"There's not much sparkle on the Christmas tree" this year for Canadian retailers, economist Maureen Farrow told delegates to the recent conference of the International Council of Shopping Centers (ICSC) in Toronto. The state of the economy dominated the conversation at the recent conference, but at a panel discussion featuring mayors from across the country, two long-term development issues -- infrastructure and sustainability -- were the big topics.

Toronto Mayor David Miller said that environmental sustainability "is the top issue of our time. It's more important than the world-wide economic crisis." And he added that this is an ideal time for governments to address problems with aging city infrastructures. "What better time to invest in infrastructure than during difficult economic times?" he asked. "It supports the construction industry, it provides jobs, and it's cheaper now than it was before."

Regina Mayor Pat Fiacco said the country needs a national strategy to deal with city infrastructure. "The property tax base isn't enough," he said. "We're falling farther and farther behind."

Mississauga's Mayor Hazel McCallion said, "We need leaders with the vision that built the two rail lines across Canada." She said the lack of infrastructure spending is "affecting the economic success of the country. We've got to get some vision. I was disappointed that during the (recent) election campaign, infrastructure was not on the radar (for federal politicians)."

In Saskatoon, Mayor Donald Atchison said a recent development deal with Wal-Mart allowed the city to use some private funding to build a new highway interchange. He said more creative financing deals like that are necessary. "Everybody wants a lower tax base but sometimes we have to look at reality as well," he said.

The conference heard from ICSC Chairman Mary Lou Fiala that retail sales in Canada rose by 4.2 per cent during the first eight months of 2008. "This is lower than the growth rates of 2006 and 2007, and more in line with the year 2000," she said. Sales are expected to increase between three and four per cent in November and December, compared to last year. That represents about $55 billion in spending, and is considerably better than the U.S. forecast, Fiala said. She's optimistic about the future, she said, because "many of the excesses that have caused our industry problems in past decades, such as overbuilding by developers and unruly aggressive store rollouts by retailers, have largely been reined in over the past few years."

Fiala said the "combined elements of a record number of store closings and the growth of lifestyle centres in the U.S. was a watershed event for the entire industry in North America, because it accelerated the crossover of tenants from one shopping centre format to another and encouraged a lot of experimentation." As a result, she said, "New and redeveloped centres can incorporate components of power, lifestyle, and traditional regional centres with a grocery store in there as well. Interestingly, these kinds of projects are often more in line with development principles being encouraged by governments, urban planners and environmentalists than traditional single-use shopping centres."

The panel of mayors agreed that the old-style shopping centre of the past, designed for suburban areas and surrounded by parking lots, must be phased out. "In newer malls, the developers are very much in tune … putting in shuttle services and bike paths and locating them closer to communities," said Alan de Souza, member of the City of Montreal Executive Committee.

Atchison said Saskatoon is encouraging developers to add office and residential condominium towers to shopping centres, to increase densification and create self-contained local communities that are not so car-dependent. But he said such plans are not without opposition, noting that everyone "talks about being environmentally friendly, but not if it means change for me."

Miller said he thinks that the development community is ahead of government when it comes to planning new buildings, noting that many new buildings far exceed current environmental requirements.

Brampton, Ont. Mayor Susan Fennell said that intense redevelopment is taking place in her city's downtown core and that people want to live in communities where they can walk to shopping and local amenities. She says Brampton is the only municipality in Canada that is cutting urban sprawl by placing a development cap of 4,500 residential units a year.

McCallion said that Mississauga began as a "bedroom community" for the City of Toronto, but that now 80,000 to 90,000 more people commute to Mississauga to work than leave the city to work elsewhere. "We have reversed the situation in Mississauga," she said. "We want people to live and work in the same community."

Published: November 11, 2008

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He is also consulting editor of Homes & Cottages, Canada's largest building and renovation magazine. Email jimhc@pathcom.com.