Growth In The Calgary Region: Opportunity Or Threat
Executive Summary
Regional planning in Alberta has always been controversial, with significant swings between systems of more and less top-down centralized control happening in cycles throughout the last century.
The most recent set of proposed changes to planning in the Calgary region, however, are the most radical ever proposed and would significantly re-shape the nature of the entire Calgary region.
Yet, until now, these proposed changes have proceeded through the bureaucratic process with virtually no public scrutiny of the potential impacts and harms of the proposal.
In 2015, the then newly-elected NDP government announced the creation of the Calgary Metropolitan Region Board, a new board designed to control planning and development issues for the entire Calgary region.
This board effectively acts as a fourth layer of government on planning and development issues, requiring almost all planning and development matters proposed in the Calgary region to be approved not just by the local municipality in which the project is located, but also by the regional board as a whole.
Despite claims that the board is based on cooperation, the ten member municipalities are being forced to participate in the organization, they cannot leave, and the voting system of the board effectively gives a veto to the City of Calgary on every issue.
Each member municipality has one vote on the Board, but any decision must be approved by not fewer than two-thirds (i.e. seven) of the municipalities, and – crucially - the two-thirds of the members voting for any proposal must also represent at least two-thirds of the population of the region.
While it may or may not have been intentional, the two-thirds majority requirement is certainly convenient for those who pushed for this system, as it means that the seven urban municipalities on the Board can always outvote the three rural municipalities on any issue, while the two-thirds population requirement means that Calgary holds a veto over every single vote, as the two-thirds population threshold cannot be met without Calgary voting for a proposal.
In effect, this puts Calgary politicians and bureaucrats in charge of planning and development for the entire region, as without Calgary’s approval, no plan or development can go ahead.
With this organizational and voting system in place, the Calgary Metropolitan Region Board has moved ahead with designing and implementing a new Growth Plan for the Calgary region.
At a very high level, the Plan is designed to help the region figure out how to accommodate the significant population growth that the Calgary region is expected to experience in the coming decades.
But the Growth Plan does much more than this.
Around the world, many regions have introduced growth management plans in an attempt to address issues of regional concern, including infrastructure, transportation, environment, housing, and more.
Generally, the idea of an all-encompassing, top-down, centralized regional plan rests on the claim that such a top-down approach will lead to more effective and more efficient planning and growth.
It is understandable, if one accepts the argument that government regulation and planning by bureaucrats can lead to more efficient outcomes, that one would therefore assume that more government regulation and control would provide that more efficient planning and growth.
However, there is very little evidence from anywhere around the world that this is the case.
This is perhaps best demonstrated by the way that the Growth Plan is described by the Calgary Metropolitan Region Board themselves.
Even the Calgary Metropolitan Region Board themselves do not attempt to claim that more centralization, more rules, more regulations, and more control will lead to better outcomes.
In fact, they don’t even claim that the Growth Plan includes more centralization, more rules, more regulations, and more control, even though it obviously and objectively does.
Instead, throughout the Calgary Metropolitan Region Board’s documents, public statements, website, consultation process, and the Growth Plan itself, the emphasis is placed on cooperation, collaboration, coordination, and “mutually-agreeable” ideas.
Unfortunately, the reality is that the Growth Plan implements the exact opposite of its stated aims.
According to its creators and proponents, the Growth Plan is designed to address a wide range of problems that are, in their opinion, associated with or caused by this future population growth and, in particular, the competitive nature of how this growth has occurred in the past.
These concerns include land use, water, infrastructure costs, transportation and transit, housing, and more, and the central planners behind the Growth Plan believe these issues would be better addressed by forcing the municipalities in the Calgary region to cooperate rather than compete.
This conflict between competition and cooperation is at the core of the disagreements and conflicts around the Calgary Metropolitan Region Growth Plan, and this is perhaps no better encapsulated than by the very idea of forced cooperation that lies at the heart of the Growth Plan.
Rather than merely permitting cooperation between municipalities as claimed, the creation of the Calgary Metropolitan Region Board and the implementation of the Growth Plan actually forces Calgary and the surrounding municipalities to cooperate on many issues, even when this goes against the wishes of the municipalities and their residents.
Requiring municipalities to cooperate even if they believe it is against their and their residents’ interests to do so is bound to lead to less fair and less equitable outcomes for the whole of the Calgary region.
The entire Growth Plan is based on the philosophy that a small group of people, in this case bureaucrats and city planners - particularly in Calgary - can do a better job planning and managing population and employment growth than the free market can.
In the full report, we show how the Growth Plan will not achieve the land, water, transportation, housing, and environment goals it claims to be designed to achieve and, even worse, how it will cause significant social and economic harm in the process.
We also assess the economic impact of the Growth Plan, especially given the tough economic climate Calgary is already facing.
One might think, then, that now would be the perfect time to reduce red tape and regulation, streamline processes, relax stifling rules and restrictions on new investments, and start getting the Calgary region’s economy going again.
In fact, the current Alberta government has repeatedly stated that their core focus is on reducing red tape and unleashing Alberta’s economy and they have put significant effort into achieving this goal in many other policy areas.
Yet, when it comes to regional planning they have, so far at least, permitted the exact opposite to continue.
Rather than reducing red tape and regulation to get the Calgary region’s economy going, in almost every policy area the Growth Plan goes in completely the other direction and essentially centralizes planning decisions for the entire region.
All types of development – single family houses, row houses, apartments, shopping malls, retail stores, manufacturing, warehouses, agricultural services, and more – will now have to be approved not only by the local municipality but also by an unelected board dominated by the City of Calgary.
The entire concept rests on the idea that top-down central planning is the best way to run a region and a region’s economy and that urban planners – and in particular the City of Calgary’s urban planners – best know what each plot of land in the region should be used for.
Thrown out the window is any concept of the free market, individual choice, property rights, competition, and, frankly, basic economics.
This dramatic centralization will impose a series of significant direct and indirect costs on the economy of the Calgary region, none of which are considered by the Calgary Metropolitan Region Board in their Growth Plan.
These costs include the millions of dollars spent creating and operating what is effectively a fourth level of government, the significant costs to Calgary businesses, residents, and the economy of this extra bureaucracy, the dramatic costs that would be incurred by projects being reduced, relocated, or cancelled under the Growth Plan, as well as indirect and intangible costs.
While it is extremely difficult to quantify the exact direct costs to the Calgary economy of some or all of these developments being scaled back, relocated, or even cancelled entirely, even a very conservative estimate suggests it would have an incredibly large impact.
Even if we take only the most conservative cost estimates and apply these estimates to just three of the Area Structure Plans that are likely to not go ahead under the Growth Plan we can get a feel for the size of the impact of these development restrictions.
The North Springbank Area Structure Plan was projected to include approximately 6,500 units of housing, the South Springbank Area Structure Plan was projected to include approximately 4,000 units of housing, and the Elbow View Area Structure Plan was projected to include approximately 7,000 units of housing.
Combined, these three developments alone would include about 17,500 units of housing which would represent about 42,000 jobs, $3 billion in wages, and almost $5 billion in lost investment to the Calgary region.
We also examine the potential impact of more indirect costs attributable to things like increased construction delays, risk, incentives, and a lack of competitive advantage in Calgary in the future.
Overall, we find that the Calgary Metropolitan Region Board’s Growth Plan would implement a system that would be worse for the environment, less effective and efficient, harmful to the economy, and more expensive for citizens.
Instead of regulating what kind of housing can be developed and where, the focus should be on promoting cooperation where cooperation makes sense and competition where competition makes sense.
The Calgary region’s problems are not unsolvable but doubling down on the policies that created the problems in the first place, will only make them worse.
To fix the Calgary region’s challenges we must remember that both competition and cooperation have important roles to play.
Growth is not a threat to the Calgary region that needs managing in a top-down centralized manner, it is an opportunity that should be allowed to flourish in a free, open, and competitive market-based system.
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