The high cost of progress

As Central Alberta prepares for another growth spurt, all three levels of government must begin the planning — and budgeting — necessary to manage that growth.

As Central Alberta prepares for another growth spurt, all three levels of government must begin the planning — and budgeting — necessary to manage that growth.

Oil prices have buoyed the energy service industry that’s so crucial to Central Alberta, driving the local jobless rate down to 5.2 per cent.

And as Nova announced its intention to spend up to $900 million to increase polyethylene production at its Joffre complex, the pressure mounted.

The Nova project, which could start early next year, would employ 500 construction workers at its peak, and average 150 to 250 tradespeople over four years of construction. Some of that workforce will come from the existing population, but many skilled tradespeople will still be needed from elsewhere.

Upon completion, up to 35 more staff and 25 contract employees would join the current local Nova workforce of about 1,000 people.

Nova officials estimate that local operations now inject about $170 million a year into the Central Alberta economy, through salaries, purchases of goods and services and in municipal taxes.

On the surface, the impact of another round of construction at Joffre is obvious: millions more will be spent in the community during the lifespan of the project, to the benefit of great many businesses and their staff. Nova estimates that 40 to 60 per cent of the project’s costs will be spent in the communities of Central Alberta.

And long-term, more people will move into Central Alberta to work at the plant, and to provide services for the plant and plant employees. The ripples will be significant.

At the next level, municipalities benefit. It’s estimated, for example, that the expanded plant will add about $2 million to the $10 million in taxes that Nova pays to Lacombe County each year. And new homeowners will provide property tax boosts to several communities.

And, ultimately, both the provincial and federal governments will scrape off tax revenue as polyethylene production is increased by 40 per cent.

But a project like this also weighs heavily, particularly on municipalities.

It’s not a simple task to welcome hundreds of people into a community.

You need housing (and that means new neighbourhoods developed and serviced), you need schools and recreation facilities.

You need arterial roads, libraries and cultural facilities.

In Blackfalds and Lacombe, projects are underway to close the gap between the demand for rec facilities and the availability. If the demand is there now, how much more acute will it be in three or four years?

Blackfalds grew by 34 per cent, to 6,300 people, between 2006 and 2011. There are two schools in the community, housing almost 700 students. But there are 1,200 school-aged children in the town and the remainder must go to Red Deer or Lacombe to attend classes.

That situation will only worsen as construction brings young families to Blackfalds.

Blackfalds town council has already begun lobbying Alberta Education for funding for a new school.

In Red Deer, similarly, both school districts face overcrowding issues. An influx of people into the community will only exacerbate those issues. The public and Catholic boards are looking for relief. For example, the Red Deer Catholic Regional Schools board recently approved a three-year capital plan that includes a new high school. But the funding must come from the province.

Growth also puts pressure on such basic things as sewer, water and transportation infrastructure.

In 2006, the province pledged $96 million toward the 92-km Olds-to-Red Deer sewage pipeline.

The project is likely to surpass the original $107-million budget and the South Regional Wastewater Commission is looking for additional funds. The need to get this project completed becomes even more critical if we have a population spurt in the region.

Similarly, Red Deer’s North Highway Connector ring road project from the Hwy 2/Hwy 11A interchange to the Hwy 2/McKenzie Road overpass becomes far more critical as Joffre construction ramps up. Phase 1 is underway, at a cost of about $90 million, with Phase 2 — the actual expressway, worth about $500 million — scheduled for 2014.

Municipalities, in general, do a good job of identifying pressure points. But they don’t have the tax resources to address those areas alone.

Central Alberta needs an injection of infrastructure money, from both the provincial and federal governments, and we need it now.

John Stewart is the Advocate’s managing editor.

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