Transformative Sectors in Edmonton’s Economy

Published on July 21, 2021

Takeaways

Edmonton has a leading energy sector, developing key expertise that is transferable from one energy source to another.
Edmonton is slated to become a global hub for hydrogen production and export thanks to key partnerships and investments made in infrastructure.
With academic leadership in critical technologies like artificial intelligence, Alberta’s economic sectors are set to grow radically from the adoption of these technologies.

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With all the right infrastructure and connectedness, Edmonton’s key economic sectors, including energy, food and agriculture, and the life sciences, will continue to thrive. With a strong focus on moving products to market, Edmonton will be able to lead globally when it comes to both traditional and emerging sectors.

What makes Canada an attractive destination for foreign investment?

There are five key components bringing value from a Canadian perspective. One is we are a stable democracy; two, we have an incredible richness of resources; three, we have an unparalleled educated talent pool and workforce that is the best in North America; four, we have a quality of life that is second to none; lastly, we are the only G7 country out of all the G7 countries that have trade agreements with every other G7 country, as well as others, giving us access to a market of 1.5 billion people. These are really strong attributes for the country.

What separates Edmonton from the rest of Canada as a destination for foreign investment?

There are some comparative strengths. There are some common national strengths, but in the Edmonton Metropolitan Region, in particular, there are a couple of things: one, we are the second youngest region in the country. The average age in Edmonton is 36, and this young population means we have strong labour force participation. We have incredible connectedness. People look at us as a northern community, but when you look at our air bridges, we are the closest to Asia through the circumpolar routes. We have connectedness to the busiest ports, Vancouver and Prince Rupert. Our rail connectivity, provided by the Canadian National Railway (CN) and Canadian Pacific Railway (CP) is great, as well as our road connections and pipelines. The old adage goes that all roads lead to Moscow. Well, all pipelines lead to the Edmonton Metropolitan Region. Edmonton’s advantages are our connectedness and people, and we will talk about some of our other attributes when we talk about specific sectors.

What is the significance of the new investments in Edmonton’s hydrogen sector?

In June of 2021, Air Products, a globally recognized company, made a significant final investment decision for the Edmonton Metropolitan Region to the tune of $1.3 billion. They did so because there are some natural advantages that we have here in this region. In Alberta’s Industrial Heartland, which is in the northeast quadrant of the region, there is some natural geology that helps in terms of salt caverns where you can store product underground very easily. There are carbon capture systems where we have trunk lines that go into the middle of the province to help enhance oil and gas recovery. There is also another one that heads north that stores carbon underground. Alberta has multiple attributes that allow us to build a transitional energy system from traditional sources to alternates like hydrogen in a way that is climate-friendly. This Air Products announcement is going to create the largest net-zero hydrogen network in the world.

“Hydrogen factors significantly in many countries’ energy transition goals so Canada has an opportunity to become a global player in this space.”

Hydrogen is going to be a part of the future. We have had a real series of conversations with Japan, South Korea, China, and California. These countries have net-zero goals by 2050 and 2060 in the case of China. Hydrogen factors significantly in many countries’ energy transition goals so Canada has an opportunity to become a global player in this space as we transition from traditional sectors to more climate-friendly sectors.

In conjunction with a number of partners, we created the Edmonton Region Hydrogen HUB. That hub is meant to create a micro hydrogen economy here, creating demand, infrastructure, and supply. This announcement is going to help create a large supply of hydrogen so we can build out the demand. Think about buses transitioning from diesel to a hydrogen-based fuel system, or heavy haul trucks that need to move heavy loads from point A to point B. This hub is the first one in Canada and the vision is that over time, there will be new hubs in other cities like Vancouver, Calgary, and Winnipeg, allowing us to connect through these ribbons of roads and rail using hydrogen. Not only is this going to be an important asset for the Edmonton Metropolitan Region, it is also going to be critical for Canada and our energy transition across a spectrum of activities. This is one piece of the pie, with carbon capture, and the green energy transition also being important pieces.

“This announcement by Air Products is really going to accelerate interest in Alberta as a hydrogen hub.”

There is a lot of interest after this announcement, though there was a lot of interest before. This announcement by Air Products is really going to accelerate interest in Alberta as a hydrogen hub. We have seen in the 24 hours after the announcement a real growth of global interest in what is going on here. All this has put this region on the map in terms of energy transition and clean technologies.

How has the oil and gas sector received the news of these investments in hydrogen?

They are very pleased with the announcement and part of it is because energy is energy—whether it is oil and gas or hydrogen, wind, or solar, the technical competencies that are necessary to deliver energy to the market are here. The world needs energy and the skill sets residing here in the talent we have working in those sectors. These are all very complementary activities, although there is obviously some competitiveness in terms of product marketing. By and large, the hydrogen investments are seen as very complementary and as a very good outcome for the region.

The skill sets we have developed in the energy sector, particularly the innovation that is going on here, are transferable to other sectors. The engineer working on one product can move across to another sector. Some of the science can be translated to the life sciences space, into the biopharmaceutical or nutraceutical spaces, because the science is all about molecules and transferring those things. Whether the molecules are in carbons or plants, the basic science remains very similar.

What is the availability of talent in the Edmonton region?

We are very fortunate here in the Edmonton Metropolitan Region. First of all, Alberta has the best K-12 school system. In addition, we have seven post-secondaries that have anywhere between 130,000 and 140,000 students in any given year, with 20,000 to 30,000 graduates every year. We are known globally for a couple of things that really enhance traditional sectors but also emerging sectors. Those areas are artificial intelligence and machine learning. The University of Alberta is ranked third globally for artificial intelligence, and that is why we have folks like Google Brain, Google DeepMind, Apple, and Amazon here. They all come here because they know that the talent exists here in research and development, creating really smart intellectual properties that can be commercialized.

“From a business perspective, you want technological differentiation and the innovation ecosystem we have in Alberta is second to none globally.”

In Alberta, we are able to take our technology and innovation and apply them in traditional sectors so businesses can achieve efficiencies. Let us talk about logistics. There are technologies to apply artificial intelligence into logistic systems to create efficiency and enhancement so your inputs are the same but your outputs are far greater. From a business perspective, you want technological differentiation and the innovation ecosystem we have in Alberta is second to none globally.

What are some of the sectors in Alberta that are going to be doing well in the coming years?

There are five transformational irons in the fire. One of them is hydrogen. The other is biopharmaceuticals, which have been building off the research and development going on in this system as well as through the whole healthcare initiative. COVID-19 has really accelerated that wave of effort. We have people coming here globally to tap into that research and development and then figuring out how to commercialize it so it has been a very new and exciting field.

“In Alberta, we have the capacity here to help agriculture investors get going with experts and equipment.”

Another key sector is food and agriculture. In Alberta, it is really about value-adding. Our region has huge potential because we have all the inputs and connectedness here—we just need to create more opportunities for value-adding. If you are a foreign direct investor looking into food and agriculture, this is the place to come because all the inputs are here and you can get your product to market in a very easy way. We have the largest food incubator here in our region so your startup costs can be offset. In Alberta, we have the capacity here to help agriculture investors get going with experts and equipment. It is really quite a special and unique capability.

Finally, there is also advanced manufacturing. We have the second-largest manufacturing parks in North America here, and most people do not realize it. Stuff that is being used in Fort McMurray’s oil sands area is built here. This is not just for Canada because our expertise, talent, and products are exported globally. We are recognized as people that can get stuff done. It is a real cluster here that is well-renowned, so if you want to get something built or made, you can come here and we will do it for you.

What must be done and by who to attract more foreign investment into Edmonton?

One of the things that Edmonton has to work on is getting our message and value proposition out to the global marketplace. Part of why Edmonton Global was formed was to help create that sense of momentum and presence in the global marketplace. We need to create the most efficient and effective mechanisms to move hydrogen to market because we are talking about a $2.3 trillion opportunity.

We need to create the most efficient and effective mechanisms to move hydrogen to market because we are talking about a $2.3 trillion opportunity.

Canada has stated that we want to be a top-three supplier of hydrogen to the world. To do so, we need to have the full capacity of our infrastructure to deliver that to the marketplace. Those are a couple of things we still have to work on but we have a little bit of momentum and acceleration starting to occur now.