Mayor Ken Johnston lists Red Deer's top employers at the 2025 State of the City Address. (rdnewsNOW/Ashley Lavallee-Koenig)

By Ashley Lavallee-Koenig

HOPES AND CHALLENGES

Mayor Johnston talks tariff threats, Red Deer highs and lows in State of the City Address

Feb 12, 2025 | 5:39 PM

About 200 community members attended Red Deer Mayor Ken Johnston’s State of the City Address on Wednesday, an annual recap of how the city is doing and where it’s going over the next year.

Held at Westerner Park, it was the first address collaboratively arranged by the Red Deer and District Chamber, Red Deer Construction Association and BILD Central Alberta.

With the advent of potential tariffs from the U.S. creeping slowly closer, Johnston confirmed he is “quite concerned” about the impact it could have on Red Deer.

“Corporately, I’ll say I’m concerned from the perspective that we have $100 million [per] year capital plans that we invest in the city. What are those costs going to be now? How do we navigate it as a corporation? That’s a concern,” he said, adding that the Chamber is arranging a discussion on this very matter between key community partners for some time in March.

Some of Red Deer’s largest employers export to the U.S., including Olymel (agriculture) and energy companies like Calfrac and Trican Well Services. Earlier this month, a report from Statistics Canada showed Red Deer had the highest unemployment rate of all its Census Metropolitan Areas for January this year.

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Mayor Johnston attributed this to labour force growth that exceeded industry ability to absorb those new workers into jobs, a process that will take time.

“We’re expanding our economic reach beyond oil and gas. We’re moving into manufacturing and technologies and that kind of thing,” he said. “It’s going to take a little while for that absorption.”

Read more: Red Deer’s employment up in January, but unemployment one of highest in Canada

This tariff threat could also add to Red Deer’s already notable financial challenges, which Johnston said was its biggest challenge in 2024, resulting in a 10.5 per cent increase to the local property tax rate.

“That was one of the most difficult decisions any of us ever made in the city, both administratively and by council,” he said.

Read more: Red Deer city council approves “absolutely necessary” 10.5% property tax increase

To address some of these financial challenges, the City introduced a new Ad Hoc Economic Development Committee last year. The Committee meets bi-weekly.

“It has an ambitious mandate,” said Johnston. “We’re looking at a common vision and a common strategy for Red Deer primarily, and a community approach that’s going to make us more competitive.”

The fruits of those labours may be seen in time for the next 2026 budget, which Johnston is currently hopeful will hold a surplus rather than deficit standing. On Feb. 24, a letter is expected to be released by City Manager Tara Lodewyk outlining these projections for 2026, so residents have a better idea of what to expect come budget debate. Johnston said this update is a new undertaking by the city, suggested by Lodewyk.

Regardless of whether the city finishes the year with a surplus, there are still other positive economic signs for Red Deer, says Johnston. For example, expansions to the Red Deer Regional Hospital have attracted new doctors and “ignited growth” downtown and in the Capstone neighbourhood, he said. Adding that he “couldn’t be happier” about the level of interest shown in Capstone and that more developments are coming soon, although it’s too early to disclose specifics.

This summer, Johnston also anticipates the release of Alberta’s Passenger Rail Master Plan, which should outline plans for a high-speed rail line that would connect the province’s largest municipalities. He said Red Deer is expected to be a stop on the route, which could have positive economic implications for the city.

Also on a positive note, while the rate is still troublingly low, vacancy in the city has risen modestly from below one per cent to around 1.2 or 1.3 per cent, Johnston said. On a similar note, housing starts also saw an 87 per cent increase in 2024.

Read more: Housing starts up 87 per cent in Red Deer

The homeless community’s struggles persist though, as the City’s latest Point in Time (PiT) Count revealed that the number of people without housing in Red Deer has more than doubled since 2022, to an estimated 766 individuals.

Read more: People experiencing homelessness in Red Deer now at least 766, more than double 2022 figures

Johnston said his biggest regret as mayor was the inability to finish introducing a new permanent emergency shelter to the city, but he hopes that in his final nine months of leadership, the province will complete its Expression of Interest so the next steps can begin.

“I think the work we do over the next six months will pave the road, frankly, for the next council,” he said. “They won’t be as burdened.”

A pending application to the second round of the Canadian Mortgage and Housing Corporation’s (CMHC) Housing Accelerator Fund also brings hope, with the city poised to receive millions in housing funding if it’s approved and implements the mandatory attached policies.

Johnston commented, “If we can bring that application to Red Deer, I think we can move the needle quite a bit.”

Read more: Red Deer city council defeats motion to withdraw Housing Accelerator Fund application

Additionally, a new group has risen to the task of addressing homelessness in the community: the Homeless Foundation for Red Deer Region. The Foundation just recently appointed its first official board and will be working on developing its strategic goals in the coming months.

Read more: New Homeless Foundation for Red Deer Region announces official board of directors

“I think we really understand in Red Deer what collaboration really means,” reflected Johnston. “You have agencies out here today, you have boards that have been developed, strategic plans that cross multiple agencies and groups, and the City. The City is not the smartest person in the room, nor is the mayor the smartest person in the room – we need all of us. I think we saw that quite well today.”