| Living in Calgary is a surreal experience these days as the economic boom continues to accelerate like a Hummer roaring down a freeway. As Albertans we are in the middle of what feels like a vast sociological experiment — a super boom that Statistics Canada describes as "China-like" in proportion.
In a September report Statistics Canada stated that Alberta is in the middle of the strongest period of economic growth ever recorded by any Canadian province. The economy has grown by an annual average of 12.7 per cent between 2002 and 2005 and our GDP has grown by 43 per cent in the same time period. That’s not far behind China — the world’s hottest economy — that is growing at an annual average rate of 14.8 per cent. Corporate profits in Alberta doubled to $53.1 billion from $23.5 billion between 2002 and 2005. Consumer spending is 17 per cent higher than in 2005 and is "on track for the best year of any province ever," says Statistics Canada. Average hourly wages in the province are the highest in Canada at $21, we have the lowest unemployment in North America and the province’s population has grown at a faster rate than any other province every year since 1996.
There’s no question the boom has been good for some Calgarians. However, an increasing number of people are in danger of being flattened by the city’s racing economic vehicle, and some have already been run over.
THE DARK SIDE
"This boom is just great for the people wanting to buy $1 million dollar houses and who don’t know what to do with all their stock options," says Gord Christie, executive secretary of the Calgary District Labour Council. "The boom is doing fabulous things for 20 per cent of our population, but for the other 80 per cent, the average, it’s sad. Eighty per cent of our population isn’t really and truly benefiting from our boom."
Calgary is rapidly becoming less affordable for people whose incomes are not keeping pace with cost of living increases. Housing prices increased by 49.6 per cent between August 2005 and August 2006. The average combined residential sale price of a home in Calgary in October was $374,269. Calgary’s inflation rate is currently running at 5.1 per cent, much higher than anywhere else in the country. According to the Mercer Human Resource Consulting 2006 Worldwide Cost of Living Survey, Calgary is now the 71st most expensive city in the world, moving up 27 spots since 2005.
While some Calgarians and many corporations are getting rich, a surprising number of citizens are just scraping by. Almost one in four (36 per cent) of employed Calgarians made less than $15 an hour in the first six months of 2006. They will make less than $30,000 before taxes this year. Fourteen per cent of Calgarians made less than $10 an hour – less than $20,000 a year before taxes.
There’s also a growing income gap between rich and poor. In 2004, the most recent statistics available, the lowest 20 per cent of income earners made an average of $13,100 a year while the top 20 per cent made an average of $152,800. The homeless population increased by 32.3 per cent between 2004 and 2006 and is now a whopping 3,436 people. This winter the City of Calgary is scrambling to come up with more space for hundreds of homeless people because existing shelters are crammed to capacity.
"There are a lot of people who are continuing to fall behind and who are not benefiting from the economic boom," says Ramona Johnston, manager of Vibrant Communities Calgary. "We see a growing income gap with people who are well off making even more and people who are not doing so well doing about the same. Maybe they’re making a dollar or two more an hour but that doesn’t outweigh the dramatic increase in the cost of living," she says.
Johnston says there’s a "mental and emotional downside" to the boom for those not benefiting.
"People feel that they’re inadequate because they’re not fully experiencing the benefits of the boom. They are struggling and on this treadmill trying to keep up with their neighbours and the wealth that they see around them."
Johnston says the economic disparity is beginning to have "a real negative impact on our sense of community."
Affordable housing is fast becoming not just an issue for low-income Calgarians, but for the middle class as well. The rental vacancy rate is currently estimated at 0.6 per cent. According to the Calgary Mortgage Housing Company there were 919 fewer apartments in 2005 than 2004, and it predicts Calgary will continue to lose apartment buildings to condo conversions and few new apartment buildings will be built. Meanwhile, the high cost of condos and houses is making ownership impossible for many.
Carrie Neilson, chair of Homeless Awareness Calgary, says Calgary’s "supercharged market" is "quickly outpacing the capacity of the average middle class to participate."
"We’ve already closed out the poor. Now we’re squeezing out the middle class. So are we going to end up with this society of absolute haves and absolute have-nots with no middle class in between? That’s my fear," she says.
Activist Brian Pincott, who is a member of Calgary Housing Action Initiative, a grassroots group addressing the housing crisis in Calgary, agrees with Neilson.
"Suddenly what used to be a good, middle class income just doesn’t cut it anymore," he says. "It’s not just a homelessness issue or a housing issue for the people at the bottom end. When you start squeezing out people who are making $40,000 a year and they can’t find housing they can afford, we’ve got a problem."
Other negative aspects of the boom aren’t as easy to quantify but are causing concern.
"I think we’re losing civility and kindness," says Neilson.
She says as an increasing number of Calgarians move into "more and more isolated enclaves or designer communities" people are becoming less empathetic and compassionate towards the down and out.
Johnston says Calgarians are also feeling an increasing amount of pressure to keep up with the richer members of the community.
"When I look at my friends, my acquaintances, I see a growing need to have more material things and a bigger house, a bigger yard and more than one car," she says.
"People who five years ago would’ve considered themselves to be very well off now look at what people around them are earning, what they’re driving and the kinds of houses they’re living in. All of a sudden they feel quite poor. It’s extraordinary, because they’re not at all poor."
Pincott recalls a comment his real estate agent made when he moved to Calgary 10 years ago.
"She said, ‘I really hope we don’t get another boom because when Calgary is in a boom the first thing that goes out the window is civility and caring for each other.’ In our rush to make hay while the sun shines, to grab onto this boom, we do have a tendency to not think much about our fellow Calgarians. We have a tendency not to think long-term," says Pincott.
Dean Neu, co-director of the Centre for Public Interest Accounting at the University of Calgary, says it would be interesting to study what the boom is doing to Calgarians’ psyches.
"Do we become more individualistic? Do we have less of a sense of community because we’ve become greedy, figuring how much money we can extract because everyone is talking about how good the economy is?" he asks.
Neu says Calgarians are avidly watching house prices and economic growth like people monitor sports scores, giving no thought to the negative consequences of the boom.
"We close our eyes to the fact that some people are actually losing. There are winners and losers in a boom," he says.
THE ANECDOTAL EVIDENCE
Fast Forward interviewed random Calgarians in late October, receiving a wide range of opinions on the boom.
Joanne Nakaska, the manager of a retail store and lifelong Calgarian, is loving the boom and says it’s "just giving people more opportunities." Nakaska has had several headhunters try to recruit her to work for other companies. She says she and her husband have been profiting from real estate investments over the last year.
Rob Rothstein says Calgary’s boom is making it a much more interesting place with a strong film festival, folk festival and better restaurants and more bands coming to town. He’s also happy with the rate of downtown revitalization.
"The city is way more vibrant, less dead," he says.
Kevin Boyce, who works at 7-Eleven and as a bartender, says he’s finally making enough money to take a vacation for the first time in two years. He says the job market is ideal for anyone willing to work.
"I’ve met a lot of people who have just moved here and have gotten several job offers. It’s an employees’ market out there," he says."(The boom) is the best thing that’s happened in this province for 20 years."
He says the only problem is the lack of rental accommodation, adding his friend just had to move to Edmonton because he couldn’t find anything in Calgary.
But many others Fast Forward talked to were less enamoured with the boom.
John Kuchera, a lifelong Calgarian aged 53, says the boom is "making everything harder."
"Everything costs more. Roads are crowded. Customer service sucks," he says.
John and his wife Beth are thinking about moving to a cheaper place in Saskatchewan or British Columbia.
A 75-year-old senior, who wouldn’t give his name, says he’s concerned about increased property taxes, crime, drugs and traffic. He’s finding the higher cost of living a challenge.
"It’s starting to squeeze me a little bit," he says, adding he still has to work to get by. "I wouldn’t break even if I had to rely on the Canada Pension Plan. I’m still falling behind even though I’m still working."
Richard, a construction worker from Nova Scotia who’s been in Calgary five years, says affordable housing is the biggest problem. He currently has three friends sleeping in his living room because they can’t find anywhere to stay.
He’s unimpressed with the mentality of some Calgarians. If he’s wearing his work clothes in Calgary, he explains, even if he has $2,000 in his pocket, security guards will approach him at grocery stores or malls and ask him to leave because they think he’s "a bum."
"There’s an attitude of snobbiness in this city. Here there’s the stigma of ‘he has dirt on his hands,’" he says.
Richard’s friend Stuart is currently living on the street while working as often as he can at temporary labour jobs. He lived in his car for five years until it was stolen. He’s also disturbed by some of the treatment he receives.
"There are a lot of arrogant people, a lot of people walk around thinking they’re better than anyone else," he says.
Both men say they feel exploited because they’re getting paid less than $10 an hour by temporary labour companies.
"They’re abusing and taking advantage of the workers," says Stuart, who jokes such companies should be called "Slaves R Us."
OBJECTIVE HERESY
Questioning the positivity of Calgary’s boom is almost heretical. There’s so much hype around its wonders. However, Todd Hirsch, economist at the Canada West Foundation, is one of the growing number of people questioning whether Alberta’s voracious boom is good for the province.
"I think it’s too carried away now. I would like to see the economy cool off," says Hirsch.
Hirsch says Alberta is growing at "breakneck speed," making it very challenging to keep up with infrastructure needs such as new hospitals, schools, public transit and roads. He’s also concerned the boom is increasing urban sprawl.
"One of the dangers in a city like Calgary (is that planners) might just say we need more roads, more subdivisions and they don’t take time to properly plan smart growth. I don’t think they stop to consider we need higher density up rather than growing out," says Hirsch.
"We’re accustomed to saying a growing population is terrific. But at the same time it leads to some growing pains when you’re welcoming this number of new Albertans into the province every year."
Calgary’s footprint is currently 480 square kilometres. Land use ecologist Brad Stelfox predicts that Calgary could grow to be more than 2,000 square kilometres, meaning that in 50 years it would push up against Kananaskis Country if it continues its current rate of growth.
However, Hirsch says Calgary’s current situation is still preferable to a faltering economy.
"We would rather have this than what was happening in Calgary in 1982 with people walking away from their mortgage because there was no hope — plummeting real estate prices, massive unemployment, people leaving the province. You don’t want that," he says.
"We are facing some problems. There’s crunches and certainly there are people whose wages are not keeping up, but I think we’d still rather be here and hoping the economy will slow a little than being (in) a recession. A lot of people in Alberta are homeless but there’s a lot more who are enjoying some really prosperous times."
TURN DOWN THE SUCK
For Albertans who are hoping that the boom will slow down there may be hope on the horizon. In an August report on housing the TD Bank Financial Group said that "recent dramatic price gains" in Calgary are "unsustainable" and the market is vulnerable to price moderation or even a drop in prices. In a September provincial economic forecast report, the TD Bank Financial Group stated that the possibility of a bust in the economy has risen to 20 to 25 per cent and the peak of Alberta’s boom has passed.
"There is no doubt that many of the ingredients of an overheated economy appear to be in place in Wild Rose Country," says the report. Report authors predict "the mood of euphoria that is pervasive in Alberta will die down significantly." For the people currently feeling left out of the positive impact of the boom that’s likely good news. |
Copyright ©2006 FFWD. All rights reserved.