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Income Inequality And Cities: Calgary's Two Faces Show Pitfalls Of Unbridled Growth

Calgary’s Energy Boom Masks A Growing Wealth Gap

CALGARY and TORONTO -- Sipping coffee in a spacious Calgary bungalow, Sandra Horley is a long way from home. The single mother of two lives in Forest Lawn, an east side neighbourhood considered among the city’s most challenged. Car-less and often without bus fare, the 43-year-old, who depends on social assistance, gets around mainly by foot.

But for the purposes of our discussion, Horley has agreed to meet at the tidy suburban cul-de-sac on the other side of town, where her kids’ elementary school principal, Jean Johnson, lives. The area’s manicured lawns are a world apart from her hardscrabble community, and yet, when it comes to gauging Calgary’s economic disparity, Horley says the distance between here and Forest Lawn is not the one that matters most.

“In Calgary, I see it like this,” she explains, opening her arms like an alligator’s jaw. “You have your wealthy,” she says, glancing up at her top hand, “and then you have your middle class and your poor, and they’re down here. Because of the oil industry in this province and in this city, there is a big discrepancy here.”

Simplistic though it may seem, the evidence is mounting that Horley’s assessment isn’t far from fact.

Calgary was built on possibility and an ingrained belief that success is available to all those who seek it. But from 1980 to 2005, the gap between rich and poor neighbourhoods deepened dramatically. While the region roared into a period of unprecedented prosperity, Census data show that the income differential between have and have-not communities (measured with the Gini coefficient, using after-tax values) grew by 81 per cent -- far more than any other urban centre. The increase was enough to vault Calgary over Toronto, giving “The Heart of the New West” the dubious distinction of leading the country in neighbourhood income inequality.

According to University of Toronto sociologist John Myles, who crunched the data in a 2011 working paper titled “Why Have Poorer Neighbourhoods Stagnated Economically, While The Richer Have Flourished?”, the shift was caused primarily because “the rich were getting richer.” Over 25 years, the mean after-tax income in Calgary’s poorest neighbourhoods inched up by a mere five per cent; in the richest neighbourhoods, meanwhile, that figure ballooned by nearly 75 per cent.

None of this comes as a surprise to Noel Keough, an urban design professor at the University of Calgary, who has tracked the issue of income inequality in the city since the ’90s. As for the root of the disparity, he, too, points toward the collection of gleaming corporate headquarters clustered downtown.

“The oil and gas sector earns significantly higher [incomes] than any other sector, and it’s a minimum of people that work in oil and gas,” he says. “The concentration of a single industry with large, multinational players concentrates the wealth that’s generated in our city and in our province.”

Keough highlighted the degree to which the bounty has been increasingly flowing into the pockets of the few in a recent report he authored for the non-profit Sustainable Calgary. In 2005, he noted, the top 10 per cent of Calgary families earned 37 times as much as those at the bottom, which represents a 13 per cent increase in the gap since 2001.

At the time of the last Census, 14 per cent of people in Calgary were living below the low-income cut-off, which was slightly below the national average. But a recent survey of the concerns of Calgarians suggests that many more are struggling: almost one-third of respondents worried about housing costs; a fifth, meanwhile, said they were anxious about having enough money to put food on the table.

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Yet as the city grows, there’s a sense that these issues -- however prevalent -- are becoming increasingly hidden.

“You honestly can live in your world and never see it,” explains Johnson, who says that the communities that have sprung up in recent decades, “are not really subdivisions so much as they’re like little satellite [cities].”

But as the gulf widens between the myth of Calgary and the reality of many who live here, some blame pride in place for obscuring the social and economic consequences of the deepening divide, which they say is taking a toll on everything from household balance sheets to neighbourhood schools.

“Calgary likes to think of itself as the communal best, richest, biggest, newest, etc.,” says Dan Meades, the director of the non-profit Vibrant Communities Calgary. “It is hard to feel that way if we also confront the fact that so many people are poor.”

It’s a tension that helps to explain why, in a land of plenty, it can be even tougher for those who are left behind.


Under Calgary’s open skies, opportunity can feel as boundless as the city’s suburban sprawl, which flows from the downtown core into a veritable ocean of asphalt, starter homes and luxury estates.

And in many ways, it is: at more than $54,000, Calgary, which has become a magnet for young professionals, has the highest personal income per capita in the country, and the second highest average household net worth. The unemployment rate, meanwhile, sits at an enviable 5.6 per cent.

“I think Calgary is a very buoyant economy,” says Alvin Libin, a high-profile businessman and philanthropist, who made his fortune in oil and gas. “People that want to work have the opportunity to work. There’s opportunity – and when there’s opportunity, then everybody has a chance.”

But Derek Cook, a social planner for the City of Calgary, has a different take.

“Calgary’s really not old enough to have really old money, but if you’re not in [oil and gas] it’s actually very, very hard to break into it,” he says. “So there’s this perception that anybody can make it in Calgary, but I don’t think that’s the reality. It’s a very stratified city.”

Financial extremes, he says, have always been part of Calgary’s DNA; since the turn of the 20th century, when the wealthy began to cluster “away from the riffraff” in the enclaves of Sunnyside and Bowness, segregation has been a natural consequence.

It’s a trend that has intensified in recent decades, as an explosion of growth in the suburbs has quite literally split Calgary in two. For better or worse, Deerfoot Trail, the quasi-highway that runs north-south through the centre of the city, has become a kind of unofficial boundary, with more affluent Calgarians cloistered in the west, and the poor in the east.

Myles’s study found that, between 1980 to 2005, there was “a clear trend toward increasing economic segregation in virtually all cities.” But Calgary led the pack.

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Percentages represent the difference that the income gap has grown between the richest and poorest neighbourhoods in Canada's largest metropolitan areas. The numbers indicate the degree to which residents of those cities are segregating themselves economically.

8: Quebec City -- 22 per cent

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In Calgary, the city’s manager of social policy and planning John te Linde, attributes the segregation to a combination of market forces, wide open spaces and a “laissez faire” attitude toward regulation.

Whereas other major Canadian cities have implemented “inclusionary zoning” provisions, which mandate that a certain proportion of new developments constitute affordable housing, such policies have so far been rebuffed in Calgary.

According to Cook, planners were told by the city’s legal department that this kind of intervention contravenes the Municipal Government Act. But a spokesman for the province recently refuted this assertion, telling the Edmonton Journal that the MGA “allows municipalities to adopt this type of inclusionary zoning.”

“There’s a market for people who don’t want to be associated or mixed up with people of lesser means,” says te Linde. “The city tries to do things to minimize that, but in Calgary, we listen to developers more than we listen to the other parties.”

The potential pitfalls of the deepening divide have not been lost on Mayor Naheed Nenshi, who delivered a TED talk on the issue earlier this year, before he was elected.

Projecting a series of city maps onto an over-sized screen, Nenshi drew a red line to show how his hometown was evolving into “two separate cities” – with stark differences in ethnic make-up, household income and the availability of recreational facilities.

“I used a red line on purpose,” he told the audience. “It refers to the practice of certain real estate agents in the U.S. to ‘redline’ neighbourhoods, to actually say to people, ‘That neighbourhood is not for you.’ There’s ample evidence that that sort of thing happens in Calgary.”


At the time, Nenshi, whose office declined The Huffington Post’s request for an interview, noted that “people are not living together, they’re living more and more apart as the city grows,” and warned that “these things have implications as we move forward.”

Some would argue that the implications are already plain to see.

On a recent evening at 2507, a satellite homeless shelter in an old warehouse on the city’s northwest side, a few dozen men mill about the common area. Several of those who will later occupy the 125-bed dorm below are wearing the kind of concrete-splattered boots that suggest a long day of working construction.

“When I started here eight years ago, a lot of people chose to be homeless – they had their drugs, their addictions,” says support worker Kim Grozell. “But now, in Calgary, you can’t work for $12 an hour and have an apartment. More people are homeless with jobs now.”

Rising costs are also a struggle for Horley, who pours more than 80 per cent of her monthly social assistance into rent.

“I would love to be able to sleep at night without worrying, ‘Am I going be able to feed my kids?’” she says. “I keep my positive attitude up, but it’s hard sometimes.”

According to a recent RBC report on the housing market, “affordability in Calgary remains quite attractive” relative to other major urban centres. But the bank observed that, as the city’s economy bounced back from a sluggish second quarter, that measure has declined.

The flipside of renewed momentum … has been an erosion of affordability,” the bank remarked. “The RBC affordability measures deteriorated for most housing types in the third quarter, rising between 0.2 and 0.5 percentage points.”

At the same time, while Calgary’s population has boomed, its supply of affordable rental units hasn’t: as Avenue Calgary reported last year, thanks in part to the conversion of apartment buildings to condos, the city’s rental stock declined by nearly 27 per cent between 1994 and 2010. Average rents now rank among the highest in the country.

“You have people moving to this city expecting to live the good life, but they’re also having to spend in a very, very expensive city,” says Kelly Ernst, program director at the Sheldon Chumir Foundation for Ethics in Leadership. “I think it does a disservice to build up this stereotype [of a booming city] but not also talk about how it’s a very expensive place to live.”

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Particularly during the recent boom, says Cook, the gap between perception and reality gave rise to feelings of financial inadequacy among many Calgarians.

“There was apparently all this money flowing around the city, and the elephant in the room, the thing that nobody talked about, was that most of us didn’t have a piece of it,” he says. “But you almost didn’t want to say that, because the common understanding in the city was that there’s lots of money. So [to] not have that money felt like there was probably something wrong with you.”

More than two years after moving to Calgary from Cuba, Ana Maria Perez says she is still surprised by the shame she detects among her coworkers when it comes to money problems.

“The girls will say, ‘O.K., let’s go to the pub,’ and I’ll say, ‘Forget it, I already blew my budget,’” she says. “You don’t hear anyone else saying that. Even if they’re broke, they don’t talk about it.”

All of which could have something to do with the fact that, at more than $190,000, Calgary’s average household debt level is by far the highest of any Canadian city.

Meanwhile, increasing economic segregation appears to be magnifying the challenges in some of the most impoverished communities.

According to Ernst, whose father was one of the early settlers in the Forest Lawn area, the neighbourhood used to be a launching pad for economic advancement. But now, he says it has become a prime example of “the increasing ghettoization that’s starting to occur in Calgary based on economic ability.”

“There’s a very large low-income group there that have been there for quite a while, and an immigrant population that is trying to be going, and they don’t have a lot of means to really move through the social ladder,” he says. “The poverty is becoming more solidified. In comparison to other neighbourhoods in Calgary, the mobility isn’t there anymore. People are staying -- and staying -- in that kind of lot in life.”

At Forest Lawn’s Patrick Airlie School, which was named for Ernst’s grandfather, teachers and administrators have had to adjust accordingly.

Though Principal Jean Johnson describes a tight-knit, supportive community where parents and students are invested in education, she concedes that curriculum delivery sometimes takes a backseat to more pressing needs.

“[The] number one priority is making sure your kids have food, but a lot of our kids don’t,” she says. “I’ve actually knocked on doors, and the mother is in a state of depression -- complete immobilized depression. The cupboards are bare, and it’s not just today.”

Patrick Airlie has a subsidized breakfast program, but access to the lunch program depends on a parent’s willingness to ask for help, which, as Horley points out, can present an added barrier to those reluctant to admit that they are struggling.

“Calgarians don’t know about this,” says Ernst, whose family is making a donation to the school, which will be used to provide kindergarteners with healthy snacks. “They just don’t.”


But that’s only part of what makes tackling income inequality in Calgary (or any other major urban centre, for that matter) so difficult.

As observers on both sides of the issue are quick to point out, the very same system -- and industry -- that critics blame for deepening the economic divide is also responsible for turning the region into an economic powerhouse.

According to Travis Davies, spokesman for the Canadian Association of Petroleum Producers, about one in six Albertans owe their employment to the sector, which has huge economic spin-off.

“I’d be more inclined to look at it as [creating] a much higher average than wealth disparity,” he says. “As one of those who works in the oil and gas industry and is not in the top 10 per cent [of income earners], I see it as a major plus that our economy is thriving.”

Prominent businessman Richard Haskayne, too, says that focusing on income inequality in Calgary misses the point.

Raised by an uneducated butcher in the tiny Alberta town of Gleichen, Haskayne, 77, has never forgotten where he came from. His significant philanthropic efforts include 10 annual bursaries earmarked for kids from rural towns who intend to live in residence at the University of Calgary.

“People like us that have struggled along the way, when we do well, we’ve given a lot back,” he says. “I think we’re a pretty generous group.”

Haskayne’s quite right: in 2010, Calgary’s annual United Way campaign raised $51.7 million, more than double the amount raised in Edmonton, a city of similar size to Calgary.

At the city’s planning offices, Cook and te Linde say Calgary is making subtle inroads, citing a newly approved plan to address poverty reduction and a proposal to pour support and resources into “tipping point” neighbourhoods that are beginning to experience decline.

Got a story to share about life in Calgary? Reach us on Facebook, tweet @HuffPostCanada with the hashtag #incomegap or leave a comment below.

But there is a sense that more significant changes would be a hard sell.

As members of the business community note, even if there were widespread agreement that the gap has become precariously wide, taking action to narrow it could also carry consequences.

“The question becomes, to what extent can that be solved by the public sector versus the private sector versus the individual versus the community?” says Ben Brunnen, chief economist for the Calgary Chamber of Commerce. “Once we address the issues of the individuals that are confronted with challenges and need the support, and we start a broader approach toward redistribution of wealth, you start … removing incentives to create wealth overall, and removing the appropriate incentives to earn.”

For her part, Horley still has faith in her own potential, and the promise that Calgary holds for those who can dig themselves out of the depths. When her girls get a little older, she is planning to go back to work, and finish her degree.

“Do I wish I had more for my kids? Absolutely. But eventually that will happen,” she says. “Eventually we will get back to having money coming in.”

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