November 2007 Market Research

[BMironov]

Statistics Canada:Labour Force Survey (Nov 2, 2007)
http://www.statcan.ca/english/Subjects/Labour/LFS/lfs-en.htm

QUOTE Employment continued to rise in October, jumping an estimated 63,000, split between full and part time. At the same time, the unemployment rate fell to a 33-year low of 5.8%, down 0.1 of a percentage point from September.

Employment has increased 2.1% (+346,000) so far in 2007, the strongest January-to-October growth in the past five years. October`s employment rate reached an all-time high of 63.7%.

• Employment growth continues to be driven by service sector
  In October, service sector employment grew by 66,000, boosting its growth in the last 12 months to 3.2%. According to the most recent statistics, the gross domestic product of the service sector grew 3.2% in 12 months, compared with a growth rate of 0.8% for the goods-producing sector.
• Back-to-back gains in Ontario
  After slow growth throughout most of 2007, employment grew strongly in Ontario for the second consecutive month, up 32,000 in October, mainly in part time. So far in 2007, employment in Ontario has risen an estimated 1.7%, still below the national average of 2.1%.Strong labour market across the West
  In Manitoba, employment grew 0.6% (+3,600) in October, bringing the increase since the start of 2007 to 2.5%. In October, Manitoba`s employment rate reached an all-time high of 66.8%. The province also had the second lowest unemployment rate in Canada (4.0%).
  
  Although employment in British Columbia showed little change in October, it has grown 2.4% since the start of 2007, mainly due to strong growth in trade. In October, the unemployment rate in the province stood at 4.4%, among the lowest rates in Canada.
  
  Alberta`s employment was little changed in October. However, the province continued to have the lowest unemployment rate in the country, at 3.4%, as well as Canada`s highest employment rate (71.5%).Older workers lead the way
  Employment increased by 32,000 among people 55 and over, with the gains distributed equally between men and women. So far in 2007, employment among this group has grown 6.9%, a much faster pace than that for core-age workers 25 to 54 years of age (+1.2%).

Extra graphs and data available at:
http://www.statcan.ca/english/freepub/71-0...-XIE2007010.pdf

 

[BMironov]

If you prefer newspaper format...
Globe and Mail:
Jobless rate hits 33-year low (Nov 2, 2007)
http://www.reportonbusiness.com/servlet/st...ry/robNews/home

This link has intersctive map of Canada with unemployment rates in CMAs.

QUOTE Canadian employers created a much greater-than-expected 63,000 positions last month, sending the jobless rate to a 33-year low.

The nation`s unemployment rate fell a notch to 5.8 per cent, while the employment rate hit a record 63.7 per cent, Statistics Canada said Friday.

Economists had expected a jobless rate of 5.9 per cent and just 12,000 new jobs in the month.

Employment so far this year has been the strongest in five years, climbing 2.1 per cent, amid high commodity prices, a strong housing market and sturdy trade.

 

[BMironov]

Globe and Mail:Canadian units of Detroit Three gain ground (Nov 2, 2007)http://www.reportonbusiness.com/servlet/st...y/Business/home

QUOTE Vehicle sales bounced back in Canada last month from a September slide as the Canadian units of the Detroit Three all gained market share at the expense of manufacturers based in Asia and Europe.

Canadians drove off dealers` lots in 121,237 new vehicles in October, compared with 118,833 a year earlier, up 2 per cent after a drop of about the same amount in September.
...
Chrysler Canada Inc., Ford Motor Co. of Canada Ltd. and General Motors of Canada Ltd. all outperformed the market for the first time in several years. GM led the way among the three with a 13-per-cent rise, while Ford`s sales climbed 6 per cent and Chrysler posted a 3-per-cent gain.
...
The October increase also appears to indicate that the supposed flood of Canadians buying vehicles in the United States due to the high Canadian dollar and lower U.S. prices is less than a trickle, Mr. DesRosiers said.

 

[BMironov]

Globe and Mail:Jobs boom leaves some behind (Nov 1, 2007)
http://www.reportonbusiness.com/servlet/st...y/Business/home

QUOTE In the two years since Ms. Schroeder`s first layoff from Ford, 140,000 jobs were lost from the Canadian manufacturing sector.

But during the same period, 714,000 net jobs were added to the work force, according to data from Toronto Dominion Bank.

"It`s not a western phenomena limited to workers shortages in oil booms. The labour market across the country is quite tight.

"What`s more, the bulk of that is coming in sectors that are going to create full-time jobs and good pay," said Craig Alexander, the bank`s deputy chief economist.

Mr. Alexander said that contrary to popular opinion, those jobs aren`t all in the oil patch, nor are they primarily for unskilled workers.

In fact, 400,000 of the new jobs created in Canada in the two-year period starting in September 2005 were in areas including finance, real estate, health care and public administration, all of which offer strong career prospects.
...
"What we`re seeing is a real dichotomy in terms of the Canadian labour market. At the same time that manufacturing has lost 60,000 jobs in Ontario since 2002, we also have a time when the unemployment rate has fallen to a generational low."

 

[BMironov]

Toronto Star:Chrysler layoffs cue cries for help (Nov 2, 2007)http://www.wheels.ca/article/32573QUOTE Earlier in the day, Chrysler announced the elimination of five shifts, four models and more than 8,500 production jobs at its North American operations because of falling demand. Among the moves, Chrysler will cancel production of the Magnum and Pacifica wagons in Brampton and Windsor, respectively.The 1,100 Brampton layoffs will probably start in February. Workers with up to 10 years of service could lose their jobs.
The loss of the Pacifica will affect at least 200 jobs in Windsor later this month, but it won`t result in a loss of a third shift because the plant has just launched a new generation of minivan and will start producing a model for Volkswagen next year.
...
Local union officials expressed shock at Chrysler`s decision because they believed the loss of the Magnum would be offset by recent changes in their contract to reduce costs, by the introduction of the Challenger sports car next year, and by eventual movement of Chrysler 300 production from Austria to Brampton.
...
The company cut a third shift in 2001 but reintroduced it in 2005 when the Chrysler 300 turned into a smash hit.

Attention! Check the side note to the article.

QUOTE WHERE JOBS GO
Recent announcements in Ontario`s auto industry.
Closings

GM

Oshawa truck plant, 1,200 jobs, January 2008

Consolidation of two Oshawa car plants, 3,600 jobs, November 2008

Ford

St. Thomas car plant, one shift of 900 jobs, April 2007

Windsor engine casting plant, 450 jobs, May 2007

Chrysler

Brampton assembly plant, 1,100 jobs, early 2008

Openings

Toyota

Woodstock SUV plant, 2,000 jobs, 2008

Honda

Alliston engine plant, 340 jobs, early 2008

 

[BMironov]

Financial Post:U.S. job growth leaps above forecasts (Nov 2, 2007)
http://www.canada.com/nationalpost/financi...9c4&k=30887

QUOTE U.S. job growth smashed expectations on Friday morning, as the 166,000 new jobs created in October came in almost double the 85,000 predicted by economists.

The job gains occurred in professional and business services, health care, and leisure and hospitality, said the Bureau of Labor Statistics.

 

[BMironov]

Financial Post:Exxon plans to drill second well off Nfld. (Nov 2, 2007)
http://www.canada.com/nationalpost/financi...f9-2fbe6defe40f

QUOTE Exxon Mobil Corp. said yesterday it will drill a second deepwater well in the Orphan Basin in Newfoundland`s offshore next year, though it stayed tight-lipped about the results of the first well, the US$200-million Great Barasway.
...
Exxon Mobil and partners Chevron Corp., Imperial Oil Ltd. and Royal Dutch Shell PLC put on hold this spring further drilling plans for the uncharted area in rough waters 390 kilometres northeast of St. John`s after Great Barasway took months longer to drill and costs escalated to an estimated US$200-million, making it one of the most expensive in the world.

There have been no rumours about whether the oil companies struck oil at Great Barasway. While remote and difficult to operate in, the Orphan Basin is estimated to contain between six and eight billion barrels.
...
Meanwhile, Mr. Hubble said Exxon Mobil Corp. will decide in a year its next step for the proposed $8-billion Kearl oil-sands project in Alberta, where the government significantly boosted royalties last week. The project received regulatory approval in July, 2007.

 

[BMironov]

TD Economics:CANADIAN EMPLOYMENT DELIVERS ANOTHER STUNNING GAIN (Nov 2, 2007)
http://www.td.com/economics/comment/ca110207.pdf

QUOTE

• 63k net new jobs created

• Unemployment rate falls to 5.8%

We’ve run out of superlatives to describe the Canadian labour market performance. 63,000 net new jobs were created in October, driving the national unemployment rate down to yet another 33-year low of 5.8%.

To be honest, the results are a bit of puzzle. There is a considerable dichotomy between the employment gains and recent economic activity data. Firms are ramping up staff, but economic growth appears to be headed for a modest gain of an annualized 2.5% in the third quarter of 2007. Unless productivity has ceased to exist, something does not add up. This leads to the conclusion that one of two things is bound to happen in the months ahead. Either employment growth is going to slow remarkably fast or forecasters, such as ourselves, have completely misjudged the underlying strength in the economy.

 

[BMironov]

CIBC World Markets:Raise a Glass to a "Healthy" Canadian Jobs Gain (Nov 2, 2007)
http://research.cibcwm.com/economic_public...oad/labourc.pdf

QUOTE Raise a glass to a "healthy" Canadian labour market, because that`s where the new hiring is coming, in health and other elements of the broad public sector. October`s consensus walloping 63,000 net addition to employment was led by a 38K advance in the public sector, where employment is up nearly 5% from a year ago. Some of that was attributable to temporary jobs associated with administering the Ontario election held that week. Private sector paid jobs are coming at a muted pace that is much more in line with the moderate performance of real GDP, with 6.5K new jobs in October running close to the yearto-date monthly average. The tip towards part-time and self-employed jobs this month took CIBC World Market`s Employment Quality Index down a few notches this month, but is still the second best reading for 2007.

While one might quibble about this month`s hiring mix, a job is a job, and labour markets are tight. A new multi-decade low unemployment rate of 5.8% might be exaggerated to the downside by the Ontario election workers, and by a jump in self-employed positions that may have included those still looking for paid full-time postings. Self-employment is up 6.7% in the past year. But October saw a third straight year-on-year wage gain of over 4%. We may be bemoaning the softness in private sector hiring, but at the same time, there just aren`t that many workers left to hire.

There will, nonetheless, be more manufacturing workers looking for something else to do as the strong C$ continues to bite. October saw only a marginal drop in the factory sector, but its headcount has dropped 3% in the past 12 months. Construction employment was close to flat, but is still nearly 6% above the year ago level amidst a solid housing market. In the service sector, 29K new health care jobs and 20K jobs in public administration led the way, with private sector gains in trade and finance offset by decline in other business services and hospitality.

 

[BMironov]

Globe and Mail:Does Canada have the stomach to fix forestry? (Nov 5, 2007)
http://www.reportonbusiness.com/servlet/st.../robAgenda/home

QUOTE Forest products remains one of the most important industries in Canada, employing more than one million people in towns, villages and major cities from Vancouver Island to Newfoundland. It`s also an industry in deep crisis. And at its core, this crisis is self-inflicted.

On June 21, in an act of unmitigated folly, about 7,500 members of the United Steelworkers of America (USA), which represents forest industry workers on B.C.`s coast, voted to strike, shutting down most of what`s left of B.C.`s decimated coastal sawmill and logging industry. Three months later members ratified a new three-year contract by a thin 50.7-per-cent majority. The strike cost tens of millions of dollars in lost economic activity in the region.

Why did the Steelworkers decide to strike in the first place? Money didn`t appear to be the issue. And they chose a time when the forest sector is crippled by the strong dollar and weak markets.
...
This senseless strike was based on resistance to changes to long-standing "entitlements." We`ve either been in denial or we are ignorant. Despite plant closings and evidence of the industry`s decline and inability to reinvest in itself, unions continue their fight to keep what they`ve won through 40 years of collective bargaining. By and large, management continues to give them what they want to keep the machines running. There`s no justification for restrictive work practices and expensive perks. The impact is the highest labour costs in the world and handcuffs on every manager in the industry.

Today`s environment features high-technology/low-cost mills in the middle of tree farms in South America, Indonesia, and Scandinavia. The efficiency of the supply chain, product quality, and overall cost structures are superior. We have been losing jobs because Canada`s plants are aging or obsolete. We have not had the capacity to invest in productivity enhancing technology. And the only way for Canada to regain a competitive edge is to invest in modernization.
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A bold reform to our system of Crown lands is urgent. Provinces will have to reform their system of Crown lands to provide certainty of fibre flows, access and costs. That could mean privatizing land or offering a 99-year lease. From an investment perspective, fibre cost and access certainty is vital. Municipalities will have to step up. In one-industry towns, the sawmill, pulp or paper mill is the largest source of revenue. Until the early `90s, the mill was expected to pay - and could afford - a disproportionate share of property taxes. In most mill towns in rural Canada, the mills actually subsidize residential property taxes. So, when a mill closes, not only do its workers leave, but the town often can`t afford to maintain services and infrastructure. Multiply that and spread it across the country. The social and economic impact to Canada has been incalculable.

 

[BMironov]

Globe and Mail:UAW deal puts St. Thomas Ford plant at greater risk (Nov 6, 2007)
http://www.reportonbusiness.com/servlet/st...y/Business/home

QUOTE The threat to the future of a Ford Motor Co. assembly plant near London, Ont. — and its more than 1,000 jobs — has grown with a new labour agreement the auto maker has reached with the United Auto Workers.

Under terms of the contract listed on the UAW website Monday, Ford has agreed to allocate new vehicles to all its U.S. plants that were on the endangered list. Those promises increase the size of the bull`s eye on Ford`s St. Thomas assembly plant, which is making antiquated gas guzzlers called the Ford Crown Victoria and Mercury Grand Marquis, vehicles expected to be phased out by 2009 or 2010.

While Ford has agreed to allocate new vehicles to six assembly plants that were at risk of closing, the company still needs to reduce its assembly capacity in North America, said Erick Merkle, vice-president of auto industry forecasting for IRN Inc. in Grand Rapids, Mich."St. Thomas? That doesn`t look good. I think St. Thomas will be eventually phased out," Mr. Merkle said.

There aren`t enough new products in Ford`s portfolio to add one to St. Thomas, he said, noting that Ford lacks the money to invest the more than $1-billion that would likely be needed to bring the plant up to 21st century manufacturing standards.

 

[BMironov]

Toronto Real Estate Board:
[bBest October ever pushes 2007 toward a strong finish[/b] (Nov 5, 2007)
http://www.torontorealestateboard.com/cons...07/nr110507.htm

QUOTE With 7,915 transactions, activity was up 10 per cent over the previous best for the month, set in 2003. Sales were also up 15 per cent over last October.

October`s strong performance has pushed year-to-date activity 12 per cent ahead of last year.

"There is every indication that 2007 will be a banner year for resale housing activity in the Greater Toronto Area," said Ms. O`Neill. "The effects of the City of Toronto`s new land transfer tax will definitely be felt in 2008 but we are also confident that consumers will
continue to see the value of real estate as a solid long-term investment."

Prices also rose in October to an average of $394,646, a four per cent increase over the previous month.

In Pickering (E13), overall activity was up 34 per cent, led by strong detached sales and a doubling of condominium apartment transactions.

Willowdale (C07) experienced the same combination of strong detached sales and sizeable condominium apartment transactions, which led to a 67 per cent increase in overall sales. Condominium apartment sales also pushed the South Humber area (W07) to a 60 per
cent overall increase in activity.

In Central Richmond Hill (N04), a combination of detached sales and attached/row-house sales, contributed to an overall increase of 54 per cent.

Map of resale house prices in October 2007:
http://www3.thestar.com/static/PDF/071106_resale_house.pdf

 

[BMironov]

Statistics Canada:Building permits (September 2007) (Nov 6, 2007)
http://www.statcan.ca/Daily/English/071106/d071106.pdf

QUOTE The value of building permits slipped slightly in September—although they were still well above $6 billion—as gains in the residential sector were more than offset by declines in non-residential intentions.

Municipalities issued building permits worth $6.2 billion in September, down 1.7% from $6.3 billion in August. Intentions peaked at $6.9 billion in May and June. This strength during recent months indicates that construction sites should remain busy in the coming months.

Non-residential permits declined 8.6% to $2.2 billion, the lowest level over the last five months. The non-residential level was almost $1.0 billion below its peak in May 2007. The industrial and institutional components experienced double-digit decreases, while the commercial component remained virtually unchanged.

In contrast, intentions in the residential sector climbed 2.6% to $4.0 billion. This ranked as the second highest monthly value since December 2005, thanks to a fourth gain in five months for the single-family component.

The total value of building permits reached $18.7 billion between July and September, down 4.1% from the second quarter of 2007. This was the second highest quarterly level on record for the total value.

The quarterly growth in residential value of 2.1% was not enough to offset a 13.0% loss in non-residential intentions.

• Housing sector: Single-family reaches a record high
• Non-residential sector: Western Canada pulls down the numbers Metropolitan areas: Toronto leads the pack

Totals (2007 YTD over 2006 YTD):
Canada: +15.2% ($-value)
Residential: +11.3%
Non-residential: +21.7%

Alberta: +19.5%
Residential: +15.9%
Non-residential: +25.0%

British Columbia: +14.5%
Residential: +16.4%
Non-residential: +10.7%

Ontario: +14.8%
Residential: +4.4%
Non-residential: +31.9%

 

[BMironov]

Financial Post:Bank of Canada likely holding line on rates (Nov 6, 2007)
http://www.canada.com/nationalpost/financi...e74&k=31951

QUOTE Bank of Canada deputy governor Paul Jenkins is set to confirm on Tuesday that the central bank has no intention of changing its overnight target rate, even as the Canadian dollar touched a new high in morning trading.

In a passage from a speech prepared for delivery to the Canadian Association of New York, Mr. Jenkins is set to say, "...the current level of the target for the overnight rate is consistent with achieving the inflation target over the medium term."

 

[BMironov]

Prince George Citizen:Energy project clears regulatory hurdle (Nov 7, 2007)
http://www.princegeorgecitizen.com/index.p...&Itemid=557

QUOTE Mackenzie Green Energy has been issued an environmental certificate for its wood-fired energy plant by the province, another hurdle in getting the $200-million to $250-million project off the ground.

The B.C. Ministry of Environment made the announcement on Tuesday.

The 59 megawatt project proposed in Mackenzie, 175 kilometres north of Prince George, is a partnership between Alberta-based Pristine Power, Harbert Power LLC and Vancouver- based Balanced Power.

Despite financial troubles that have hit Pope & Talbot and a slumping lumber market, the partnership remains bullish on the project. The project will rely on wood waste from Pope & Talbot`s pulp mill that originates from Canfor`s sawmill in Mackenzie. Financially-troubled Pope & Talbot is under bankruptcy protection in Canada, and Canfor is in the midst of taking a spate of temporary sawmill shutdowns in northern B.C.
...
She said they also don`t have any concerns with the lumber sector -- nor specifically with Canfor`s challenges -- as they believe the wood fibre basket in the Mackenzie area is very strong in the long term. Canfor had considered shutting down its Mackenzie sawmills indefinitely this summer, but pulled back and now operates the facility at a reduce level. Canfor has lost nearly $124 million this year, a result of poor lumber markets and a rising Canadian dollar.

Green Energy already has a purchase agreement in place with B.C. Hydro for the power, and has secured the majority of the fibre needed through its agreement with Pope & Talbot.
...
The project is expected to be start construction in early 2008 and be complete by December of 2009.

The project will create 260 construction jobs and 26 permanent jobs, and provide property taxes of $500,000 to Mackenzie, a forest-based community with a population of about 5,000.

 

[BMironov]

Globe and Mail:China sends loonie flying above $1.10 (Nov 7, 2007)
http://www.reportonbusiness.com/servlet/st...y/Business/home

QUOTE China`s move to diversify its $1.43-trillion (U.S.) in foreign reserves caused a collapse in the U.S. dollar Wednesday and sent the Canadian currency hurtling over the $1.10 mark.

The loonie soared to $1.1024, up almost two full cents from Tuesday`s record close of $1.0852. The currency`s astonishing gains over the past year are the largest in its history.

The latest jump came as the greenback fell the most since September against the currencies of its six biggest trading partners, according to Bloomberg. That, in turn, sent oil prices above $98 a barrel and gold surging above $845 — making Canada`s commodity-linked currency all the more attractive.
...
The move came one day after another huge move in the loonie, this time sparked by Bank of Canada comments that suggest interest rates won`t be cut. Deputy Governor Paul Jenkins also refrained from expressing much concern about the currency`s appreciation.
...
Wednesday`s turbulence in global currency markets comes as the European Central Bank and Bank of England decide on interest rates. Both are expected to remain on hold.

China delivered a one-two punch to the dollar as a top lawmaker suggested a bigger role for the euro in its hoard of foreign reserves and a central banker said the dollar is losing its global currency status.

 

[BMironov]

Hamilton Spectator:City OKs plant that will recycle computer parts (Nov 7, 2007)
http://www.thespec.com/News/Local/article/277938

QUOTE The city is giving its nod of approval to a new recycling business in Stoney Creek.
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The company is taking over a building on Millen Road that was damaged in the tornado that hit the city in November 2005.
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As part of its recommendation of approvals to the ministry, the city requires the business to offer up a financial guarantee that it will pay for the cleanup of the site if the operation fails. It also requires that the building upgrade its fire safety plan after an inspection found violations. The operation would have a daily waste limit of five tonnes, limiting the amount of truck traffic to and from the building.

 

[BMironov]

TD Economics:Global Markets: FED STEPS UP TO THE PLATE ONCE AGAIN (Nov 6, 2007)
http://www.td.com/economics/global/gm1107.pdf

QUOTE Market activity was a bit tamer in the period between the Fed’s 50 bps cut in September and the most recent 25bps cut on October 31. Financial market volatility was lower in October, although nowhere near pre-credit crunch levels. In addition, credit spreads narrowed modestly. The combination of these two factors began to push the economic data back into the spotlight. A triumvirate of themes has unfolded. First, we changed our view for the Bank of Canada’s next move in the wake of the October 16 meeting. Second, both the Fed and the Bank of Canada have clarified their relative stance from six weeks ago. Third, the market has not followed suit, especially in the U.S., which has created an interesting divergence between the two.

U.S.: The 75bps Shot in the Arm is Enough
With a good dose of stimulus to buoy markets, the focus can now return to watching economic fundamentals. In the third quarter, GDP rose at a 3.9% annualized pace, helped by consumption, business investment, exports, government spending and non residential construction.
...
The housing market will continue to lead slower economic growth. The housing market has not yet reached a bottom, though we think that it is increasingly drawing near. The deceleration could quicken in early 2008 as teaser rates that were initially used to attract homeowners give way to a wave of higher mortgage rate resets.
...
Another element of concern relates to unearthing which large commercial banks have exposure to the subprime mortgage market. Thus far, the results have not been pretty.
...
But the Fed has proved more than willing to provide the market with a hit of stimulus to revive the economy. The Fed followed up the September 18 rate cut of 50bps with another 25bps rate cut on October 31. In our view, this is where the Fed ends the cycle, with the fed funds rate at 4.5% and the discount rate 5%.

Bank of Canada is in a Tight Spot
Canadian data over the past month has told a fairly consistent story. That is, the Canadian economy remains in good health, and so far, has managed to absorb the downside from the massive 70% rally in the Canadian dollar. The Bank of Canada opted to keep the overnight rate on hold at 4.5% on October 16, which came as little surprise to anyone.
...
There are still a number of risks which complicate the decision making process for the Bank and underpin the decision to stay on hold. The economy is clearly operating well above capacity, but the Bank will probably wait and see how much the strong loonie does the Bank’s heavy lifting in terms of a de facto rate hike.
...
Yet, like expectations for the Fed, the futures market in Canada continues to price in cautious rate cuts by the Bank of Canada.

 

[BMironov]

ScotiaCapital:Real Estate Trends (Nov 7, 2007)
http://www.scotiacapital.com/English/bns_econ/retrends.pdf

QUOTE The Canadian economy is in the midst of an unprecedented post-war construction boom. Adjusted for inflation, spending on construction projects — including residential housing, non-residential buildings and engineering structures such as roads and dams — has increased at an average annual rate of close to 6% since the mid-1990s, almost twice the advance in the overall economy. This momentum has carried into 2007, with outlays rising an annualized 4% through June. The total value of construction investment will surpass the $200 billion mark this year for the first time ever.

The industry’s contribution to the nation’s overall economic wellbeing is disproportionate, especially in recent years with manufacturers pinched by the rapid appreciation in the Canadian dollar and relentless offshore competition. Since 2003, the construction sector has accounted for fully one-quarter of domestic output growth, double its share of the national economy. More than 250,000 construction jobs have been created over this period, or almost 1 in every 5 new positions.

This doesn’t account for the significant indirect benefits. The industry has a powerful multiplier effect because of its large domestic material content, high labour intensity and significant service sector spillovers. The rise in construction jobs in recent years has been matched by strong growth in service industries, including finance, insurance & real estate, professional and management services, and retail sales.

 

[BMironov]

The Star Phoenix:Oilsands estimate tops 1B barrels (Nov 6, 2007)
http://www.canada.com/saskatoonstarphoenix...4e-72e363a3d0d8

Independent evaluation pegs Sask. project`s reserves, exploration company reports

QUOTE The Calgary-based company -- so far alone in exploring Saskatchewan`s potential for oilsands production -- now has independent verification of the size of its bitumen reserve from its Axe Lake exploration project.

Oilsands Quest Inc. reported Monday its independent consultant, McDaniel Associates Consultants Ltd., provided a low estimate of 1.117 billion barrels of "original bitumen in place" from the 36-square-mile area where Oilsands Quest has done extensive drilling during the past 22 months. Original bitumen in place defines the reservoir and does not project an estimate of what percentage of those barrels can be recovered using current oilsands extraction techniques.
...
Company president Christopher Hopkins says the next step is to continue to do in-fill drilling this coming winter in order to gather more information on how best to extract the bitumen and whether the resource in place might even be higher. However, he says the company`s accelerated spending on the project, which will hit $100 million this winter, has shown results.
...
McDaniel Associates also provided both a "best estimate" and a "high estimate" that might be confirmed in the future by more detailed exploration work. The best estimate was for a deposit of 1.34 billion barrels and the high estimate a deposit with 1.55 billion barrels in place.
...
In the future, Hopkins says the company will do drilling outside the existing area because it believes the deposit sits over a wider area than what has been drilled so far. Nevertheless, he says in less than 24 months of operation in Saskatchewan the company has gone from disproving claims that there was no significant oilsands deposits in the province to showing there is such a deposit, comparable to some current oilsands projects now under construction nearby in Alberta.
...
In the wake of the revised royalty structure for both conventional oil and gas and oilsands projects announced by Alberta Premier Ed Stelmach last month, Hopkins says the end result is Saskatchewan now has a slightly more favourable royalty regime in place for oilsands developments.