NEWS PHOTO COLLIN GALLANT Renovated store fronts in the city's downtown core are a sign of economic reslience, say local business leaders who defended the city's outlook after a bleak picture was painted in a national newspaper this week.
cgallant@medicinehatnews.com@CollinGallant
The city’s elected officials and business leaders are taking issue with a bleak picture of Medicine Hat’s economy that appeared in a national newspaper on Wednesday.
“My guess is they had the headline and made the story fit it,” said Mayor Ted Clugston, who was quoted heavily in a report in the Financial Post.
Clugston says it concentrated too much on a scaleback of the city’s natural gas operations and not enough on efforts made to diversify the economy. The article, titled “A tale of two Alberta towns: One in the throes of a boom, the other mired in the energy downturn,” contrasts economic activity in Grande Prairie and Medicine Hat, respectively.
The article is part of a series from the Financial Post about the economic situation in rural Alberta. Other articles include the plight of coal towns, specifically Hanna, which are facing mine closures, as well as the complexities of retraining oilpatch workers for new careers.
Medicine Hat is contrasted with Grande Prairie, which benefits from proximity to new oil and gas field development, as riding a boom, while locals grapple with a bust that has no end in sight.
“I spoke at length about diversifying the economy and the work we’ve done,” said Clugston. “We’ve stressed Medicine Hat as a place to add value to natural gas, to make methanol, carbon black, urea, or cryptocurrency, or burn it to make electricity.
“I was surprised.”
Some readers have consistently criticized the News for glossing over the economic picture and job losses in the oil patch while local natural gas activity is at historic lows.
They might think the portrait is accurate.
Clugston has been widely quoted as saying the current downturn in the province “feels worse than the 1980s” downturn, because there’s no likelihood high gas prices will return.
Last week, Municipal Affairs Minister Kaycee Madu said new business tax incentives are needed to counteract the current “depression.” The Associate Minister of Natural Gas, Dale Nally, constantly points to “drastic actions” needed to stabilize the industry.
The article describes downtown as a series of boarded up store fronts and states “most Hatters” work at just three major industrial companies, including Cancarb.
But the article fails to mention a significant expansion underway at the facility, said Clugston.
A call to readers for comment on the story garnered little official reaction, though some pointed to a broad support base in the region from CFB Suffield, ranching, greenhouses, renewable energy, petrochemical production, defence spending and other industries.
However, it’s hard to say if those stand-bys have been enough to counter hundreds of job losses in the drilling sector experienced after 2012, or the seemingly fragile nature of ongoing natural gas production in the region.
Sandra Blythe of the city’s economic development and land office said efforts have been underway for four years and are now paying off.
“The reality is that the city and region are in a growth spurt,” said Blythe, stating that new cannabis, cryptocurrency and refining operations or expansions are underway, adding investment and jobs to the local business landscape.
“It is a period of transition and the (oil and gas) industry is taking a different shape.”
Her office led a business attraction and retention study this fall relating to labour market, skills and the state of local business. An action plan is due in early March.
Early results show 80 per cent of business owners see the local business environment as “very good to excellent,” with about half expecting to invest in their enterprises in the short term and 28 per cent planning to add workers.
“They are definitely seeing the future as very bright,” said Blythe.
Unemployment figures specific to Medicine Hat, which Statistics Canada considers statistically unreliable, are difficult to parse.
The latest figures for southern Alberta, including Medicine Hat and Lethbridge, show unemployment at 4.9 per cent in November, up from 3.9 per cent in late 2018.
Incomes are low compared to Alberta, but higher than the national average. At the same time, Medicine Hat remains home to the largest percentage of low-wage workers in the province.
In another seeming contradiction, local building permits remain on par compared to last year, though new home construction has essentially dropped completely out of the picture.
Demographically, Medicine Hat’s population is following in line with national trends regarding an aging baby boomer population.
