The non conformer's Canadian Weblog

January 24, 2015

ONCE AGAIN ALBERTA HEADS INTO A DEPRESSION

ALBERTA’S GREED DID NOT PAY OFF AS EXPECTED AGAIN AND AGAIN
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Never mind what the spin doctors will say about Alberta’s future, the present reality is  Alberta is mainly, oil and gas, tourists, dependent on its resource sector and  the province has long relied on both the economic activity and the direct revenue from royalties and land sales to underpin government budgets but now this bubble has burst again,  the Oil’s price plunge means a bumpy ride in  all  sales, the economy in Alberta.   ‘Oil Prices are not going to bounce back:’ Prentice gloomy about quick oil recovery. Oil’s price collapse sends shiver across Alberta’s real estate market. Home prices fall also  in Calgary as real estate chill deepens.  Sales are down 7.5 per cent versus a year ago, while the  new listings have   “gushed” 42 per cent higher.  The Bank of Canada’s decision this week to slash its trend-setting interest rate a quarter of a percentage point to 0.75 per cent will not help to pay the high home mortgages many have there. You also cannot borrow more money, or buy more when facing a job cut.  School fees in Alberta triple in five years.   The out-of-pocket cost of sending a child to public schools in Alberta nearly tripled in five years as boards became increasingly dependent on fees to meet their budgets, and the Edmonton police are focusing more energy on   property crimes which  have climbed significantly. There have been 23 break and enters, 28 thefts from vehicles, and 20 thefts of vehicles in the area during the first few weeks of 2015. That is double number of property crimes the neighbourhood experienced at the same time in 2014 .  “The fact that these school fees have increased during a period when this province had record revenues is just not fair to the average Alberta family,”
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While the Alberta Premier Jim Prentice says there’s no chance that the province can “ride things out” while waiting for a rebound in oil prices. Prentice admits  that a full discussion must be held with Albertans to find a way to deal even tax increases, with a decline of $7 billion in resource revenues triggered by a fall in world oil prices to below US$50 a barrel. Alberta’s prideful boast of being the only jurisdiction in Canada without a provincial sales tax will likely soon be history. The province, with a $40-billion budget, expects to take in only $17 billion in combined corporate and personal income tax this year. Prentice also said that public-sector workers are among the best paid in Canada and will need to step up in tough times. Dream on..Alberta Premier Jim Prentice says there are no simple solutions for the revenue shortfall that will be coming from plummeting oil prices and Albertans will feel the consequences.  Alberta can’t just wait for high prices to return: there has to be a focus on cost-cutting while at the same time providing necessary cash for the also significantly reduced  core services. On top of day-to-day deficits, the province also owes $11 billion for borrowing to pay for past capital projects.  Alberta has to  to do a lot more than pray for another oil boom to come along and to presently pay the Bills..The oils sands  too are not the big miracle Alberta had dreamed on.
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oil-sands (1)
CANADA’S PRIME MINISTER’S Stephen Harper bad policy on Oil and Putin, where he says Russia has failed on many  fronts and has had no positive gains NEEDS A Re Adjustment. As in his own province things look really bleaker now too. Prime Minister Stephen Harper was openly  punishing Russia but seems to have inflicted more pain on his own people instead. THE OIL PRICE DROP HAS HIT  CANADA  SEVERELY
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 CALGARY – Suncor Energy Inc. slashed $1-billion from its 2015 budget, with oil sands and East Coast projects getting deferred and 1,000 jobs eliminated. That was a day after Canadian Natural Resources Ltd. lopped $2.4-billion from its previously announced 2015 plan  and In oil boom town Fort McMurray, ‘it’s like the place has gone dead’ .  The  Plunging oil prices will cost Canada’s drilling industry close to 23,000 direct and indirect jobs this year, more than were lost during the 2009 downturn, according to updated forecast Thursday by the Canadian Association of Oilwell Drilling. Oil-patch spending cuts  have escalated well into the billions of dollars represent money that won’t go to the Albertan workers. The drillers and oil-field service providers involved in fracking,  maintaining old wells and hauling gear around are just  the thin edge of the wedge in the oil-price collapse as the companies in that sector make even larger cuts to their work forces in the coming months. What a costly Harper fight with Russia for all Canadians.
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Further more a surge of light oil from North Dakota and Texas is cutting into the earnings of Canadians who turn heavy oil sands into a lighter crude that fetches more from refiners. Producers in Alberta, home of the country’s greatest reserves, upgraded 20 percent less of the region’s crude in October than four years earlier, according to the province’s energy regulator. Two of five plants under construction were canceled and the province’s upgrading and refining capacity fell in 2013 for the first time in three decades. Companies are now sending record amounts of the heavy stuff on pipelines and trains to refineries in the U.S. Midwest and Gulf Coast, Projects including Suncor Energy Inc. (SU)’s Voyageur joint venture with France’s Total SA (FP) and Value Creation Inc.’s BA Energy Heartland were abandoned. Global oil prices, down by more than 50 percent since June, will make upgrading projects even more challenging because the price difference between heavy and light crude is narrower, U.S. output has risen 70 percent in the past five years as producers used horizontal drilling and hydraulic fracturing to tap into previously inaccessible shale rock layers thousands of feet below the Earth’s surface. Most of the increase has been in light, sweet crude, similar quality Alberta upgraders get from processing heavy, thick oil sands. The rising flows south of Canadian crude are drawing a backlash in Alberta from labor groups, who say jobs, not just oil, are being exported. Alberta’s 4.6 percent unemployment rate, second lowest in Canada after Saskatchewan, may increase after oil’s 55 percent drop in six months prompted some producers to curtail future investment. “Building upgraders in Alberta is seen by the industry as uneconomic,” Dinara Millington, a vice president at the Canadian Energy Research Institute, said in an e-mail Jan. 13. “The U.S. refining market is being flooded with the light crude and they wouldn’t necessarily want our light stuff.”

http://www.businessweek.com/news/2015-01-20/shale-oil-growth-in-u-dot-s-dot-hurts-canadians-as-well-as-opec

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“Canada, the oil sands’ poor image isn’t just a question of bad PR.  Anti-oil sands sentiment has made it nearly impossible to build the necessary pipeline connections producers need to get all that oil to market. TransCanada Corp.’s crossborder Keystone XL pipeline is in danger of being axed by U.S. President Barack Obama. The industry’s backup plan, Enbridge Inc.’s Northern Gateway pipelineto shipping terminals on the B.C. coast, has become bogged down in political and environmental controversy. Even TransCanada’s Energy East proposal, a sort of backup for the backup, has encountered unexpected political resistance in Ontario and Quebec—two provinces the diluted bitumen must transit through on its way to refineries in New Brunswick.”

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Canadian exporters now also have also been stung by Russia’s currency crisis and its retaliatory sanctions against the West over the crisis in Ukraine.   Companies from farm-equipment manufacturers to pork producers are affected.  The Russian market bought 563-million dollars worth of Canada’s agricultural exports in 2012 Richard Davies, a vice-president at pork and poultry processor in Caaaanada Olymel,  said the fallout from the Ukraine crisis has had a significant effect. Russia has struck back by slapping a ban on meat, seafood, milk and dairy products, fruit and vegetables from Canada, the U.S., the European Union, and other countries.  The Russian government has also limited subsidies, particularly to its agricultural sector.

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SEE ALSO

https://thenonconformer.wordpress.com/2009/01/08/canadas-oil-sand-projects/

https://putin1hero.wordpress.com/2015/01/01/canadas-prime-mister-is-in-direct-conflict-with-putin/

https://thenonconformer.wordpress.com/2009/07/27/albertas-manure-pile/

https://www.google.ca/search?q=thenonconformer+alberta&oq=thenonconformer+alberta

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