alberta government more fiscal room to reduce provincial taxes or increase spending or a combination of both. If this scenario materializes, Alberta economic growth and local employment will be higher than the forecast.
•
go
If the anticipated oil sand and other resourcesrelated projects proceed earlier than expected, economic growth in Alberta and Edmonton over the next five years will be higher than the forecast.
z A much higher than forecast Canadian dollar which will allow the Bank of Canada to lower interest rates further than forecast.
• Prepared by: City Forecast Committee, April 1997
16
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 1
.I°
Selected Economic Forecasts Forecast
Actual
Indicator
1994 1 1995 I
1996
1997
I
1998 I 1999 I 2000 I 2001
1 2002 _
U.S.A., Canada and Alberta World Oil Prices (U.S. $/Barrel)
17.10
18.40
22.34
20.50
21.00
20.50
21.00
21.00
20.00
1.90
2.00
2.10 ,
2.20
1.72
1.25
1.54
1.60
1.75
U.S.A.
3.5
2.0
2.5
2.0
2.5
3.0
3.0
3.0
3.0
Canada
4.6
2.2
1.6
3.0
3.0
2.0
3.0
3.0
3.0
Alberta
4.4
2.3
2.4
3.6
3.8
3.5
3.5
3.5
3.2
Prime Lending Rate (%)
6.9
8.7
6.1
6.5
7.0
7.5
6.5
6.0
6.0
Exchange Rate (U.S.S/Can$)
0.73
0.73
0.73
0.75
0.77
0.73
0.77
0.78
0.79
Net Migration (Alberta) (000)
6.0
Alberta Natural Gas Prices ($/G.J)
Economic Growth Rate (/o)
18.3
18.0
_
20.0
22.0
22.0
20.0
18.0
18.0
5.0
5.0
5.0
4.0
4.0
4.0
3.0
2.5
2.5
2.5
Edmonton Net Migration - C.M.A.(000) - City (000)
Population. C.M.A. (000) - City (000) Economic Growth Rate CYO
(6.9) (12.0)
(5.6) (11.0)
0.5 (3.3)
3.0
3.0
855
856
862
873
884
894
904
913
922
621
615
616
624
631
639
645
651
658
N.A.
N.A.
2.2
3.6
3.8
3.5
3.4
3.5
3.0 509
Employment (C.M.A.)
439
453
454
463
472
481
490
500
Unemployment Rate (C.M.A.) (cs%e)
10.4
8.9
8.5
8.0
7.5
7.0
6.5
6.0
5.5
3.0
2.8
2.8
2.5
Inflation Rate - CPI (C.M.A.) (%)
1.6
2.0
2.2
2.5
3.0
Vacancy Rate (City) CYO 8.9
10.2
7.6
6.0
5.5
5.0
4.5
4.0
4.0
17.3
16.3
16.9
15.5
15.0
14.5
14.0
13.5
13.0
• Total
3,151
1,893
1,935
2,500
2,500
2,500
2,400
2,400
2,400
- Single Family
1,690
1,130
1,421
1,900
1,900
1,900
1,800
1,800
1,800
- Multi-Family
1,461
763
514
600
600
600
600
600
600
5,006
3,082
3,638
4,300
4,000
4,000
3,900
3,900
3,900
- Single Family
3,225
2,159
2,944
3,500
3,100
3,100
3,000
3,000
3,000
- Multi-Family
1,781
923
694
800
900
900
900
900
900
Apartment (Oct) Downtown Office (Dec)
Housing Starts (Units)
City
C.M.A. - Total
Building Permits (City) - Low ($million)
- High
443
371
407
450
500
500
500
500
500
550
600
600 _
600
600
600
Sources: 1. 1994-96 actual: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Colliers Macaulay Nicolls Inc., Canadian Petroleum Association, and Edmonton Planning and Development Dept. 2. 1997 - 2002 forecasts: City Forecast Committee, April 1997.
Prepared by: City Forecast Committee, April 1997
17
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 2 Population Forecasts, 1995-2002: City of Edmonton Age Group
1993
1995
1996
1997
1998
1999
2000
2001
2002
Actual 0-4
47,045
43,862
42,729
42,450
42,730
42,369
42,091
41,919
41810
5-9
44,412
42,574
42,244
42.444
41,960
42,035
41,636
41,073
40,744
10-14
39,730
40,396
40,798
41,131
41,202
41,206
41,705
41,890
42,052
15-19
38,592
38,774
40,069
41,497
43,153
44,777
45,478
46,232
46,535
20-24
55,804
49,754
47,391
46,992
46,615
47,104
48,505
50,155
51,532
25-29
60,367
53,157
52,532
53,258
53,636
52,896
51,728
50,122
49,645
30-34
64,305
58,920
55,641
53,333
51,116
49,325
48,879
49,300
49,941
35-39
58,171
58,622
59,330
59,338
59,085
58,574
57,021
54,502
52,154
40-44
45,399
48,810
50,806
53,062
55,247
56,818
57,763
58,932
58,906
45-49
35,556
38,395
40,118
41,358
42,847
45,210
47,450
49,693
51,892
50-54
27,921
28,899
29,767
31,608
33,436
34,960
37,026
38,882
40,078
55-59
24,705
24,465
24,666
25,154
25,903
26,835
27,477
28,448
30,211
60-64
23,954
22,595
22,080
21,976
22,040
22,103
22,390
22,699
23,147
65-69
21,049
21,540
21,692
21,564
21,371
21,055
20,609
20,249
20,146
70-74
16,449
18,074
18,650
18,984
19,380
19,775
20,091
20,291
20,170
75-79
10,952
11,718
12,509
13,445
14,282
15_218
15,808
16,330
16,609
80-84
6,966
8,164
8,873
9,188
9,633
9,919
10,357
11,042
11,830
85+
5,222
6,153
6,674
7,148
7,671
8,332
9,026
9,637
10,194
626,999
614,871
616,369
623,931
631,308
638,511
645,038
651,396
657,595
13,300)
3,000
3,000
3,000
2,500
2,500
2,500
4,798
4,562
4,377
4,203
4,027
3,858 I
3,699
Total Net Migration Natural Increase
(11,000) 5,178 I
Prepared by: Planning and Development Department, April 1997. Note: Population is for spring of the year
Prepared by: City Forecast Committee, April 1997
18
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 3 , Population Forecasts, 1995-2002: Edmonton C.M.A. Age Group
1991
1995 ,
1996
., 1997
1998
1999
2000
, 2001
2002
Actual 0-4
66,830
58,533
56,399
56,145
55,959
55,920
55,942
56,100
56,362
5-9
65,570
63,153 ,
62,623
61,531
60,531
58,967
57,384
55,597
55,244
10-14
58,720
62,539
63,287
63,409
63,058
63,280
63,143
62,936
61,770
15-19
57,780
61,694
62,637
63,999
65,736
67,123
68,221
69,182
69,246
20-24
69,075
65,473
65,480
67,065
68,689
70,583
72,264
73,395
74,662
25-29
80,290
67,037
67,648
68,535
69,090
69,295
69,088
69,519
70,937
30-34
85,180
77,080
72,825
69,585
66,699
64,908
64,556
65,811
66,530
35-39
75,135
81,042
81,208
81,149
80,307
78,742
76,289
72,527
69,203
40-44
63,200
70,129
72,944
75,472
78,166
79,742
80,730
81,191
81,065
45-49
46,705
58,402
60,890
61,901
63,387
66,138
68,905
71,851
74,298
50-54
37,340
42,906
44,637
48,338
51,389
54,139
56,881
59,413
60,376
55-59
33,015
34,365
35,173
36,391
37,997
39,582
41,207
42,956
46,507
60-64
29,900
29,883
29,991
30,111
30,606
31,151
31,880
32,714
33,836
65-69
25,020
26,648
26,936
27,221
27,324
27,411
27,383
27,548
27,643
70-74
18,330
22,463
23,017
23,313
23,795
24,245
24,696
24,992
25,235
75-79
13,230
15,107
15,947
17,110
18,093
19,039
19,604
20,095
20,341
80-84
8,225
10,870
11,589
12,128
12,519
12,687
13,241
13,963
14,942
85+
6,370
9,758
10,424
11,274
12,107
12,879
13,495
Total
839,915
862,383
873,162
883,771
894,226
903,520
912,668
921,691
500
5,000
5,000
5,000
4,000
4,000
4,000
5,995
5,779
5,609
5,455
5,294
5,148
5,023
Net Migration
Natural Increase
8,564 ,
855,888 (5,604)
6,332
9,151
•
Prepared by: Planning and Development Department, April 1997. Note: Population is for spring of the year.
Prepared by: City Forecast Committee, April 1997
(
• 19
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton ,e.
PART 2: SOCIAL FORECAST CANADA The overall funding for human services will continue to decrease at the federal level and result in decreases by other levels of government. It is unlikely that Canadians will see a return to the level of services that were provided in the early 1990s. The Canada Health and Social Transfer (CHST) fund, which provides financial transfers to the provinces for health, post-secondary education and social services, will be reduced by another $2.5 billion cash transfer in 1997/98 in order to
m The Alberta Family Employment Tax Credit (1997) will increase personal income for low and middle income working families with children. The credit amount depends on the employment earnings and overall income per family. The maximum credit is $250 per year for one child and $500 per year for two or more children. m The reduced funding for human services will continue to result from the re-definition of the role of government, the impact of fund reductions at the federal level and apparent public support for tight fiscal management. These impacts may be lessened if re-investment at both the provincial and federal levels begins to occur. Spending dollars wisely and forming effective partnerships will be the overriding goals.
reach the federal government's target of a $4.5 billion reduction. This will result in Alberta receiving an estimated $407 million less from the CHST in 1997/98 than it did in 1995/96. m The federal-provincial arrangement to increase the Child Tax Benefit to poor families with children indicates both a trend to improve working relationships with other levels of government as well as a commitment to reduce child poverty. However, the increase will not occur until at least 1998. Specific financial impacts cannot be projected until the arrangements, which vary by province, are concluded.
ALBERTA The human service policies, processes, and 'outcomes will continue to be influenced by new funding arrangements and the re-definition of the role of government.
Prepared by: City Forecast Committee, April 1997
As shown below, a disproportionate number of Albertans in need reside in Edmonton in comparison to Calgary. These differences will remain significant. Social-Economic Need Factors: • Single-parent Families
•
• • • • •
Edmonton vs. Calgary
•
16.2% : 13.2%
Less than Grade 9 Education: Low-income families:
8.7% : 4.3% 19.0% : 17.0% 9.4% : 7.8%
Seniors (65+ age group) Supports for Independence (Welfare) Cases l995*: Child Welfare Cases 1995**: Unemployment rate (1996 average):
20,960 : 13,672 2,214 : 1,768 8.5% : 7.1%
Sources: Figures for single-parent families, education level, income, and seniors are from the 1991 Census of Canada. Others are as noted.
*
For Alberta Family and Social Services regions that are larger than the cities. For health authority regions that are larger than the cities.
20
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton m Edmonton will continue to have a higher proportion of people accessing health and social services than will Calgary. II The disparities between the two cities may begin to be addressed as funding formulae development moves away from strict per capita models for regional health services, services to children, and preventive social services.
.m The increased economic activity in northern Alberta will result in increased in-migration to Edmonton. This will bring an increased demand for housing and human services.
Employment and Unemployment The well-being of many Edmontonians will be positively impacted by the projected positive economic environment.
EDMONTON Demographic Changes The increases in the 75+ and 15-19 age groups will be the most significant demographic trend during the forecast period.
E
The 75+ age group in the population will grow by over 9.000 or 2.9% during the forecast period. A high proportion of this age group will be women living alone. The demand for services
by this group, such as health care, seniors housing. and aids to daily living will increase significantly. Isolation and conflicts with adult children may also be major social issues facing this group. 1 The 15 - 19 year population will increase by over 5,000 or 12%, resulting in increased
challenges for secondary schools and may also result in an increase in property crimes and
demand for young offender services. z The 0 - 9 year age group will decline by more than 2,000 or 2.8% during the forecast period. This demographic factor will provide downward pressure on day care and out-of-school care. However, employment opportunities and incentives to work programs will place upward pressure that will outweigh the demographic change.
Prepared by: City Forecast Committee, April 1997
The positive social impacts will derive from a decreasing unemployment rate, increasing employment, and low inflation. This environment will result in increased financial independence, improved health status, and empowerment for those Edmontonians obtaining full-time jobs. z The limited gains in wage settlements may not keep pace with the projected 2.5% to 3% annual inflation rate, and inflation may remain below the level at which income tax categories are indexed. Therefore, middle income
Edmontonians who are not impacted positively by the Federal Child Tax Benefit changes or by the Alberta Family Employment Tax Credit may continue to see a reduction in spending power. As well, Employment Insurance premiums have decreased slightly while Canada Pension Plan
premiums have recently been increased
significantly. The decreases in the former are not off-set by increases in the latter. Li2 More people who have "good" jobs (i.e. longer term with benefits) will be working from home with high technology assistance. The greater use of technology will spill over into areas such as home schooling and other aspects of education.
Youth Unemployment
21
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Youth unemployment wilt continue at its traditional level, about half again as high as the rate for the general population. (11
Youth unemployment (15-24 years age group) traditionally has been fifty percent higher than unemployment for the general population. This trend is expected to continue.
m The increasing tuition fees at post secondary educational institutions impacting enrollment may be softened by federal student help initiatives.
Restructuring The restructuring of the delivery of health and child welfare services, initially driven by costcutting and a philosophy of devolution of responsibility, will be completed. m A major issue for service management will be how future funding allocations relate to past utilization and current need. m There will continue to be a shift in service responsibilities to the community, families, and individuals. In particular, women may be required to shoulder more of the burden for meeting health and social needs, creating more stress on the family. m The large service systems, such as health and education, are competing for individual donations and corporate dollars, increasing financial pressures on smaller social service agencies. utl
The smaller agencies will likely have to fine tune their fund raising to specific target groups. To ensure their viability, many agencies will have to become more effective marketers of their services. Mergers and loss of some services to the community can be expected.
Prepared by: City Forecast Committee, April 1997
Poverty The percentage of low income families in Edmonton will continue to be higher than that for Alberta as a whole (19.3% vs. 13.9% in 1991). m The Provincial Supports For Independence Program clients who are employable will continue to be required to seek job training, move to other income support programs, and become employed. The incentives created by the Child Tax Benefit changes and the Family Employment Tax Credit will act to reduce the effects of poverty for the working poor only. I The new provincial Employment Tax Credit for low and middle-income families will have its most direct benefit on the working poor with
children. One-fifth of Edmonton children live in families with incomes below the low income cut-offs. This rate may decrease during the forecast period given the close association between the unemployment rate and the poverty rate. Edmonton's relative position however, in comparison with other municipalities, will not change.
m The increased employment and lower unemployment rates could see the number of food bank users and users of other supplemental programs level off (food bank usage almost doubled between 1990 and 1995).
Health Services The additional funds being reinvested in health care offer some promise that concerns in this area may be reduced. m Over the forecast period, the health care system can expect increased demand from specific populations such as seniors in the 75+ age group
22
•
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton and Aboriginal people. These groups as well as low-income individuals and families have relatively poor health status and high health care utilization. E The recent funding increases, especially due to the new Regional Health Authority funding model (1997), will make delivery of health services more manageable for the Capital Health Authority. E The downsizing of provincial institutions will see more mentally ill persons living and treated in the community. Many may be forced to live in inadequate or marginal inner city housing and create additional pressures on human services in the community. E
The current short supply of supportive living and group homes for vulnerable populations (e.g. frail elderly, mentally ill, disabled individuals, and abused children) will need to be addressed during the forecast period by local groups and provincial agencies. Conflicts with homeowners over locations of group homes may become an issue.
E
I Increasingly, social and related services will become more accountable as funding bodies move toward evaluation of programs and strategic, outcome-based funding. The increased employment and employment incentives will result in increased demand for child care services and programs. However, this may be somewhat offset by the decrease that will occur in the numbers of the 0 - 9 age group. go Increasingly, younger seniors will be healthier and require fewer support services. However, older and at-risk seniors will require more support to prevent dependency. E
As a result of the changing family structure of the aging population, more older people will be cared for or will be living with their adult children. The stresses caused by intensive care giving, without reprieve or relief, may result in increases in elder abuse.
E
More older and at-risk seniors, including those with dementia, will be required to live in
Social Services The municipal revenue shortfalls for social services will result in City Council and the Civic
Administration re-addressing priorities. •
unregulated or partially regulated "supportive"
Municipal social services will no longer be universally available, but will be targeted to those most in need.
E New provincial policies do not permit municipalities to access the Canada Health and Social Transfer, as had been permitted with the previous Canada Assistance Plan. This has resulted in shortfalls in revenues for municipal social services programs and necessitated a reexamination of the services provided.
Prepared by: City Forecast Committee, April 1997
The Capital Region (Edmonton, St. Albert, and Strathcona County) Children's Services Authority will be implemented and services related to child welfare will devolve to community agencies under contract to the Authority.
housing environments. Issues may arise as to expectations of the level of care by landlords and residents of housing services. E
Many services, professionally driven before restructuring, are attempting to recruit increasing numbers of volunteers for service delivery and program management. It is unclear whether the community can continue to effectively respond to the downloading of
23
Socio-Economic Forecasts, 1997 - 2002, City of Edmonton services with motivated and capable volunteers • when these volunteervilie already experiencing stress.
increasing societal attention. The expected increases in the elderly population and economic trends indicate that over the forecast period and beyond, the potential for senior abuse is high.
Crime and Violence The demographic and economic trends will create conditions that are likely to increase criminal activity. As the population ages, fear of crime will likely rise out of proportion with the actual crime rates. The decrease in criminal activity in Edmonton (43% between 1991 and 1995) slowed considerably in 1996. Community policing strategies and Safer Cities Initiatives, have had a role in reducing crime.
el An increasing number of mentally ill persons have been deinstitutionalized and forced to live in the community as a result of changing philosophy and public sector downsizing. This may result in more public disorder and victimization occurrences, necessitating police intervention as a social service agency of last resort.
Recreation and Leisure While people are not able to pursue recreation as
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The demographic trends which also contributed
much as in previous years, the need for health-
to the decline in criminal activity are forecast to
giving and fulfilling leisure activities is becoming ever more important as our lives get busier and more stressful. This is especially so in light of increased pressures on the health and social support systems. The challenge for recreation providers will be to make the most effective use of resources to provide the opportunities that citizens can use.
change. These will contribute to both an increase in potential for actual crimes as well as an increase in the fear of crime. The proportion of the population in the more-crime-prone years, the 10-24 age group, is projected to increase during the forecast period. A portion of these young people face reduced opportunities to satisfy their material and social needs. The reductions in the social safety net, combined with a scarcity of good, secure jobs with benefits, will place pressure on young people. The struggle to meet their own needs is likely to produce anti-social behaviour in the form of stealing and other criminal activities. Seniors are more fearful of crime than others are in the general population, particularly in relation to personal victimization. The efforts directed at reducing fear of crime will need to take into account this demographic trend.
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Senior abuse, which is believed to be severely under reported, will become the object of
Prepared by: City Forecast Committee, April 1997
A 1996 survey of Edmontonians showed 49% felt they had less free time for recreation and leisure pursuits than they did in 1991. The trends in favorite activities among Edmontonians show a strong increase in team sports. Individual exercise-oriented activities, non-mechanized outdoor and nature pursuits, and golf are on the upswing, Creative and cultural activities are holding relatively constant, as are downhill skiing, snowboarding, more passive hobbies, and spectator activities. Camping has declined somewhat in popularity, but hunting, fishing, and ATV/4-wheel drive activities are down more substantially.
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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton ail The recreation participation rates for most activities show moderritc declines in participation since 1981 (dropping by 5 to 15%). Some are, however, showing a decline in popularity of over 20%. These are: dancing, roller-skating, racquetball, visiting museums, boating, skating (not hockey), jogging, overnight camping, and crafts are down overall over the last fifteen years. Those leisure activities showing an increase in participation rates are golfing, playing video games, and bicycling. These trends closely parallel those seen for the entire province. Changes in participation rates and activity preferences can be linked to the aging of the population, but this does not fully explain the changes seen from 1981 to 1996. The factors people have cited as barriers to participation in recreational and leisure pursuits have undergone marked shifts over the last fifteen years. In 1981, work commitments, lack of opportunity, and facility overcrowding were the most important. By 1996, people surveyed were most likely to identify cost (both admissions/charges and cost of equipment/supplies), and family and work commitments. Overcrowding at facilities was also mentioned often, although this is not always supported by facility usage statistics. In 1996, fee reduction cards were issued to 6.645 individuals and 58 groups by City recreational facilities. The usage of this program is expected to increase, as more people become aware of it.
m Volunteerism is an important component of our social life, both as a satisfying pastime and as an essential supplement to the operation of most not-for-profit groups and agencies. Although seniors are less likely to do volunteer work than younger adults, those who do are more active in terms of the amount of time they commit to volunteer work. Willingness to volunteer appears to increase with levels of income and education, and is greatest in the 30 to 44 age group, particularly in households with school children.
Social Forecast Risks While the "baby boomer" population (those born between 1947 and 1967) will show the greatest demographic change, the forecast does not view this age group as a vulnerable population. Yet, there may be unforeseen needs or issues that will be significant. Historically, the baby boomer population has not been adequately planned for. i The federal and provincial budgets were generated in election years. The direction may change with the 1998 budgets when new governments have been elected. at The economic elements of the social forecast are subject to the risks identified for the economic forecast.
1 The highest-ranked reasons for participation in leisure and recreational activities in 1996 were: for pleasure. for relaxation, physical health or exercise, doing something different from work. and enjoyment of nature. Competing, showing accomplishments to others, and getting away from the family ranked relatively low. The ranking relationship of these factors has remained relatively consistent over the last fifteen years.
Prepared by: City Forecast Committee, April 1997
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Socio-Economic Forecasts, 1997- 2002, City of Edmonton
Prepared by: The City Forecast Committee The City of Edmonton April 1997
© The City of Edmonton Extracts from this report may be reproduced for individual use without permission, provided the source is fully acknowledged. However, reproduction of this report in whole or in part for purpose of resale requires written permission from the City of Edmonton. While due care and attention has been taken when preparing this report, the City of Edmonton makes no warranty on the reliability of the forecasts.
Prepared by: City Forecast Committee, April 1997
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