AB Pol Econ

Alberta Finance Minister releases First Quarter Update

25Aug

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Uncategorized

Alberta Finance Minister releases First Quarter Update

On 23 August, Joe Ceci, Treasury Board President and Finance Minister released the provincial government's first scorecard on its April budget. The First Quarter Fiscal Update detailed the financial implications of the Fort McMurray wildfire. However, the net impact of the fire, after estimated federal assistance, is minimal in a financial sense but not a human one. A key concern for provincial fiscal planners will be the pace of rebuilding in the Wood Buffalo area and projected rise in employment in this area. The practice of updating the public on the province's fiscal situation goes back to the mid-1990s when then Treasurer Jim Dinning brought in a batch of fiscal rules to consolidate financial reporting and to mandate firm deadlines for budget updates and financial reports. Reve...

18Aug

By albertarecessionwatchNo Comments

Commercial

Office Property in Alberta

Originally posted 18 August 2016 Update of Dream Office REIT The below news article from Andrew Willis of The Globe and Mail signals the expectation that contrarian investment fund Slate Asset management will purchase a significant portion or all of its Alberta properties. Dream last year wrote down a very significant portion of its 45 properties. As the report records, two very different views on Alberta real estate are destined to converge as Dream exits the market and Slate takes a much longer view. (more…)

18Aug

By albertarecessionwatchNo Comments

Bankruptcies

Update on personal bankruptcies

Originally posted 18 August 2016 Equifax Canada, one of Canada's largest consumer debt rating monitoring firms, released today (18 August) information about average debt and delinquency rates by age categories, major city, and provincial breakdowns. In Calgary, the average debt level (excluding mortgages) was the highest in Canada at $28,572 up by only 1.2 per cent year-over-year. This was, significantly, the smallest increase in Canadian cities. Calgary's delinquency rate at 1.1 per cent was the same as the average Canadian delinquency rate. The delinquency rate for Calgary rose by 32.2. per cent year over year, the second fastest in the country. (more…)

18Aug

By albertarecessionwatchNo Comments

Opinion/Research

Ontario vs. Alberta

A recent Globe and Mail piece (14 August 2016) uncovered an analysis prepared for Labour Minister MaryAnn Mihychuk in February 2016 contrasting the seriousness of the 2008-09 auto bailout with Alberta's current economic and financial woes. The analysis compared unemployment rates in Ontario's manufacturing sector with Alberta's oilpatch. Alberta's unemployment rate in the oil sector rose from 2.9 per cent in 2011 to 7.9 per cent in 2015, whereas Ontario's manufacturing sector unemployment rate rose to 21.9 per cent in 2009 from 8.4 per cent in 2007. The article acknowledged that unemployment in the oil patch remains high and the general unemployment is at its highest in 22 years. A Western University economics professor is cited as saying that another reason for the auto bailo...

Electricity De-Regulation and the "Enron clause"

16Aug

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Energy

Electricity De-Regulation and the "Enron clause"

Originally posted 16 August 2016 The de-regulation of electricity markets was a cornerstone policy of the Klein years. Recently the government has commenced legal proceedings to roll back a clause in the Power Purchase Agreements (PPAs) known as the “Enron clause.” (more…)

8Aug

By albertarecessionwatchNo Comments

Energy

The de-regulation of electricity markets was a cornerstone policy of the Klein years. Recently the government has commenced legal proceedings to roll back a clause in the Power Purchase Agreements (PPAs) known as the “Enron clause.” It is perhaps under-stating the case that electricity de-regulation in Alberta is “complex”. Historically, electricity rates for both retail and commercial customers were set by the Alberta Utilities Board who determined what rate of return the electricity provider would receive. Underlying regulation was a concept that electricity was central to the well-being of citizens and business enterprises and a stable market supplying electricity was in the public interest. This attitude shifted during the 1980s with the Thatcher reforms in Britain’s electricity and...

21Jul

By albertarecessionwatchNo Comments

Retail sales

Retail Sales

Originally posted 21 July 2016 Consumer spending is an integral part of the economy. Usually retail sales constitute about 50-70 per cent of an economy. Alberta, with its high level of capital investment, generally would rely less on consumer spending. That said, Albertans are still the highest per capita consumers in Canada, with an appetite for big trucks and dining out. At least up until the current recession. As would be expected consumer spending has softened over the past couple of years.

12Jul

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Energy

Originally posted 12 July 2016 Energy drives politics in Alberta. Since the early days of the twentieth century when natural gas (1911) and oil (1914) was discovered in the Turner Valley, the politics of Alberta have been influenced by the growing wealth of the oil and gas sector. Three pillars of the Calgary establishment- Sir James Lougheed, R.B. Bennett and W.H. McLaws - created the Calgary Stock Exchange in 1913. Like so many Alberta financial stories, the stock exchange grew by leaps and bounds until its building was foreclosed upon. While Alberta's premiers have not come directly from the oil patch, premiers ignore the oil patch at their peril. (more…)

11Jul

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Health

Health care policy and delivery cost Alberta taxpayers about $20 billion per year or roughly 40 per cent of the province's operating budget. The NDP government has maintained funding in the system but now efforts are underway to identify ways of streamlining the system. A Primary Care Network Review by Alberta Health identified a number of troubles, some of which the Auditor General had noted in earlier reports. Of concern is the high ratio of physicians to health staff that weakens the rationale for multi-member teams. (more…)

Alberta Treasury Branches (ATB Financial)

28Jun

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ATB

Alberta Treasury Branches (ATB Financial)

2016-17 First Quarter Financial Results Originally posted 28 June 2016 Given the dreary news coming out of the commercial real estate market in Alberta this week, ATB's earnings were a surprise on the upside. ATB earned $25 million which represented nearly Budget 2016's full year estimate of earnings ($27 million) predicted on April 14th. The optimistic news in ATB's first quarter report contrasts starkly with news from commercial real estate REIT, Dream Office, that wrote down 45 per cent of its Alberta office portfolio. [See Commercial Real Estate for more details.] (more…)