How Canada Wins: Attracting investment to Edmonton region through co-operation

Creating Alberta’s Industrial Heartland was an optimistic move more than 20 years ago, but growth in its size and its ongoing stability continues to pique the interest of investors the world over.

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“Economies of scale in an industrial cluster matters, and as we grow the cluster (the) more competitive it becomes and the more attractive it becomes for foreign companies to want to put their investments here,” said Mark Plamondon, executive director of Alberta’s Industrial Heartland Association (AIHA).

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Alberta’s Industrial Heartland is a designated industrial zone northeast of Edmonton comprised of more than 580 square kilometres of land earmarked for industrial operations. The region isn’t new but Plamondon said over the last 10 years the area has been hitting its stride, racking up more than $45 billion in capital investment, more than 30,000 direct and indirect jobs, becoming Canada’s largest hydrocarbon processing region.

The value of a cluster

Plamondon said that part of the region’s success is the availability of several critical elements in the industrial process, specifically for petrochemical operations.

“The main differentiator between us and other economic development agencies is our focus,” said Plamondon.

His reference to focus applies not just to the geographic area or the resources that the heartland has, but also to the association’s specific mission.

“I think that given that we are specifically focused on heavy industrial investment in this geographical jurisdiction, that really helps us hone in on high-potential companies and high-potential opportunities.”

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Malcolm Bruce, CEO of Edmonton Global which similarly works to attract investment and business to the Edmonton area, said that the AIHA’s focus has earned it a strong international reputation.

“They’re globally known, so that folks like Dow and Linde and others are very aware of the value proposition that the heartland offers. And if you think about it, from low-cost feedstock to stable geology to a skilled workforce, all of that sort of in a bundle, really makes this a very attractive place for them to invest in,” said Bruce.

Another part of the heartland’s attraction for potential international investors is its emphasis on sustainability in an industry that is typically carbon-laden.

“(A) key piece of infrastructure, is the carbon capture sequestration capability in this region. So, that positions companies to not only produce low-cost products because we have low-cost feedstocks, you can also produce low-cost and low-carbon products,” said Plamondon.

Bruce highlighted the heartland as a front-runner in carbon capture for the entire province, noting too that the whole region also uses air monitoring systems to help inform the district on its operational decisions.

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“We’ve been in the carbon capture game for over 10 years, and it all emanates out of the Industrial Heartland,” said Bruce.

“In the last two years, there hasn’t been a major project announced in the heartland that is not net-zero. Be that through carbon capture or other mechanisms.”

With connectivity using CN Rail to bring products to the Port of Prince Rupert, the heartland also gives businesses in the area better access to export, specifically to the Asian-Pacific market where demand for oil and gas products is high. Ever since the economic relationship with the United States started deteriorating, Alberta and Canada as a whole have looked for other international trading partners, which access to the B.C. port provides.

History

The AIHA was founded in 1999 with the goal of attracting investment and generating business in the region. Fort Saskatchewan, Lamont County, Strathcona County, Sturgeon County and later the City of Edmonton all became municipal partners of the AIHA, offering up land to be developed for industrial operations for the broader benefit of the whole group. Fort Saskatchewan Mayor Gale Katchur discussed the heartland’s origins in an interview with Postmedia.

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“It was started by (Fort Saskatchewan’s) mayor (Ken) Hodgson at the time, and the mayor of Strathcona County at the time,” Katchur said.

“They said, ‘What if we talked about creating an area where we had strictly industrial, and we planned for it to be here well into the future.”

The founding municipalities, over time, formalized collective agreements of co-operation, allowing for expedited zoning, permitting, and the development of infrastructure to foster further growth. All of it took time but, as Katchur points out, the initial work is reaping long-term benefits as the region continues to attract more business.

“I’m going to say we went from that awkward teenager stage to an adult stage where we are now very credible with the federal government and the provincial government, and they come to us asking for information, asking us to do studies,” said Katchur.

Plamondon said how the AIHA ensures the success of the heartland comes down to three pillars:

1. Promoting project opportunities by contacting companies directly, answering questions from companies that reach out to AIHA to figure out whether “their next major capital investment makes sense in Alberta’s Industrial Heartland.”

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2. Advocating for the Industrial Heartland to all three levels of government to make the business case for investments in the area.

3. Advancing the social licence within the region by fostering communication about business and projects to participating communities, to “ensure there’s good dialogue between community and industry.”

Collaboration

Founded on principles of co-operation, the heartland has maintained its prioritization of municipal partnerships to ensure the broader benefits of the whole region, which both Katchur and Bruce emphasized.

“When it talks about the co-operation for the region to function, it really goes back to the start, where the board, at the time when it was developed, created a bylaw that said we will not compete with one another,” Katchur said.

Eliminating in-fighting allows the AIHA to advocate for the whole region, which it does in tandem with many groups, including alongside Edmonton Global.

“I just took a team from the Edmonton region over to Japan for a week. We got back 10 days ago, and (Plamondon) was part of that, along with Applied Pharmaceutical Innovation, the Edmonton Chamber (of Commerce), the Edmonton International Airport, and the tourism destination, as well as the University of Alberta. We really concentrated to showcase to our Japanese partners and allies that we are very serious about this relationship,” said Bruce.

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Whether it’s Plamondon going with Edmonton Global internationally, or representatives from Edmonton Global accompanying him on advocacy trips to Ottawa, Bruce said the two work symbiotically to make the case for the region.

Local impacts

Apart from the more than 40 businesses that have landed in the heartland, creating jobs and boosting tax revenue, the heartland also has secondary and tertiary benefits to industries outside of the heartland that Edmonton Chamber of Commerce president and CEO Doug Griffiths touched on.

The investments that land in the heartland, he said, “makes the entire region around Edmonton more economically attractive to other businesses and industries,” because it shows that large companies have faith in the viability of the area.

Bruce said the benefits run down the supply chain and feed into neighbouring communities, even the ones not affiliated with the heartland.

“The impacts on a supply chain, particularly in places like the Nisku or even in the City of Edmonton, where a company like Dow — 60 per cent of all their workforce comes out of NAIT. So it’s very important that we show this broader collaboration to be able to support the economic impacts,” said Bruce.

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But perhaps no one benefits from the heartland’s activity to the extent that the folks who live in it do. Katchur said Fort Saskatchewan is the “gateway” to Alberta’s Industrial Heartland, and as such has reaped the rewards that she says the community has grown to appreciate.

“Over the last number of years, the public perception has changed dramatically. People understand the high-paying jobs that come with these projects. They understand that there’s going to be some more traffic that we have to deal with and contend with. We have greater population growth,” said Katchur.

The side-effects of the heartland, she said, are offset by how the community benefits from having big companies as neighbours.

“It means that there’s going to be additional tax dollars that are going to provide greater quality of life for our citizens,” she said.

The business case for clusters

Bruce, Plamondon, Katchur and the billions of dollars and tens of thousands of jobs all make a strong case for the benefits of clustering services and working co-operatively. Griffiths said the surrounding region could take a lesson from the heartland and develop more clusters in different areas throughout the Edmonton region.

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“I look out at Jasper (Avenue) from the World Trade Centre here, headed to the west down to (Alberta Machine Intelligence Institute) and the U of A and to me it seems like the perfect place to have an innovation district where artificial intelligence is focal here, and then it complements the construction engineering,” said Griffiths as an example of a potential new cluster.

The key, Griffiths said, is ensuring Edmonton and the surrounding municipalities are strong individually, which helps with broader mutual stability.

“Edmonton is stronger when Spruce Grove is strong and Sherwood Park is strong, and Leduc is strong. The rest are also stronger when Edmonton is strong. So the regional capacity being a cluster of municipalities is what gives you the economies of scale to compete internationally, to attract clusters of industries.”

zdelaney@postmedia.com

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