The single largest impediment to economic/commercial development in Estevan is housing, the lack of it and the ungainly prices attached to the existing inventory.
That seemed to be the dominating message delivered by Michel Cyrenne and Manpreet Sangha, executive director and economic development manager respectively for the Estevan Chamber of Commerce who recently sat down with The Mercury to discuss the business climate in the Energy City.
"The housing issue impacts decision making in a negative way. It is preventing companies from adding employees, preventing them from growing and expanding," said Cyrenne. "Businesses are having to delay expansions or in some cases, cancelling expansion plans, and this climate has created the need to pay higher than industry standard wages," Cyrenne added.
When there is the need to pay higher than average wages in the service, hospitality and retail sectors, profits are decreased or disappear and that makes all businesses riskier propositions, he said.
"The cost of construction is going up consistently and constantly for both materials and labour. Our City's offset development levy fees have gone up. The local market will bear only so much as to what they'll be willing to pay. After it reaches a certain tipping point, when there is no profit margin possible for new developers, they won't be wanting to come to Estevan or to any market area where something like this exists," he added.
"I don't think we've reached that point yet due to our aggressive economy and the income levels being where they are. So there is leeway yet for developers, but we haven't seen any new developers on the scene since the change was made to the offset development levy. If there is an effect, we'll probably see it in 18 to 24 months. Right now, units are still being built."
Cyrenne said the Bakken oil boom, which is now leveling off to become a rush rather than a boom, will continue to drive the local economy for the next 15 years at least, and that steady flow of activity should have an overall good e ffect on the local economy and community well being.
The completion of the world's first commercial sized carbon capture project at Boundary Dam next spring will see another leveling off of business activity, but, he suggested, with the expectation of similar units being installed at Units 4 through 6, pending a successful outcome at Boundary Dam's Unit 3, the building pace could quicken again at the local power station during the next few years.
"With the clean-coal project, they came in knowing it is only temporary and the response was the development of a labour camp. There is not a lot of speculation building going on. Most of it is based on specific demand. They are building on an as needed basis," said Cyrenne.
"The clean-coal project has had some impact on traditional housing supply too," said Sangha, "because other companies are having housing shortages they have to deal with."
"It's not the end of everything," said Cyrenne with a smile. In other words, it's not a doom and gloom scenario really, it's a matter of finding solutions to a very robust economic situation that isn't going away soon.
The potential opportunities for tourism, research and development and capital venture projects are huge..
"It can be about Bakken and beyond the drilling opportunities. It can be about permanent positions. We have an emerging geothermal project on deck and the huge logistics centre and transportation hub growing at nearby Northgate, 100 people during construction, 26 permanent jobs when it's done," said Sangha. Local industry should benefit.
The north/south trade corridor is another area of local concern since the traditional corridor leads from Mexico and southern United States right up to Saskatoon and Edmonton through Estevan and the nearby international border crossing.
"That's why we definitely support the Time to Twin move. It's a safety issue for them, and we look at it economically. It would be a huge benefit to the region not only in terms of development of a proper trading corridor travel, tourism and logistics in general. Creating a more user-friendly travel environment is what we need. We have a different twist than the committee, but the desire is the same. We have to keep pushing for it, it's important. The resource base in this corner of the province is not going away. We have to play catch-up just on maintenance so if twinning is to come piece-meal like the announcement that it will be twinned between here and Bienfait, so be it."
Sangha added, "the agricultural sector is another major one we cannot ignore. There is oil and gas and then agriculture." That too requires hassle-free routes.
The availability of serviced land within the city limits has become another worrisome issue, said Cyrenne. There are some industrial properties available, not a lot of residential plots that aren't already taken, so that means some raw land will need to be serviced soon. The surrounding RM of Estevan has some available and the long-promised truck bypass route will see a big opportunity emerge for developers and businesses in general.
"I know there have been a lot of inquiries about business along this bypass," said Sangha.
With a river and mining to the south of the city, industrial development opportunities might be limited, but so far there have been no requests or inquiries coming to the economic development department regarding the potential for building multi-storied office buildings other than the one or two storey traditional models already seen around the city.
"Nobody seems to be pushing that file," said Cyrenne, "even though emergency services can now accommodate multi-storied businesses."
Sangha said an ambitious survey she undertook shortly after assuming her job last year is now complete, and a smaller survey regarding economic development goals among local industries is underway.
"We're looking at what hurdles they face for expansion. We'll take what we learn to City Hall and educate the business community so they can plan for the future," Sangha said.
The two managers said they seek answers for the local business community on questions concerning infrastructure, housing, roads and traffic, labour recruitment and retention and what it would take for a business to take root in Estevan as well as to assist those who are already well entrenched.
"We want people who come here as temporary labourers to maybe want to stay as permanent residents. Our council is recognizing that and moving in that direction. If the kids in the family love the city and don't want to leave, then the transient worker might stay. That's why it's good to build up our recreational areas, develop those walking paths, provide lighting, make sure existing businesses in the community are taken care of as well as trying to attract new ones," said Cyrenne.
On that file, the C of C is currently developing a strategy for directional signs around the city to help those who aren't that familiar with where things are to find their way around. Cyrenne provided one example.
"You're coming into Estevan and don't know the city, but you have to get to Cactus Park. What do you do? How can we help you find it?"
Proper signs at all four entrances to the city will help alleviate this logistical GPS problem.
"We have so many new people here now. Let's make them comfortable, let them know where they're going. It's a three to seven year signage plan we hope we can get in the budget," Cyrenne said, adding that the chamber hopes to have a permanent tourism director on the job within the year. Right now the duties are being split among current staff.
With the local Hotel Association contributing to the well-being of the tourism development committees, and the growth of industrial tourism, there is a pattern emerging on that file too, and with two more hotels on the drawing board, those needs should be well covered.
"But if we can't attack this housing issue well, those people are just going to stay in Red Deer or Calgary aren't they?" said Cyrenne.
"Not everyone is making a six-figure salary, and I hate to use the word greedy, because you can't fault people for taking advantage of the supply and demand situation. The opportunity is there for them. This might be considered a small market for some, but it's a sustainable market even with the oil industry having its fluctuations. We know there is a higher risk seen for those who might be looking at a 15 to 20-year return, but in housing there are opportunities all over as people leave entry-level housing or rental units and move on. It's strong," Cyenne said in conclusion.
