experts: real estate column Thursday, January 03, 2008

A Snapshot of Alberta

Nuclear power, high speed trains, new highways: it's not hard to see why Alberta is driving the economic engine of Canada.

By Marty Douglas

As published in REM - independent news and opinion for Canada's real estate industry.

Randy Forbes (the Dali Lama of Coast Realty Group and my boss) and I spent a long weekend in Banff recently, courtesy of the fine folks at MaxWell Realty, bringing a drop of salt water insight to brokerage challenges. While there, we were privileged to listen to Howard Tenant from the University of Lethbridge and Roger Gibbons from the Canada West Foundation.

Culture shock is the transition from the dental gnashing in B.C. over the possibility of nuclear power in Alberta (our NDP leader demanded a seat at Alberta’s decision-making process) and sitting in a room where heads nod in agreement as the speaker suggests nuclear power should be the most essential promise of the next election. In addition to the N word, Mr. Tenant added high-speed trains – probably not the Liberal and liberally subsidized Bombardier variety – between Edmonton and Calgary, a four-lane highway from the capital to Fort McMurray and a renewal of education impetus to promote the next generation of risk-taking entrepreneurs.

Take a deep breath and go back and read that list.

I challenge any province in Canada to match those bold proposals. And we wonder why Alberta is driving the economic engine of Canada!

Some other nuggets: Alberta is short of power. Brownouts are not unusual and environmentalists are delaying a power line from the USA. Alberta is short of water. Can you imagine importing hydro and water from the USA?

Alberta is short of skilled labour. Okay, a shortage of skilled labour is not unique to Alberta as I discovered in a B.C. bar, instructing a server that flat beer can be discerned as you pour it rather than letting the customer embark on his own road to discovery.

Calgary is gobbling up land to the extent it is one of the largest cities in North America by land usage. That’s got to stop – they don’t have the cab drivers to get you from north to south in the city! And the housing boom seems to be flattening as supply increases in most Alberta cities. If prices level at new plateaus, they are very high plateaus. A 19-year-old salesman in Fort McMurray, fresh out of junior high in a market with an average price of $632,000, had 32 deals by the end of August. And in Calgary, they were selling 60-foot frontage lots on a man-made lake (puddle, pond, lagoon, slough, marsh, bog, swamp, bayou, wetland) for $600,000 – last year!

Wind, ethanol and barley do not make money in the energy economic model. Green they may be but when you consume more than you produce, you’re a socialist. And finally, nuclear energy will come to pass in Alberta because it’s necessary to maintain the tar sands oil extraction and besides, Chernobyl and Three Mile Island are very dated red herrings.

Roger Gibbons smacked us across the face for thinking value-added immigration is going to increase anytime soon. Our usual sources – India, China – have soaring economies and so the residents have less incentive to leave – unless, of course, they are kicked out. Immigrants who are coming to Canada are just like us – they have already had their 1.6 children and are not likely to add to our birth rate. Our children are playing in a global labour pool and as likely to be working offshore as at home. Our labour shortages may be met by Mexicans on longer work visas.

Calgary’s sprawl is contrary to the current and future needs of baby boomers who want walkable, low-maintenance communities. Populations need to be encouraged around transportation systems. Will we have to retro-fit much of the current housing stock to meet the future demand for green standards? Governments are acting as though global warming is real – whether it is real or not doesn’t matter!

On the subject of China, Mr. Gibbons reminded us China used to be a market, now it’s a competitor. Our latest effort for a deep-sea port at Prince Rupert, while sound, is woefully inadequate. The federal financial commitment to the port facility over the next eight years is the rough equivalent of three major highway interchanges – far too modest. And if you think the port is for exports, you’re right – but not ours. The containers will be filled with Asian exports on their way to Chicago and Memphis distribution centres.

At least we own the railroads.

So far.

Marty Douglas is a managing broker for Coast Realty Group (Comox Valley) Ltd., managing two of 15 Coast Realty Group offices on Vancouver Island and the Sunshine Coast of B.C. He is a past chair of the Real Estate Errors and Omissions Corporation of B.C., the Real Estate Council of B.C., and the B.C. Real Estate Association, and is a current director of the Vancouver Island Real Estate Board. Email; 1-800-715-3999; Fax (250) 897-3933.

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Recent Articles by this columnist:

Surviving in a slower market
Wednesday, December 19, 2012

The downside of teams
Saturday, October 02, 2010

Thank you, FINTRAC
Wednesday, November 19, 2008

No song and dance for weighty housing issues
Monday, October 29, 2007

Advice for a Real Estate Consumer
Wednesday, August 01, 2007

All articles by Marty Douglas

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