By: RICHARD GILBERT, Journal of Commerce, May 18, 2011
The top four cities for economic growth in Canada in the next five years will be located in Saskatchewan and Alberta, according to a study by the Conference Board of Canada.
“Buoyed by the resources and energy sectors, the economies of Saskatoon, Calgary, Regina and Edmonton will post noticeably stronger growth than the other cities covered in this report,” said Mario Lefebvre, director of the Conference Board of Canada’s Centre for Municipal Studies.
According to the Spring 2011 edition of the Metropolitan Outlook, Saskatoon will lead the country with real GDP growth of 4.1 per cent in 2011.
Housing starts sprang back from a weak 2009 to hit 2,380 units last year—matching the recent 2007 peak,” said the report. “Both single-detached and multiple-unit starts rose smartly, helping to boost overall construction output by eight per cent—a strong rebound following a gain of less than 1.0 per cent in 2009.”
Population growth is projected to push housing starts higher in 2011 and 2012.
In the non-residential sector, work is expected to start on the $200 million River Landing complex in 2011.
The residential and commercial complex also involves the construction of a $30-million office building, as well as the $60 million Art Gallery of Saskatchewan.
City council has also decided to demolish the 103-year-old Traffic Bridge and build a new $30-million steel truss span with wider lanes.
The strength of residential and non-residential sectors are expected to stimulate construction activity, with an increase of 5.6 per cent in 2011, 6.9 per cent in 2012 and 5.9 per cent in 2013.
Real GDP is forecast to grow by 4.2 per cent between 2012 and 2015.
Calgary’s economy is expected to increase by 3.4 per cent in 2011 and 4.2 per cent between 2012 and 2015.
Despite a number of major projects already under way, total construction output is projected to increase by 1.8 per cent in 2011.
The latest estimates show that about $14.2-billion worth of energy-related projects are now under way in the province. Other non-residential projects that will boost construction activity in Calgary in 2011 include the $1-billion Quarry Park mixed-use development and a $1.3-billion hospital.
Housing starts are forecast to drop to 8,100 units in 2011, as strong new home prices take a bite out of demand.
In Regina, real GDP is expected to expand by 3.1 per cent in 2011 and by 3.8 per cent between 2012 and 2015.
The collapse of the domed stadium scheme in Regina has forced the city of Regina and the Saskatchewan government to consider new options for a stadium and redevelopment of 46 acres currently housing CP Rail’s container yards.
“These yards are to be relocated to what’s called a global transportation hub emerging in the city’s west,” said the report. “Indeed, development of this hub is positioned to be a significant growth driver in the medium term.”
Housing starts increased 45 per cent to 1,347 units in 2010 and are projected to moderate to near 1,280 units in 2011. However, housing starts are expected to jump above 1,400 units in 2012 and remain there for several years.
The construction industry is expected to expand 6.2 per cent in 2011 and an average of 5.6 per cent between 2012 and 2014.
Edmonton's economy is expected to rise 3.1 per cent in 2011 and 3.6 per cent between 2012 and 2015.
The Alberta government is investing $165 million in capital project in 2011, including a new police station in Terwillegar and other infrastructure projects.
Plans for a downtown arena to replace the aging Rexall Place still lack firm financial commitments.
The proposal would also see significant downtown redevelopment and a stop on a yet-to-be-built light rail transit line. Alberta has approved up to $492 million for this LRT route. Longer term, the city is weighing competing proposals from five international design teams to redevelop the City Centre Airport into a neighbourhood for 30,000 residents.
Housing starts rebounded from recession approach 10,000 units in 2010, which represents a 58 per cent increase from 2009. A pullback to near 7,600 units is expected for 2011, with starts hovering near 9,000 units per year afterwards, as population growth is expected to accelerate starting this year.
Edmonton’s construction sector declined by 24 per cent in the last two years, but is forecast to increase by 1.4 per cent in 2011.
The other Western cities covered in this report can expect moderate economic growth.