May 2015 Alberta Economic Fundamentals

Ally

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#21
GDP to shrink in both Calgary and Edmonton in 2015 due to oil market changes (not Gov't change)

Alberta’s two biggest cities — Calgary and Edmonton — will both fall into a recession this year, according to a new report released Thursday by the Conference Board of Canada.

Calgary’s economy is expected to shrink by 1.2 per cent this year, while Edmonton’s real GDP is forecast to fall by 0.8 per cent, said the Metropolitan Outlook: Spring 2015 report.

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#22
What does Rachel Notley have in mind for the oil industry? Good question

If you want to know what has Alberta’s oil industry spooked, all you have to do is read the New Democratic Party’s election platform. Incoming premier Rachel Notley ran on a blueprint that promises “a careful review of how Alberta will promote resource processing and fair royalties.” The thing is, no one – not the public, not the industry and probably not even the incoming NDP government – knows exactly what that means. Which is pretty much the definition of uncertainty.

A couple of months ago, nobody was expecting the NDP would end up running the province – least of all the New Democrats. That may explain why the party’s election platform was as much a list of wishes as an actual plan to govern. Item No. 1 on the wish list: Charging the oil industry more for what it takes out of the ground.

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#23
The sky didn't fall

One week ago today, Albertans were coming to terms with something that former premier Jim Prentice said we would never be – ‘An NDP province’.

Social media blew up with comments about how Alberta had just committed suicide, corporations would flee in terror, the oil and gas industry would sink into oblivion.

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#24
Alberta residential landlords ready to fight any consideration of rent controls

Alberta’s residential landlords oppose any move by the new majority NDP government to impose rent controls in the province.

In a Herald interview last fall, Rachel Notley, an NDP MLA at the time and now premier-designate for the province, said it is time for the government to implement a form of rent control, at least temporarily, with a cap on how much rent can be increased annually.

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#25
Oilsands land is becoming Alberta's hottest real estate as oil rebounds

An indication that crude’s recent rally has further to run can be found in the northern forests of Alberta, where companies are paying the most in eight years to lease land for oil sands development.

Auctions attracted the highest prices since 2007 in the first four months of the year even as Canadian heavy oil slid below US$30 a barrel, from US$87.23 in June, and producers from Cenovus Energy Inc. to Royal Dutch Shell Plc slashed spending and jobs.

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#26
The importance of oil price averages

First quarter results are in for several major Bakken-affiliated firms, including many exploration and production companies. The results, in conjunction with comments from this month’s North Dakota Oil and Gas Division webinar, are very telling of the Bakken’s ebb and flow nature. EOG and Marathon do not plan to complete many wells until prices recover. Each operator has been a major Bakken producer in the recent past. Continental, Hess, XTO and Burlington have already completed several wells this year, as evidenced in their combined role in March’s production increase. The wells brought online in the first quarter by the four operators were the reason behind an unlikely oil production increase during the end of the first quarter. And, Emerald Oil, a smaller independent operator heavily linked to the Bakken, actually went out and purchased more unconventional acreage in the Delaware Basin, putting to rest any idea that all small operators need to buckle in and hold on in survival mode until prices recover.

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#27
Alberta home slump boosting rentals

With the housing market in oil-rich Alberta at a standstill after the crude price crash, he’s now considering staying in the apartment he rents, concerned he may be stuck with a house he can’t sell should work dry up.

“Initially, we planned to buy but now we are not sure,” he said in a May 14 phone interview. “If you sell the property, maybe you can’t sell it immediately.”

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#28
Alberta economy is not as bad as oil makes it seem

As of March, Alberta led the country with the biggest increase in people receiving Employment Insurance Benefits, reaching a total of 38,800 beneficiaries. In April, unemployment hit 5.8%.

The number of Albertans on EI has increased monthly for the last five months, and March saw the second-biggest increase since 2009.

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#29
Albertans on jobless benefits soar 25% from last year as oil slump takes toll

Alberta saw a dramatic increase in the number of people on Employment Insurance in March, with nearly 25 per cent more people receiving benefits than there were in 2014.

As global oil prices remained depressed, Alberta had the country’s largest increase in beneficiaries for the third consecutive month, with an 8.9 per cent increase from February. There were 38,750 EI recipients in the province in March, up 3,180 from the previous month. Year-over-year, the hike was 24.7 per cent, or 7,670 people.

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#30
Edmonton's contrary housing market defies expectations

ls the sky falling?

If you’re an Edmontonian, you might be forgiven for wondering. The news these days is full of doom and gloom. Alberta’s unemployment rate is up. Our bankruptcy rate is up. The Conference Board of Canada and the CIBC are predicting a recession here. The Petroleum Labour Market Information Division of Enform predicts the loss of 185,000 Canadian jobs.

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#31
Millions of barrels of oil are about to vanish

Millions of barrels of untapped oil that U.S. shale drillers discovered during the boom years are about to disappear from their inventories.

Six years ago, the industry pushed the Securities and Exchange Commission to make it easier for companies to claim proved reserves for wells that wouldn’t be drilled for years. Some prospects considered sure-things when crude was $95 a barrel are money losers at today’s $60. When crude crashed in 2008, 44 U.S. companies wiped 630 million barrels from their books.

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#32
Pension funds take a stake in Calgary rentals

The Calgary rental market is attracting pension funds that see a lucrative, low-risk and long-term investment in rental properties.

Last year, Intergulf Development Group sold 50 per cent of its Calgary-based Aura Rental Tower to Hydro Quebec, says Intergulf vice-president Shaadi Faris. The 24-storey Intergulf-Cidex project is currently renting, with one-bedrooms starting at $1,300 and two-bedrooms starting at $1,800.

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#33
Alberta home prices to slump for the first time while other markets gain ground

Canada’s housing agency is expecting home values to fall in Alberta over the next two years as the impact of lower oil prices weigh on the energy-reliant province.

Canada Mortgage & Housing Corp. provided the forecast in its second quarter housing market outlook released Monday, the first time it’s predicting lower Alberta home prices in the current cycle. The report also gives a two-year forecast of housing starts, sales, and other economic indicators for the nation.

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#34
Meet Alberta's new energy minister

She's not a household name, but Marg McCuaig-Boyd is now one of the most important cabinet ministers in Rachel Notley's new NDP government in Alberta.

McCuaig-Boyd was named energy minister on Sunday and has a big job ahead of her.

So who is McCuaig-Boyd?

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Ally

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#35
Edmonton's housing markets to cool down in 2015 and 2016

Edmonton’s housing construction market is forecast to cool, starting this year with a modest slowdown and turning into a more substantial downturn in 2016, according to Canada Mortgage and Housing Corp.

Total housing starts in the Edmonton census metropolitan area are projected to dip to 13,800 units this year, down 0.5 per cent from 13,872 in 2014, said the CMHC’s spring housing outlook released Monday.

The slowdown will accelerate in 2016, when construction will drop 16.7 per cent to 11,500 units started — the lowest level since 2011, with 9,332 starts.

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Ally

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#36
Calgary region housing starts to fall 23% this year

Housing starts in Calgary, as well as sales and prices in the city’s resale market, are all expected to decline this year, according to a new report from the Canada Mortgage and Housing Corp.

“The impact of low oil prices will hold back employment growth throughout the forecast period to its lowest level since 2010, and migration is forecast to come down from the elevated levels recorded in the last couple of years. This will keep sales and housing starts from making large gains in the coming years,” said Richard Cho, the CMHC’s market analyst in Calgary.

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Ally

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#37
Calgary Economic Development says city's economic in much better shape than many fear

Business leaders and politicians tried to quell corporate Calgary’s concerns over low oil prices and uncertainty surrounding Alberta’s new NDP government Tuesday.

During Calgary Economic Development’s annual “Report to the Community,” CEO Bruce Graham told a crowd of hundreds the city’s rates of unemployment and workforce participation rates are still “very favourably comparable to places like Toronto and Montreal.”

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Ally

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#38
Edmonton arena district exceeding expectations of its most ardent backers

EDMONTON - Something remarkable, unexpected and historic is happening in Edmonton’s downtown.

Even by the high standards of revitalization set by North America’s most successful arena districts in Los Angeles and Columbus, Ohio, the related condo, office and hotel development around their arenas didn’t happen nearly so fast as it is happening in Edmonton.

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Ally

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#39
Home foreclosures down across Alberta

Residential investors planning to scoop distressed properties in Alberta will find slim pickings as foreclosures are lower now, eight months after oil prices crashed, than they were a year ago.


Across the province, 453 homeowners are in the foreclosure process, compared to 519 in the first quarter of 2014, according to figures provided by the Court of Queen's Bench of Alberta

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Ally

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#40
Business license for Fox Creek hotel goes up 133,233%

EDMONTON - The business licence fee for the Timber Ridge Inn & Suites in Fox Creek is going from $75 a year to an annual average of $100,000 — an increase of 133,233 per cent.

The Timber Ridge and all other 11 hotels in the oilpatch and forestry town, 260 kilometres northwest of Edmonton, face sky-high hikes to renew their business permits.

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