A fertilizer hauler pulls out of the CF Industries plant in northwest Medicine Hat on May 10, 2022 with the wind turbines at the Box Springs Windfarm in the background. Renewable energy development, high utility prices and higher costs for products like fertilizer, highlighted the local year in business.--News file photo
cgallant@medicinehatnews.com@CollinGallant
Business activity in southeast Alberta was again headlined by the utility sector in 2022, but with renewed oil and gas activity, high inflation, lack of workers and uncertainty chipping at consumer confidence.
Many small businesses opened for business as usual following measures and capacity reductions brought in to contain a wave of COVID-19 infections in the fall of 2021. Flights in and out of the Medicine Hat Regional Airport by WestJet resumed late in the year.
By all accounts spending rose, but partially because of high fuel and utility prices that also cut into margins for business owners, while a tight labour market saw wages increase.
Supply chain issues hit vehicle deliveries (the City of Medicine Hat reported a “year’s long” backlog in fleet replacements), anything with electronics and even major industrial equipment.
Big deals
Hat-based EnerStar Rentals pulled off a coup, securing the rights to market Starlink Satellite internet service to drilling rig fleets in North America.
In major business news, Medicine Hat, Brooks and industrial entities officially formed a hydrogen hub strategy in July with acceptance of report on creating a local market. The city also received millions in grants to forward a carbon capture and sequestration plan, known as Clear Horizon.
The real estate sector rose and fell in 2022 – home prices were up 4 per cent by year end, however – while home building remained static. That was as unemployment sat at just 3.3 per cent in November.
In new commercial construction, Medicine Hat saw two new bank branches completed, BMO and Connect Credit Union, while smaller branches were shuttered.
The Points West Continuing Care facility, near Strachan Road, should be complete in 2023, along with two car dealerships in the same south-end area.
Big building
Talks to sell the half-completed Aurora Sun facility in northwest Medicine Hat fell through in the fall, owner Aurora Cannabis announced in year-end results on Sept. 22. At the same time, Aurora announced an agreement to take over established grower Bevo Farms to use its Aurora Sky facility in Leduc to grow vegetables and flowers.
After several years on the drawing table, Saamis Solar project, a planned $500-million array to be placed on the former Westco Fertilizer plant north of Crescent Heights was submitted to regulators. It could be built by the end of 2024 according to the applicant, Irish-based green power developer, DP Energy.
Alberta regulators also dealt with a plethora of proposals for wind and power projects in the southeast as others were completed.
That includes Cypress Wind, Jenner, Hilda, Lanfine, Rattlesnake Ridge, Forty Mile and Wildrose windfarms, along with solar plants in Dunmore Solar, Clydesdale near Enchant, and others underway.
Cypress County Deputy Reeve Richard Oster estimated that with existing and proposed wind turbines for the county of 7,200 people, the total number of towers could be 230 in several years, each attached to new tax revenue and surface lease payments.
“Like them or not they’re here,” he told the Chamber of Commerce’s leadership breakfast in November.
Late in the year, three major solar project proposals, comprising more than $1 billion in construction value, went before regulators attached to 2024 completion dates.
Altalink lists 14 separate line and grid upgrade projects in the area around Medicine Hat.
Energy
Natural gas prices also lifted out of a decade-long trough due to global instability and a potential energy crisis in Europe, which also took the price of oil on a ride.
That led to targeted oil drilling in the region, and breathed new life into junior exploration companies with mature fields.
Pinecliff Energy announced it was debt free and would begin a dividend after suffering depressed commodity prices in the late 2010s. Its shares were worth 8 cents each in 2020, but ended 2021 at 68 cents and touched $2 in mid-2022.
Journey Energy purchases the Western Canadian assets of EnerPlus, including the Glauc C field near Medicine Hat.
International Petroleum, which controls the Suffield block, reached 50,000 barrel per day production rate from its global operations in the third quarter – after shutting in production in 2020.
Gross profits tripled compared to the previous year as world oil prices shot up in mid-2022. However, oil futures that began 2022 at US$75, and went as high as $121 in June, were set to close the year at US$77.
Cost of living
The same cycle pulled the price of gasoline to the $2 per litre mark in Medicine Hat for part of the year, adding cost to business and stressing home budgets.
Consumer price index rose by 6.2 per cent in Alberta, according to the province’s Labour Ministry, compared to a 2.3 per cent increase in weekly earnings.
A look ahead
Downtown Medicine Hat saw the completion and opening of the Towne Square event space, but the area saw ups and downs in the last year.
The Mezz Restaurant that opened in the midst of COVID capacity restrictions closed late in the year. Its last major event stands as the byelection victory party for Premier Danielle Smith.
As for 2023, the action appears to be on Third Street, with several new storefront redevelopments on the go, continuing work to renovate the Assiniboia Hotel and, potentially, municipal roadway updates in the city’s new budget cycle.
