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MAY 2008, Volume
23 Issue 5
What's
Happening in Alberta
CN rolls out Alberta rail
upgrades to Fort Mac
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CN will spend $430 million on
Western upgrades, mostly in Alberta
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Canadian National Railway Co. say it will spend $430 million in rail infrastructure projects in Western Canada this year, with the bulk of it in northern Alberta. The spending includes upgrades to CN's recently acquired Athabasca Northern Railway, an important transportation link to the oilsands region near Fort McMurray. CN bought the 325-kilometre Athabasca line for $25 million in December 2007. It connects with CN track at Boyle, about 160 kilometres north of Edmonton.
The purchase and upgrade plans are based on long-term traffic volume guarantees that the company negotiated with Suncor Energy Inc. for its 200,000-barrel-a-day operation, as well as OPTI Canada Inc. and Nexen Inc. for their joint Long Lake project in Alberta.
CN said the upgraded railway will allow greater volumes of northbound shipments of construction materials and machinery to support the booming oilsands development.
The Montreal-based company also announced plans to build a line to the new container terminal at Prince Rupert, B.C.
This is part of the Port Alberta strategy of the City of Edmonton, and partners, to ensure that the Edmonton region develops as a major North American warehousing, distribution and multi-modal hub, linking road, rail and air throughout the region with marine ports on the West Coast and to the central U.S.
"Alberta's $46 billion GDP annual economy now has an express lane to unprecedented trans-Pacific trade," said Ron Gilbertson, president and CEO of Edmonton Economic Development Corp. "Port Alberta will co-ordinate a strategy to optimize our region's 'road, rail and runway' infrastructure so Edmonton industry can capitalize on new export and back-haul opportunities with Asian markets."
Developers look
to friendly Airdrie
Airdrie may become the destination of choice for industrial and office developers this year because of the soaring cost of serviced land in Calgary, according to Avison and Young.
The commercial real estate agency noted that the price of an industrial acre in Calgary had reached an average of $517,000 as of the end of last year.
"Airdrie has been seeing an average price per acre of $357,000, a very enticing option to [Calgary] investors, owner/users and developers," the company notes.
Avison and Young's study also showed that land for office development in Calgary is posting record numbers as the supply tightens. H&R Real Estate Investment Trust, as one example, paid $48.1 million for the 3.4-acre Calgary site that will be the new Encana head office tower. This works out to $324 per square foot, or $28 per buildable square foot.
"The lack of serviced land available for purchase and development inside of the Calgary city limits continues to be a constraining factor on the market," the study said.
Any new development areas will be on the outskirts of the city and will be highly dependent upon receiving servicing, infrastructure and land use approvals in order to get started, Avison Young suggests.
Aside from Airdrie, other potential commercial and industrial destinations include Balzac, and the Patton/Wrangler Business Park along the eastern edge of Calgary, Avison Young said.
Despite the recent spikes in land values, Avison and Young believes 2008 will be marked by a shift away from speculative plays to a focus on income-producing asset. "A lack of serviced land and the increase in prices has moved land out of the top spot for investors. Expect to see the focus on key fundamentals such as cash flow and quality products," the company said.
In 2007, the study found, Calgary saw an all-time high of $4.7 billion in commercial real estate sales, up by more than $1.4 billion from a year earlier and more than twice the total volume seen in 2005.
Storing emissions
will cost billions
Premier Ed Stelmach is calling on the federal government to ante funding to help cover costs of a new federal emissions reduction plan that targets Alberta's huge oilsands projects.
Stelmach wants Ottawa and the energy sector to "put money on the table" to help fund the proposed multibillion-dollar carbon storage network to capture Alberta's CO2 emissions.
The premier is unhappy with Ottawa's plans to force new oilsands plants to store their CO2 emissions, and he doesn't support a national carbon credit trading system.
Stelmach told the Canadian Press that he plans to "constantly" remind the prime minister that resources fall under provincial jurisdiction, so Alberta will be "looking at the Constitution" over these issues.
Alberta Energy Minister Mel Knight said he sees nothing in the federal plan that would suggest Alberta needs to butt heads with the federal government.
But the premier says he plans to "stand up for Albertans" and he'll oppose any transfer of wealth to other countries or provinces by way of carbon-credit trading.
More job seekers
heading West
A Central Canada slump in manufacturing, combined with a robust job outlook in the West, may lead to an increase in inter-provincial migration to Alberta this year, suggests the Conference Board of Canada.
The east-west economic disparity will remain pronounced in 2008, as the five fastest-growing cities in Canada will all be west of Ontario, according to the board's Metropolitan Outlook for 27 Canadian Cities.
"Calgary and Edmonton will remain in a league of their own in 2008," said Mario Lefebvre, director, centre for municipal studies.
With real gross domestic product (GDP) growth forecast to reach 4.2 per cent this year, Calgary will likely match its growth performance of 2007 when it was the third-fastest growing CMA in the country behind St. John's and Saskatoon. Strong energy demand, furious construction activity and robust consumer spending growth will continue to drive Calgary's outlook.
Edmonton's economy will be fuelled by stronger energy output and solid domestic demand. As a result, real GDP is forecast to grow by four per cent this year.
As a comparison, central Canadian cities will see only modest gains in 2008. Toronto - along with Quebec City and Halifax - will each post growth of 2.8 per cent this year, for instance, far below Alberta's pace.
The end result, according to the board, is that Alberta may see an acceleration of workers relocating from Central Canada.
Employers in Alberta have already been recuriting workers from across Canada, sometimes offering to pay travel expenses.
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