Calgary Economy

[Infrequent Poster]

Originally Posted by Surrealplaces

Supposedly July was a really bad month for Calgary...the worst month over month numbers since the downturn, so not too surprising that the unemployment rate would rise. In the grand scheme of things, we are 8 months into the downturn with an unemployment rate of 6.6% so not too bad.

But remember when you said this......Originally Posted by Surrealplaces View Post
"That's gotta be at least 100 people! Also from the same article.....
Quote:
In mid December, TD Economics predicted Alberta’s unemployment rate would increase to 5% next year and then rise further to 5.2% in 2016.

It looks like the sky is falling....time for some people to go home and celebrate."



Not trying to throw anything in your face, but your tune is sort of changing in my opinion. For clarity you made that comment about five months ago.

[Policy Wonk]

If you really want to see people running around with their hair on fire about the Alberta economy, talk to the good people of the Las Vegas hospitality industry.

[Spring2008]

Calgary makes Economist Top 10 list of best places to live in the world
Liveability and cost of living factors in ranking
CBC News Posted: Aug 18, 2015 7:52 AM MT Last Updated: Aug 18, 2015 7:53 AM MT

Calgary ranked No. 5 in the Top 10 best cities to live in the 2015 Economist Intelligence Unit report. (Leslie Kramer/CBC)


Economist Intelligence Unit top ten cities list
(Note: CBC does not endorse and is not responsible for the content of external links.)

Calgary has made the Economist Intelligence Unit's Top 10 list of best places in the world to live.

It joins the ranks of Vancouver, rated at No. 2, and Toronto at No. 3.

The best place in the world to live for the fifth year in a row is the Australian city of Melbourne.

The annual liveability survey looks at factors including culture, infrastructure, health care and education.

While the Top 10 cities garner the most attention, the survey also shows an increase in global instability in the past year. Liveability has decreased in 140 of the world's cities, it says. Civil unrest and ongoing conflicts contribute to the decline.

"The threat to personal safety, whether in the form of crime, unrest or conflict has knock on implications for other aspects of liveability," said Jon Copestake, editor of the survey.

"Last year, events in Ukraine and the Middle East formed a sobering backdrop to global liveability, but in the last twelve months this has been compounded by protests in the U.S., sanctions in Russia and shootings in France and Tunisia." he said in a statement.

http://www.cbc.ca/news/canada/calgar...orld-1.3194619

The five most liveable

Country

City

Rank (out of 140)

Overall Rating (100=ideal)

Australia

Melbourne

1

97.5

Austria

Vienna

2

97.4

Canada

Vancouver

3

97.3

Canada

Toronto

4

97.2

Australia

Adelaide

5

96.6

Canada

Calgary

5

96.6

http://www.eiumedia.com/index.php/la...-attacks-mount

[Surrealplaces]

If you're not trying to throw this in my face, then why dig up something from 5 months ago?....is it to show that I've changed my tune? To inform us Calgarians that we lost jobs in July so the sky is indeed falling? Or to prove that the unemployment rate in Calgary is higher than the TD bank predicted?

For the record, yes, my tune probably has changed a little bit because the economy has obviously changed. 5 months ago when I posted that and up until July, jobs were still increasing, and in July they decreased.... As far as the sky not falling.....my tune hasn't changed on that. If I lived in Greece or Spain where unemployment is in the mid 20's maybe the sky would feel like it's falling, but 6.6% instead 5.6% isn't exactly the sky falling IMO.

Originally Posted by Infrequent Poster

But remember when you said this......Originally Posted by Surrealplaces View Post
"That's gotta be at least 100 people! Also from the same article.....
Quote:
In mid December, TD Economics predicted Alberta’s unemployment rate would increase to 5% next year and then rise further to 5.2% in 2016.

It looks like the sky is falling....time for some people to go home and celebrate."



Not trying to throw anything in your face, but your tune is sort of changing in my opinion. For clarity you made that comment about five months ago.

[flipstah]

I'm on month 1 of funemployment and I'm trying to get out O&G. Not sure if moving out of the province is wise.

[Tills13]

Originally Posted by flipstah

I'm on month 1 of funemployment and I'm trying to get out O&G. Not sure if moving out of the province is wise.

Our worst is, it seems, better than most provinces' best.

[Infrequent Poster]

Originally Posted by Surrealplaces

If you're not trying to throw this in my face, then why dig up something from 5 months ago?....is it to show that I've changed my tune? To inform us Calgarians that we lost jobs in July so the sky is indeed falling? Or to prove that the unemployment rate in Calgary is higher than the TD bank predicted?

For the record, yes, my tune probably has changed a little bit because the economy has obviously changed. 5 months ago when I posted that and up until July, jobs were still increasing, and in July they decreased.... As far as the sky not falling.....my tune hasn't changed on that. If I lived in Greece or Spain where unemployment is in the mid 20's maybe the sky would feel like it's falling, but 6.6% instead 5.6% isn't exactly the sky falling IMO.

Ok maybe I am putting it in your face a bit. For that I apologize. I didnt have to dig up your comment, or go looking for it. The reason why is because at the time you made it. Any and all discussion on the matter was met by people like you immediatly down playing and trying to handwave away any and all talk of any sort of downturn. I remember people crying that alberta was being picked on etc. Like it was ridiculous. I found the subject interesting (as did many others on here) and all talk of it was being censored. Comments being deleted, entire threads being deleted sometimes within minutes.

Now fast forward 5 months and when I read your comment saying how 6.6% unemployment is pretty good. After suggesting that the unemployment level would only be at 5.2 in 2016 never mind 2015. It just made me think of how you (excuse me for putting it this way) arrogantly handwaved away any and all notion of any sort of a potential downturn.

I mean your kind of doing the exact same thing now, with your comment about greece in my opinion. You are moving the goal posts.

So again I apologize for calling you out. But I just call it like I see it.

[Surrealplaces]

No need to apologise, it's all just civil debate

True, many of us here in Alberta were dismissive about the whole downturn situation. At the time everyone knew there was going to be a downturn, but nobody really knew what was going to happen....and still people don't know really. I never made any predictions, only posted what TD bank had predicted. You must have been new to the forum back then, because you'd know that those posts weren't really about the economy. They were just part of a long running region vs region city vs city bickerfest that has been going on for ages, and unfortunately people get sucked in..me included....that's really the reason the thread got closed.

Many of the Albertans that were being arrogant were doing so because there were a few forumers who seemed to be taking joy (and I don't doubt for a second that they were) in posting the negative news...anything negative they could possibly dig up. If you hang out in the Canada section long enough you'll know what I mean. Was Alberta picked on? Let's put it this way, we have seen other areas of the country have unemployment spikes and bad news for the economy at various times, but you don't see Alberta forumers jumping on the bandwagon and posting every negative thing they can find. The posts 5 months ago weren't about the economy, they were just the usually city vs city region vs region bullshit that permeates the Canadian section.


Using Spain or Greece might be extreme, but it's to make a point. The sky isn't falling, and I still don't think it is even though the unemployment rate is 1% higher than it predicted to be. If it goes up another percent or two I still won't think it is. It won't be good for Calgary/Alberta, but we've seen unemployment rates jump and drop around Canada for years.

Originally Posted by Infrequent Poster

Ok maybe I am putting it in your face a bit. For that I apologize. I didnt have to dig up your comment, or go looking for it. The reason why is because at the time you made it. Any and all discussion on the matter was met by people like you immediatly down playing and trying to handwave away any and all talk of any sort of downturn. I remember people crying that alberta was being picked on etc. Like it was ridiculous. I found the subject interesting (as did many others on here) and all talk of it was being censored. Comments being deleted, entire threads being deleted sometimes within minutes.

Now fast forward 5 months and when I read your comment saying how 6.6% unemployment is pretty good. After suggesting that the unemployment level would only be at 5.2 in 2016 never mind 2015. It just made me think of how you (excuse me for putting it this way) arrogantly handwaved away any and all notion of any sort of a potential downturn.

I mean your kind of doing the exact same thing now, with your comment about greece in my opinion. You are moving the goal posts.

So again I apologize for calling you out. But I just call it like I see it.

[Spring2008]

Cool
http://calgaryherald.com/business/en...ails-big-swing

Yedlin: CP Rail takes big swing

In seeking to buy Norfolk Southern, its much larger rival, Calgary-based Canadian Pacific Railway is doing something Canadian companies rarely do — making a ‘stretch’ acquisition that vaults it into an entirely different rank in terms of size and competitiveness.

While banks have ventured south of the border, a deal worth almost $30 billion involving the purchase of a U.S. competitor has never been undertaken by a Canadian company.

You have to go back to 2004, when Manulife Financial bought the Massachusetts-based insurance company John Hancock in an all-stock deal valued at US$10.3 billion to find a Canadian company in a trans-border deal of size.

The proposed merger — sent politely by letter and somewhat reminiscent of a bygone era when young male suitors formally asked their (hopefully) future fathers-in-law for permission to marry their daughters — would make CP Rail the largest railway in North America.


It would also allow bypassing of the congested Chicago hub, which has long been seen as the pinch point for North American rail traffic. One-fourth of all U.S. rail traffic passes through that city every day.

No one is building new rail on this continent and there is more rail traffic today carrying freight than there has been in almost 10 years. Those increased carloads are not due to the lack of pipeline capacity. The reality is that oil by rail is not as big a player on an aggregate basis. Rather it reflects the changing nature of the American economy and the fact it’s on an upward growth trajectory.

The bid for Norfolk Southern is as audacious as it is clever.

CP Rail is the smaller of the two companies, but sees an opportunity where the new entity is greater than the sum of its parts given the efficiencies that could be realized.

It also comes as Norfolk Southern is under similar pressures to reduce costs and decrease its operating ratio as Canadian Pacific was in 2012, when Pershing Square’s Bill Ackman took a 14.2 per cent interest in the storied railway. He succeeded in shaking up the railways board of directors while installing Hunter Harrison as chief executive.

At the time, CP’s operating ratio was close to 80 per cent, the worst of the continent’s Class I railroads. Norfolk’s operating ratio is reportedly about 70 per cent.

Harrison pledged to bring down CP Rail’s operating ratio when he took over. When Canadian Pacific reported third- quarter earnings last month, the numbers showed an operating ratio of 59.9 per cent — the lowest in the railway’s history.


The market has to be looking at what Harrison has achieved at CP Rail and thinking he, with president Keith Creel, could work the same magic at Norfolk Southern.

Another reason for the two companies to come together, according to CIBC World Markets, is that it would decrease Norfolk’s exposure to coal, which makes up 15 per cent of its freight loads.

There is no mistaking the fact the coal industry is under siege and the amount of coal being mined and shipped for electricity production in North America is only decreasing.

Of course, Canadian Pacific’s overture is only a first step in what could be a long journey.

There are regulatory hurdles to overcome and, as with every proposal to merge or buy a company, the first offer is rarely the highest and best. From Norfolk’s perspective, it’s name is now on a dance card. The question for both its board and management is whether it wants a long-term relationship with Canadian Pacific or another partner.

There other aspects to CP Rail’s move that make it exciting, including the fact that by swinging big it’s taking a page from the 2007 book Northern Tigers, written by legendary oilpatch veteran Dick Haskayne.

In his book, Haskayne laments the missed opportunities of Canadian companies with heft on the continental and/or international stage, suggesting it’s important corporate Canada aim higher or risk being acquired by foreign players.

It’s an argument Haskayne ardently voiced when Australian mining giant BHP Billiton sought to buy Saskatchewan’s Potash Corp. and was one of the precepts that drove the merger between PanCanadian Energy and Alberta Energy Corp in 2002. Creating an energy company of size would make it less vulnerable to a foreign takeover and instead able to acquire assets.

The proposal also comes amid a dearth of good news coming from Calgary and its energy-heavy world. Layoffs persist, the oil price languishes and the industry is under tremendous pressure from many angles. The very notion this city could become home to North America’s largest railway company is just downright cool.

Finally, the railway is the last surviving entity created by the starburst when holding company CP Limited spun out five publicly traded entities in 2001: CP Ships, PanCanadian (now Encana), CP Hotels, Fording Coal and CP Rail.

If the deal to buy Norfolk does succeed it will ensure the railway that united this country from coast to coast will continue to play an important role not only in Canada, but across North America.

It’s a legacy that would make former prime minister Sir John A. Macdonald more than a wee bit proud.

Deborah Yedlin is a Calgary Herald columnist

dyedlin@calgaryherald.com

[lubicon]

Originally Posted by Spring2008

Cool
http://calgaryherald.com/business/en...ails-big-swing

Not so cool if they move the HQ out of Calgary, which is entirely possible.

[Vercingetorix]

Originally Posted by lubicon

Not so cool if they move the HQ out of Calgary, which is entirely possible.

It wouldn't be a positive, but the worst case scenario would be the moving of a handful of executives. Most likely not a lot would change for either side.

[McMurph]

Doesn't CP still benefit from the historic deals that were made with the government over the last 150 years (right of ways, land ownership, policing, etc). A few head office jobs may not be a concern. A foreign owned and operated company acting as a sovereign ruler over a huge hunk of land (including many inner-city swaths) might be. Even as it is, CP went a bit rogue during the 2013 floods and that was when they were happening within site of their HQ.

[MalcolmTucker]

There are foreign owned railways in Canada today. Also, can't confuse ownership with control, in a regulated industry the government always has the power to be in control.

This would be subject to the Foreign Ownership of Land Regulations (Joint Federal and Provincial), as it is way more land than 80 acres. (provincial copy here)

[ragerunner1]

Hopefully oil prices and the industry will stabilize in 2016.

Suicide rate in Alberta up 30% in wake of mass oilpatch layoffs
http://www.cbc.ca/news/canada/calgar...offs-1.3353662

The rise and fall of the oilpatch Christmas party
This year in Calgary, the Grinch stalks the land when it comes to corporate Christmas parties
http://www.cbc.ca/news/canada/calgar...lled-1.3343075

[Bokimon]

I keep hearing alot about OPEC being mentioned with all of this. I did some searching and it looks like Canada isn't even on that list of member states, nor is the USA. Despite us producing a decent chunk of oil for the worlds needs.
Many of the members there are actually middle eastern nations some whom are of not so friendly states. Do these folks over there really have control over how our oil is sold thus calling the shots on our economy and that of North America?

It seems kind of shady with so much misery going on in our province that the fat cats on the other side of the world don't seem to care or are perhaps punishing the west for our Shale and Oilsands products.

Or maybe I am just not informed enough with the workings of the global oil market and our governments lack of foresight is to blame

[geotag277]

Originally Posted by ragerunner1

The rise and fall of the oilpatch Christmas party
This year in Calgary, the Grinch stalks the land when it comes to corporate Christmas parties
http://www.cbc.ca/news/canada/calgar...lled-1.3343075

I think we've all heard the anecdotes of out of control XMas parties in the oil and gas sector, but as a personal anecdote I have been a bit lazy this year planning my own company Christmas party. We usually go out to dinner and for some reason the mass media news obsession with Christmas party cancellations made me think I could delay a bit organizing this years. Well, I left it until early November and of course everything was booked solid until Christmas.

The wild parties might be tamed from the more extravagant outliers in the industry, but from my experience as a boots on the ground business owner, Christmas is definitely not cancelled in Calgary this year.

[geotag277]

Originally Posted by Bokimon

I keep hearing alot about OPEC being mentioned with all of this.

OPEC is kind of like a price fixing cartel. This kind of organization to fix prices would be illegal in many Western countries, but they supply a majority of the world oil so they somewhat can do what they want. It's simply an agreement between middle eastern countries on production targets.

Oil is supply and demand, and in periods of oversupply, the price goes down. OPEC generally fluctuates demand so that prices are consistent. Thus, a price fixing cartel.

There is kind of a perfect storm if issues brewing which is causing OPEC to not want to reduce supply.

Firstly, the main oil growth over the past few years has been US Shale oil, not under OPEC control. The only effect OPEC reducing production would have on a producer outside of their little group is that their group loses market share in the world oil market.

Secondly, Iran is returning to the world market following the nuclear sanctions being lifted, and they want to return to their pre-sanction production within OPEC.

That really wouldn't be good for anybody, but Iran and Saudi Arabia are not exactly friends in the middle east and so no one is really backing down. Thus, a perfect storm of over supply continuing for the foreseeable future.

I think we shouldn't get too wrapped up in our own problems here in Calgary regarding oil. Oil prices being this low really aren't good for anybody, including Saudi Arabia. Many OPEC states are losing billions and billions of dollars right now as they fund their public services with oil money. This kind of stand off between Saudi Arabia and Iran can have very serious destabilizing effects on the middle east in general. Calgary oil sands producers are the least of my worries.

[lineman]

Originally Posted by Bokimon

I keep hearing alot about OPEC being mentioned with all of this. I did some searching and it looks like Canada isn't even on that list of member states, nor is the USA. Despite us producing a decent chunk of oil for the worlds needs.
Many of the members there are actually middle eastern nations some whom are of not so friendly states. Do these folks over there really have control over how our oil is sold thus calling the shots on our economy and that of North America?

It seems kind of shady with so much misery going on in our province that the fat cats on the other side of the world don't seem to care or are perhaps punishing the west for our Shale and Oilsands products.

Or maybe I am just not informed enough with the workings of the global oil market and our governments lack of foresight is to blame

AFAIK, OPEC was created as a response to the power that Western-based petroleum multinationals were wielding over member states. To producing countries such as ours they're a nuisance at times, to countries such as Venezuala, OPEC is invaluable.

I could be wrong, but that's what I get out of it.

[Bokimon]

True, I also heard of the cartel reference in which OPEC has been referred to.
Also have heard Saudi must also be losing out with all this glut of extra oil for cheap, but then again they are one of the only countries in the world with over a trillion dollars cashed away in their royal family trust accounts. I guess they can weather the storm for a little while longer even if it was like a billion dollars a day loss. Over here, that would be suicide territory for us.

I keep getting the impression that our North American oil is being seen as a threat to OPEC as during the past years when CAN/USA were really growing especially with the high oil prices maybe we were taking a larger dent in the market share of global demand.
Then again USA probably was trying to be more self sufficient by mostly using their own oil rather than purchasing from the mid east. Lots of solid growth and activity in the Dakotas it seems to scare OPEC and it kinda seems their motive is to crush the Shale Oil Business. This over supply of mid east oil is how many months now, 7 or 8? It would mean potentially at least that much longer in duration for the economic pain we albertan's are feeling now. 2016 will be a crummy year if that is the case.

Its a complicated topic I know but to me it seems there is an element where OPEC has a part to play in and maybe they might have some sinister side to all this. I don't even know if our gov. can even plea to OPEC to stop all this excess production. Sounds too wishful to be a reallity. All I know is they are in record production state while we are dead in our derricks.

[geotag277]

Originally Posted by Bokimon

True, I also heard of the cartel reference in which OPEC has been referred to.
Also have heard Saudi must also be losing out with all this glut of extra oil for cheap, but then again they are one of the only countries in the world with over a trillion dollars cashed away in their royal family trust accounts. I guess they can weather the storm for a little while longer even if it was like a billion dollars a day loss. Over here, that would be suicide territory for us.

I keep getting the impression that our North American oil is being seen as a threat to OPEC as during the past years when CAN/USA were really growing especially with the high oil prices maybe we were taking a larger dent in the market share of global demand.
Then again USA probably was trying to be more self sufficient by mostly using their own oil rather than purchasing from the mid east. Lots of solid growth and activity in the Dakotas it seems to scare OPEC and it kinda seems their motive is to crush the Shale Oil Business. This over supply of mid east oil is how many months now, 7 or 8? It would mean potentially at least that much longer in duration for the economic pain we albertan's are feeling now. 2016 will be a crummy year if that is the case.

Its a complicated topic I know but to me it seems there is an element where OPEC has a part to play in and maybe they might have some sinister side to all this. I don't even know if our gov. can even plea to OPEC to stop all this excess production. Sounds too wishful to be a reallity. All I know is they are in record production state while we are dead in our derricks.

I don't think it's sinister as much as a natural consequence of what happens when a bunch of different players want to produce oil and there isn't enough demand to cover the supply.

If you look at the history of oil, this is always what happens. In the 80s during the oil glut, Saudi Arabia led OPEC in reducing supply to maintain prices. What actually happened was that they lost market share. So they don't want to do that again.

If you go even further back in history, you'll see that in the dawn of oil production in the United States, absolutely no one was making any money at all until Rockefeller bought and consolidated nearly every single oil interest in the United States. That monopoly is what made oil profitable, and in many ways, the OPEC monopoly is what sustains the profitability of oil in the modern age. If you have disparate competing actors all trying to produce oil to as many markets as possible, it is a race to the bottom and no one makes money.

And for all of Saudi Arabia's much tauted oil reserves, they will run out of money in about 5 years at current prices. If you think Alberta has been struggling to diversify it's economy you will be shocked at how devastating that would be for Saudi Arabia.

http://money.cnn.com/2015/10/25/inve...c-middle-east/

Again, I think the biggest risk in all of this is not the fact some oil sands producers in Calgary will struggle for a while, this has serious implications on middle eastern stability in general.