Editorial

The crushing Alberta advantage

been beaten to death in this space. But not a week goes by without another astonishing revelation about how bad it’s getting.
Inflation in the construction industry really is having some harsh consequences. They could go from harsh to downright ugly if they prevent communities from having the cultural facilities they require.
Here’s the latest example of the way the wind is blowing: A developer told The Leader last week that he’d have to charge $250,000 per condominium unit he plans to build in Slave Lake. Two years ago he built an identical building in Edmonton that cost him 70 per cent less. The difference is entirely due to construction costs, which are up mainly because contractors can afford to bid high for jobs they don’t really need. He said they actually told him this is what they were doing.
And developers have no choice but to pay the price if they want their buildings built. If that’s not gouging the customer, what is?
There are so many jobs, companies will make absurdly high bids because they don’t really care if they win it or not. If they do, at an inflated price of, say, 50 per cent over what it’s really worth, so much the better for them. In the current climate, they may be the only bidder!
So it goes. A condo that would have cost the home buyer $150,000 in 2004 will cost him $250,000 in 2007. And if you don’t like it, tough luck.
The good news in this scenario is that there are lots of people riding the wave of higher incomes who will shell out regardless and get their homes. For those who can’t afford it, there are at least some government supports for affordable housing. We likely won’t see tent cities appearing around Slave Lake.
But what about public facilities? Arenas, libraries, swimming pools? Now there’s a real dilemma. Municipalities will always find a way to build and repair their streets, sewer and water systems, regardless of the ravages of inflation. They come first, and the more they cost, the further down the list recreation and cultural facilities get pushed.
So what happens when a community, like Slave Lake, really needs a rec complex? What happens when everyone capable of building it is already so busy building bigger things in bigger towns that they don’t need or want the work? What happens is they bid some ridiculous amount – take it or leave it?
If it’s too high, the community will have to leave it.
This type of thing is happening all over Alberta. It’s happening right here in Slave Lake. So we may have to just put up with substandard facilities, or not have them at all.
This comes with other costs. Who wants to move to a community where houses cost $300,000 but the arena is falling apart?
Premier Ralph Klein is visiting Slave Lake this August. He’s playing golf and raising some money for his political party. Perhaps somebody should corner him and explain how the Alberta Advantage is crushing our ability to renew our crumbling recreation infrastructure.
The province can’t make magic, but it can certainly help ease the pain.