June 2011 Alberta Economic Fundamentals

[Ally]

Challenges remain, but momentum building in Alberta economy




EDMONTON - Two years after the Great Recession ended, Alberta's energy-fuelled economy is again flexing its muscles.




With oil prices tripling from their 2009 lows, drilling activity on the upswing, unemployment falling and oilsands investment surging, Alberta looks poised for a new growth supercycle.




In fact, compared with the beleaguered U.S., the debt-ridden economies of Europe or the sluggish growth in Ontario and Quebec, Canada's energy superpower looks like a rising star once again.




Just don't call this new growth cycle a boom - at least not yet. There are still nagging patches of weakness and some serious challenges ahead, both from within and beyond Alberta's borders. To wit: The U.S. recovery remains fragile, China's supercharged economy is slowing, and the 27-month-old bull market in equities looks as if it may be running out of gas.





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[Ally]

Labour shortage bigger challenge than ever





EDMONTON - An executive from a big-name construction company drew laughs at a recent business conference when he urged everyone in the room to go home and make babies ` so dire is the need for workers in Alberta.




It`s no joke for employers; The labour shortage that plagued Albertans with long lines for service and inflated costs for purchases from burgers to upgraders is back.




The underlying factors never went away even when the economy tanked in late 2008 and 2009, argues Mike Corbett, senior vice-president of David Aplin Recruiting.






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[Ally]

Oilsands generates thousands of jobs, billions of dollars in taxes across the country





EDMONTON - When the Canadian Energy Research Institute (CERI) released its sixth-annual oilsands update in May, it highlighted the bright investment future of the industry.




The University of Calgary energy economics think-tank expects $2.1 trillion to be pumped into 47 new projects between 2010 and 2035.




That`s split into $253 billion for initial capital for construction and, over the longer term, $1.8 trillion for operation, maintenance and sustaining capital.




But the real story is the benefits such massive investment will splash all across North America ` 900,000 full-time and part-time jobs; $444 billion in taxes paid to all levels of government; and a cumulative total of more than $623 billion in royalties bulging Alberta government coffers.






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[Ally]

Calgary house prices dip slightly in May





CALGARY ` Calgary house prices dipped slightly in May as sales picked up compared with last year, according to the Canadian Real Estate Association.




CREA data released Wednesday show the average MLS sale price of all residential properties in the city fell by 0.5 per cent from a year ago to $416,055 while sales were up 4.0 per cent to 2,219.




In Alberta, year-over-year sales improved by 8.7 per cent to 5,659 units and the average sale price dropped by 2.0 per cent to $357,086.






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[Ally]

Short-term expectations positive for Calgary region housing starts





CALGARY ` The short-term expectations for housing starts are positive in the Calgary region, says the Conference Board of Canada.




In its Metropolitan Housing Starts report released Friday, the board said the Calgary census metropolitan area was up to 7,175 units in May on a seasonally-adjusted annual rate, up from the three-month average of 6,325.




However, May`s number is down from 8,544 units a year ago.




The board said short-term expectations are based on residential permits data.




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[Ally]

Oil price slide hits Alberta crude



CALGARY ` World oil prices continued to fall Friday, reaching four-month lows as investors reacted to fears of stronger output from Saudi Arabia and lower global economic expectations.





Both London-traded Brent and New York-traded West Texas Intermediate dropped, but the latter, which is the base for the price fetched by most Alberta crude, fell more.





WTI for July delivery settled at $93.01 US a barrel, down $1.94, or two per cent, its lowest since Feb. 18, while Brent crude for August delivery slipped 81 cents to $113.21 US a barrel, the lowest settlement since May 24.





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[Ally]

Flint gets Alberta oilsands construction contract





Flint Energy Services said it signed a letter of intent with MEG Energy for construction and pipe installation services at MEG`s Christina Lake project near Conklin, Alberta.




The Canadian energy services company also received additional field construction work on Suncor Energy`s Firebag project since the first quarter of this year.




Including the new agreement with Canadian oilsands developer MEG Energy, the added backlog for Flint`s facility infrastructure segment is about C$300 million.






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[Ally]

Alberta labour crunch could be worse this time





An executive from a big-name construction company drew laughs at a recent business conference when he urged everyone in the room to go home and make babies - so dire is the need for workers in Alberta.




It's no joke for employers. The labour shortage that plagued Alberta with long lines for service and inflated costs for purchases from burgers to upgraders is back.




The underlying factors never went away even when the economy tanked in late 2008 and 2009, argues Mike Corbett, senior vice-president of David Aplin Recruiting.






Read the full article here.

 

[Ally]

Agrium shares jump after it raises profit outlook





WINNIPEG ` Shares of Calgary-based Agrium Inc. (TSX: AGU) jumped on Monday after it raised its second-quarter earnings outlook, citing strong retail sales and higher nutrient prices.




The company`s shares rose more than three per cent in early trading in New York and Toronto, even as many U.S. stocks fell at the open as investors pulled out of riskier assets.




Shares of fellow fertilizer producers Mosaic Co and Potash Corp. of Saskatchewan were also higher, but their gains lagged Agrium`s climb.




Agrium, potash miner and the largest North American farm-products retailer, said on Sunday it now expects to earn $4.10 to $4.40 per share in the quarter, up from its previous view of $3.38 to $3.88.




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[Ally]

Wild Rose Circle aims to revitalize area of Chinatown




EDMONTON - Seniors in Chinatown will soon live beside family and sip tea on a leafy rooftop terrace thanks to a new $50-million development touted to help revitalize an inner-city neighbourhood, organizers announced Saturday.




The Wild Rose Circle Project will also house two floors of shops, dental and medical services, a drugstore and other businesses, according to plans for the mixed-use development to be built north of downtown along 106th Avenue and 100th Street.




Above the pedestrian-friendly commercial space, twin apartment buildings will include 128 supported-living seniors units, 96 affordable-housing units, 12 condominiums and other units for families and students. Residents will have access to a secure rooftop courtyard and garden and 150 underground parking stalls.





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[Ally]

Stelmach seeks unity from western premiers




EDMONTON - Alberta Premier Ed Stelmach wants his counterparts from Canada`s western provinces and territories to help him convince the federal government to support construction of roads and pipelines that will facilitate trade with booming Asian countries.




The outgoing premier will make his pitch for co-operation over the next three days at the western premiers` conference in Yellowknife, N.W.T.




`Our future prosperity will be determined by our ability to tap into rapidly growing Asian economies,` Stelmach said in a statement about the conference.





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[Ally]

CN boosts rail access to northern Alberta




EDMONTON - If there's an economic slowdown looming -as sinking stock market indexes seem to suggest -you wouldn't know it by listening to Claude Mongeau.




The affable CEO of Canadian National Railway Co., who was in Edmonton on Thursday to address a Chamber of Commerce luncheon crowd, sees no reason to back away from CN's rosy profit outlook for 2011.




Back in April, after the Montrealbased rail giant posted a sharp uptick in first-quarter profits, CN said fully diluted earnings per share could jump by up to 15 per cent this year. CN earned $4.20 per diluted share for 2010, excluding a gain on the sale of an asset.





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[Ally]

New air service between Edmonton and Cranbrook launched




EDMONTON - A new non-stop air service starting Wednesday between Edmonton and Cranbrook is aimed at holidayers and commuting workers.




Integra Air launched a flight Mondays, Wednesdays and Fridays from the Executive Flight Centre on Airport Service Road north of the main terminal to Canadian Rockies International Airport in Cranbrook.




Dave Macfarlane, director of the Lethbridge-based airline, said the flights are aimed at tourists headed for the Columbia Valley and the Kootenay region.





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[Ally]

Uncertain future for LNG: Analyst






Western Canadian natural gas producers seeking salvation from low domestic prices through liquefied natural gas markets in Asia could be disappointed, cautioned one analyst.




Producers hope to profit on prices currently $4 to $8 higher in Japan and Korea than in North America, and possibly see stronger prices at home even if competing export terminals spring up across the U.S.




The rationale makes sense in an open market context of supply and demand, but fundamentals can and do change quickly, noted Gerry Goobie, with Purvin & Gertz energy consultants




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[Ally]

Sum landlord faces record $207,000 in fines





CALGARY ` A Calgary landlord and his family face $207,000 in total fines ` the largest one-time penalty ever meted out by the courts in Alberta for violations under the Public Health Act ` for numerous violations at six rental properties throughout the city.




Crown lawyer Rob O`Neill and defence lawyer Jeinis Patel jointly submitted the stiff fines to provincial court Judge Frank Maloney on Monday for consideration.




`It will be the biggest penalty issued at one time in Alberta, if accepted by the court,` O`Neill said outside court. `It`s the biggest against a single landlord, however, it is spread over six properties. For an individual property, there have been higher penalties.`






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[Ally]

Calgary Economic Development launches campaign to attract people and business





CALGARY ` Calgary Economic Development will announce today a national marketing and business development campaign to attract people and business to Calgary, the Herald has learned.




The campaign, whose name is `calgary: be part of the energy.ca`, is aimed at positioning Calgary as an emerging international cosmopolitan city.




Bruce Graham, president and chief executive of Calgary Economic Development, said the purpose is to attract people and prospective employees `and to address our longer term workforce needs.`




`The second reason is to further develop and diversify our business base in a more sustainable way to complement our strength in areas like energy,` said Graham.






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[Ally]

Alberta retail sales growth tops all provinces





CALGARY ` Alberta retail sales in April posted the highest monthly and annual growth rates of all provinces in the country, according to Statistics Canada.




The federal agency reported Tuesday that sales in Alberta hit $5.235 billion during the month, up 1.6 per cent from March and an increase of 7.4 per cent from April 2010. Across Canada, retail sales increased 0.3 per cent to $37.4 billion in April. That was also up 3.6 per cent from a year ago.




The largest increase nationally among the subsectors in April was registered at motor vehicle and parts dealers (1.7 per cent). Sales at new car dealers (1.1 per cent) advanced for a second consecutive month. Gains were also reported at other motor vehicle dealers (8.3 per cent) and automotive parts, accessories and tire stores (6.0 per cent). Used car dealers (2.2 per cent) reported the only decline, explained Statistics Canada.




It said sales at furniture and home furnishing stores rose 3.2 per cent and gasoline station sales rose for a third consecutive month, up 0.5 per cent in April and the ninth increase in 10 months.






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[Ally]

Western premiers support Alberta's call to spur Asia trade





Canada's western premiers on Monday backed Alberta Premier Ed Stelmach's call for speedy development of roads, ports, pipelines and policies that will support increased trade with booming Asian economies.




In a joint statement released after the first of three days of meetings, the premiers reinforced the need for "timely approval" of major infrastructure projects including the controversial Enbridge Northern Gateway Pipeline, which would carry 520,000 barrels of Alberta oilsands bitumen from the Edmonton region a day to a tanker terminal in Kitimat, B.C. From there, tankers would carry the raw bitumen to Asia, where it would be upgraded and consumed. The National Energy Board will begin hearings on the proposed pipeline in January.




"We know by having the right kind of infrastructure we can grow the economy for Canada substantially," Northwest Territories Premier Floyd Roland said after chairing the twohour meeting at the territorial legislature in Yellowknife. "If we don't become more innovative and find ways of working together, we'll find ourselves losing ground when it comes to the global economy."




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[Ally]

Alberta home sales rise in May





The number of homes sold through the MLSÂ System of the Grande Prairie & Area Association of REALTORSÂ came in well above year-ago levels in May 2011.







According to statistics provided by the Association, home sales numbered 210 units in May 2011, rising 31 per cent from May 2010. Provincial activity, in comparison, was up nine per cent from a year earlier.







That said, it is important to note that while May 2011 did indeed post a solid sales figure, the magnitude of the year-over-year gain is largely a reflection of falling sales in May last year.







On a year-to-date basis, home sales in the first five months of 2011 were running 12 per cent above levels in the same period in 2010, and stood well above 2009 levels.





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[Ally]

EnCana, PetroChina end $5.4 Billion shale gas deal





China`s biggest North American energy deal to date was called off Tuesday, as Encana Corp and PetroChina failed to reach terms for a $5.4-billion Cdn joint venture to develop a Canadian shale gas play.




Encana, Canada`s No. 1 natural gas producer, said the two companies ended talks on an agreement that would have seen PetroChina take a half stake in Encana`s massive Cutbank Ridge field in northern British Columbia.




`There were significant gaps in fundamentals,` said Alan Boras, a spokesman for Encana. `As a result we ended negotiations.`






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