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September 2015 Economic Fundamentals

Ally

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Alberta could see public-sector job losses unless oil industry gains momentum. That should get Gov't attention

Public sector jobs in Edmonton will be at risk if oil prices don’t find stability above $50 US through the next two years, warns the City of Edmonton’s chief economist.

“If we see oil prices continue to bounce between $40 and $50 a barrel, we will get through 2015, but 2016 and 2017 will be much more problematic,” John Rose said in an interview.

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Stantec Tower in Edmonton set to be Canada's tallest tower outside Toronto

The Stantec Tower under construction in the downtown Ice District has quietly grown to 66 storeys from 62, making it a 251-metre-high behemoth that will be Canada’s seventh-highest skyscraper.

“Just having the Stantec building at 62 storeys was a huge coup for Edmonton,” Downtown Business Association executive director Jim Taylor said Tuesday.

“If you now tell me that this building is going to surpass anything in Calgary, anything outside Toronto in Canada … this is putting Edmonton on the map as far as the country is concerned, as far as the continent is concerned.”

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OPEC expects crude to make gradual climb to $80 per barrel over next 5 years

OPEC is assuming the oil price will rise gradually to $80 a barrel in 2020 as supply growth outside the group weakens, a slower recovery than several member nations have said they need.

The average selling price of the Organization of Petroleum Exporting Countries’ crude will increase by about $5 annually to 2020 from $55 this year, according to an internal research report from the group seen by Bloomberg News. Iran and Venezuela said they would like to see a price of at least $70 this month and most member countries cannot balance their budgets at current prices.

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Nexen Energy's Long Lake oilsands facility resumes full output

CALGARY — Nexen Energy, a wholly owned subsidiary of China’s CNOOC Ltd, said on Thursday it has resumed full production at its Long Lake oilsands and upgrader facility in northern Alberta after regulators amended a pipeline suspension order.

The Alberta Energy Regulator last month ordered Nexen to shut in 95 pipelines at the Long Lake facility as part of an investigation into one of the largest oil-related pipeline spills on North American soil, discovered in July.

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Cautious outlook for Calgary's resale housing market

For those actively shopping Calgary’s resale housing market or those thinking about testing the water, there’s no need to make a hasty decision.

The vibes in the current oil price-splattered marketplace would suggest there is little urgency to make what, for many, will be their biggest financial decision.

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Condo tower with no traditional parking sells 90% of units in five days

The N3 project, to be located near the historic St. Louis Hotel along 8 Ave. S.E., and 4 St., is being developed by Knightsbridge Homes, of Calgary, and Metropia, of Toronto, with an expected occupancy of summer of 2017. The average price of available units is $260,000.

According to Altus Group, a real estate research company, 1,430 new Calgary condos sold in the first half of this year, compared with 2,758 for the same period in 2014.

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Alberta is an environmental leader, not an embarrassing cousin (with poll)

Many Albertans were rightfully insulted when Premier Rachel Notley described Alberta to a Global TV news reporter as the “embarrassing cousin that no one wants to talk about.”

The backlash was so strong and immediate, that the premier later made a point of speaking with media and explaining that her comments weren’t about Alberta or Albertans generally, but rather, they were about Alberta’s poor environmental performance.

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Alberta forest products sector has a lot on its mind

The mountain pine beetle is “Item 1” among issues of concern to the industry, Whittaker said, adding the pine-tree killing insect poses a threat that is “real and not going away.”

“We have some significant challenges in places like Jasper National Park, where it’s spreading and it’s difficult to eradicate,” Whittaker said. “We know what happened in British Columbia — we can see what happened. Our forest-fire season this year will look like a drop in the bucket if the pine beetle works its way through Alberta as it has through British Columbia, with giant stands of dead trees just waiting to catch fire.

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Alberta economy to contract more than expected this year

In its new Provincial Outlook, the bank said that due to “deteriorating conditions over the summer” Alberta’s economy is now expected to contract by 1.3 per cent in 2015 compared to the June forecast of a one per cent drop in real gross domestic product.

The report said the provincial economy is expected to return to positive territory in 2016 with 0.6 per cent growth.

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Todd Hirsch says Alberta's economy could recover in 2016

The worst of the economic downturn could soon be over for Alberta's energy sector, according to the chief economist at ATB Financial.

There are signs the province will rebound enough to see modest growth by the second half of 2016, Todd Hirsch said on the Calgary Eyeopener Monday ahead of his address to the 2016 Economic Outlook presented by Calgary Economic Development and ATB Financial at the BMO Centre.

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Big changes coming to Whyte Avenue in Edmonton. Is this a continued sign of renewal and confidence that the market will rebound despite low oil prices?

Calgary-based Wexford Developments unveiled plans Tuesday to build the 132,000-square-foot Raymond Block on Whyte at 105th Street.

The name is a nod to the Raymond Hotel that occupied the site in the 1900s, but most Edmontonians know the parcel as a contaminated brownfield owned by Imperial Oil that underwent nearly 20 years of environmental remediation to clean up leakage from underground tanks after an Esso gas station closed in 1998.

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Halliburton to cut management layers in North America as oil bust continues

Halliburton Co., the world’s second-largest oilfield services provider, told employees that more jobs are being cut in North America, the region hardest hit by the yearlong crude crash.

The Houston-based company, which generates nearly half its sales in the U.S. and Canada, will “flatten the North America business by eliminating multiple layers of management,” President Jeff Miller wrote in a memo sent to employees Monday. Emily Mir, a spokeswoman at Halliburton, confirmed the memo Wednesday in an e-mail. She declined to specify the total number of additional jobs to be cut.

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Imperial Oil able to cut spending on operations due to supplier cost drops

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Slower commercial property sales in Calgary due to drop in oil price

In much of Western Canada, the fall in oil prices has led to slower activity in commercial property markets in the first half of 2015, says a report released Thursday by RE/MAX.

The report said the impact of the drop in oil prices was felt most strongly in Edmonton and Calgary.

“In Edmonton, the total number of commercial and land sales was down nine per cent year-over-year in the first half of 2015. The overall value of those sales was down 13 per cent, dipping below $1 billion at half-year for the first time in three years. In Calgary, the downtown office market experienced the greatest impact from downsizing in the energy sector. Average net rents decreased approximately 19 per cent year-over-year; the average vacancy rate of all classes was approximately 13 per cent,” said the report.

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Alberta the only province to see year-over-year drop in wages

Alberta was the only province to see wages drop from year-ago levels in July, Statistics Canada said Thursday.

It said average weekly earnings for non-farm payroll employees were $1,140.56 in July — still the highest in Canada but down 0.6 per cent from June and 1.2 per cent from July 2014.

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Alberta, still growing in population thus supporting housing market from dramatic downward effect so far

Alberta might be in recession, but that hasn’t stopped thousands of Canadians from moving here.

Between April and June of this year, a total of 31,293 people arrived in Alberta from other provinces. At the same time, 23,029 packed up and left for greener pastures elsewhere in Canada. That left a net gain of 8,264 new Albertans, outpacing the average quarterly gain of 7,000 over the last five years.

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Steady prices, little change in local housing market

Braden Batch, a market analyst with Canada Mortgage and Housing Corporation, made a stop in Grande Prairie last week to provide a housing market update.

“Basically, the end of 2014 and into 2015, (we’re) looking at a slower period,” said Batch. “In my presentation today, I was talking about... it’s not the oil prices per say that relates to the Grande Prairie market but it’s more of the performance of the energy industry as a whole. Grande Prairie is not necessarily tied to oil so much as other energy products and that is a pillar of the economy of this town. So when I was looking at how sales actually respond to a change in the oil price, it was tough to really map out and what really came through was how the performance of the energy industry as measured by the S&P Energy Index, so that’s trending pretty closely with the housing resale market right now.”

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Alberta premier tells business leaders energy industry must clean up its act

EDMONTON - The energy industry will be critical to Alberta's economy for many years to come, but it must "clean up its environmental act," the province's premier told business leaders Tuesday night.

In her keynote address to the Alberta Chambers of Commerce, Premier Rachel Notley acknowledged the fiscal challenges facing the province while sounding a note of optimism about its future.

She said her NDP government will work to promote a healthy business climate, noting she will be travelling to New York next week to sell the province as a good bet for investors.

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Alberta premier tells business leaders energy industry must clean up its act

EDMONTON - The energy industry will be critical to Alberta's economy for many years to come, but it must "clean up its environmental act," the province's premier told business leaders Tuesday night.

In her keynote address to the Alberta Chambers of Commerce, Premier Rachel Notley acknowledged the fiscal challenges facing the province while sounding a note of optimism about its future.

She said her NDP government will work to promote a healthy business climate, noting she will be travelling to New York next week to sell the province as a good bet for investors.


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House prices could see year-over-year gains in Calgary

Senior economist Robin Wiebe, in the board’s metro resale snapshot, forecasts prices will rise as much as 2.9 per cent. His seasonally adjusted annual MLS sales rate, as of August, is 24,900 — down 4.2 per cent from last month and 31.2 per cent from a year ago.

Calgary Real Estate Board data show year-to-date MLS sales, through Sunday, are down about 26 per cent from a year ago, at 15,123 transactions. New listings have dropped by eight per cent, to 27,197, while the average sale price is down two per cent at $471,733.

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