January 2011 Alberta Economic Fundamentals

[Ally]

Stelmach welcomes investors, on his terms





Calgary -- Ed Stelmach, Alberta`s Premier, knows what it would take for him to push Ottawa to block a takeover or investment deal in Canada`s oil sands, and he also knows what he wants from China in exchange for oil. He`s asking for more than just cash.




Mr. Stelmach has welcomed foreign investors, including state-owned outfits from China and Korea, into Alberta. But he also backed Brad Wall, his Saskatchewan counterpart, as he insisted BHP Billiton PLC keep its Australian-Anglo hands off Potash Corp. of Saskatchewan Inc. last fall. With potash being as valuable to Saskatchewan as bitumen is to Alberta, the Saskatchewan Premier pushed the federal government to kibosh the hostile takeover. Prime Minister Stephen Harper complied.




`We have many, many investors in the oil sands, from many different countries, including many state-owned enterprises,` Mr. Stelmach said in a recent interview. `Let`s say if one company, whether it be state-owned or not, but one large company wanted to buy everybody out, I can assure you that we wouldn`t allow that to happen because it would not only affect production ... but also royalties.



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[Ally]

Shifting line in the oilsands





Sinopec Corp., the world`s seventh-largest company, is not an organization one would expect to display cartoons scrolling on a giant screen in its head office. The building in central Beijing is a dull 26-storey structure befitting an energy company controlled by the Chinese government. But inside, the harsh exterior gives way to smooth white stone elegance, lit by a mammoth chandelier, with colourful child-like images flashing on a giant screen above the guarded entrance. The pictures highlight some of Sinopec`s properties around the world, including the company`s prize Canadian asset: Syncrude Canada Ltd., the No. 2 oil sands producer, 9.03% of which was purchased in April for US$4.65-billion.




A thousand kilometres away, just outside of Seoul, Korea National Oil Corp. also shows off its premiere Canadian asset ` Harvest Operations Corp., the Calgary-based oil and gas producer that also holds oil sands assets, acquired in late 2009 for US$4.1-billion, including debt. The Harvest display pales beside that of the Syncrude presentation: A small picture of Harvest in a frame at the base of the elevator in KNOC`s 11-storey head office. The squat building is meant to resemble a semi-submersible offshore oil rig, a nod to KNOC`s roots, with a concrete arm jutting out of the main structure connecting to a concrete cylinder.




The differences in their Canadian displays don`t, however, reflect the treatment the two state-owned companies received from Ottawa. Both were forced to make numerous commitments as part of Canada`s investment review process. Moreover, visits to their respective headquarters reveal what Ottawa has not: a glimpse of what it takes to pass Canada`s `net benefit` test imposed on foreign investors ` a yardstick that came under close scrutiny this past fall during BHP Billiton PLC`s failed takeover run for Potash Corp. of Saskatchewan Inc.



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[Ally]

Canadian job numbers rising





CALGARY - The unemployment rate in Calgary remained relatively flat in December but continued to beat the national average, according to the latest statistics.




The city comes in at six per cent unemployment in December, flat to the prior month, compared with 7.6 per cent across Canada, Statistics Canada said Friday.




The Canadian economy created 22,000 net new jobs last month, an unexpected gain led by a massive surge in manufacturing jobs seen primarily in Ontario and Quebec, the agency said.




The ranks of the employed rose by 2.2. per cent year-over-year, a marked improvement from a 1.1 per cent slide in 2009.




While within historical averages, December results were higher than analysts' expectations of 20,000 jobs and marked the second month in a row of gains on the employment front.




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[Ally]

Alberta job market better than a year ago



EDMONTON - Alberta`s unemployment rate closed the year on a steady note at 5.6 per cent in December, unchanged from the previous month.





The province lost 2,400 jobs but that was offset by 3,600 people who dropped out of the labour force, according to figures released Friday by Statistics Canada.




Most of the job gains occurred in professional, scientific and technical services; forestry, fishing, mining, oil and gas.




Educational services; health care and social assistance; and finance; insurance, real estate and leasing saw employment declines.




Alberta`s job market has improved since December 2009 when the unemployment rate was 6.6 per cent. The province added 21,100 jobs.




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[Ally]

Report predicts $180B on oilsand spending





CALGARY - Investment in Alberta's oilsands is set to reach a whopping $180 billion over the next decade, peaking at 20 per cent more than was spent during the height of the last boom, according to Peters & Co.




Strong and sustained oil prices in the $75 to $90 US per barrel range and increased interest from deep-pocketed foreign investors such as state-owned PetroChina and France's Total are leading the charge in renewed interest in the resource, the Calgary-based investment house said.




"The increased level of transactions can be attributed to robust economics and the scarce availability of a large scale resource with low political risk," said the report, released late Wednesday.




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[Ally]

Harper echoes his ministers: Energy from oilsands is 'ethical,' he says






OTTAWA ` Prime Minister Stephen Harper has backed his new environment minister with a strong defence of the Canadian oilsands, saying they are an important source of job creation and the world should know this country is an "ethical society" which will reliably provide the resource.







Harper made his comments Friday, after Environment Minister Peter Kent said earlier this week that the oilsands have a poor reputation because of disinformation and that they actually produce "ethical oil."







Kent's choice of that phrase has drawn attention as an apparent new attempt by the Conservative government to improve the reputation of the oilsands in Washington, D.C., where they have been pilloried by critics who have lobbied for a boycott.







Canadian defenders of the oilsands have been keen to point out to Americans that their other major sources of oil are from nations ` such as Venezuela, Saudi Arabia and Iran ` that don't practise western-style democracy.




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[Ally]

Fewer vacant units in Calgary





There were fewer vacant apartments this fall in Calgary than for the same period a year ago, says a federal agency.




Following three consecutive years of increases, rental vacancies in the Calgary area declined this October, says Canada Mortgage and Housing Corp.'s annual rental market survey.




The vacancy rate in 2010 was 3.6 per cent, down from 5.3 per cent in 2009, it says.




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[Ally]

Calgary average resale price to exceed $400,000





For the first time since 2008, the average selling price of resale homes in Calgary will again move through the $400,000 barrier this year, predicts a federal agency.




And in terms of new homes, the average will likely hold its head at around the half-million-dollar mark, says Canada Mortgage and Housing Corp.




Resale price growth was impressive in the beginning of 2010, it says.




While balanced market conditions encouraged price gains early in the year, the market began to favour the buyer as demand dissipated, resale listings rose and prices started to soften.




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[Ally]

Quebec and the Fairy Godmothers





Today, let's have some fun and play Fairy Godmother to Quebec. Let's grant the province the wish it articulated in Copenhagen. Wave the magic wand and poof, wish granted. Shut down Alberta's oilsands, except, since it`s Quebec making the wish, we have to call it tarsands, even though it's not tar they use to run their Bombardier planes, trains and Skidoos.





Ah, at last! The blight on Canada's reputation shut down. All those dastardly workers from across Canada living in Fort McMurray, Calgary and Edmonton out of jobs, including those waitresses, truck drivers, nurses, teachers, doctors, pilots, engineers etc. They can all go on Employment insurance like Ontario autoworkers and Quebec parts makers!





Closing down Alberta's oil industry would immediately stop the production of 1.8 million barrels of oil a day. Supply and demand being what it is, oil prices will go up and therefore the cost at the pump will go up, too, increasing the cost of everything else.





But lost jobs in Alberta and across the country along with higher gas prices are a small price to pay to save the world and not "embarrass" Quebecers on the world stage. Not to worry though, Saudi Arabia, Libya and Nigeria can come to the rescue.





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[Ally]

U.S. panel calls for more steps to avoid another massive oil spill




WASHINGTON ` The oil industry, Congress and the Obama administration need to do more to reduce the chances of another large-scale oil spill, a presidential panel investigating the BP well blowout concluded Tuesday.




The seven-member panel unanimously endorsed 15 separate recommendations in the wake of the largest offshore oil spill in U.S. history. Many of the proposals will require action by Congress.




The panel calls for increasing budgets and training for the federal agency that regulates offshore drilling; increasing the liability cap for damages when companies drill offshore; dedicating 80 per cent of fines and penalties from the BP spill to restoration of the Gulf; and lending more weight to scientific opinions by other federal scientists in decisions about drilling.




`It is our government`s responsibility that exploration and extraction occur in ways that are beneficial to the country,` panel co-chair and former Florida Senator Bob Graham said. `Drilling offshore is a privilege to be earned, not a right to be exercised by private corporations.`



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[Ally]

Calgary Residents: Click here to have your say







Mayor Naheed Nenshi is bent on legalizing secondary suites throughout the city with less red tape.




Currently, the city has strict zoning laws that forbid suites in certain residential areas and requires a property to be a certain size.




However, Nenshi claims the rules are archaic and opening up secondary suite development to all areas of the city will help foster more affordable housing for everyone.



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[Ally]

Edmonton's housing starts continue to moderate in December





Edmonton, January 11, 2011







` For the third month in succession, total housing starts decreased on a year-over-year basis across Greater Edmonton in December. According to preliminary figures released today by Canada Mortgage and Housing Corporation (CMHC), housing starts in the Edmonton Census Metropolitan Area (CMA) totalled to 558 units in December, down from 812 units in the last month of 2009. Despite the recent reduction, annual starts were considerably higher than 2009. To the end of December, total housing starts reached 9,959 units, up from 6,317 units reported in all of 2009.





There were 309 single-detached units started in December, down 31 per cent from the same month last year and representing the slowest month since July 2009. This brought the fourth quarter tally to 1,246 units, for a decrease of 24.5 per cent compared with the final three months of the previous year. Despite the recent slowdown, single-detached home builders broke ground for 6,062 units in 2010, up over 55 per cent from the 3,897 units started across Metro in January through December of 2009.





Multiple unit starts, which consist of semi-detached, row, and apartments units, amounted to 249 units in December, down 32 per cent from 364 units in December 2009. Despite a strong year-over-year improvement in row unit activity, total production was pulled down by fewer semi-detached and apartment unit starts. For the year, multiple unit starts increased by 61 per cent to 3,897 units, up from 2,420 units tallied to the end of December 2009. `New apartment activity experienced the largest gains, with starts in 2010 more than double the volumes recorded throughout the previous year,` noted Richard Goatcher, CMHC`s Senior Market Analyst for Edmonton.








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[Ally]

When you understand the importance of job creation on real estate markets, this 36 page report will bring you excitement



The 2010 Construction Looking Forward release for Alberta reports new labour market assessments for the 2010`2018 period. The assessment includes 2008 and 2009 as part of the analysis to track the impact of the global recession on local construction investment and labour markets. The scenario is divided into three parts:



1. The Current Cycle (2008`2011)



2. Steady Growth (2012`2016)



3. Housing Downturn (2017`2018)



The Current Cycle (2008`2011) hit faster than expected in 2009 and the recovery has begun sooner than expected. These market shifts are the biggest in housing. Indeed, the drop in new housing in 2008 and 2009 likely represents overbuilding earlier in the decade as starts ran ahead of new household formation. Low interest rates and price corrections are prompting a sharp housing rebound in 2010 and 2011.



Read the full report here.

 

[Ally]

Calgary housing starts up strongly in 2010, despite recent slowdown



Read the full article here.

 

[Ally]

Edmonton housing starts decline in December, but 2010 was better year for builders than 2009





EDMONTON ` Housing starts in the Edmonton region declined in December year-over-year ` but despite a slow finish, 2010 as a whole was considerably busier for builders than last, according to Canada Mortgage and Housing Corp.




The federal agency said 558 homes were started in the Edmonton census metropolitan area, down 31.3 per cent from 812 starts in December 2009. It marked the third consecutive month that home construction slowed compared to last year.




Despite the monthly decrease, total starts in 2010 were nearly 57.7 per cent higher than the 6,317 units reported in 2009, CMHC said.




It was the same story in the single-detached sector where the 309 houses started in December represented a 31-per-cent decline from a year earlier and the slowest month since July 2009.




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[Ally]

Edmonton building permits down in November





EDMONTON ` The value of building permits taken out for the Edmonton region declined in November, said Statistics Canada.




The Edmonton census metropolitan region had permits totalling $285.1 million, down 1.6 per cent from October and down 45.9 per cent from November 2009, the federal agency reported Monday.




By comparison, Calgary`s November total of $227 million was a five-per-cent monthly decline and a 28.3-per-cent year-over-year decrease.




Alberta also showed a drop-off in construction intentions, dropping to $795 million, off 5.8 per cent from October and down 29 per cent from a year earlier.




Residential permits totalled $447.6 million, down 8.1 per cent from October and 29 per cent off last year`s pace.




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[Ally]

Calgary region housing starts soar by 47% in 2010







CALGARY - Housing starts in the Calgary census metropolitan area were up a whopping 47 per cent in 2010 from the previous year despite a recent slowdown in the homebuilding industry.




Canada Mortgage and Housing Corp. reported Tuesday that total starts finished the year at 9,262 units, up from 6,318 in 2009.




In the region, single-detached starts hit 5,782 units, an increase of 21.1 per cent from 4,775 while the multiple-family sector rose by 125.5 per cent to 3,480 units from 1,543 in 2009.




Richard Cho, senior market analyst in Calgary for the CMHC, said that since the summer builders have started fewer homes in response to higher competition from the resale market and slower new home sales.




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[Ally]

$100 oil imminent, but record high years away







LONDON/NEW YORK - Oil is expected to hit $100 a barrel this quarter, but a record high above $147 is far less likely any time soon, a Reuters poll of investment managers and bank analysts showed on Wednesday.




Investment managers are as bullish as investment bank analysts about the prospects for ICE Brent futures LCOc1, which are trading near $98.




Brent hit a 27-month high on Wednesday following production interruptions in Norway and Alaska, while growing global demand raised expectations of tighter supplies.




"We don't see too much supply coming into the market," said Alex Moiseev, chief investment officer at Dighton Capital Management, a managed futures firm based in Switzerland.




"$100 is an almost immediate target."




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[Ally]

Pembina pipeline adds Edmonton-area terminals




EDMONTON - A unit of Calgary-based Pembina Pipeline Corp. (TSX: PPLhttp://http://www.financialpost.com/markets/company/index.html?symbol=PPL&id=2039019) has completed a $57-million deal to acquire terminal and storage facilities for the oil and gas sector in the Edmonton area.




Pembina Midstream Ltd. Partnership purchased the assets from Gibson Energy Partnership. The facilities include pipeline-connected terminalling and storage facilities with more than 300,000 barrels of existing storage capacity, as well as related undeveloped property.




`This strategic purchase is another example of Pembina`s ability to vertically integrate and leverage its existing assets to provide synergies across our business units,` said Bob Michaleski, Pembina`s CEO.




`Our conventional pipelines, gas services and oilsands and heavy oil business units will all benefit from this acquisition.`



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[Ally]

International Migrants flock to Alberta








During the last ten years Alberta has been the benefactor of a large influx of interprovincial migrants; however, that trend reversed during the recession. On the other hand, over the last two years international migration continued unbounded, and in 2010 Alberta will attract a record number of international immigrants.







Through just the first three quarters of 2010 on a net basis, Alberta attracted 18,922 international migrants, already more than in 2009 (the previous record year) despite there still being an entire quarter of migration data left. Over the last fifteen years the trend has been towards a higher number of international immigrants to Alberta but the numbers were particularly high between 2008 and 2010.




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