Calgary Economy

[Chadillaccc]

Originally Posted by ItsALondonThing

As someone who is shortly emigrating to Calgary, and as somebody who works for a consultancy in Oil & Gas, I am a little concerned to read the stories in the press over the last few days regarding the drop in oil price and how its likely to be very negative for the Alberta economy. Here are links to just a few:

http://globalnews.ca/news/1617917/oi...nd-canada-too/

http://www.theglobeandmail.com/repor...ticle21116012/

http://www.edmontonjournal.com/Alber...975/story.html

To what extent will this affect Calgary? Will we see big projects cancelled and cut backs in state spending?

Here's a pretty great article on the situation. Worth a read, and should put your mind at ease. Oil sands operate a lot different than other oil.

http://www.theglobeandmail.com/globe...board/follows/

[Deepstar]

It's hard to say what what be affected, or if there would even be any effect. Oil Sands especially is a different type of business. A prolonged low price could have some affect on postponing a project, but for the most part they are long term projects that don't seem to get affected by the ups and downs of oil prices.

Originally Posted by ItsALondonThing

As someone who is shortly emigrating to Calgary, and as somebody who works for a consultancy in Oil & Gas, I am a little concerned to read the stories in the press over the last few days regarding the drop in oil price and how its likely to be very negative for the Alberta economy. Here are links to just a few:

http://globalnews.ca/news/1617917/oi...nd-canada-too/

http://www.theglobeandmail.com/repor...ticle21116012/

http://www.edmontonjournal.com/Alber...975/story.html

To what extent will this affect Calgary? Will we see big projects cancelled and cut backs in state spending?

[Spring2008]

Home Depots 425,000 sf rapid deployment centre broke ground, next to their 625,000 sf dc. Calgary's quickly becoming the distribution hub of the west.

Home Depot breaks ground on new Calgary Rapid Deployment Centre

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Home Depot Canada president Bill Lennie speaks at the ceremonial groundbreaking for Home Depot’s new Rapid Deployment Centre which will be built...more

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From left; Serge Carestia, Home Depot Canada Vice-President of Supply Chain, Home Depot Canada president Bill Lennie, Calgary Mayor Naheed Nenshi and...more

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Home Depot Canada president Bill Lennie helps Calgary Mayor Naheed Nenshi tie on an orange Home Depot apron for the ceremonial groundbreaking of Home...more
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BY MARIO TONEGUZZI, CALGARY HERALD OCTOBER 30, 2014
The Home Depot Canada officially broke ground Thursday on its first Rapid Deployment Centre in Western Canada to be located in Calgary’s Dufferin North Industrial Park in the southeast.

The retailer said the centre will create more than 150 jobs for the community throughout its construction and opening.

“The new RDC will ensure the right amount of stock flows to stores across British Columbia, Alberta, Manitoba and Saskatchewan,” said the company.

It said the 425,000-square-foot centre, located in the Shephard industrial area at 6325 106th Ave. S.E., will be a fast-flowing Canadian Pacific rail-served distribution centre sending products directly to 70 stores located across Western Canada.

It is being built alongside the company’s 640,000-square-foot Stocking Distribution Centre, which is also currently under construction. Earlier this year, The Home Depot Canada opened its first RDC in Vaughan, Ontario to service Central and Eastern Canada.

Bill Lennie, president of The Home Depot Canada, said the company has 70 stores in Western Canada with 27 stores in Alberta and 10 in the Calgary region.

“This is really one construction project and both facilities are co-located on the same campus,” said Lennie, adding the two centres will employ about 200 people. Lennie was in Calgary for the groundbreaking ceremony which took place at the downtown CPR Pavilion.

“This is going to take Home Depot to the forefront of supply chain and logistics distribution . . . A million square feet is pretty typical for the RDC campuses. This one is unique in the way that it’s divided. It’s the first time that we’ve co-located a Stocking Distribution Centre with a Rapid Deployment Centre. So this is really the next step, or next phase of supply chain for the Home Depot. It’s the first of its kind for us. I think it’s the first of its kind in North America.”

Lennie said the company went through extensive research for logistics, for flow of freight, for cost of operations, and the community to do business in.

“We put all those factors together and Calgary was a clear-cut decision for us as the place we wanted to locate our facility. This not only services all of our stores in Western Canada but it’s also the stopping point and distribution point for all of our direct import flow. So from B.C. to Calgary and then onto our rapid deployment centre in Toronto and to our stores as far out as the Atlantic . . . And CP being a great business partner of ours was another big piece of the decision.”

Construction has started on the RDC which is expected to be completed by December 2015. The SDC is expected to be completed a month later.

Calgary Mayor Naheed Nenshi said the city developed the Dufferin North Industrial Park in Calgary’s southeast for projects like this: distribution and logistics business centres that need to be close to major transportation hubs.

“We are happy to welcome Home Depot’s Rapid Deployment Centre to our Dufferin North Industrial Park because it will provide diverse employment opportunities, support economic diversification, and promote the movement of goods to benefit Calgarians and local businesses,” he said.

Keith Creel, CP’s president and chief operating officer, said the new Home Depot facilities, located beside the railway’s Intermodal Terminal in Calgary, takes advantage of CP’s ability to integrate its services with the supply chain operations of a leading retailer.

Bruce Graham, president and chief executive of Calgary Economic Development, said the new facility is a huge step forward in solidifying Calgary’s position as Western Canada’s transportation and logistics hub.

“It also represents a significant increase in Western Canadian capacity, matching retail market growth and a Home Depot commitment to Calgary as an inland port destination for the pacific gateway,” said Graham.

mtoneguzzi@calgaryherald.com

Twitter.com/MTone123

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http://www.calgaryherald.com/touch/s...ml?id=10338473

[Spring2008]

American developer building 500,000-square-foot distribution centre in Balzac area

Rendering for future 500,000 state-of-the-art distribution centre to be built in the High Plains Industrial Park in the Balzac area.
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BY MARIO TONEGUZZI, CALGARY HERALD OCTOBER 8, 2014
CALGARY - A major investment and real estate development company in the United States, owned by Ross Perot Jr., son of the former presidential candidate and well-known American businessman, is building a 500,000-square-foot distribution facility on spec in the Balzac area, the Herald has learned.

Hillwood Investment Properties is partnering with Calgary-based Highfield Investment Group on the High Plains Industrial Park development and it represents the Dallas-based company’s first venture into the Canadian commercial real estate market.

Hillwood said the new state-of-the-art, large-scale cross-dock distribution centre will be the largest spec building of its kind in Alberta and it will target companies seeking a highly-efficient distribution centre serving Western Canada.

“We chose this market for a substantial long-term investment based on our view that Calgary is the distribution hub for western Canada with growth potential,” said Perot, chairman of Hillwood. “Hillwood looks forward to partnering with a strong development company like HIG to deliver a high-quality industrial space for top tenants across the region.”

Adrian Munro, chief executive of HIG, said the industrial park, located just east of the CrossIron Mills shopping centre, is already home to a 1.3-million-square-foot Target facility and Gordon Food Service is building a 290,000-square-foot facility.

The Balzac area’s proximity to infrastructure is a big reason why distribution centres are being built out there, said Munro.

“The ability to get from High Plains to Stoney Trail to (Queen Elizabeth 2 Highway) to north, south, east and west,” he said. “The proximity to infrastructure is a major inducement.

“When we set out with High Plains a few years ago, our vision was to create a niche product - a product that would fill price point to marketplace. We set out to keep our prices below $500,000 per acre to the end-user and as a result we’ve seen significant traffic because of the price point to market.”

He said typical land prices in Calgary are $650,000 to $800,000 per acre.

A third reason for the high interest in the area, he said, is that Rocky View County provides a tax advantage for companies compared with the City of Calgary. He said that advantage is about 80 cents to one dollar per square foot and can result in significant annual savings.

“This speaks volumes to how Alberta is positioned in the North American market,” said Munro. “To be able to attract a company of their magnitude to Canada and attract them to Alberta speaks volumes for how Alberta is positioned for growth in the future and also the Calgary area.

“We’re undergoing almost a transformation. We are going to become a distribution hub in the future. We’re there now. We see some distribution out of here. But the full go forth distribution in western Canada is starting to become the Calgary area.”

Colliers International in Calgary is the listing agent for large-scale transactions in High Plains including the Hillwood project.

Hillwood is the second largest owner of land for future development of more than 87 million square feet of logistics space in the U.S. The company is best known for its Alliance brand that includes the 18,000-acre AllianceTexas, 4,474-acre AllianceFlorida at Cecil Commerce Center, and 2,000-acre AllianceCalifornia.

“Hillwood’s entry into the Canadian real estate market represents our strong confidence in both the Alberta and Calgary economies,” said Chris Brown, senior vice-president of Hillwood Investment Properties. “We are excited to be working with HIG and look forward to additional projects in the future.”

http://www.calgaryherald.com/touch/s...ml?id=10273035

[ItsALondonThing]

Brent crude now trading in London at $82. Can Alberta suffer this for long?

[geotag277]

Originally Posted by ItsALondonThing

Brent crude now trading in London at $82. Can Alberta suffer this for long?

Oil sands break even price is in the 60s, so projects will be profitable instead of wildly profitable. Assumed investment horizons regarding oil sands projects generally don't care about the random dips and valleys and peaks of the oil price. These guys are smart enough to realize oil is a fluctuating commodity.

It's worth pointing out that oil has dipped below the break even point for oil sands (under 60 between 2007 and 2009), and Alberta "suffered" through it just fine, growing as a province, growing as an economy, albeit at a more "healthy" rate.

Here's a handy graph showing Alberta's economic history, and the relative contribution of oil sands oil. Note that even without oil sands completely, Alberta's economy is still on a constant upwards trajectory.

[Sands]

Originally Posted by geotag277

Oil sands break even price is in the 60s, so projects will be profitable instead of wildly profitable. Assumed investment horizons regarding oil sands projects generally don't care about the random dips and valleys and peaks of the oil price. These guys are smart enough to realize oil is a fluctuating commodity.

It's worth pointing out that oil has dipped below the break even point for oil sands (under 60 between 2007 and 2009), and Alberta "suffered" through it just fine, growing as a province, growing as an economy, albeit at a more "healthy" rate.

Here's a handy graph showing Alberta's economic history, and the relative contribution of oil sands oil. Note that even without oil sands completely, Alberta's economy is still on a constant upwards trajectory.

I have to say this chart is old and misleading today. Back to 2000-2005, Oil Sands production is still relatively small. In the last 10 years, we have seen robust production and investment growth in oil sands, where as conventional oil and gas is declining. so Today the weight or impact of oil sands to our economy is probably more look like without conventional oil and gas curve in your chart.

[Spring2008]

I could be wrong, but I don't think oil prices will stay low, fundamentals remain moderately strong across the US and developing nations.

[Ramsayfarian]

Originally Posted by Spring2008

I could be wrong, but I don't think oil prices will stay low, fundamentals remain moderately strong across the US and developing nations.

I'm no economist nor am I an O&G expert, so this only my highly uneducated opinion.

We are hooped in the short term. We've had corrections before and we've had the bottom drop but we've never had our biggest trading partner be energy independent and the States is almost there.

The middle east, if not the world, seems to be the most unstable it has been in over a decade and the price is still dropping.

Due to extremely low production cost, The Saudis can ride this out laughing all the way to the bank. There's one theory that they're driving the price down to scare off a bunch of the larger shale projects in the States. If true, this could bode well for Alberta.

Long term we'll be fine. Eventually the US will either frac themselves into oblivion or markets will open up. At the very least production will slow down, so on the plus side there might be something left for future generations.

Production is already being cut, the price will stabilize and there will still be money to be made, but I foresee more layoffs, more offshoring, and probably more than a few canceled construction projects.

[Fuzz]

Its not as bad for Canada as it seams. With our dollar declining, and oil being priced in USD, we aren't all that much worse off than when our dollar was at or over par. The US shale gas boom ain't gonna last forever, those wells have fast declines and require lots of drilling activity to keep production up. I think there is a reason you aren't seeing to much panic in the oil patch the past couple weeks. They know the reality, it isn't all that bad.

[Ramsayfarian]

Originally Posted by Fuzz

Its not as bad for Canada as it seams. With our dollar declining, and oil being priced in USD, we aren't all that much worse off than when our dollar was at or over par. The US shale gas boom ain't gonna last forever, those wells have fast declines and require lots of drilling activity to keep production up. I think there is a reason you aren't seeing to much panic in the oil patch the past couple weeks. They know the reality, it isn't all that bad.

It's not just shale gas, there's shale oil and I'm not sure about drilling activity, but i do know their proven reserves are slightly less than Saudi Arabia now. Saudi's production costs for a barrel of oil are slightly less than what we pay for a gallon of gas.

The reason why we're not seeing much panic is because it's only been two weeks. That would be a bit hasty.

[Doug_Cgy]

I heard on the news today that the mid-term elections in the US yesterday could bode well for Alberta oil and Keystone XL (due to Republican majority in the house)

[Chadillaccc]

The election was a catastrophe for the interests of the American people, but a nearly unprecedented victory for American business. The American people's loss could very well be our gain, unfortunately.

[CorporateWhore]

Originally Posted by Chadillaccc

The election was a catastrophe for the interests of the American people, but a nearly unprecedented victory for American business.

Leadership in the US has been catastrophic for the interests of the American people for a really long time now, no matter who wins what title. The Democrats are just as controlled by special interest and lobby groups as the Republicans. Or to put it more succinctly; same shit, different pile.

[Ramsayfarian]

Originally Posted by Doug_Cgy

I heard on the news today that the mid-term elections in the US yesterday could bode well for Alberta oil and Keystone XL (due to Republican majority in the house)

Glad to hear that there could be an upside to them going full retard.

[Ramsayfarian]

Originally Posted by CorporateWhore

Leadership in the US has been catastrophic for the interests of the American people for a really long time now, no matter who wins what title. The Democrats are just as controlled by special interest and lobby groups as the Republicans. Or to put it more succinctly; same shit, different pile.

I agree that it's pretty much the same shit, different pile, but at least the Democrats have not embraced stupidity and ignorance with open arms like the Republicans have.

[geotag277]

Originally Posted by Ramsayfarian

I agree that it's pretty much the same shit, different pile, but at least the Democrats have not embraced stupidity and ignorance with open arms like the Republicans have.

Democrats appeal to one demographic and Republicans appeal to the opposite demographic. They play their roles great, but it's best to think of American politics as a business. There is a shit load of money in elections, politics, lobbying - and both parties benefit hugely from this idea that the two sides are diametrically opposed and you need to passionately support one over the other. Huge money in that. And so the pendulum swings from democratic leaning to republican leaning every four to eight years (funny how that works) and billions and billions and billions of dollars change hands along the way.

The only issue that really matters in the US is election reform, but neither party will touch it because it's bad for business. There is no option in the US but the status quo. Meanwhile, democrats will be paying lip service to equal rights and social reforms for the next 100 years, and republicans will be talking about abortion and social conservatism for the next 100 years, and things will progress as they always have regardless of who gets voted in. IMO there are no winners.

[Allan83]

Originally Posted by Fuzz

Its not as bad for Canada as it seams. With our dollar declining, and oil being priced in USD, we aren't all that much worse off than when our dollar was at or over par. The US shale gas boom ain't gonna last forever, those wells have fast declines and require lots of drilling activity to keep production up. I think there is a reason you aren't seeing to much panic in the oil patch the past couple weeks. They know the reality, it isn't all that bad.

Here’s an interesting chart:


The story with it is titled, The Only Oil Price Going Up in the World Right Now:

This is a custom built chart of Canadian heavy oil prices (Western Canada Select–WCS) - in Canadian dollars. (Canadian dollar charts are hard to find!). This chart takes into account the lower Canadian dollar against the greenback. It shows that heavy oil producers aren't hurting - in fact, they're getting some of the best prices ever in the last five years...
http://finance.yahoo.com/news/only-o...xUxBQAKR.TmYlQ

[Ramsayfarian]

Originally Posted by geotag277

Democrats appeal to one demographic and Republicans appeal to the opposite demographic. They play their roles great, but it's best to think of American politics as a business. There is a shit load of money in elections, politics, lobbying - and both parties benefit hugely from this idea that the two sides are diametrically opposed and you need to passionately support one over the other. Huge money in that. And so the pendulum swings from democratic leaning to republican leaning every four to eight years (funny how that works) and billions and billions and billions of dollars change hands along the way.

The only issue that really matters in the US is election reform, but neither party will touch it because it's bad for business. There is no option in the US but the status quo. Meanwhile, democrats will be paying lip service to equal rights and social reforms for the next 100 years, and republicans will be talking about abortion and social conservatism for the next 100 years, and things will progress as they always have regardless of who gets voted in. IMO there are no winners.

Originally Posted by geotag277

Democrats appeal to one demographic and Republicans appeal to the opposite demographic. They play their roles great, but it's best to think of American politics as a business. There is a shit load of money in elections, politics, lobbying - and both parties benefit hugely from this idea that the two sides are diametrically opposed and you need to passionately support one over the other. Huge money in that. And so the pendulum swings from democratic leaning to republican leaning every four to eight years (funny how that works) and billions and billions and billions of dollars change hands along the way.

The only issue that really matters in the US is election reform, but neither party will touch it because it's bad for business. There is no option in the US but the status quo. Meanwhile, democrats will be paying lip service to equal rights and social reforms for the next 100 years, and republicans will be talking about abortion and social conservatism for the next 100 years, and things will progress as they always have regardless of who gets voted in. IMO there are no winners.

Thanks for explaining the American political system to me like I'm five. In your defense, I could see how, one may think I need to be explained to at that level. However, I'm worried about your simplistic view as you make it seem like politics of late is normal and that it's really just a harmless a game. I hope you were just dumbing it down on my behalf.

Your comment did make me smile as I do appreciate the effort and the good nature in which you posted. I'm kind of news/world politics junkie and spend way too much time on the net.

I read your post as I was taking a break from reading this Rollingstone article about Chase Bankss involvement in the sub-prime fiasco. Very long slog, but so far it's been worth the grind. To stay topical, the lawyer whom the article is about is a Canuck and worked in Calgary after she got fired from Chase. She was the sole reason why they agreed to pay a $9 billion fine. Go Canadian Ethics!!
http://www.rollingstone.com/politics...0141106?page=3

I'm no expert but I do like to think that I have a fair understanding for a person of my limited intellect on how things work.

There's partisanship and then there's doing what's right for the country and fellow Americans, not what's best for big business at the expense of the well being of Americans and their country.

Yes Democrats are at the trough and their handling of Wall Street after the subprime crisis is bullshit and a crime unto itself.

The Democrats are also weasels, but they didn't engineer a couple of wars. On this last one they did stand by like sheep, but Bush and Co had whipped the country into a murderous frenzy. A trillion dollars later and over 100K confirmed dead and up to a million est as a side effect of living in a country that has had the shit bombed out of it.

Combine that with Obama's brutal handling of post war Iraq and the brutality of Al-Maliki and now we have ISIS. Which kind of makes us pine for the days of Osama and his loveable gang of misfits. Who got his start back in the 80s and was trained and supplied by Americans under a Reagan.

Now we are bombing American tanks and other assorted goodies that ISIS looted.

But I digress

Both parties are evil, however the Republicans with their new found friends in the Tea Party have sunk to new lows and have proudly embraced ignorance and mock science. They have realized only the truly rich or the extremely ignorant/frightened will vote for them.

In a free and democratic society, there is no way in the world the Republicans would have won the senate. Not with their track record. Not after the bullshit the pulled with the budget.
Republicans basically bought their victories and what they couldn't buy they tried to disenfranchise or gerrymandered the ridings.


Political reform is not going to happen, but they can start to fix things by overturning Citizens United and get big money out of politics. Until that happens there's no hope of changing anything.

In the mean time the Republicans will continue to destroy the middle class and continue to not give a crap about the less fortunate and help the rich get richer, and they will continue to win elections one way or another.

[MichaelS]

Just to your point about the Democrats not wanting to engineer a couple of wars, what is your take on Obama and Kerry's strong desire to invade Syria last year? Were it not for Putin getting Asad to give up his chemical weapons, the Democrats would have led America into another war it seems.