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Edmonton Socio-Economic Outlook, 2001-2006

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Edmonton Socio-Economic

2001 - 2006 Prepared by The City Forecast Committee OCTOBER 2001

~ II~lt~flDE'VELO?MEI

LA1EMWANGA

EDMONTON SOCIO-ECONOMIC OUTLOOK 2001 - 2006

Prepared by: City Forecast Committee October 2001

Copyright ÂŠ 2001 by the City of Edmonton Planningand Development Department c/o: 3rd Floor, City Hall Sir Winston Churchill Square Edmonton, Alberta, Canada T5J 2R7 The City of Edmonton provides this information in goodfaith but it gives no warrantynor accepts liabilityfrom any incorrect, incomplete or misleading information, or its use for any purpose.

Edmonton Socio-Economic Outlook, 2001 - 2006

Jong Huang (Chairperson) Chief Economist Planning and Development Department

K.L. Siu Senior Infrastructure Officer Asset Management & Public Works Department

Madjid Heydari Senior Economist Planning and Development Department

Stan Dilworth Director, Audit, Regulatory and Standards Planning and Development Department

Dana Oikawa Forecast Manager EPCOR Power Generation

Gwendo Greenaway Revenue Accountant EPCOR Water Services

Terry Dew Director of Research Economic Development Edmonton

Rod Keith Strategic Planning Officer Community Services Department

Alan Brownlee General Supervisor, Forecasting & Assessment Transportation and Streets Department

Staff Sgt. Dean Albercht Planning & Evaluation Services Section Edmonton Police Services

Audra Jones General Supervisor, Traffic Planning Transportation and Streets Department

Don Pilling Fire Protection Engineer Emergency Response Department

Nila Chowdhury Budget Consultant Corporate Services Department

Christina Ionescu Economist Corporate Services Department

Robert Higgins Planner II Planning & Development Department

Cyndie Annett Research Analyst Economic Development Edmonton

For more information contact: Jong Huang

phone: (780) 496-6068; fax: (780) 401-7068 email: jiong.huang@gov.edmonton.ab.ca

Madjid Heydari

phone: (780) 496-6070; fax: (780) 401-7068 email: madj id.heydari@gov.edmonton.ab.ca

Prepared by: City Forecast Committee, October 2001

Edmonton Socio-Economic Outlook, 2001 - 2006

0 TABLE OF CONTENTS

EXECUTIVE SUM M ARY .................................. ECONOMIC OUTLOOK.......................................... SOCIAL OUTLOOK..............................................

1 1 2

IMPLICATIONS OF THE OUTLOOK ........... 3 BUSINESS SECTOR ............................................... 3 GOVERNMENT AND THE PUBLIC SECTOR............. 4 FAMILIES AND INDIVIDUALS ............................... 4

INTRODUCTION ................................................

PART 1: ECONOMIC OUTLOOK....................

UNITED STATES ....

.............................

CAN ADA ............................................................

Building Permits............................................. BuildingPermits..........16 Housing Starts ................................................ Real Estate Market........................................ ECONOMIC OUTLOOK RISKS..................... Downside Risks to the Outlook...................... Upside Risks to the Outlook ..........................

16 16 17 18 18 18

PART 2: SOCIAL OUTLOOK.........................

OVERVIEW ......................................................

KEY SOCIAL ISSUES ...................................... 24 Social Implications ofDemographic Change. 24 Employnment and Incomes.............................. 25 Poverty ................................. ........................ 26 Social Services............................................... 27

Housing and Homelessness........................... 27

Prime Lending Rate.......................................... 7 Exchange Rate ........................ ....................... 7 A LBERTA ........................................................ 8 Oil and Gas ................................................. 10 ... 11 Net Migration............................................ ............................... 11 EDMONTON.... Economic Growth.......................................... 11 Demographic Changes.................................. 13 Employment...................... ...................... 14 Unemployment Rate ...................................... 14 Inflation ................................ ....................... 15

Education..................................................... 28 Crim e ........................................................... 29 Recreationand Leisure.................................. 30

Prepared by: City Forecast Committee, October 2001

APPENDIX 1 - EMONTON CENSUS METROPOLITAN AREA..................................32

Edmonton Socio-Economic Outlook, 2001 - 2006

0likely EXECUTIVE SUMMARY

appreciate to US$0.66 in 2003 and to US$0.70 by 2006. Canada

Economic Outlook External Factors External Factors

The fragile economic conditions in the U.S. deteriorated markedly in the wake of the terrorist attacks on September 1 T. he U.S. economy is sliding into a recession. The recession is expected to be short and will likely be over by early next year. The U.S. real GDP is forecast to increase by 1.1% this year and 1.5% in 2002. The world economy has been affected by the economic slowdown in the U.S. in 2001, but should fare better in 2002 as the U.S. economy rebounds. Natural gas prices are forecast to average $6 per

The Canadian economy has followed the U.S. into a recession, which is likely to last until the end of this year. The substantial monetary and fiscal stimulus already in the pipeline, coupled with a rebound in the U.S. economy next year, is expected to aid the economy on its way to recovery. The Canadian economy is forecast to grow by 1.4% in 2001 and 1.7% in 2002. Economic growth will intensify over the 2003-06 period. Alberta After a stellar performance in 2000, thanks to the energy sector, the Alberta economy is expected to continue to grow, albeit at a more moderate pace. Lower taxes and interest rates, positive net migration, continuing consumer, government and

gigajoule (gj) in 2001, but are expected to fall to

business spending will result in a 4.5% expansion in

$3.40/gj in 2002 and rise to about $4/gj range during 2003-06. Oil prices are expected to average US$27.00/bbl in 2001, US$23.00/bbl in 2002 and US$22/bbl to US$23/bbl over the 2004-06 period.

2001, followed by an additional 2.8% in 2002. Economic growth is forecast to average 3.2%-3.7% over the 2003-06 period.

Interest Rates and Exchange Rates The Bank of Canada has been cutting short-term interest rates rather aggressively lately, in concert with the U.S. Federal Reserve Board. During January to October of this year, short-term interest rates fell by 3 percentage points in Canada and by 4 percentage points in the U.S. The Canadian prime rate currently (October 24, 2001) stands at 4.5%. An additional 0.25 to 0.5 percentage points cut in both the Canadian and U.S. short-term rates is expected before the year-end. As the recovery takes hold in 2002, concerns over re-emerging inflationary pressures will result in some tightening of monetary policy and therefore higher interest rates, more so in the U.S. than in Canada. The Canada/US under US$0.65 US$0.65 expected to stay

exchange rate has averaged just is so far this year. The dollar is around this level in 2002, but will

Prepared by: City Forecast Committee, October 2001

Edmonton Buoyed by sharply higher energy prices, a strong provincial economy and positive net migration, the Edmonton region's economy is estimated to have 2 rin on grown by 4.5% in 2000. Economic prosperity is expected to continue in the region in 2001 and 2002. Tax cuts, lower interest rates and continuing healthy energy investment in northern Alberta will result in the Edmonton region's economy growing by 4.6% in 2001. Lower commodity prices due to sluggish North American and world economies, coupled with the completion of several major projects currently underway, will slow Edmonton region's economic growth to 2.8% in 2002. With the North American and world economies returning to their respective long-term regional the by 2003, paths by growth Edmonton the Edmonton 2003, growth economypaths is forecast to grow by 3% inregional 2003. 03 eooyi Thereafter, the oeatt economy willrwb expand at%i about 3.5% erear per year. Page 1

Edmonton Socio-Economic Outlook, 2001 - 2006

Demographic Changes The City of Edmonton's population is expected to increase by about 39,000 people by 2006, reaching 702,200. The population of the Edmonton Census Metropolitan Area (CMA) is expected to increase by some 67,000 over the same period, reaching 1.001 million (See Appendix I for the boundaries of the Edmonton CMA). Net migration is expected to range between 5,000 to 5,300 people per year for the City of Edmonton and 8,000 to 8,500 for the Edmonton CMA. The City of Edmonton and the Edmonton region's population, like the rest of Canada, will continue to age.

Office space vacancy rates will decline gradually over the forecast period, as continued healthy economic growth will result in higher net office absorption rates. The apartment vacancy rate will decline in 2001 and then rise gradually as the pace of economic activity moderates.

Social Outlook The Federal Government announced a number of social initiatives in the January Speech from the Throne. Some of the items relevant to this forecast include:

Inflation

The Edmonton region's inflation rate, as measured by the consumer price index, is expected to average 3.2% this year. Continued moderation in energy prices will reduce the region's inflation rate to 3% in 2002. Thereafter, inflation is forecast to ease to

around 2.5% per year.

* initiatives

Labour Market The strong pace of job creation came to a halt in September. Despite this, the number of jobs created in the Edmonton region during January to September of this year averaged about 22,000 more than the same period in 2000. For the year as a whole, a net increase of 20,000 jobs is expected. The region's unemployment rate dropped to a historical low of 3.8% in September. For the year as a whole, it is expected to average 5%. Thereafter, the region's unemployment rate will edge up slowly, reflecting a more moderate economic growth, rising to 6.2% by 2006. Construction Sector The value of building permits in the City of Edmonton rose by 7.2% in the first nine months of this year. For the entire year, the value of building permits is expected to reach $800 million. Housing activity has been strong in both new and resale markets in the region. Housing activity is expected to continue at a healthy, albeit slower, pace during the 2002-06 period. Prepared by: City Forecast Committee, October 2001

increased funding for the National Child Benefit, better access to services for all families and children, and changes to the laws for child support, custody and access; registered Individual Learning Accounts to help adults finance additional learning; focussed assistance for Aboriginals;

address

crime

prevention,

organized crime and gangs, cyber crime and terrorism; greater consideration for the needs of victims; and added safeguards for children; efforts to advance progress on disease prevention; innovation in primary health care; funding for needed equipment; and strengthened efforts to encourage physical fitness and participation in sport; and improvements to public transit and creation of more affordable rental housing.

Among the provinces, Alberta has shown the steadiest employment growth over the longest period (eight years). The majority of new jobs were full time; job creation was strongest for women and young people in the service sector. Notwithstanding, poverty is still a serious concern for many Albertans. The Government of Alberta has recently formed a committee to gather public input on the province's low-income programs, and to review programs and supports presently provided to needy Albertans. The proportion of single-parent families in the city increased from 16.2% in 1991 to 17.6% in 1998. Of Edmonton's single-parent families, 62% had incomes below the poverty level in 1997. Page 2

Q Edmonton Socio-Economic Outlook, 2001 - 2006 While the number of owner-occupied dwellings in Edmonton increased from 1991 to 1999, the number of rental units declined. The shortage of affordable housing in Edmonton is becoming acute. The third count of homeless persons in Edmonton (September 2000) found 1,160 homeless persons in the city. The City of Edmonton is currently preparing a LowIncome and Special Needs Housing Strategy that will document the current demand and supply and condition of housing, factors' influencing the construction of new housing for needy Edmontonians, and the legislative policy and funding background affecting social housing. It will also social housing policy for review also recommend recommend aa social housing policy for review by City Council. Criminal activity in Canada has declined for eight years, up to 1999. In contrast, total criminal activity in Edmonton increased in 2000. Violent crime rose 3.7% and property crimes were up 4% in 2000. The number of family disputes rose from 5,357 in 1997 to 5,514 in 2000, but the number of child abuse cases reported dropped from 543 in 1997 to 441 in 2000. In 1998/99, the number of youth property crime cases before Canadian courts fell significantly, while the number of youth violent crime cases held steady. Walking for pleasure has remained the most popular recreational activity since the early 1980s. Soccer and basketball are the only team sports to show significant growth. People say they get involved in recreation/leisure activities to get away from work, to find relaxed time with family or nature, and for health and exercise. The costs of participating admission fees, equipment and supplies - are the major factors preventing or limiting participation in recreation and leisure activities. Family commitments are an important criterion in allocation of leisure time. 48% of Edmonton residents were physically active on a regular basis.

IMPLICATIONS OF THE OUTLOOK Business Sector Over the forecast period, Edmonton's business community is expected to benefit from: * *

* * * *

However, during the same period, Edmonton businesses must adjust to: *

* *

* * *

Prepared by: City Forecast Committee, October 2001

slightly higher population growth, slg epo t growth, strong employment growth, modest increase in wages and salaries, lower income and business taxes and slightly lower interest rates, therefore, stogadtbldipalencmgrwh * strong and stable disposable income growth, * strong and stable purchasing power growth * stable consumer spending, * strong and stable demand for housing/rental units, continued spin-off from investment activity in energy, pipeline and resource-related projects in northern Alberta, increased government spending, the Alberta Government 2001 energy rebate for high energy costs, moderating energy costs, a large supply of relatively low-cost downtown office space.

tight labour markets in the early years of the forecast - shortage of skilled labour in certain occupations, increased house prices and rental rates, increased inflation, particularly in the early years of the forecast due to higher energy/utilities and labour costs, increased uncertainty arising from the increased weakening of external (international and interprovincial) markets, increased uncertainty arising from terrorist attacks and the war in Afghanistan, increased security and insurance costs, and deregulation of electricity and potentially higher electricity costs.

Page 3

Edmonton Socio-Economic Outlook, 2001 - 2006

Government and the Public Sector Over the next few years, Edmonton's government and public sector will benefit from: *

* *

continued strong economic growth in the province and an increase in employment opportunities, increased assessment base, increased spending on education, health care and infrastructure by the provincial government, and stable oil and gas prices.

However, over the same period, the public sector must deal with: * *

continued municipal infrastructure shortfalls, continued excess supply of space and a slower increase in real estate prices in the downtown non-residential markets, continued demand for government services in

the areas of health, education and infrastructure as a result of the ageing population and positive net migration, * the number of potential retirees exceeding the number of first-time labour market entrants, * an increasing demand to maintain and acquire parkland for more passive pursuits, * a shortage of affordable housing, and * homelessness.

Families and Individuals Over the forecast period, expected to benefit from: *

Edmontonians

are

increased employment opportunities and a healthy rise in wages as a result of continued strong economic activity, and some moderation in the extent of poverty for the working poor with children.

However, Edmontonians must also deal with: * *

rising house prices and rents due to tighter apartment vacancy rates, and providing more care for aged relatives.

Prepared by: City Forecast Committee, October 2001

Page 4

Edmonton Socio-Economic Outlook, 2001 - 2006

INTRODUCTION This report provides an economic and social analysis of current and future changes in the City of Edmonton and the Edmonton Census Metropolitan Area (CMA) for the years 2001 to 2006. The outlook is used as a reference for the preparation of the 2002-2004 corporate and departmental business plans, 2002 corporate and departmental budgets, 2002-06 Capital Priorities Plan and Budgets, and the City's Long Range Financial Plan. In addition, other public agencies, citizens and businesses use the forecast for planning purposes.

of 0.3% in the second quarter of 2001, down from 1.3% in the first quarter and 1.9% in the fourth quarter of last year.

Economic Growth U.S. & Canada 10

'03 Q4

'01 '02 'V3 'V4 Q1

1998

The City Forecast Committee monitors economic and social activities/trends throughout the year. The Committee prepares an outlook report semiannually, in the spring and in the fall.

PART 1: ECONOMIC OUTLOOK

neda,,U.S. Dep.rt.ntof Source:Stad..c. Co.

1999

*Q3 104 '01 '02

2000

2001

In the labour market, the modest job gains early in the year all but disappeared. By September 2001, the non-farm employment was 201,000 less than the level in December 2000. In contrast, by September

2000 the economy had created 1.3 million jobs relative to December 1999.

The jobless rate has

risen steadily, from 4% in last December to 4.9% in September of this year, the highest since September

UNITED STATES

of 1997.

The U.S. economy has entered a recession in the second halfof this year; the recovery to begin next year. Economic growth will average 1.1% in 2001, 1.5% in 2002, 3.5% in 2003 and 3% per year over 2004-06.

The tragic event of September 11h caused an In addition, it caused enormous loss of life. extensive damage to New York's financial-market infrastructure, and hit the U.S. airline and tourist industries very hard. It also shattered already fragile consumer and business confidence. The U.S. economy has likely contracted in the third quarter and is expected to experience a further drop in the final quarter of 2001, fulfilling the technical definition of a recession. The recession is, however, expected to be shallow and brief, owing to aggressive monetary and fiscal policies already in place, easing in energy prices and significant inventory adjustments already underway.

The already fragile economic conditions in the U.S. turned for the worse in the third quarter of this year, precipitated by the September 11 terrorist attacks in New York and Washington. Recent data suggest that the economy was on the brink of recession prior to September 1 1th. Business spending on equipment and software, a major contributor to growth over the past several years, has been falling rapidly over the past three quarters due to an excess capacity brought on by past over-investment, especially in the information technology sector. Consumers, affected by recent lay-off announcements, were losing confidence and becoming more cautious in their spending. A continuing strong U.S. dollar, coupled with a slowing global demand, was taking its toll on exports. Real GDP growth slowed to an annual rate Prepared by: City Forecast Committee, October 2001

To restore confidence and boost the economy, the U.S. Federal Reserve lowered short-term interest rates by a full percentage point in the aftermath of the attack, adding to the 3 percentage point cuts in interest rates since last December. The U.S. government also announced disaster relief for affected businesses and individuals and a financial Page 5

EdaLmonton Socio-Economic UOlok, 2001/- 2006O assistance package to the airline industry. In addition, the government is considering a stimulus package consisting of tax cuts and spending increases to help boost the economy. The fiscal policy was already stimulative, as the administration's tax cut package had passed, and rebate cheques were being distributed. With consumer inflation in retreat, owing to an ease in energy prices and a sluggish economy, the Federal Reserve Board is likely to lower interest rates by an additional 0.25 to 0.5 percentage point in coming months.

CANADA The Canadian economy hasfollowed the U.S. into recession. Economic growth is forecast to average 1.4% in 2001, 1.7% in 2002, 3.3% in 2003 and 3.2% per year over 2004-06. The Canadian economy has likely contracted in the third quarter of this year, in part, due to export disruptions to the U.S. in the aftermath of the September 11. The economy was already weakening

September 11. The economy was already weakening

sharply even before the tragic event in the U.S. Real GDP growth dropped from an annual rate of 2% in

By early next year, the respond to timlusalrady mnetryshould adeconomy the ubsantal iscl the substantial fiscal and monetary stimulus already The tax cuts and to turnaround. in place and begin shuldhelpresore shar drp inintrestrats sharp drop in interest rates should help restore consumer and business confidence and to stabilize equity markets. Lower interest rates should also result in narrowing of spreads between U.S. interest rates and rates in other countries. This, in turn, will

the first quarter of 2001 to only 0.4% in the second quarter, rate in six years. Consumer slowest rate the slowest quarter, the spending weakened significantly in the second quarter an from an falling from growth falling spending growth real spending with real quarter with annual rate of 3.4% in the first quarter to 1.1% in the second quarter. Similarly, growth in the residential construction slowed sharply in the quarter. The trade sector was a major drag on the economy in the second quarter as exports fell and

weaken the U.S. dollar relative to other currencies,

imports rose. Business spending on non-residential

ave eport. U.. therfor therefore boosting U.S. bostin exports. Eerg Energy pries prices have already moderated, and are expected to ease further over the next two years, leaving more cash in consumers' pockets for spending.

imports rose. Business spending on non-residential construction and machinery and equipment was the only major component of aggregate demand that improved in the second quarter compared to the previous quarter.

Overall, the U.S. economy is forecast to grow by 1.1% in 2001, 1.5% in 2002 and 3.5% in 2003. Over the 2004-06 period, the U.S. economy is forecast to expand, on average, by about 3% per year.

The overall employment picture has been dismal. Although employment did rebound in September, the economy lost about 2,000 jobs in the third quarter, compared to a gain of 22,000 in the second quarter of 2001. Given the layoff announcements by several Canadian companies in the aftermath of the attack in the U.S., employment prospects will likely remain poor over the balance of this year and into next year.

Economic Growth Forecast U.S. & Canada il 0mmmM MME 1

SCanada

4 3 2.

_ .

U..

0 99

'00

'01

Source:U.S.Departmentof Commrce,Stsll

'02

'03

'04

'06

Canada. CityForecatCommtle

Preparedby: City ForecastCommittee, October2001

Canada's consumer price inflation has been easing rapidly in response to moderating energy prices and the sluggish economy. It has fallen from a 10-year high of 3.9% in May of this year to 2.6% in September. Canada's core inflation (excluding energy and food) was only 2.1% in September. Given the plummeting economic activity over the balance of this year and into the first half of next year, and the anticipation of further moderation in energy prices, Canada's overall inflation is expected to be subdued in the near term.

Page 6

Edmonton Socio-Economic Outlook, 2001 - 2006

The Bank of Canada has continued its accommodative policy rather aggressively lately, by lowering interest rates. Short-term rates in Canada have fallen by 3 percentage points since January of this year. With no concern over inflation, the Bank is expected to cut short-term rates by an additional 0.25 to 0.50 percentage points before the year end. The combined effect of the drop in interest rates and the lower Canadian dollar relative to the U.S. dollar has caused domestic monetary conditions to ease as much as, if not more, than that south of the border. The large dose of monetary and fiscal stimulus, coupled with a recovery in the U.S. next year, is expected to help boost economic activity next year.

Canada's recent expansion only intensified in the last couple of years and the unemployment rate, while down considerably, was still not low enough to trigger widespread wage pressure. Canada's short-term rates are forecast to rise by 0.75 percentage point during 2002. Consequently, Canada's prime rate is likely to reach 5.25% by December 2002, resulting in a 2002 annual average rate of 4.9%. Beyond 2002, Canada's short-term rates are expected to increase more aggressively in 2003 than in 2002. Thereafter, they will stabilize around 7%.

Overall, the Canadian economy is expected to grow by 1.4% in 2001. Economic growth will intensify in the second half of 2002 as the U.S. and world economies strengthen, and Canada's domestic economy responds to the current monetary and fiscal stimulus. The Canadian economy is forecast to grow by 1.7% in 2002. Over the 2003-06 period,

Prime Lending Rate l lll _ _ _ _ -

_ ,I.r

Cnd

the Canadian economy is forecast to grow by about -

# # #

3.2% per year.

9Source:

Bankof Canada.U.S. FederalRoserv.Board

Prime Lending Rate Prime Lending Rate Forecast

The chartered banks in both Canada and the U.S. have followed their respective central banks by lowering their prime lending rates. As a result, the U.S. prime rate fell by 4 percentage points during January to October of this year, and currently stands at 5.50%, while the Canadian prime rate fell by 3

lmulllhh

I II

percentage points to 4.5% during the same period. An additional 0.25 to 0.50 percentage point drop in short-term interest rates, and consequently in prime rate, is expected in both the U.S. and Canada.

.. .97

o00

'01 '02

'03

'04

'05

'0O

Source: Bankof Canada,CityForecastCommlte

By early next year, the U.S. economy is expected to begin to recover. The current monetary and fiscal stimulus already in the pipeline is strong enough that, if not scaled back, it might re-ignite inflationary pressures later on. As a result, the U.S. Federal Reserve will likely begin to move monetary policy to a more neutral stance in 2002. Short-term interest rates in the U.S. are expected to rise by 1.25 percentage points during 2002. The Bank of Canada will also raise interest rates, but less aggressively than its counterpart in the U.S. This is because Prepared by: City Forecast Committee, October 2001

Exchange Rate The Canadian dollar has come come under renewed pressure lately, trading in the 63 to 64 U.S. cents range, nearly 3 cents below its January 2001 level. This is despite the fact that the Canadian economy, although weakened sharply, still performed better than the U.S. economy. However, falling commodity prices, narrowing of spread between the U.S. and Page 7

Edmonton Socio-Economic Outlook, 2001 - 2006

Canadian Canadian recession Canadian

short-term rates and the fear of the economy following the U.S. into a is putting downward pressure on the dollar.

The Canadian dollar averaged US$0.649 in the first ten months of 2001. There is not much prospect for an improvement until the second half of next year when economic growth in Canada will intensify. Even then, the appreciation of the Canadian dollar will be limited as the Bank of Canada will lag behind the Federal Reserve Board's next tightening cycle. The Canadian dollar is forecast to average US$0.647 in 2001 and US$0.65 in 2002. Over the 2003-06 period, the Canadian dollar is expected to appreciate slowly against the U.S. dollar owing to a better economic performance relative to the U.S. and a strong current account balance. The dollar is forecast to average US$0.66 in 2003 and rise gradually to US$0.70 by 2006.

spending provided the largest contributions to growth. Real exports grew by only 1.1%, reflecting lower volumes of oil and gas exports out of the province. On the income side, corporate profits before taxes rose by a whopping 58% in 1999, while total wages and salaries increased by 6.4%. Soaring oil and natural gas prices helped the Alberta economy to surge ahead in 2000. Oil prices averaged US$30.22/bbl in 2000, up 59% from their 1999 average of US$19.29/bbl, while natural gas prices averaged $4.76/gj, up 69% from their 1999 average of $2.81/gj. As a result, Alberta's real GDP is estimated to have grown by 6% in 2000. The economic expansion appears to have been broadly based with all major components of aggregate demand growing strongly. Cohsumer spending buoyed by robust employment growth and rising compensation, grew solidly, as indicated by an 8.9% rise in retail sales in 2000. Alberta led all provinces and territories in retail sales gains in 2000, and

Canada-US Exchange Rate

posted its second highest gains in 10 years. Alberta

Forecast

sales of new motor vehicles in 2000 registered their

illlfi

strongest performance ever. Total housing starts in

0.73,

the province grew by 6.4% last year and the total

0.72

value of residential construction in the province rose

0.71

by 4.4%.

0.70 0.69

The Government of Alberta 2000-01 Annual Report

0.6o

indicates that government spending on goods and

services and capital investment rose by 10.5% in

0.6

.97

'02

'03

'04

Sourme:Bankof Canada,CityForecast Comminee

ALBERTA

2000, reflecting increased spending on health, education and infrastructure. In addition, buoyed by

the substantial increase in energy commodity prices, business spending increased significantly in 2000. The number of active rigs drilling rose 39% in the year. The value of manufacturing shipments was up by nearly 18% in 2000, led by a dramatic 60% rise in the value of shipments from the petroleum and

Alberta will avoid the North American recession. The economy is forecast to grow by 4.5% in 2001, 2.8% in 2002 and 3.2% to 3.7% over the 2003-06 period. 1999-2000 The Alberta economy expanded by 3.6% in 1999, the latest year for which data is available, up from 2.4% in 1998. Business spending on machinery and equipment, along with government and consumer Prepared by: City Forecast Committee, October 2001

coal products industry. Probably none of the major components of Alberta aggregate demand in 2000 grew more vigorously than exports. The value of Alberta's international merchandise exports increased 60% in 2000. International exports accounted for about two-thirds of the total value of Alberta exports. Higher prices for oil and natural gas, petrochemical products, wood pulp, and increased export volumes for

Page 8

Edmonton Socio-Economic Outlook, 2001 - 2006

telecommunication equipment, oil and gas, and wheat contributed to this stellar performance.

level in 2000 - a considerable boost to the provincial economy.

The Alberta economy created 35,000 (annual average) new jobs in 2000, pushing the number of employed Albertans to 1,588,200 (annual average), up from 1,553,300 in 1999 or by 2.2%. The accommodation and food industry created the highest number of jobs, followed by the construction industry. More than 80% of those employed were working in full-time positions. Alberta's unemployment rate averaged 5% in 2000, the lowest in decades.

Despite the government announcement and the recent drop in oil and natural gas prices, the Alberta economy is expected to expand by 4.5% this year. Growth is mainly concentrated in the domestic economy, supported by strong consumer spending and residential construction. Continued strong employment growth, healthy increase in compensation, record low (real) interest rates and tax cuts are contributing to a strong domestic economy in Alberta. The Alberta economy has created, on average, 2,800 jobs a months during January to September of this year, higher than the past two years for the same period. The provincial unemployment rate dropped to a 20-year low of 4% in September and averaged 4.6% in the first nine months of this year. Average weekly earnings have risen by 2.7% in the first seven months of this year. The combination of higher employment and higher wages has pushed the value of total wages and salaries in the province by 8.5% in the first half of

The strong economic activity, coupled with low unemployment, resulted in higher consumer prices and tightening labour markets with rising wage rates. The Alberta consumer inflation increased to 3.3% in 2000, the highest since 1991. The Alberta average weekly earnings grew by 3% in 2000. Growth to Continue in 2001 2001 appears to be another prosperous year for

this year.

Albertans. Although oil and natural gas prices have moderated this year, prices and demand are high enough to support a healthy level of economic activity. However, the sharply weakening North American economy and the tragic event of September 1l th will directly and indirectly through impacts on other jurisdictions' economies - affect the Alberta economy.

interest rates, has unleashed a significant purchasing power. This is demonstrated by a 9.1% rise in the number of housing starts in the first nine months of this year, 11.5% increase in the number of MLS housing resales over the first eight months of 2001, 6% increase in the number of new motor vehicle sales, and a 9.7% increase in the value of retail sales in the first eight months of this year.

In October, concerned with the impact of lower resource prices on the provincial fiscal position, the Alberta government announced corrective actions aimed at reducing government spending in the fiscal year 2001-02. The actions consist of deferring several infrastructure projects worth $753 million and $525 million in other savings, including a 1% spending cut by all departments, and abolishing energy-related assistance programs that are no longer needed because of lower energy costs.

Alberta international exports appear to be downshifting, as the North American and overseas economies are entering a recessionary or no growth phase. The value of Alberta exports fell from $7.6 billion in January of this year to $5.2 billion in July. The value of exports is likely to continue to shrink until the second half of next year when economic growth in the North American economy will intensify.

Many of the deferred projects were multi-year projects. As a result, the deferral will have less impact on economic activity in any one particular year. Moreover, even with the reductions S announced, government total spending in 2001 will still be up by about 8% (on a calendar basis) from its Prepared by: City Forecast Committee, October 2001

This, coupled with tax cuts and lower

Alberta inflation hit a 10-year record high in May 2001. It has moderated since then, and is expected to continue to ease over the balance of this year and next, owing to continued moderation in energy prices and slower economic growth. In the first nine months of this year, Alberta inflation averaged 3.3% compared to the same period last year. Page 9

JLEmonton

Socio&-JL4Eo

EEcOuoo,

Led by consumer spending and residential construction, and supported by exports and government spending, the Alberta economy is expected to post another solid performance this35u year. Real GDP is forecast to grow by 4.5% in 2001. In 2002, Alberta consumers are expected to be the major contributor to economic growth, albeit at a more moderate pace than in 2001. The Alberta economy is forecast to expand by 2.8% in 2002. As the recovery in the North American and overseas economies intensifies next year, so should the demand

for

commodities.

and

prices

of Alberta's

of economic activity in Alberta to 3.2% to 3.7% over 2003-06.

Economic Growth Forecast Alberta & Edmonton

200

World Oil Prices Forecast (US$/bbl) (SIb

ufII

30 25 20-

export

This should help accelerate the pace

2001IJJ

.9,' F-1. So-: C.iy

. o

'04

'05 06

Co..m.

With natural gas demand softening with the slowing North American economy, production levels rising in response to the recent high prices, and storage levels returning to a healthy state, natural gas prices this year have fallen as sharply as they rose last year. Indeed, gas prices at the AECO storage facility in southern Alberta dropped from an average of $12.91/gj in January 2001 to $3.34/gj in September.

IAbrtEdnt

Although the growing dependence on gas-fired power plants is expected to continue, the economic slowdown and stepped-up drilling programs are expected to greatly improve the supply/demand balance over the next two years. Consequently, AECO gas prices are expected to ease substantially

*2 , 0 '97

"98

'99

'00

'01

'02

'03

'04

'05

'06

Source:StatsicsCanada. CityForecast Committe.

Oil and Gas Oil market fundamentals have weakened significantly in recent months, putting a downward pressure on prices. The slowdown in the global economy, precipitated by the events of September 11 h,has eased the overall demand for crude oil. On the supply side, continued overproduction by OPEC and an increase in non-OPEC production levels, led by a revival in the former Soviet Union, has resulted in a further increase in inventories. West Texas Intermediate, WTI, oil prices fell from an average of about US$28/bbl in the first half of 2001 to about US$22/bbl since mid-September. Overall, the price for WTI crude oil is expected to average about US$27/bbl this year. Thereafter, a more balanced

from an average of $6.00/gj in 2001 to around

$3.40/gj next year. Over the longer anticipated recovery in the North economy should cause prices to rise $4.00/gj for the remainder of the forecast

term, the American to around period.

Alberta Natural Gas Price Forecast (Cdn$/G.J.)

mhhi

7.00oo 6.00

5.00 4.00 3.00 2.00

oo 0.00

s.r.:

'97 '98 '99 os....comm..

'00

'01'02

'03

'04'05 '

supply/demand fundamentals are expected to allow WTI prices to settle in the US$22 to US$24 range for the remainder of the forecast period. Prepared by: City Forecast Committee, October 2001

Page 10

Edmonton Socio-Economic Outlook, 2001 - 2006

Net Migration Net migration to Alberta (international and interprovincial) between January and June 2001 reached 19,541, up from 19,280 in the same period in 2000. Net migration for 2001 is estimated to be 35,585 (please see footnote 3 in Table 1), up by about 6,500 from 2000. The Alberta economy is expected to grow faster than the national economy during the forecast period, resulting in net migration to the province continuing to be strong, averaging 28,000 between 2002 and 2005, increasing to 30,000 in 2005 and 2006.

Forecast Net Migration(*) Alberta, Edmonton(CMA), Edmonton(City) A MA),lEd E

50.000

30.000

Despite the recent drop in oil and gas prices, demand and prices are still reasonably high to support a healthy level of activity in the energy sector, contributing to solid economic growth in the

migration to the province and the

1prospects,

20,000

resulted in lower prices for crude oil and natural gas prices lately. This prompted the Alberta government to announce a combination of spending cuts and deferred infrastructure projects in the fiscal year 2001-02. The Edmonton share of the deferred projects is estimated at $155 million, out of a total of $753 million. However, the impact of the deferral will be scattered over several years as many of these projects had multi-year spending profiles. Also, it should be noted that even with the spending cutback announced, total government spending in the province will increase by about 8% in 2001 (calendar year).

Edmonton region's economy. In addition, the weakening of the U.S. economy will affect central Canada more than Alberta. With Alberta's continuing healthy economic growth and good job

Abernta

40.000

Edmonton region should remain fairly high in the near-term. '97

:t. .

'99

Cana...C.t c

'00

'01

ron tnno

'03

'04

opmnOp

&D year n Number,areforJuty, ofpreurcous year toJunoe31 ofcurrent

'06

.ent

In 2001 the personal and corporate tax cuts by the

federal and provincial governments are expected to play an important role in strengthening consumer and business spending in the Edmonton region.

EDMONTON Economic Growth The Edmonton economy is forecast to grow by 4.6% in 2001 and 2.8% to 3.5% over the 2002-06 period The Edmonton region's economy is estimated to have grown by 1.1% in 1999, following a 1.6% expansion in 1998. Economic growth in the region accelerated at 4.5% in 2000 in response to sharply rising energy prices, strong performance of the provincial as well as national economies and positive net migration to the region. The sharp slowdown in the U.S. and Canadian economies in the second half of this year has Prepared by: City Forecast Committee, October 2001

In August, Edmonton hosted the 8 h World Championships in Athletics, which was a great success. An economic impact assessment study conducted in 1997 estimated that the event contributed a net increase (direct, indirect and induced) of about $203 million to the provincial economy, of which $157 million would be accrued to the Edmonton region's economy. The regional economy is also expected to benefit from the economic spin-off from investment in northern Alberta. In September 2001, Economic Development Edmonton estimated the proposed, announced and recently completed or under construction major projects in northern Alberta at $61.5 billion. These projects represent roughly 79% of the value of all major projects planned for the province of Alberta.

Page 11

Edmonton Socio-Economic Outlook, 2001 - 2006 Summary of Major Projects

current 754-megawatt megawatts.

($ millions) Sector

North

capacity

900

Alberta

Agriculture and Related Chemicals and Petroleums Commercial/Retail Commercial/Retail and Residential Forestry and Related Infrastructure

270 489 721 257 632 3,773

351 489 1,699 1,927 632 6,865

Institutional

1,760

3,944

Manufacturing 112 Mining 8 Oil, Gas and Oilsands Oil, Gas and ilsands47,383 47,383

International Airport at a cost of $83 million.

116 8 49,403 49,403

The feature project of phase III involves the construction of a Central Hall to connect the new and original terminals, and is expected to be completed in the spring of 2003.

Other Industrial

Pipeline Pipeline

1,260 1,260

180

2,972 2,972

Power

The City of Edmonton plans to spend $108 million for the first phase of the south LRT extension over the next five years.

Edmonton Airports is proceeding with the third phase of the re-development of the Edmonton

219

3,390

5,053

Residential

692

1,222

Telecommunications Tourism/Recreation

560

303 2,318

retail complex "South Edmonton Common" on a 300-acre site at 23 Avenue and Calgary Trail,

61,504

77,520

costing $250 million, is currently underway. About 3,500 construction jobs will be created over five years.

Total

Sources: 1. Alberta Econonic Development, September 2001 2. Econonic Development Edmonton,Septentber 2001

* Totals rmay not add up due to rounding

Camrose Development Ltd.'s constructionof the

* Christenson Developments is constructing a $40 million commercial and townhouse complex in

The following projects will have a significant impact on the Edmonton economy over the next five years: *

The University of Alberta will receive $120 million over the next five years from the Government of Canada and Government of Alberta for the creation of the National Institute for Nanotechnology. The new national research facility will be dedicated to the research and development of Nanotechnology, a cutting-edge science that is rapidly advancing areas from health care to computer technologies, The City of Edmonton is spending $145 million to upgrade and expand its sewer system.

EPCOR has proposed to build a $500 million expansion to its Genesee plant during 2002-05 to increase capacity by 400 megawatts.

TransAlta Utilities has announced a $1.8 billion expansion to its Keephills power plant during 2002-05. The expansion will increase the plant's

Prepared by: City Forecast Committee, October 2001

the downtown. Construction will be completed in 2001. *

The City of Edmonton will spend approximately $50 million in the next seven years to upgrade the Gold Bar wastewater plant to the tertiary treatment level.

Alberta Envirofuels Inc. plans to spend $80 million to convert its existing Edmonton plant, which is producing MTBE, to produce isooctane, a gasoline component. Construction began in summer of 2001 and is expected to complete by mid-2002. The construction will need 250 person-years.

The provincial government will be spending $220 million for the completion of the Anthony Henday Drive from Whitemud Drive to Calgary Trail. (In October, 2001, the provincial government extended the completion date for this project to fall of 2006. Initially, this project was to be completed in 2005.)

The provincial government will spend $125 million over the next 5 years to create a centre Page 12

Edmonton Socio-Economic Outlook, 2001 - 2006 of excellence for cardiac research in Edmonton. (In October, 2001, the provincial government announced that some preliminary work is already completed, further work will be

expected to continue to decline as the number of deaths increase and births decline as the population ages.

deferred.) The

increased

Population Forecast investment activity

Edmonton (CMA), Edmonton (City)

in northern

uumill

mmm

Alberta will increase job opportunities in the Edmonton region, which, in turn, will lead to

100**0

increased migration to Edmonton to take advantage of available job openings. This will add to the region's customer base and, therefore, have a positive impact on consumer spending. Overall, the region's economy is forecast to grow by 4.6% in

250

2001, slightly higher than the provincial economy.

Economic growth in the Edmonton region will moderate to 2.8% in 2002 as several major projects, including the Scotford refinery, will be completed and as the Alberta economy will be affected by weakening of the North American and overseas economies. Over the 2003-06 period, the region's economy is forecast to grow by 3% to 3.5%.

03 '02 01 '99 0 ... t Committ..ee So-.: stot.Canada,City F..c

'04

s 06

The Edmonton region's population, like the Canada, continues to age. The number of aged under 40 is expected to grow by nearly over the forecast period. The number of

rest of people 10,000 people

aged 40 and over is forecast to increase by some 58,000 with most of the increase occurring in the

Demographic Changes

50-plus age group (28,000) and the 40-plus age group (9,000). The trend is similar for the city of Edmonton.

Over the forecastperiod,the City ofEdmonton's number ofpeople aged 40 and over isforecast to increaseby 36,000 as opposed to only 2,850for the people aged under 40. The City of Edmonton's population is expected to increase by about 39,000 people by 2006 reaching 702,200 (see Table 2). The population of the Edmonton CMA' is expected to increase by some 67,000 over the same period, reaching 1.001 million (see Table 3). Net-migration is expected to range between 5,000 and 5,300 people per year for the City of Edmonton and between 8,000 and 8,500 for the Edmonton CMA. Net-migration for the Edmonton region is linked to the relative differences in the unemployment rates between the region and the rest of Canada. The unemployment rates for Edmonton and Alberta are expected to continue to decline relative to the rest of Canada. The other component of population change, natural increase, is

Our ageing population has a direct impact on the size of the working age population (ages 15 to 64) and the labour force, which is comprised of people either working or looking for work. As the working population ages, more people will leave the labour market than enter it. The population of the City of Edmonton and the Edmonton CMA have broadly similar age profiles, with the CMA having slightly larger shares of ages under 20 and the City having larger shares of young adults and people aged 60 and over. This changing age structure has important implications for various sectors of the economy: *

* 1The boundaries of the Edmonton CMA are shown in Appendix I. Preparedby: City Forecast Committee, October 2001

the growth in the number of people in their twenties will increase demand for apartments and.first-time buyer housing; the large increase in the 40-plus and 50-plus age groups will support continued strong demand for more expensive housing, while growth in the Page 13

Edmonton Socio-Economic Outlook, 2001 - 2006

older groups will support 'empty nester' and retirement housing; and Sthe high growth in the number of people aged 65 and over will increase demand for social and health care services,

Edmonton Population Change

2001 and 2006 Between

mmIlll

iiill

During the first seven months in 2001, employment in the Edmonton region grew steadily, rising by an average of 2,500 jobs a month. Edmonton region employment registered a marginal drop in August, followed by a sharp decline in September. Part of the drop in employment since August can be attributable to the end of the World Games in August. Despite the job losses during AugustSeptember, average employment in the first nine months of 2001 is about 20,000 more than the same period in 2000.

27,000

E CMA OCity

22,000

Goods Producing Industries Creating Most Jobs

II "'"'"'"'

in Edmonton: Jan-Aug Average, 2000 and 2001*

7,00:

17,oo00 12,000

2,000

I nm,

0-9

10-19

20-20

30-39

40-49

50-59

60-69

70-79

80+

& OevelopmentDepaotment Cityof EdmontonPlannhing Source:

-". , 510.9.Or a 0..

Employment

The Edmonton region's economy is expected to create 20,000 new jobs in 2001, 6,000 in 2002 and 7,000 to 8,000 per year during 2003-06. The total employment in the Edmonton region rose by 1.3% in 2000 to 488,000. Trade, accommodation and food, and transportation and warehousing, made the largest gains, while manufacturing, health and social assistance, and educational services, respectively, registered the largest losses.

Labour Market

Edmonton (CMA)

Employmnt

520

Unempoymentt

6.2

Statistic(2) o Stolistlc. Sourc: Canada No,

00.

.on....us

Goods producing industries have created the majority of new jobs so far this year, led by construction (10,300 jobs) and manufacturing (4,600 jobs). Both these industries lost jobs last year. The pace of job creation is expected to ease over the balance of this year. The region's employment is forecast to rise by 20,000 new jobs in 2001. Employment growth is expected to moderate in 2002 as the construction of Scotford refinery will be completed. During the

2002-06 period the region's employment is expected to rise by an average of about 6,000 to 8,000 jobs per year. This brings the total number of jobs created during 2001-06 to 56,000.

480 460

5.1

440

Unemployment Rate

14.1

420

.... . .a...

N -..

Soure: Sandst,...

The unemployment rate in the Edmonton region is

forecast to hit 5% in 2001, 5.2% in 2002, and rise gradually each year, reaching 6.2% by 2006.

Prepared by: City ForecastCommittee, October2001

Page 14

Edmonton Socio-Economic Outlook, 2001 - 2006

The unemployment rate fell to an average of 5.5% in 2000, down from 5.9% in 1999 and 6.1% in 1998. The region's 2000 unemployment rate of 5.5% is the lowest since 1987 when Statistics Canada started to release the unemployment data by metropolitan area. The unemployment rate for individuals 25 years and over declined from 4.4% in 1999 to 4.2% in 2000. The unemployment rate for individuals in the 15 to 24 age groups also fell from 12.6% in 1999 to 11.2% in 2000. The region's overall labour force participation rate 2 fell steadily from 72% in 1997 to 70.2% in 2000. The male participation rate fell from 77.3% to 76.3%, while the female participation rate fell from 65.1% to 64.2%. The strong pace of job creation this year has pushed the unemployment rate down steadily to a historical low rate of 3.8% in September. For 2001 as a whole, the region's unemployment rate is forecast to average 5%, rising to 5.2% in 2002. Thereafter, the unemployment rate will rise gradually every year, reflecting a slower economic growth in the region, reaching 6.2% by 2006.

Employment/Unemployment Rate Forecast, Edmonton (CMA)

Edmonton's inflation rate, as measured by consumer price index, increased to 3.3% in 2000, up from 2.3% in 1999 and 0.9% in 1998. Sharply higher energy prices and an increased cost of housing contributed to higher prices in 2000. Tight labour market conditions also contributed to inflation by pushing wage rates up. In May of this year, high energy and food prices pushed Edmonton's inflation rate to 5.9%. Had it not been for the provincial energy rebates, energy prices would have pushed the region's inflation even higher. Since May, inflation in the region has moderated, falling to 3% in September. In the first nine months of this year, inflation in the Edmonton region averaged 3.1%. For 2001, the Edmonton inflation is forecast to average 3.2%.

Inflation Rate Edmonton (CMA) 111111

1 1

i 1

560

...i.....

7.5

•E•I, [

Number of Peophl Employed . ''-..rr-"-I/M-1/111 • 411-11

. 520 I

500 480

mow. .

460 1 440

Mile...._ 111610.1WW.

2.5

•

1.1111

. 6.5 "C

. 2'

-- .

118

'88

'00

'01

l '

J-AJOJ-AJOJ-AJOJ.AJOJ-AJOJ-AJ 96 97 98 99 00 01

Source Stags dos Canada

5.5 5

Inflation Rate Forecast

I II I II 111

420 Ill

AMAIN v

11 ! IMELWAIMIIII

•uuu uuiui 540

I 4.5

Edmonton (CMA)

*04

116

Source: Statistics Canada. City Forecast Committee

Inflation The Edmonton region's inflation rate is forecast to fall marginally to 3.2% in 2001 and to 3% in 2002. Thereafter, it will average about 2.5% per year over the forecast period.

min '98

'01

'02

04'05

'06

Source: Statistics Canada, Coy Forecast Conenittee

The participation rate represents the number of persons in the labour force expressed as a percentage of the total working age population. 2

Prepared by: City Forecast Committee, October 2001

Page 15

Q Edmonton Socio-Economic Outlook, 2001 - 2006 In 2002, oil and natural gas prices are expected to fall by an average of about 12% and 30%, The price of electricity is also respectively. expected to fall. However, with the termination of electricity and natural gas rebates, consumers will

000

face higher overall heating and power bills. Other

800

Building Permits Forecast City of Edmonton ImmIiII

major components of the Consumer Price Index (CPI) are expected to rise, but slower than in 2001. As a result, the Edmonton region's inflation rate is forecast to be around 3% in 2002.

Igh

600 400

200

Over the 2003-06 period, the inflation rate is expected to ease to 2.5% , reflecting slower economic growth and stable energy prices.

.oo

.9 99

'o 1

Source: Planning & Development. CityForecastCornnittee

Building Permits

Housing Starts

The total value of buildingpermits will rise to around $800 million this year and range between $650 to $750 million per year over 2002-06.

Housing starts are expected to rise to 6,800 units for the Edmonton region and 4,170 for the City in 2001. Thereafter, they will moderate to 5,900 and 3,600 respectively.

The value of building permits for the City in 2000

Building Permits

Housing starts in the Edmonton region totalled 6,228 units in 2000, down from 6,489 units in 1999. The drop was mainly caused by multi-family units, which fell by about 11%. Single-family starts were almost at the 1999 level. Similarly, the City's

Edmonton (City)

housing starts dropped to 3,765 units in 2000,

totalled $786.7 million, up by about 20% from $657.5 million in 1999.

mimmuu ii

largely due to lower multi-family units.

100 2001

Housing Starts

0.......

Sro

,,:" "

. "

..-,o

2000

...

Edmonton (CMA)

,,,nnmmlmnnllil

50 40

800

Boo Source: Planning& Devolopmenl 400

Led by institutional and residential development, the value of building permits increased by 7.2% in the first nine months of this year compared to the same period last year. For the year as a whole, the value of building permits is expected to reach about $800 million. Beyond 2001, as construction projects are completed and the demand for building space moderates, building permit values will fall within the range of $650-$750 million in 2002-06.

Prepared by: City Forecast Committee, October 2001

200

, .

, +

So.: Canada Mo ogag.e andHousing Caton

The current historically low real mortgage rates, increased net migration and high disposable incomes have contributed to strong housing activity in the region this year. In the first nine months of the year, housing starts in the region rose by about 15%, led Page 16

Edmonton Socio-Economic Outlook, 2001 - 2006

by single-family units. For the City, single-family starts appear to be the major focus of housing activity this year, rising by about 28% in the first nine months of this year. Muti-family starts in the

housing starts are expected to average around 5,900 in the region and 3,600 in the City. Housing Starts Forecast

City dropped by about 6% over the same period.

Edmonton (CMA), Edmonton (City)

For the year as a whole, a total of 6,800 units are expected to be started in the region and 4,170 units in the City, with the single-family units taking the dominant share of the starts in both the region and

o7000 6000

the City.

40oo00

MMmOuEllli so 3000-

5-Year Mortgage Rate Adjusted for Inflation l_

o 01

0 '97

Sll ......... 0 . C ..

ity o

'9 '9 .o

'01

'02

0 '03 04

'06

Real Estate Market

1-Y.arA... Â°

The apartment vacancy rate will average 1.0% in 2001 and then climb gradually to 2.5% in 2006. The downtown office vacancy rate will average

12% in 2001 andfall to 10.5% by 2006.

..Ssti.csC.n.d. Average Resale House Price

Canada Mortgage and Housing Corporation's (CMHC) rental market report indicates that the City

Edmonton (CMA)

of Edmonton's apartment vacancy rate fell to 1.4%

mlllmmllll 1986=

200

100 -Ao.

200

in 2000, the lowest in two decades. This led to a 4.7% increase in apartment rental rates last year. The City's apartment vacancy rate is expected to fall

160

1% in 2001, as net migration rises this year. This w20 ill exert further upward pressure on the apartment rental rates in 2001. The low apartment vacancy rate and high rental rates should lead to proportionately

-to

0o0 so 00 0..

.96 . *' 0.)

Sour,,.: Edmonton RealEstlte Board go, l_. dperiod.

.. .A.. _.

The resale market has also been strong this year with the average selling price and number of units sold rising by 6.5% and 11%, respectively, in the first nine months of this year. Since 1986, the resale value of single-family and muti-family homes in Edmonton has risen faster than inflation in the City. Housing starts inthe Edmonton region and the City are expected to moderate slightly in2002 as the economic growth in the region slows a bit. Housing starts are forecast to fall to 6,400 in the region and 4,000 in the City in 2002. Over the 2003-06 period, Prepared by: City Forecast Committee, October 2001

more rental units being built during the forecast

This should provide some relief and cause the rental vacancy rate to climb gradually, reaching 2% by 2003 and 2.5% from 2004 to 2006. The vacancy rate in the downtown office market fell to 12.4% in 2000 from 12.9% in 1999. The downtown office market will be affected by the conversion of current office space to other uses as owners attempt to add value to their properties. It is also expected that space will be released to the market as public and private sector leases expire. This will place upward pressure on the office space vacancy rate in the short run.

Page 17

Edmonton Socio-Economic Outlook, 2001 - 2006

The office space vacancy rate will decline over the forecast period as economic activity and employment opportunities continue to improve, resulting in higher net absorption rates. The forecast calls for the downtown vacancy rate to fall to 11.5% by December 2001 and then decline slowly to 10.5% by 2006.

Vacancy Rate Forecast City of Edmonton

MIiIIll

1MMu

The recent U.S. National Energy Policy calls for a balanced approach to increasing domestic energy supply, including the continued development of nuclear and coal-fired power generation. The adoption of this approach would reduce the emphasis on gas-fired generating plants, slow the increase in U.S. natural gas demand and remove much of the upward.pressure on recent gas prices. If aggressively adopted, this policy may lead to a reduction in the current pace of development of

Apartment OfficeSpac

government revenues reduced. Under these circumstances, economic activity in Alberta and Edmonton could be much weaker.

North American gas resources.

Alberta's personal savings rate has trended downward since 1982. It rebounded in 1999 to 7.1% from 5.9% in 1998. A continued sharp correction in equity markets will cause a reduction

S 0as 00 Sour-cCMHC,City Forecast Committee

V 01

'02

'03

'04

'05

in individuals' wealth and may result in the savings

'06

rate to resume its downward trend.

ECONOMIC OUTLOOK RISKS

Alberta Savings Rate m u l

30 25

Downside Risks to the Outlook

~15 The major downside risk to the forecast relates to the current uncertainty in the wake of September 11th tragic event and the threat of further attacks including

biological/chemical

attacks.

The

psychological and financial impact of such actions would be significant on the already fragile consumer and business confidence. This would result in consumer and business retrenchment and lead to a much deeper and longer recession in the North America, which ultimately spills over to Alberta and Edmonton. As oil inventories increase and prices begin to drop to the lower end of the OPEC target range, world producers will need to ease back on production to maintain a reasonable supply/demand balance. A failure to do so will return world markets to a state of excess supply, with sharply reduced prices. In such a case, planned investment in the Alberta energy sector could be jeopardised and provincial Prepared by: City Forecast Committee, October 2001

10 , 0 .

4 ..

.4 .4

I "u.AlberTreasury

Upside Risks to the Outlook A major escalation of the war in Afghanistan may spill over to the neighbouring countries. This may result in disruption of flow of oil from the Middle East, causing oil prices to rise sharply. While high energy prices would contribute to increased inflation and a general slowdown in economic activity, it would help to sustain the feverish pace of development in the oil and gas sector in Alberta. Over the medium to longer term, a concerted effort to meet the greenhouse gas objectives of the Kyoto Page 18

Edmonton Socio-Economic Outlook, 2001 - 2006

protocol through a mandated increase in the reliance on natural gas would increase both its demand and price. While clearly inflationary, such a move would require expanded drilling programs and pipeline facilities in the province. Whether such a change would increase overall economic activity in Alberta and Edmonton would depend on the extent to which other industries might be damaged by these and other climate change provisions.

Preparedby: City ForecastCommittee, October2001

Pae 19

Prepared by: City Forecast Committee, Odtober 2001

Page 19

Table 1 Forecast for Selected Economic Indicators Forecast

Actual/Estimate

Indicator

1998

1999

2000

2001

2002

2003

2004

2005

2006

USA, Canada and Alberta

World Oil Price (US$/bbl) (1) Alberta Natural Gas Price ($/GJ) (2) Economic Growth Rate (%)* USA Canada Alberta Prime Lending Rate (%)

14.42 1.93 4.3 3.9 2.4

19.29 2.81

30.22 4.76

27.00 6.00

23.00 3.40

22.00 4.00

22.50 4.10

23.00 4.00

23.50 4.10

4.1 5.1 3.6

4.1 4.4 6.0

1.1 1.4 4.5

1.5 1.7 2.8

3.5 3.3 3.2

3.0 3.2 3.5

3.0 3.2 3.7

6.6

6.4

7.3

6.00

4.90

6.25

7.00

Exchange Rate(US$/Cdn$)

0.67

0.647

0.65

0.66

0.68

0.69

0.70

Net Migration (Alberta) (000) (3)

49.3

35.6

28.0

30.0

Net Migration - CMA(000) (3) - City(000) (3) Population - CMA(000) - City(000) Economic Growth Rate (CMA)(%)

11.0 6.8 898 633

8.5 5.3 933 663

8.0

5.0 945 670

5.0 959 678

8.0 5.0 972 685

8.5 5.3 985 693

8.5 5.3 1,001 702

1.6

1.1

4.5

4.6

2.8

3.0

3.5

Employment (CMA)(000)

474

482

488

508

514

522

529

536

544

6.1 0.9

5.9 2.3

5.5 3.3

5.0 3.2

5.2 3.0

5.4 2.5

5.6 2.5

5.9 2.5

6.2 2.5

1.9 14

2.2 12.9

1.4 12.4

1.0 11.5

1.5 11.0

2.0 11.0

2.5 10.5

-Total - Single Family - Multi-Family

3,591 3,932 2,032 2,141 1,559 1,791

3,765 2,137 1,628

4,170 2,500 1,670

4,000 2,250 1,750

3,800 2,150 1,650

3,600 2,100

1,500

-Total

5,947 6,489 4,080 4,075

6,228 4,072

6,800

6,400

6,200

4,600

4,200

4,100

5,900 4,000

1,867

2,156

2,200 700

2,200 650

2,100 650

1,900 625

750

725

Unemployment Rate(CMA)(%) Inflation Rate CPI(CMA)(%)

31.6

29.1 Edmonton 8.5 7.1 5.3 4.4 910 923 648 658

Vacancy Rate (%) Apartment (CMA, Oct) Downtown Office (the City, Dec) Housing Starts (Units) City

CMA

- Single Family - Multi-Family Building Permit Value - Low

2,414

-(City) ($million) - High 688 658 787 800 *The U.S., Canada and Alberta economic growth rates are for real GDP at market price.

Sources: Actual/Estimate: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Colliers McCaaulay Nicolls Inc., Canadian Petroleum Association, Alberta Economic Development and The City of Edmonton Planning and Development Department Forecast: City Forecast Committee, October, 2001 Notes: 1. World oil prices are for West Texas intermediate crude at Chicago in U.S. dollars. 2. Natural gas prices are Alberta average market prices in Canadian dollars. 3. Numbers are for July 1of previous year to June 31 of current year.

Prepared by: City Forecast Committee, October 2001

Page 20

Edmonton Socio-Economic Outlook, 2001 - 2006

Table 2: City of Edmonton Population: 2000-2006 2000

2001

2002

2003

2004

2005

2006

0-4

38,386

38,079

38,346

38,820

39,231

39,383

39,661

5-9

41,623

40,710

39,622

38,753

38,097

38,012

37,976

10-14

42,285

42,284

42,266

42,088

41,642

40,901

40,277

15-19

45,031

45,461

45,607

45,531

45,647

45,748

45,890

20-24

56,326

56,429

56,916

58,127

59,250

60,005

60,824

25-29

52,744

53,386

54,314

54,970

55,587

56,213

56,778

30-34

52,549

52,294

52,096

52,569

53,076

53,656

54,763

35-39

56,868

55,187

53,647

51,937

50,739

50,332

50,519

40-44

57,066

57,768

57,953

58,191

57,852

56,981

55,694

45-49

47,521

49,475

51,379

53,081

54,326

55,191

56,073

50-54

38,175

39,735

40,375

41,427

43,287

45,199

47,191

55-59

28,267

29,527

31,914

33,981

35,761

37,723

39,386

60-64

24,403

24,998

25,760

26,821

27,970

29,084

30,471

65-69

23,908

23,932

24,057

24,373

24,669

25,157

25,860

70-74

20,107

20,569

20,873

21,132

21,273

21,309

21,399

75-79

15,836

16,235

16,498

16,888

17,347

17,814

18,261

80-84

8,987

9,478

10,089

10,580

11,027

11,306

11,608

85+

7,429

7,765

8,064

8,350

8,648

9,108

9,557

Total

657,509

663,311

669,777

677,619

685,428

693,123

702,185

Prepared by: City of Edmonton Planning & Development Department, February, 2001.

Prepared by: City Forecast Committee, October 2001

Page 21

Edmonton Socio-Economic Outlook, 2001 - 2006

Table 3: Edmonton CMA Population: 2000-2006 2000

2001

2002

2003

2004

2005

2006

0-4

56,423

56,106

56,647

57,519

58,305

58,690

59,257

5-9

62,754

61,551

60,097

58,948

58,096

58,110

58,204

10-14

65,562

65,746

65,902

65,839

65,335

64,362

63,539

15-19

66,347

67,159

67,503

67,557

67,893

68,253

68,726

20-24

67,458

67,763

68,527

70,187

71,748

72,853

74,045

25-29

69,495

70,568

72,009

73,102

74,125

75,140

76,093

30-34

70,783

70,672

70,643

71,474

72,338

73,330

75,061

35-39

81,625

79,471

77,465

75,190

73,636

73,220

73,692

40-44

82,300

83,553

84,051

84,622

84,356

83,295

81,609

45-49

70,655

73,785

76,844

79,599

81,687

83,219

84,765

50-54

58,392

60,875

62,048

63,860

66,909

70,080

73,384

55-59

42,124

44,136

47,857

51,148

53,994

57,058

59,629

60-64

33,438

34,374

35,528

37,121

38,819

40,466

42,512

65-69

29,584

29,702

29,946

30,427

30,883

31,582

32,544

70-74

25,041

25,696

26,157

26,549

26,795

26,914

27,098

75-79

19,073

19,619

19,989

20,521

21,131

21,766

22,367

80-84

11,709

12,382

13,219

13,907

14,536

14,943

15,379

85+

9,771

10,235

10,650

11,053

11,481

12,132

12,772

Total

922,532

933,394

945,081

958,623

972,067

985,412

1,000,676

Prepared by: City of Edmonton Planning & Development Department, February, 2001.

Prepared by: City Forecast Committee, October 2001

Page 22

combat substance abuse, reduce tobacco consumption, prevent injuries and promote mental health.

PART 2: SOCIAL OUTLOOK OVERVIEW In the January 30, 2001 Speech from the Throne, the Government of Canada announced a number of initiatives that should have significant positive impacts on the health and social well-being of Canadians. Those with particular relevance to this forecast are outlined below. *

Edmonton Socio-Economic Outlook, 2001 - 2006

For children - increased funding for the National Child Benefit, better access to services for all families and children, and changes to the laws for child support, custody, and access.

Provincial and municipal infrastructure improvements to public transit; creation of more affordable rental housing; safer water quality and improved municipal water and waste water systems; strengthened laws on toxic substances and environmental contaminants; enhanced broadband communications access (which will complement Alberta Government investments to extend high-speed Internet); and continued support for the Community Access Program and SchoolNet.

Career training - help for youth who need assistance staying in school or getting their first

Gaming has become a major source of revenue for the Province and may surpasses oil royalty in the future. About $1.37 billion was played in legal gaming in Edmonton in 1997/98, including lotteries, charitable casinos, bingo, raffles, horse racing, pull tickets, and video lottery terminals. Lottery

job, Registered Individual Learning Accounts to

revenues continue to flow into the Alberta Lottery

help adults finance additional learning, and a comprehensive labour-market strategy for persons with disabilities.

Fund, which will increase by $68 million to $838 million in 2001. For the year 2000/2001, the Edmonton Community Lottery Board received $11.7 million, an increase of $0.8 million over last year. These monies fund a variety of community projects across the city.

Focussed assistance for Aboriginals - better delivery of the basic needs for jobs, health, education, housing and infrastructure; training to increase entrepreneurial and business expertise; measures to reduce the incidence of fetal alcohol syndrome, preventable diabetes and tuberculosis; and steps to reduce the percentage of Aboriginal people entering the criminal justice system.

Initiatives to address crime problems increased emphasis on crime prevention, organized crime and gangs, cybercrime and terrorism; greater consideration for the needs of victims; added safeguards for children; and reintroduction of amendments to legislation on young offenders.

Health care - efforts to advance progress on disease prevention; innovation in primary care; funding for needed equipment; and strengthened efforts to encourage physical fitness and participation in sport, plus further steps to

Prepared by: City Forecast Committee, October 2001

This summer Edmonton hosted the 8th World Championships in Athletics and the World Triathlon Championships. Events of this scale bring considerable benefits to Edmonton. They also are increasing an already competitive market for corporate sponsorships, volunteers and to a lesser extent, special event equipment. As the growth in the number and scope of events continues, the demands on existing parkland are increasing. Some parks, most notably Edmonton's North Saskatchewan River Valley, are reaching their capacity both from an environmental and a social perspective.

Page 23

Q Edmonton Socio-Economic Outlook, 2001 - 2006 KEY SOCIAL ISSUES

create some demand for housing, childcare, and other human services.

Social Implications of Demographic Change

Where Does

Growth Come From? Alberta's Populationniil...ili

The increases in the 55-64 age group (28.1%) and the 75 age group (17.8%) will be the most significant demographic trends during the forecast period. The proportion of young people in the population is starting to decline.

HNet

It is estimated that over the forecast period in the City of Edmonton, the 0 - 9 age group will decrease by 1.4%. The 10 - 14 and 15 - 19 age groups will

change by -4.7% and +0.9%, respectively over the forecast period. This decline in the number of young people in our population will begin to have implications for schools and other agencies providing services to children. At the other end of the population spectrum, the 75+ rou iniss epectd age dmoton age group in Edmonton expected tto inceas increase by by

about 17.8%. The increase will largely occur in the

ighproorton reaan oldr,ofthecit older, central areas ofental the city and aa high proportion alone. The living women is group of this age demand for services such as health care, exercise programs, seniors housing, and aids to daily living . will continue to increase. Isolation may be a problem for some, and conflicts with adult children and other caregivers may also affect this group. The "baby-boomers", currently in their 40s and 50s, are becoming the overriding demographic group of interest. While this age group is not at present considered to be as vulnerable as are others from a social and economic perspective, the group warrants attention due to its sheer numbers. The 45 - 54 age group in Edmonton is expected to increase by 15.8%, the 55 - 64 age group, will increase by 28.1%, and the 65 - 75 age group will grow by 6.2%. These increases will have implications for specific health services used by this group, but also present significant opportunities for companies and agencies serving their needs. Social issues will include caring for ageing parents and helping to meet needs of adult children not in the workforce.

interprovIncil Migration * Not InternatkmI Mg!tion N...I 1_,-....

30 %of

Migration will will Migration

Total.9.08n......

also contribute contribute also

to Edmonton's

increasingly ethnically diverse population. In 1996, 15% of Alberta's population consisted of immigrants,

the third highest proportion after Ontario and British Columbia. In 1991, there wer In 1991, there were and British Ontario 46,785 people who Columbia. were not Canadian citizens in Edmonton's population. By 1999, there were only were only 1999, there population.of By33.3%, Edmonton's 31,161, a decrease suggesting that immigrants are becoming citizens and making their

home here. In 1996, 14% of Edmonton's population consisted of visible minority groups. Visible consisted of visible minority groups. Visible minorities comprise 10.1% of Alberta's population. The share of Canada's immigrant population born in Asia and the Middle East increased from 14% in 1981 to 31% in 1996, a considerable change from the predominantly European-born immigration of revious decades. Edmonton has the second highest number of Aboriginal people of major Canadian cities, after Winnipeg. Although Aboriginals make up only 4% of the Edmonton population, their numbers are rapidly increasing. Across Canada, the Aboriginal population increased by 24.6% between 1991 and 1996, compared to the 5.2% growth of the general population. In Edmonton, the Aboriginal subpopulation is significantly younger than than the the overall overall significantly younger population is population.

Net migration to the province and to the Edmonton area is forecast to remain. In-migrants will generally be singles and young families, and will Prepared by: City Forecast Committee, October 2001

Page 24

Edmonton Socio-Economic Outlook, 2001 - 2006

Employment and Incomes In 2000, Alberta recorded its eighth consecutive year of employmentgrowth over 2%. Across Canada, employment grew by 2.2% in 2000, somewhat slower growth than in the previous three years. Although the number of people in the workforce increased, the unemployment rate remained the same (6.8%). The majority of new jobs were full time (up 2.2%), but part-time jobs increased as well (by 2.1%). In part because of strong growth in the service sector, job creation was strongest for women and for young people aged 15 to 24. Jobs for.young people were up 4%, but the unemployment rate for them was still at 12.5% Canada-wide. When population growth is taken into account, the employment rate among core workingage males actually declined slightly.

Canadians' personal savings rate (disposable income minus consumer spending) has continually declined, to below 2% by 1999. Because of slow growth in wages over the last several years, many Canadian families have gone increasingly into debt to maintain their lifestyles. Since 1995, the consumer bankruptcy rate for Alberta has risen dramatically from the early 90s, although it has been down the last two years from the high in 1997. Positive social impacts can be expected from decreasing unemployment, low inflation, and low mortgage rates. This environment will result in increased financial independence and improved health status for those Edmontonians obtaining fulltime jobs with benefits, and those successful with small business ventures. The demand for some elements of social services may be reduced. Household Savings Rate Canada l l l ll

The number of jobs in the private sector grew by 3.9%, but public sector jobs also increased for the

second consecutive year.

The number of self-

employed persons declined for the first time since 1986, with the losses in farm employment as a major factor for the decline. Among the provinces, Alberta has shown the steadiest employment growth over the longest period. For eight consecutive years, employment has grown by more than 2%. Alberta's unemployment rate dropped to 4.8% by December 2000. Canadians' real disposable income has been dropping. Nationally, the estimated family income after tax remained essentially unchanged in 1997 for the third consecutive year, after adjustments for inflation. Apart from a modest increase in 1994, the average family income after tax declined throughout the early 1990s. The 1997 average after-tax family income was estimated at $45,605, about 6% less than in 1989, the peak year for income. Transfer payments averaged $6,474, about 10% lower than the peak in 1993, while the average income tax was $11,541, down slightly from the high in 1996. Employment grew 1.9% in 1997, while average hours worked per week increased 0.5% to 37.9 hours. The average weekly earnings in 1997 were essentially unchanged. Prepared by: City Forecast Committee, October 2001

20 E 18 14

12 21

6 4

Source:Statistics Canada

100

Total Household Debt Canada E III EM EE l

E g 80o 70

s60 2

40 30,--

20 20

t 10 0

' Source: Statistics Canada

Page 25

Edmonton Socio-Economic Outlook, 2001 - 2006 I Consumer Bankruptcies Edmonton

IllllMlll

1992

.1993 1994

1995

199

19..97

The poverty gap (what an average low income

family would need to reach the LICO) for poor families in the City of Edmonton was greater than for poor families in Canada, in Alberta and even within the Edmonton CMA. Couples with children under age 18 have the largest poverty gap. In 1995, an average low-income Edmonton family would have needed an additional $11,585 to raise their

24.8% of seniors.

199

Source: Qualo.ity of Li.feIn Canadian Communities, 2001Report.FCM

Notwithstanding the relatively positive news discussed above, the Greater Edmonton Competitive Strategy has recently raised concerns that Edmonton's local economy is not creating jobs at the rate it was just recently. Job growth has fallen to less than half the almost 6% growth of two years ago and economic growth driven by oil and gas is not expected to be sustainable.

income to the LICO level. Just-released information from the report on quality of life in Canadian

communities indicated, however, that the percentage of Edmonton families living on low incomes decreased from 21.3% in 1996 to 15.9% by 1998. In Edmonton, two-parent families earned, on average, $58,300 in 1998. Single-parent families averaged only $24,800. Between 1991 and 1998 the proportion of single-parent families in the city increased from 16.2% to 17.6% of all families. Sixty-two percent of Edmonton's single-parent

families had incomes below the poverty level in Poverty

P1997,

The income gap between rich andpoor is widening in Edmonton and across Alberta. Poverty is a factor that contributes to an increased risk of health and mental health problems, and injuries, particularly for children. About one in eight Alberta children live in low-income situations. The Government of Alberta has recently formed a committee to gather public input on the province's low-income programs, and to review to programs and supports presently provided to needy Albertans. Twenty-six percent of all Edmontonians had an income below the Statistics Canada Low Income Cut-Off (LICO) in 1995, a significant factor when compared with the figure of 20% for Canada and 18% for Alberta. Figures for some of the subgroups falling below the LICO, were more alarming:

* * *

* *

61.6% of Aboriginals. 49.4% of recent immigrants. 35.0% of youth (ages 15 to 24). 34.9% of persons in visible minorities. 32.1% of children under 14. 27.9% of women, but only 24% of men.

Preparedby: City ForecastCommittee, October2001

compared with the rest of Canada at 51.1% and Alberta at 52.7%. The numbers of families and children living in poverty in Edmonton may decrease somewhat during the forecast period, given the historically close association between the unemployment rate and the poverty rate. Consequently, the number of food bank users may level off. The food bank usage more than doubled between 1991 and 1996, but then declined in 1999.

Average Monthly Food Bank Use

mll

Edmonton

lli

20,000

18,000 16,000

Hperons I~ampers

14,000 12,000

E 10,000 800 S,000,

4,oo 2,00 0 1990 1991

1992 1993

1994 1995 1996 1997

1998 1999

Source:EdmontonGleanersAssoclation

Page26

Q Edmonton Socio-Economic Outlook, 2001 - 2006 Social Services Source of Family Income

Most families are less dependent on various forms of government social programs for financial I0Em support than they have been in recentyears.

Alberta, 1998

liillllll o 0 Governmnent Transfers

illustrates

table

following

The

the

reduced

Other

dependence of most Edmontonians on the Employment Insurance and Social Assistance programs between 1996 and 1998. % Re c e ivin g B e n efi t s 1996 1998

Husband-Wife Families Employment Insurance Social Assistance

21.0 9.2

Source

Average Monthly Child Welfare Caseloads

Employment Insurance

15.2

13.2

Social Assistance

37.2

31.6

14,00III nton

4,o0

Alberta

12,000

Non-Family Persons Employment Insurance

10.3

8.9

Social Assistance

22.8

23.6

transfers

tF. i. s

16.8 8.8

Lone-Parent Families

Government

P..

em. . . .gla..

If nd-W sba.. . Statistics Canada, 2000

8ooo0 S 6,000

(including

E.I.,

Old Age

social C.P.P., Supplements, Security/Income assistance, etc.) contributed 10.8% of the total community income of Edmonton in 1998. This

sop 2,o0o

compares to a high of 15.3% in Sudbury and a low of 6.4% in Halton, Ontario. The average for Canada is 12.8%. Edmonton is more or less in the middle of

Numbers of Individual Children Receiving Child Protection Services

the range for the 18 cities reporting.

94 95 96 Source:Alberta FamllyandSocialServce

Edmonton, 1995-2000

Albera and Cnadaiii

Economic Dependency Rates Alberta and Canada

lllllllll 7,000,

,0oo 5,oo0

0 Canada

3oo

EfAlerta

2,00

1201.0

E 15

I 199590

1996107

1997198

1998/99

1999100

10 Source: Ma'mowe Region, Children's Services, unpubl. Data, 2001

5 0 Source:Statistics

1996

Sora ttsisCanada

1997

Although child welfare caseloads in the city are increasing, they are not rising as fast as for the W province as a whole.

Preparedby: City ForecastCommittee, October2001

Housing and Homelessness The shortage of affordable housing in Edmonton[ The shortage of affordable housing in Edmonton is becoming acute.

Page27

Edmonton Socio-Economic Outlook, 2001 - 2006

The Federation of Canadian Municipalities (FCM) has raised concerns about the growing shortage of Edmonton's affordable housing in Canada. experience is no different. While the number of owner-occupied dwellings in Edmonton has increased from 123,200 units in 1991 to 148,000 units in 1999, a 20.1% increase; the stock of rental dwelling units decreased from 113,000 to 112,100. The conversion of apartments to condominiums, ageing of buildings and demolition of derelict housing are all affecting the existing affordable housing stock.

Homelessness continues as a significant problem across Canada. The Government of Alberta and Edmonton City Council jointly appointed a task force on homelessness for Edmonton. The task force will identify ways the community, private and public sectors can co-ordinate support for homeless people. The spending to provide shelter for Alberta's homeless will total $13 million this year. This includes $3 million in new money toward a public-private partnership to address homelessness, and an increase . of $500,000 for operating emergency shelters - a total budget of $10 million.

The City of Edmonton is currently preparing a LowIncome and Special Needs Housing Strategy. The strategy will document the current demand for such housing, the supply and condition of the existing housing stock, and factors influencing the construction of new housing for the needy Edmontonians. It will also describe the present legislative, policy and funding background in which the Federal and Provincial governments, the City,

Alberta's retail housing market remains strong. Increased employment and the arrival of workers from outside the province are putting more pressure In Edmonton, this is on housing inventories. reflected by the hike in the resale of homes in the $160,000 to $220,000 range. Many Edmontonians who can afford to are moving into larger and better homes. The sales of upper-end homes are up by 35% in recent months. At the same time, home sales

and community based agencies are operating. It will

in the lower cost range -

recommend a social housing policy for review by City Council.

slightly down, from 55% to about 50% of the total home sales last year. The recent trends over the past

under $120,000 -

are

three years have revealed that the price of housing in

The declining vacancy rates, coupled with increased demand and rising energy costs are driving up rents. Although incomes have shown upward trends in recent months, they are not rising as rapidly as

urban locations is increasing at a greater rate than that of outlying suburban areas. This trend is opposite to what has been predicted for decades.

rental rates. One-fifth of Canadian households spend

Edmontonians

at least half of their income on housing. Many of these are families already living below LICO. These low-income renter households, for which the number and proportion increased between 1991 and 1996 in Edmonton, may experience increased difficulty obtaining adequate shelter. Many who cannot afford housing will join the ranks of Canada's homeless.

residence for longer periods. 46% of Edmontonians had lived in their current place of residence for five years or longer in 1999, in contrast to 40.6% in 1993. This suggests that Edmonton neighbourhoods may be becoming somewhat more stable. In 1993, 77.3% of Edmonton residents who had lived in their current dwelling less than one year came from elsewhere in Edmonton, while in 1999, only 69.6% had lived elsewhere in Edmonton.

The third count of homeless persons in Edmonton (September 14, 2000) found 1,160 homeless persons in the City. Of these, 650 (56%) had no housing

have

been

living in the

same

Education

alternatives, and 510 were living in emergency

accommodations/shelters. Because there are a number of factors potentially influencing the numbers of persons counted, comparisons with the results of other surveys of the homeless are probably not meaningful.

Low-income residents have difficulty getting out of the poverty trap, in part because of the cost of obtaining additionaltraining.

Prepared by: City Forecast Committee, October 2001

Page 28

The opportunity to attain an education is elusive for a significant proportion of Edmonton families living

Edmonton Socio-Economic Outlook, 2001 - 2006

at or below the poverty level. In 1994, about onethird of persons aged 18-21 from low-income Criminal Offences Edmonton, 1995-2000 Edmonton, 1995-2000

high school, backgrounds had not completed . compared with one-quarter of their counterparts

from higher income backgrounds. Furthermore, while university participation rates rose for people from all socio-economic backgrounds between 1986 and 1994, the increase was smallest amongst those

from lower-income backgrounds.

80,000 -

0Property

"** .0. .00

The Federal

Government recently announced establishment of a

2,.00-

system of Adult Learning Accounts to help lowincome Canadians finance much-needed education.

0 Source

1996

1099

1997

2000 20

Edmonton Police Service, 2001

Crime Criminal

increased

activity

somewhat

Violent Crimes

Edmonton

Edmonton in 2000.

IIIImHilll

For all of Canada, criminal activity has shown a

1.400

consistent decline for the eight years up to 1999, the

1.200

In contrast, the total

1,000

latest figures available.

criminal activity in Edmonton rose in 2000. Violent crime rose 3.7%, to 1,392 incidents per 100,000 population. Property crimes were up 4% in 2000, due

significant

increases in fraud and counterfeiting. There were 5,514 cases of family disputes in 2000, up from 5,357 in 1997, but the

number of child abuse cases reported to police has dropped significantly - from 543 in 1997 to 441 in 2000. The following table illustrates the favourable ranking of Edmonton CMA when compared with crime rates in other western Canadian census metropolitan areas. It should be noted that Statistics Canada compiled these figures using different inclusion criteria than those from the Edmonton Police Service quoted above. The EPS figures are for just the City of Edmonton (not the CMA) and include all reported incidents.

Regina Vancouver

AGAINST PERSONS Re a 274 271 Vancouver

AGAINST HOUSEHOLDS 382 360

Calgary

236

268

Victoria

224

234

Winnipeg

203

277

O ,Edmo6kton

'-2J00P .': :

Bo 400 200

1986 Source: Quality of

1991

1996

1998

1999

2000

Life in Canadian Communities, 2001 Report, FCM;

Edmonton Police Service. 2000

Youth crime continues to be proportionally more property-oriented than crimes committed by adults. However, in 1998/99 the actual number of youth property crime cases before Canadian courts fell significantly, while the number of youth violent crime cases held steady. Over the past decade, the violent crime rate of female youths has increased 2.5 times as fast as for male youths, but the rate of male youths charged with violent crime is still almost three times as high as that for female youths. Aboriginals continue to be over-represented in the youth and adult correctional systems relative to their population. In reporting jurisdictions where Aboriginal status was known, Aboriginal admissions to custody accounted for 26% of the total admissions and 18% to probationary status. In those same jurisdictions Aboriginal youth made up only 5% of the total youth population.

22(5

Source: Statistics Canada 1999 Preparedby: City ForecastCommittee, October2001

Page29

Edmonton Socio-Economic Outlook, 2001 - 2006

0accompanied by a steady increase in the perceived Number of Young Offenders Charged

Edmonton

m miumu

safety walking alone at night and an increased use of

300

discretion when assessing personal safety.

Recreation and Leisure

400

popular trends in

__The

98:

1 ,,00,t.o,.

,CM

Source: Quality of Life In Canadian Communities, 2001 Report. FCM

The chances of an individual being a victim of either a crime against the person or a household varies with age, the person's income and where he lives, Across Canada in 1999, young people ages 15-24 reported the highest rate of personal victimization - more than twice the national average, and 1.5 times that of individuals in the next age group (2534). Generally, the risk of personal victimization

recreational pursuits are

the ageing of the population, as well as reflectingcomplex people's and busy lifestyles. people's complex and busy lfestyles.

A province-wide recreation survey was conducted in Alberta in 2000, the latest in a standardized survey approach conducted periodically since 1981. The following chart summarizes the top ten recreational pursuits, as compared to the survey results from 1996. Ten Most Popular Recreational Pursuits Edmonton, 1996 and 2000

declines as people get older with those aged 65+

reporting the lowest rate. Persons with low income are ar more oe0 likely to become victims of crimes against the person than are those with higher incomes. With...... respect to crimes against households, those in urban

500 o 0

ENNuM

ill

0hlds00

100

Walklngon atreet.

,_,__._........1.

.........-

areas were at greater risk, as are households with

Cr.n., .,c.

higher incomes.

...... At.nd sports

Percent Feeling Safe Walking Alone in the Neighbourhood at Night

event... no

199

2000

-trai,

,i,, ...............

Edmonton Source: Alberta Recreation Survey 1996, 2000 80

The top ten activities have remained relatively stable over the time span of the survey. Walking for pleasure has remained the most popular activity since the inception of the survey. The most notable changes in 2000 arose through additional choices

60 -

109,

1993

.Source:Edmonton Police

19.

1000

Seaice.

By 1999, 54% of Canadians felt that crime levels had become stable in their neighbourhoods, up from 46% in 1993. Seniors, the fastest growing age group, are generally more fearful of crime than are others in the general population. The citizen surveys conducted by the Edmonton Police Service in 1994, 1996 and 1998 indicate stabilization in the perceived levels of neighbourhood crime. This is Prepared by: City Forecast Committee, October 2001

given in the questionnaire. Low-cost healthpromoting activities that people can do spontaneously have remained popular while more

expensive activities, or activities that have to be organized in advance or require greater time commitments have dropped in popularity. Soccer and basketball are the only team sports to show significant growth, largely because of popularity among young people. Most other team sports have levelled off (ice hockey, football, ringette), or have declined somewhat (softball/baseball). Other once-

Page 30

Edmonton Socio-Economic Outlook, 2001 - 2006

popular sports to show significant decline are racquetball and tennis. According to the survey results, many Edmontonians are interested in taking up physical fitness/aerobics, golf, swimming, bicycling and tennis, if they aren't already taking part in these activities.

Why do Edmontonians Participate

in Recreation/Leisure Activities?

mmesoniII

% of Respondents

o60

of work have increased in importance recently. Perhaps in compensation for this, increasing proportions of Edmontonians cite family commitments as an important criterion in allocation of their leisure time. With respect to recreational activity, it has been found that Albertans are more active than people in Central and Eastern Canada. A survey of 87,000 Canadians found that nearly 20 million people, or about 85% of the population aged 15 and over,

participated in one or more nature-related activities during 1996. Albertans had the highest participation rate, at

89%.

Forpleasur.

.r.,,a

According to research conducted in 1999 by the

.....

Alberta Centre for Well-Being, 48% of Edmonton

h..lthl.eris l.. h

EM To do something

i..

residents were physically active on a regular basis.

In comparison, 56% of Calgarians said they were

199 1996

.of

a2000

00agreed

To be with,,iy

exercising regularly. Almost 59% of Edmontonians that they were not getting as much exercise

as they needed. Approximately 19% of the Alberta

Surey 2000, 1996,991988 Recreation Source: Alberta

population remain sedentary. Of them, 69% have no What are the Barriers to Recreation/Leisure Participation for Edmontonians? mMu mm h ll %ofRespondents 0

intention of becoming active. People with higher income and those with more education were more likely to be physically active. Those with an annual household income of less than $20,000 reported the least physical exercise.

... b.nZ OF-m~D,

019s

Source:Alberta Recreation Survey2000,1996,1992, 1988

Like the activities themselves, the factors motivating Edmontonians to get involved in recreation and leisure pursuits have remained relatively constant over the last few years. The most frequently stated reasons have to do with getting away from the pressures of work, seeking relaxed, quality time with family or nature, and for health and exercise. The costs of participating - for admission fees and for equipment and supplies - are the major factors preventing or limiting participation in recreation and leisure activities for Edmontonians. The demands Preparedby: City Forecast Committee, October 2001

Page31

Edmonton Socio-Economic Outlook, 2001 - 2006

APPENDIX I - EMONTON CENSUS METROPOLITAN AREA

Edmonton Census Metropolitan Area ..i City

Village Urban

rSecondaryHighway

BON ACCRD

Railway

Town *

Stu geon St

i .....

ighway

"GALED

County Boundary

....... Service Area Boundary

rat conarat

Couty

.............. f:.... ." DM

pd C

.. . .

Fec i,

]=County

?'on,,n,,

o2Parkland01Pg3

D., VN, , ..

""I

County

Prepared by: City Forecast Comititee, October 2001

IFI

000

BTM"

LEDUC

â&#x20AC;¢

10 kilo-tre

Page 32

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