July 2010 Alberta Economic Fundamentals

[Amber]

Calgary house prices hold study, but small decline likely: survey

Calgary house prices remained strong in the second quarter compared to the same period in 2009, but they are expected to decrease slightly over the remainder of the year, according to the Royal LePage House Price Survey released today.

"Overall, prices are still higher than they were a year ago," said Ted Zaharko, broker and owner of Royal LePage Foothills. "But as the second quarter ends, we are seeing the market lean in favour of the buyer."

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[Amber]

Calgary`s hot neighbourhood: Tuscany leads local home sales

Northwest zone city`s top seller

It`s no surprise to realtor Jeff Neustaedter that the northwest community of Tuscany has recorded the most MLS single-family home sales so far this year than any other neighbourhood in the city.

During the first six months of 2010, there have been 220 single-family home transactions in that community with its views of the snow-capped Rocky Mountains.

Neustaedter`s team at Re/Max Mountain View currently has 38 of the community`s 165 active listings.

The realtor rattles off a list of Tuscany`s selling points: schools, including a new middle school set to open in September 2012, the C-Train going to Crowfoot, Stoney Trail, and the views from the community.

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[Amber]

Most Albertans expect to pay less than asking price for home: survey

CALGARY - First-time homebuyers in Alberta, more than in any other Canadian province, are expecting to pay less than the asking price for their home.

The first TD Canada Trust Home Buyers Report, released today, says 71 per cent of those surveyed in the province expect to pay less compared with 65 per cent nationally. Also, the report says 26 per cent of Albertans expect to pay the asking price and only three per cent expect to pay more than the asking price.

The report surveyed Canadians who have purchased their first home in the past two years or who intend to purchase a home in the next two years.


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[Amber]

Stelmach seeks Clinton`s support for pipeline to U.S.

His letter urges her to respect `relationship over past quarter century`

EDMONTON — Days after an influential U.S. congressman wrote a letter to Secretary of State Hillary Clinton opposing a proposed oilsands pipeline, Premier Ed Stelmach has penned his own letter to her in support of the project.

"It is important ... that the process rely on factual information and be in keeping with the free-trade principles that have served our energy relationship over the past quarter century," Stelmach`s letter says.

TransCanada Corp. wants to build a pipeline from Hardisty, in eastern Alberta, to the U.S. Gulf Coast.

Known as the Keystone XL line, it could eventually transport more than 900,000 barrels of oil a day to Texas refineries.

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[Amber]

Wheat Prices on the Rebound

Adverse weather in Canada, Europe and Russia has pushed the price of wheat sharply higher in the past week, as the once high-flying commodity rallies from recent depressed lows.

Like crude oil and other commodities in 2008, the price of wheat (ZW-FT548.5018.003.39%)spiked to extremely high levels during the months before the credit crisis hit. Since then, beyond short rallies, the price of wheat has plunged as supply has risen.

But bad weather in major wheat producing regions – heavy rain in Saskatchewan, severe hot and dry weather in Russia and Kazakhstan – has stirred buying interest among investors. The latest surge has also been amplified by investors who had bet wheat prices would keep falling but who are now buying futures contracts to cover their short bets.


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[Amber]

Edmonton Region unites against bitumen exports

Campaign calls for more refining in Alberta through construction of upgraders

EDMONTON - Energy firms are on the verge of exporting a huge portion of Alberta`s raw bitumen, a move that future generations will view as an incredible loss of economic opportunity, says a co-operative group of municipal politicians, labour leaders and petrochemical industry representatives.

"We can`t let this happen. There is too much at stake to wait any longer," Sturgeon County Mayor Don Rigney said on Wednesday.

"We are here to show support for the most significant economic development initiative and policy challenge facing Alberta today," he said at the kickoff of the "Refine It Where We Mine It" campaign.

The public education effort aims to build support for more government action to encourage four new major bitumen upgrader projects.

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[Amber]

Confidence index slips in Alberta

Business Barometer index declines

EDMONTON — Confidence among owners of Alberta`s small and medium-sized businesses fell in June after increases in the first five months, the Canadian Federation of Independent Business reported Wednesday.

The Business Barometer index dropped almost three points to 68.5, offsetting about half of the gains since last December.

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[Amber]

Money talks louder than critics` noise

"The dogs may bark, but the caravan moves on," an ancient Persian proverb states.

Translation: Follow the money, not the noise.

By unveiling a $1.5-billion deal Wednesday to acquire UTS Energy`s 20-per-cent stake in the stalled Fort Hills oilsands project, Total SA has cast its vote.

It`s following the growing river of cash that`s flowing into Alberta`s oilsands, not the noisy fulminations of oilsands critics.

In doing so, the French energy giant joins an impressive list of oil supermajors and other heavyweight players who see a bright future in exploiting the world`s second-largest oil reserves, despite ongoing efforts by the eco lobby and its political allies to halt further development.

Total`s move comes just a day after the $127-billion Canada Pension Plan Investment Board -- the country`s largest pension fund -- announced a $250-million stake in Laricina Energy, a small but innovative oilsands player, and it follows a string of recent blockbuster deals by other major foreign buyers.

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[Amber]

Calgary new home prices rose 3.1% in May: StatsCan

CALGARY - New house prices in the Calgary region rose by a higher rate in May than the national average on a year-over-year basis.

The New Housing Price Index released today by Statistics Canada reported a 3.1 per cent increase from May 2009 to May 2010 and a monthly increase of 0.3 per cent from April.

Nationally, new house prices rose by 0.3 per cent on a monthly basis and by 2.9 per cent on an annual basis.

Between April and May, prices increased the most in Regina (3.4 per cent), followed by Toronto and Oshawa (0.7 per cent), said the federal agency.

In May, prices decreased in Kitchener (0.8 per cent), Victoria (0.4 per cent), Windsor (0.2 per cent) and London (0.1 per cent).

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[Amber]

Alberta`s Beetle Battle to Cost $800 Million

Alberta`s campaign against the mountain pine beetle will cost up to $800 million over the next two decades, predicts provincial Sustainable Resource Development Minister Mel Knight.

Giving an update on the "war" against the rice-sized bug, Knight said the fight to bring the beetle population back in line with historic norms could take 20 years and draw hundreds of millions from the provincial treasury. "I would suggest that those sorts of dollars over a 20-year period would not seem unreasonable," the minister said.

"Given what we see, you know, (in) changes in the climate over the last number of years and a bit of easing of some of our kinda long deep winter freezes, we may want to be sure that we continue the control program."

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[Amber]

Calgary Tower now Canada`s 2nd tallest

CALGARY - A 14-metre-long vertical steel girder was to be added to a Calgary skyscraper under construction yesterday afternoon, making the Bow tower the tallest building in Canada outside Toronto.

The girder will be the first link in the steel skeleton that makes up the 55th through 57th floors. The Bow is to be 218 metres by last night. Near the end of September, it is scheduled to "top-off" at 58 storeys and the exterior glass curtain wall was to be in place by Christmas.

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[Amber]

Alberta job, housing numbers up

But between part-time work and recovery from building slump, performance is less impressive than it looks

EDMONTON — Alberta got a double dose of positive economic news -- with some caveats -- on Friday as it gained 5,700 new jobs in June over the previous month and 33-per-cent more housing starts year-over-year.

The province`s seasonally adjusted unemployment rate was 6.7 per cent, up 0.1 per cent from May but down 0.1 per cent from June 2009, according to Statistics Canada.

The jobless rate rose despite the gain of 5,700 jobs from May because its labour force -- the number of people looking for work -- grew by 7,300 in the same period.

ATB Financial senior economist Todd Hirsch said it`s the third month in a row of job creation in Alberta.

"But the bad news is the jobs were heavily skewed to part-time jobs," Hirsch said.

Alberta lost 9,600 full-time jobs, but gained 15,300 part-time ones.

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[Amber]

Oilsands resurgence yields boom in pipeline projects

Wave of building, expansion, openings underway

EDMONTON - Call this the year of the pipeline.

As bitumen production from the oilsands continues to increase, pipeline firms have pushed forward with major projects that are now almost ready to flow.

Two major oil-export lines to the U.S. and a large diluent-import line are set to go into operation this year, while two other lines undergo significant expansions.

This year also marks the start of hearings for Northern Gateway, Enbridge`s dual bitumen-export and diluent-import project between Bruderheim and Kitimat, B.C.

In March, the Inter Pipeline Fund`s $1.8-billion Corridor pipeline expansion received its first oil. The new line will bring 465,000 barrels a day of diluted bitumen from the Shell joint venture Athabasca Oil Sands Project mine to the Scotford upgrader just northeast of Edmonton.

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[Amber]

Slide in new-home prices slows

Edmonton one of just three cities to post declines in May

EDMONTON — The price of a new home in Edmonton remained flat in May from a year ago, according to data released by Statistics Canada Thursday.

Edmonton registered only a 0.1-per-cent 12-month dip in the contractors` selling price, the federal agency said Thursday.

Since July 2008, prices have fallen each month by as much as 12 per cent from the previous year.

ATB Financial senior economist Todd Hirsch said both Edmonton and Calgary have seen new-home prices trending up in the first half of 2010 after spending much of the past two years priced below the previous year.

"Not only had new-home prices been rising, but existing-home prices were also showing fairly solid gains, despite the fact that Alberta`s economy was still shaking off the recession," Hirsch said.

But he expects new-home prices to cool.

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[Amber]

National job surge not seen in Calgary

As he fires out resumes in his quest for full-time employment, Iain Macpherson isn`t surprised by new numbers showing a stagnant Calgary job market.

The communications specialist is looking for work at a time when the city, and province, still lag behind the rest of the country in creating jobs — and more of those coming online are part-time.

"Hopefully I`ll land a full-time position," said Macpherson, who recently graduated from the University of Calgary with a PhD and has a year-old daughter. "But those positions seem to be drying up fast."

New numbers from Statistics Canada Friday showed surprising overall results, with more than 93,200 jobs added nationally last month, bringing employment essentially back to pre-recession levels.

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[Amber]

Construction of new homes in Calgary soared in June

CALGARY - Housing starts in the Calgary census metropolitan area soared in June compared with a year ago.

According to preliminary data released today by Canada Mortgage and Housing Corp., total starts during the month were 685, up by 57.8 per cent from June 2009.

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[Amber]

Canada`s oil-sands companies get boost from BP`s Gulf gusher

Suncor Energy Inc. and Canadian Natural Resources Ltd., two of the largest oil-sands producers, rank among the biggest winners as a U.S. halt on new Gulf of Mexico drilling leads investors to alternative crude sources.

Canadian energy stocks are drawing the highest premium since 2005. Standard & Poor`s/TSX Energy Index of Canadian stocks now trades for 32.1 times reported profit from the past year, more than twice as much as fuel producers in the MSCI World Index, the benchmark for equities in 24 developed markets.

Oil-sands miners, which strip crude from tar-soaked earth, have been reviled by environmental groups such as the Pembina Institute over toxic waste and carbon emissions from oil processing that contribute to global warming. The projects now don`t look as harmful compared with deepwater drilling, after BP Plc`s spill tarred about 550 miles of shoreline from Texas to Florida, said Don Coxe, a strategy adviser to Bank of Montreal`s BMO Capital Markets unit.

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[Amber]

Oil sands campaign a smear

The campaign against Alberta`s oil sands was escalated last week by a group calling itself Corporate Ethics International, which is neither international nor ethical.

If this group were ethical, they wouldn`t have stated that the oil sands sprawled across an area twice the size of England when, in fact, the area totals 1% of England`s land mass.

(By the way, their campaign is called "Rethink Alberta" and attacks the province as a travel destination. It omits that the province has conservation areas bigger than Switzerland.)

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[Amber]

Canada seeks to counter oilsands attacks at Washington meet


The Harper government is using an international clean energy conference to correct what it describes as misleading attacks against Canada`s oilsands industry, Natural Resources Minister Christian Paradis said Tuesday.

Speaking to reporters after wrapping up a meeting with his counterparts from more than 20 major economies in Washington, Paradis said he had scheduled several bilateral meetings, including a lunch with a U.S. government official, to defend the oilsands.

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[Amber]

Nova Chemicals to ship ethane volumes into Alberta

A dearth of natural gas and ethane supply has prompted Nova Chemicals to contract feedstock volumes from North Dakota, the petrochemical giant said.

The operator of the massive Joffre plant in central Alberta, one of the largest in the world, said Thursday declining production of ethane in the province drove the contract with Hess Corporation to ship supplies from the prolific Williston Basin.

"It`s the first time in our corporate history that we have had projections suggesting the possibility of not enough ethane feedstock to run our Alberta polyethylene plants at full capacity," said spokeswoman Wendy Lomicka. "We reached that in 2010 for the first time."

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