The Conception of Alberta’s Industrial Heartland: Spring 1993

In the spring of 1993, Strathcona County, Fort Saskatchewan, Lamont County, and Sturgeon County came together with a shared vision to cooperate, including rezoning land for easier municipal, provincial, and federal development approvals.  This would assist smaller “fence-line” industries to start or grow by using the services of larger existing facilities to accommodate the smaller, and allow the bi-products of one facility to be the feedstock of another.

The benefits would be to grow high tech employment, improve environmental efficiencies by decreasing emissions through “eco-industrial” development, and increased tax revenues for the municipalities and the province of Alberta.

Even during the early 1990s, an aspirational dream of an emissions-free zone in this region was quietly held. Today, the region is closer to this dream.

The vision that was conceived has become an economic cornerstone for the Edmonton Metro Region, Alberta and Canada, now known as “Alberta’s Industrial Heartland”. The purpose of this article is to tell the history of the Heartland and the story of those that contributed its formation, and to celebrate its bright future.

1993 – The Beginnings

In the early 1990s many municipalities were concerned about maintaining their autonomy and were focused on protecting and growing their tax base to ensure their unique municipalities remained sustainable. As well, during this time there was room for more communication between business and municipal governments.

To address this communication opportunity, the Fort Saskatchewan Regional Industrial Association (FSRIA) began meeting with Strathcona County Economic Development. They soon recognized that the region was losing opportunities and that they needed to modify their approach.

One key challenge businesses faced was the process to rezone land for industrial purposes. It was difficult for a company to buy a large portion and get it rezoned by the municipality as it could take up to three years to work through government bureaucracy and meet all the concerns with adjacent landowners.  Provincial permits came next, which could take another two years. This was an undesirable investment timeline for many new developments. Even existing businesses that just wanted to expand, like Dow Chemical and Shell, faced a slow process.

Mel Coutanche and George Marshall, both working for Dow Chemical and with FSRIA, reached out to important industry players and key politicians, and facilitated a meeting to look for regional solutions. In the spring of 1993, a group of 22 industry and government leaders came together to discuss the opportunities facing the region and how to progress the petrochemical industry by working together.

“It finally reached a head, and Mel Coutanche facilitated a meeting. And, he didn’t do it on behalf of Dow and he didn’t do it on behalf of Strathcona County; but he just knew a lot of the individuals and went for it.” Former Strathcona County Mayor Vern Hartwell stated of this meeting.

A visionary of the Heartland, Vern Hartwell attended this meeting as chair of the Strathcona County Economic Development and Tourism Advisory Committee along with Duane McPhail, the County’s Economic Development manager.  Vern had recently finished his term as Sherwood Park & District Chamber President, and was beginning his first term in Strathcona County politics as a counsellor.  Lamont County Reeve, and future Alberta premier, Ed Stelmach, was also at the meeting.

The meeting was held in a local industry facility lunchroom. Mel Coutanche remembers that a couple of the attendees were large hockey fans, and with the ’93 Stanley Cup playoffs happening that evening Mel was both surprised and encouraged to see the attendees at the work meeting anyway.

A total of 16 initiatives were brought to the group for discussion. In order to get strong buy-in on actions, the group decided that unanimous support was needed to make any initiative a priority – if one member voted against an idea, it was off the table.

“As I recall, the group agreed on a “top 3” (out of 16) suggested initiatives. They were: Market the Region, Share Training Courses, and Do (more) Business Locally. This “partnership” concept became the key to future initiatives and agreements,” Mel Coutanche said.

That spring meeting marked the beginnings of Alberta’s Industrial Heartland. The group set in motion over the next few years to create a region that would attract and sustain development that would benefit all members involved.

Building a Collaborative Dream – 1993-1997

As the dream was built into reality during the mid-1990s, collaboration became an essential theme between industry and different levels of government.

At the time getting municipalities to work together was a bit of a challenge, but despite these typical challenges persisting, an unusually cooperative nature emerged with the Heartland project.  A vital part of the Heartland proposal was simplifying zoning approvals in the area.  The municipal leaders and administrators began aligning Municipal Development Plans so that companies investing in the area would have an advantage in choosing the Heartland region. “Heavy industrial zoning” was placed in Lamont County, Sturgeon County, and Strathcona County, and “industrial zoning” was placed in Fort Saskatchewan.  Despite only zoning for standard industrial, Fort Saskatchewan was essential to the partnership because they had serviced lots that would be vital for the smaller fence-line companies.

A key leader and driving force behind the Heartland’s beginnings and political collaboration during the 1990’s was Vern Hartwell. When the idea began in 1993, Vern was a recent President of the Sherwood Park & District Chamber of Commerce, and newly elected Strathcona County Counsellor. Vern became the County’s mayor in 1995 and spearheaded the political front of the project forging relationships and working with the leaders of the four municipalities. He also liaised with the provincial government. Premier Ralph Klein was kept up-to-date on the project, and either the Economic Development Minister or Premier himself communicated  “every 6 or 8 weeks” with the new Strathcona County Mayor. The Mayor also began to draft articles for the provinces’ first inter-municipal corporation.

The province wanted to enact change that was good for the province as a whole and the businesses began to work together with government as partners in a special way.  Groups or associations coming forward with policy proposals together had more advocacy strength than lone municipalities or businesses. As industry and government began work together in a new way with the Heartland concept, a partnership was forged that is still in place today.

Industrial Collaboration

Strong partnerships between industry were also vital. One opportunity that the early leaders saw was in “fence-line industries” – smaller companies that could benefit from being near a larger company to create a symbiotic relationship.  Smaller companies struggle when the land they have to develop still requires services like water or sanitation. Larger companies have the financial means to service large sections of land and still have room for a smaller company to tap into the system from the “fence-line”.   In turn, these larger companies can sell what would have been “waste” as feedstock for smaller operations next door, creating a new revenue source right next to them.

“Nobody is going to pump anything up the stack if they can sell it for a nickel,” Vern Hartwell said of fence-line industries.   This concept back then was called “eco-industrial” development.

Despite the many positive relationships, concern lay with some of the existing companies in the area concerned that the plan would just bring in more competition to their operations. As a result, some didn’t want to invest time with the new initiative. The project leaders kept a mantra of “what is good for your neighbours is good for you” that applied not only to industry, but also to municipalities focused on their own interests. Heartland visionaries believed that a strong collective voice would prevail in garnering the support of the provincial government, as well as the businesses they hoped to attract in the future.  The highly collaborative approach would serve the project well.

The Importance of Value-Add

It was very important to the Alberta Government that the region didn’t just simply  extract oil or natural gas, but that it also had a plan to upgrade the raw products into end products with a higher value.

“The extraction of one tonne of natural gas could mean one job, but one tonne of further refined ethylene could be ten jobs, and one tonne of polyethylene could mean a hundred jobs,” Mel Coutanche described of the importance of value-added production to the Heartland and to Alberta.

With the development of the Heartland concept well underway in the late 1990’s oilsands producers began advocating the provincial and federal to establish a tax and royalty regime that would be conducive to further investments in the oilsands. Historically, Alberta was a large producer of both oil and natural gas, and during this time there was a massive amount of excess natural gas with a limited market capacity to buy it. With a new policy in place, natural gas could be sold right here in our home province to other companies for further refining and value-adding.

The federal and provincial governments responded to industry by approving a number of pipeline projects which opened up the extracted products from natural gas to be upgraded domestically as a feedstock for the local producers here in what would later become Alberta’s Industrial Heartland.

1997 – A “Think Tank” Meeting

In 1997, municipal political and administrative representatives, senior industry executives, and provincial representatives from Alberta Economic Development met for what future Heartland Executive Director Larry Wall described as a “think tank” meeting. This became an important milestone marker in the Heartland development, and, mere months later, the final documents would be signed and announced to the public.

Two keys themes emerged from this final ‘first’ meeting. The first was they needed  finalized Complementary Area Structure Plans. This framework set out to understand the needs of the municipalities, as well as the local community, and establish an area that was designated for large industrial manufacturing. It would allow a businesses to negotiate one set of zoning terms that would not differ between partnering municipalities.

Mel Coutanche reminisced that the cohesive zoning formalized by the four municipalities was a key milestone of the project. In the future, this coordinated land rezoning across all four municipalities would potentially shorten the approval process for new facilities by up to three years.

The second theme was the recognized need to “put this region on the map”.

Larry Wall described how that international exposure was very important to the group. “This was not about getting some folks in Edmonton to make an investment here in Strathcona County, Fort Saskatchewan, Sturgeon County or Lamont County; this was about getting somebody in Frankfurt, Germany, or in New York, or in Houston, Texas, or in London, or in Tokyo, or Hong Kong; [we needed] investors there to know what the opportunity was here.” Larry Wall said.

Soon after this meeting, the municipal partnership was finalized and a public introduction was made of Alberta’s newly formed Industrial Heartland.

An Introduction of Alberta’s Industrial Heartland

May 27th, 1998, Festival Place. Surrounded by industry and community leaders, Premier Ralph Klein held a public announcement of the articles of incorporation of  Alberta’s Industrial Heartland Association (AIHA) to industry and the public, and celebrated the cooperation of business and government.

“It was an information session and a congratulation meeting – more of a congratulation meeting than it was for anything. Because, people had [put in] thousands of hours, thousands of hours,” Vern Hartwell described.

This celebration announced to the public that the province’s first and only inter-municipal corporation had been finalized and formally signed by the partnering municipalities.

The four municipal Chief Administrative Officers were appointed to be members of the Heartland executive board, and they became the functional portion carrying out the work, with the municipal counsellors making up the board. Larry Wall was hired as the first Executive Director of AIHA.  The “Heartland” was now finalized and operating.

Built-In Collaboration from the Start

A key challenge from the beginning was the constant temptation for municipalities to focus on growing their own tax base, rather than focus on what was good for the Heartland region as a whole. To address inter-municipal competition issues head-on, AIHA built collaboration right into its structure.

At its formation, each municipality contributed funds to AIHA as an investment rather than as an expense. Once particular goals were achieved, and increased tax dollars flowed into municipalities from new developments in the Heartland region, a percentage of tax revenue was returned to AIHA and redistributed to individual municipalities to pay back all investments into AIHA.

“That type of revenue sharing formula was critical. It got the municipalities thinking about this from a business perspective, as compared to an expense perspective. ‘What was the return?’ This was all about putting in a dollar and getting back ten, or putting in a dollar and getting back two. Better to get back two than nothing,” commented Larry Wall.

The Importance of the Environment

As Larry Wall took the helm of AIHA, he described himself as a young environmentalist that realized the massive cumulative impact he could have leading the organization.

“I was an environmentalist; I ran an outdoor center, in which environmental education was  our key thing… Initially, I thought this [joining Alberta’s Industrial Heartland] was leaving my principles behind, and then I realized that if we could make one small improvement on this industrial scale it was the equivalent of 10,000 people doing something on a local scale, or maybe 100,000 people doing something on a local scale; small influences in this world had massive impacts. So, from a personal values point of view, I find myself in a position to have a greater positive impact on our community on both an economic and environmental basis than I ever could have, as much as I enjoyed, and loved, and respected the environmental education part of it.” Larry Wall said.

This environmental outlook was also shared by Vern Hartwell.  “I dreamed of a 500-square-mile zone that would be totally emissions free in 50 years from when we started”.  Vern still holds this dream today.

The Vision was Collective

The leaders were intent on the philosophy that if the Heartland was truly good at what it did then external investment would come, and so the team set out to put platitudes into achievable actions.  A key goal of AIHA was to get large scale value-add manufacturing. While it was highly unusual at the time to put down numbers as targets, they put out an ambitious goal to attract another $1 billion in value-added manufacturing and $100 million in eco-industrial manufacturing in the first five years.

They also wanted to expand their small industrial manufacturing service industry by 20% in municipalities. These smaller players would support the big large industrial facilities. With the growth of fence-line businesses the pie would grow for all.

And finally, they wanted to promote eco-industrial processing, based on the concept of improved economic and environmental outcomes through the exchange of products. By promoting centralized infrastructure systems throughout the Heartland serving water, steam, electricity, or natural gas, it would create enormous efficiencies, rather than each business needing to develop its own systems.

As well, there were logistics efficiencies of being in the same region. Larry Wall would state, “if your customer is next door it’s a significant savings over having to incur the cost of shipping it … three thousand kilometres“.

Learning and Reaching the International Market

As the Heartland was beginning, the staff needed to learn how international business worked, as well as how to promote the region. Larry Wall described how the team did not know the level of analysis that outside organizations undertook or the needs of the international market (i.e. feedstock, jurisdictional considerations) in order for them to choose Alberta to invest in. Also, while the international market knew about Canada, they had little knowledge of Alberta – some knew Alberta as a producer, but not as a value-added manufacturer.  The process to identify the competitive advantages of this area began.

One of Larry Wall’s first jobs was to introduce the Heartland to leading members of businesses in the petrochemical industry around the world. He began outreach, and Vern and Larry took several trips to Calgary to meet with business leaders at Canadian international offices with business cases. At times they faced the challenge of finding contacts “high enough” up the ladder to talk to, but, with time, persistence, and perhaps a little luck, the momentum began.

Administrators from the provincial and federal government soon became AIHA ambassadors on the international stage and began to open the doors for major investment. In time, companies were reaching out to the Heartland, instead of the other way around.

From the Beginning to Today, and to Tomorrow

Over the first years of formation Larry Wall led Alberta’s Industrial Heartland successfully, and in 2008 Neil Shelley became its second Executive Director. Edmonton was welcomed into the Heartland partnership in 2010, and in 2011 the Town of Bruderheim, the Town of Gibbons, and the Town of Redwater were approved as Associate Members.  Today the AIHA is seen as a smashing success with billions of new dollars invested into the region.  The hard work and strong foundation is still paying dividends.

Mark Plamondon is the Heartland’s current executive director. An engineer with an MBA and years of senior leadership experience in industry, Mark is a Fort Saskatchewan resident committed to carrying the Heartland vision forward. He began in the role in 2017, at a time when the Government of Alberta had just rolled out their Petrochemicals Diversification Program. While Alberta has faced economic challenges, Mark is striving to keep the future bright for the region.

When asked about the vision of the Heartland, Mark referred back to the founding principles: “We are a globally recognized, diversified, eco-industrial cluster, with a world-leading hydrocarbon processing industry that sets the global standard for industrial, environmental, social and governance leadership.” He commented that over the years this initial vision has grown and that AIHA has increased its focus on building out a diversified industrial base.

Mark Plamondon stated that the vision is supported by four principles: first, he sees Environmental, Social and Corporate Governance (ESG) stewardship as critical for future economic prosperity. The world is looking for long-term ESG leadership so the region can continue to have the social license needed to continue to operate. The second principle is that stable economic growth contributes to resilient and vibrant communities. The more diversified this region can be, the more it leads to stable and vibrant communities. Mark sees a third principle also within diversification efforts: it reduces the peaks and valleys of commodity industries which means more resilient revenue. And finally, in a hail back to the original concept of “fence-line industries” Mark believes that industrial clustering improves overall competitiveness and creates a more efficient region.

A Testament to the Founders

In discussing the strength of the enduring vision of AIHA Mark remembered the early leaders. “I think it’s also a testament to the founders who set up the association and structured it in such a way that it can be self-sustaining. It was structured in a way… that has led to a strong association.”

When discussing the future, Mark Plamondon sees AIHA as well-positioned to capitalize on the opportunities. The recently released Alberta Natural Gas Strategy is an example of this. There was a lengthy and thoughtful consultation process on this document that AIHA was a part of, and Mark believes that Alberta’s Industrial Heartland “fits perfectly” with the strategy, due to its current focuses on petrochemicals, hydrogen, and the plastic “circular economy”.

(For more on hydrogen, visit https://sherwoodparkchamber.com/can-alberta-become-a-player-in-the-hydrogen-economy/, and for more on the Circular Economy, visit https://sherwoodparkchamber.com/albertas-circular-economy-another-piece-to-diversifying-our-economy/).

Conclusion

A journey that started over 20 years ago to build a collaborative zone for industry to invest, build, and thrive has arrived, and the future is still being charted. We thank those leaders that have built the Heartland to what it is today.

The charter members of Alberta’s Industrial Heartland were key to the successful beginning, and we also want to applaud the efforts of the current leadership team and administration for their continued vision and ongoing work to ensure the sustainability and success of the organization into the future. We congratulate them for their many achievements.

Member Municipalities:

Associate Members

We sincerely thank these four individuals for allowing interviews to write this article:

Vern Hartwell; Sherwood Park & District Chamber of Commerce President 1989, 1992.  Strathcona County Counsellor – 1992-95. Strathcona County Mayor – 1995-2004.  Alberta’s Industrial Heartland Association, Chair – 1995-2004.

Mel Coutanche; Dow Chemicals, Government Relations. Independent Consultant for Alberta’s Industrial Heartland.

Larry Wall; Strathcona County. Economic Development Officer – 1995-1998; Alberta’s Industrial Heartland Association, Executive Director – 1998-2008.

Mark Plamondon; Alberta’s Industrial Heartland Association, Executive Director – 2017-Present.

Author: John Perozok, Policy Analyst at the Sherwood Park & District Chamber of Commerce.