Genevieve Simms
Are there opportunities in the economic slowdown?
The boom is over and bad news is everywhere. Carnage on the stock markets. People losing their savings jobs and even their homes. Here in Alberta we’re coming out of one of the most overheated growth periods the city has ever experienced. The downsides of that boom have been well-documented from the housing shortage and miserable customer service to the long work weeks and low quality of life. A bust brings bad news of its own but we wanted to take a break from the endless news of economic doom and gloom to start a new conversation: are there opportunities in this economic slowdown? What are they? Could the bust actually be a good thing for Calgary in some ways? The wallet may slim a bit in the coming months but read on for some things worth smiling about.
AFFORDABLE HOUSING
Calgary housing prices skyrocketed by nearly 40 per cent in 2006. “Builders were running at 120 per cent of their capacity” recalls Ed Jensen president of the Calgary Real Estate Board. “And guess what? They couldn’t get staff. Prices went up everything went up and it hurt affordability.” Now inventory has increased while prices and interest rates have come down putting home ownership within reach for more people. “Buyers are in the driver’s seat” says Jensen. “They can negotiate. They couldn’t negotiate two years ago.” And what about people who already own and want to move? “If your house went up in value so did the one you’re going to buy” Jensen says. “If your house went down in value so did the one you want to buy. So there’s no harm in this marketplace.”
THE RETURN OF CUSTOMER SERVICE
Customer service became a forgotten concept in recent years. Now ho-hum employees who move like molasses will be more likely to get a kick in the pants as employers find more potential workers to choose from. “That might be a little uncomfortable for a lot of workers who have had it pretty good for the last two or three years here in Alberta but for employers it’s been quite miserable actually trying to get and retain workers” says ATB Financial economist Todd Hirsch. “I think with the slowdown that is going to gradually move back into balance a little bit. That is a positive thing.”
‘INCOME-DRIVEN’ ENERGY CONSERVATION
Imagine a city of one million people reducing its ravenous energy consumption — not because of guilt nor altruistic motives but necessity. “People will become much more aware of what they’re spending their income on” says University of Alberta economist André Plourde. “This will kind of cross all kinds of things [including] energy…. Think of things like size of houses. Think of new cars. All of a sudden there’s incentives not to buy as big a car.” There are also incentives to turn down the heat switch off needless lights and drive less. Plourde calls it “income-driven” conservation and it’s likely to become the norm as budgets tighten.
REDISCOVERING OUR BACKYARD
The global economic crisis has suddenly made vacationing closer to home a lot more attractive. “We just took a 20 per cent discount on what it would cost to vacation in Alberta — particularly with Americans” says Travel Alberta’s Don Boynton referring to the current exchange rate (the Canadian dollar is currently worth about 81 American cents). Boynton says budget-conscious Americans are asking: “Can I get cheap airfare and is it reasonable when I come here to eat and sleep?” Alberta’s tourism industry he says can deliver on these requests. And Albertans themselves — responsible for about half of the $5 billion spent on tourism in Alberta each year Boynton says — have new incentives to pitch their tents in parts of the province they haven’t yet discovered.
SEEING THE BIG PICTURE
What matters in life? Fancy new toys or family and friends? “During a downturn we see a bigger picture” says Calgary historian David Finch. “We see the values of life that are more eternal and we invest in those.” Finch says the downturn gives people a chance to slow down de-stress and make new relationships. “During the boom people are flipping houses all the time but during a downturn people settle into their neighbourhoods and they get to know their neighbours because they stay longer” he says. And Alberta’s history shows that no matter how bad it gets this too shall pass. “Whatever you do don’t worry” says Finch. “Whatever the current situation is — boom or bust — it won’t last very long.”
ARTISTIC CREATIVITY
Local arts groups face a lot of uncertainty. “We probably will be suffering along with just about every other charity for disposable income” says the Calgary Professional Arts Alliance’s Dale Turri. However there are hints of hope. While an arts foundation in Ottawa recently announced it won’t give any grants next year Calgary’s city council just approved a funding increase to Calgary Arts Development (CAD) — even in the midst of tense budget cuts. “We were really encouraged by that” says Turri. As well the space crunch that’s afflicted the arts community could ease as prices come down. Another plus for artists: a downturn encourages originality. “It promotes creative thinking” says Alberta College of Art & Design (ACAD) Students’ Association president Dan Barnfield. “A downturn like the one we’re facing shows the usual way of doing things isn’t working.”
CHEAP GAS
Drivers always complain loudly when the price of gas goes up but it comes down the response is more muted. “My phone rings a lot less” says University of Alberta economist Andrew Leach. “You don’t see people throwing parties in the streets when gas is at 75 cents.” The bargain prices won’t last forever but for now they’re a nice reprieve for drivers who complained about gouging during the summer. “People weren’t as worried for their own financial situation” recalls Leach. “Now people are worried about their personal finances and the cheap gas is kind of an offsetting good thing but it’s not a perfect experiment.” Not perfect but we’ll take it nonetheless.
BOOSTED COMMUNITY SPIRIT
In hard times people come together. “Sometimes [an] abundance of material wealth can actually create a lack of community spirit” says Salima Stanley-Bhanji of Vibrant Communities Calgary. The recession she says gives people new opportunities to get involved in their communities. “During the boom a lot of people who are not struggling actually are unaware of those Calgarians who are struggling” she says. Organizations that rely on volunteers are optimistic that volunteering will increase as the economy slows. “I think with people having more time they’ll choose to spend some of that time in the things that really matter to them” says Volunteer Calgary’s Laurel Benson. “…People are more aware of the need.”
