Strategy

Abbotsford: Boomtown, B.C.

Can Abbotsford keep its growth under control?

Abbotsford, B.C., is like a gangly, awkward teenager. At least that’s what David Hull, executive director of its chamber of commerce, believes. The city has been rapidly growing over the past few years, and is still adjusting to its larger size, spending millions to upgrade its civic infrastructure to accommodate a population that is growing about 2% faster than the provincial average. “We’re trying to catch up with our growth,” Hull says.

What happens when the city matures is a big question. Abbotsford’s economy is built on the relatively steady agricultural industry, but it also has an abundance of manufacturers, mainly in the wood-products sector. Those businesses have been hit hard by the housing slowdown in the United States, creating a drag on the city’s GDP.

Fortunately for Abbotsford, it has an airport, and one of the few in the province that can handle international flights. In the meantime, the city is still enjoying the Vancouver spillover effect. Places such as Richmond, Burnaby and Surrey experienced their own mini-booms as people migrated eastward, and now it’s Abbotsford’s turn.

That population boom has been good for business, too. The city’s expected 2.5% GDP growth this year should outpace all other small and mid-sized census metropolitan areas, according to the Conference Board of Canada. And the city is now a hub that companies can use to tap into the burgeoning Fraser Valley region that surrounds it. “The increase in population provides us with lots of potential to add members,” says Bruce Howell, CEO of Prospera Credit Union, an Abbotsford-based bank that employs more than 500 locals. “And the diverse economy, with agriculture, business services, high-tech and the airport, provides lots of potential in small-business financial services.”

But the most striking aspect of Abbotsford’s growth is the 49% average increase in commercial building permits during the past three years, greater than any other city in Canadian Business’s ranking. Abbotsford alone is spending approximately $100 million on three large projects: a 7,000-seat sports-entertainment complex, a cultural centre and a community centre, all of which will be completed by early spring. A new hospital and cancer facility opened last month, and the town is creating a land-use plan for approximately 400 acres of land for industrial development in the province’s Agricultural Land Reserve. “Soon we’ll be out of our gangly teenage phase,” Hull says, adding the city will finally have the necessary amenities for a place of its size.

To keep the pace of development going strong, the city is banking on its airport. Back in 2006, one of the runways was extended to handle the massive passenger jets used in international air travel, and the city is busy promoting the facility as a “no-hassle” alternative to its chaotic counterpart in Vancouver. Passenger numbers have doubled to more than 500,000 since 2000, and the airport is undergoing modifications to allow it to handle 1.5 million passengers a year. But with only 10 to 12 flights a day, the airport still has a lot of room to grow. Most of the flights to and from Abbotsford are domestic — Calgary, Edmonton and Toronto — although a charter flight to Mexico operates from the airport. A charter flight to India is also in the works. Hull says there is demand for such a flight, given that 15% of the city’s population is East Indian.

There’s also an opportunity to attract some air cargo business. Abbotsford could be an international hub to receive cargo from overseas before it’s sent down south, since the city is right on the U.S. border. “Vancouver is quite congested and expensive to use,” Hull says. He envisions courier companies using the airport in Abbotsford to distribute packages to the fast-growing Fraser Valley area, or other carriers shipping fresh produce to overseas locations. The airport in February received approval from Transport Canada to participate in its international air cargo transshipment program.

Dave Kandal, chairman of the Abbotsford Airport Authority, is a little less wide-eyed about wooing cargo business away from Vancouver. “To establish an operation with two airports that close together is a questionable business practice,” he says. “They have to see a real advantage to coming out to Abbotsford.” But Kandal believes it will come in time. “It’s just waiting for the right operation to come along.”

The region’s population growth could be reason enough to attract more carriers, Kandal says. The airport’s primary service area, which includes Chilliwack, Langley and part of Surrey, is the fastest-growing region in the province. The population is estimated to increase by more than 20% between 2005 and 2015. “The airport is a very important aspect not only for development in Abbotsford, but development for the communities that surround us,” says Barry Marsden, chairman of the Conair Group, which provides aerial fire control services, and owner of aircraft maintenance company Cascade Aerospace.

More activity at the airport bodes well for both Conair and Cascade, which employ more than 1,000 people in Abbotsford. Cascade recently won a contract to provide heavy maintenance for WestJet’s fleet of Boeing 737s over the next three years. One of the factors in winning the contract was that Abbotsford is considered “online” for WestJet, meaning the airline already flies to that location. A plane can undergo maintenance and immediately return to service.

But the single biggest advantage for Cascade to be in Abbotsford is the city itself. “It’s a very good place to live and raise a family,” says CEO David Schellenberg. “Our business depends on attracting and retaining good people.” Abbotsford’s mix of outdoor living and big-city amenities certainly helps attract workers. Cascade boasts the city is one of the most “desirable locations in the world” as part of its online pitch.

The company will also find future workers through the University of the Fraser Valley, which has a campus in Abbotsford. Cascade worked with the university to develop its aerospace program, and Marsden intends to strengthen ties with the city’s educational institutions in the future. “We have to get into a different type of training where we can develop people at home here, starting in high school, and then bring them into the industry,” he says.

But Cascade is looking beyond Abbotsford for opportunities. The company is currently spending more than US$2 million to expand its facility in Spokane, Wash. Schellenberg is quick to add the operation will not cannibalize the company’s Canadian business, and Cascade has no plans to leave Abbotsford. “It’s our mother hen,” he says.

Growing an aerospace industry will certainly involve a few setbacks, but Abbotsford has a stable agriculture and food processing industry to rely on. Perhaps the biggest challenge for the city is managing its growth. Freeing up land for development is difficult, because much of it is designated for agricultural use, and there’s a lengthy bureaucratic process to get it rezoned. That means the city will have to pack a lot of people and buildings together in a limited area — and still maintain the country vibe that attracted residents in the first place. “We’ve all seen cities in B.C. that grew fast and didn’t do it right,” Hull says. “You get one chance.”