We Crush Toronto and Vancouver on Cost of Living, and that’s a Big Deal
Reflections on a year in Economic Development in Alberta – Part 4
In the Klein era, the politicians of the day liked to talk about the Alberta Advantage, which was not a specifically defined thing but in general meant low taxes and a low regulatory burden on business. Over the past decade this slogan has fallen out of use a bit, but the notion that there is an advantage to living and doing business in Alberta remains. We are often at the top of the table of Canadian provinces in GDP and population growth per capita, which has with a few exceptions been a persistent trend.
There are tax advantages to doing business in Alberta – no provincial sales tax and the lowest corporate tax rate in Canada certainly have a positive impact on the bottom line. But this is not our biggest advantage today. Our secret weapon is the cost of living and quality of life compared to other major Canadian centres. That is by far the thing that people who make really big decisions at really big companies will hone right in on, if you talk to them about moving to Alberta. You can talk about taxes all you want – but companies are most interested in the cost of living, and the availability of talent. Obviously these two go hand in hand.
You can buy a nice house in Calgary or Edmonton for a third of the price of Toronto and Vancouver, and spend weekends in the mountains or walking in the river valley. This is a massive competitive advantage in the war for talent, and one that I think we’ll see more and more conversations about in the several years ahead.
Related to the cost of living advantages here is the adoption of remote work. There’s a debate about whether and how much it is “here to stay”, but one thing we know for sure is that it is more accepted than ever before, and there will be companies who continue to embrace it. Well, if your employees can work from anywhere, why make them work in New York or San Francisco or London or Toronto or Vancouver? Even if a company’s headquarters remains in one of those major centres, could it not have an office in Edmonton or Calgary that supported a network of employees working partly from home and partly from the office in that city?
I suspect we’ll begin to see more and more of this in the coming years. Major companies will look to lower cost of living jurisdictions to locate portions of their workforce, using some sort of blended remote work model. Alberta is very well positioned to benefit from this shift. Alberta (or cities in Alberta) can actively recruit companies in higher-cost jurisdictions to move some of their whitecollar workforce here on a hybrid-remote model. This is an unusual and massive opportunity created by the confluence of skyrocketing home prices in major global markets combined with the pandemic’s catalyzation of remote work.