Regina Executive Leadership Outlook

May 2016

Quarterly Report

1www.economicdevelopmentregina.com

Table Of ContentsIntroduction ...............................................................................................................................................................2

Executive Summary ...................................................................................................................................................3

Economic Outlook .....................................................................................................................................................4

Executive Confidence Index ..................................................................................................................................4

Current Conditions .................................................................................................................................................5

Policy: Perception of a Business-Friendly Region .................................................................................................9

Conclusion ..............................................................................................................................................................15

2IntroductIonCommencing in 2015, The Regina Executive Leadership Outlook (RELO) is a partnership between Economic Development Regina (EDR) and Praxis Consulting that provides the perspective and thought leadership of Reginas key business leaders about current and future prospects for the Regina economy on a quarterly basis.

Survey

This document reports the frequency of responses to queries in a survey conducted by Praxis Consulting, in partnership with Economic Development Regina in May 2016. It includes demographic cross-tabulations that tested significant at the 95% confidence level.

Fieldwork for this project included 44 surveys completed by CEOs and senior executives in Reginas business community. Survey responses were received via an online survey, delivered to each participant by email. Responses were collected May 3 13, 2016.

A total of 73 survey invitations were sent; the response rate is 60%. Margins of error cannot be applied to this type of non-probability sample.

In many cases data is captured on symmetrical, verbally-anchored five-point response scales.

On this scale, responses of 1 or 2 are negative; a response of 3 is neutral, and responses of 4 or 5 are positive.

This report shows frequency of response at every option in the response set, along with a mean, to indicate the overall level of response.

Interviews

The interview data is intended to supplement the survey data, providing in-depth context for survey results. Some of their responses are reported as Selected Comments.

Fifteen executives were invited for the third quarters interview process and nine chose to participate. The following individuals were the nine interviewees that participated in the third quarters interviews:

1. Jim Deane: Access Communications

2. Jeremy Drummond: Studio Ten Productions

3. Stephen Hall: Brown Communications

4. Mark Heise: Rebellion Brewing Co.

5. Chad Jedlic: Harvard Development

6. Courtney Keith & DanTorrie: Nicor Group

7. Rachel Mielke: Hillberg & Berk

8. Vianne Timmons: University of Regina

9. Ryan Urzada: Travelodge

3www.praxis-research-strategy.ca

ExEcutIvE SummaryFor EDR, RELO is more than simply taking the pulse of our community; it informs our strategy by encouraging our community leaders to Think Big. Partnerships, like the one EDR shares with Praxis Consulting are an ideal way to identify the changes required to take Regina from good to great. RELO is one of many tools used by EDR to shape and confirm EDRs Sector Strategy and its vision of a Regina that is home to 300,000 people and an economy that will create 50,000 new jobs by 2040.

The third edition of RELO suggests that overall respondents feel our city is business friendly. Respondents identified the need for residents to better understand our community assets, which will enable local leaders to communicate the Regina Advantage nationally and internationally.

Perhaps most importantly, executives identified the urgent need to engage young talent in their businesses and in the community by providing this demographic with an opportunity to express their opinions and voice their thought leadership.

The third edition of RELO also tells a story of a resilient and consistent economy, with a stable and slightly increasing executive confidence index, planned investments and hiring and higher revenue expectations.

Simultaneously, this publication lays out both a challenge and an opportunity to agree what we should write on the blank slate that is our collective image of Regina; to Think Big about how civic government and business leaders work together; and to do all of this not for Reginas young talent, but with them, seeking their guidance and thought leadership to assist in taking Regina from good to great!

Overview: Reginas Reputation & Working with a New Generation The RELO Executive Confidence Index is 2.11. While the confidence index indicates overall optimism, it remains stable,

increasing just 3 points from 2.08 in January 2016.

Executives ranked Regina and area as being generally attractive to business with a mean score of 3.21 (out of a possible 5) on 22 factors

Executives ranked Regina as being business friendly with a mean of 3.27.

Availability of post-secondary programs was rated as Reginas most attractive factor with a mean of 3.93

Over half (57%) suggest availability of labour should be Reginas top priority to ensure the Regina region is perceived as business friendly

Over half (57%) suggest leisure and recreation as the most effective regional attribute in retaining young talent.

Just under three quarters (73%) said giving young talent a voice, allowing them to put forward ideas that add value and bring fresh energy to a workplace are the top corporate attribute that is most effective in retaining young talent.

4EconomIc outlookExecutive Confidence IndexThe Executive Confidence Index is a single statistic calculated to gauge leadership confidence in future economic prospects. It is an average taken from questions asking executives to look ahead 12 months. These questions ask executives about the future of Reginas economy (D2), about their business future investments (D4), about their business future number of employees (D6), about their business future sales revenue (D8) and about their business future profitability (D10). In each question, a numeric value is assigned to a verbal response. A value of 1 indicates an expected decrease. A value of 2 indicates an expectation of the status quo, while a value of 3 indicates an expected increase.

This statistic assumes equal weight across all five economic questions. The result is an average among all responses. In this calculation, the lowest possible result is 1.0 and the highest possible result is 3.0. A result above 2.0 means that executives are optimistic about the economic outlook for their business, while a result under 2.0 means that executives are pessimistic about the economic outlook for their business.

In May 2016, the CEO Confidence Index is 2.11, a positive result above the neutral mid-point. This number represents an increase of 3 points from the last survey conducted in January 2016.

5www.economicdevelopmentregina.com

Current ConditionsA calculation similar to the CEO Confidence Index will tell us how executives feel about todays economic conditions compared to one year ago. In May 2016, executives rate the current economic condition of their business, compared to one year ago, at 1.85, under the neutral mark and 2 points lower than in January 2016.

Three quarters (75%) expect Reginas regional economy to perform at about the same level over the next 12 months. Only 4.5% expect Reginas economy will perform worse while 20.5% expect it will perform better.

This represents a significant change from January 2016, when just over half (57.4%) expected Reginas economy to perform about the same and one third (33.3%) expected Reginas economy to perform worse.

Looking back over the last 12 months, 43.2% say Reginas regional economy is now worse, down significantly from the 79.6% who said the same in January. 47.7% say the economy is now about the same and 9.1% say it is better.

The largest group (43.2%) says their business profitability has remained the same over the last 12 months. An almost equal amount (40.9%) say their business profitability has decreased over the last 12 months and 15.9% say it has increased.

Since last year In next 12 months

Decrease Same Increase Decrease Same Increase

Investments 25.0 38.6 36.4 15.9 40.9 43.2

Employees 29.5 40.9 29.5 13.6 63.6 20.5

Sales Revenue 54.5 20.5 25.0 29.5 31.8 38.6

Profitability 40.9 43.2 15.9 27.3 45.5 25.0

6Current Events: Attracting and Retaining Young TalentRELO participants agree that we must focus on attracting and retaining young people in our labour force in order to build for the future. They have some clear views on what it will take to accomplish that goal.

Survey Question: It is important to retain young talent in Regina and region. From the list below, select the top 3 factors that you believe are most effective in retaining young talent in our region.

Leisure and recreation is the most effective in retaining young talent in our region. Executives ranked selection of leisure and recreation activities (57%) as most effective, along with sense of community (networking, labour talent, tolerance) (48%), and co-op or work-study programs (48%) as the top 3 factors that are most effective in retaining young talent in our region.

Survey Question: It is important to retain talented young employees in our organizations. From the list below, select the top 3 corporate attributes that you believe are most effective in retaining young talent.

7When it comes to retaining talent in organizations, 73% said giving young talent a voice, allowing them to put forward ideas that add value and bring fresh energy to a workplace was the top corporate attribute that is most effective in retaining young talent. Next top-ranked priorities were offering results-based work hours; similar to flex-time (50%) and mentorship programs (45%).

Comments of interest from the interviews

Millennials love to move around, dont want to be stuck at their desk all day

Work-life balance

Be innovative, different solutions to meet individual needs

Think silicon valley type organization; jeans and tees, flex everything; express yourself.

Want variety in their work

Build relationships with your staff

Offer mentorship

I dont think pay is a super driver anymore, especially young people

One-size doesnt fit all; treat individually

Dont take your job too seriously; have fun in what you do

Be creative with flex options

Remote work opportunities

Extra vacation days in the summer

Give your employees some say, and then some recognition

Feedback and coaching as opposed to supervision and performance management

If people understand your brand, you dont have to work hard on hiring; be authentic and natural people are drawn to that

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8Policy: Perception of a Business-Friendly RegionExecutives ranked Regina and area as being generally attractive to business. Asked to rank 22 proven factors that influence whether a region is perceived as being business friendly on a one to five scale, responses resulted in a mean score of 3.21, indicating highly attractive.

Availability of post-secondary programs was rated as Reginas most attractive factor, with a mean of 3.93, while cost of servicing the land was ranked as Reginas least attractive factor with a mean of 2.73.

Survey Question: There are a number of factors that have proven to influence an investors assessment of whether a city or region is business friendly or not. A selection of these factors is provided below. For each factor, indicate the degree to which you believe Regina and area is attractive to business using a scale between 1 and 5 where, 1 means Not at all attractive and 5 means Very attractive. If you dont know or have no opinion select no opinion.

9Other highly ranked factors included reputation of post-secondary programs (3.70 mean), corporate tax rate (3.59 mean), and rail accessibility (3.55 mean). Lowest ranking factors, ie. where we were perceived to be les friendly, included union/labour relations environment and construction costs (both had a mean of 2.77), red tape (2.83 mean), and municipal incentives (2.84 mean).

Survey Question: Of these factors, please indicate what you think should be the top 3 priorities when it comes to ensuring Regina is perceived as a business-friendly region.

Of the factors, 57% suggest availability of labour should be Reginas top priority to ensure the Regina region is perceived as business friendly. As for ranking other top priorities for the Regina region, 27% of respondents indicated that red tape, tax friendly environment, corporate tax rate, and accessibility of airport/air travel ranked are of equal priority.

When asked to recommend a single investment, attribute, or to take Regina and area to the next level, 38.6% of respondents described defining Reginas identity and marketing it consistently.

Survey Question: In your opinion please rank Regina and region as being business-friendly on a scale between 1 and 5 where 1 means Not at all business-friendly and 5 means very business-friendly.

www.economicdevelopmentregina.com

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Executives ranked Regina as being business friendly. Asked to rank Regina and region as being business-friendly on a one to five scale, responses resulted in a mean score of 3.27, indicating highly business friendly.

Survey Question: This question is your opportunity to Think Big. We are interested in your great idea to improve the attractiveness of Regina for future growth. If it was up to you, what is that single investment, attribute or change that you would recommend to take Regina and area to the next level?

The answers we received are organized by theme:

Image/Perception

A community drive, supported messaging campaign/culture that actively promotes the strengths of the Queen city

Maximize and leverage the opportunities that exist when people come to town for various events. Ensure that these visitors see the Best Regina has to offer, so they return

Travel accessibility; safe and environmentally controlled communities; high end sporting and cultural programs

We need a signature tourism attraction. Bigger than anything we currently have in the City. Best example I can think of is the West Edmonton Mall. There are many reasons to go to Edmonton (same as Regina), but there is an added bonus of being able to go to the Mall when you are there. If you also want to help keep young talent in Regina, there are a variety of benefits to having a signature attraction: Pride in your City, cool thing to do, etc. Rider games definitely meet some of this criteria - however Riders have two big drawbacks: First, it costs significant $$ to go to a game, and more importantly, there are only 10 days per year that it is relevant to Regina. However, if the pride and attraction of the Riders could be manifested into a local tourism attraction of large magnitude - accessible all year around like the West Ed Mall - then this could be a huge factor in making Regina stand out as a tourist destination, as well as increasing local, civic pride.

We need to define Regina's identity and develop a new vision for the city. We are a big town becoming a small city and we need to capitalize on becoming more cosmopolitan and diverse. What do we want to be when we grow up?

Regina has to revive its Tourism Brand, to find a unifying theme people will rally behind. Get people excited and proud about living here. Doesn't have to be another I Love Regina campaign but something that will have a similar effect on people.

Decide who we want to be. Have a specific plan and go out and execute it. Cant be all things to all people.

I think we need to focus on "The Whole Regina Package". Business is generally good for us, but it helps our business goals to be able to develop and promote the "added value" that Regina can offer (i.e. a place to live, work (or study) and play). I think the package needs to involve a focus on branding our assets as destinations in themselves - i.e. Wascana Park (with more commercial opportunities within) and its connection to the "live and play" options in Regina Downtown and the Warehouse District.

Educate everyone that Regina is not a second-tier city in Canada. I have encountered too many scenarios where people/companies perceive Regina in a manner that is not correct and at times insulting.

That Regina create a sense of identity. Something to advertise and encourage residents to promote this great city.

I would like Regina to work out what we are known for. What stands out and what attracts people to our community.

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People

Attraction of skilled labour/Managers/Executives - somehow move the dial so people in other parts of the country would see Saskatchewan as a place of opportunity. Possibly some focused effort on people who grew up in Saskatchewan - may be more attractive to move back.

There needs to be more "inclusion" of young professionals in this City - our experience is most companies want to do business with their "old buddies". While this may be a solid short term solution - what happens when they are retire? There needs to be more mentorship from senior leaders in the community, encouraging the next generation of talent to get involved!

Job Growth. We need to create employment opportunities by attracting new businesses to our community and by encouraging existing businesses to expand

We Grow Potential Here. The province has long been a place for pioneers. Our attitude and work ethic shaped our current path. Let's get back to living and working in place where attitude is everything. Use the Saskatchewan pioneering spirit to create the lifestyle you want within a career that makes a difference. Let's work together in a provincial wide community that is connected and communicative. Work Hard. Play Hard. Live. If more people within the city exude this zest for life, it is easy for people travelling to set up shop in the city to join in the movement. Let's create and showcase a lifestyle that embraces all of the opportunity within our city. People need to be reminded of the choice they have to make every day to pursue their best.

Build a world class business incubation infrastructure to capitalize on the appetite of younger business professionals to own / operate their own small business. Work collaboratively (industry, academia, government) to create a single place for business incubation

www.praxis-research-strategy.ca

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Infrastructure

Connectivity

Commit large scale solar power generation on all new infrastructure - particularly in the area due to be developed just north of the city centre, across the rail tracks. A full-on commitment to a massive solar installation in this concentrated area would send a powerful message to the rest of Canada and the world that Regina is progressive, sustainable, innovative and forward-thinking.

More value-added agriculture, look to feed the world

Significant investment in transit, specifically to deliver people to and from the downtown and Evraz Place. Given the new construction in these locations and limited parking, expedited transit to and from these locations could really make downtown excursions more inviting and stress free. Perhaps something similar to Calgary's C-Train, which could run North/South along Albert Street and East/West Along Victoria Avenue.

Canada's most vibrant, inclusive, attractive, sustainable community, where people live in harmony and thrive in opportunity - this City Council vision still resonates and we have a significant way to go yet to achieve the essence of the vision; The Stadium and RRI should be great catalysts that open the door for us even thinking about what the next 'big idea' could be or should be; safety must be assumed, lack of safety however, can set a negative undertone that may undermine achievement of the vision - regardless of how much infrastructure is built!

Continue to develop and improve infrastructure, services and support. The more attractive our city is the better.

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Comments of interest from the interviews

Not just availability, but quality of labour

Municipal red tape /Municipal transparency

Regulation changes/instability

Municipal programs that support businesses

Reginas costs are too high when compared to other larger centres

Saskatchewan in general is perceived as a small economy

Lack of forward-thinking people in government-Were perceived as a government town; slow moving, bureaucratic & not business-friendly.

Reginas top priority should be removing municipal barriers for investors and marketing our quality of life

Regina is perceived as crime-ridden

Regina is perceived as having a high quality of life

University has to be big part of our City

Be proud and brag

We're not good at bragging

Regina branding

What is the Regina 'package'? Bring all the small things together for "This is Regina"

Downtown campus would bring people to downtown core

Make some decisions re: Transit; make citizens more reliant on transit

Enforce maximum parking requirements

Get the masses congregating downtown; spending more time in the area; populate it

Amenities around Wascana Park, ringed by residential buildings similar to Central Park

(Wascana Park) Market this asset-Connect this asset with the bigger downtown piece and warehouse district

Invest in culture & the arts

A new energy: "City vibe"

Outdoor patios/cafes

Reposition Regina away from 'old fashioned'

Booming warehouse district

Reginas top priority should be removing municipal barriers for investors and marketing our quality of life

www.economicdevelopmentregina.com

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concluSIonThe participants in the 3rd quarterly Regina Executive Leadership Outlook spoke strongly and clearly on two themes:

1. Our economy is strong and they are confident in the future.

2. There is a significant to-do list for Regina on effectively marketing our community, and on changing our city and our business community to meet the needs of younger workers.

The third edition of RELO suggests that overall survey respondents feel our city is business friendly. Respondents identified the need for residents to better understand our community assets, which will enable local leaders to communicate the Regina Advantage nationally and internationally.

Perhaps most importantly, executives identified the urgent need to engage young talent in their businesses and in the community by providing this demographic with an opportunity to express their opinions and voice their thought leadership.

The third edition of RELO also tells a story of a resilient and consistent economy, with a stable and slightly increasing executive confidence index, planned investments and hiring and higher revenue expectations.

EDR is thankful for the time and energy given by our RELO participants, and for their wisdom. Their views and perspectives inform our strategy and help us to stay on track in terms of community priorities.

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About EDREconomic Development Regina Inc. (EDR) is the economic development agency for the City of Regina and region. EDR provides leadership to the community to support industry growth and diversification through retention and expansion of existing business and encouraging investment, development of industry and tourism with focus on the key-growth sectors of the economy in the Region. In collaboration with key stakeholders, we work to identify, develop and promote opportunities that advance economic prosperity for those who live, work, learn, visit and invest in the Regina region and ensure the Regina region offers a vibrant and diversified economy for investors, is a positive destination experience for visitors and offers a high quality of life for residents.

John Lee, President & CEO Economic Development Regina Inc. E: jdlee@economicdevelopmentregina.com P: 306-789-5099 ext. 222

About PraxisPraxis consulting is Saskatchewans largest locally-based management consulting firm. Praxis works collaboratively with clients in the facilitation of growth and excellence, leveraging an unmatched wealth of experience across multiple sectors. Praxis strives to:

Inform clients with market research and economic impact studies, providing relevant insights into various sectors and communities.

Strategize, developing custom solutions tailored to clients most unique and complex needs.

Execute strategic plans, portfolios and projects by facilitating internal project management, change management and communication capacity.

Val Sluth, Managing Principal E: info@praxis-research-strategy.ca P: 306-545-3755