June 2012 Alberta Economic Fundamentals

[Ally]

Pipeline leak near Sundre takes toll on Gateway project





An oil spill in central Alberta flowed into the Red Deer River system, but its ultimate effect may be felt thousands of kilometres away, over the Rocky Mountains.




Just over a week ago, a section of pipeline running under a tributary of the river near Sundre leaked up to 475,000 litres of oil, with much of it flushed into nearby Gleniffer Lake.




Today, the spill threatens to give Premier Alison Redford a major political headache as she touts pipeline expansion across the continent and a Canadian energy strategy aimed at boosting Alberta oil and gas exports.






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[Ally]

Cold Lake boom squeezing military families




An oil boom in Cold Lake is putting pressure on military families, who work on the northeastern Alberta base.




"It's ridiculous," said Ashley Finnigan whose husband works on the base. "The military used to be rich people in Cold Lake before the oil came, now they're bottom of the barrel."




Finnigan's family returned recently to Cold Lake after two years in Ontario.





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[Ally]

Alberta to lead country in renovation spending growth





CALGARY ` Alberta is forecast to lead the country in year-over-year growth in renovation spending this year and next year, according to a report by the Altus Group.




The report said renovation spending in the province will rise by 7.9 per cent this year from $6.4 billion in 2011. The annual growth in 2011 was only 0.2 per cent from 2010.




The report also said Alberta`s annual growth in renovation spending will be 5.1 per cent in 2013.






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[Ally]

Outlook for oil remains unclear for now





Monday's stock markets pretty much told the whole story.




On news that the probailout party emerged victorious in Greece, Asian markets rallied, choosing to ignore the black cloud in Europe in the form of Spain.




European investors - alongside their North American counterparts - took a more realistic view of the challenges that lay ahead, as rallies in both New York and London lost momentum.




The exception was the S&P/TSX Composite Index, which gained 76.23 points through the trading session.






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[Ally]

Calgary companies earn 'B Corporation' stamp of approval





CALGARY ` The black circle with the letter `B` stamped inside it may not be familiar to Calgary consumers right now, but give it time.




With five Calgary companies already sporting the logo and several more going through the process required to earn it, the `B Corporation` symbol is quickly becoming the newest way to single out ethical and environmentally friendly businesses.




Like a `Fair Trade` sticker on a coffee tin or an `LEED` rating on a building design, the B Corporation stamp of approval is meant to provide peace of mind to socially conscious consumers. To receive B Corporation certification (the B stands for Benefit), companies must meet certain standards of social and environmental responsibility, as determined by the non-profit organization B Lab.






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[Ally]

Lethbridge home sales up in May



The number of homes sold through the MLSÂ System of the Lethbridge and District Association of REALTORSÂ posted a ninth consecutive double digit year-over year gain in May 2012, marking a full year of year-over-year growth.





Home sales numbered 249 units in May 2012, an 18 per cent increase compared to May 2011. There were 194 single family home sales in Lethbridge, up 19 per cent from year-ago levels. By comparison, home sales in all of Alberta rose 23 per cent compared to May 2011.





The average price of a home sold in May 2012 was $245,072, down three per cent from May of 2011. The average selling price for all of Alberta was $374,653 in May 2012, up five per cent from the previous May.





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[Ally]

Natural gas prices spike to highest in nearly a month




Natural gas futures in New York fluctuated after rising to the highest price in almost four weeks on forecasts of hotter-than-normal weather that would boost demand for the fuel to produce electricity.




Gas gained as much as 5.3 percent and fell as much as 0.6 percent, as Commodity Weather Group LLC in Bethesda, Maryland, predicted above-normal temperatures in the southern and central U.S. from June 25 through June 29. The high in Dallas on June 25 may be 101 degrees Fahrenheit (38 Celsius), 8 above average, according to AccuWeather Inc. in State College, Pennsylvania.




`The market is following the thermometer,` said Phil Flynn, senior market analyst at Price Futures Group in Chicago. `There`s no doubt that it`s a very hot start to the summer, and that`s turning out to be supportive for prices.`





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[Ally]

Canada's oil insiders want a carbon tax




Camarta personally oversaw construction of Shell's $6-billion Muskeg River Mine, a project challenged by persistent labour shortages and a series of explosions not long after it opened. The project's timeline also coincided with a surge in oil prices from $12 to $100 per barrel, which set off an economic boom harder and faster than anything northern Alberta had ever seen.




Camarta was at PetroCanada by the time the Great Recession of 2008 struck. "Hell on wheels," is how he described it. Oil sands investment shrank just as quickly as it had grown.




Now, after four years of shaky global recovery, it's set to hit record highs once again.





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[Ally]

Offshore Oil Keeps Atlantic Canadian Workers at Home



A May 22/2012 Maclean`s Magazine article announced that Ottawa is taking steps to ease employee relocation efforts for Oil & Gas companies in Edmonton Alberta seeking specialized workers and professionals from the U.S.. This call to action for the Canadian Parliament is taking place because workers and executives previously filling energy sector jobs in the oil rich Edmonton soil came from Atlantic Canada. But with offshore drilling in Canada`s Atlantic fast becoming a reality, workers are staying put. Enter the U.S. labor force.





With the U.S. job market continuing to struggle in many areas placing specialized workers, professionals, and executives on the hunt, Edmonton Alberta is becoming an attractive and viable option. These workers are not only seeking a temporary solution, they are looking at making Edmonton a long term place of residence as demand for high paid labor in the energy sector is projected to remain strong. This is good news for Edmonton Realtors. Instead of condo rentals and short term leases, workers are looking at purchasing homes in Edmonton. Jay Love and Shari Love, an Edmonton real estate team, sees both an opportunity to fill this impending demand while boosting the recreational real estate market in Edmonton. According an article released by the Edmonton Journal on June 18/2012, the prices of recreational properties in Alberta are seeing a noticeable drop. This is an opportunity that highly skilled workers from the U.S. moving to Edmonton may want to capitalize on.





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[Ally]

Hot job market feeds Alberta's record population boom





Alberta has the biggest population surge in the country, with a recording-breaking boom in both interprovincial migration and immigration.









A hot job market has become a magnet for workers from other provinces this year ` namely Ontario, British Columbia and Newfoundland ` while immigration to Alberta is at record levels.




It`s easy to see why. The province`s jobless rate ties with Saskatchewan for the lowest in the country, and employment has grown at more than three times the national average in the past year. Average weekly wages are the highest in the country. In the next decade, Alberta`s government figures the province could be short 114,000 workers amid blistering demand.





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[Ally]

Recruiting blitz for new Calgary hospital takes superboard across Canada and to U.S. and Europe





The provincial health superboard has hired hundreds of nurses, therapists and clinical staff in Calgary as part of an aggressive $50-million recruitment blitz that`s taken the medical authority across the country and abroad to staff the city`s new hospital.




Alberta Health Services has brought on 860 new staff members and is on track to hire the roughly 2,400 positions needed to operate the South Health Campus, said Brenda Huband, AHS senior vice-president for the Calgary zone.




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[Ally]

No relief for natural gas producers as Apache's Kitimat plant delayed



Beleaguered natural gas producers in Western Canada are going to have wait a little longer for relief from severely depressed prices. Janine McArdle, the senior executive in charge of the Kitimat LNG project at Houston-based Apache Corp., said the facility`s planned startup will take an extra year as the company continues to look for firm contracts with buyers in Asia.





Apache`s proposed natural gas liquefaction plant on the northern British Columbia coast, which it owns with Encana Corp. and EOG Resource Inc., would be the first in line to ship large quantities of LNG to Asia.





The first cargo is now expected to leave Canada in 2017, a year behind the latest plans. The project has regulatory approval, but Apache needs to be sure it has a market for the gas and that the project is economic before taking a final investment decision, Ms. McArdle, senior vice-president for gas monetization at Apache, North America`s largest oil and gas independent producer, said Wednesday.





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[Ally]

Calgary and Alberta rates of inflation lowest in Canada





CALGARY ` Alberta and the Calgary region had the lowest rates of inflation in the country in May, according to Statistics Canada.




The federal agency reported Friday that consumer prices in Alberta rose 0.4 per cent in the 12 months to May while in the Calgary census metropolitan area they increased by 0.3 per cent.




Nationally, prices rose by 1.2 per cent






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[Ally]

Calgary labour market tightening





CALGARY ` No one has to tell Andrew Corcoran about the challenges in today`s tightening labour market in Calgary.




He`s experiencing it first-hand.




Corcoran, franchise partner in Calgary for 1-888-WOW-1Day! Painting, has been busy since starting the company in the city at the beginning of March. It`s a sign that once again the economy is booming.






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[Ally]

Alberta oil and gas still key to U.S. energy security, says consul general





CALGARY - Outgoing U.S. consul general Laura Lochman spent much of her final Calgary speaking engagement talking up Alberta`s oil and gas industry and the role she believes it will play in ensuring American energy security.




Lochman, who completes a three-year stint as U.S. consul general for Alberta, Saskatchewan and the Northwest Territories on July 8, acknowledged in an address to the Calgary Chamber of Commerce on Thursday that the Canada-U.S. energy trade has experienced bumps in the road during her time in this country.




`The decision on a certain proposed pipeline was, let`s say, not quite what many of us ` including myself ` would have expected,` Lochman said.




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[Ally]

Alberta's crude oil output to more than double by 2021




CALGARY - Alberta's conventional and oilsands crude output is growing faster than expected and overall oil output will more than double by 2021, according to an annual report by the provincial regulator released Wednesday.




The cornucopia of crude, however, had some observers questioning how Alberta will get the bounty to market and what price it will fetch, given regulatory challenges faced by proposed pipelines.





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[Ally]

Bigger spike forecast for Calgary home starts






CALGARY, AB - The last year Calgary and area new home builders started construction on more than 11,000 homes was 2008, when 11,438 foundations were poured, including a decades-high 7,051 multi-family homes.




The next year more than 11,000 homes will be started is 2012, accord- ing to the Calgary-area spring Housing Market Outlook (HMO) from Canada Mortgage and Housing Corp.




CMHC expects builders to start 11,600 new homes this year, comprised of 5,700 single-family and 5,900 multi-family homes. Next year, look for 11,400 starts, including 5,900 singles and 5,500 multis.





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[Ally]

Alberta jumps to 21st of the world's best places to invest in oil and gas





CALGARY - Alberta has moved up in the world of best places to invest in oil and gas activities, to 21st place from 61st a year ago, according to the latest Fraser Institute report.




The province shot up in the ranking of 147 jurisdictions ... partially on the provincial government`s promise to streamline certain energy and environmental regulations, according to the conservative think tank`s Global Petroleum Survey 2012.




`Two years ago, Alberta ranked 60th in the world for oil and gas investment, the result of what the industry saw as an unexpected royalty grab by the provincial government,` said Gerry Angevine, Fraser Institute senior economist and co-author of the studay. `Today, investors say they are less concerned about regulatory uncertainty, the cost of regulatory compliance, and regulatory duplication and inconsistency.`






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[Ally]

The great migration



Retired City of Calgary employee Bob Bourassa recently gave up his five-bedroom estate home in Airdrie for a 1,200-square-foot townhome across the city ` and he couldn`t be happier.





`I love it,` says the 62-year-old former bus driver. `It`s everything I wanted.`





At 1,200 square feet, the two-bedroom, two-and-a-half bath townhome built by Mattamy Homes in the development of Windsong is a big downsize from Bourassa`s former five-bedroom home in Edgewater Estates.





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[Ally]

Drillers stand by forecasts despite oil-price slide




EDMONTON - They`re classic value traps: cheap stocks that keep getting cheaper, sucking in unwary investors.




The energy services sector is full of them. The long list of losers includes U.S. giants like Halliburton, Baker-Hughes and Weatherford, and homegrown players like Precision, Ensign or Trican.




Although a few Alberta firms ` such as Mullen ` resisted the steady declines over the past year, their shares are also starting to buckle.




The reasons are clear: with North America drowning in shale gas ` and now, oil as well ` and crude prices crumbling sharply, the outlook for services firms is growing dimmer by the day.





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