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April 2010

Ally

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News articles for April 2010.
 

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Alberta building permits rise 137%

EDMONTON — Contractors and developers appear bullish on Edmonton`s economic recovery as building permits issued in February neared nation-leading levels.

But the head of a group representing Alberta`s builders says the rebound has yet to reach his industry.

The value of permits for the Edmonton census metropolitan area was $395.5 million, Statistics Canada reported Wednesday, up 27 per cent from January -- and up 137 per cent from last February, in the depths of the economic slowdown.

Alberta posted $1.01 billion worth of projects in February, an 86.7-percent increase from the same month of 2009, when values fell to their lowest level since September 2004.

Residential permits accounted for $690 million of Alberta`s total, while $319 million was non-residential.

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Spring thaw in Edmonton house market

EDMONTON — Edmonton`s resale housing prices, listings and sales all posted double-digit increases in March compared with a year earlier, according to figures released Tuesday by the Realtors Association of Edmonton.

Buyers trying to beat higher mortgage rates, a seasonal surge and an improving economy heated the market in March, said association president Larry Westergard.

"We`re back from where we were in 2008 into 2009 where the market really corrected based on what happened globally, back to where it should be for what the Alberta and Edmonton economy is demanding for houses," Westergard said.

Single-family homes in the Edmonton area sold on average for $388,473 in March -- up 4.7 per cent from February and 11 per cent over March 2009. The median, or midpoint, sale price for a single-family house was $364,000, up 9.2 per cent from March 2009.

Condominium prices rose to $252,416 in March. That`s up 8.4 per cent month-over-month and 10.5 per cent year-over-year.

Duplex and row-house selling prices averaged $313,836, down a third of a per cent from February, but still up 10.4 per cent from a year ago.

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Alberta sees big jump in construction permits

EDMONTON — Building plans for commercial and multi-family projects vaulted Alberta to December`s second-biggest biggest monthly gain among Canadian provinces in the value of construction permits.

Builders took out $1.2 billion worth of permits -- a 9.1-per cent increase over November, Statistics Canada reported Thursday. Only Ontario posted a bigger gain.

It`s a vastly brighter outlook than the construction sector faced in December 2008; the value of building permits increased 61.2 per cent from then. But the increase wasn`t shared provincewide.

ATB Financial economist Dan Sumner noted the gains came from Calgary`s higher issuance of commercial and multi-family permits.

The value of permits in Calgary jumped 72 per cent from November and 173 per cent from a year earlier.

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Edmonton Proposed 29-Storey Condo casts shadow over Oliver

The grand log cabin stands, nestled in the trees, on the lip of the North Saskatchewan River bank, right where 115th Street meets 99th Avenue.

Built in 1936, it`s crafted of round logs hewn at Pigeon Lake and features an enormous fieldstone fireplace. It also has one of the city`s best views, a vista that includes the river, the Victoria Golf Course and the University of Alberta campus.

Over the years, it has been home to a number of prominent Edmontonians, including actor and drama professor Gordon Peacock and publisher and politician Mel Hurtig. Standing in the middle of Oliver, ringed by highrises, it`s a reminder of an era when Edmonton was still a city on the western frontier.

But the cabin`s days on the riverbank may be numbered. Last month, Stantec Consulting circulated a letter to Oliver residents, informing them of its proposal to rezone the cabin site and two neighbouring properties, the better to build a 105-unit, 29-storey condominium tower, with four levels of underground parking built into the side of the bank

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Calgary GDP to zoom ahead in 2011

Calgary`s economy is on the rebound and set to outpace the rest of the country next year, a new forecast says.

In its spring outlook, the Conference Board of Canada predicts the city will post 2.8 per cent economic growth this year, down from an earlier forecast of three per cent.

Stronger construction and services activity is expected to help the city recover from last year`s downturn in the energy sector, the report said.

The latest forecast puts Calgary in the middle of the pack among the 13 major Canadian cities this year. But in 2010 the city will jump to the head of the pack with 4.4 per cent growth as a recovery in the oilpatch takes a firmer hold.

The outlook is more optimistic than other recent forecasts, including one from Calgary Economic Development, which expects a much slower pace of growth of 0.8 per cent to 1.2 per cent.

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Spring Panic for Calgary home buyers

Lynne Engelman and Kevin Giddings have less than 120 days to find a home.

The Calgary couple won`t be homeless if they strike out, but they will be without a near-record-low five-year mortgage rate. They were pre-approved for the 3.69% guaranteed rate just before all the major banks jacked up their rates last week.

If they had to go to the bank today to borrow, the five-year rate would be more like 4.25%, and that figure is expected to rise in the next four months.

"We knew rates wouldn`t continue to be at these all-time lows so I said, `let`s lock in and hopefully we can find a home,` " says Mr. Giddings.

Rising interest rates on the long end of the mortgage market are just one more catalyst for a spring housing market expected to reach a fever pitch.

Throw in new mortgage rules in effect April 19 that will make it tougher to borrow in some cases, a new harmonized sales tax (HST) in Ontario and British Columbia on July 1, and a likely Bank of Canada hike in short-term interest rates, and buyers are getting panicked.

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Balzac power centre leads retail expansion

Calgary`s retail landscape is getting bigger as 33 projects totalling nearly 10 million square feet are planned or under construction.

The latest project, the Herald has learned, is CrossIron Common -- a free-standing retail power centre on more than 49 hectares and 1.2 million square feet of developed space.

Ivanhoe Cambridge, a Canadian-based global shopping centre owner, manager and developer, is behind the project.

The new development is situated in the Balzac area, off the Queen Elizabeth II Highway and Highway 566 just north of Calgary city limits and beside the CrossIron Mills shopping centre, which opened last August.

CrossIron Common will include a 103,000-square-foot Lowe`s store and a 150,000-square-foot Costco as anchor tenants with openings in the second half of this year, said John Scott, vice-president of development for Ivanhoe Cambridge.

He said future phases could include free-standing restaurants, service-related retail such as banks, community services like medical or dental offices, and a full range of large-format retailers.

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Real estate investor bets on Edmonton

Rising interest rates, tighter mortgage rules and worries of another housing bubble make it a bad time to invest in real estate, right?

Not so, says Don Campbell, president of the Real Estate Investment Network and bestselling author, who`s just released his fourth book on property investment.

"If you`re buying a mutual fund or a stock, you have no control," Campbell said.

"With real estate, you can buy it and add value. You can live in it, you can rent it out and most importantly, right now, for every one dollar you put into the market of your own you`re going to be playing with four or five dollars because of the banks, and as long as you`ve purchased a positive-cash-flow property -- it takes care of itself.

"Your mortgage slowly gets paid down. Rent puts income into your pocket and you`re leveraged."

He calls Edmonton an especially promising place to invest and puts his money where his mouth is -- most of his own investment properties are in the city.

In Campbell`s eyes, it was even a good time to invest in real estate during last year`s recession/housing correction because of less competition for deals.

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Alberta unemployment rate hits 14-year high

EDMONTON — Where did 9,700 Albertans ready to work if they could only find a job come from?

A surge in jobseekers boosted Alberta`s unemployment rate 0.6 percentage points to 7.5 per cent in March, its highest level since 1996, Statistics Canada reported Friday.

Much of the increase is attributed to the labour force, or those seeking work, growing by those 9,700 people.

That factor overshadowed the fact the province also lost 3,400 jobs in the month. While employment fell by 4,500 full-time jobs, it was partially offset by the gain of 1,100 part-time jobs.

Compared to a year ago, Alberta`s labour force has grown by 13,200 people.

Alberta is the only province where employment is below the level of July, when the national recession bottomed out.

It`s the third month in a row the rate has risen in Alberta.

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Edmonton Arena: The puck stops here

Tomorrow night, the Edmonton Oilers will end their 31st season in the National Hockey League in dismal fashion: not just out of the playoffs but dead last. With luck, they`ll avoid matching their franchise-record lowest season total of 60 points.

But for a Cinderella run to the Stanley Cup final four years ago, the team`s golden days are long gone. It has been 20 years since the Oilers last won the cup, their fifth in seven years and the only one since Wayne Gretzky`s infamous trade to California.

The team will begin rebuilding with a top draft pick in June, but the construction plans don`t stop there. There is also a campaign to erect a $400-million arena.

The Oilers and their billionaire owner say they need it to stay competitive in a small market. They also say the new home must be in the heart of the city – and taxpayers should pick up the tab.

In a community already on the hook for billions in infrastructure backlog, the proposal has proved incredibly divisive. Some residents feel it will spark a rejuvenation of the sputtering downtown core and some consider it blackmail, a veiled threat to move if the public says no. Others, however, fear the decision is a forgone conclusion.

"A new arena will be built, and it will be subsidized," University of Alberta economist Brad Humphreys predicts. "It`s not just Edmonton – that`s the way it happens across North America."

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Sinopec to buy stake in Syncrude: Report

Shares in Canadian Oil Sands Trust (COS.UN-T32.231.534.98%) climbed Monday amid reports that Sinopec, Asia`s biggest refiner, plans to buy ConocoPhillips` (COP-N55.960.641.16%) stake in Syncrude Canada, the world`s largest oil sands development.

Canadian Oil Sands, already a 37 per cent owner of Syncrude Canada, was thought to be a leading candidate to acquire the additional stake put up for sale last year by ConocoPhillips.

Investors seemed relieved at reports that there could be another buyer — particularly one from the huge Chinese market — sending shares of Canadian Oil Sands up by 53 cents to $31.23 at midmorning on trading of more than 1.1 million shares.

The possibility of Canadian Oil Sands buying an additional stake in Syncrude had been weighing on the trust`s unit price recently since the company would need to raise up to $4 billion in financing for the transaction.

Shares in ConocoPhillips gained 45 cents to $55.77 (U.S.) on the New York Stock Exchange.

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Drillable projects counter `dirty oil` rap

Stunted evergreens and naked poplars sprout from snow-covered ground, thick on hillocks and thin in muskeg-wet plains and creek beds, on the vast oilsands-bearing lands south of Fort McMurray.

From the air, seismic lines crisscross the landscape, starting at the edge of the city airport runway and running right up to Highway 63, the dangerously busy two-laner that leads to Edmonton, 450 kilometres to the south.

The newer seismic lines are wavy, tour guide Chris Bloomer, an executive vice-president with Petrobank Energy and Resources, says over the helicopter intercom, to address concerns that straight seismic lines give predators an unfair edge because they can see their prey from long distances.

The latest trend is "4-D" seismic, a second course of 3-D seismic that allows the developer to see changes in the oily resource and therefore better plot the plan to recover it.

As the choppers fly south on this tour organized by the In Situ Oilsands Alliance, there`s more disturbance -- hectares of forest taken out to feed the Alberta-Pacific Forest Products mill near Athabasca, square-cut blocks where rigs were drilling delineation holes before fleeing the spring melt, pipeline and service corridors, gas wellheads (some shut in because of a gas-over-bitumen regulatory decision), narrow roads and evidence of past forest fires.

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Spring thaw in Edmonton house market

Edmonton`s resale housing prices, listings and sales all posted double-digit increases in March compared with a year earlier, according to figures released Tuesday by the Realtors Association of Edmonton.

Buyers trying to beat higher mortgage rates, a seasonal surge and an improving economy heated the market in March, said association president Larry Westergard.

"We`re back from where we were in 2008 into 2009 where the market really corrected based on what happened globally, back to where it should be for what the Alberta and Edmonton economy is demanding for houses," Westergard said.

Single-family homes in the Edmonton area sold on average for $388,473 in March -- up 4.7 per cent from February and 11 per cent over March 2009. The median, or midpoint, sale price for a single-family house was $364,000, up 9.2 per cent from March 2009.

Condominium prices rose to $252,416 in March. That`s up 8.4 per cent month-over-month and 10.5 per cent year-over-year.

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China ramps up in oilsands by buying into Syncrude

Refining giant Sinopec more than doubled China`s presence in Alberta`s oilsands by paying $4.65 billion US for ConocoPhillips` nine-per-cent stake in Syncrude Canada Ltd.

Houston-based Conoco confirmed the sale after details leaked out of Hong Kong early Monday, sending the share prices of Canadian oilsands producers higher.

Conoco had been soliciting offers for its stake in Syncrude since last October.

In a news release, the company said the deal is part of plans to shed more than $10 billion in assets around the globe. The sale is expected to close in the third quarter, pending Canadian and Chinese government approval.

"We are pleased that SIPC (Sinopec) has recognized the value of this quality asset," Jim Mulva, Conoco-Phillips` chairman and chief executive said in a statement.

Other potential buyers were rumoured to include Canadian Oil Sands Trust -- the largest Syncrude owner, with 36 per cent -- various pension funds and other international players from countries such as India.

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Edmonton building gains unlikely to last: Analysts

New-home construction made a comeback in March, as builders began work on 813 units in the Edmonton region compared with just 135 units last March.

But this new pace may be as busy as it gets, with little chance of a return to the much higher construction rates of 2007 and early 2008.

After a year in which hundreds of unsold houses convinced builders to stop building homes on speculation, the inventory is now down to almost nothing.

"Back in 2008 the activity was unsustainable. The last thing anyone wants is a return to that frenzy," said Tim Howard, executive officer of the Edmonton chapter of the Canadian Home Builders Association.

But on the other hand, most of the inventory today is raw land, with builders only starting to get serious last fall about ramping up work.

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Syncrudes stake tops China`s investments in Canada

It is by far the largest Chinese investment ever made in Canada, and it shows that China is still willing to pay a premium price for energy assets that no one else will match.

Monday, state-owned giant Sinopec Corp. was revealed as the winning bidder for the 9.03% stake in Syncrude Canada Inc. that was put on the market by ConocoPhillips Co. last year. It offered a whopping US$4.65-billion.

The fact that Sinopec put in the highest bid did not come as a shock — the company is already an investor in the oil sands, and it has spent more than $10-billion to buy two Calgary-based companies with largely foreign assets: Addax Petroleum Corp. and Tanganyika Oil Co. Ltd.

But the price tag on the Syncrude stake still surprised onlookers, who did not guess it would fetch that much.

"I think that was quite a strong price and should be taken as a very strong signal of China`s interest [in the oil sands]," said Marc Friesen, an analyst at Versant Partners.

"It shows that the world continues to watch the oil sands and they`re very interested in the development potential of these assets."

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China antes up U.S. $4.56B

It is by far the largest Chinese investment ever made in Canada, and it shows that China is still willing to pay a premium price for energy assets that no one else will match.

Yesterday, state-owned giant Sinopec Corp. was revealed as the winning bidder for the 9.03% stake in Syncrude Canada Inc. that was put on the market by ConocoPhillipsCo. last year. It offered a whopping US$4.65-billion.

The fact that Sinopec put in the highest bid did not come as a shock -- the company is already an investor in the oil sands, and it has spent more than $10-billion to buy two Calgary-based companies with largely foreign assets: Addax Petroleum Corp. and Tanganyika Oil Co. Ltd.

But the price tag on the Syncrude stake still surprised onlookers, who did not guess it would fetch that much.

"I think that was quite a strong price and should be taken as a very strong signal of China`s interest [in the oil sands]," said Marc Friesen, an analyst at Versant Partners.

"It shows that the world continues to watch the oil sands and they`re very interested in the development potential of these assets."

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Analyst cuts natural-gas price outlook amid `intense` ovesupply fears

FirstEnergy Capital analyst Martin King cut his 2010 price forecast for U.S. natural gas futures by 23 per cent Friday as "intense fear" of oversupply presses the market lower.

King, based in Calgary, lowered his average price estimate for this year to $5 US per million British thermal units from $6.50 for gas futures on the New York Mercantile Exchange. He also reduced his average Canadian price at the AECO Hub in Alberta by 25 per cent and cut FirstEnergy`s U.K. outlook by 20 per cent.

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Drilling rights fetch $112 million in Alberta record for April sales

Alberta`s first drilling-rights sale of the fiscal year is the richest April sale on record, both in contributions to the provincial treasury and the rate paid per hectare.

The Crown sale on Wednesday brought in $112 million or $974 per hectare, outstripping the previous record for non-oilsands sales of $102 million on April 3, 2000, and $875 per hectare in the April 5 sale in the peak drilling activity year of 2006.

It`s the most paid in records going back to 1996 on the Alberta Energy website.

A total of 12 licences and 14 leases sold for more than $1 million, including a whopping $9.3 million or $18,193 per hectare paid for a licence near Drayton Valley, just southwest of Edmonton.

The licence was purchased through broker Scott Land & Lease of Calgary to protect the identity of the buyer.

Another lease, a few kilometres to the northwest, was sold through another broker for $2.6 million, or $10,312 per hectare.

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