rmr'I-uh. . . - .J-q '05 wt, economic development Tomor . W's Calgary be part of the energy? . calgary "Rf Wi-EIey? v- - . - I 'r?l31; . - I 1? "1h HumBuilding on our Energ 2015 Accomplishments at a Glance workforce development building capacity by attracting and retaining the best and brightest major initiatives sector developments long-term solutions for economic growth helping organizations to relocate, stay, expand, or invest in Calgary Conducted Benchmarking Calgary’s Competiveness study with Monitor Deloitte versus 11 global cities. Engaged more than 300 local businesses in a changing economy. The 802,200 people working in the Calgary region in December was down 1.1 per cent from a year earlier but GPD per capita was highest in Canada at $80,578 in 2015. Hosted eight sold-out sessions on workforce best practices sessions supporting the changing needs of the local workforce. Careers in Manufacturing organized 19 tours of the shop floor at local factories for 396 high school students. Supported 24 inbound trade and investment missions and five outbound missions including trips to China, Brazil and Europe. Calgary Film Centre secured an anchor tenant, William F. White International, in advance of 2016 opening. The Calgary Connector Program, a partnership with Bow Valley College and Calgary Regional Immigrant Employment Council, created 224 connections for 100 people that led to 24 job offers. Film and television productions spent more than $175 million in southern Alberta in 2015. Ten companies used the shortterm office space in the Global Business Centre (GBC). Of the 34 organizations that have used the GBC in the past five years, 20 have gone on to set up permanent offices in Calgary. WORKshift held a Future of Work conference in Calgary with 200 national participants. Calgary welcomed 3,756 new businesses in 2015, a net increase of more than 1,300 businesses. The 59,565 businesses in the Calgary region, includes the highest number of corporate head offices, more than 150, and small businesses, more than 56,600, per capita in Canada. Calgary had the highest labour force productivity in Canada with GDP per capita of $80,578 in 2015. Established strategic relationships with Canada China Business Council, Council for the Americas Alberta and Kinetica Ventures. Action Calgary partners remained strong supporters of our work with a 93 per cent retention in 2015. promoting Calgary changing national and international perceptions of Calgary The Calgary: Be Part of the Energy Campaign More than 377,000 visits to our websites, visit durations up 55 per cent. More than 22,700 Facebook followers, up 26%. Media included 932 stories valued at more than $1.6 million. More than 12,300 Twitter followers, up 109%. More than 4,400 Linkedin followers, up 34%. Wrote 104 Calgary stories as part of content strategy. More than 5,700 Instagram followers, up 2,114%. Calgary Economic Development · 2015 Annual Report · 03 media & industry familiarization events funding sources tours hosting media and key decision makers  engagement through business, economic and community events government and private sector support of economic development efforts 2015 Funding Sources $5,155,865 Conducted “scout” trips that resulted in five major film & TV productions shot in Alberta in 2015 and potential for more in 2016. Produced four episodes of Behind the Scenes and screened promotional video at regional film festivals. Productions shot in Alberta in 2015 The Revenant Fargo, Season 2 Hell on Wheels, Season 5/6 Heartland, Season 9 Wynonna Earp Burn Your Maps Lewis & Clark The Reckoning Bank of Canada Governor Stephen Poloz addressed the challenges of commodity price cycles to a sold-out Economic Outlook audience. Alberta Premier Rachel Notley’s first speech to business audience was part of our Stampede Investment Forum that attracted investors from a dozen countries. $5,344,918* Leveraged revenue from other orders of government $1,971,939 Leveraged revenue from private sector $0 $65,586 Deferred contributions More than 3,000 people attended our seven Signature Events including Report to the Community, Economic Outlook and Soul of the City speaker series. The Soul of the City speaker series hosted four events and welcomed RBC Foundation to join The Calgary Foundation as a sponsor. City of Calgary base grant Investment Total: $12,538,308 * Includes $5 million from Government of Alberta for Calgary Film Centre. 2014 Funding Sources $322,959 The Global Business Centre hosted 51 business networking and educational events. $5,155,865 Leveraged revenue from other orders of government City of Calgary base grant $245,495 Deferred contributions $18,179 Investment $1,948,613 Leveraged revenue from private sector Total: $7,691,111 04 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 05 26 12 Message from the President and Chair With the collapse in oil prices and continuing low gas prices, the three-year strategy aligned with the objectives in the community- current economic downturn has ushered in a new era for Calgary. wide 10-year economic strategy: Building on our energy. The economy had grown by more than 32 per cent in the decade With a vision for sustainable growth, shared prosperity and prior to the 2.5 per cent decline in 2015. Continued migration a strong community, we are the stewards of a strategy that’s into the city and a “rightsizing” of the workforce in the energy directed by a leadership and implementation team made up of sector put Calgary’s unemployment rate on course to exceed civic partners, governments, private sector and post-secondary the national average for the first time since the 1980s. The ripple institutions. In the first full year of implementation, activity was effect left record high office vacancy rates, a softening real estate under way in almost 75 percent of the 32 specific actions. market and a decline in new building permits. 18 modifications of the strategy to better reflect the opportunities unrecognizable to businesses and investors in 2015 and they and challenges in this economic downturn. quickly started re-thinking short and long-term strategies. However, in the midst of the historic downturn last year there were areas where Calgary outperformed. 25 24 Through additional funding from The City, Calgary Economic Development has put the highest priority on talent retention and office space vacancy. We’ve also pivoted from an emphasis Canada in 2015. Every Calgarian also generated almost $81,000 on recruiting people to supporting global trade opportunities. of economic activity last year – 80 per cent more than the We will continue to promote Calgary’s position as an “inland Canadian average. port” and distribution centre. We also market our expertise in foundation for future growth. Calgary Economic Development participated in two studies comparing business attractiveness to cities in North America and around the world. Both concluded a talented, globally focused workforce is Calgary’s strongest asset. They recognized Calgary is financial services, advances in agribusiness and the opening of a $28-million film centre to nurture growth in creative industries. Economic development is a community effort. Our entire organization is grateful for the tireless effort and unwavering support many people and organizations provide through our Action Calgary partnership program and volunteering on our advisory committees. an affordable global city and one of the most competitively taxed On behalf of the Board and staff at Calgary Economic jurisdictions in Canada. Development, our special thanks to all our Action Calgary Our business community and people endured challenging times in 2015 but Calgary remains, in a relative sense, an attractive 06 · 2015 Annual Report · Calgary Economic Development headwinds through 2016 and fundamental changes beyond that. sector still deployed more capital than any other industry in ideas with our legendary entrepreneurial energy to lay the table of contents All indications suggest Calgary and Alberta will face economic Even with a 40 per cent reduction in spending, the oil and gas Our young and well-educated population is merging innovative 36 Ongoing stakeholder engagement in 2015 led to slight Following an overheated four-year period, the economy was location to open a business, a great city to make a living and, partners, advisory committee volunteers, Mayor Naheed Nenshi, Calgary City Council and the administration team at the City of Calgary. Your commitment and thoughtful leadership is shaping 05 Letter from the President & CEO and Chairman of the Board 07 A Message from Mayor Naheed Nenshi 08 About Calgary Economic Development 14 Calgary Economic Development also experienced significant Action Calgary Partners change in 2015. With new leadership, the organization restructured 16 Advisory Committees with more focus on trade and investment opportunities in 20 Major Initiatives new markets. We also provided more support to hard-hit local Mary Moran, Steve Allan, 38 Sector Overviews businesses and workers. We also developed our first organizational President & CEO Chairman of the Board 52 Signature Events 54 Economic Overview 58 Financial Statements especially, a great place to make a life. the Calgary of tomorrow. Calgary Economic Development · 2015 Annual Report · 07 A Message from Mayor Nenshi On behalf of my colleagues on City Council and the citizens of I would like to acknowledge the work of the talented people Calgary, I am pleased to bring greetings to all of you reading the at Calgary Economic Development for the crucial role they Annual Report from Calgary Economic Development. play in bringing all three orders of government and the private It been a difficult year for Calgarians as the plunge in oil prices reverberated throughout the economy and tested our resolve as sector together to address major economic, societal and environmental challenges. a community. In times such as this, it is important we remember As stewards of the Economic Strategy for Calgary, they enhance the entrepreneurial spirit, optimism and energy that Calgary is our economic sustainability and quality of life by connecting known for. Resolving the challenges that we face today is going government and business, and promoting the people and to require an unprecedented level of work and collaboration. opportunities in Calgary, across Canada and around the world. Calgarians need their politicians, business and community Sincerely, leaders to all work together to address these challenges. Support for pipelines to get our oil and gas to global markets is critical as these projects are vital to the economic health of our city, our province and our country. At the City of Calgary, we are accelerating diversification in the economy with the Building on our Energy strategy that supports our economic resiliency initiative, instills a sense of community, a commitment to shared prosperity and a focus Naheed K. Nenshi, Mayor, City of Calgary on sustainable development. 08 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 09 Calgary Economic Development’s Mandate Calgary Economic Development works with business, government, and community partners to achieve sustainable economic growth, embrace shared prosperity, and build strong communities. Managed by an independent Board of Directors, Calgary Economic Development is a not-for-profit corporation funded by the City of Calgary, community partners, other orders of government, and the private sector through the Action Calgary program. Calgary Economic Development’s Mission We collaborate to advance opportunities in achieving economic success, embracing shared prosperity and building a strong community for Calgary. As stewards of the 10-year Building on our Energy: the Economic Strategy for Calgary, Calgary Economic Development operates in accordance with the key objectives set out in the strategy and supports the leadership team responsible for the strategy’s implementation. Calgary Economic Development is a conduit, connector, catalyst, and storyteller. We are opportunity makers, helping to spark and fuel the growth that makes Calgary an economic engine. We nurture prospects and potential. We harness possibilities. And we support individual and business prosperity. We are connectors, linking business people with change makers: investors, advisors, industry leaders, partners, and employees. We introduce companies to new locations, markets, and customers. We are storytellers, getting to know Calgary and Calgarians, and telling our stories to the world. We are a wealth of information. It’s our business to figure out what makes Calgary work. And it’s our job to share facts and resources freely with everyone who wonders why or who or how much. Like the city we serve, we’re collaborative, entrepreneurial, innovative, social, creative, and global. We help shape and share Calgary’s story. And we’re proud to be part of the energy. 010 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 011 Calgary Economic Development is a conduit, connector, catalyst, and storyteller. As economic developers, we work on a variety of initiatives throughout the year. While many of these initiatives have immediate activities and outcomes, the actual impact on a business or the community is often seen years after the initial engagement or interest in Calgary. We have sector specialists in the areas of: CLEAN TECHNOLOGY & RENEWABLE ENERGY Calgary Economic Development’s job is to connect people with resources that can help them grow their careers or businesses, thrive in new locations or markets, and feel at home in our community. Whether it’s a regional, • Business retention, expansion, and attraction national, or international • Investment attraction • Real estate support • Events and missions Our economic development • Workforce development services include: • Research and market data business, we facilitate access to Calgary and help existing Calgary-based businesses too. Our programs and initiatives support business and workforce development, and position Calgary as the location of choice: • Building on our Energy: the Economic Strategy for Calgary Calgary. Be Part of the Energy. campaign • Global Business Centre • Calgary Film Centre ENERGY TRANSPORTATION & LOGISTICS FINANCIAL SERVICES REAL ESTATE FILM, TELEVISION & CREATIVE INDUSTRIES MANUFACTURING & PRODUCTIVITY • WORKshift • 12 · 2015 Annual Report · Calgary Economic Development Action Calgary Partnership Program Calgary Economic Development · 2015 Annual Report · 13 Our People in 2015 With any organization, it is the people who truly make a difference in where the organization has been and where it is headed. That sentiment is very true at Calgary Economic Development. It is the commitment, passion, and energy of our Board, staff, Action Calgary partners, and advisory committee that enable Calgary Economic Development to play a key role in shaping and sharing Calgary’s story. OUR BOARD MEMBERS Steve Allan, Chair, Corporate Director, Community Volunteer Leontine Atkins, KPMG Eric Axford, Suncor Energy Lori Caltagirone, Sunesis Consulting Trent Edwards, Brookfield Residential Jeff Fielding, City of Calgary Tom Hodson, Tiger Calcium Corp. Hannes Kovac, OPUS Corporation OUR STAFF Patricia McLeod, Lawyer and Corporate Director Office of the President & CEO Finance & Administration Trade & Investment Attraction Brad Pierce, Borden Ladner Gervais Mary Moran Brian McClure Gillian McCormack Karen Garrick Ramzieh Khalil Kate Bowering* Murray Sigler, Sport Calgary Chantal Leblanc Joyda Bianco Katie Findlay Quincy Smith, Dentons Film, Television & Creative Industries Fern Lockwood Lulu Mashonganyika June Reid Bonnie Nunnari* Kristy Sze Sasha Musij Susan Turner Alecia Peters* Business Development & Workforce Innovation Joan Shilling Rollin Stanley, City of Calgary Luke Azevedo Ward Sutherland, Councillor, Ward 1 Jolayne Motiuk Kevin Zimmel, Royal Bank of Canada Lissa Craig Marketing & Communications Lisa Corcoran Jennifer Arthurs Jeannette Castillo Stephen Ewart Claire Griffin Chelsea Hallick Jessica Whiting Deana Haley Robyn Bews Patti Dunlop Guillermo Sordo Rachel Yin Megan Zimmerman Sophia Lebessis Research, Strategy & Advocacy Nelda Schulte Court Ellingson David Potter David Ducasses Pamela Sellar Susan Thompson* Jeanette Sutherland Nicole Mullings Wade Van Rooyen Carol Thiessen* * On Leave 14 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 15 Thank you to our Action Calgary Partners ACTION CALGARY The Action Calgary corporate partnership program engages Calgary business leaders to influence the movement of our economy. The thoughtful leadership, and generous financial and in-kind support from this group of visionary Calgarians supports Calgary Economic Development in delivering award-winning initiatives and programs, driving economic and individual prosperity, and positioning Calgary on the global stage. PLATINUM Action Calgary partners not only help us shape and international media; connect to incoming trade and share Calgary’s story; they are a big part of Calgary’s investment delegation; and participate in labour, story. Calgary Economic Development approaches the investment, and trade missions. Action Calgary program as a true partnership with a long-term relationship in mind. On behalf of the Board and staff at Calgary Economic Development, we would like to thank our Action Over the past year, Action Calgary partners had Calgary partners for their visionary leadership, first-in-line access for speaking and sponsorship investment, support, and participation in making opportunities at our signature events, and the Soul Calgary’s energy felt across the country and around of the City speaker series. Our partners had the the world. GOLD SILVER Aecon Group Aspen Properties ATCO Group Birchcliff Energy opportunity to tell their stories in local, national, and Bow Valley College Brookfield Residential Calgary Flames Hockey Club 2015 Action Calgary Revenue Calgary Regional Partnership Action Calgary Partners provided almost $1.45 million in funding in 2015. 64% 9% Major events 16 · 2015 Annual Report · Calgary Economic Development 11% Calgary, Be Part of the Energy. campaign Other Economic Strategy activities Cenovus Energy Dentons dmg events (Canada) Enbridge ENMAX Evans Hunt GE Canada Nexen Energy Gowling WLG Red Point Media Group Joe Media Group Resorts of the Canadian Rockies JWN Energy KPMG Matco Developments Metro Calgary Mount Royal University SAIT Tarpon Energy Services University of Calgary WestJet Airlines BRONZE Axia Supernet 5% Calgary TELUS Convention Centre Bennett Jones LLP Burnett, Duckworth & Palmer LLP Calgary Municipal Land Corporation Cresa Calgary DIRTT Environmental 11% Calgary Airport Authority First Calgary Financial Action Calgary program management Calgary Folk Music Festival Glenbow Museum Calgary Opera GlobalFest HBI / Haworth Sizeland Evans Interior Design Kasian St. Mary’s University Lawson Projects Stone-Olafson PwC Theatre Calgary Quintaro Imaging Trico Homes RGO V Strategies Shape Properties YMCA Calgary Calgary Economic Development · 2015 Annual Report · 17 Thank you to all our Committee Members BUSINESS DEVELOPMENT ADVISORY COMMITTEE Scott Hutcheson, Aspen Properties Damon Harmon, Cresa Calgary David Routledge, Oxford Properties Ian Parker, Brookfield Properties Randy Kraft, KPMG Chris Ollenberger, Quantum Place Properties Bill Whitelaw, JWN Cheryl Gottselig, Burnett, Duckworth & Palmer Norm Landry, Lawson Projects Cody Clayton, Remington Development Corp. Robert Booth, Bennett Jones Bill Chomik, Kasian Architecture Peter Stack, Cadillac Fairview Matthias Tita, City of Calgary Chris Carlsen, Birchcliff Energy Valerie Kinnear, Mount Royal University Steve Allan, Calgary Economic Development Iain McCorkindale, M21/Matco Colleen Shepherd, Calgary Regional Partnership Denis Painchaud, Nexen CNOOC Many of our Action Calgary and industry partners participate on our eight advisory committees. These community leaders congregate to discuss issues, create solutions, and advance opportunities that support purposeful diversification and sustainable growth for Calgary. Their unwavering commitment helps direct the organization in achieving the actions in Building on our Energy: the Economic Strategy for Calgary. ECONOMIC STRATEGY LEADERSHIP AND IMPLEMENTATION COMMITTEE HOUSING OUTLOOK & MARKETING EXPLORATION COMMITTEE Lori Van Rooijen, Alberta College of Art and Design Jeff Dyer, Accessible Housing Association Michael Brown, Calgary Municipal Land Corp. Pat Firminger, Alberta Human Services Alan Tennant, Calgary Real Estate Board Evelyn Cutts, ATCO Group Amie Blanchette, Calgary Region Home Builders Association Wendy Lowe, Ambrose University Val Hoey, Bow Valley College Stephan Poirier, Calgary Airport Authority Patti Pon, Calgary Arts Development Dean Prodan, Calgary Arts Development Adam Legge, Calgary Chamber Michael Brown, Calgary Municipal Land Corp. Colleen Shepherd, Calgary Regional Partnership Bill Robertson, Calgary Regional Partnership Tom Bornhorst, Calgary TELUS Conventional Centre Rollin Stanley, City of Calgary Lori Kerr, City of Calgary Chris Heseltine, Government of Alberta Justin Riemer, Government of Alberta Sandra Locke, Government of Alberta Lori Zaparniuk, Government of Alberta Peter Garrett, Innovate Calgary Roberto Geremia, Broadwalk Properties Trent Edwards, Brookfield Residential Adam Legge, Calgary Chamber of Commerce Carole Simpson, Mount Royal University Maureen MacDonald, SAIT Cindy Ady, Tourism Calgary Therese Takacs, St. Mary’s University Adrian Bussoli, AGM Wear Mike Flynn, Apel Extrusions Mike Holden, Canadian Manufacturers and Exporters Rod McKay, Tourism Calgary Stuart Dalglish, City of Calgary Susan Mide-Kiss, University of Calgary Matko Papic, Evans Consoles Brad Stevens, City of Calgary Franco Savoia, Vibrant Communities Calgary Erin Chrusch, City of Calgary 18 · 2015 Annual Report · Calgary Economic Development Guy Huntingford, Urban Development Institute Jyoti Gondek, University of Calgary Luciano Dalla-Longa, Government of Alberta Ian Wild, ATB Stace Wills, Innovate Calgary Erhard Kiefer, ATCO Didier Luneau, Calgary Hotel Association Jeff Gaulin, CAPP Kam Sandhar, Cenovus Energy Shane Keating, City of Calgary Donna Banks, Cresa Calgary MANUFACTURING ACTION COMMITTEE Mac Logan, City of Calgary Jim Saunderson, Western Economic Diversification Georg Paffrath, Trico Homes Satvinder Flore, AMEC Foster Wheeler Lino Luison, Enbridge Duane Macauley, Dynamic Source Manufacturing Chima Nkemdirim, City of Calgary Felicia Mutheardy, Canada Mortgage & Housing Corp. Gail Sokolan, City of Calgary Rollin Stanley, City of Calgary Michael Whitt, Innovate Calgary Jeff Loomis, Momentum Bob Miller, Calgary Regional Partnership Joseph Brunelle, Fidelity Machine & Mould Solutions Ralph Quinlan, Fleischmann’s Calgary Brian Rosentreter, Global Analyzer Systems Tom McCaffery, Government of Alberta Philip Doublet, Nortruck Manufacturing and Distribution Ltd. COMMERCIAL REAL ESTATE ADVISORY COMMITTEE Chester Nagy, Plains Fabrication Tim Hogan, WAM Development Group Jim Dewald, University of Calgary Anita Fleming, CN Rail Jim Brown, JRSB Logistics Karla Spilsted, City of Calgary Jeff Bradshaw, V Strategies Ben Smith, Calgary Logistics Council Jonathon Moser, Lafarge Cindy Brown, Calgary Airport Authority Hanif Manji, WestJet Airlines Bill Bird, WAM Development Group Keith Stanley, Cathay Pacific Michael Arena, Canadian Pacific Railway Stephan Poirier, Calgary Airport Authority Bob Miller, Calgary Regional Partnership Peter Wallis, The Van Horne Institute Colleen Shepherd, Calgary Regional Partnership Reg Johnston, RJ T&L Consulting Stephan Poirier, Calgary Airport Authority Reg Reimche, Canadian Pacific Railway Hanif Manji, WestJet Airlines Chris Marko, Hopewell Logistics Sue Stevenson Brown, FRC West David Roberge, SAIT Pam Frey, Government of Alberta Alberto Sia Lu , Optima Manufacturing Michael Neumann, Standen's George Tempelton, AOR Cris Daklala, Byblos Bakery Rollin Stanley, City of Calgary LOGISTICS ADVISORY COMMITTEE CAREERS IN MANUFACTURING Michael Bussoli, Apparel Innovation Scott Taylor, GWL Realty Advisors Patricia Evans, Sizeland Evans Munir Patel, Suncor Energy Brett Darichuk, AltaInjection Moulding Louis Keleman, Simo Corp Hannes Kovac, OPUS Group Michael Nygren, Shape Properties Rajen Shah, PwC Regina Corrigan, Gowlings Duane Hertzer, Optima Manufacturing Sarah Quayle, City of Calgary Chester Nagy, Plains Fabrication Dave Nolan, Studio Y Creations Debra CameronMackinnon, Westech David Miles, Cresa Calgary Corrie Banks, Triskele Logistics CALGARY WORKS Lance Livingston, AECON Carol Howes, ENFORM Chris Thomas, BizCon Group Pat Firminger, Alberta Human Services Brian Thompson, SAIT Polytechnic Corrie Banks, Triskele Logistics Jeanette Sutherland, Calgary Economic Development Bill Campbell, Sobey’s Karen Chown, University of Calgary John Simpson, JSAI Herman Van Reekum, VRV Global Ashu Gandhi, City of Calgary Stuart Boland, Volunteer Calgary Economic Development · 2015 Annual Report · 19 Focusing on sustainable growth, shared prosperity and building a strong community. 20 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 21 M A J O R I N I T I AT I V E S Building on Our Energy The Economic Strategy for Calgary  The economic downturn that reverberated As economic conditions worsened in of Calgary with its focus on innovation and throughout Calgary in 2015 coincided 2015, The Leadership and Implementation collaboration to diversify the economy with the first full year of implementation Team prioritized a number of key actions and strengthen our community. of our updated 10-year economic strategy and identified the need to strengthen for the city. collaboration. We improved our Building on our Energy: an Economic Strategy for Calgary is the framework approved by City Council to achieve a sense of community, shared engagement with the private sector and post-secondary institutions as well as increasing outreach efforts with the new Alberta government. Calgary’s global reputation has attracted businesses, investment and people. Now we are positioned to be a global talent hub that exports knowledge and problem solving ability as well as products and services in energy and other sectors of prosperity and sustainable development The Leadership and Implementation the economy including agribusiness, in Calgary. The actions and tactics align Team met twice in 2015 while staff manufacturing, creative industries, with six areas of focus to leverage our and members of the Board of Directors clean-tech and renewables. global, entrepreneurial, innovative, for Calgary Economic Development people, community and collaborative held more than 100 meetings with key energies to achieve purposeful stakeholders to implement actions. economic diversification. In 2016, Calgary Economic Development will welcome private-sector stakeholders to the Leadership and Implementation Building on our Energy: an Economic Team to improve our engagement with Implementation is achieved through Strategy for Calgary was drafted in times the business community. We will also host collaboration of City Administration, of prosperity but it is as relevant, if not a series of roundtables with the Alberta civic partners, post-secondary institutions more so, today. The Strategy is aligned government to better align economic and not-for-profit agencies as well with the Economic Resiliency initiatives development activities across the province. as representatives of the Alberta and that have been implemented by The City federal governments with ongoing guidance provided by a Leadership and Implementation Team. Progress on Economic Strategy In the 18 months since Building on our Energy: an Economic Strategy for Calgary was approved activity has commenced Complete with no further activities and is ongoing in 80 per cent of the actions. Progress on the 32 actions and 142 specific tactics – half are lead or co-lead by Calgary Economic 2% 1% 7% 9% New tactics undertaken Complete with ongoing activities 19% Development – is measured through Not yet commenced community-wide core indicators and individual actions. Tactics have been cancelled 61% Commenced with ongoing activities 22 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 23 P R O G R E S S O N C O R E I N D I C AT O R S I N 2 0 1 5 Sustainable Development 0.54 Diversity of land use in Calgary, out of 1.0. Target: 0.55 Estimated overall gross domestic product for all Calgary industries in 2015. Target: $130 billion The City initiated the Main Streets Strategy to ensure major thoroughfares remain vibrant. 66.1 Calgary's score, out of 100, for non oil and gas diversification. Target: 68 Calgarians satisfied with the overall level and quality of City services and programs. Target: 84% City of Calgary Citizen Satisfaction Survey, 2015. Conference Board of Canada. City of Calgary Citizen Satisfaction Survey, 2015. I N I T I AT I V E S : Calgary Arts Development supported 10,289 activities I N I T I AT I V E S : I NI TI AT I VES : Calgarians who agreed their overall quality of life is good. Target: 90% 80% $117.6 billion City of Calgary Planning Development and Assessment. (2014, updated biennially.) 86% Sense of Community Calgary Economic Development opened dialogue with Edmonton Economic Development and Government of Alberta to collaborate on foreign trade and investment efforts. Calgary's Residential Diversity Index rating, out of 1.0. Target: 0.23 by 2020 City of Calgary Planning Development and Assessment. (2014, updated biennially.) Sustainable Calgary State of the City Report, 2011. by arts organizations in 2015 The City of Calgary launched an innovation program to seek citizens’ suggestions resulting in 87 per cent of on how to improve service delivery. Calgarians being engaged with the arts in some way. The City of Calgary launched an open data program allowing citizens access to Calgary Economic Development hosted 24 inbound trade missions last year. 0.21 I N I T I AT I V E S : 25.6% Non-residential assessment in the total City of Calgary property assessments. Target: 29% City of Calgary Planning Development and Assessment, 2015. New and/or enhanced City curated data on everything from traffic flows to building permits. programming introduced at The City of Calgary launched the Fair Entry program to reduce barriers faced by the Calgary Zoo, TELUS Spark, low income Calgarians in accessing City programs and services. Heritage Park and Winsport. Construction on the new downtown library commenced. 30% 74% Calgarians regularly involved in neighbourhood and community events. Target: 36% Calgarians who ranked overall perceptions of Calgary as favourable. Target: 76% City of Calgary Citizen Satisfaction Survey, 2015. Calgary Economic Development National Perceptions Survey (2014, biennial survey.) I N I T I AT I V E S : I N I T I AT I V E S : A record year for sport tourism The City continues to work I N I T I AT I V E S : with 59 culture and sport bids closely with developers to The Calgary Regional won last year. focus on transit oriented Partnership and The City of Calgary Arts Development I N I T I AT I V E S : development, creating complete Calgary are collaborating on an Authority will launch SpaceFinder The Energy Futures Lab, Calgary Economic Development communities, increasing the industrial land mapping project in 2016 – an online arts space facilitated by the Natural Step, collaborated with Advantage percentage of development in in the region. booking tool. brings together innovators and BC, Toronto Financial Services existing neighbourhoods and Alliance and Finance Montreal increasing the percentage of the to understand Canada’s financial population living within walking services value proposition and distance of services. the opportunities for Calgary. I N I T I AT I V E S : influencers in Alberta to explore I N I T I AT I V E S : Annual transit ridership increased from 111.5 million City of Calgary Recreation is and collectively address current collaborating with Corporate and future energy challenges. trips in 2014 to an estimated of other facilities such as Calgary, Be Part of the Energy car c-trains now in service. 113.2 million trips in 2015. Four Properties to maximize the use Multiple family (condos and Community Association buildings Innovate Calgary launched town homes) housing starts and lands for community and with Tourism Calgary, generated AlbertaIN, a directory of service doubled single family housing neighbourhood events. more than 500,000 social media providers for innovation start-ups starts in 2015. 24 · 2015 Annual Report · Calgary Economic Development Calgarians who agree Calgary is a great place to make a life. Target: 90% City of Calgary Citizen Satisfaction Survey, 2015. marketing campaign, aligned in southern Alberta. 84% engagements and $9 million in The City of Calgary commenced work on the 1St St. SW, 4th. St SW and 8th, St SW underpasses. media stories in 2015. Calgary Economic Development · 2015 Annual Report · 25 Shared Prosperity 11% Calgarians living at or below the low Income cut off before tax. Target: 10% Statistics Canada , 2013. 80% Calgarians who agree Calgary is a great place to make a living. Target: 90% City of Calgary Citizen Satisfaction Survey, 2015. I N I T I AT I V E S : The City of Calgary launched the Fair Entry program – a single application process for all subsidies programs. This the first program of its kind in Canada. I N I T I AT I V E S : Vibrant Communities Calgary has brought together a Leadership Calgary Economic Development Implementation Council to support the Implementation Plan for Enough for All. has completed the pilot year With renewed focus on innovation and diversification, the Alberta and federal governments are providing added support for job creation, flexible work and training programs to prepare the labour force for the 21st century economy. of a Business Retention and Expansion program. Completing 259 surveys, the process has expanded our business networks and information gathered assists in identifying 68.7 Calgary's employment rate at the end of the year. Target: 71.7 per cent Canada Labour Force Survey, 2015. 25.3% Calgary households that spent more than they could afford (32 per cent of gross family income) on housing. Target: 17.4% Statistics Canada, 2015. I N I T I AT I V E S : growing businesses. Programs are being developed and implemented to incorporate entrepreneurial training throughout the campus at University of Calgary, Mount Royal University and Calgary Arts Development. Innovate Calgary is leveraging Kinetica Ventures to create an energy technology corridor connecting Calgary Economic Development , downtown energy companies, SAIT, University of Calgary and Innovate Calgary. I N I T I AT I V E S : The City of Calgary drafted an Affordable Housing Strategy to address the growing need of housing for low income Calgarians. Not-for-profit, City of Calgary and home-builders have formed Resolve to provide affordable and supported rental housing for 3,000 vulnerable and homeless Calgarians. 26 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 27 M A J O R I N I T I AT I V E S Be Part of the Energy Calgary. Be Part of the Energy is the platform to tell our story and serve as a call to action to engage businesses and investors to see Calgary as a long-term opportunity with one of the world’s best talent pools. In response to the rapidly changing economic climate, the four-year Be Part of the Energy campaign shifted from a primary focus on labour attraction to an emphasis on the emerging and counter-cyclical business, trade and investment opportunities in Calgary. The national advertising campaign backed by a “content program” broadened Calgary’s story to not only include Mayor Nenshi on Morning Joe, CNBC-TV bright spots and advancements within the energy sector, but reveal the lesser known stories about our entrepreneurs and innovators. WestJet Airlines, GE Canada's Customer Innovation Centre and Arlene Dickinson’s District Ventures were featured to highlight Benchmarking Calgary’s competitiveness the entrepreneurial and innovative spirit that’s a fundamental element of the Calgary business culture. In June, Mayor Naheed Nenshi visited New York City to meet with leaders in the financial services sector and conduct interviews with major media outlets including CNBC-TV and Bloomberg News. The mayor lobbied for greater access to US markets for Alberta oil and promoted the business opportunities in Calgary. The media blitz The study helped determine our the city’s goals for economic compares with cities from across relative competitiveness — which success, shared prosperity and North America and around the we defined as a condition created building a strong community. world — the strengths, the risks, when government, industry and the weaknesses — is a critical part citizens “work together to pursue of the work at Calgary Economic prosperity.” The study determined Development. Calgary is well positioned to thrive generated extensive coverage in Canada and the Working with consultants United States. Monitor Deloitte, we conducted To enhance the Be Part of the Energy campaign as it evolves with the city’s economy in the years ahead, a content strategy was initiated in 2015 to help tell Calgary’s story on an ongoing basis, not only during advertising and media campaigns. The Calgary Economic Development website was refocused to emphasize storytelling about our people and companies as well as the innovations that were initiated in Calgary. In 2015, more than 100 stories were published on our website. 28 · 2015 Annual Report · Calgary Economic Development Understanding how Calgary a study released in November Benchmarking Calgary’s Competitiveness to better understand how we compare to among a diverse peer group of global cities with similar industry strengths including Pittsburgh, Houston, Brisbane, Rio de Janeiro, Vancouver, Singapore, Chicago, Atlanta, Aberdeen and Rotterdam. The study drew on data from 2014 and 2015 and, while metrics such as gross domestic product have changed since then, our real value proposition in attracting companies considering Calgary lies in our people and our young, educated and globally connected workforce. The insight from the study will assist efforts to diversify 10 peer cities in five essential areas: Calgary is known for its oil and gas the economy to position Calgary human capital, economic strength, industry but the study concluded as an innovation centre and target innovation and entrepreneurship, the economy is actually steered businesses from industries such as the cost of doing business and by the knowledge-driven services agribusiness, transportation and livability impacts. supporting the sector. A highly logisics, financial services, creative skilled workforce is critical to industries, and renewable energy. achieving knowledge-driven growth that’s needed to achieve Calgary Economic Development · 2015 Annual Report · 29 Instagram Initiative @lifeincalgary Each week, a different influential Calgarian or organization takes over the @lifeincalgary Instagram account to show their unique perspective of the city. It’s become a hub for diversity, creativity and community. 30 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 31 M A J O R I N I T I AT I V E S Calgary Film Centre Supporting a growth industry With the arrival of William F. White Modern sound stages are the critical International as the anchor tenant late infrastructure for the film and television in 2015, the Calgary Film Centre moved industries and the Calgary Film Centre from an idea for a modern film studio first provides a foundation for local creative put forward in 2009 to a working facility industries to flourish as southern Alberta already acting as an incubator for the becomes a preferred location for more industry in Alberta. local and international productions. The Calgary Film Centre will collaborate with Alberta Culture and Tourism, educational institutions, unions and guilds to develop educational programs, host conferences and workshops as well as conducting work/study programs for people entering the industry. The official opening of the more than The centre puts in place a creative $28 million project is set for May 2016 environment to showcase the quality of after workers complete the final touches productions being developed in Alberta on the facility that includes three sound for various media platforms. stages in addition to warehouse and workshop space that was in operation late in 2015. 32 · 2015 Annual Report · Calgary Economic Development The Calgary Film Centre is a $28.2 million development that includes $10 million in funds from the City of Calgary, $5 million from the Government of Alberta and $1 million from William F. White International. The Calgary Film Centre is located on an 8.35-acre site in the Great Plains Industrial area of Calgary and has warehouse and workshop facilities and three purpose-built studios. William F. White International – which provides production services and equipment for film, television, digital media and theatre – moved into the centre in November 2015 as the anchor tenant. Calgary Economic Development estimates the addition of the centre could be the catalyst for industry to increase its The intention is for the facility in contribution to the Alberta economy southeast Calgary to become a centre to $500 million annually in five to of innovation and excellence in the seven years. The film centre, along with creative and digital media industries by programming in partnership with many driving development of new local and of the post-secondary institutions, will international projects while contributing support the growth and mentorship of to economic diversification. the crew base in Calgary and area. Calgary Economic Development · 2015 Annual Report · 33 Goundbreaking research In partnership with Stone-Olafson and Rogers Communications, M A J O R I N I T I AT I V E S WORKshift developed ground-breaking Canadian research titled: Connecting Canadian Talent to the workplace with WORKshift Supporting Canadian organizations to adopt flexible work cultures Technology and Flexible Work. Results were conclusive: flexible work (time and location were assessed), when Thanks to our Founding partners’ thoughtful leadership and financial support, WORKshift continues to support Canadian organizations to embrace and succeed with meaningful workplace transformation. The Founding partners are: supported by appropriate technology, can significantly and positively impact organizational success. Events WORKshifting means changing the way Created and incubated at Calgary we think about where and when work can Economic Development since 2009, get done most effectively. WORKshift has evolved from a regional Shaw Business WORKshift hosted sold-out four marque events across Canada in 2015 to raise awareness about the benefits and trends towards mobile work.  telework initiative to a national movement KPMG •  January 2015 – Ottawa Rogers Communications •  January 2015 – Toronto The Canadian CIO consensus report for 2015 found that 48 per cent of organizations in Canada do not have a formal mobility strategy but are “working on one.” There is no question Canadian organizations are looking at developing mobile and remote strategies for their workers in the coming years.  To make WORKshifting more than simply an organizational ambition means having the right technology, workspaces and policies to produce your most inspired work wherever and whenever that might be. The question remains, where can organizations turn for the support around human resources, workspace and technical considerations required to integrate this shift? with a vision to transform the way work is done in Canada. Today, WORKshift is Citrix (GotoMeeting) the authoritative voice in the country •  May 2015 – Halifax promoting, educating, and accelerating •  October 2015 – Calgary the adoption of flexible work programs that allow companies across Canada to embrace our changing world. With a national presence firmly established in 2015, WORKshift will adapt to the economic realities and move to the promise to help put Calgarians work. The global talent hub initiative will elevate the profile of Calgary’s highly educated, globally aware workforce to other areas. We’ll tell the world the benefits of employing Calgary-based employees who will WORKshift from virtual or collaborative co-work locations around Playbook The market spoke and we listened. A dialog with employers shifted the WORKhshifting conversation from “why” to “how”. Employers, convinced of the mobile future of work, want to know how to achieve it.  In partnership with our Founders and industry partners, WORKshift developed the first flexible work Playbook as a definitive guide to flexible work implementation. It will be available in 2016. the city. We will export expertise but retain the talent here in Calgary! 34 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 35 M A J O R I N I T I AT I V E S Global Business Centre Supporting Calgary’s growth Delegations using Global Business Centre in 2015 included the following countries: The Global Business Centre is a the centre is to create an eco-system multi-storey building in the heart of for success through educational downtown Calgary where business programming as well as working with meets opportunity. companies to help their business plans. Belgium The centre offers transitional office space The current tenants include Kinetica Kosovo for businesses seeking to enter the Calgary Ventures, which accelerates innovative market. It also provides meeting space for energy developments, the Canada & China local companies that want information Business Council, and the governments on international opportunities or are of Ontario and Quebec as they assist local interested in collaborating to identify companies seeking business opportunities opportunities to export goods, services in Calgary and Alberta. and knowledge to global markets. The Global Business Centre hosted The centre is operated by Calgary 24 delegations as part of our investment Economic Development and in 2015 attraction efforts in 2015. It was also the hosted more than 50 events with our site of an open house for international Action Calgary partners and other delegates at the 2015 Stampede business groups. Events include seminars Investment Forum as we focused on on export opportunities along with increasing trade and export opportunities briefings, workshops, roundtables and and positioning Calgary as a talent hub. France Czech Republic Dubai Mexico Peru South Korea China Japan United States networking receptions. Since the Centre opened in 2010, it has provided temporary office space for almost 40 companies. More than half of those companies established permanent offices in Calgary. The mandate for The Global Business Centre is a place that fosters creativity and collaboration through an exchange of market information and industry knowledge in the heart of Calgary’s vibrant business district. 36 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 37 M A J O R I N I T I AT I V E S Renewables Clean technology is a driving force in energy As the world committed to more To facilitate growth in the sector, Calgary renewable and environmentally Economic Development is involved in responsible energy in 2015 and several initiatives in 2015, including: Alberta accelerated its phase out of coal-generated electricity it has created • connects energy companies with tremendous opportunities for Calgary as a innovators to accelerate technology leader across the entire energy spectrum. development and adoption, as an Renewable energy and clean technology have become a major focus for Calgary Economic Development as associate member. • a directory to help local large corporations – collaborates with entrepreneurs identify service post-secondary institutions and other providers for funding, advice, and stakeholders to apply innovative thinking other business incubation services. to global challenges. of its committees to promote an environment where women can of dollars in investment opportunities participate in, contribute to, and lead to develop transitional and renewable generated from renewables in 2030 and Calgary companies have demonstrated they can develop and commercialize technology to turn challenges into business opportunities. Alberta is home to almost 200 renewable energy companies and is a proven leader in areas such as power cogeneration and carbon capture and storage, and the opportunities to harness wind and solar energy in the province are tremendous. 38 · 2015 Annual Report · Calgary Economic Development More than 60 provincial and federal government funding and contribution programs are available for Alberta technology driven entrepreneurs. efforts in the knowledge economy. energy sources from natural gas to 30 per cent of Alberta’s electricity must be Joined the Calgary Council for Advanced Technologies on one in Alberta by 2030 will create billions The province’s commitment to Every 150 megawatts of solar energy capacity installed creates more than $300 million in investment as well as 1,875 construction jobs and 45 full-time jobs in addition to lease payments and municipal property taxes. Canadian Solar Industry Association. • emissions from coal-generated electricity biomass, wind and solar. Technologies have the potential to convert 20 million tonnes in feedstock waste annually in Alberta into bioenergy products – including renewable energy. Partnered with Innovate Calgary on initiatives including AlbertaIN – the energy sector – from start-ups to The pledge to eliminate greenhouse gas Joined Kinetica Ventures, which Alberta is Canada’s third largest producer of wind energy and harnesses only one percent of the potential resource available. • Participated in Energy Futures Lab, a multi-stakeholder group leveraging Alberta’s leadership in energy to accelerate a “greener” future. Calgary Economic Development’s Megan Zimmerman was among the key influencers and innovators in its 40 inaugural fellows. The University of Calgary is home to the Institute for Sustainable Energy, Environment and Economy while Mount Royal University has offered Earth and Environmental Sciences studies for four decades and Applied Research and Innovation Services at SAIT has a focus on “green” building technology. Calgary Economic Development · 2015 Annual Report · 39 SECTOR OVERVIEW Energy Calgary: A global energy centre focused on innovation About 2.5 million barrels of oil sands crude and 1.3 million barrels of conventional oil were produced each day in 2015. In Western Canada and industry forecasts total production will surpass 5.3 million barrels a day by 2030. A fundamental shift in global oil price engagement sessions. Although the Economic Development to seek out dynamics over the last two years battered panel’s report was released early in 2016 opportunities for companies to sell their the Canadian oil and gas industry and implementation of its recommendations products or expertise to become part of companies adjusted to the historic were delayed until 2017. the global supply chain. downturn in 2015 with painful costcutting measures that included sharply lower spending and fewer staff. The Alberta government lists more than $40 billion in oil and gas projects under construction and a further $76 billion in announced or proposed projects. There were 5,282 oil and gas wells drilled in Western Canada in 2015 compared with over 11,000 two years ago due to low commodity prices and a transition to longer horizontal wells. There were 1,538 business establishments in the energy sector in Calgary in 2015. Statistics Canada. dialogue with the royalty and Industry revenues declined 40 per cent in climate panels, 2015 and layoffs followed at companies we partnered with that had been staffed for growth focused the Government on improving efficiency. of Alberta The elections of an NDP government in Alberta and a federal Liberal government prompted a change in environmental and Canadian Association of Petroleum The requirement for additional pipeline infrastructure to reach new markets reinforces the fact that crude oil production in Western Canada is at a record 3.8 million barrels a day and will continue to grow. Producers to host policies in time for the UN climate conference in Paris. Alberta established Delegates from 14 countries participated in the third annual Stampede Investment Forum for the oil and gas industry. To facilitate an expert panel on climate change that recommended increasing the provincial Premier Notley’s first speech to Calgary Industry’s focus to improve efficiency business leaders at our annual Stampede and reduce the environmental footprint Investment Forum in July. will drive innovation and create new carbon levy, capping GHG emissions from She pledged Alberta would maintain oil sands and accelerating the phase out of “a warm welcome for investors.” coal-fired power plants. Premier Rachel Notley’s government also Keystone XL pipeline in November named a Royalty Review Advisory Panel reinforced the pressing need for and Calgary Economic Development infrastructure to move Alberta oil and facilitated private stakeholder sessions and gas to new markets. The focus on global was a supporting partner in the community markets aligns with a shift by Calgary unforeseen opportunities for companies at home and to play a role addressing the energy and environmental challenges worldwide. 2015 Annual Average Natural Gas Prices 60 3.5 50 3.0 2.5 40 2.0 30 1.5 20 1.0 10 0 in reservoir stimulation, for example, demonstrate how technology can create The US government’s rejection of the 2015 Average Annual Oil Prices business opportunities. Recent advances 0.5 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC West Texas Intermediate ($USD/bbl) Western Canadian Select ($CDN/bbl) 0.0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Henry Hub Natural Gas ($USD/MMBtu) Alberta Natural Gas ($CDN/GJ) Data supplied by EIA & Baxtex Energy 40 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 41 SECTOR OVERVIEW There were 4,762 transportation and logistics companies with operations in the Calgary area in 2015. Transportation & Logistics Statistics Canada. Transportation and logistics in Calgary grew slightly in 2015 to $5.4 billion and accounts for 4.6 per cent of municipal GPD. Leading transportation and distribution hub in Western Canada A growing transportation and logistics Calgary Economic Development is than 15 million passengers a year and is network has positioned the Calgary region working with the Calgary Regional nearing the completion of its $2-billion as a premier hub in North America’s Pacific Partnership and other stakeholders expansion. The multi-year project includes Northwest region to connect people and including Calgary Logistics Council, The new cargo and livestock- handling products by air, rail and road. Van Horne Institute, and local universities facilities, the longest runway in Canada and colleges to build on the city’s long and a new terminal to serve international history as a transportation centre since the travelers is scheduled to open in fall 2016.  The sector has become an area of growth for energy, agri-business and manufacturing firms as well as the retail sector; with companies including transcontinental railways first arrived in the 19th century. worked with the transport sector Costco having made Calgary a hub in the TransCanada Highway and CANAMEX to research issues including “over- their intermodal transport systems and North-South Trade Corridor with access to dimensional” load capacity on local roads distribution networks. more than 50 million people by ground and worked with The City to help trucking transport within 24 hours. companies get products to customers The Calgary International Airport is a 14 municipalities that make up the growing aviation hub that serves more Calgary International Airport contributes more than $8.2 billion to the local GDP annually and is responsible for 48,000 direct and indirect jobs, including 24,000 jobs at the airport site. The Calgary Regional Inland Port was approved for Foreign Trade Zone status by the Government of Canada in 2015. in 2015, Calgary Economic Development Today, Calgary sits at the crossroads of “inland port” in Western Canada, the Approximately 163,000 trucks crossed the Canada-US border at Coutts, Alta., on the CANAMEX North-South Trade Corridor in 2014. In laying a foundation for the future Canadian Tire, Home Depot, Sobey’s and As part of the plan to be the leading Calgary CMA, Statistics Canada, 2015. Calgary International Airport more than doubled in size and passenger volumes in last 20 years and its $2-billion expansion includes cargo facilities, runway and a terminal opening in fall 2016. more efficiently. Calgary Regional Partnership received the critically important Foreign Trade Zone status in 2015. The designation from the federal government exempts manufacturers from paying taxes and duties on imported goods until a finished product is sold. The 14 municipalities within the 10,000-square kilometer area that comprise the Calgary Regional Partnership are Airdrie, Banff, Black Diamond, Calgary, Canmore, Chestermere, Cochrane, High River, Irricana, Nanton, Okotoks, Redwood Meadows, Strathmore and Turner Valley. 42 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 43 SECTOR OVERVIEW Finance Attracting global investment In the last two decades Calgary has been first office in the city and has described among the most active banking centres Alberta as a “key market” going forward for worldwide. The massive investments in the Asian financial group. oil sands and other natural resources has slowed as the global oil supply glut reverberated through the energy sector globally and financings declined significantly in 2015. The pace of mergers and acquisitions will rise and fall with commodity prices but the sharp decline in capital spending in Canada’s oil and gas sector to $42.8 billion in 2015 after several years topping $70 billion it was evidence of a suddenly resource-abundant world. Calgary ranked 28th of 86 cities globally in the most recent Global Financial Centre Index. Even with the current downturn, Canada’s oil and gas industry is forecast to need more than $500 million in capital to meet Financial services sector accounts for about 15 per cent of Calgary’s GDP. production growth forecasts over the next decade. Asset management and venture capital firms, along with private equities funds and “angel investors” are areas of opportunity with the stock market volatility. Private investment firms are There were 1,347 business establishments in financial services in 2015. Statistics Canada. Two dozen major international banks have offices in Calgary. developing innovative capital structures to fund industry – particularly among The dearth of optimism in 2015 doesn’t small and intermediate-sized oil and gas mean a lack of future opportunities. producers. The investment banking expertise in Western Canada attracts only about Calgary extends beyond oil and gas and 10 per cent of all angel investment capital opportunities are emerging in clean-tech, in Canada and non-energy projects in renewable energy, agri-business and other particular require changes to government sectors. Calgary ranks in the top third policies and programs for Calgary to be of 86 cities included in the Global competitive with other jurisdictions. Financial Centre Index. Two dozen major international banks have a presence in Calgary. In July, the Bank of Tokyo-Mitsubishi UFJ opened its All of Canada’s financial institutions and the vast majority of the top global investment banks have operations in Calgary. 44 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 45 SECTOR OVERVIEW Real Estate Buildings and facilities to grow business The economic downturn impacted real market from new office towers there’s a estate in Calgary in 2015 as new housing focus on retrofitting older buildings for starts declined and office vacancy rates residential or other uses. rose but optimism for the future was endured as the value of building permits surpassed $7 billion for the third straight year. The number of people moving to Calgary 21,057 people still moved to the city – and the construction of new single-family homes fell a similar percentage to 4,138 declined by 4.1 per cent from 2014 to new homes. However, 8,895 multi-family $7.03 billion but that was after permits housing units started last year were down for construction of new residential and only 16 per cent from the previous year. than doubled over the last five years. Calgary CMA, Statistics Canada. declined by more than 40 per cent in 2015 – The value of building permits issued commercial developments had more Building permits valued at $7.03 billion in 2015 were a 4.1 per cent decline from 2014. As the price of new single-detached homes declined by 1.8 per cent in 2015 – Real estate firm CB Richard Ellis has said to an average of $491,600 – Calgary Calgary had the fastest growing office Economic Development worked with market in Canada from 2005 to 2014. industry to find creative solutions to As oil and gas companies downsized and affordable housing. A slowing economy new towers added to the inventory of and changing workforce means the downtown offices the vacancy rate went availability and affordability of housing from 9.8 per cent in 2014 to 17.6 per cent directly influences workforce retention, at the end of 2015. productivity and quality of life. Calgary offers a variety of commercial real estate “ecosystems” from downtown office towers to suburban campuses to suit the shifting needs of companies and their workforce. Sublease arrangements have lowered Assessing the long-term potential for commercial rents and real estate agents transited-oriented developments predict a “flight to quality” on any uptick emerged as a priority for the real estate in oil prices, as companies typically take sector with plans in place for a new advantage of the downturn to upgrade Green Line C-Train by 2024. Construction started on 8,895 multi-family housing units in 2015 compared with 4,138 single-family houses. Calgary CMA, Statistics Canada. Calgary has a total more than 40 million square feet of downtown office space and almost 24 million square feet of suburban office space. Calgary CMA, Statistics Canada. Downtown office vacancy rate was 17.6 per cent, 19.1 per cent in suburban offices and 7.9 per cent for industrial space in the fourth quarter of 2015. Calgary CMA, Statistics Canada. There were 2,151 business establishments in the real estate sector in Calgary in 2105. Calgary CMA. Statistics Canada. their work environments. With 3.5 million square feet office space to come onto the 46 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 47 SECTOR OVERVIEW Manufacturing Innovation driving export opportunities and career options The manufacturing sector was a buffer Development is collaborating with to low oil and gas prices in 2015 as the companies to identify opportunities, overall value of consumer and industrial make contacts and develop strategies products made in Calgary increased more to enter new markets. than one per cent with agri-food emerging as the largest component of the sector in Alberta. One of our primary interactions with the sector is through an outreach strategy to help change perceptions about jobs in the Manufacturing in Calgary surpassed sector among high school students and $5.95 billion in overall business in 2015 underserved populations. Industry tours and represents eight per cent of the and career fair activities are coordinated Calgary economy. by our Careers in Manufacturing program The sector embodies the city’s entrepreneurial spirit with about 1,850 companies in energy, construction, in an effort to raise awareness of the technology-focused sector and improve the supply of qualified workers. aerospace, biomedical, chemicals, The program was developed through electronics, furniture and others. Many engagement with 75 manufacturing invested heavily in advanced automation companies in the Calgary region and and technology and the highly efficient provided 19 tours for almost plants are globally competitive. 400 students in 2015. With depressed prices for petroleum and With logistics essential to the movement coal products, Statistics Canada reported of goods, our Manufacturing Advisory food manufacturing in the province Committee helped foster a dialogue surpassed these products in value in with local companies and The City about October. The food sector has strong export transportation planning, a new municipal potential and Calgary provides companies transit line, “over-dimensional” loads a well-developed infrastructure, access to and better designs for industrial and capital, a highly skilled labour force and a business parks. Manufacturing generated more than $5.95 billion in GDP in 2015. Statistics Canada. Manufacturers benefit from the region’s Foreign Trade Zone status by delaying duties and tariffs on imported components until a finished product is sold. There were 1,682 business establishments in manufacturing in Calgary in 2015. Statistics Canada. Careers in Manufacturing arranged factory tours for almost 400 Calgary high school students to learn about career paths in the sector. large concentration of head offices. The lower Canadian dollar and reduced oil and gas activity has prompted many manufacturers to target international markets and Calgary Economic Oil and gas attracted people and capital from around the world to Calgary and our skilled workforce creates opportunities and fuels innovation in sectors such as manufacturing. 48 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 49 SECTOR OVERVIEW Creative Industries Award-winning crews and world-class scenery 2015 was a stellar year for creative Alberta is the fourth largest centre for industries in the Calgary area with an film and TV production in Canada after increased level of spending on film and British Columbia, Ontario and Quebec. television productions and Hollywood The opening of modern sound stages at The Revenant talent delivering Oscar-winning the Calgary Film Centre in spring 2016 is Fargo, Season 2 performances in films shot in expected to provide the foundation for southern Alberta. future growth in the industry. Hell on Wheels, Season 5/6 The Revenant was nominated for As the awards attest, the quality of work 12 Academy Awards and won three – from our talent and crews is world class. best cinematography, best director and best actor for Leonardo DeCaprio – and showcased the province’s visual beauty. The film also carried on a rich tradition of award-winning films and television Calgary Economic Development worked The Reckoning in the city’s “film friendly” environment for major studios as well as independent and Along with global acclaim for exceptional addition to support from the provincial 12 Academy Awards and won three – productions, the entire creative industries government, is critical to Calgary’s ability best cinematography, best director sector in Alberta was buoyed by the to build on last year’s accomplishments for Alejandro Iñárritu and best $175 million spent on film, TV, and other with sustained growth. actor for Leonadro DeCaprio. It was productions in the Calgary region in 2015. nominated for four Golden Globes There was almost $50,000 more spent to and won three, including scout locations for future projects. awards for the American network FX. local producers to attract more work to three Golden Globe Awards. • Balletlujah earned Corkscrew Media the Canadian Screen Award for Best Biography or Arts Documentary Program or Series. • Young Drunk Punk and Borealis earned Seven24 Films nominations for Canadian Screen Awards. Film and TV productions spent $175 million in southern Alberta in 2015. the city and province. The lower Canadian dollar has added to the value of filming in Canada but the quality of local crews and facilities in The Creative Industries sector also Four episodes of Behind the Scenes were produced by Calgary Economic Development, Shaw TV Calgary and Alberta Film including segments on V Strategies, Fargo Season 2 and Burn Your Maps. Alberta is the fourth largest film production jurisdiction in Canada after British Columbia, Ontario and Quebec. includes video gaming and digital media. Best Picture – Drama. • Fargo Season 2 was nominated for Burn Your Maps point for permitting and production needs • The Revenant was nominated for lauded with Emmy and Golden Globe Wynonna Earp Lewis & Clark Alberta productions were celebrated at this year’s Academy Awards, Emmy Awards, Golden Globe Awards ceremonies: another local production that has been Heartland, Season 9 in 2015 to enhance a “one-window” access programs produced in Alberta. The critically acclaimed TV series Fargo is Major productions shot in Alberta in 2015: “The Calgary Film Commission is well informed and motivated. They do a fantastic job promoting our city and province to the world … they help with location support, permitting, and even political trouble shooting so that a production can access more diverse and sometimes sensitive locations in a timely manner.” – Leslie Cowan, production manager, Fargo. In the last decade, the Calgary area accounted for more Oscar, Golden Globe and Emmy awards than any jurisdiction in Canada. Every dollar invested in film & television production through the Alberta Media Fund has a return on investment estimated at more than $6. There were 269 film and television businesses establishments in Calgary in 2015. Statistics Canada There were 4,520 creative industry business establishments in Calgary in 2015. Statistics Canada. 50 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 51 SECTOR OVERVIEW Workforce & Productivity Exporting goods, services and knowledge to the world Workers were top of mind in 2015 as partnership with Calgary Region layoffs in the oil and gas sector dominated Immigrant Employment Council and news headlines and prompted a shift Bow Valley College. in strategy from Calgary Economic Development after years of addressing a skills shortage in local industries. The Calgary Connecter Program partners secondary institutions to link business and community leaders to broaden the employment statistics for years but professional networks for people most 2015 was a period of adjustment as the often impacted in a downturn – immigrant unemployment rate reached 7.0 per cent professionals, Aboriginal graduates, in December en route to surpassing emerging professionals and international the national rate for the first time student. There were 224 connections since the 1980s. initiated for more than 100 “connectees” Our Calgary Works Employer Advisory but the emphasis changed to retaining Committee also determined retention, qualified workers and skills development health and engagement of the workforce in 2015. The total number of people was a priority. The Re-engage workshop working in the Calgary region fell by series was developed with business, 1.1 per cent from 2014 to 802,200. government, post-secondary institutions There were still 9,100 more people in and the community to retain the jobs than two years earlier driven by professionals and skilled trades workers increases in immigration. who will drive Calgary’s future economic growth. work was often outsourced to places Calgary Economic Development also with available infrastructure and labour. hosted a series of workforce round- Now Calgary companies are seeking tables for industry and government opportunities to leverage our young and on “up-skilling” workers, engaging educated workforce and the capacity for youth and underserved populations, business to expand globally. changes to foreign-worker programs and One initiative launched in 2015 to help people impacted by the economic downturn was to adopt a national immigrant retention program in Total employment in the Calgary region declined 1.1 per cent to 802,200 – still more than 9,100 jobs over 2013. Statistics Canada. The overall workforce in the Calgary region grew 1.3 per cent to 862,400 in 2015. Statistics Canada. in 2015 that resulted in 24 job offers. primary focus of workforce initiatives When Alberta’s economy was booming, Statistics Canada. with Alberta Human Services and post- Calgary had led the country in In recent years, labour attraction was the The 7.0 per cent unemployment rate in the Calgary region in December 2016 was an increase from 4.7 per cent a year earlier. There were 3,756 new businesses launched in Calgary in 2015, down 6.1 per cent from the previous year. City of Calgary. Calgary has more than 56,600 small business and is the headquarters for more than 150 corporations. A 28 per cent population growth from 2006 to 2015, most of any city in Canada, boosted Calgary’s population to more than 1.4 million. Statistics Canada. entrepreneurship. It led to creation of the Careers in Calgary program to inform youth about in-demand jobs in the science, technology, engineering or math-related professions. Calgary has the highest labour force productivity among Canadian cities with GPD per capita of $80,578 in 2015. 52 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 53 Soul of the City Neighbour Grant winners: “We’ve adjusted to rising prices; we can adjust to falling ones. These adjustments are never easy. They are often difficult and painful for affected individuals and their families. But they are necessary.” – Bank of Canada Governor Stephen Poloz, Calgary Sept.21, 2015 Signature Events East Village Street Fair and Show 'n' Shine With oil prices and the Canadian His comments followed forecasts dollar plummeting in September, for a challenging year ahead Great Spaghetti Western Family Run the financial world was watching from both Todd Hirsch, Chief when Bank of Canada Governor Economist at ATB Financial, Stephen Poloz delivered a and Glen Hodgson, Senior Vice keynote address titled Riding the President and Chief Economist at Commodity Cycle: Resources and the Conference Board of Canada. annual Economic Outlook. attendance – a record for one of luncheon in May. Development hosts – were a testament to the anxiety among business leaders and the appetite for perspective and 54 · 2015 Annual Report · Calgary Economic Development also the topic at our annual Report to the Community events Calgary Economic insight about the economy. Soul of the City Speaker Series The shifting economy was The nearly1,600 people in the select number of signature Report to Community Reading Town Canada Bringing the community together for trusted insight and informed discussion the Canadian Economy at our Economic Outlook Yarn Bombing Aurora on the Park More than 600 people attended the panel discussion about how As the economic downturn groups awarded $5,000 worsened in 2015 the Soul of the apiece for community- City speaker series addressed the improvement projects. issue of poverty in our first event. Calgary can stay competitive Calgary Mayor Naheed Nenshi and embrace purposeful delivered the keynote address diversification. Business on a topic that resonated columnist Deborah Yedlin of throughout the community. the Calgary Herald moderated The crowd economy was the focus of our third event as Sean Moffitt, Managing Director of Wikibrands and an authority on “social influence” authority, led Poloz acknowledged Albertans a lively conversation with Elyse were well aware “it can be hard Allan, president and chief to ride the cycles” in oil and gas executive officer of GE Canada, prices. He also reminded the Jeff Fielding City Manager audience “Canada has seen this for the City of Calgary and movie before” and he expressed Trent Edwards, chief operating confidence in our ability to officer of Brookfield Residential rebound from this extended and John Rossall, chairman of period of depressed prices. the Canadian Association of The Neighbour Grants program Director of Conservation and Petroleum Producers. in partnership with The Calgary Science, as he led a journey Foundation was celebrated around the world that linked at our second event with five nature with culture. Neighbor Grant Pitch Night About one in 10 Calgarians are a discussion on the power of estimated to live in poverty crowd funding and the future and the workshop with of the sharing economy. Vibrant Communities Calgary, Momentum and YWCA focused on finding solutions to the root causes of the problem. The final event celebrated multiculturalism. The experience was hosted by the Calgary Zoo with Dr. Axel Moehrenschlager, Calgary Economic Development · 2015 Annual Report · 55 Economic Overview West Texas Intermediate crude averaged $48.66 US per barrel in 2015 versus $93.17 in 2014 US EIA. Western Canadian Select crude averaged $35.28 per barrel in 2015 versus $73.60 in 2014 Bloomberg. As “lower for longer” became an unwanted Despite the downturn, Calgary continues Even with declines in home construction catchphrase for crude oil and natural to attract people and new businesses. and double-digit increases in office and gas prices and industry activity in 2015 Statistics Canada estimates approximately industrial space vacancy rates, developers it also reflected an economic downturn 21,000 people settled in the Calgary area remained relatively optimistic. The value of in Calgary that started a year earlier and during the year ending June 30, 2015 to building permit applications in Calgary fell offered little indication of a turnaround bring the regional population to more by 4.1 per cent in 2015 to $7.03 billion this at year’s end. than 1.4 million people. More than remains well above the historical average. With GDP declining by 2.4 per cent, Calgary endured a painful recession in 2015 due to depressed oil prices and AECO natural gas averaged $2.56 per gigajoule in 2015 versus $4.27 in 2014 NGX. Calgary’s GDP contracted by 2.4 per cent in 2015 after expanding by 32.4 per cent from 2005 to 2014. Statistics Canada. Calgary had the highest workforce productivity in Canada in 2015 with $80,579 in GDP per employee Statistics Canada. than shut their doors and retail spending increased slightly to $28 billion. West Texas Intermediate crude finished 2015 more than 30 per cent lower than it began the year at $37.13 US per barrel the impact of provincial and federal The almost 57,000 small businesses in and benchmark Western Canadian government policies that impacted Calgary is the highest number per capita Select was almost 48 per cent lower to capital investment after years ranking in Canada. It’s notable that a strong base $22.51 per barrel as pipeline constraints as one of the strongest economies in of experienced business owners has often added to discounts on Canadian crude. North America. become a pillar of growth for jurisdictions Natural gas was also lower with the when economic conditions turnaround. Alberta price finishing the year 28 per cent Reductions in staffing levels and capital lower at $2.19 a gigajoule. expenditures were the dominant story Housing starts softened in 2015 but that throughout the oil and gas industry as was after surging to record levels the The outlook for the economy in 2016 is spending declined dramatically and previous year. The 8,895 new multi-family uncertain and our challenge is to show Calgary’s unemployment rate increased units was a more than 40 per cent increase that a young, well-educated workforce from 4.7 per cent to 7.0 per cent at the from the total in 2013. New single-family can entice jobs here just as jobs end of 2015. home starts in Calgary were down previously attracted bright, talented 36 per cent from a year earlier at 4,138. people to Calgary. The economic picture wasn’t universally 56 · 2015 Annual Report · Calgary Economic Development 1,100 companies opened for business bad. Aside from upstream oil and gas, The MLS Benchmark price for detached the Calgary economy had significant homes fell 1.8 per cent from 2014 to an contributions from other sectors average $491,600 at the end of the year including agribusiness, business while condominiums declined 5.1 per cent services, construction, renewable to an average of $283,600 and attached energy, manufacturing, and homes declined 2.1 per cent to an transportation and logistics. average $328,200. Calgary Economic Development · 2015 Annual Report · 57 Calgary by the numbers Indicator Gross Domestic Product* Price of Oil (WTI) $USD/bbl (annual average) Price of Oil (WCS) $USD/bbl (annual average) Price of Natural Gas (Henry Hub) $USD/mmBTU (annual average) Price of Natural Gas (Alberta Natural Gas) $CDN/GJ (annual average) Alberta Capital Expenditure on Oil and Gas Extraction Population (as of July 1) Unit 2007 $Billions $USD $USD $USD 2015 $115.7 $48.66 $35.28 $2.62 2014 $118.7 $93.17 $73.60 $4.37 2013 $113.1 $97.98 $72.77 $3.73 % Change 2014-2015 -2.5% -47.8% -52.1% -40.0% $CDN $2.56 $4.27 $3.01 -40.0% $Billions $42.8 $52.5 $51.6 -18.5% Persons 1,439,756 1,405,967 1,357,845 2.4% Working Age Population (December) Labour Force (December) Employment (December) Employment Rate (December) Unemployment Rate (December) Labour Force Participation Rate (December) Alberta Average weekly earnings (December) Net Migration (as of July 1) Housing Starts (Single-Family) Housing Starts (Multi-Family) MLS Benchmark Detached Home Price** (December) MLS Benchmark Condominium Home Price** (December) MLS Benchmark Attached Home Price** (December) Value of Building Permits Value of Building Permits** Consumer Price Index (December) Inflation Rate (December) Retail Sales Industrial Space Vacancy** (Q4) Downtown Office Space Vacancy** (Q4) Suburban Office Space Vacancy** (Q4) Small Businesses (December) New Businesses** Business Closures** Persons Persons Persons % % % $ Persons Housing Units Housing Units $ 1,191,800 862,400 802,200 66.9% 7.0% 72.4% $1,137.91 21,057 4,138 8,895 $494,000 1,160,700 851,700 811,400 69.9% 4.7% 73.4% $1,159.60 35,692 6,494 10,637 $501,400 1,121,600 830,900 793,100 70.7% 4.5% 74.1% $1,143.70 38,331 6,402 6,182 $461,900 2.7% 1.3% -1.1% -4.3% 48.9% -1.4% -1.9% -41.0% -36.3% -16.4% -1.5% $ $286,200 $299,500 $275,800 -4.4% $ $324,500 $329,300 $302,600 -1.5% $Billions $Billions 2002=100 % $Billions % % % Number Number Number $6.98 $6.30 134.1 1.5% $28.8 7.9% 17.6% 19.1% 56,688 3,756 2,453 $7.38 $6.50 132.1 2.2% $28.5 4.7% 9.8% 13.1% 55,569 4,001 2,306 $7.18 $6.05 129.3 2.6% $26.8 5.9% 9.1% 11.0% 51,845 3,890 2,581 -5.4% -3.2% 1.5% -30.1% 0.8% 68.1% 79.6% 45.8% 2.0% -6.1% 6.4% All numbers are Calgary Census Metropolitan Area unless otherwise indicated. **denotes City of Calgary geography; Source: Statistics Canada, Conference Board of Canada, CMHC, The City of Calgary, CB Richard Ellis, Canadian Real Estate Association, Industry Canada. 58 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 59 Management's Responsibility To the Board of Directors of Calgary Economic Development Ltd.: Management is responsible for the preparation and presentation of the accompanying financial statements, including responsibility for significant accounting judgments and estimates in accordance with Canadian Public Sector Accounting Standards for Not‑For‑Profit Organizations and ensuring that all information in the annual report is consistent with the statements. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required. In discharging its responsibilities for the integrity and fairness of the financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of financial statements. The Board of Directors and Audit Committee are composed primarily of Directors who are neither management nor employees of the Company. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities, and for approving the financial information included in the annual report. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. The Board is also responsible for recommending the appointment of the Company's external auditors. MNP LLP is appointed by the Directors to audit the financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Board and management to discuss their audit findings. April 21, 2016 financial statements 60 · 2015 Annual Report · Calgary Economic Development 59 Management's Responsibility 60 Independent Auditors' Report 61 Financial Statements 61 Statement of Financial Position 62 Statement of Operations 63 Statement of Changes in Net Assets 64 Statement of Cash Flows 65 Mary Moran, Brian McClure, Chief Executive Officer Acting Chief Financial Officer Notes to the Financial Statements Calgary Economic Development · 2015 Annual Report · 61 Independent Auditors’ Report Statement of Financial Position As at December 31, 2015 2015 2014 278,716 1,493,115 715,949 42,511 2,530,291 8,422 157,732 2,696,445 73,878 5,017,117 552,854 17,553 2,000,000 7,661,402 26,631 158,436 7,846,469 476,165 415,864 871,518 1,763,547 665,718 488,628 5,697,690 6,852,036 166,154 766,744 932,898 2,696,445 185,067 809,366 994,433 7,846,469 Assets Current Cash and cash equivalents Short‑term investments (Note 3) (Note 14) Accounts receivable and accrued revenue (Note 4) Prepaid expenses Advances to a related party (Note 9) To the Board of Directors of Calgary Economic Development Ltd.: We have audited the accompanying financial statements of Calgary Economic Development Ltd., which comprise the statement of financial position as at December 31, 2015, and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Property and equipment (Note 5) Intangible assets (Note 6) Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian Public Liabilities Sector Accounting Standards for Not‑For‑Profit Organizations, and for such internal control as management determines is necessary to Current Accounts payable and accrued liabilities (Note 7) Salary and vacation payable Deferred contributions (Note 8) enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance Commitments (Note 13) with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and Net Assets perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. Invested in property, equipment and intangible assets (Note 10) Unrestricted An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion Approved on behalf of the Board Director Director In our opinion, the financial statements present fairly, in all material respects, the financial position of Calgary Economic Development Ltd. as at December 31, 2015 and the results of its operations and its cash flows for the year then ended in accordance with Canadian Public Sector Accounting Standards for Not‑For‑Profit Organizations. Calgary, Alberta April 21, 2016 Chartered Professional Accountants 62 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 63 Statement of Operations Statement of Changes in Net Assets For the year ended December 31, 2015 For the year ended December 31, 2015 2015 2014 5,155,865 112,800 5,170,418 54,000 7,700 1,621,636 211,555 138,748 65,586 4,785,137 139,608 162,592 13,802 6,957 1,820,133 17,763 110,717 18,179 12,538,308 259,495 7,334,383 5,584,891 4,734,466 1,383,663 666,238 119,887 87,919 21,847 12,598,911 (60,603) 350,630 4,192,104 1,981,355 636,765 155,365 95,062 383,929 7,795,210 (460,827) (932) (61,535) 667 (460,160) Revenue City of Calgary Operating grant (Note 1) Other grants Alberta government (Note 9) Federal government Other government Business community Expense recovery (Note 11) Other revenue Investment income Amortization of deferred contributions related to property, equipment and intangible assets Net assets, beginning of year Deficiency of revenue over expenses (Note 10) Investment in property and equipment Investment in intangible assets Net assets, end of year Invested in property, quipment and e intangible assets 185,067 (110,698) 4,570 87,215 166,154 Unrestricted 809,366 49,163 (4,570) (87,215) 766,744 2015 994,433 (61,535) 932,898 2014 1,454,593 (460,160) 994,433 Expenses Program costs (Note 9) Employee costs Marketing and promotion Corporate services Business travel Amortization of intangible assets Amortization of property and equipment Deficiency of revenue over expenses before other items Other items (Loss) gain on disposal of capital assets Deficiency of revenue over expenses 64 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 65 Statement of Cash Flows Notes to the Financial Statements For the year ended December 31, 2015 For the year ended December 31, 2015 2015 2014 Cash provided by (used for) the following activities Operating Deficiency of revenue over expenses Change in terms of advances to related party included in revenue Amortization of intangible assets Amortization of property and equipment Loss (gain) on disposal of capital assets Amortization of deferred contributions for property, equipment and intangible assets Changes in working capital accounts Accounts receivable and accrued revenue Prepaid expenses Accounts payable and accrued liabilities Deferred contributions Salary and vacation payable Investing Advances to related party Purchase of short‑term investments Proceeds on disposal of short‑term investments Capital Purchase of property and equipment Proceeds on disposal of property and equipment Purchase of intangible assets Increase (decrease) in cash resources Cash resources, beginning of year Cash resources, end of year 1. Incorporation and nature of the organization Calgary Economic Development Ltd. (the “Company”) was incorporated as Promoting Calgary Inc. under the Business Corporations Act (61,535) 2,000,000 87,919 21,847 932 2,049,163 (460,160) 95,062 383,929 (667) (259,495) (241,331) in the Province of Alberta in July 1999. The Company changed its name to Calgary Economic Development Ltd. on January 1, 2003. (163,095) (24,958) (189,553) (4,826,172) (72,764) (3,227,379) (37,685) (4,710) 405,056 5,275,160 141,229 5,537,719 The Company has been receiving contributions from the City of Calgary since inception to sustain its operations. In the current year, 3,524,002 3,524,002 (2,000,000) (3,454,791) (5,454,791) The Company is registered as a non‑profit organization under the Income Tax Act of Canada, and is exempt from income taxes. The mandate of Calgary Economic Development Ltd. is to lead the City of Calgary's economic development efforts in promoting the City’s competitive advantages and pro‑business climate. Successful economic development results in business growth and industry development, increased investment and trade activities. In turn, this fosters increased competitiveness, access to foreign markets, sustainable prosperity, diversification, productivity, high employment and a desirable quality of life. the Company received an operating grant of $5,515,865 (2014 ‑ $4,785,137) and the City has indicated that they will provide similar funding each year until the 2018 fiscal year, at which point the funding is subject to renegotiation. 2. Significant accounting policies Basis of accounting (4,570) (87,215) (91,785) 204,838 73,878 278,716 (9,141) 667 (139,817) (148,291) (65,363) 139,241 73,878 The financial statements of the Company are the responsibility of management. They have been prepared in accordance with Canadian Public Sector Accounting Standards for Not‑for‑Profit Organizations ("PSAS for NPOs"), with the optional 4200 series, as established by the Public Sector Accounting Board in Canada. The significant polices are described below. Use of estimates The preparation of financial statements in conformity with Canadian Public Sector Accounting Standards for Not‑for‑Profit Organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary. Amortization is based on the estimated useful lives of property and equipment, and intangible assets. These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in the statement of operations in the periods in which they become known. Controlled not‑for‑profit The Company’s financial statements do not include the accounts of Calgary Film Centre, which is controlled by the Company. The required disclosures have been provided in Note 16. All transactions with the subsidiary are disclosed as related party transactions (refer to notes 9 and 11). 66 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 67 Notes to the Financial Statements Notes to the Financial Statements For the year ended December 31, 2015 For the year ended December 31, 2015 Revenue recognition At initial recognition, the Company may irrevocably elect to subsequently measure any financial instrument at fair value. The Company The Company follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year has not made such an election during the year. in which the related expenses are incurred. Contributions for the purchase of property and equipment are deferred and recognized on the Transaction costs related to financial instruments remeasured at fair value at each reporting date are expensed in the period, whereas same basis as amortization expense of the related asset. Unrestricted contributions are recognized as revenue when received or receivable they are added to the carrying value of the financial instrument for those measured at cost or amortized cost. if the amount to be received can be reasonably estimated and collection is reasonably assured. Sponsorship (pledges) are recognized as revenue when the amount to be received can be reasonably estimated and ultimate collection is reasonably assured. Contributions for program related activities include amounts recovered from events and projects undertaken by the Company alone or with a number of economic partners. Financial asset impairment The Company assesses impairment of all of its financial assets measured at cost or amortized cost. When there is an indication of impairment, the Company determines whether it has resulted in a significant adverse change in the expected timing or amount of future cash flows during the year. If so, the Company reduces the carrying amount of any impaired financial assets to the highest of: Interest revenue is recognized on a pro rata basis over the term of the related deposit or investment. the present value of cash flows expected to be generated by holding the assets; the amount that could be realized by selling the assets; and the amount expected to be realized by exercising any rights to collateral held against those assets. Any impairment, which is not Cash and cash equivalents considered temporary, is included in current year deficiency of revenue over expenses. Cash and cash equivalents include balances with banks and short‑term investments with maturities of three months or less. Cash subject to restrictions that prevent its use for current purposes is included in restricted cash. The Company reverses impairment losses on financial assets when there is a decrease in impairment and the decrease can be objectively related to an event occurring after the impairment loss was recognized. The amount of the reversal is recognized in the Short‑term investments statement of operations in the year the reversal occurs. Short‑term investments consist of investments in RBC Premium Money Market Fund. Contributed materials and services Property, equipment and intangible assets The Company receives various contributions in the form of material or services that it uses to carry out its objectives. Because of Purchased property, equipment and intangible assets are recorded at cost. Contributed property, equipment and intangible assets are financial statement. the difficulty in determining the fair value of these materials and services, the Company does not recognize the amounts in the recorded at fair value at the date of contribution if fair value can be reasonably determined. 3. Short‑term investments Amortization is provided using the straight‑line method at rates intended to amortize the cost of assets over their estimated useful lives. Tenant improvements are amortized over the lease term. Computer equipment Furniture and fixtures Software Trademarks Website development costs Short‑term investments consist of money market funds. As at year‑end, $nil (2014 – $3,000,000) is externally restricted for the development of the Calgary film studio. Rate 2 years 5 years 1 year 5 years 30% Long‑lived assets 4. Accounts receivable Accounts receivable and accrued revenue relate to the following: Trade accounts receivable Accrued revenue Goods and Services Tax receivable Long‑lived assets consist of property, equipment and intangible assets. Long‑lived assets held for use are measured and amortized as described in the above accounting policy. When the Company determines that a long‑lived asset no longer has any long‑term service potential to the Company, the excess of its net carrying amount over any residual value is recognized as an expense in the statement of operations. Write‑downs are not reversed. Financial instruments Allowance for doubtful accounts 2015 643,896 69,000 4,988 717,884 (1,935) 715,949 2014 534,169 459 18,226 552,854 552,854 As at December 31, 2015, accounts receivable includes $217,585 (2014 – $24,903) in amounts outstanding greater than 90 days, of which $176,975 was subsequently received (2014 – $19,023). Accounts receivable have been recorded at their net realizable value, based on management's best estimate of the recoverable amounts. The Company recognizes its financial instruments when the Company becomes party to the contractual provisions of the financial instrument. All financial instruments are initially recorded at their fair value, including financial assets and liabilities originated and issued in a related party transaction with management. Financial assets and liabilities originated and issued in all other related party transactions are initially measured at their carrying or exchange amount in accordance with PSAS Section 4260 Disclosure of Related Party Transactions By Not‑For‑Profit Organizations (refer to Note 11). 68 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 69 Notes to the Financial Statements Notes to the Financial Statements For the year ended December 31, 2015 For the year ended December 31, 2015 5. Property and equipment 8. Deferred contributions Computer equipment Furniture and fixtures Tenant improvements Computer equipment Furniture and fixtures Tenant improvements Cost 635,656 332,837 2,581,631 3,550,124 Accumulated amortization 630,113 329,958 2,581,631 3,541,702 2015 Net book value 5,543 2,879 8,422 Cost 632,815 332,837 2,581,631 3,547,283 Accumulated amortization 618,275 320,746 2,581,631 3,520,652 2014 Net book value 14,540 12,091 26,631 6. Intangible assets Software Trademarks Website development costs Cost 265,959 7,290 521,225 794,474 Accumulated amortization 265,959 4,853 365,930 636,742 2015 Net book value 2,437 155,295 157,732 2014 Net book value 3,895 154,541 158,436 Accounts payable and accrued liabilities relate to the following: 70 · 2015 Annual Report · Calgary Economic Development deferred to periods when the specified expenses are made. Changes in the deferred contribution balance are as follows: 2015 5,697,690 784,213 (5,610,385) 871,518 Balance, beginning of year Amount received during the year Less: Amount recognized as revenue during the year Less: Return of contributions Balance, end of year 2014 422,530 6,281,015 (927,342) (78,513) 5,697,690 9. Advances to a related party In the prior year, the Alberta Government approved a grant of $5,000,000 for the development of the Calgary film studio, the full amount had been received as of December 31, 2014. The Company is permitted, under the grant agreement, to disburse grant funds to other organizations for the purpose of carrying out the construction of the Calgary film studio. For the year ended December 31, 2014, the Company advanced Calgary Film Centre Ltd. ("CFCL") $2,000,000 in the form of a 7. Accounts payable and accrued liabilities Trade accounts payable Accrued liabilities Deferred contributions consist of unspent contributions externally restricted for programs. Recognition of these amounts as revenue is 2015 464,090 12,075 476,165 2014 575,129 90,589 665,718 promissory note for the construction of the Calgary film studio. During the year, the promissory note was cancelled and a grant agreement between the Company and CFCL was completed. Under the terms of the grant agreement, the Company is to provide funds to CFCL for the purpose of the construction of the Calgary film studio. If CFCL fails to proceed with the Calgary film studio, the agreement will be terminated and CFCL will be required to repay all unspent funds. As at December 31, 2015, all funds received by the Company have been advanced to CFCL and are included in program costs. 10. Net assets invested in property, equipment and intangible assets Property and equipment Intangible assets Invested in property, equipment and intangible assets Amortization of intangible assets Amortization of property and equipment (Loss) gain on disposal of capital assets Amortization of deferred contributions related to property, equipment and intangible assets Deficiency of revenue over expenses 2015 8,422 157,732 166,154 (87,919) (21,847) (932) (110,698) 2014 26,631 158,436 185,067 (95,062) (383,929) 667 259,495 (218,829) Calgary Economic Development · 2015 Annual Report · 71 Notes to the Financial Statements Notes to the Financial Statements For the year ended December 31, 2015 For the year ended December 31, 2015 11. Related party transactions Equipment lease Related party balances and transactions not otherwise disclosed in these financial statements consist of: On January 1, 2010, the Company entered into an operating lease agreement for a term of 60 months for equipment, which was The Company paid the City of Calgary rent, operating and other costs totaling $194,103 (2014 – $144,139), which is included in corporate services expense. At year end, $2,042 (2014 – $80) of this amount is included in accounts payable. In addition to the operating grant, the Company received revenue from the City of Calgary totaling $112,800 (2014 – $20,000) for project sponsorship and facility rent, and received $5,000 (2014 – $53) for reimbursement of expenses. extended in the prior year to December 31, 2015. The Company is currently in negotiations to renew the lease. The annual commitment is $17,100 per annum (2014 – $17,100 per annum). Facility lease In the prior year, the Company’s lease agreement expired and a month to month lease agreement was signed for the period The Company recognized revenue of $211,455 (2014 – $nil) from its wholly owned subsidiary, Calgary Film Centre, which is included in October 1, 2014 to December 31, 2014. Annual payments were approximately $20 per year plus operating costs. The lease is for space business community revenue. Included in accounts receivable is $211,455 (2014 – $nil) relating to this revenue and $nil (2014 – $8,328) in the Calgary TELUS Convention Centre and the landlord is the City of Calgary Corporate Properties, a related party. The Company is due from the subsidiary for expenses paid on its behalf. currently in negotiations with the City of Calgary Corporate Properties to renew the lease. The Company paid other companies related through common ownership for sponsorship, rental of space and other services totaling The Company has a ten year rental agreement, effective June 15, 2009, with a third party corporation, for office space in the Neilson $131,658 (2014 – $156,484). $42,168 (2014 – $64,184) of this is included in marketing and promotions, $89,490 (2014 – $84,930) is Block which is part of the TELUS Convention Centre facility. The term of the agreement is for ten years with an option to not continue included in employee costs, and $nil (2014 – $7,370) is included in corporate services expense. At year end, $969 (2014 – $2,212) was after the first five years. During the year ended December 31, 2014, the Company agreed to continue the lease for another five years. included in accounts payable. The Company also received revenue from these companies totaling $87,930 (2014 – $30,000), which is There are no rental costs but the Company does pay operating costs. included in business community revenue. At year end, $35,000 (2014 – $25,000) of this amount is included in accounts receivable. The Company has a lease for office space in the Neilson Block. The agreement is with the City of Calgary Corporate Properties, a related The Company paid other companies related to directors of the Company for other services totaling $16,700 (2014 – $1,894), of which party. In the prior year, the Company’s lease agreement expired and a month to month lease agreement was signed for the period $14,198 (2014 – $1,894) is included in corporate services expense, and $2,502 (2014 – $nil) in program costs. At year end, these October 1, 2014 to December 31, 2014. The annual payments were $10 per year plus operating costs. The Company is currently in amounts were fully paid. The Company also received revenue from these companies totaling $149,000 (2014 – $110,671), which is negotiations with the City of Calgary Corporate Properties to renew the lease. included in business community revenue towards its Action Calgary and other programming. At year end, no amounts were outstanding. All transactions are in the normal course of operations and have been recorded at the agreed to exchange amounts that have been 14. Financial instruments General objectives, policies and processes negotiated between the parties. The Board of Directors, through the Audit Committee, has overall responsibility for the determination of the Company's risk 12. Income taxes management objectives and policies and, while retaining ultimate responsibility for them, it has delegated the authority for designing The Company is a tax‑exempt organization under the Income Tax Act (the “Act”) and as such is exempt from income taxes. In order to The Board of Directors receives quarterly reports from the Company's senior management through which it reviews the effectiveness maintain its tax free status under the Act, the Company must meet certain requirements within the Act. In the opinion of management, of the processes put in place and the appropriateness of the objectives and policies it sets. these requirements have been met. 13. Commitments Service agreements and operating processes that ensure effective implementation of the objectives and policies to the Company's senior management. The Company, as part of its operations, carries a number of financial instruments. The nature of these instruments and the Company's operations expose the Company to credit, interest rate and liquidity risk. The Company manages its exposure to these risks by operating in a manner that minimizes its exposure to the extent practical. There have been no significant changes from the previous year in the exposure to risk, policies or procedures used to manage financial instrument risks. On December 1, 2015, the Company signed a six month service agreement for IT management, expiring May 31, 2016. The monthly commitment is $9,630. 72 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 73 Notes to the Financial Statements Notes to the Financial Statements For the year ended December 31, 2015 For the year ended December 31, 2015 14. Financial instruments (continued) 14. Financial instruments (continued) Credit risk Liquidity risk Credit risk is the risk that the Company will incur a financial loss because a contributor or counterparty has failed to discharge an Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company has a planning obligation. The Company is exposed to credit risk on its accounts receivable and accrued revenue. This risk is somewhat mitigated due and budgeting process in place to help determine the funds required to support the Company's normal operating requirements on to the fact that the accounts receivable comprises amounts due from the City of Calgary and the provincial and federal governments. an ongoing basis. The Company ensures that there are sufficient funds to meet its short‑term requirements, taking into account its To further mitigate this risk, the Company regularly reviews its accounts receivable list and follows up on collections in a timely manner. anticipated cash flows from operations and its holdings of cash and cash equivalents. In addition, the monies invested in short‑term The amount outstanding at the prior year end, which is the Company's maximum exposure to credit risk related to the accounts investments can be withdrawn on demand. The following table sets out the contractual maturities of financial liabilities: receivable, are disclosed in Note 4 and summarized below. 2015 Trade accounts receivable Government receivables Other receivables Total 2014 Trade accounts receivable Government receivables Other receivables 0‑90 days Current 0‑30 days 31‑60 days 61‑90 days 91 days and older 359,680 4,988 69,000 433,668 36,355 ‑ ‑ 36,355 13,099 ‑ ‑ 13,099 15,242 ‑ ‑ 15,242 217,585 ‑ ‑ 217,585 641,961 4,988 69,000 715,949 63,358 18,226 459 82,043 379,480 ‑ ‑ 379,480 41,428 ‑ ‑ 41,428 25,000 ‑ ‑ 25,000 24,903 ‑ ‑ 24,903 534,169 18,226 459 552,854 Total Credit concentration 91 days and older Total 2015 Trade accounts payable Accrued liabilities Total 465,097 12,075 477,172 (1,007) ‑ (1,007) 464,098 12,075 476,165 2014 Trade accounts payable Accrued liabilities Total 586,944 90,589 677,533 (11,815) ‑ (11,815) 575,129 90,589 665,718 15. Defined contribution pension plan The Company established a defined contribution pension plan for its salaried employees on January 1, 2000. The total expense incurred for the year ended December 31, 2015 was $132,811 (2014 – $127,729). As at December 31, 2015, two members accounted for 48 per cent of accounts receivable (2014 – two members, 51 per cent). The Company believes that there is no unusual exposure associated with the collection of these amounts. The balance of accounts receivable is widely distributed amongst the remainder of the Company’s large membership base. The Company performs regular credit checks and provides allowances for potentially uncollectible accounts receivable. Interest rate risk The Company is exposed to interest rate risk arising from the possibility that changes in interest rates will affect the fair value of short‑term investments. As at December 31, 2015 a 1 per cent change in interest rate, with all other variables held constant would impact the (deficiency) excess of revenue over expenses by $14,931 (2014 – $50,171). 74 · 2015 Annual Report · Calgary Economic Development Calgary Economic Development · 2015 Annual Report · 75 Notes to the Financial Statements For the year ended December 31, 2015 16. Controlled organization The Company controls its wholly owned subsidiary, the Calgary Film Centre Ltd ("CFCL"), formerly The Alberta Creative Hub. The companies are under common management. CFCL has not been consolidated in the Company's financial statements, but its financial statements are available on request. CFCL was incorporated under the authority of the Alberta Companies Act on December 17, 2009 and commenced operations on January 1, 2010. The Company is registered as a not for profit organization and thus is exempt from income taxes under the Income Tax Act of Canada. It was formed with the primary purpose of supporting the growth and development of the film, television, media and other creative industries. The following is condensed financial information of CFCL as at and for the years ended December 31, 2015 and December 31, 2014. This information was prepared using the same accounting policies as Calgary Economic Development Ltd. 2015 Financial position Total assets Total liabilities Total net assets Statement of operations Revenue Expenses (Decrease) increase over expenses Cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities (Deficiency) excess in cash and cash equivalents 2014 25,359,365 (20,541,858) 4,817,507 10,372,840 (5,551,870) 4,820,970 395,506 (398,969) (3,463) 60,045 (57,646) 2,399 (1,223,919) 16,630,287 (16,561,145) (1,154,777) (103,675) 7,005,000 (5,750,986) 1,150,339 During the year ended December 31, 2014, CFCL received an advance of $2,000,000 in the form of a promissory note from the Company for the construction of the Calgary film studio. During the year, a grant agreement between the parent Company and CFCL was completed and the promissory note was cancelled (Note 9). During the year ended December 31, 2014, City of Calgary (“City”) approved funding to CFCL of $10,000,000 for the development of the Calgary film studio. CFCL received an initial grant of $5,000,000 for the purchase of the land for the film studio in the prior year, and the remaining $5,000,000 of the grant was received based on reimbursement of actual eligible costs in the current year. CFCL has entered into a management agreement with the Company that sets out the terms and conditions by which the Company is to provide services of its employees in relation to general day to day administration and management services in connection with the business of CFCL (Note 11). 17. Comparative figures Certain comparative figures have been reclassified to conform with current year presentation. 76 · 2015 Annual Report · Calgary Economic Development @calgaryeconomic calgary-economic -development @lifeincalgary Calgary Economic Development 731 1st Street SE Calgary Alberta Canada T2G2G9 calgaryeconomic ph 403 221 7831 fax 403 221 7828 toll free 1888 222 5855 calgaryeconomicdevelopment.com