Premier says she’s open to tax breaks to help hotels get built near BMO Centre

Premier Danielle Smith signalled Thursday that she’s open to providing ‘broad-based programs’ such as tax breaks that could help developers

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While the Alberta government likely won’t commit public money to support much-needed hotels in downtown Calgary near the BMO Centre, Premier Danielle Smith isn’t opposed to providing broad supports to help get projects off the ground, she said Thursday.

The province is also close to unveiling a strategy around building out Alberta’s ski resorts, Smith said Thursday.

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The premier’s comments come as major conventions have started descending on Calgary’s massive new convention centre, where the area east of downtown needs anywhere from 2,500 to 5,000 hotels rooms. Speaking to Calgary’s business community at a lunch held by the Calgary Chamber of Commerce, Smith said she doesn’t want to “pick a winner or loser” by helping specific projects.

“My preference is to have a broad base of tax cuts and broad-based programs that are available to everyone,” Smith said in a conversation with chamber president and CEO Deborah Yedlin. She added that she doesn’t know how that program would take shape.

Several groups including the chamber have flagged the area’s severe deficit of hotels as the BMO Centre officially opened last week. While one group, Matthews Southwest Hospitality, has signalled its intent to build a hotel and is in its due diligence period, no hotels have broken ground.

Sol Zia, executive director of the Calgary Hotel Association, said developers’ plans to build hotels will likely be contingent on some level of government support due to high building costs and labour shortages in the construction industry.

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“I think firm commitments . . . will require some sort of relief or support from governments to get the hotel development projects to assign contracted, shovels-in-the-ground development,” Zia said after the premier’s remarks.

The Calgary Municipal Land Corp. and Mayor Jyoti Gondek have said they’re confident hotels will come to the area now that the BMO Centre is complete and conventions are coming to the building, which nearly doubled its convention capacity. (The Global Energy Show this week welcomed around 30,000 people.)

Zia said “a number” of developers have plans to bring proposals to CMLC, however they’re waiting for government supports to ensure they get a reasonable return on their investment. At least one agreement could be inked by the end of the summer, he said.

Premier Danielle Smith
Premier Danielle Smith speaks at a Calgary Chamber of Commerce luncheon at the Hyatt Regency on Thursday. Darren Makowichuk/Postmedia

Smith said Calgary is short about 5,000 hotel rooms, while the chamber has pegged that number between 2,500 and 3,000. (The average hotel has about 250 to 300 rooms.)

The premier’s remarks are a positive sign, Zia said, because it shows she’s willing to engage with industry on the issue.

“The flip side would have been, ‘Hey, that’s not the business of government.’ ”

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Smith also said she’s tasked Tourism Minister Joseph Schow with creating a “resort strategy,” which should be announced in the coming weeks.

“When you see how relatively undeveloped we are around our ski hills here, we think that can change,” Smith said.

The province has said it’s aiming to double Alberta’s tourism economy by the early- to mid-2030s, and announced a new tourism strategy earlier this year. However, that strategy did not reference direct investments in the industry.

“That’s part of the issue that we’re facing is that we may need to see several more hotels being built in this entire region . . . So if we can come up with a strategy to incentivize all of that, I’d be really interested in hearing it.”

The province’s ability to spur investment around the Rockies may be challenging because much of Alberta’s resorts are in national parks.

“The majority of Alberta’s ski hills are situated in national parks where development is constrained, an issue that falls within federal jurisdiction,” Tracy Douglas-Blowers, president and CEO of the Alberta Hotel and Lodging Association, wrote to Postmedia in response to a question about whether there are opportunities for Alberta to influence development at resorts in the Rocky Mountains.

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