Edmonton Strathcona: Global Financing Hub

Edmonton Strathcona: Global Financing Hub

February 04, 2021

Here’s a bold prediction you can take to the bank: in the next five years Alberta will become the fastest growing, wealthiest and most innovative place to be in North America.

And Edmonton Strathcona will be at the centre - a global hub of finance, technology and natural resources.

Really? How so?

Because it’s already happening. I see it day in and day out. It’s a wave of capital and new jobs, and all we need to do now is get in front of it and position ourselves for the huge swell pushing it along.

I own and run a business that helps finance Canada’s leading growth companies. We see movements of capital, companies that are growing, and people who are focused on creating jobs “where the puck is going” in the economy, to borrow a well-known phrase from Wayne Gretzky.

And today it’s clearer than ever that the “puck” of economic growth is moving at breakneck speed into the sector known as “energy transition”: hydrogen; helium; lithium; EV infrastructure; Artificial Intelligence; and nuclear.

There is a flood of investment capital coming into Alberta right now, and more on the way, to take advantage of our key assets: plentiful supply of natural gas; strong energy infrastructure; a skilled work force; low taxes; and a young and educated population.

Yes, our existing energy sector infrastructure is still strong, and will be in demand for several decades. And here’s something for you – smart money managers across Canada are telling me that the Biden administration’s green plans in the US will start to make Canada’s energy sector look very attractive. That’s already been reflected in stock prices since mid-November. Don’t take my word – call your Investment Advisor and find out.

But the biggest and most powerful wave of investment and job growth we’ll see in the next generation here in Alberta is in this new clean energy sector.

So what does all this have to do with Edmonton Strathcona?

There is a huge opportunity for us here – I can clearly see if from my perspective of someone who has spent 30 years working in Canada’s capital markets. There is a gap in the value creation chain that begins with the germ of an idea and ends up being the next Shopify. And we have an opportunity to fill that gap – one that I’ll call the “teenage years” in the creation of a successful company.

Here’s how it works:

Edmonton has an exceptionally strong network of early- stage innovators, entrepreneurs and groups that support them. The University of Alberta has a global reputation in Artificial Intelligence, which will fuel so much growth in a wide variety of commercial applications over the next decade. These are the “babies” starting out into the world.

The best and most promising of these innovative “babies” find all the support and mentoring that they need to get into the “child” stage of growth. Edmonton excels in this area. Groups like Tim Lynn’s Startup TNT and Brass Dome Ventures Ltd. and others have an amazing track record of success. Alberta Innovates - the province's full-service innovation engine. is another great source of support. On the local scene, Edmonton Global has a strong and robust platform that networks support in a number of fast-growing areas.

Further down the line, once companies are fully grown and mature “adults”, the provincial government’s newly formed Invest Alberta Corporation. is set up to attract leaders in this sector and bring them to Alberta. Invest Alberta’s recent success in having mCloud of Vancouver move to Alberta to be closer to it’s customer base of AI-powered ESG solutions was a huge win.

So, here’s where the gap comes in. Many companies that are maturing, have proven out their business plan and show promise by scaling up quickly can end up being bought outright or obtain financing in the private equity market.

Here’s where we in Edmonton fall behind. Check out this chart (figures provided by Edmonton Global) that illustrates that fact – Calgary, Toronto and Montreal respectively have raise 21x, 6x and 31x more money that we have here in Edmonton in this stage in the past year.

What’s the reason for that? I think the biggest factor is each of those other cities have a long tradition of supporting public venture capital investments. In other words, stock exchanges. Although physical trading floors no longer exist, the Calgary Stock Exchange, Toronto Stock Exchange and Montreal Stock Exchange all were responsible for supporting early stage mining, technology, pharma and other companies. This culture is in the DNA of these cities, and public venture capital markets play a huge role in advancing companies in these “teen” years.

We’ve never had a stock exchange here in Edmonton. But, we don’t need one. There are no boundaries to capital and there are no barriers to Edmonton becoming a financial hub – as long as we attract the right people here.

It’s already starting. Echelon Partners, a Toronto-based investment dealer, recently opened up an office in Calgary with a mandate to help finance and support the leading ESG companies here in Western Canada – with a focus in Alberta. You can read more about that here (paywall): Echelon Wealth bets on Alberta with new investment banking office for Western Canada - The Globe and Mail

How well has Echelon done in the past three months in this sector? Close to $100 million closed and pending/visible in the past 90 days. You can bet that other dealers are seeing that and making plans to head out our way ASAP.

So let’s bring Canada’s leading investment dealers to Edmonton Strathcona. There’s no reason they have to be in Calgary. Let’s open up an office here and provide five key things that the global providers of capital are looking for – and all of which we have in spades:

  • Proximity to the U of A and all the technology coming out of it, as well as the support network described above
  • Low cost real estate in an attractive location with easy access to the airport
  • Access to top-notch research – which we will develop and set up with open access to global fund managers, dealers and investors
  • Close proximity to government offices and decision makers at the provincial level who affect policy decisions and support in this space
  • A progressive, open and welcoming community known for its vibrant culture and ethnically diverse neighborhoods

The gap we would be filling is the one which is the “teen” years for this fast-growing companies. Prior to full maturity, they need access to Canada’s public capital markets. Nobody does this better than Canada. I know because I work with the people who do this day in and day out. And I know that if we sell them on the benefits of establishing a presence here in Edmonton Strathcona, they would come. In a huge way.

Finally, the federal government has a program that we could easily access the world’s top innovators to join this hub. The Start-Up Visa Program could be used as a powerful tool to attract top innovators from Europe, Africa, Asia and anywhere who would benefit from our Strathcona global hub.

What would all of this cost taxpayers? Zero. Investment dealers, fund managers and global wealth managers will pay for access to our research . Our insight. Our knowledge.

Which means that the best and brightest men and women who will be moving the puck quickly along in this space will come here, to Edmonton Strathcona, and be part of our hub.

All we need is the leadership, relationships and will to get this done. And I have all three. As Member of Parliament for Edmonton Strathcona, by top priority for our riding, for our city and for our province, would be to work with a wide network of local, provincial, federal and private sector partners to get this done.

That’s the future I see for Edmonton Strathcona. It’s exciting, and it’s real. And it’s happening right now.

Let’s get in front of this wave. Let’s put Edmonton Strathcona on the map of global financial capitals of the next decade. Will you join me?

 

- Rick Peterson


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