Edmonton (Alta.) - 1987-2000 - Socio-economic forecasts_1997-2002, City of Edmonton (1997-04)

Socio:Economic Forecasts 1997 -2002 City of Edmonton

April 1997

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SOCIO-ECONOMIC FORECASTS 1997 - 2002 CITY OF EDMONTON

Prepared by the City Forecast Committee April 1997 THE

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton

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*Members of City Forecast Committee

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Jong Huang (Chairman) Senior Economist Planning and Development Department

Brian Boles Manager of Planning & Evaluation Community Services Department

Dana Oikawa Senior Economic Advisor Edmonton Power

Steve Friedenthal Social Planner Community Services Department

Rick Hersack Director of Research Economic Development Edmonton

Rod Keith Parks Planner Community Services Department -

Alan Brownlee Supervisor of Forecasting Transportation and Streets Department

Sgt. John Fairweather Community and Organizational Support Edmonton Police Services

Patrick Walters Economist Planning and Development Department

Carmen Sparrow / Gary Care Planning Analysts TELUS Communication (Edmonton)

Nila Chowdhury Senior Budget Consultant Office of Studies & Budget

Don Pilling Fire Protection Engineer Emergency Response Department

Susan Ancel Director of Planning & Distribution Aqualta

Bev Burke Manager of Personnel Services Human Resources Department

Christina lonescu

Bob Mills

Cost and Value Analyst Corporate Services Department

Department Controller Asset Management & Public Works Department

For more information contact:

Jong Huang,

phone: 496-6068; fax: 496-6028 email: jhuang@gov.edmonton.ab.ca Patrick Walters, phone: 496-6070; fax: 496-6028 email: pwalters@gov.edmonton.ab.ca

Prepared by: City Forecast Committee, April 1997

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 6.5% and then to 6.0% from 2001 to 2002 because the domestic and foreign deficits are erased, providing the Bank of Canada with the ability to lower interest rates.

EXECUTIVE SUMMARY Economic Growth

The value of the Canadian dollar is expected to appreciate from US$0.73 in 1996 to US$0.75 in 1997 and US$0.77 in 1998, as the Canadian economy continues to benefit from improvement in its domestic and foreign deficits. However, the political uncertainty in 1999 over Quebec's future will cause the exchange rate to fall to US$0.73.

With political stability restored in 2000, the currency is expected to resume its upward trend and average US$0.77 in 2000 and US$0.79 in 2002.

J. The growth in Canada is expected to rise from 1.6% in 1996 to 3% in 1997 and 1998. Higher interest rates, continued fiscal restraint from federal and provincial governments, and political instability associated with a Quebec referendum can be expected to hold growth to 2.0% in 1999.

Nationally, economic growth is expected to rebound to 3.0% annually from 2000 to 2002.

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The growth in Alberta is expected to improve to 3.6% in 1997. in response to low interest rates, more stable provincial government expenditures, firming energy prices, increased exports, and increased investment in the energy and resource sectors. The provincial economy will grow at 3.8%

Oil and Gas m Oil prices are expected to decline to around

US$20.50 per barrel in 1997 from US$22.34 in

in 1998. as construction begins on several major

1996 because of weaker world demand and increased world production. Thereafter, a gradual increase in world demand should support a steady increase in prices to around US$21 in 1998-99.

However, the possible development of a major new oil field in the former Soviet Union in 2000 will substantially increase world oil production, causing the oil price to drop to US$20 before it recovers to US$21 in 2002.

resource projects. By 1999, the growth rate will drop to 3.5%. as higher interest rates and lower oil prices produce a negative effect on aggregate demand.

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The mining and forestry, manufacturing, construction. and transportation industries are expected to have an above-average growth rate over the forecast period. Therefore, these industries will experience an increased share of the total output over the period.

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Interest Rates and Exchange Rates The Prime rate is expected to stay low in the first quarter of 1997 and increase by the second quarter. averaging 6.5% for 1997 and 7% for 1998 as economic growth continuously improves. The political uncertainty in Canada with the Quebec referendum, along with the rising short-term interest rates in the United States, will cause the prime rate to edge up to 7.5% in 1999. By 2000. the forecast assumes that political stability will be restored in Canada. As a result. the prime rate will decline to

Prepared by: City Forecast Committee, April 1997

The continued growth in the Canadian and U.S. demand for natural gas is expected to keep gas prices high at around $1.60 per GJ in 1997. Starting in I 998. the expansion of pipeline capacity into Eastern Canada and Midwest U.S. markets should moderate domestic competition in Alberta, resulting in gas prices rising steadily to around $2.20 by •

2002.

Labor Market I

As the Edmonton region benefits from strong investment in northern Alberta, the Edmonton labor market is expected to improve significantly. Total

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton population in 2002, down from 73% in 1993. The population in the 65+ age group is projected to rise to 12% in 2002 from 10% in 1993.

employment in the region will increase at a rate of 9,000 per year from 454,000 in 1996 to 509,000 in 2002. The unemployment rate will continue to drop from 8.5% in 1996 to 5.5% in 2002. m The goods-producing industries will experience above-average employment growth whereas the government-supported service sector will have below-average growth over the forecast period.

Inflation •

Inflation will remain low at 2.5% to 3% over the forecast period as the economy continues to experience excess capacity.

Construction Sector Social Forecasts m Several recently announced resource related and general construction projects will have a significant impact on the construction sector in Alberta and the Edmonton region. This, together with low interest rates and increased employment, will substantially boost housing construction activity in the Edmonton region. Therefore, housing starts are expected to increase to the range between 3,900 and 4,300 units per year in the region and 2,400 to 2,500 units in the City over the forecast period.

m The growth (29%) of the 75+ age group over the forecast period will see increased demand for health services and supportive housing; social isolation may become an issue. This will occur at the same time as services for seniors are being reduced.

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x Both apartment and office space vacancy rates will decline gradually over the forecast period as economic activity and employment opportunity continue to improve, resulting in higher positive net migration.

The increases in the numbers of the 15-19 age group will present challenges for Edmonton's school boards and result in increased propertyrelated crimes.

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The improved economy, increasing numbers of jobs. and provincial and federal child tax credit developments for the working poor, will result in a decrease in the depth of pdverty.

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Population Change

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The S407 million decrease in health and social transfer funding to Alberta (between 1995 and

1998) is resulting in more specific targeting of

I The population growth will be modest. Net

services to those most in need. This will reduce the availability of preventive services, delivered and funded by the City, to middle and higher income. groups.

migration for the Edmonton Census Metropolitan Area (C.M.A.) is expected to rise from 5.600 -

persons in 1995 to the range of 4,000 to 5.000 persons per year over the forecast period. The City will receive about two-thirds of the region's net migration. Edmonton's population is expected to increase at an average rate of 1.1% per year from an estimate of 616.300 in 1996 to 657.600 in 2002.

The population in the Edmonton C.M.A. will rise from 862.400 in 1996 to 921,700 in 2002. m The population will continue to age. The population group under 45 years will account for 66% of total

Prepared by: City Forecast Committee, April 1997

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The reductions in social and health services, resulting from government restructuring and decreased funding, will continue to shift more of the burden of care for seniors and other vulnerable groups to the community and family members.

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton m The decreasing crime rates, the trend of the 1990s, has slowed. Increasing'n imbers of the 75+ age group and burdens on family for care will result in elder abuse becoming a more significant issue.

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m Evidenced by a decline in recreation participation rates, Edmontonians are expressing that they have less discretionary time for recreation and leisure pursuits.

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m However, over the same period, the public sector must deal with: • • • •

IMPLICATIONS OF THE FORECASTS

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Business Sector

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Over the forecast period, Edmonton's business community is expected to benefit from: • low inflation, •

increased spin-off activity from a number of

stabilized oil prices and gradually improved gas prices.

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continued fiscal restraint at the provincial and federal government levels, funding for education that grows at less than the rate of inflation, a health care system weakened by cuts and consolidations, municipal revenue shortfalls, modest increase in population, with an increasing proportion of seniors,_ families that are placed under greater stress, due to high youth unemployment and cutbacks in services to seniors, stable to slightly rising child welfare case loads, and

higher interest rates.

recently announced energy and resource-

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related projects, a modest recovery in housing construction,

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improved employment and income growth,

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modest population growth, supported by a major influx of military personnel, and the improvement in employment outlook.

However, during the same period, Edmonton businesses are likely to face: •

higher interest rates over the next few years,

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continued weakness in consumer spending, as individuals attempt to re-build depleted savings or reduce debt, and adjust to lower paying jobs and lingering concerns about job security.

Government and the Public Sector

Families and Individuals m Over the forecast period, Edmontonians are expected to benefit from: •

greater employment opportunities,

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continued relatively low interest rates for purchases of homes or other major items,

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decrease in the depth of poverty for the working poor.

m However. Edmontonians must also deal with: •

providing more care for aged relatives,

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potential for more space shortages in high schools,

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a health care system weakened by deep funding cuts, and

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fewer supports for families.

M Over the next few years, Edmonton's government and public sector will benefit from: • the improved economic outlook for the province and the increase in employment opportunities.

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low inflation, and

Prepared by: City Forecast Committee, April 1997

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton INTRODUCTION' PE

This report provides a forecast of major economic and social indicators for the years 1997 to 2002. The forecast will be used as a reference for the preparation of the 1998-2002 Capital Priorities Plan and the 1998 Operating Budget. Civic departments could use this document for preparing departmental business plans or strategic plans. In addition, other public agencies, citizens and businesses could use the forecasts for planning purposes.

m The City Forecast Committee undertakes monitoring and forecasting activities throughout the year. The forecast report is prepared semi-annually, one in the spring and the other in the fall.

However, as the U. S. economy presses against its capacity by exhibiting strong growth, inflationary pressures are likely to be ignited.

The forecast assumes that the U.S. Federal Reserve will move to raise short-term interest rates in 1997. As a result, the economy will slow in 1997 in response to a tighter monetary stance by the U.S. Federal Reserve.

I The forecast assumes that the U.S. economy will slow to 2.0% in 1997. It will rebound to grow at 2.5% in 1998 and 3.0% annually from 1999 to the end of the forecast period.

CANADA The Canadian economy will grow moderately in

response to slower American economic activity,

PART 1: ECONOMIC FORECAST

lagging consumer conftdence, and continued fiscal

UNITED STATES

m The Canadian economy grew by 1.6% in 1996, down from 2.2% in 1995. Economic activity was driven by exports to the U.S. as domestic demand remained weak. Consumer spending was restrained by job insecurity and high levels of consumer debt. Economic growth was further hampered by public and private sector restructuring.

As Canada sends 80% of its exports to the U.S., economic changes in that country will have significant implications for the Canadian economy.

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After six years of expansion, the U.S. economy continues to show considerable strength as it grew by 3.9% in the final quarter of 1996. The average growth rate for 1996 was 2.5%.

Despite the unemployment rate hovering around 5.0%, inflation remains modest.

I The City Forecast Committee provides this information in good faith but it accepts no warranty nor accepts liability from any incorrect, incomplete or misleading information, or its improper use.

Prepared by: City Forecast Committee, April 1997

restraint in the short term.

m The Canadian economic activity is expected to increase to 3.0% in 1997 and 1998. With interest rates at relatively low levels, businesses and consumers can be expected to restructure their debt at reduced rates. This should reduce business costs and increase personal disposable income. As a result, sales of interest sensitive items such as cars and homes may benefit. In 1999, the forecast assumes that there will be a referendum in Quebec. This will result in short term political instability in Canada and cause international money markets to place a higher

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton premium on investing here. Higher short term interest rates should re.duce aggregate demand and result in economic growth falling to 2.0% in 1999.

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The forecast assumes that political stability is restored by 2000. Thus, Canadian economic growth is expected to rebound to 3.0% in that year and remain at that rate for the rest of the forecast. The growth profile for the Canadian economy will resemble that of the U.S. since

provided the Bank of Canada with the ability to ease monetary conditions. Thus, the prime rate was lowered to 6.1% in 1996 from 8.7% in 1995. It is expected to increase slightly to 6.5% in 1997 as the Bank of Canada tightens the money supply in response to rising short-term interest rates in the United States. By 1999, the prime is expected to rise to 7.5% as the Canadian economy experiences short-term political instability and the Bank of Canada is forced to raise short-term interest rates to defend the Canadian currency. With the return of political stability the prime rate is expected to decline to 6.5% in 2000 and then 6.0% from 2001 to the end of the forecast. The short-term rates will be kept low towards the end of the forecast because the domestic and foreign deficits are erased and this provides the bank of Canada with the ability to set a monetary policy independent of the United States.

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Prime Lending Rate

the economy will continue to be dependent on exports to the United States. The economy will

receive modest support from consumer spending in the short-term, as Canadians attempt to rebuild savings that were depleted by declining real wages. In addition, consumers will continue to suffer job insecurity, as public and private sectors continue to restructure.

Further into the forecast period, declining interest rates and better job prospects will convince consumers to loosen their purse strings. Aggregate domestic demand will be boosted by increased government spending, as Governments that have controlled their finances, re-invest in the economy.

Canada's remarkable performances at lowering inflation, and cuffing its foreign and domestic deficits have combined to make Canada an attractive place to invest. As a result, the Canadian dollar appreciated during 1996 and

Prepared by: City Forecast Committee, April 1997

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The Canadian dollar averaged US$0.7334 in 1996, up slightly from US$0.7288 in 1995.

The exchange rate appreciated sharply during the period September 1996 to November 1996; rising from US$0.73 to US$0.75 as foreign investors were impressed by Canada's strong economic fundamentals. The sharp increase in the exchange rate provided the Bank of Canada with the ability to further cut short-term rates.

The forecast calls for the dollar to average US$0.75 in 1997 and US$0.77 in 1998 as the economy continues to benefit from

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton improvement in its domestic and foreign deficits and easing of risks associated with the possible separation of Quebec from Canada.

However, the political uncertainty in 1999 over Quebec's future in Canada causes the exchange rate to fall to US$0.73. With political stability restored in 2000, the currency resumes its upward trend and averages US$0.77 in 2000 and US$0.79 in 2002.

lower interest rates and the concomitant increase in consumption will merely offset the reduction in non-residential construction. As a result, the economy will grow at 3.5% in 20002001 and 3.2% in 2002.

Economic Growth 5

Alberta & Edmonton MAlberta D Edmonton

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Notwithstanding the much anticipated return of

Iraqi crude to world markets in December

• ALBERTA The Alberta economy will out perform the national economy, as it benefits from strong investment in the resource sectors.

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The provincial economy grew at 2.4% in 1996 up from 2.3% in 1995. Economic growth. in Alberta, is expected to increase to 3.6% in 1997, in response to low interest rates. stabilizing provincial government expenditures. firming energy prices, increased exports, and strong investment in the energy and resources sectors. Economic growth will increase to 3.8% in 1998 as construction begins on several major resource projects. By 1999, the growth rate will drop to 3.5% as higher interest rates and lower oil price produce a negative effect on aggregate demand. By 2000, some projects are completed or nearing completion and thus,

Prepared by: City Forecast Committee, April 1997

1996,. severe winter weather and low inventories combined to drive oil prices up sharply at year end. With West Texas Intermediate (WTI) trading in the U.S.$25 to $26 per barrel range throughout much of December, the average price for 1996 rose to U.S.$22.34. However, a break in the weather in January 1997 saw the re-emergence of market fundamentals and a decline in prices.

Weak growth in world demand, increased production gains in non-OPEC countries, continued lapses in OPEC discipline and the full impact of the "new" Iraqi supply are expected to soften the WTI price to around U.S.$20.50 per barrel in 1997. Thereafter, the price outlook will be shaped by a gradual increase in world demand and the possible development of a major new oil field in the former Soviet Union. Consequently, the current forecast calls for prices to firm somewhat in 1998 and 1999, before softening again in 2000 with the assumed introduction of substantial new volumes of non-OPEC oil.

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton

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Budget and announced by the Alberta Government in November, 1995, is expected to stimulate about $25 billion investment in oil sands projects by 2020. These projects, if all proceed, will create about 44,000 new jobs; a majority of the jobs will be in Alberta.

1.1111111111111N111 m Faced with too much shut-in gas and insufficient pipeline capacity to move it to the strong U.S. Midwest market, Alberta gas prices suffered from increased domestic gas-on-gas competition and remained weak throughout much of 1996. However, with the onset of frigid temperatures in November, gas prices rose sharply, raising the annual average price to $1.54 per GJ. Over the coming year, the resurgence of the more accessible U.S. West Coast markets and the reduced Alberta storage levels caused by the prolonged cold spell are expected to sustain gas prices beyond the winter months. Moreover, starting in 1998, the addition of expanded pipeline capacity to the Eastern and Midwest markets should moderate the level of gas-on-gas competition within the province. Therefore, continued growth in Canadian and U.S. demand is expected to prompt a further increase in natural gas prices to around SI.60 per al in 1998, with prices rising steadily thereafter to around $2.20 by 2002.

Despite efforts at diversification, the provincial economy will continue to rely on energy and forestry developments. Reduction of the machinery and equipment tax, contained in the 1996-97 Alberta Budget, will continue to stimulate investment in the province. The change of the royalty and tax regimes to a uniform and generic measure for the oil and gas industry, contained in the 1996-97 Federal

Prepared by: City Forecast Committee, April 1997

E The following are some major resource related projects that are proposed or under construction, which will have a significant impact on economic activity in Alberta and the Edmonton region: I. Imperial Oil plans to spend $1.3 billion to expand its in-situ operation at Cold Lake between 1996 and 2000.

Shell Canada plans to spend $1 billion on the development of a mine and extraction plant in the Fort McMurray area.

Construction will commence in 1998. and finish in 2002.

3. Suncor plans to spend $320 million over a three year period on the expansion of its operations at Fort McMurray and $336 million on a new oil sands project.

4. Syncrude expects to spend $2 billion over the next ten years on oil sands development.

5. Grande Paper Alberta plans to construct a $900 million pulp and paper mill in the Grande Prairie area.

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 12. Broken Hill Properties plans to build a $750 million diamond mine in the North West Territories. The mine should create 1,000 construction jobs and 830 permanent jobs over the mine's 25 year life span.

6. Dow Chemical Canada plans to spend $200 million to expand its ethylene plant at Fort Saskatchewan, which could create 400 to 500 construction jobs.

7. Nova and Union Carbide plan to invest $825 million expanding the existing ethylene production complex at Joffre; Union Carbide plans to build a $270 million polyethylene plant at Prentiss (near Joffre) over the next four years. These two projects are expected to create 900 construction jobs and 230 permanent jobs.

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8. Nova plans to spend $400 million on another ethylene derivatives plant at Joffre.

Work is expected to commence in 1998 and last unto 2000.

Alberta's personal saving rate has dropped almost in half since 1985. As a result, consumer spending will be restrained as individuals attempt to re-build their savings or reduce their debts. The provincial economy will be mainly driven by exports of petrochemicals, manufactured goods, forest products and energy products to the U.S. and investment in the resource sector. The goods-producing sectors and the private-service-producing sectors will experience above average growth.

The forecasts assume that the worst of the

provincial cuts are over. As a result, government restraint will not retard economic growth.

9. Alberta BioClean Fuels plans to spend $535 million on the construction of an automotive fuel additive plant in Strathcona County.

Construction is expected to last from 1997 to 1999.

Alberta Savings Rate 20

10. AT Plastics Inc. plans to spend $120 million to expand its Edmonton polymers plant.

Construction will be completed in 1998.

The expansion will create 50 to 200 construction jobs. When completed, the plant will employ 40 additional full-time workers and increase its production by 70%.

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11. Diashowa-Marubeni International Ltd. proposes to invest $900 million to construct a lightweight coated paper mill with an annual capacity of 300,000 tones. This project is expected to create 300 direct jobs and 2,000 person-years of employment during construction. They are also planning to upgrade their High Level sawmill for value added lumber production and a wood chipping facility to process coniferous pulp logs.

Prepared by: City Forecast Committee, April 1997

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Net migration to Alberta from other provinces and countries is expected to average 20,000 persons in 1997, up from 18,000 in 1996. In 1998 and 1999, the provincial unemployment rate will be lower than the national rate as the Alberta economy will have an above average performance. Therefore, net migration should increase to 22,000 in each year. Net migration

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton 3. The move of 3,500 military personnel and their families to Edmonton Garrison from Calgary and Chilliwack will be facilitated by $100 million for construction at the Base.

The Edmonton Garrison is expected to have an annual economic impact of $500 million in the region.

should fall to18,000 in 2002, as the pace of employment growth slackens.

Net Migration Alberta

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4. The Edmonton Concert Hall Foundation is spending $41.5 million to construct the Francis Winspear Centre for Music.

Construction is expected to be completed in 1997.

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EDMONTON The Edmonton region's economic growth will mirror the province's as the region benefits from investments in resource-based activity in Northern Alberta.

1.1 In addition to the investment projects in the energy and forestry sectors, as mentioned in the preceding section, the following construction projects will have significant impact on the Edmonton Economy over the next five years:

I. TransAlta Enterprises will spend $73 million to build a garbage composter plant at Clover Bar over the next three years. This project will generate 400 construction jobs and 50 permanent jobs.

2. The provincial government and the City will spend about $70 million in 1996-98 to extend Anthony Henday Drive from Stony Plain Road to Yellowhead Trail and Whitemud Drive from 17th Street to Highway #I4.

Prepared by: City Forecast Committee, April 1997

5. The consolidation of all scheduled passenger flights at the Edmonton International Airport and construction of the terminal in 1997 is expected to increase traffic from 1.9 million passengers to about 2.7 million at the airport. The construction of the airport will cost $170 million to $250 million over the next five years.

6. Camrose Development Ltd. is planning to build a $250 million retail complex on a 300 acre site at 23 Avenue and Calgary Trail.

About 3,500 construction jobs will be created over the next five years. The project is expected to start in early 1997.

7. A multi-use $18 million building complex is being built by Reminton Development Corp.

in a west Edmonton industrial park between 181 Street and 184 Street.

8. Carlson Projects North has started building a warehouse distribution center in the west end of Edmonton. About 50 construction jobs will be created. They are also constructing a $2.3 million hotel complex„ in Sherwood Park.

9. Fonorola and Ledcor Industries will be hiring 90 workers based in Edmonton to lay a fiber optic network from Edmonton to

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Toronto along the CNR tracks. The project will cost $120 million.

10. Cambridge Shopping Centers Ltd. is planning to spend $8 million to improve Southgate Mall and another $2 million to renovate Heritage Mall.

Population growth will be modest.

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11. Dorsett Hotels and Resorts International plans to spend $22 million to convert the Cambridge Building at Jasper Avenue into a 183 room Radisson Plaza hotel.

12. The Bay Building at Jasper Avenue will be renovated to house Alberta World Trade Center and Craig Broadcasting System's new TV station. The station will cost $9 million and create 135 permanent jobs.

13. The Federal/Provincial Municipal

Infrastructure Program will be extended for one more year under which the City is estimated to get $25 million for public works which will create 400 jobs in 199798.

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The net migration to the City of Edmonton was estimated at -3,300 persons in 1996 up from -11,000 in 1995 and -12,000 in 1994. Over the forecast period, the regional and provincial unemployment rates are expected to decline relative to the rest of Canada as labor market conditions improve in the province. In addition, continued fiscal restraint in the rest of Canada will combine with improved Alberta labor market conditions to attract would be job seekers from other provinces to Alberta and the Edmonton region. Net migration to Edmonton is forecasted to total 3,000 annually from 1997 to 1999 and decrease to 2,500 annually for the rest of the forecast period.

Similarly, net migration for the Edmonton

Census Metropolitan Area (C.M.A.) is expected to average 5,000 persons annually from 1997 to 1999 and decline to 4,000 persons annually, for the rest of the forecast.

Edmonton Net Migration

14. CAE Aviation was awarded a $135 million contract by the Canadian Department of National Defense for avionics updates of CC130 Hercules Aircraft.

City and C.M.A. fl

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15. Telus Corporation is spending $30 million on the construction of a fiber optic network in Edmonton's Rhatigan Ridge and Greenfield neighborhoods. Construction is expected to be completed in 1997.

16. All Weather Windows is building a $10.3 million factory for manufacturing windows and doors at 184 Street and Yellowhead Trail. It will employ about 1,000 people.

Population

Prepared by: City Forecast Committee, April 1997

Edmonton's population declined from 627,000 in 1993 to 616,400 in 1996 as negative net migration exceeded positive natural increase.

However, the expected positive net migration will result in population growth over the next six years. Edmonton's population will increase by 1.1% per year from an estimate of 616,400 in 1996 to 623,900 in 1997 and 657,600 in 2002.

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton

Population in the Edmonton C.M.A. will also rise by 1.1% a year from 862,400 in 1996 to 873,200 in 1997 and 921,700 in 2002.

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Population Distribution My of Edmonton 01993 1_ IN2002

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Edmonton Population City and C.M.A.

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Continued government restraint will act as a drag on the region's overall performance in the short-run. Activity in the goods-producing and private service-producing sectors will be supported by energy and forestry developments. In addition, the transfer of 3,500 military personnel to the Canadian Forces Base in Edmonton will add a further stimulus to the Edmonton economy

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The total value of all goods and services in the Edmonton economy is expected to grow by 3.6% in 1997, as the region benefits from strong investment activity in northern Alberta.

The forecast assumes that the Edmonton region would continue to function as the trade and

E The average age of the City's population will

continue tc climb as the "baby b6omers" (those born between 1947 and 1967) age. The population in the under 45 age group is expected to account for 66% of the population by 2002 down from 73% in 1993. The changing demographic composition will have important implications for the real estate market, since the percentage of the population in the 25-34 age group (first time home buyers) is expected to fall while that in the 35-44 age group (move up market) is projected to remain constant. The share of the population aged 15-24 (labor market

entrants) is expected to be 15% by 2002, the same as 1993. The population share in the 0-14

service center for the oil and gas industry and northern Alberta. As the planned projects enter

age group (elementary school) is expected to decline from 21% in 1993 to 19% by 2002.

Finally, the percentage of individuals in the 65+ age group (retirees) is projected to grow to 12% in 2002 from 10% in 1993.

the construction phase in 1998 and 1999, economic growth is expected to increase to 3.8% and 3.7% in each of those years, respectively. The pace of economic growth will slacken to 3.0% by 2002 as projects are completed.

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Prepared by: City Forecast Committee, April 1997

The forecast expects total output in the Edmonton region to increase by 23.0% between 1996 and 2002. Mining and forestry(37.2%), manufacturing(27.2%), construction(30.9%), and transportation(36.0%) industries are expected to

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton produce above average growth rates. As a result, these industry experience an increase in their share of total output over the forecast period.

Whereas, agriculture(10.4%), trade(21.0%), finance(22.3%), community, personal and business services(15.5%), and public administration(12.4%) will grow at or below the overall growth rate and their share of total output should decline.

The forecast expects total employment in the Edmonton region to increase by 12.1% from 1996 to 2002. Mining and forestry(26.1%), manufacturing(22.1%), construction(19.4%), transportation(18.0%), and trade(16.7%) industries are expected to have above average growth rates.

Consequently, these industry divisions will increase

their share of total employment over the forecast period. The remaining industry divisions should grow below the regional average and should suffer a decline in their share of total employment.

Labor Market

Employment growth should exceed labor force growth as the region benefits from economic activity in northern Alberta.

The total employment in the Edmonton C.M.A. was estimated at 454,000 persons in 1996. an increase of 1,000 over the 1995 estimate. The forecast calls for employment to grow by 9,000 persons to 463,000 in 1997, as the region benefits from strong investment in northern Alberta. By 1998, total employment will average 472.000 persons and this will increase to 509,000 persons by 2002. z

The employment growth in the region will track that in the province. The goods producing industries will experience above-average growth rates whereas the government supported service sector will grow below average.

Prepared by: City Forecast Committee, April 1997

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Share of Total Employment Edmonton C.M.A.

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Industry

I

The unemployment rate is expected to fall to 8.0% in 1997, down from 8.5% and 8.9% in 1996 and 1995, as employment growth outstrips labor force growth. The forecast expects employment growth to be slightly larger than labor force growth throughout the forecast period. As a result, the unemployment

12

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton rate should continue to decline to 5.5% by .,• , 2002.

3 2.5

Unemployment Rate 12

E eeu

—Edmoatoa-CJILA--

10

a.

11

2 1.5 1

8

0.5

6

0

4

Inflation Rate - CPI Edmonton C.M.

• • • •IllII••II• •• •• • • II • • • 94 95 96 97 98 99 0 1 2 Year

2 0 94 95 96 97 98 99 0 1 Year

2

Construction Inflation Inflation will remain low over the forecast period as the economy experiences excess capacity.

The recovery in the construction sector will continue in 1997 and for the rest of the forecast period.

35

I

The economy, over the forecast period, is expected to experience positive growth.

However, the growth will not cause undue inflationary pressure because the economy will continue to experience excess capacity. In addition, a stronger Canadian dollar should keep imported inflation low. Therefore, Edmonton's inflation will rise modestly to average 2.5% in 1997 from 2.2% in 1996. The

rate is expected to increase to 3.0% in 1998 and 1999 before declining to 2.5% by 2002. As a result, the region's inflation rate remains within the Bank of Canada's target range of I% to 3 % .

The construction activity in Edmonton, during 1995 and 1996, was restrained by excess supply in both residential and non-residential markets.

High levels of housing construction in 1993 coupled with weak demand stemming from relatively high interest rates, lagging employment income growth, and low population growth resulted in a large inventory of unsold houses. As interest rates fell sharply in 1996, home ownership became very affordable and as a result, the sales to listing

ratio for re-sale housing increased to 49% in 1996 from 38% in 1995. The number of re-sale homes sold in 1996 increased by 30.2% to 11,566 units, as buyers took advantage of low interest rates and affordable house prices. The arrival of the final batch of military personnel at CFB Edmonton, in 1997, should add to the demand for off-base civilian housing.

The building permit values increased to $407 million in 1996 from $371 million in 1995.

This reversed a four year trend of declining permit values. The forecast calls for building

Prepared by: City Forecast Committee, April 1997

•

• 13

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton permit values to range between $450 and $550 million in 1997 and iiicrease to between $500 and $600 million per year over 1998-2002.

addition, a significant amount of industrial space is obsolete and in need of upgrade. The same applies to the institutional sector where the Edmonton Public School Board reports that it requires about $80 million to upgrade 37 aging schools.

Building Permits City of Edmonton

m

Edmonton's housing starts totaled 1,935 units in 1996, up 42 units from 1995 but well below the 1993 level of 4,235 units. The increase in

building activity in 1996 stopped a three-year decline in housing starts. With an improvement in investment intentions, low interest rates, positive net migration and a stronger labor market, housing starts should increase between 1997 and 1999 to 2,500 units annually.

Housing starts will fall to 2,400 units annually over the rest of the forecast period.

Total housing starts in the Edmonton C.M.A. was 3,638 units in 1996 up 556 units from 1995. The forecast expects housing starts to total 4,300 units in 1997 and decrease to 4,000 units annually in 1998 and 1999. By the end of the forecast period, housing starts will decline to 3,900 units.

In the non-residential market, construction activity was concentrated in the industrial sector, where the average vacancy rate was 6.5% in 1996 up from 6.2% in 1995. This activity was driven by strong demand for warehousing space by firms active in northern Alberta. Construction activity in the industrial sector should continue in 1997 as the inventory of industrial space remains relatively low. In

Prepared by: City Forecast Committee, April 1997

Real Estate Market Both apartment and office space vacancy rates will decline. go

The apartment vacancy rate averaged 7.6% in October 1996, down from 10.2% and 8.9% in 1995 and 1994. This skips a six-year trend of rising vacancy rates. The reduction in the vacancy rate is attributable to positive net migration and the conversion of apartments to condominiums.

m Edmonton's vacancy rate is forecasted to average 6.0% in 1997 and trend downwards to 4.0% by 2002 as Edmonton experiences improved labor market conditions and positive net migration. z The vacancy rate in the downtown office market increased marginally to 16.9% from 16.3% in 1995. The downtown office market in 1996, benefited from provincial economic growth as the number of businesses in this area

14

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton increased from 2,093.:. 2,238. However, this growth was not enough to completely offset the negative effects of public and private sector restructuring on the office market.

Consequently, the office market experienced its sixth consecutive year of negative absorption.

Vacancy Rate 18

City of Edmonton

DApartment 111Office Space

15 512 • 9

•

III

rrr

• 6

Office Space Absorption

3

City of Edmonton

0

90 91 92 93 94 95 96 97 98 99 0 1 2 Year

Edmonton Forecast Risks There are downside risks to the forecast.

The downtown office market will be affected by the possible conversion of current office space to other uses as owners attempt to add value to their properties. The expected conversion of the Centennial Building to a senior citizens condominium and the planned conversion of the Cambridge Building to a hotel are examples of this. It is also expected that space will be released to the market as public sector leases expire. This should place upward pressure on the vacancy rate in the short term.

I

The forecast calls for the downtown vacancy rate to fall to 15.5% by December 1997 and then decline continuously to 13.0% by 2002 as the downtown experiences positive absorption rates.

•

The forecast assumes that the worst of the public and private sector restructuring is over.

If these organizations continue to restructure the forecast should be revised downwards.

•

If world oil prices fall far below US$18 over the forecast period, the planned investment in the energy sector will be significantly curtailed and provincial government budget revenues will be reduced. As a result, economic activity in Alberta and Edmonton will be slower.

The Canadian forecast assumes that interest rates will stay relatively stable over the forecast period. This assumption could be violated by the following events:

I. fear of higher inflation rates in the U.S.; 2. continued political uncertainty over the future of Quebec; 3. a much lower than forecast Canadian dollar; and

Prepared by: City Forecast Committee, April 1997

1

5

•

.

.

.

•

•

Socio-Economic Forecasts, 1997- 2002, City of Edmonton • a higher than forecast federal budget deficit. m Any or a combination of these events will exert pressure on the Canadian dollar and thus force the Bank of Canada to increase interest rates.

Higher than the forecast interest rates will curtail economic activity and result in a lower growth rate.

'There are upside risks to the forecast.

Unexpected increases in provincial revenues may allow the Alberta government more fiscal room to reduce provincial taxes or increase spending or a combination of both. If this scenario materializes, Alberta economic growth and local employment will be higher than the forecast.

•

go

If the anticipated oil sand and other resourcesrelated projects proceed earlier than expected, economic growth in Alberta and Edmonton over the next five years will be higher than the forecast.

z A much higher than forecast Canadian dollar which will allow the Bank of Canada to lower interest rates further than forecast.

• Prepared by: City Forecast Committee, April 1997

16

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 1

.I°

Selected Economic Forecasts Forecast

Actual

Indicator

1994 1 1995 I

1996

1997

I

1998 I 1999 I 2000 I 2001

1 2002 _

U.S.A., Canada and Alberta World Oil Prices (U.S. $/Barrel)

17.10

18.40

22.34

20.50

21.00

20.50

21.00

21.00

20.00

1.90

2.00

2.10 ,

2.20

1.72

1.25

1.54

1.60

1.75

U.S.A.

3.5

2.0

2.5

2.0

2.5

3.0

3.0

3.0

3.0

Canada

4.6

2.2

1.6

3.0

3.0

2.0

3.0

3.0

3.0

Alberta

4.4

2.3

2.4

3.6

3.8

3.5

3.5

3.5

3.2

Prime Lending Rate (%)

6.9

8.7

6.1

6.5

7.0

7.5

6.5

6.0

6.0

Exchange Rate (U.S.S/Can$)

0.73

0.73

0.73

0.75

0.77

0.73

0.77

0.78

0.79

Net Migration (Alberta) (000)

6.0

Alberta Natural Gas Prices ($/G.J)

Economic Growth Rate (/o)

18.3

18.0

_

20.0

22.0

22.0

20.0

18.0

18.0

5.0

5.0

5.0

4.0

4.0

4.0

3.0

2.5

2.5

2.5

Edmonton Net Migration - C.M.A.(000) - City (000)

Population. C.M.A. (000) - City (000) Economic Growth Rate CYO

(6.9) (12.0)

(5.6) (11.0)

0.5 (3.3)

3.0

3.0

855

856

862

873

884

894

904

913

922

621

615

616

624

631

639

645

651

658

N.A.

N.A.

2.2

3.6

3.8

3.5

3.4

3.5

3.0 509

Employment (C.M.A.)

439

453

454

463

472

481

490

500

Unemployment Rate (C.M.A.) (cs%e)

10.4

8.9

8.5

8.0

7.5

7.0

6.5

6.0

5.5

3.0

2.8

2.8

2.5

Inflation Rate - CPI (C.M.A.) (%)

1.6

2.0

2.2

2.5

3.0

Vacancy Rate (City) CYO 8.9

10.2

7.6

6.0

5.5

5.0

4.5

4.0

4.0

17.3

16.3

16.9

15.5

15.0

14.5

14.0

13.5

13.0

• Total

3,151

1,893

1,935

2,500

2,500

2,500

2,400

2,400

2,400

- Single Family

1,690

1,130

1,421

1,900

1,900

1,900

1,800

1,800

1,800

- Multi-Family

1,461

763

514

600

600

600

600

600

600

5,006

3,082

3,638

4,300

4,000

4,000

3,900

3,900

3,900

- Single Family

3,225

2,159

2,944

3,500

3,100

3,100

3,000

3,000

3,000

- Multi-Family

1,781

923

694

800

900

900

900

900

900

Apartment (Oct) Downtown Office (Dec)

Housing Starts (Units)

City

C.M.A. - Total

Building Permits (City) - Low ($million)

- High

443

371

407

450

500

500

500

500

500

550

600

600 _

600

600

600

Sources: 1. 1994-96 actual: Statistics Canada, Bank of Canada, Canada Mortgage and Housing Corporation, Colliers Macaulay Nicolls Inc., Canadian Petroleum Association, and Edmonton Planning and Development Dept.

2. 1997 - 2002 forecasts: City Forecast Committee, April 1997.

Prepared by: City Forecast Committee, April 1997

17

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 2 Population Forecasts, 1995-2002: City of Edmonton Age Group

1993

1995

1996

1997

1998

1999

2000

2001

2002

Actual 0-4

47,045

43,862

42,729

42,450

42,730

42,369

42,091

41,919

41810

5-9

44,412

42,574

42,244

42.444

41,960

42,035

41,636

41,073

40,744

10-14

39,730

40,396

40,798

41,131

41,202

41,206

41,705

41,890

42,052

15-19

38,592

38,774

40,069

41,497

43,153

44,777

45,478

46,232

46,535

20-24

55,804

49,754

47,391

46,992

46,615

47,104

48,505

50,155

51,532

25-29

60,367

53,157

52,532

53,258

53,636

52,896

51,728

50,122

49,645

30-34

64,305

58,920

55,641

53,333

51,116

49,325

48,879

49,300

49,941

35-39

58,171

58,622

59,330

59,338

59,085

58,574

57,021

54,502

52,154

40-44

45,399

48,810

50,806

53,062

55,247

56,818

57,763

58,932

58,906

45-49

35,556

38,395

40,118

41,358

42,847

45,210

47,450

49,693

51,892

50-54

27,921

28,899

29,767

31,608

33,436

34,960

37,026

38,882

40,078

55-59

24,705

24,465

24,666

25,154

25,903

26,835

27,477

28,448

30,211

60-64

23,954

22,595

22,080

21,976

22,040

22,103

22,390

22,699

23,147

65-69

21,049

21,540

21,692

21,564

21,371

21,055

20,609

20,249

20,146

70-74

16,449

18,074

18,650

18,984

19,380

19,775

20,091

20,291

20,170

75-79

10,952

11,718

12,509

13,445

14,282

15_218

15,808

16,330

16,609

80-84

6,966

8,164

8,873

9,188

9,633

9,919

10,357

11,042

11,830

85+

5,222

6,153

6,674

7,148

7,671

8,332

9,026

9,637

10,194

626,999

614,871

616,369

623,931

631,308

638,511

645,038

651,396

657,595

13,300)

3,000

3,000

3,000

2,500

2,500

2,500

4,798

4,562

4,377

4,203

4,027

3,858 I

3,699

Total Net Migration Natural Increase

(11,000) 5,178 I

Prepared by: Planning and Development Department, April 1997.

Note: Population is for spring of the year

Prepared by: City Forecast Committee, April 1997

18

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Table 3 , Population Forecasts, 1995-2002: Edmonton C.M.A. Age Group

1991

1995 ,

1996

., 1997

1998

1999

2000

, 2001

2002

Actual 0-4

66,830

58,533

56,399

56,145

55,959

55,920

55,942

56,100

56,362

5-9

65,570

63,153 ,

62,623

61,531

60,531

58,967

57,384

55,597

55,244

10-14

58,720

62,539

63,287

63,409

63,058

63,280

63,143

62,936

61,770

15-19

57,780

61,694

62,637

63,999

65,736

67,123

68,221

69,182

69,246

20-24

69,075

65,473

65,480

67,065

68,689

70,583

72,264

73,395

74,662

25-29

80,290

67,037

67,648

68,535

69,090

69,295

69,088

69,519

70,937

30-34

85,180

77,080

72,825

69,585

66,699

64,908

64,556

65,811

66,530

35-39

75,135

81,042

81,208

81,149

80,307

78,742

76,289

72,527

69,203

40-44

63,200

70,129

72,944

75,472

78,166

79,742

80,730

81,191

81,065

45-49

46,705

58,402

60,890

61,901

63,387

66,138

68,905

71,851

74,298

50-54

37,340

42,906

44,637

48,338

51,389

54,139

56,881

59,413

60,376

55-59

33,015

34,365

35,173

36,391

37,997

39,582

41,207

42,956

46,507

60-64

29,900

29,883

29,991

30,111

30,606

31,151

31,880

32,714

33,836

65-69

25,020

26,648

26,936

27,221

27,324

27,411

27,383

27,548

27,643

70-74

18,330

22,463

23,017

23,313

23,795

24,245

24,696

24,992

25,235

75-79

13,230

15,107

15,947

17,110

18,093

19,039

19,604

20,095

20,341

80-84

8,225

10,870

11,589

12,128

12,519

12,687

13,241

13,963

14,942

85+

6,370

9,758

10,424

11,274

12,107

12,879

13,495

Total

839,915

862,383

873,162

883,771

894,226

903,520

912,668

921,691

500

5,000

5,000

5,000

4,000

4,000

4,000

5,995

5,779

5,609

5,455

5,294

5,148

5,023

Net Migration

Natural Increase

8,564 ,

855,888 (5,604)

6,332

9,151

•

Prepared by: Planning and Development Department, April 1997.

Note: Population is for spring of the year.

Prepared by: City Forecast Committee, April 1997

(

• 19

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton ,e.

PART 2: SOCIAL FORECAST CANADA The overall funding for human services will continue to decrease at the federal level and result in decreases by other levels of government. It is unlikely that Canadians will see a return to the level of services that were provided in the early 1990s.

The Canada Health and Social Transfer (CHST) fund, which provides financial transfers to the provinces for health, post-secondary education and social services, will be reduced by another $2.5 billion cash transfer in 1997/98 in order to

m The Alberta Family Employment Tax Credit (1997) will increase personal income for low and middle income working families with children. The credit amount depends on the employment earnings and overall income per family. The maximum credit is $250 per year for one child and $500 per year for two or more children. m The reduced funding for human services will continue to result from the re-definition of the role of government, the impact of fund reductions at the federal level and apparent public support for tight fiscal management.

These impacts may be lessened if re-investment at both the provincial and federal levels begins to occur. Spending dollars wisely and forming effective partnerships will be the overriding goals.

reach the federal government's target of a $4.5 billion reduction. This will result in Alberta receiving an estimated $407 million less from the CHST in 1997/98 than it did in 1995/96. m The federal-provincial arrangement to increase the Child Tax Benefit to poor families with children indicates both a trend to improve working relationships with other levels of government as well as a commitment to reduce child poverty. However, the increase will not occur until at least 1998. Specific financial impacts cannot be projected until the arrangements, which vary by province, are concluded.

ALBERTA The human service policies, processes, and 'outcomes will continue to be influenced by new funding arrangements and the re-definition of the role of government.

Prepared by: City Forecast Committee, April 1997

As shown below, a disproportionate number of Albertans in need reside in Edmonton in comparison to Calgary. These differences will remain significant.

Social-Economic Need Factors: • Single-parent Families

•

• • • • •

Edmonton vs. Calgary

•

16.2% : 13.2%

Less than Grade 9 Education: Low-income families:

8.7% : 4.3% 19.0% : 17.0% 9.4% : 7.8%

Seniors (65+ age group) Supports for Independence (Welfare) Cases l995*: Child Welfare Cases 1995**: Unemployment rate (1996 average):

20,960 : 13,672 2,214 : 1,768 8.5% : 7.1%

Sources: Figures for single-parent families, education level, income, and seniors are from the 1991 Census of Canada. Others are as noted.

*

For Alberta Family and Social Services regions that are larger than the cities.

For health authority regions that are larger than the cities.

20

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton m Edmonton will continue to have a higher proportion of people accessing health and social services than will Calgary.

II The disparities between the two cities may begin to be addressed as funding formulae development moves away from strict per capita models for regional health services, services to children, and preventive social services.

.m The increased economic activity in northern Alberta will result in increased in-migration to Edmonton. This will bring an increased demand for housing and human services.

Employment and Unemployment The well-being of many Edmontonians will be positively impacted by the projected positive economic environment.

EDMONTON Demographic Changes The increases in the 75+ and 15-19 age groups will be the most significant demographic trend during the forecast period.

E

The 75+ age group in the population will grow by over 9.000 or 2.9% during the forecast period. A high proportion of this age group will be women living alone. The demand for services

by this group, such as health care, seniors housing. and aids to daily living will increase significantly. Isolation and conflicts with adult children may also be major social issues facing this group.

1 The 15 - 19 year population will increase by over 5,000 or 12%, resulting in increased

challenges for secondary schools and may also result in an increase in property crimes and

demand for young offender services. z The 0 - 9 year age group will decline by more than 2,000 or 2.8% during the forecast period.

This demographic factor will provide downward pressure on day care and out-of-school care.

However, employment opportunities and incentives to work programs will place upward pressure that will outweigh the demographic change.

Prepared by: City Forecast Committee, April 1997

The positive social impacts will derive from a decreasing unemployment rate, increasing employment, and low inflation. This environment will result in increased financial independence, improved health status, and empowerment for those Edmontonians obtaining full-time jobs. z The limited gains in wage settlements may not keep pace with the projected 2.5% to 3% annual inflation rate, and inflation may remain below the level at which income tax categories are indexed. Therefore, middle income

Edmontonians who are not impacted positively by the Federal Child Tax Benefit changes or by the Alberta Family Employment Tax Credit may continue to see a reduction in spending power.

As well, Employment Insurance premiums have decreased slightly while Canada Pension Plan

premiums have recently been increased

significantly. The decreases in the former are not off-set by increases in the latter.

Li2 More people who have "good" jobs (i.e. longer term with benefits) will be working from home with high technology assistance. The greater use of technology will spill over into areas such as home schooling and other aspects of education.

Youth Unemployment

21

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton Youth unemployment wilt continue at its traditional level, about half again as high as the rate for the general population.

(11

Youth unemployment (15-24 years age group) traditionally has been fifty percent higher than unemployment for the general population. This trend is expected to continue.

m The increasing tuition fees at post secondary educational institutions impacting enrollment may be softened by federal student help initiatives.

Restructuring The restructuring of the delivery of health and child welfare services, initially driven by costcutting and a philosophy of devolution of responsibility, will be completed. m A major issue for service management will be how future funding allocations relate to past utilization and current need. m There will continue to be a shift in service responsibilities to the community, families, and individuals. In particular, women may be required to shoulder more of the burden for meeting health and social needs, creating more stress on the family. m The large service systems, such as health and education, are competing for individual donations and corporate dollars, increasing financial pressures on smaller social service agencies. utl

The smaller agencies will likely have to fine tune their fund raising to specific target groups.

To ensure their viability, many agencies will have to become more effective marketers of their services. Mergers and loss of some services to the community can be expected.

Prepared by: City Forecast Committee, April 1997

Poverty The percentage of low income families in Edmonton will continue to be higher than that for Alberta as a whole (19.3% vs. 13.9% in 1991). m The Provincial Supports For Independence Program clients who are employable will continue to be required to seek job training, move to other income support programs, and become employed. The incentives created by the Child Tax Benefit changes and the Family Employment Tax Credit will act to reduce the effects of poverty for the working poor only.

I The new provincial Employment Tax Credit for low and middle-income families will have its most direct benefit on the working poor with

children. One-fifth of Edmonton children live in families with incomes below the low income cut-offs. This rate may decrease during the forecast period given the close association between the unemployment rate and the poverty rate. Edmonton's relative position however, in comparison with other municipalities, will not change.

m The increased employment and lower unemployment rates could see the number of food bank users and users of other supplemental programs level off (food bank usage almost doubled between 1990 and 1995).

Health Services The additional funds being reinvested in health care offer some promise that concerns in this area may be reduced. m Over the forecast period, the health care system can expect increased demand from specific populations such as seniors in the 75+ age group

22

•

Socio-Economic Forecasts, 1997 - 2002, City of Edmonton and Aboriginal people. These groups as well as low-income individuals and families have relatively poor health status and high health care utilization.

E The recent funding increases, especially due to the new Regional Health Authority funding model (1997), will make delivery of health services more manageable for the Capital Health Authority.

E The downsizing of provincial institutions will see more mentally ill persons living and treated in the community. Many may be forced to live in inadequate or marginal inner city housing and create additional pressures on human services in the community.

E

The current short supply of supportive living and group homes for vulnerable populations (e.g. frail elderly, mentally ill, disabled individuals, and abused children) will need to be addressed during the forecast period by local groups and provincial agencies. Conflicts with homeowners over locations of group homes may become an issue.

E

I Increasingly, social and related services will become more accountable as funding bodies move toward evaluation of programs and strategic, outcome-based funding.

The increased employment and employment incentives will result in increased demand for child care services and programs. However, this may be somewhat offset by the decrease that will occur in the numbers of the 0 - 9 age group. go Increasingly, younger seniors will be healthier and require fewer support services. However, older and at-risk seniors will require more support to prevent dependency.

E

As a result of the changing family structure of the aging population, more older people will be cared for or will be living with their adult children. The stresses caused by intensive care giving, without reprieve or relief, may result in increases in elder abuse.

E

More older and at-risk seniors, including those with dementia, will be required to live in

Social Services The municipal revenue shortfalls for social services will result in City Council and the Civic

Administration re-addressing priorities. •

unregulated or partially regulated "supportive"

Municipal social services will no longer be universally available, but will be targeted to those most in need.

E New provincial policies do not permit municipalities to access the Canada Health and Social Transfer, as had been permitted with the previous Canada Assistance Plan. This has resulted in shortfalls in revenues for municipal social services programs and necessitated a reexamination of the services provided.

Prepared by: City Forecast Committee, April 1997

The Capital Region (Edmonton, St. Albert, and Strathcona County) Children's Services Authority will be implemented and services related to child welfare will devolve to community agencies under contract to the Authority.

housing environments. Issues may arise as to expectations of the level of care by landlords and residents of housing services.

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Many services, professionally driven before restructuring, are attempting to recruit increasing numbers of volunteers for service delivery and program management. It is unclear whether the community can continue to effectively respond to the downloading of

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton services with motivated and capable volunteers • when these volunteervilie already experiencing stress.

increasing societal attention. The expected increases in the elderly population and economic trends indicate that over the forecast period and beyond, the potential for senior abuse is high.

Crime and Violence The demographic and economic trends will create conditions that are likely to increase criminal activity. As the population ages, fear of crime will likely rise out of proportion with the actual crime rates.

The decrease in criminal activity in Edmonton (43% between 1991 and 1995) slowed considerably in 1996. Community policing strategies and Safer Cities Initiatives, have had a role in reducing crime.

el An increasing number of mentally ill persons have been deinstitutionalized and forced to live in the community as a result of changing philosophy and public sector downsizing. This may result in more public disorder and victimization occurrences, necessitating police intervention as a social service agency of last resort.

Recreation and Leisure While people are not able to pursue recreation as

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The demographic trends which also contributed

much as in previous years, the need for health-

to the decline in criminal activity are forecast to

giving and fulfilling leisure activities is becoming ever more important as our lives get busier and more stressful. This is especially so in light of increased pressures on the health and social support systems. The challenge for recreation providers will be to make the most effective use of resources to provide the opportunities that citizens can use.

change. These will contribute to both an increase in potential for actual crimes as well as an increase in the fear of crime. The proportion of the population in the more-crime-prone years, the 10-24 age group, is projected to increase during the forecast period. A portion of these young people face reduced opportunities to satisfy their material and social needs.

The reductions in the social safety net, combined with a scarcity of good, secure jobs with benefits, will place pressure on young people. The struggle to meet their own needs is likely to produce anti-social behaviour in the form of stealing and other criminal activities.

Seniors are more fearful of crime than others are in the general population, particularly in relation to personal victimization. The efforts directed at reducing fear of crime will need to take into account this demographic trend.

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Senior abuse, which is believed to be severely under reported, will become the object of

Prepared by: City Forecast Committee, April 1997

A 1996 survey of Edmontonians showed 49% felt they had less free time for recreation and leisure pursuits than they did in 1991.

The trends in favorite activities among Edmontonians show a strong increase in team sports. Individual exercise-oriented activities, non-mechanized outdoor and nature pursuits, and golf are on the upswing, Creative and cultural activities are holding relatively constant, as are downhill skiing, snowboarding, more passive hobbies, and spectator activities.

Camping has declined somewhat in popularity, but hunting, fishing, and ATV/4-wheel drive activities are down more substantially.

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Socio-Economic Forecasts, 1997 - 2002, City of Edmonton ail The recreation participation rates for most activities show moderritc declines in participation since 1981 (dropping by 5 to 15%).

Some are, however, showing a decline in popularity of over 20%. These are: dancing, roller-skating, racquetball, visiting museums, boating, skating (not hockey), jogging, overnight camping, and crafts are down overall over the last fifteen years. Those leisure activities showing an increase in participation rates are golfing, playing video games, and bicycling. These trends closely parallel those seen for the entire province. Changes in participation rates and activity preferences can be linked to the aging of the population, but this does not fully explain the changes seen from 1981 to 1996.

The factors people have cited as barriers to participation in recreational and leisure pursuits have undergone marked shifts over the last fifteen years. In 1981, work commitments, lack of opportunity, and facility overcrowding were the most important. By 1996, people surveyed were most likely to identify cost (both admissions/charges and cost of equipment/supplies), and family and work commitments. Overcrowding at facilities was also mentioned often, although this is not always supported by facility usage statistics.

In 1996, fee reduction cards were issued to 6.645 individuals and 58 groups by City recreational facilities. The usage of this program is expected to increase, as more people become aware of it.

m Volunteerism is an important component of our social life, both as a satisfying pastime and as an essential supplement to the operation of most not-for-profit groups and agencies. Although seniors are less likely to do volunteer work than younger adults, those who do are more active in terms of the amount of time they commit to volunteer work. Willingness to volunteer appears to increase with levels of income and education, and is greatest in the 30 to 44 age group, particularly in households with school children.

Social Forecast Risks While the "baby boomer" population (those born between 1947 and 1967) will show the greatest demographic change, the forecast does not view this age group as a vulnerable population. Yet, there may be unforeseen needs or issues that will be significant. Historically, the baby boomer population has not been adequately planned for. i The federal and provincial budgets were generated in election years. The direction may change with the 1998 budgets when new governments have been elected. at The economic elements of the social forecast are subject to the risks identified for the economic forecast.

1 The highest-ranked reasons for participation in leisure and recreational activities in 1996 were: for pleasure. for relaxation, physical health or exercise, doing something different from work. and enjoyment of nature. Competing, showing accomplishments to others, and getting away from the family ranked relatively low. The ranking relationship of these factors has remained relatively consistent over the last fifteen years.

Prepared by: City Forecast Committee, April 1997

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Socio-Economic Forecasts, 1997- 2002, City of Edmonton

Prepared by: The City Forecast Committee The City of Edmonton April 1997

© The City of Edmonton Extracts from this report may be reproduced for individual use without permission, provided the source is fully acknowledged. However, reproduction of this report in whole or in part for purpose of resale requires written permission from the City of Edmonton. While due care and attention has been taken when preparing this report, the City of Edmonton makes no warranty on the reliability of the forecasts.

Prepared by: City Forecast Committee, April 1997

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