Major Industries
From Calgarypedia
Contents |
Overview
Since the discovery of oil and gas in nearby Turner Valley in 1914, Alberta has been Canada’s oil and gas capital. Alberta’s focus on the energy sector has resulted in a volatile economy in the past, but with structural changes that have directed the sector towards long-term investments, coupled with strong global demand for energy, Alberta’s economic future appears bright.
In 2006, Alberta’s real GDP growth was reported in excess of 6%, more than double that of the national average. While growth was anticipated to be more moderate in 2007, the rate of growth confirms the structural change that is occurring in the Canadian economy as Alberta, and Calgary in particular, emerges as one of the country’s most important business regions.
With both the population and employment experiencing high rates of growth, incomes levels are also on the rise and unemployment rates are the lowest in the country. Economic forecasts suggest that the Calgary Economic Region will retain its position as one of the leading economic regions in Canada based on the presence of the energy sector and the continued investment activity associated with the oil sands.
A further consideration in the growth of the local economy is the importance of the Calgary-Edmonton corridor. As the result of a 2003 TD Economics report, the Calgary-Edmonton Corridor Region has gained prominence as a centre of high economic activity and prosperity. With energy prices running at record levels, the corridor has emerged as a major economic region both nationally and internationally. GDP per capita in the region is exceeding the national average both in Canada and the United States, buoyed by the energy demand of the U.S. and China.
Transportation, warehousing, advanced technology and health care are sectors also experiencing growth. Future economic development efforts at the local level should focus on the synergies evident within the region and leverage this potential in the promotion and marketing of their communities.
Alberta will soon become the second largest global producer of oil behind Saudi Arabia. Calgary is poised to be one of the major beneficiaries of this activity because of its well-entrenched position as the financial, technological (R&D/engineering) and decision-making hub for the industry by growing, retaining and attracting new companies to the region with both domestic and international scope.
Energy
The energy sector is the backbone of Calgary’s economy. The energy industry covers many aspects of the value chain including production, refining, marketing, and power fuel sources such as oil and gas (fossil fuels), biofuels, and sustainable and renewable energies. Oil and gas production make up the majority of the energy industry in Calgary.
From a supply perspective and under current global consumption patterns and preferences, Alberta and Calgary’s economic development through oil and gas is healthy. Calgary is Canada’s energy capital. It is the decision-making hub and head office of every major oil and gas company in the country and is rapidly becoming an innovative national centre for finance, design, and construction associated with the oil and gas sector. As well, Calgary is home to the industry’s major trade associations and the nation’s energy regulator, the National Energy Board. No other industry in the country is as highly concentrated as Canada’s energy sector: the decisions made in downtown Calgary affect multi-billion dollar projects in Alberta, Canada and around the world.
In an effort to be close to the rich oil sands of northern Alberta, major Canadian and international firms such as Husky Oil and BP have established offices in Calgary.
The high oil prices over the past decade have supported growth of the oil field services, as well as growth in financial services, business services, manufacturing and transportation and logistics. Additionally, drilling companies and energy-related engineering and consulting firms have grown tremendously to fill demand created for their services.
In terms of other forms of energy, Alberta has significant deposits of natural gas, oil, oil sands and coal. Alberta has 60% of Canada’s total coal reserves -- 50% of all electricity generated in Alberta comes from coal-fired plants. Natural gas accounts for 40% of Alberta’s electricity needs, while the remainder is produced by hydro, wind and biomass energy.
The emergence of sustainable and renewable energy sources has led to development of the energy sector as it relates to renewable sources of power. While efforts have been made to utilize new technologies such as biofuels and hydro power, wind is the most promising source of alternative energy in Alberta.
In September 2003, Enmax Corporation and Vision Quest Windelectric opened a $100-million wind farm in southern Alberta, Canada’s largest single-site wind farm. The 114-turbine, 75-megawatt generating facility produces about 235,000 megawatt hours a year of electricity – enough energy to power more than 32,500 homes annually.
Financial Services
Calgary’s financial services industry is a dynamic sector, made up of banks, investment banking, securities dealers and exchanges and other financial intermediation activities. The sector includes all six of Canada’s major banks, strong regional banks, international investment banks and other financial investment firms.
Calgary is Western Canada’s financial and business centre with more head offices per capita than any other major Canadian city. The significant concentration of corporate head offices, many with an international focus, provides access to the necessary decision makers, and attracts financial service providers.
Over 22,000 people work in Calgary’s financial services industry. From 1998 to 2007, the sector has surpassed the Canadian and Albertan employment growth rates with a 4.6% annual average growth rate.
Continued strength in Calgary’s overall economy, particularly in the energy sector, has continued to drive strong performance in the financial services segment. Calgary has emerged as the financial and head office centre for the Canadian energy industry. No other centre in Canada has such a large concentration of activity in one industry. Every part of the energy sector’s value chain has a significant presence in Calgary, and as a result, a strong financial community has emerged to address the needs of all parts of the energy sector.
Beyond the capital-intensive oil and gas industry, Calgary’s population is also quite wealthy, which is beneficial to the financial services retail market. Rapid growth in Calgary and Alberta demands new business and community infrastructure, and requires the support of a large amount of investment, providing financial services companies with abundant opportunities for their products and services.
Transportation and Logistics
The transportation and logistics industry in Calgary is composed of several different hubs that come together to make the city an ideal choice for transportation corporations. The Calgary International Airport (YYC) is one of the busiest airports in Canada, both by passenger and aircraft movements.
In 2007, Calgary International served 12.24 million passengers and saw 248,548 planes pass through its gates. In addition to passenger flights, the airport is also a busy port for cargo. Currently, the airport is undergoing upgrades to the cargo facilities that would let Calgary International accommodate seven additional Boeing 747s.
The second pillar of the transportation industry in Calgary is the rail system. Calgary is home to highly developed rail, intermodal auto and trainload facilities. Canadian Pacific Railway and Canadian National, Canada’s largest railways, provide service to every major city in North America. With easy access to the Pacific ports of Vancouver, Calgary makes an ideal hub for rail shipping.
The backbone of the transportation industry has been, and always will be, the long haul trucking business. Calgary is in an advantageous situation due to its location; it is situated on two of North America’s largest highways. The TransCanada Highway runs from the east coast to the west and travels directly through Calgary. The second highway runs north to south from Alaska to Mexico City. This “smart corridor” uses shared information systems to bring safety and efficiency to commercial traffic and allows easy access from any city in North America.
All of Calgary’s transportation nodes are highly developed and have created opportunities for locating large distribution facilities for major companies such as Canadian Tire and The Bay.
Information and Communication Technology
Calgary is home to a thriving information and communication technology (ICT) industry. The ICT industry includes over 2,400 companies that employ approximately 55,200 workers, representing almost 10% of total employment in the region. Calgary’s ICT sector is diverse – it supplies products to many other industries and consumer groups, which makes it key to the economic activity in the city. The complex and rapidly evolving ICT sector is made up of five main sub-sectors, which include information technologies, electronics, wireless and telecommunications, geomatics and digital media.
The ICT industry is also exceptionally well-served by dedicated and professional organizations and associations that work together to deliver the broadest possible networking, connection and advocacy for the benefit of all of its sub-sectors. Further development of the ICT industry will come with continued investment in research and commercialization from both the public and private sector. Additionally, Calgary’s boasts the highest Internet use in Canada, at 77%. The industry is expected to grow as Calgary is home to the largest number of technology start-ups per capita in Canada.
Manufacturing
The manufacturing industry in Calgary is one of Canada’s stronger performing locations. Manufacturing currently accounts for 7.3% of Calgary’s employment. Of all the different segments of manufacturing in Calgary, five core divisions make up the bulk of production: food, machinery, fabricated metal products, computer and electronic and chemical manufacturing. Despite the high Canadian dollar that has recently raised the cost of exporting manufactured goods, Calgary continues to add jobs and contribute to the economy.
Film and Creative Industries
Calgary is home to a strong but niche, boutique film and television industry. To filmmakers, Calgary represents the chance to film their entire movie in one location. The mountains to the west and the badlands to the south provide an ideal western scene, while downtown Calgary can emulate any major urban centre. Calgary and the surrounding region have been the location for major films such as The Assassination of Jesse James and the Oscar-winning Brokeback Mountain.
Creative industries in Calgary continue to grow. Creative industries are fields such as computer graphic design, advertising and digital multimedia technology. The Alberta College of Art and Design and the Southern Alberta Institute of Technology Polytechnic are two schools that cater to the demand of this emerging creative class. Calgary has more than 4,500 applied arts and design organizations, employing more than 40,000 workers.
Health and Wellness
Health and wellness as an industry encompasses a wide variety of sub-sectors such as biotechnology, life sciences, information and communications technology, and manufacturing, along with value-added activities in research and development, sales and professional services. The sector represents a significant opportunity for Calgary, as its population continues to demand new and advanced health-related products and services.
Calgary has become a leader in advanced technological research and service delivery, as well as becoming a leader in wellness. With existing strengths in the areas of sport medicine and fitness, kinesiology and e-health, the advancement and development of the health and wellness sector will continue into other areas including medical devices, health-related professional services, digital imaging, and alternative and complementary health.
Sources
Key Industries in Calgary – Calgary Economic Development[1]
Calgary’s Economy – Calgary Economic Development[2]
