The year 2018 was a transformational one for Medicine Hat and region. All year long, a parade of major announcements saw a diverse number of new industries take root in the city and region. The positive economic impact of these new developments will be felt for many years to come.
The good news started in December 2017, when Capital Power’s Whitla Wind Facility, located near Bow Island, was selected in the first round of the Renewable Electricity Program. The 298-megawatt facility will cost $325 million to construct, and will employ 200 workers at peak activity levels this summer.
In March, news broke that cryptocurrency mining company Hut 8 would invest $100 million to build a 42-megawatt data centre next door to the City of Medicine Hat’s newly commissioned power plant. The Hut 8 data centre, now complete, has resulted in 40 new technology jobs, not to mention a steady stream of revenue for the City of Medicine Hat’s electric utility.
In April, Aurora Cannabis announced that the world’s largest purpose-built cannabis production facility would be located on 71 acres of land in Box Springs Business Park. Upon completion, Medicine Hat’s pot plant will employ more than 400 people, making it the largest private sector employer in the city. The sheer scale of the development will materially impact Medicine Hat’s economy and labour market, increasing annual gross domestic product by $20 million and reducing the unemployment rate by a full percentage point.
Bookending the year, Cancarb made it known in December 2018 that parent company Tokai Carbon had made a final investment decision to expand its thermal carbon black production facility. Starting in spring 2019, Cancarb will undertake a $40 million expansion project that will result in a 20-per-cent increase in output and the creation of nine new full time positions.
As if half a billion of new industrial activity wasn’t enough, the commercial building boom of 2017 extended itself well into 2018, with construction ongoing throughout the city.
Notable commercial projects that broke ground in 2018 include Stringham LLP’s office building on Gershaw Drive, Pilot Flying J’s travel centre on the Trans-Canada, Seymour Pacific Developments’ apartment complex in Southlands, the Canalta/Co-op commercial development on Strachan Road, and two new hotels located in the south end of the city.
All told, Medicine Hat and region saw nearly $1 billion of construction activity take place in 2018. The unprecedented level of activity has caused regional unemployment to plummet from 10 per cent in 2016 to four per cent as of this writing. As 2018’s ground breakings turn into 2019’s grand openings, labour market analysts predict 700 newly created full-time positions will become available through 2019, driving labour demand even higher.
The hope now is twofold. First, that increased labour market demand will draw discouraged and underemployed workers into full time employment; second, that any additional labour market demand will be filled by new residents drawn to Medicine Hat by the promise of full-time work. Whatever the case, the increased availability of full time employment should give a boost to residential construction, retail sales, and restaurant outings.
Going into 2019, global headwinds are building. Canada’s oil and gas industry is in crisis while the mortgage stress test continues to rebalance housing markets in Vancouver, Toronto, and Medicine Hat. Internationally, stock market volatility is on the rise as global growth projections start to wobble. It is in this context that Medicine Hat remains a competitive bright spot, home to a highly skilled workforce, a unique blend of location specific assets, and an unbeatable quality of life. Investors take note: Medicine Hat has a business state of mind.
This article was published in the Medicine Hat News Business Beat on Dec. 19, 2018.