Why some municipalities want to leave this Edmonton region investment group

Three municipalities say they want out of an organization that works to persuade international companies to set up shop in the Edmonton region.

In quick succession, councils in Strathcona County, Sturgeon County and Fort Saskatchewan each said they'll give notice to withdraw from Edmonton Global.

That sets in motion a two-year process to officially leave as shareholders in the collective of 14 cities, towns and counties, and stop paying into the organization after 2025.

Taken together, the municipalities cover most of the region north and east of Edmonton, including a vast amount of agricultural land and a major area for heavy industry. If they follow through and leave, it will have a big impact on the economic development group.

A map of the Edmonton region municipalities that are shareholders of Edmonton Global. (Steven Silcox/CBC News Graphics)

Edmonton Global CEO Malcolm Bruce told CBC News the group is stronger with all 14 members.

"The sum of the regional assets that we take to market really is the attractive thing to the international community. And we really need to understand what that will mean if we change this. International competition is very fierce."

What is Edmonton Global?

In 2017, 15 Edmonton-area municipalities agreed to join forces and pay into the regional economic non-profit as shareholders. Membership costs vary depending on community size.

In return, Edmonton Global took up the mantle of promoting Edmonton and surrounding communities, attracting foreign direct investment and helping local companies expand and get into export markets.

The idea is that pooling resources to attract jobs and investment is more effective than individual municipalities — especially smaller ones, with fewer resources — going it alone.

Proponents say it also lets the region present a united front for economic benefits across communities, rather than competing with each other.

Malcolm Bruce, who lived across Canada and internationally during his 30-year military career, is the CEO of Edmonton Global. (Nathan Gross/CBC)

Six years ago, former Edmonton mayor Don Iveson heralded the new regional collaboration as his proudest accomplishment of the year.

But local doubts about the organization aren't unprecedented.

Bon Accord, a town about 30 kilometres north of Edmonton, exited shortly after the group's creation. Morinville and Parkland County also voted to start the withdrawal process in recent years, but then reversed their decision, and the group remains an alliance of 14 municipalities.

Bruce said that the organization has played a part in bringing $2.6 billion in net new investment to the Edmonton area, and an estimated 4,200 permanent jobs.

Why are municipalities trying to leave?

Strathcona County, which covers an area directly east of Edmonton encompassing a large, mostly rural area, plus the urban centre of Sherwood Park, first voted to leave on Nov. 30.

Less than two weeks later, Sturgeon County, a rural district north of Edmonton, also opted to pull out. And finally, Fort Saskatchewan, a city of about 28,000 people just northeast of the city made the same choice.

Rod Frank is the mayor of Strathcona County, just east of Edmonton. (Submitted by Strathcona County)

Councils in all three municipalities discussed the issue behind closed doors before coming back and voting unanimously to start the withdrawal process.

Strathcona County Mayor Rod Frank told CBC News that the mayors didn't discuss the move with each other in advance, but for his council, it came down to a tight budget.

"Their overall mission is something we believe in. It's just a matter of the cost of it, and can we achieve results elsewhere."

Strathcona County council also voted to pay the $500,000 annual fee to Edmonton Global out of reserve funds, instead of their operating budget, for the next two years.

During the meeting, Coun. Robert Parks also brought up a November business summit that Edmonton Global helped organize.

He took issue with the organization "throwing what I believe was an extravagant event that primarily advertised Edmonton to Edmonton, with little regard to advertising the region outside our borders."

In an interview, Fort Saskatchewan Mayor Gale Katchur said council hasn't seen the value for the money going toward Edmonton Global.

The communities planning to withdraw are three of the five municipal members of the Alberta Industrial Heartland Association. It's another regional non-profit that works to attract investment to an established industrial energy hub northeast of Edmonton.

"That is really where our focus has been when we talk about attracting business to our region," Katchur said.

A Sturgeon County spokesperson said Mayor Alanna Hnatiw wasn't available for an interview. A statement sent to CBC News underlined that the county has contributed nearly $1 million to Edmonton Global since 2017, through membership fees and other funding.

The statement also referred to the municipality's other regional work, including the Edmonton Region Hydrogen Hub and the Alberta Industrial Heartland Association.

"Sturgeon County simply has not seen a sufficient return on investment to justify continuing its membership with Edmonton Global."

What now?

Edmonton Global CEO Bruce said the organization will embark on a "listening tour" in the new year to try to resolve the issues behind the withdrawal notices. The two-year waiting period means the decisions aren't final.

But leaders in other Edmonton-area communities have questions about next steps too. St. Albert Mayor Cathy Heron said fees will increase for the members that are left if the withdrawals go ahead. Her city sits right in between Edmonton and Sturgeon County.

"We'll still be marketing the region and they will still be benefiting from that international exposure, but not paying in. So that leaves the rest of us kind of frustrated and feeling slighted," she said.

"I personally can't speak for my whole council, but I'm in it for the long haul. I know in the end, marketing ourselves as a region is good for the entire region."

Morinville Mayor Simon Boersma said mayors from all the municipalities in Edmonton Global plan to meet at the end of January to have a deeper conversation.

"Any time that we look at organizations that encompass more than two or three people, it's like living in a family trying to figure out how that is going to affect you."

Strathcona County Mayor Frank said he's open to the possibility of staying with the economic development group, and it's still too early to say what will happen — whether more communities will move to withdraw, or the three that have given notice will reconsider.

"It could mean just a reset for Edmonton Global," he said.

"There's now a few that have made this decision, so it's certainly something that has to be addressed."