AB Pol Econ

Opening Comments – Alberta’s Recent Economic Transition to FMI Seminar- Alberta’s Economic Horizon, Sutton Place Hotel, Edmonton, Thursday 9 February 2017

11Feb

By albertarecessionwatchNo Comments

Opinion/Research

Opening Comments – Alberta’s Recent Economic Transition to FMI Seminar- Alberta’s Economic Horizon, Sutton Place Hotel, Edmonton, Thursday 9 February 2017

My presentation is concerned with the past five to ten years with a focus on 2012 to 2016. We first begin with the current biggest source of investment and income… This ten-year period shows the magnitude of the oil price fall in real terms since the start of the financial crisis –the dark shaded area. In real terms we are only back to the low point coming out of the financial crisis of 2007-09. [Chart from http://www.macrotrends.net/1369/crude-oil-price-history-chart] I wanted to illustrate the very real consequences of the material decline of oil prices on this and the next slide. The breadth of the recession has also touched Stampede parties hosted which have been scaled back as revenue dropped in the oil and gas sector. An important impact has been the difficult adjustments in t...

25Jan

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Energy

The Donald makes good

Originally posted 25 January 2017 The day before Robbie Burns Day was an especially propitious day for executives at TransCanada Corporation. Two working days into office and the new U.S. President has "delivered" on the promise to revive the Keystone XL pipeline from Hardisty Alberta to Steele City on the border of Nebraska and Kansas. The decision is subject to terms being negotiated with the proponents, presumably to achieve some return to the U.S. Treasury and to U.S. construction and factory workers. Several commentators have noted this negotiation may be similar to the "shake-down" orchestrated by Premier Christy Clark with the Trudeau government's approval of the Kinder-Morgan TransMountain pipeline. (more…)

18Jan

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Residential

Bringing it all back Home- Prospects

Originally posted 18 January 2017 Part 4- Prospects It is always difficult predicting the future at the best of times. In the world of Donald Trump with the high degree of uncertainty about trade agreements, prognostications are even more precarious. In the previous three parts we have studied the effects of employment, corporate and personal income, and mortgage financing on the residential market. Data shows that the market is holding up exceptionally well under the current circumstances. (more…)

10Jan

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Budget

Not a great start to Budget 2017

Opinion On 9 January 2017 at 11:23 a.m. I received an email from the Government of Alberta with a press release entitled "Albertans asked for input into Budget 2017" [News Release]. Puzzled by the contradiction between the desirability of open public consultation on matters of great public interest and these closed door meetings, I hopefully contacted Mike Brown, the Press Secretary for Treasury Board President Joe Ceci, at 12:12 p.m.to learn where the Edmonton event was to be held. As veteran political columnist, Graham Thomson, reported in today's Edmonton Journal (NDP's public consultations look more like public relations, 10 January 2017) he was able to get a response from Brown, albeit unsatisfactorily, on the secret location of the meeting. At the time of writing (6:30 p.m. 11 J...

9Jan

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Residential

Bringing it all back home Part 3

Part 3 Mortgage and Credit availability Next we turn to the financial aspects of the housing markets. If borrowers are experiencing difficulties in meeting their monthly (or weekly) payments, normally they will approach the creditor and seek to negotiate a type of forbearance agreement. This can take many forms such as extending the amortization period or increasing the principal of the loan through an equity take out in order to catch up with interest payments (to pay for daily expenses or to pay down more expensive debt such as credit cards). As the following Chart shows, the chartered banks in Alberta have not slowed down their mortgage (more…)

4Jan

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Real Estate

Bringing it all back home- Part 2

Part 2- Sources of Demand Oil and Gas Economy A key to understanding an economy’s capacity and resilience to sustain demand for a basic “commodity” such as housing is to begin with the key sources of export earnings that Alberta, as an economic unit, receive to support payments for products and services produced inside and outside Alberta. (more…)

3Jan

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Residential

Bringing it all back home

Throughout 2016, there has been a nagging question mark at the back of my mind about the state of Alberta’s residential real estate market. Why has this market held up so well when the economy has suffered two years of recession? After 18 months of economic contraction, residential real estate has not cratered and housing starts, though at reduced levels, are still fairly strong at about 2,000 units per month. This series investigates firstly whether there is a “crisis” in the residential market, secondly what are the drivers of residential prices; thirdly the financial sources of supply for the housing market, and finally the prospects for 2017. (more…)

13Dec

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Opinion/Research

Economic Diversification

In October, I wrote a column for Alberta Council of Technologies concerning diversification. [Tech Notes] In posts covering the Economic Outlook 2017 put on by the Economics Society of Northern Alberta, a summary of the panel on economic diversification was provided. The debate, in essence, pitted Gil McGowan who supports more government intervention to foster more value-added, commodity-based production with economist Trevor Tombe and Canada West Foundation CEO, Martha Hall Findlay, who judge that the market is the best to allocate capital. My column sketched the "inglorious history" of economic diversification in this province. The Don Getty years were perhaps the height of poor investments but Peter Lougheed's Heritage Fund investments in Prince Rupert, Vencap Equities, and support ...

9Dec

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Economic Data

Economic Outlook 2017

At the 2017 Economics Society of Northern Alberta Outlook conference held on 8 December at the Chateau Lacombe, Associate Professor of Political Science, Greg Anderson spoke to the possible impact on Alberta from the election of Donald Trump. (Anderson is a specialist in U.S.-Canadian relations.) His talk "The (Dis)United States of America and POTUS 2016"- placed the election results in the broader context of global events such as the Brexit vote and immigration crisis in Europe. (POTUS stands for President of the United States.) In observing that filmmaker Michael Moore predicted Trump's victory in Michigan (a state that Moore is quite familiar with), Anderson recounted the shock and paralysis of the Clinton camp on election night. Trump was much better at tapping into the grim economi...

8Dec

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Uncategorized

Economic Outlook 2017

On 8th December 2016, the Economics Society of Northern Alberta hosted their annual 2017 economic Outlook conference. The Association pulled together a list of eminent economists, a political scientist, and keynote speaker the environmentalist Avi Lewis. This post will summarize presentations of some speakers with a subsequent post covering the remaining speakers. The first speaker was Dr. Avery Shenfeld, chief Economist of CIBC who provided a global outlook. Shenfeld observed that the “new normal” growth rate for western industrial economy is now 2% rather than 3%. In Europe he noted that the Greek crisis is not over and that there uncertainty concerning the restructuring of Italian banks. With respect to Brexit he acknowledged that UK- Europe trade is very significant and felt that the...