Resource development has been a major key to Canada’s economic growth and prosperity. In recent years, oil and gas, especially from Alberta, have been primary drivers of the nation’s economy. Historically, expansion of pipeline capacity kept pace with resource development, but increasingly, this is no longer the case. Capacity of existing pipelines serving Alberta is constrained and proposed new pipelines face long delays due to the significant opposition that has impacted their regulatory approval and implementation. The lack of transportation capacity and limited access to coastal refineries and overseas markets also results in a considerable price discount on Western Canada crude oil relative to world oil prices.
Alberta Energy requested that the Van Horne Institute structure and manage a study that answered the following question: Is it feasible to carry bitumen from Fort McMurray, in Northern Alberta to tidewater in Alaska, then from there, to world markets via a combination of purpose-built rail and pipeline? A study released earlier this year by the Van Horne Institute, based at the University of Calgary, suggests that it is.
The study includes:
a conceptual engineering and business case assessment of the railway and oil transport requirements by AECOM
information sharing and solicitation and support from First Nations by Generating for Seven Generations (G7G)
an assessment of mineral volumes and transport revenue potential by the University of Alaska (Fairbanks) and Michigan Tech Research Institute
The proposed railway between Fort McMurray and Delta Junction, Alaska is comprised of 2,440 km of single, standard gauge bi-directional heavy haul track. The track is upgradable to a double track configuration that would add substantial capacity. The study identifies rolling stock equipment and manpower requirements for both a 1.0 million barrel per day (MBPD) and 1.5 MBPD bitumen volume. The bitumen, initially heated in storage tanks in Fort McMurray, would be transferred at Delta Junction in Alaska, to be reheated in additional storage tanks and ultimately transferred to a new pipeline for loading on ships in Valdez, Alaska.
The study recognizes that the proposed railway passes through, or comes in close proximity to, a number of areas that are environmentally protected, support migratory and/or sensitive or endangered species, or are important for wildlife and biodiversity, especially along major river valleys. The Environmental Approval and Permitting process will be extensive and complex and is defined in the study.
The study includes a detailed analysis of capital and operating cost estimates, as well as a business case analysis. The capital cost ranges between $28 and $34 billion for 1.0 MBPD to 1.5 MBPD. The defined route for the railway will create an opportunity to transport to North American and to world markets, mineralization deposits that to date, are locked in. The metallic mineral potential within the 100 mile wide project corridor is estimated to generate in place gross metal values between $333 and $659 billion over 30 years of operation.
Consultation and meaningful involvement and participation of First Nations is essential to the success of this project. Our partners in the project, G7G, made contact with all First Nations leadership and tribes directly affected by the project through information sharing and project presentation meetings.
The Alberta to Alaska Railway Study presents an alternative routing for the transportation of bitumen from Western Canada to world markets. While the timing for the completion of this initiative includes further feasibility analysis, environmental approval and permitting and construction at a significant cost, it is a nation- building project. Transportation is an enabler of any economy and this initiative will unlock the petroleum and mineral potential of the north in both Canada and the United States of America.
Welcome to the VIEWPOINT page. Something new at FACILITYCalgary. VIEWPOINT will be an OP-ED page, authored by Mark Kolke most weeks and by others with guest pieces from time to time - to provide our readers with perspective, opinion and thought provoking ideas in a longer format than news-bytes-light which give information but without room for context. Opinions and feedback are, of course, always welcomed.
Sometimes they'll even be published.
Mark Kolke, Editor/Publisher
FACILITYCalgary considers guest opinion articles on any topic, for the VIEWPOINT page. Articles typically run from 400 to 1,200 words, but submissions of any length will be considered. All submissions must be original, and exclusive to FACILITYCalgary. We will not consider articles that have already been published, in any form, in print or online. Submissions may be sent:
or mail to: FACILITYCalgary/PLANDflex Corporation, Suite 1000, 888 – 3rd Street SW, Calgary, AB T2P 5C5
to see previous articles, just scroll down ↓↓↓↓↓↓↓↓↓↓
June 1, 2016
‘JUST GO’ – by Mark Kolke
“Returning to normal”. “Going back, to how things were” – no evidence anyone anywhere ever experiences those.
Wildfires ravaged them.
90% still standing.
Can we help?
Not equating, but I see parallels between Fort McMurray and New York.
I visited, two months after 9/11. Energy there, that hustle, was palpable. Most memorable, a letter on my hotel bed. From Mayor Rudy Giuliani, saying “thanks for coming back”. It might have been a copy, but it felt like he’d signed a few thousand copies.
My parallel, isn’t that letter, but the value of that visit …
First group of 80,000 displaced Fort McMurray residents, can return starting today.
Massive clean-up, enormous re-build. Stores scrambling restocking groceries, prescriptions and fuel. And garbage bags, brooms and beer. Stuff. Insurance claims.
But, can we help restock their spirit?
Wait a few weeks – once everyone who can has returned, once emergency crews retreat – then book a room, buy a meal, see a site, meet someone – just go!
More than financial supports, benevolent hands of governments and NGO’s, what Fort McMurray needs now is visitors, old friends, new friends, investors, buyers and sellers of every kind, doing business, spending money. Shaking some hands. Exchanging some hugs. And some purchase orders!
What else can we do?
Donate, if you haven’t already. Subscribe to Fort McMurray Today [just did - year is $50]. We can lend a hand, extend a hand, show up, spend some time, spend some money, listen to some stories – tell everyone you know, “Fort Mac is open for business again”.
When fire destroys forests, new growth flourishes from the forest floor. Why should a city be any different? When the all-clear has been given, we should go back. If you’ve never been, go for the first time – it will be fantastic.
Most of us who’ve been in service businesses or selling things for a long time – often nostalgically reminisce of ‘how things used to be’ in the good ole’ days. Not all companies are equal, and some barely try anymore – so when a company and its people stand out, it seems appropriate to shout out. To stand on a soap-box and yell it out.
Which begs this question: which came first – the company’s policy and reputation, or the employee’s attitude?
My story, about my chair, but there is much more there …
Background: seventeen years ago I acquired my TOM chair, made by Keilhauer. It cost something north of $1,000 at the time. I got it with help from Steve Corner at McCrum’s. I must admit I’ve not bought anything else from them since. No complaints, just no needs in my home-office a la Ikea. I believe I’ve golfed more with Steve more often than I’ve visited their showroom in that time.
Recently my chair failed. It has had a few nicks and scratches – it’s been moved many times, not often by professional movers, but tossed into the back of my SUV du jour. The chair survived. I’d grown accustomed to its comfortable leather seat, the lumbar support and I’ve grown accustomed to, and attached to my chair …
Imagine my chagrin when the main mechanism (a gas cylinder-lift system) failed. Popped out, dislocated, oil on the floor. I tried to push it back together and it simply offloaded me to the floor. For several days I sat on something else, leaving my crippled chair on newspapers by the door. Oil dripped, the chair leaned north and I fondly rubbed that seat each time I walked by. I was sad. I checked out current prices for comparable chairs – over $1,600. Yikes! I debated tossing the chair in a bin and shopping for a new one, or maybe a used one – something comfortable, serviceable.
Expecting an expensive solution to my problem, I timidly called Steve. He suggested I bring it by so their service people could check it out – see what the problem was. I tossed the chair in my vehicle and stopped by the showroom the next day. It turns out Steve was out on calls, and their service department is at another location. I was given Erin’s card, but before I left, I perused new and used offerings in the showroom. I touched the newest iteration of TOM. Nice. And off I went.
Erin returned my call that afternoon, suggesting I bring it in. I was helped getting it out of my vehicle – and in we went. She confirmed I needed a new gas-cylinder, the cost was approximately $80. The repair would take 10-15 minutes, did I care to wait? I said, sure … can I watch. Under Erin’s direction a sturdy fellow, likely younger than my chair, used a pipe-wrench and several solid grunts to get parts apart – and just a few minutes to install the new gizmo. While he was at it, he popped on 5 new casters. These kind gracious speedy people said, there you go. I asked for the tally, for my bill. They said, ‘there you go, did you need help getting that in your vehicle?’
Seventeen years, fifteen minutes, no charge.
Oh my!
This doesn’t happen. It used to happen, many years ago – but to believe it happens now is something I only believe, because it happened to me. And, as you might guess, I’ve happily told anyone who will listen.
Is this incredible experience I’ve had attributable McCrum’s? Steve? Or Erin and her crew? Each, and all, I suspect.
This kind of service is incredibly uncommon. It makes sense of course, but especially in times when business is tough – it stands out, stands proud, when kind people so swiftly make my seventeen year old TOM whole again. The roll, the swivel, the lift. Better than new, this seat is nicely fitted to its owner.
It confuses me, with such great personnel, that McCrum's don't have these people featured on their website. I think they deserve some recognition - but I suspect, given my experiences, there are many more staff and great service stories worth celebrating. Mine could not be a solitary event. Just couldn't be.
Mark Kolke is the Publisher of FACILITYCalgary
April 15, 2016
Put away the crystal ball
Predicting the lowest point of the real estate market is pure guesswork – not even a crystal ball can help you here.
The current situation in the Alberta market is perfect example of why predicting continual gloom and doom, or declaring the worst is over, is risky business. Who really knows what the answer is? I don’t, that’s for sure. A wise person once said that six out of five economists correctly predicted our last recession – I think that pretty much sums it up.
What I do know is that all astute real estate investors continually monitor for peaks and valleys in the market, altering their actions accordingly to maximize profits. Even these players would personally tell you they never really know what side of the coin their bet is going to land. So, if that’s the case, what about Joe and Mary Sixpack (Ralph Klein’s favourite way of describing “severely normal” Albertans)? How is the average person supposed to know when to make a move?
Well, the first thing to do is have a trusted REALTOR® advise you on the current market and the recent history in the area you want to buy, as well as your own area if you’re looking to sell. I know what you’re thinking, “Of course the CEO of the Calgary Real Estate Board would say to use a REALTOR®.” Okay then, I challenge you to make the case for investors who relied on self-advice and limited public information in making important decisions.
The fact is a REALTOR® is the primary person you need on your team to advise you. Plenty of options are available and you should do some interviewing to help you find a REALTOR® that deserves to be your trusted advisor.
Ultimately, the decision for most people to buy or sell is not directly linked to the current state of the real estate market. If this was the case, we would never see a shortage of listings when the prices peak. During any round of market craziness, where astonishing record prices occur, there are a few people who cash-out and move to rural Saskatchewan to live off their profits and pursue their dream of photographing butterflies. This is clearly not the strategy of the masses.
When the market softens, which it does regularly in Alberta, the doom and gloom in the media causes some people to hit the pause button. A move up on the property ladder may be put on hold because jobs are in jeopardy and the future looks shaky, but more often than not, life returns to normal as we get used to new economic realities. From more than 30 years of experience working as a REALTOR®, or in service of REALTORS®, I can state unequivocally that the market is never quite as good or bad as the media makes it out to be.
It’s very rare that a buyer would time their decision for when the market bottoms out. These folks may well get some bragging rights for paying the lowest price on the street, but ultimately these are homes we are talking about, not marketable commodities. I can count on my hand the number of people I have met who talked about the price they paid and how low it was, just as the price swung up while the ink dried on their contract. It’s not very common at all.
Everyone has a real estate experience they like to share, and without fail, it centres more on the qualities of their home (good or bad), the neighbours (naked or noisy) and the neighbourhood amenities (walk-ability or drive times). So take a breath everyone and keep in mind what another wise person said to me about the real estate market, “It all comes down to about six inches - the space between your ears!”
The challenges of navigating a real estate transaction deserve more than a focus on price alone. In fact, I still chuckle at the number of times clients would share the story of when they bought their home and one partner would tell the story with a price, only to be corrected by their better half. Meanwhile, I had the actual price in the file folder and neither was accurate. The price only matters in the moment.
When you buy gold, are you buying that one particular bar, or the gold itself? The same goes for real estate. You know it is yours by the address, but what you’ve really done is invested in the local real estate market. Any moves you make within that market transfers to your equity at any new address. Keeping score only matters when you cash out to move to rural Saskatchewan. When you come back, one of our members will be happy to help you jump back into the real estate market in the Calgary region.
Alan Tennant is CEO of the Calgary Real Estate Board
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
April 12, 2016
Yahoo - Calgary is the most expensive city to do business in Canada!
I had to chuckle as I read the excuses being made in the media as to why Calgary is the most expensive city to do business in Canada - as if that was a bad thing. Well I think we are ranked just where we want to be.
A closer look at KPMG Competitive Alternatives study reveals a meagre 3.7-point difference between Canada’s least expensive City to do business, Fredericton at 83.3 points and Calgary, its most expensive City at 87.0 with the average US city baseline being 100. The fact that there are 15 other Canadian cities in the KPMG study ranked between Fredericton and Calgary would suggest to me that the cost differential amongst Canadian cities is immaterial to most business investors particularly when you consider that all US cities in the study are ranked as being more expensive than their Canadian counterparts.
Furthermore, I would ask where do we want our city to be ranked? Are the least costly alternatives - Fredericton, Moncton, and Charlottetown where we aspire to be? Or is it along side Canada’s more prominent and most expensive business centres - Vancouver, Montreal, and Toronto? Even in the US, wouldn’t we prefer to be compared with the more expensive and enterprising cities in the study - New York, San Francisco, and Los Angeles all of which are significantly more expensive on KPMG’s scale than Calgary.
The reality is that over the past decade that this study has been done, Calgary has always ranked amongst the most expensive places to do business in Canada. Over this same time period, Calgary has also been the engine for job growth in Canada producing in some years 10% of all the new jobs in the country as well as having one of the lowest unemployment rates in the nation. Decision-making for nearly 50% of our country’s capital investment during this period was energy sector related and those investment decisions were largely procured, financed and engineered out of Calgary. To support this job growth over 30,000 people were moving to Calgary annually producing an economic flywheel effect on our local economy.
Unfortunately, the cost structures that are examined in the KPMG study do not fluctuate as quickly as the economy which creates a disconnect when there is an economic downturn as we have experienced. Our ranking may also reflect the fact that not all facets of our economy are negatively impacted by low oil and gas prices. There are also local businesses that are thriving with the lower Canadian dollar, lower energy costs and the increased capacity in our workforce. Perhaps we are more resilient than we give ourselves credit for.
If Calgary aspires to attract the best and the brightest, be it headquarter talent, lawyers, accountants, engineers or system developers then logically the city needs to be and wants to be amongst the cities that are the most expensive places to do business. Top talent like most everything else follows the money. Today more than ever before talent is mobile, talent is global and talent is increasingly going to larger, more dynamic and even more expensive cities.
Lets not get hung up about inflationary salaries in the oil patch or the lack of incentives for high tech as reasons for our higher costs. Calgary needs to get back to basics. It needs to roll out the red carpet to encourage business growth. It has to provide more support to reduce risks for early stage entrepreneurial companies and to fast-track job-producing development in its own backyard all of which drives economic growth.
Calgary needs to get back on its horse even if that means being the most expensive City in Canada by being the job-producing engine we can be. In doing so we will continue to be the dynamic, vibrant and can-do city that we are known for.
Bruce Grahman is an Independant Consultant adn former President & CEO of Calgary Economic Development
March 19, 2016
Growth Management: Focusing on Priorities
The Notley government promises a new Municipal Government Act in the fall, following a consultive process. In its September announcement, the Government said that new Growth Management Boards would be established in the Calgary and Edmonton areas. “Growth management” may seem like an innocuous term, but it has been associated with severely unaffordable house price increases in Canada, as well as in Australia, New Zealand, the United Kingdom, the United States and elsewhere.
Growth management typically strengthens land use policies, usually by “imposing urban growth boundaries” or other “urban containment” strategies that ban or severely limit new housing on or beyond the urban fringe.
As a result, urban containment policy reduces the land supply, while the continuing demand for more houses drives up prices. This is consistent with the basics of economics. Where the supply of a demanded good or service is limited, higher prices result, other things being equal. This means demised middle-income housing affordability.
Even before the proposed Municipal Government Act, recently adopted growth management policies in the Edmonton area and in the city of Calgary have been accompanied by unprecedented middle-income house price increases. This is a significant turnaround. Between 1970 and 2005, house prices rose at approximately the same rate as household incomes in both metropolitan areas. Yet, since 2005, house prices have raced 40 percent ahead of incomes in both areas.
These price increases are not just for large houses in the suburbs. Virtually all house prices have been driven up. Condominium prices have risen so much in Calgary that they are 20 percent higher than those of two-storey houses just 10 years ago, according to RBC Economics data.
People recognize the problem. A recent Angus Reid poll found that approximately one-half of residents in Edmonton and Calgary considered house prices to be “too high” or “unreasonably high.” Yet, the house price increases of the recent decade could be just the beginning.
House prices have doubled or tripled compared to household incomes in metropolitan areas that have restricted peripheral housing development for longer periods of time. This has occurred in vibrant metropolitan areas like Sydney, Auckland and San Francisco. But is has also been the experience in areas that have had depressed economies for decades, such as Liverpool and Glasgow.
Vancouver house prices are approximately three times as costly relative to household incomes as they were before urban containment was implemented four decades ago. RBC Economics recently characterized Vancouver prices as dangerously unaffordable, and estimated that costs for the average house (detached and condominium) would take more than 80 percent of a typical household’s pre-tax income. The detached houses so important to raising families would take 109 percent of typical incomes!
Investors have flocked to Vancouver to make fortunes on the “sure-thing” of Vancouver housing. This drives prices even higher. According to Gary Mason of the Globe and Mail there are many “houses and condos with no lights on because no one actually lives there,” as Vancouver becomes an “investor haven for the rich.” Similarly, investors have flocked to other urban containment markets, such as San Francisco, Sydney, Auckland, and London.
Housing affordability is important to families. Housing is the largest element of household budgets. As housing costs rise, households have less to spend on other goods and services. Some households can be driven completely out of the home ownership market, as prices rise well beyond what they can afford.
There is an increasing recognition urban containment policy has driven urban planning “off the rails.” In a recent book, London School of Economics and Political Science economists Paul Cheshire, Max Nathan and Henry Overman contended that “improving places” (a principal objective of contemporary urban planning) “is a means to an end, rather than an end in itself.” They added that “the ultimate objective of urban policy is to improve outcomes for people rather than places.” Cities are not improved by policies that reduce the standard of living by driving up house prices relative to incomes.
In her November address to the Alberta Association of Municipal Districts and Counties (AAMDC), Municipal Affairs Minister Danielle Larivee referred to the importance of strong sustainable communities for Alberta families. A prerequisite to strong, sustainable communities is strong, sustainable families.
The Municipal Government Act review should have as a principal focus restoring and maintaining middle-income housing affordability.
Wendell Cox is Chair of Housing Affordability and Municipal Policy at the Frontier Centre for Public Policy.
March 22, 2016
Protecting the treasure that is Canada's boreal forest - by Gregory Siekaniec; article provided by Ducks Unlimited, as published in the Vancouver Sun
Canada’s boreal forest is a vast tract of land, stretching from British Columbia to Labrador, from Yukon to southern Ontario. This forest is so big that it’s hard to put its size into perspective. But think about this: three-quarters of all Canada’s forests and woodlands are in the boreal zone — that’s some 307 million hectares in total.
Particularly around this time of International Day of Forests (March 21) and World Water Day (March 22) it’s important to remember the boreal cleans the air we breathe and filters the water we drink. In addition, it provides products we need and opportunities to improve our quality of life through recreation and its shear natural beauty.
It is home to half of all bird species in the country. It’s home also to the woodland caribou and contains thousands of lakes, rivers and wetlands that provide habitat for much of Canada’s biodiversity.
And forests in general, including the boreal, also support the livelihoods of thousands of Canadians — both aboriginal and non-Aboriginal — particularly in rural communities.
Yet despite its magnitude and importance, our boreal forest often doesn’t get the level of public attention it deserves.
And public attention is key because it helps ensure we continue to maintain a careful balance of environmental, economic and social values in these forestlands.
That’s why Ducks Unlimited, one of Canada’s oldest conservation organizations, is working hard to improve the public’s understanding and awareness of this impressive natural heritage, while also ensuring that its conservation and sustainable development support communities and help grow our economy.
It’s also why we’re working with organizations like the Sustainable Forestry Initiative Inc. (SFI), the largest forest certification program in North America with strong acceptance internationally. Its certification standards help ensure forests are managed to some of the most rigorous sustainable forestry requirements in the world. Ducks Unlimited worked closely with SFI to develop its latest certification standards, including the components that detail how wetlands can be properly managed within working forests.
SFI is also involved in forestry education and outreach, promotes forest conservation, and provides grants for scientific research. One such grant funded a project to determine best practices for planning and building forestry roads that protect wetland ecosystems in the western boreal forest. Ducks Unlimited Canada partnered with SFI program participant Louisiana Pacific Canada Ltd. and FPInnovations, a not-for-profit that specializes in the creation of scientific solutions in support of the Canadian forest sector, to find alternatives to the typical logging roads that have the potential to obstruct water flow and damage boreal wetlands.
“Corduroy” roads were often used in the early 20th century by foresters, and involve laying down logs side by side over waterlogged areas, creating a pattern that resembles corduroy fabric. The idea is now being resurrected in today’s context with modern technology.
We’ve reinvented these roads to ensure they don’t negatively impact boreal wetlands. Modern corduroy roads are informed by the latest environmental science to ensure continuous water flow through wetlands, and each road is customized to meet the water flow requirements of a specific swamp, bog or fen.
Depending on how water flows, geotextile fabrics and culverts are added to provide the road with additional strength and support.
The success of this work in the boreal plains of Saskatchewan and Manitoba is leading to the development of a national guide being led by FP Innovations with support from Ducks Unlimited, as well as SFI program participants Louisiana-Pacific, Resolute Forest Products, J.D. Irving, Weyerhaeuser and the New Brunswick Department of Environment that will further improve wetlands management.
Ensuring water flow is key to preserving these wetlands and the habitat of numerous mammals, birds, fish, insects, fungi and micro-organisms that inhabit Canada’s boreal forests.
And these same forests are an important tool that can be used in the fight against climate change, storing massive amounts of carbon and purifying our air and water.
I’m proud to be working to protect these magnificent forests while also ensuring that sustainable forestry can be practised, providing for the livelihoods of hundreds of communities and thousands of Canadians and their families.
I strongly believe in the work we are doing, in partnership with like-minded organizations like SFI, the resource sector more generally, federal and provincial governments, local communities, and First Nations and Métis.
This work — whether it be in continuously improving forest certification standards, educating our younger generation on the importance of forests or planning for the conservation of regions within the boreal — is key to ensuring our boreal forests and the enormous benefits they provide will be protected for both the foreseeable and distant future.
Gregory E. Siekaniec is the Chief Executive Officer of Ducks Unlimited Canada, an organization that has helped conserve Canadian wetlands since 1938. He is also the Vice-Chair of the Sustainable Forestry Initiative, an independent, non-profit organization dedicated to promoting sustainable forest management.
March 15, 2016
Mortgage Rule Changes Not Well Thought Out
Starting in 2008, the federal government has made changes to the manner in which mortgages can be financed through the Canada Mortgage and Housing Corporation (CMHC). For instance, the maximum amortization period has been reduced from 40 years to 25 years; the maximum gross debt service ratio is 39 percent and the maximum total debt service ratio is 44 percent. Until February, 2016, homebuyers needed to have a 5 percent down payment. Starting February 15, 2016, this has now been increased to 10 percent for any amount between $500,000 and $999,999. (Homes that are worth more than $1,000,000 require 20 percent down payment, so CMHC is not involved.)
The changes instituted in February of this year are aimed specifically at the Toronto and Vancouver housing markets. When announcing these changes, Finance Minister Bill Morneau stated, “We are not fearing anything in particular, what we are doing is trying make sure we look at areas of the market that present potential risks”. Although unwilling to say it specifically, Mr. Morneau appears to be fearful of a housing bubble in the Toronto and Vancouver markets.
The problem here is that, if indeed there is a risk of a housing bubble, federal government policy was a large contributor to the creation of this bubble. The extremely low interest rate policy that began in 2008 is designed to get consumers and businesses to save less and spend more. In response to the incentives put in place by this low interest rate policy, consumers have chosen to spend more on housing. In cities such as Toronto and Vancouver there is strong demand and restricted supply of detached housing, combined with an inflow of foreign buyers, which serves to increase house prices. Clearly, the low interest rate policy began to exacerbate this increase in prices.
This is where the federal government is running into the problem that is almost always associated with policy implementation: no matter how honorable the original intentions of any particular policy may have been, there will almost always be what is politely termed unintended consequences. In the case of low interest rate policy, the unintended consequence may be a housing bubble in localized markets. In response to the unintended consequence of housing bubbles, the government introduced new policy in the form of mortgage rule changes that apply across the entire country. Introduction of this new policy produces its own set of unintended consequences.
Until the recent decrease in the world price of oil, growth in Alberta largely drove the growth in the Canadian economy. Today, with the price of oil stubbornly hovering in the $30 U.S. range, the Alberta economy is slumping quite badly. Because of the February, 2016 mortgage rule changes, an already underperforming Alberta housing market will likely be adversely affected. These changes will depress demand for housing in Alberta, making the already depressed housing market even worse.
The policy lessons to be learned from these mortgage rule changes are quite clear. Before implementing any policy, governments must think carefully about the consequences, both intended and unintended, that may arise in the implementation of these policies. Failure to do so may lead to the seemingly never ending implementation of a new policy, which is simply designed to correct the unintended consequences of some previous policy. This type of knee jerk policy implementation is not good for the overall economic performance of an economy and should be avoided.
Frank Atkins is Research Chair of Finance & Capital Markets and Brianna Heinrichs is an executive assistant at the Frontier Centre for Public Policy.
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
March 8, 2016
Conrad Black: Don’t underestimate Donald Trump. He will win. [ in rebuttal to John Robson’s piece: Dear America, about this Donald ]
It is with great regret that I take public issue with my colleague John Robson, a columnist and editorial writer for the National Post, in this case over his comments on Donald Trump in this newspaper on Monday.
John completely missed the point of the Trump candidacy. Donald Trump polled extensively last year and confirmed his suspicion that between 30 and 40 per cent of American adults, cutting across all ethnic, geographic, and demographic lines, were angry, fearful and ashamed at the ineptitude of their federal government.
Americans, Trump rightly concluded, could not abide a continuation in office of those in both parties who had given them decades of shabby and incompetent government: stagnant family incomes, the worst recession in 80 years, stupid wars that cost scores of thousands of casualties and trillions of dollars and generated a humanitarian disaster, serial foreign policy humiliations, and particularly the absence of a border to prevent the entry of unlimited numbers of unskilled migrants, and trade deals that seemed only to import unemployment with often defective goods.
I was one of those who thought at the outset that Trump was giving it a shot, and that if it didn’t fly it would at least be a good brand-building exercise.
Foreigners like Robson should remember that Americans, unlike most nationalities, are not accustomed to their government being incompetent and embarrassing. History could be ransacked without unearthing the slightest precedent or parallel for the rise of America in two long lifetimes (1783-1945) from two and a half million colonists to a place of power and influence and prestige greater than any nation has ever possessed — everywhere victorious and respected, with an atomic monopoly and half the economic product of the world.
Forty-five years later, their only rival had collapsed like a souffle without the two Superpowers exchanging a shot between them. International Communism and the Soviet Union disintegrated and America was alone, at the summit of the world.
And then it turned into a nation of idiots, incapable of doing anything except conduct military operations against primitive countries. The objective performance of the latter Clinton, George W. Bush, and Obama administrations, and the Gingrich, Reid-Pelosi, and Boehner-led congresses, and most of the courts, have for these 25 years been shameful and as unprecedented in American history as the swift rise of America was in the history of the world.
The people turned out rascals and got worse rascals.
Donald Trump’s research revealed that the people wanted someone who was not complicit in these failures and who had built and run something.
Washington, Jackson, the Harrisons, Grant, Theodore Roosevelt, Eisenhower, and others had risen as military heroes, though some of them had had some political exposure. Jefferson and Wilson were known as intellectuals, Madison as chief author of the Constitution, and Monroe and John Quincy Adams as international statesmen. What is called for now is a clean and decisive break from the personalities and techniques of the recent past.
Donald Trump doesn’t remind anyone of the presidents just mentioned, but he elicited a surge of public support by a novel, almost Vaudeville, routine as an educated billionaire denouncing the political leadership of the country in Archie Bunker blue-collar terms.
Last (Super) Tuesday, he completed the preliminary takeover of the Republican Party. He demonstrated his hold on the angry, the fearful, and the ashamed by passing the double test: he had held no elective office, but he was a worldly man who knew how to make the system work and rebuild American strength and public contentment.
All the other candidates in both parties were vieux jeu, passe. Only a few of the governors (Bush, Christie, and Kasich) had run anything successfully, none of them had built anything, and all were up to their eyeballs in the sleazy American political system — long reduced to a garish and corrupt log-rolling game of spin-artists, lobbyists, and influence-peddlers.
Bernie Sanders gets a pass, but he is an undischarged Marxist, and while many of his attacks on the incumbent system and personnel have merit, his policy prescriptions are unacceptable to 90 per cent of Americans.
It was clear on Tuesday night that Trump’s insurrection had recruited the Republican centre and pushed his opponents to the fringes. The conservative intellectuals, including my friends and editors at National Review, as well as Commentary, the Weekly Standard, and some of the think tanks, attacked Trump as inadequately conservative.
They are correct — he isn’t particularly conservative, and favours universal medical care, as much as possible in private-sector plans, but a stronger safety net for those who can’t afford health care, and retention of federal assistance to Planned Parenthood except in matters of abortion. Traditional, quasi-Bushian moderate Republican opponents and liberals were reduced to calling him an extremist — claiming he was a racist, a “neo-fascist” said Bob Woodward, America’s greatest mythmaker and (albeit bloodless) Watergate assassin, and a “Caeserist” by the normally sane Ross Douthat in The New York Times. (He was confusing the triumphs of the early Caesars with the debauchery of the later Caligula and Nero and the earlier bread and circuses of the Gracchi, but it is all bunk.
John Robson took his place in this queue on Monday, claiming Trump was squandering an inherited fortune (he has multiplied it), and concluding that Trump is “a loathsome idiot.” The sleaziest dirty tricks campaigner of modern American history, Ted Cruz, claimed Trump was in league with gangsters.
On Tuesday night, Cruz ran strongly in his home state of Texas but his support is now confined exclusively to Bible-thumping, M16-toting corn-cobbers and woolhats, and he has no traction outside the southwest and perhaps Alaska.
The orthodox Republican candidate, Marco Rubio, is now a Chiclet-smiled, motor-mouth loser, having first been exposed as such by Chris Christie (the New Jersey governor who could have won the nomination and election four years ago and is now running for the vice-presidential nomination with Trump). Rubio should bite the dust in Florida next week.
On Super Tuesday evening Donald Trump made the turn from rabble-rouser to nominee-presumptive. The only early campaign excess he has to walk back is the nonsense that all the 11 million illegal migrants will be removed, and then many will be readmitted. Of course the selection process must occur before they are evicted, not after.
Even the formidable and adversarial journalist Megyn Kelly acknowledged that he looked and sounded like a president. He spoke fluently and in sentences and without bombast or excessive self-importance.
He is placed exactly where he needs to be for the election, after Hillary Clinton finishes her escapade on the left to fend off the unfeasible candidacy of Bernie Sanders. (This is if she is not indicted for her misuse of official emails — Obama is nasty enough to have her charged, and almost all prosecutions of prominent people in the U.S. are political, but she is now all that stands between Donald Trump and the White House, but is almost a paper tigress.)
Trump sharply raised the Republican vote totals and the fact that he carried 49 per cent of the Republican voters in Massachusetts, a state with almost no extremists in it, indicates how wide his appeal has become.
Hillary Clinton was, as Trump described her when she unwisely accused him of being a sexist, a facilitator of sexism; simultaneously the feminist in chief and First (Wronged) Lady, as spouse of America’s premier sexist.
She was elected in a rotten borough for the Democrats in New York State, and was a nondescript secretary of state.
She has been caught in innumerable falsehoods and her conduct in the entire Benghazi affair (the terrorist murder of a U.S. ambassador) was reprehensible. Her indictment for various breaches of national security and possible perjury is regularly demanded by former attorney general Michael Mukasey and other worthies.
She is often impressive, but all these and more failures, as well as unseemly activities with the Clinton Foundation, will be mercilessly pounded on in the campaign.
Donald Trump will not simulate the languorous defeatism of the senior Bush or Mitt Romney, or the blunderbuss shortcomings of Bob Dole and John McCain. (Romney’s savage attack on Trump on Thursday served to remind Republicans of how he squandered a winnable election in 2012 and faced in all four directions on every major issue.)
Eight years ago, it was time to break the colour barrier at the White House. Now it is time to clean the Augean Stable. Donald Trump has his infelicities, though not those that malicious opponents or people like John Robson, who simply haven’t thought it through, allege. But he seems to have become the man whom the great office of president of the United States now seeks.
He is far from a Lincolnian figure, but after his astonishing rise it would be a mistake to underestimate him.
Conrad Black is a noted Canadian business executive, newspaper publisher, conservative writer and historian. He is also founder, former owner and pubisher of The National Post.
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
Feb. 15, 2016
How are YOU feeling today? ... by Simon Batcup
How are you feeling today? Good, nervous, jittery, fit, poor?
How much of what you are feeling comes from deep inside of you as opposed to external sources; the radio you turn on in the morning, the newspaper or website you read, the friends and business associates you talk to.
I woke up the other day listening to a financial correspondent talking about another bad day on the markets in Japan and China and how it will ‘infect North American markets without a doubt’. I rolled out of bed feeling not very happy. Sitting on the edge of my bed I scanned Google, then Twitter followed by Facebook. More difficult news, shootings in places I’d never been, traffic jams on roads I probably won’t even be driving on, and an uproar about healthcare in the UK. It was not an uplifting start to the day.
Then it struck me. If I just got up, stretched, did my workout then ate my breakfast, without radios, TV stations, social media, NO external intrusions, and reflect on my life that morning, how would I feel then?
In today’s on-line world, we get ‘stimulus overload’ all too often, in so many ways; the value of our portfolios, the livability of our city, how much hotter or colder our country is this year compared to last.
As humans we are programmed to respond when we are provided new information, it is wired into our DNA. There’s a bear outside the cave; better light a fire. Bad weather is coming in; better seek shelter. Stocks are down; do we have enough to retire? Murders are up; is it safe to walk our streets?
I fear we have become a nation stressing and worrying about things a previous generation would not even have had information about.
According to an article in Forbes magazine, the overall crime rate in 2010 is no higher than it was in 1968. But do you feel that way? We certainly didn’t get constantly barraged with stories of terrible crimes around the world back in 1968. After reading the newspaper in the morning, we watched the evening news at night, other than that we lived our lives. Maybe ignorance really was bliss?
Do you know that a baby born today will live into their eighties, a baby born in 1910 would have lived on average to their fifties? However, listening to health articles on the radio, it sometimes feels that I’ll be lucky to see the end of the decade.
Social media sites like Facebook are filled with emotional stories put there to tug at heart strings; there are so many lost dogs and people needing us to type amen and like a picture!
This constant flow of information, hitting us from all sides surely cannot be good for us.
Should we continue to accept these external stimuli influencing how we are feeling?
So, here is my suggestion. For just one week, don’t turn on the radio, don’t read the newspaper, don’t check your newsfeed and don’t watch TV. For one week, check out of being on-line! It will be tough, friends will want to talk to you about the latest news blast. In fact, both friends and family will have to be in on your exit from the electronic world, so as to resist sharing that latest nugget that they have heard.
Try a week of waking up and seeing how you really feel from the inside. I’d be interested to know how it goes.
Simon Batcup is a Calgary business man, consultant, community activist, cyclist and writer - and principal at Osborne Interim Management
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
January 19, 2016
Is 2016 another cyclical problem, or an enormous opportunity?
by Mark Kolke
Nearly everywhere else on the planet, lower energy is a good thing.
For farmers, consumers and anyone manufacturing heavy things that need to be shipped a long distance, it's a good thing.
In Calgary, Houston and any other oil-centric market you can imagine, low energy prices are bad news. We know how to weather ups and downs because history has given us one up for every down – the cycle repeats and prosperity has been abundant in every recovery.
So, where do we look for the seeds of recovery – and who has the watering can?
Is this a game changer, or just another loop on our cyclical roller-coaster?
For my struggling colleagues, unemployed friends and nervous-about-their-investments friends, I empathize.
My memory of the 80’s is still fresh enough – I remember a prolonged bottom and stress-testing every element of personal and corporate lives. I’ve owned my share of worthless stock certificates, lost more than a few shirts on hot tips and had sour investments in real estate and mortgages which seemed infallible. Until they weren’t. But tell me, is this like that NEP-era downturn we remember so painfully well?
In some ways, yes, but mostly not.
Interest rates aren’t through the roof. And the villains are not politicians. So who then are today’s villains – or is there only one, or anyone to blame?
It seems to me we view cycles in commodities very differently when they are somewhere else, or in some other sector like pulp & paper, orange juice, coffee, nickel … you get the picture?
Everyone seems to know what to do, what they’ll do, if/when oil prices percolate upward again – but will they? And what should we do? Wait, sitting on our collective hands? I don't see some recovery train coming to town. Our recovrey needs to be Calgary's recovery - Alberta's, home grown and not a waiting game for something that might come ...
Is the current view – pessimism, low oil price, shriveling Loonie and high unemployment in Alberta coupled with a shaky Canadian economy the problem? Or symptoms, characteristic and a platform for a NEW NORMAL?
While, like most Calgarians, I appreciate the historical cyclical nature of the oil-patch, could it be that this downturn is different, is going to last a long time and low energy prices are here to stay for the medium to long term?
I’m expecting surprises. Two years from now we’ll be learning who made a killing in 2016. We’ll learn who started a business in their basement or garage who now has world-beater product. We’ll come to appreciate what so many other Canadians have known through most decades of their life – an economy can function without unbridled growth, communities can flourish and be full of spirit and noble citizenship without double-digit growth. We have as much grit as any community in Canada, we’ve been lulled for a while awash in prosperity of delicious depth and duration. These times, right now, are one-part deja-vu. One-part different. Are we already adapting. Are you?
Ask yourself, who benefits from low energy costs? Our forestry companies, farmers, ranchers and hog producers – their input costs just went down and their exports are now cheaper to buy, and cheaper to ship, than in a long time, so they’ll do well this year. And next year.
Who else will do well?
This is a smart city and while we are most often focused on oil & gas, there are so many smart folks out there – many with transferable skills. I don’t mean engineers driving buses. I mean engineers engineering different things. We have manufacturers who can re-tool to make different products. Sure it’s hard. Let’s do it anyway. We have computer wizzes filling ever Starbucks in town – lets get them out from behind the counter and get them back in our universities – learning more, teaching , inventing, developing …
Calgary isn’t a city, isn’t the oil-patch, isn’t just a place where rivers and railroads meet settlers and cattle – we are 1.3 million brains, 1.3 million pairs of hands. We can make more hay, make our own way and re-invent ourselves, our businesses and professional practices. Invention, re-invention are necessities of recovery.
What businesses can we grow that don’t depend on rising oil & gas markets? What expertise can we package, market and export that we’ve never done before?
We aren’t silicon valley. But we don’t need a valley – we need dreamers with dreams and we need to put support and foundations under them. Do you know someone with a dream, an idea, a product? Invest in them …
Yes, we need to be cheerleaders.
And, yes, we need to be leaders - not dependant on or waiting for the next gravy-train to arrive or for some government magic measure (seriously, have they ever?) to arrive. There is no need for waiting. We are 1.3 million. We are here. Lets get busy.
P.S.: I read a sad commentary yesterday – an op-ed in the Globe and Mail. Preston Manning was counselling conservatives on what do while out of power – about rebuilding and reinventing who conservative parties market themselves. Not that his political advice isn’t logical, but for someone who has represented himself as an advocate for Alberta and son of once-powerful leader – I was disappointed that his pulpit (pun intended) is not used for a more practical and useful-to-Albertans message that will re-energize our community and our province as opposed to plotting strategy for elections four years off …
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
January 5, 2016
Mark Kolke's 12-Step Recovery Plan
With apologies to my fellow recovered alcoholics, I have a twelve step plan for recovery – for Calgary, for Alberta, for Canada: January, February, March …
I’m serious.
We’ve had it so good. For so long. We’ve lulled ourselves into a belief it would continue unabated – and now headlines remind us regularly that things got bad, then worse, then more-worse …
I believe in recovery. Of lives, families, communities. We are not our worst selves – we are our best selves.
In the entrails of bad times are built businesses, fortunes and new industries. And renewed lives.
For many in our midst, being without a job, without a solution to cover their overdraft, bills and mortgage payments it is of little comfort to say, ‘hey, we’ve been there’, though most of my contemporaries have.
Or our parents / grandparents have been. Little comfort to someone out of work in a field where hundreds of others with similar qualifications are competing for zero jobs. Grocers need to be paid. Kids clothes aren’t free. Cutting back on spending is only part of the solution.
We’ve recovered before, many times.
Remember the flood? BSE? The cold war, WWII, the great depression, scrip, the Crow-rate? I’m not talking little bumps in the road – but serious deep valleys of trouble. No mystery to us here. Our parents, our grandparents had more than pioneering spirit. They never looked for an oil-boom, a hand out or any podium-thumping politician to save them or to bring a ‘thought-through-solution from government’ to bail them out. We've been generous - we've sent lots of hay to help Ontario in dry times, lots of cash to Ottawa all the time. Albertans carry our weight and pay our way ...
Current difficulties should come as no surprise, should they? Is it a surprise that companies were ‘a little fat’, such that cutting staff 25% was possible without reducing the BOE/day? Did we not know that economists from Toronto swooping into town to explain graphs about things they didn’t know were not for listing to, but for discounting?
For the last two years, political events near (ie: Notley, Prentice, Redford) and far (ie: U.S. 2016, Europe, Middle East) together with whipsawed commodity markets. No sunny days on our horizon (sorry Mr. Trudeau but it’s every bit as bad as NEP days, perhaps worse).
On the corporate side, there are always winners and losers. Stock prices plummeting, lenders ‘re-stating terms and extending maturities of credit terms on credit facilities’ seems remarkably like a term from the 1980’s, ‘workout’.
On the personal side, where most of us live, having our powder dry, debt levels in line and a job or business is no longer routine – it is worth holding onto. Unfortunately there are too many hanging on by their fingernails with no hopes in sight, wishing for an oil price recovery. And soon. But that dream is a fantasy wish we don’t get – and if/when we realize that, too many 12-month periods will have passed, too many steps, too much shoe leather …
So, what do we do?
Look around. I see and hear whiners, but not many. I see failures, but not many. We’ll see bankruptcies, foreclosures, receiverships – plenty of workouts. We’ll see divorces tearing families in many directions, but not too many.
We’ll see heroes. We’ll see recoveries. We’ll see old-models of new business formations (2 guys, 1 phone, 1 kitchen table) being replaced by meet-up groups of creative people inventing new enterprises. We’ll see school bus drivers with a P.Eng. on their resume. We’ll see two guys with a pickup hauling junk to the dump. And taking a little cash to the bank. We’ll see people figuring out how to get a grant, get a loan – and getting along entrepreneurial paths. We’ll help them. We’ll buy from them. They’ll buy what we’re selling too – perhaps not right away. Communities and economies are give and take realities. We’ve all been at trough taking. Time for more giving, less taking, more pulling together.
We’ll see out leaders struggle, miss-step and miss-speak. They will try hard to be cheer-leaders. We need them to be orchestra conductors. Behind the scenes they’ll try to do both. They’ll succeed more than they fail. Yes, they’ll do it with our money. They’ll spend too much, incur too much debt and make too many mistakes. So will we. Lots of startups will fail, but we’ll keep starting them. Lots of expectations will be adjusted. People will downsize their home, right-size their budget and teach their kids that this is not the land of milk and money.
Leaders will lead.
Shakers will shake and movers will move.
This economy in Calgary is not a collection of industries – but a collection of people. Alone we are lone and lonely. Together, we are a force to be reckoned with. We’ve been before. We’ll be again.
Hard work, ideas, capital, innovation, problem solving – talent, energy, skills. And attitude.
One step at a time. Take all twelve, then repeat.
Restaurant owners are taking it on the chin, but grocers are doing well – sales are up. New car sales are hit, but used car sales aren’t. Resources are still our strongest asset, and our strongest of all is a renewable one – people. Albertans – original, transplanted, new and old – are tough. Farmers, ranchers, merchants and teachers. Wildcatters and wild cats. Cool cats. Dog lovers and people huggers. Moms, dads, sons and daughters. We’ve been through tougher times. Right now the roads are snowy but there are fewer roadblocks than ever.
We ARE the recovery. Actions, words, deeds, ideas, transactions. But first, we need a recovery mindset. Most Albertans have it. If you don’t have it yet, reach out a hand – someone will shake it enthusiastically, and roll up their sleeves alongside you.
Recovery starts with a step forward, not back. Sometimes it feels like we are going the wrong direction, but determination finds its way forward. If you’re up, have a great idea you want to shout-out, give me a call.
If you’re feeling too low down to see the light just yet, give me a call. I’ll buy the coffee – and we’ll get where we need to go, one step at a time. One day at a time. One month at a time, all twelve. We ARE all in this together.
…
Readers, please stay tuned to this space. Each week, starting today, there will be an opinion piece published each week. Most often it will be mine. Sometimes guest pieces. Sometimes re-publishing something great from somewhere else. The purpose is to generate discussion, discuss contrary opinions and offer insights to what is happening in our little prairie town. For many this will not be a happy new year due to circumstances.
Some circumstances cannot be fixed, but our attitude and viewpoint can change – can be inspired, and when it does we can get fired up. We get to choose if we are victims or players. Are we going to roll over and play dead? Or work our tuchuses off?
Views expressed in this article are the author's own and do not necessarily reflect FACILITYCalgary's editorial policy or views of our sponsors.
Welcome to the VIEWPOINT page. Something new at FACILITYCalgary. VIEWPOINT will be an OP-ED page, authored by Mark Kolke most weeks and by others with guest pieces from time to time - to provide our readers with perspective, opinion and thought provoking ideas in a longer format than news-bytes-light which give information but without room for context. Opinions and feedback are, of course, always welcomed.
Sometimes they'll even be published.
Mark Kolke, Editor/Publisher
FACILITYCalgary considers guest opinion articles on any topic, for the VIEWPOINT page. Articles typically run from 400 to 1,200 words, but submissions of any length will be considered. All submissions must be original, and exclusive to FACILITYCalgary. We will not consider articles that have already been published, in any form, in print or online. Submissions may be sent: