Cities have to be labour markets first to improve productivity, wages. Edmonton’s mayor gets it

Mayor Andrew Knack year end interview on Thursday, Dec. 18, 2025 in Edmonton. Photo by Greg Southam-Postmedia

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Cities are, first and foremost, labour markets. Their primary economic function is to match people with jobs, companies with workers and skills with opportunity. Productivity improves, wages rise and living standards follow when cities perform this role well. But no amount of cosmetic improvement can compensate when they do not.

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Edmonton Mayor Andrew Knack gets this. In a recent interview, he said the newly elected city council should place economic development at the centre of its agenda. But other municipal governments across Canada frequently lose sight of this basic truth.

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Instead of focusing on expanding the local economy, improving job quality and raising wages, councils often gravitate toward highly visible, but low-impact interventions: streetscape upgrades, decorative lighting, hanging flower baskets and other forms of urban embellishment.

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This is not to say that such investments are useless. Attractive streets do matter. Cities that look neglected struggle to attract visitors, shoppers and even residents. But beautification is a complement to economic vitality, not a substitute for it. Without a strong economic engine, decorative gestures amount to little more than civic window dressing.

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We were reminded of this imbalance years ago while attending a presentation by a young planner who said better-designed transit shelters would meaningfully increase public transit ridership. The proposal was earnest and well-intentioned, but fundamentally flawed.

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Transit demand is driven by where people live, where they work, how much they earn and how long it takes to travel between home and work. Shelter aesthetics may improve the experience at the margin, but they do not alter the underlying economics of commuting. Ignoring those fundamentals leads to policies that are superficially appealing, but strategically hollow.

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Edmonton has already demonstrated that it understands at least part of the equation. The city has been outpacing larger Canadian centres in housing construction. It builds homes faster than most of its peers and housing growth has kept pace with population growth, which is among the fastest in the country relative to city size.

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Affordability is a powerful draw. One Alberta minister described it as the province’s key competitive advantage, and that assessment is largely correct. But affordability alone is not a growth strategy.

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The stronger advantage, and the more durable one, would be Alberta’s ability to generate high-paying, high-productivity jobs that attract and retain skilled workers. A knowledge-based economy, anchored in innovation and advanced services, would raise incomes while preserving the affordability that currently distinguishes Edmonton from larger cities.

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The city’s challenges and opportunities intersect most starkly downtown. Edmonton’s core continues to struggle. A major commercial complex has fallen into receivership. Numerous storefronts are boarded up or vacant.