The Next City
December 21, 1998
WHEN BRITAIN’S CONSERVATIVE ICON, G. K. CHESTERTON, NOTED early in this century that only what is local is real, he could scarcely have imagined how his words would one day apply to premillennial events in Black Diamond, Alberta. About 60 kilometres southwest of Calgary — the unicity’s continuous oozing outward makes exact measurements difficult — Black Diamond is just a ki-yi yippy from Longview, the scene of Peter Lougheed’s favorite picture of Alberta. In it, says the still revered former premier, you can see ranchland populated by cattle, the occasional cowboy, and those ubiquitous sentinels of wealth — oil well pumpers — all cast against the breathtaking backdrop of the snowcapped Rocky Mountains.
Now on weekends in Black Diamond, which only a few years ago might comfortably have epitomized a redneck Alberta town, Calgary yuppies have become ubiquitous in what was once the exclusive preserve of cowboys. They come not for the famous beef jerky, but for the ice time that has become as rare within the city limits as a popular Liberal politician. In 1998 alone, an estimated 12,500 new houses sprouted up in Calgary.
Just how those newcomers have affected the city and its surrounding communities was poignantly illustrated on the most local of levels when on a recent afternoon in the midst of hockey tryouts, volunteers noticed a problem. Among the many eastern newcomers was a boy who spoke French only. Standing alone along the boards in a strange part of his country, he was a linguistic outcast unless someone could translate. The volunteers didn’t expect finding a bilingual tongue in Black Diamond to be easy; stereotypically, it would be impossible. But then, a small voice peeped out from beneath one of the wire masks and helmets, “I speak French,” said a 10-year-old hockey player. And then, “Me, too,” from another. And another. Soon new buddies surrounded le petit Canadien, his eyes bulging at the sound of his mother tongue spoken so freely in the belly of cowboy country.
Meet the New West, spilling out from an ever more sophisticated Calgary. The city with its all-too-obvious phallic landmark, the Calgary Tower — the inspiration for Toronto’s look-alike — surges with an economic virility, which is setting the nation’s pace for fiscal, political, and intellectual change.
Calgary, whose French immersion enrolment rivals Toronto’s eight per cent (about 55,000 Calgarians speak French and En-glish fluently), welcomes hundreds of newcomers a week. In 1997, the last year for which there are statistics, Calgary’s net population growth was 23,439 — double the previous 10 years’ average, the third highest single-year migration on record, and the largest since the pre-National Energy Program boom of 1981 when Calgary found room for 31,276 more citizens. The Conference Board of Canada forecasts its annual rate of population growth to be top among the nation’s major cities for the next four years, averaging close to two per cent. At the end of 1998, Calgary’s population, excluding satellite communities, approached 815,000, a doubling in size in just 25 years, a quadrupling since the late 1950s when Calgary consisted of just over 200,000 people sprinkled along the banks of the Bow River, and 33 per cent more than Toronto’s prior to its recent amalgamation.
The recent growth is even more impressive considering the government’s simultaneous closure of the Canadian Forces base in Calgary — centrally located in the southwest part of the city — and the transfer of its 6,000 Armed Forces personnel to Edmonton. Closing a military base would wreak havoc in most communities, but Calgary barely missed a beat. Private schools bid to take over the base school, and heavy equipment soon renovated sparse military housing into $150,000 homes and turned the demolished barracks into upscale townhouses and condos. Meanwhile, neighboring towns such as Okotoks, Strathmore, High River, Airdrie, and Cochrane have doubled in size, forming a satellite commuter belt.
“They come from Vancouver because of the recession,” says Irene Pfeiffer, director of executive search for Price Waterhouse in Calgary and president of the city’s Chamber of Commerce. “They come from the East because of lifestyle, and they come from the Maritimes due to economic necessity.” Whatever the reason, they just keep on coming.
In 1997, Calgary’s economy grew at a stunning tempo — 6.8 per cent, the best of any major Canadian centre — fulfilling the Royal Bank economic forecast that “Canada will lead the G7 in growth, Alberta will lead Canada and Calgary will lead Alberta.” That white-hot pace cooled to a still sizzling 4.9 per cent in 1998, and though the authority expects growth to tail off to 2.8 per cent in 1999, that’s hardly shabby considering the world’s economic woes.
Despite the influx of job seekers, Calgary’s unemployment rate continues to fall — no major Canadian city consistently betters it. A pair of steel-toed boots and a good attitude, Calgarians commonly say, will get you $15 an hour as an unskilled laborer in a construction industry slowed only by the need for more workers. “Last year we had 60 per cent of the housing starts in Alberta,” says Mayor Al Duerr, who watched the value of building permits issued set new records in 1998. “So we know where the Alberta advantage is.”
Canadians have seen boom town Calgary before, in the 1970s when OPEC and the sudden fear of an international oil shortage had people in the city’s oilpatch fantasizing about crude fetching $100 a barrel. That boom, as westerners still vividly recall, went bust spectacularly in the early 1980s. The 1981 National Energy Program financially and emotionally gutted the city’s petroleum industry. Almost overnight, massive layoffs made tens of thousands of geologists, engineers, and drilling employees “consultants,” the code for unemployment at that time. In 1983, 11,000 Calgarians left, followed by another 9,600 in 1984. At the same time, the province tried to diversify the economic base. Boondoggles prevailed: from the banking sector to pulp mills to greenhouse cucumber farms to magnesium plants, taking with them wheelbarrows of taxpayers’ dollars.
THIS TIME, THOUGH, THE PROSPERITY IS DIFFERENT. ENTREPRENEURS — spurred by laissez-faire economic policies — are thriving.
Ralph Klein rolled back public service salaries in all sectors by five per cent and chopped overall government spending by 20 per cent. His large scale governmental layoffs hit the capital city of Edmonton hard but left Calgary virtually unscathed. Meanwhile, the province began divesting itself of the previous regime’s numerous public-private business ventures, which had soaked up $2 billion in taxpayers’ money.
To recruit industry, Klein offered industry corporate tax cuts and lowered bureaucratic barriers and regulations. The $3-billion provincial deficit — Canada’s largest per capita before Klein took over — soon vanished. By 1996, a $2.5-billion surplus was paying down Alberta’s debt load.
The Klein Revolution had its opposition. Yet compared with the battles that Ontario’s Mike Harris waged during his revolution or with those that would occur in British Columbia’s heavily unionized environment, Klein’s government had it remarkably easy. When he went to the polls in March 1997, voters returned Klein with a vastly enhanced majority — 63 seats out of 83.
Social scientists could spend careers examining this phenomenon, but University of Calgary political scientist Lisa Young explains simply that Alberta has a “homogeneity of opinion” unique in Canada. “This is not a culture of dissent. We notice that even with our students, who are far less willing than their counterparts elsewhere in the country to roll up their sleeves and indulge in vigorous debates. It’s a culture of agreement rather than disagreement.”
The corporate sector has thrived in this culture. “The economy is much more diversified than it was in the past,” explains the Chamber of Commerce’s Pfeiffer. “The banking community has made Calgary the financial centre of Western Canada. We’re not as dependent on oil and gas, although it remains a driver. We’re a major transportation centre and centre for high technology. This is a city that’s built on high technology so you don’t see the inner-city decay associated with Toronto or Montreal from a declining manufacturing sector.”
As Pfeiffer notes, the most significant local legacy of the 1988 Winter Olympics wasn’t speed skating ovals and bobsled runs but fibre optics, which attracted high-tech firms. “This city was wired long before any other place in the country.” The advanced technology sectors (information technology, telecommunications, and life sciences) have quadrupled their output to $7 billion in the past 16 years. The city’s 1,100 advanced technology companies directly employ 29,000 people — a figure matching oilpatch employment.
Manufacturing grew by an astounding 20.8 per cent in 1994 before settling down to 11.5 per cent and 8.1 per cent in 1995 and 1996, the last years for which statistics are available. Agriculture also blossomed with seven per cent growth in the past two years, primarily in hog production for Asian markets. (However, that rose’s bloom has faded: farm cash receipts are forecast to dip by three per cent in 1999.)
The economy’s healthy diversification showed in 1998. The city barely wobbled as crude oil prices plummeted to below $15 a barrel. The oilpatch generally rolled with the punch, redirecting many of its rigs to natural gas.
Calgary is Canada’s youngest major city with one-third of its residents in the 25- to 44-year-old age group. It ties Ottawa for the most university degrees per capita. The combination, says Pfeiffer, creates a sort of economic jet fuel. “Just the sheer energy of the city,” she says, appeals to investors. “You see traffic jams at 6 a.m. and people at their desks at 7. There is a very, very strong work ethic.”
Murray Smith, the province’s labor minister, describes this renewed economic vigor as “Big mountains, big space, big unicity, big Olympics, big education, big technology.”
In Calgary, size matters. But so does technique. “One guy from Edmonton told me that to get anything done there you have to phone 100 guys,” says Smith. “In Calgary, you go to the Pete [Petroleum] Club, phone 10 guys and it’s done.
“Things get done quickly here. . . . There’s always a feeling of ‘can you afford to say no to the guy at the door?’ even if the guy says he can turn lead into gold. You might say, ‘ah, bullshit’ and then, ‘well, maybe bullshit, but maybe he’s got an idea.’ Well, it turns out he knows a couple of guys, and you make a few calls and . . .
“You take big risks, but there doesn’t seem to be an attitude of failure if you go bankrupt. And there’s a culture of partnership, and understanding that the guy who works for you today might be your boss tomorrow.”
The evidence supports this yahoo, stampede-style boosterism for which Calgarians have become notorious. Says Smith: “When Dow Chemical moves its head office to Calgary, something’s going on.” Calgary now claims the head offices of 103 of the top 800 Canadian companies, second only to Toronto.
And there are probably more to come. As Smith notes: “There’s a certain Albertaness to a lot of these things. Look at the CP Rail move. [CEO David] O’Brien’s an Albertan, guys love bringing big stuff home.”
Emotions are no doubt a factor, but public policy remains the prime motivator. “Government is the enabler,” says Pfeiffer, who contrasts British Columbia with Alberta. “We’ve got a government that encourages entrepreneurialism. In B.C., the politics is driving the economy, and the NDP does not encourage entrepreneurialism.”
In other words, they’re a bunch of lefties, and right-thinking Alberta has got it right, which may sound trite, particularly to those Albertans appalled by the Klein government’s retreat from the marketplace. Still, as Smith notes, “Alberta’s GDP is now only 10 per cent below that of
B. C. They’re at $103 billion and we’re at $93 billion. We’re growing at 4.5 per cent. They’re shrinking at 0.5 per cent.”
In 1988, before the free trade agreement, British Columbia accounted for 44.5 per cent of the western Canadian provinces’ global exports, and Alberta for 33.3 per cent. Within eight years — even before B.C.’s economy sputtered — the positions had reversed. At this pace, Alberta will surpass British Columbia by the year 2001.
Ontario threw a few Alberta noses out of joint last summer by dropping its provincial income tax rate to 40.5 per cent of federal tax — 3.5 points below Alberta. But the western province still has only one high income surtax of eight per cent, while Ontario has one of 20 per cent and another of 53 per cent, and Albertans pay no provincial sales tax while Ontarians pay eight per cent. “Overall, Alberta’s taxes are still lower than Ontario’s,” says Mark Milke of the Canadian Taxpayers Federation who nevertheless points out that despite a 1.5 per cent cut in July, Alberta personal income taxes are still 5.5 per cent higher than 15 years ago.
Alberta Treasurer Stockwell Day did not take Ontario’s income tax one-upmanship lightly. He foresees Alberta eliminating all provincial income tax in about 15 years, thanks to new revenue streams such as gambling. While Day’s political opponents insist on large increases in education and health care funding, to many conservatives, an income tax-free Alberta represents a place where anything is possible.
Alberta will eliminate its net debt — that beyond the value of government assets — this year. Eliminating the outstanding government debt in the years ahead could eliminate another $1 billion in interest payments, which Day, at least in his dreams, would use to reduce income taxes. As Klein’s Calgary spokesman, Gord Olsen, told the Calgary Herald: “We are prepared to take Ontario on for the race to the bottom. If they want to lower the tax rate, we’ll lower it too.”
Alberta’s tax advantage is also huge for employees, according to Labour Minister Smith. “The difference between B.C. and Alberta is a tax saving of $8 per $100 salary at the executive level,” he says, explaining why Vancouver professionals increasingly flee east of the mountains. He also knows a “teacher from Quebec who took an $8,000 pay cut and put more money in her pocket.”
AMID ALL THIS POLITICAL ARM WRESTLING TO SEE WHO’S THE TOUGHEST free marketeer on the block, observers see another, more cerebral, Calgary. Scholars at the University of Calgary, itself not much more than 30 years old, have won a reputation for innovative intellectual development, with the political science department especially grabbing attention. Reporters and commentators increasingly refer and defer to, among others, Lisa Young, David Taras, Roger Gibbins, Shadia Drury, Tom Flanagan, Rainier Knopff, and Ted Morton. Some such as Flanagan, Morton, David Bercuson, and Barry Cooper, have become regular commentators in the Globe and Mail, Calgary Herald, and Sun Media, among others.
Flanagan — who frequently shares a byline with Stephen Harper, a former student and Reform MP, and now president of the National Citizens’ Coalition — was an ad-viser to Preston Manning from the time of Reform’s inception until the two split over ideological differences. Author of a book on the party and of a long list of articles on the need for Canada’s political right to reconcile, Flanagan established a profile as a right-wing academic long before most media outlets thought there could even be such a creature.
Morton, too, has Reform connections, most notoriously as one of the party’s two candidates in Alberta’s senator-in-waiting elections, which he won in October. That both he and Flanagan settled into their intellectual careers in Calgary should come as no surprise. People tend to gravitate to those of like minds. As Flanagan noted when reviewing a recent CBC/Calgary Herald/Angus Reid poll showing that 78 per cent of Albertans believe they have Canada’s highest quality of life and that most believe Alberta has the least government interference: “Since 1935 we’ve never had a government that could be described as left wing or interventionist. People’s perceptions match the reality.”
Calgary’s federal politics best illustrates its entrepreneurial culture in the political arena. While Central Canada has sniffed around Reform curiously but warily for most of the 1990s, Calgarians plunged in the deep end in 1993, breaking their long ties with the federal Tories and electing Reformers across-the-board. In the same way, says Knopff, the city’s culture imbues the academic community. “It was apparent to me as soon as I arrived here that there was a high sense of energy,” says Knopff, who studied at the University of Saskatchewan in Saskatoon and the University of Toronto before joining the University of Calgary’s political science department. “I got here and I was exhausted immediately.”
Knopff, a conservative, bristles when the University of Calgary is stereotyped as a hotbed of conservatism simply because some of his department’s highest profile academics also lean to the right. “That really relates to only about a quarter of us,” he insists. “We are a diverse department.” Still, he agrees that “it’s a lot easier to be a conservative academic in Calgary than it is in Saskatoon or Toronto because (a) I’m not the only one and (b) there’s more resonance out there in the community. There are connections. For example, the Property Rights Institute springs up in Calgary — surprise, surprise — which is something that wouldn’t happen elsewhere.”
Knopff and Young both point to Calgary’s history of political innovation. The city also embraces the head offices of organizations such as the Canada West Foundation (one of the driving forces behind Senate elections), the National Foundation for Family Research and Education, and the National Citizens’ Coalition.
“Of its size, it’s the most productive academic community in the country,” says Young, who does not count herself among the University of Calgary conservatives. “It’s a culture of productivity. It’s the culture of the city that influences the department.” She still can’t get over how rapidly some of the CP Rail employees who transferred from Montreal have adapted to the local culture. They may still cheer for the Montreal Canadiens when they come to town, but when it comes to politics, “they’re talking about all these regional issues as if they grew up with them.”
Some of Calgary’s intellectually conservative reputation can also be explained by newspaper reporters’ — in their attempts to be balanced — recent discovery that academia contains as many different viewpoints as society at large. And, if you want conservative thinking, what better place to look than Calgary. Morton, a constitutional and human rights expert — frequently denounced by liberals as a disgrace to academia because of his positions on gay rights and on the nation’s “French-kissing” obsession with Quebec — epitomizes the swagger and sophistication of Calgary’s conservative intelligentsia when he describes himself: “I’m every liberal’s nightmare: a right winger with a PhD.”
GROWTH, THOUGH — WHETHER ECONOMIC OR INTELLECTUAL — has its problems. Residents of the city’s established areas grumble about their taxes subsidizing the suburbs, which sprawl far beyond the existing infrastructure’s capacity. One developer, dismayed at the municipal government’s inability to keep pace with growth, has even offered to build, and pay for, a school in his new neighborhood while another developer chipped in a library. Riding high on the popularity of single family homes, the developers believe they can recoup their costs in faster sales and higher housing prices. By comparison, though, little effort has gone into rental accommodation. The vacancy rate for apartments is less than one per cent — and rents are climbing, adding pressure to what is already the nation’s highest inflation rate.
More troubling for a city that prides itself on cleanliness and affluence, Calgary has an estimated 3,800 homeless people — 45 per cent of whom are thought to be employed but unable to find accommodation — and only 800 hostel beds. Alarmed by such want in the shadow of plenty, former MP, MLA, and SNC Lavelin chairman Art Smith formed the Calgary Homeless Foundation, which this summer called upon the private sector to raise $1 million to help government, churches, and social agencies. So far, it appears on course to be another barn raising.
While nothing about Calgary’s traffic would appear terribly amiss to a Torontonian, transportation — including roads, buses, and commuter rail — preoccupied voters and candidates in last fall’s municipal elections. “The Deerfoot Trail was built to handle 100,000 cars a day, and right now it’s handling 140,000,” says Mayor Duerr of the city’s most frequently used freeway, which has ground to a halt in the past year for no reason other than volume.
Duerr — who foresees a future, much like that forecast by demographer David Foot, where municipal governments take precedence in citizens’ lives — has demanded that the province return more of the $200 million Calgarians annually pay in gasoline taxes. Either that, he says, or give the city the power to raise more taxes locally.
Klein, whose government returns a paltry $25 million — one-third of previous totals — to the city in transportation grants, has offered to increase its share of the financial burden. But that didn’t halt a two per cent property tax hike as the city threw another $75 million at the expected $500-million bill for extending the south and northwest legs of the Light Rail Transit system, buying new train cars and buses, building a new $45-million interchange, and upgrading Deerfoot Trail.
And still the city pushes ahead. Now the nation’s second largest financial centre, Calgary is “no longer competing with Edmonton,” says Pfeiffer. “Eyes are on the global economy, on global competition and opportunities.”
This global focus is pushing Calgary’s Cowtown roots into the background. While cowboy boots, jeans, and bolo ties still pass during the annual 10-day Calgary Stampede, civic boosters’ efforts to have white-collar Calgary “dress western” on Fridays during 1998’s “Year of the Cowboy” flopped. Celebrating the past is one thing, it appears, living in it is merely tacky. Casual Fridays, maybe. Cowboy Fridays? Don’t think so.
Calgarians still nod and say hello to strangers on pathways and sidewalks — a habit which alarms newcomers until they realize they are not being accosted. But Knopff wonders “how long that sense of small town connections will last.” Here, growth has never been questioned, because Calgarians have seen it as an enhancement of, not a threat to, its core values or, as Mayor Duerr calls them, civic “ethics.” Still, the risk that, in moving forward, Calgary may lose one of its most marketable economic commodities — its lifestyle — is one most of the city’s entrepreneurs would no doubt take. In fact, the day they are no longer willing to take that risk might very well be the day they discover they have lost what they were trying to save.
“I’ve seen this city get cut up and beat up and its money stolen by the feds,” says Murray Smith, revealing the resentment that remains from Pierre Trudeau’s National Energy Program era when “you couldn’t give away some of these companies. And then I’ve seen people rebuild it one brick at a time. If I was a young hot shot again, I’d pick this town.”
No doubt he would. As Young says, “The centre of gravity is moving to Calgary.”
Alan McGinty, Toronto, responds: January 22, 1999
I recently returned to Toronto after 12 years in London, England, and am still in the process of re-acquainting myself with my country. So I picked up The NEXT CITY for the first time today, your article on Calgary being the clinching factor in my purchase as I vacillated over what looked like a dull-but-worthy publication. What, I wondered for the first time since I left Canada, is happening in Calgary?
In England, one can expect sparse — and I mean sparse — media coverage of Toronto, Vancouver, Ottawa, and Montreal, in that order. Barring a major disaster or international event (such as the Olympics), no other Canadian city rates a story. In Toronto, one can expect heavy coverage of Toronto, Montreal, Vancouver, and Ottawa: Canada’s four cities with more than one million people. The “B List'” is Calgary, Edmonton, Winnipeg, Quebec, Halifax, and St. John’s.
Calgary — despite your protestations to the contrary and my own adolescent memories of hearing of it as an “up and coming” city — barely makes it on to Toronto’s radar screen. Less so Montreal’s. I needn’t tell you about the rest of the world.
Since I left in 1986, the population of the Greater Toronto Area has increased by one million. That’s 25 per cent more than the entire population of present-day Calgary, “rapid” growth notwithstanding. Just Toronto’s western suburbs in Peel Region exceed Calgary in both population and wealth. And they barely rate a mention as well.
After London, Toronto seems to me spacious, traffic-free, friendly, and charmingly provincial. Nice though. And wealthy enough to offer a wide range of luxury products and high culture — though invariably smaller, less varied, and less sophisticated than the great cities of London, Paris, and New York. And, come to that, most European capitals and big American cities.
While your local boosterism is both charming and needed for any city with pretensions to greatness, I’m afraid your article is somewhat misguided. There are simply not enough people in Calgary. In my own view, Calgary is also just too cold to ever get really big.
Realistically, there are only two possible “big cities” in Canada: Toronto and Vancouver. Neither has achieved this status yet and it is no sure thing, especially given Canada’s somewhat anaemic economic performance of late. Montreal, charming and big though it is, is both too cold and too culturally insular. Toronto is handicapped by its cold climate, but the sheer dynamism and wealth of this part of Ontario has continued to attract a steady stream of newcomers (vastly outstripping Calgary on that score, by the way). However, Toronto is barely two thirds the size of Chicago — and less wealthy per capita — and even Chicago doesn’t figure much in Europe or in Northeastern U.S./California (America’s “metropolitan centres”). If Toronto tops Chicago in population (i.e., reaches nine million), it could do it, because it would also act as the cultural and economic focal point for Canada, which by then would have more than forty million people. Chicago loses its brightest and best to New York, California, and Washington, and there’s no reason to assume this wouldn’t continue.
Vancouver’s stunning natural beauty and gentle climate means it would need far fewer people, but it would still have to beat San Francisco: a tall order. New York and Los Angeles will continue to be the only really great cities in America: Dallas and Houston are too hot, too “suburban,” and too right wing, no matter how big they get. Sao Paulo, Rio de Janeiro, and Mexico City are New York and LA’s only potential threats from this hemisphere, though I see no great medium term prospects for any of them.
As for Calgary? Dream on.