March 2011 Alberta Economic Fundamentals

[Ally]

'Fear Premium' roars back



For oil producers, drillers and Alberta's depleting treasury, it's an unexpected gusher.




But for motorists, it means an another unwelcome surge in gasoline prices and an effective tax increase on incomes.




With fighting raging in Libya and political tensions boiling across North Africa and the Middle East, crude prices have spiked to the highest level in 30 months.




In New York, oil futures surged by $2.60 US a barrel Wednesday to close above $102 for the first time since September 2008.




While that's 30 per cent below the record 2008 high of $147 a barrel, it represents a jump of more than $10 or nearly 11 per cent since Feb. 1, as the so-called "fear premium" returns with a vengeance to volatile oil markets.





Read the full article here.

 

[Ally]

Cold Lake's cold oil comfort



There is so much oil around the City of Cold Lake that it could form its own emirate. Instead, the city is broke.





It`s so financially strapped that this urban centre of 14,000 in Northeastern Alberta, near the Saskatchewan border, has proposed to dissolve itself as a city, or to stop accepting new residents.





In fact, the higher the oil prices, the bigger its challenges because higher oil prices mean even more oil industry development, which results in more oil workers moving in and using its already overused municipal services.





`Something has to change in order for Cold Lake to become a viable and solvent community,` Craig Copeland, the city`s mayor, said in an interview.





Read the full article here.

 

[Ally]

Alberta forest-product shipments worth 25 percent more in 2010






EDMONTON ` Stronger prices and demand in 2010 led to a 25-per-cent year-over-year increase in the value of forest products shipped from Alberta.




Shipments of lumber, panelboard, pulp and paper shipped by member companies of the Alberta Forest Products Association totalled $2.3 billion for the year, the industry group said Wednesday. That compares to about $1.9 billion in 2009.




The pulp-and-paper sector had a particularly good year, with shipments worth $1.3 billion.




It`s good news for the provincial forest industry which is struggling against low demand in a weak U.S. economy, a high loonie and a mountain-pine-beetle infestation.





Read the full article here.

 

[Ally]

Alberta slowly winning pine beetle battle




EDMONTON - Alberta`s forests have received a temporary reprieve in the battle with their most voracious enemy.




Recent ground and aerial surveys show the mountain pine beetle`s progress through the province`s coniferous woodlands has slowed considerably from last year.




The province says extreme cold weather killed off more beetles than usual, while a program of removing infected trees reduced the survivors` ability to spread to new pines.




`I have to say the work we`ve done, with a little help from Mother Nature, has turned the thing around a bit for this year,` Sustainable Resource Development Minister Mel Knight said.



Read the full article here.

 

[Ally]

Alberta ranked as world's top mining jurisdiction







TORONTO (Reuters) - Canadian provinces still dominate a list of the world's most attractive mining jurisdictions, with Alberta claiming the top spot, according to a Fraser Institute survey released on Thursday.





The survey, based on views of about 500 mining companies, measures the attractiveness of the mining policies implemented by governments across the globe.





Though a surge in metal prices has made miners more optimistic, many respondents said a growing trend of resource nationalism and new mining taxes are a cause for concern.





"I think for virtually every jurisdiction there is a feeling that things are getting worse, as opposed to better," said Fred McMahon, co-author of the report.





Read the full article here.

 

[Ally]

Bull sale an economic weathervane





Forget what Punxsutawney Phil, Balzac Billy and Staten Island Chuck have to say.




In these parts, it's Belvin X-man 14'10, Remitall F Power 1X and Lorenz Riptide 52W who are the true harbingers of spring -and the best ones to tell us which way the wind is blowing.




While that wind may be a little more rank than what the cute little groundhogs serve up each February, on Wednesday some of Alberta's best bovines are giving a thumb's -make that a pedicured hoof's -up when it comes to the climate of the coming months.




At least, that's what the good humans are translating for me down at the 111th annual Calgary Bull Sale, which winds up later today with feverish bidding on some of the finest bulls on the continent.




Read the full article here.

 

[Ally]

Calgary home sales up for second month in a row







CALGARY - Single-family home sales and average prices were up in February compared with a year ago.




According to the Calgary Real Estate Board, sales in the single-family market hit 1,169 transactions last month for an average sale price of $461,786. In February 2010, there were 1,035 sales for an average price of $458,254.




It was the second consecutive month of year-over-year growth in sales.




However, the condominium market is still experiencing a slowdown in activity. For the 10th consecutive month, year-over-year sales are down. In February, there were 468 condo sales for an average price of $290,145 compared with 536 transactions at $282,880 in February 2010.




Read the full article here.

 

[Ally]

List prices on Calgary homes too high: Expert





CALGARY - Sellers of residential property in Calgary need to adjust their expectations when they list their homes for sale and potential buyers, waiting for a U.S.-style housing crash, won't see it happen, says a leading North American real estate expert.




U.S.-based Steve Harney, who was in Calgary Thursday to speak with CIR realtors, said there is a big disparity in the local market between the average list price and the average sale price.




"What those two things mean is what the average buyer is willing to pay for a house in this market is a different number than what the average seller right now is willing to sell it for," said Harney. "And your sales won't go until the seller starts to realize, because the buyer usually can buy at whatever they can afford to buy, in order to sell their house ... they might have to get somewhat more realistic on their price. Anything in the world is only worth what someone's willing to pay for it."




Read the full article here.

 

[Ally]

Tsuu T'ina chief says he'll meet with his people on S.W. ring road





CALGARY ` The chief of the Tsuu T`ina Nation says he`s willing to go back to the band members to determine whether there is any interest in reopening talks with the province on the southwest ring road.




In a statement released Wednesday, Chief Sandford Big Plume noted that there`s a lot of dissatisfaction with the five routes proposed by the province.




`At the same time, the Tsuu T`ina Nation has a long-term need for increased traffic flow to support future commercial development plans,` he said. `For those reasons, I intend in the near future to meet with Tsuu T`ina people to gauge their willingness to either consider a review of a significantly improved version of the ring road contract that was rejected in 2009, or a new route through Tsuu T`ina that requires less land and has less impact on the Nation.`




Big Plume said he would advise band members not to consider either option unless the province was willing to take legally binding steps to deal with the three areas of concern identified during the last referendum.




Read the full article here.

 

[Ally]

Hillary Clinton 'supportive' of Alberta oil imports, wavers on Keystone XL pipeline




WASHINGTON ` U.S. Secretary of State Hillary Clinton says she is "generally supportive" of increasing American oil imports from Canada, but sidestepped questions Wednesday about whether she backs a controversial new oilsands pipeline from Alberta to Texas.







Clinton, testifying before the Senate appropriations committee, said it would be improper for her to take sides in the debate over Calgary-based TransCanada's Keystone XL project because her department makes the decision on whether to grant a permit for its construction.







"Since my department bears the ultimate responsibility for making a recommendation on the pipeline, I am not able to express an opinion," said Clinton.







Her remarks came in response to questions from South Carolina Republican Senator Lindsey Graham, an prominent oilsands booster who visited Alberta's Fort McMurray last September.





Read the full article here.

 

[Ally]

Mayor urges council to act quickly on downtown arena decision




EDMONTON ` The city could earn more than $6.5 million a year in property taxes, which would help pay off the debt it would incur if it covered one-third of the cost of a downtown arena, city administrators told council Wednesday.




Mayor Stephen Mandel said councillors need to make up their minds to ink or tear up the deal within a month. `It`s enough already. I think we`re going around too many circles and let`s make a decision.`




Chief financial officer Lorna Rosen told council the $6.5 million a year is a conservative estimate, counting the two hotels, retail shops, parking and the casino already proposed for the area. Other projects will come up, she said. Their models suggest the city could take in as much as $350 million in additional tax revenue if it agreed to borrow $125 million under a provincial program called a community revitalization levy.




Under that program, all of the municipal and education taxes from around the arena project would go toward paying off the city`s debt for a period of 20 years. If excess tax dollars were generated, it would go into the general city budget.



Read the full article here.

 

[Ally]

Survey: B.C. lags behind other provinces in attractiveness to mining sector



Fraser Institute: Alberta ranks as world's top mining jurisdiction.





Read the full article here.

 

[Ally]

Calgary mayor's key campaign plan may fail






Four months into his job as Calgary mayor, Naheed Nenshi may have hit his first wall.






The key plank of his election campaign ` Better Idea No. 1, as he called it ` to allow secondary suites in all residential neighbourhoods is on the ropes. And part of the mayor`s proposal likely wouldn`t hold water in court.






Under the city`s current bylaws, homeowners who want secondary suites in single-family neighbourhoods have to go through an onerous and costly land-use-change process.






Nenshi, along with the backing of a city administration report and a handful of aldermen, is proposing the city allow secondary suites in all residential areas provided they meet safety codes, have on-site parking for tenants and the homeowner lives in the home.



Read the full article here.

 

[Ally]

A suite solution for Calgary's affordable housing needs





We have a tremendous opportunity in front of us.




An opportunity to increase the amount of affordable rental housing in our community. An opportunity to enable more people to be homeowners. An opportunity to allow our seniors to age in place, the opportunity to ensure greater health and safety in housing and enhance the vibrancy and character of our existing communities.




All of this with virtually no cost to the average Calgarian.




It seems too good to be true doesn't it? Sadly, it may actually turn out that way.




Read the full article here.

 

[Ally]

No sales tax as long as oil keeps pumping: Snelgrove




Alberta doesn't need to consider a provincial sales tax until oilsands revenues are exhausted, some day far into the future, says Finance Minister Lloyd Snelgrove.




"The people of the day can then decide," Snelgrove said, speaking at the Calgary Chamber of Commerce Monday morning about the new provincial budget.




Other provinces with sales taxes have underperforming economies and carry high debt loads, the minister argued.




"The suggestion that somehow things would be better with a sales tax really doesn't historically hold water," Snelgrove, while speaking to reporters later.



Read the full article here.

 

[Ally]

CNRL guards against runaway costs at Horizon oilsands project




EDMONTON ` Canadian Natural Resources is gearing up for plenty of work at its Horizon upgrader site north of Fort McMurray as Canada`s second-largest energy firm begins to slowly expand the project.




But with an eye on what happened during the 2006-08 boom, when construction costs went through the roof, CNRL plans to keep the work under tight control by dividing it into 46 individual projects, stopping or delaying them if costs start to soar again.




The firm will have a maximum of 5,500 workers on-site at one time ` compared to the 10,000 during phase one ` and won`t be on the hook for more than $2.5 billion of work at one time. It plans to spend $1.2 billion on improvements to Horizon this year.




The approach may not be new in the global oilpatch, `but it will be a different approach for the Fort McMurray area, and it gives us the ability if there is a labour crunch or if costs takeoff that we can just slow down and wait for it to blow over,` president Steve Laut said in an interview.



Read the full article here.

 

[Ally]

Clarity from council proves new arena is a must




It will be one thing if a new arena district is rejected because the Katz Group isn't willing to pay its fair share or the private company fails to come up with an outstanding design that will actually give Edmonton's downtown a much-needed boost.




However, if the deal and the design are strong, yet the arena project still fails because of misinformation and half-truths coming from folks who don't care at all about revitalizing our downtown, or actively dislike professional sports, or have an interest in the team staying at Rexall Place, then we all lose.




So, it was with some relief to see a number of city councillors cut through many of the fallacious arguments around the arena in a council meeting on Wednesday. City manager Simon Farbrother and chief financial officer Lorna Rosen were on hand to update council on negotiations with the Katz Group.



Read the full article here.

 

[Ally]

Oilsands loom large for ConocoPhillips





CALGARY - ConocoPhillips Canada will go full-speed ahead on its Alberta in situ oilsands investments this year while choking back spending on its natural gas business and maintaining support for liquids-rich conventional plays.




Joe Marushack, 52, who took over as president last spring after three years in charge of ConocoPhillips' Australian operations, said in an interview with the Calgary Herald this week that recent violence in oil-producing countries around the world makes the Houston-based company's interests in Canada even more precious.




"Right now, you've seen there's turmoil in the Middle East," he said. "This is an example of why energy security is so important to Canada and the U.S.




Read the full article here.

 

[Ally]

Demand increasing for industrial real estate in Calgary





CALGARY - Positive momentum continues to grow within the Calgary industrial real estate market, according to a new report by Avison Young.




"Signals, such as larger longer-term deals, a reduction in unoccupied, recently-completed space, and an overall increase in demand have been witnessed," it said.




And a trend of increasing demand has convinced several developers to bring new product to the market. This new construction will not be available until the end of 2011.




The report said Calgary's industrial market availability is 5.2 per cent (including sublease space) as of the end of 2010. This is up marginally from 5.0 per cent in the previous two quarters, due to two large, single-tenant industrial buildings becoming vacant: Haworth Ltd.'s facility at 10 Smed Lane S.E. and Enerflex Systems Ltd.'s facility at 4700 47th St. S.E.




Read the full article here.

 

[Ally]

Calgary inner-city neighbourhoods form coalition to fight crime





CALGARY - Inner-city communities frustrated with crime, traffic and other downtown problems seeping into their neighbourhoods are building a new coalition to lobby the city.




The group has met once informally and will come together again Wednesday, inviting more than a dozen communities on downtown periphery, including Inglewood, Bridgeland-Riverside, East Village, Eau Claire, Sunnyside and Crescent Heights.




Stephanie Felker, president of the Bridgeland-Riverside Community Association, said Our City Centre Network is still in its infancy, but it could be an important tool in helping inner-city residents deal with issues unique to them.




Read the full article here.