Alberta Cities Come in 1st and 2nd for Best Places to Invest in Canadian Real Estate PLUS Edmonton Real Estate Forecast 2009 and 2010 Outlook

According to an article in the Canadian Real Estate Magazine, Edmonton takes first place in the best areas to invest in real estate in Canada. Whether oil is $50 or $100, Edmonton’s underlying economy is poised to be a national leader over the next decade. Calgary followed closely behind. Second in corporate head office locations in the country, lowest in unemployment and highest in average income, Calgary will challenge Edmonton as leader of Canada’s economy. Five Year Cycle: In Canadian real estate investing, you’ve got to be able to hold onto a property. It’s not like buying a stock that you sell a few days later because it went up a few dollars. I use a five year cycle, because that seems to be the time frame when you can trade up or move on. According to the Canadian Real Estate Magazine, the outlook for Alberta real estate is promising: The economy will grow by just 1.2% in 2008, as output has declined in goods-producing industries such as manufacturing, construction and mineral fuels. With these industries expected to rebound, Alberta is forecast to generate real GDP growth of 2.6% in 2009.

Edmonton Real Estate Forecast 2009

According to the Canadian Real Estate Magazine, Edmonton Real Estate forecasts for 2009 are very promising. A growth rate of 4%, according to the Conference Board of Canada, in part due to oilsands development in the northeast parts of Edmonton, construction and infrastructure activity, is making forecasts for Edmonton real estate 2009 a key player for property rental returns. According to Don R. Campbell, president of REIN, Calgary, “With over $200 billion of investment pouring into Northern Alberta in the next vie years we will witness a dramatic growth in jobs, which will attract people from across the country and around the world, each and every one of them requiring housing either rental or purchase in Edmonton real estate 2009.” In addition, the completion of the LRT route from Health Sciences Station to Century Park central Edmonton real estate at the end of 2009 is expected to bump up the 2009 forecasts for Edmonton real estate values by ten to even twenty per cent says REIN. In 2008, the average price of an Edmonton condo was $228,750 according to Royal LePage, which is one the most affordable and undervalued real estate markets in all of Canada. CMHC figures show the average monthly rental income for a two bedroom Edmonton property was sitting at about $1,000 per month. 2009 Edmonton real estate investors forecast such as Bill Briggs, a local realtor for Re/Max Real Estate Central Branch says that property investors in Edmonton tend to purchase mid to lower priced single family homes as well as apartments and condos to achieve good cashflow. The forecast for 2009 in Edmonton real estate values is that cashflow will continue to be a great positive for the markets while property values should stabilize by mid year. “Proximity to the University of Alberta, the Northern Alberta Institute of Technology and Grant MacEwan College provide a huge number of prospective home renters,” he says. Edmonton condo forecast for 2009 might be the best opportunity for cash flow because these units tend to rent faster and are expected to see a 12.2% increase in rent by the end of 2009, according to CMHC.

The 2010 Outlook for Edmonton Real Estate

According to many experts, now is a great time to purchase Edmonton property. There are several factors that result in this conclusion. Firstly, mortgage rates and lending are at all time lows in the history of this country. With BoC lending rate at 1% as of February 2009 and an expected drop by 0.25% to 0.5% in the upcoming Bank of Canada announcements, the variable rate mortgages that are tied to the BoC lending rate to some point, will possibly hit the lowest point ever in the coming month. The 2010 outlook for Edmonton real estate is that the rebound in commodity prices such as oil and gas will have a very positive effect on the Alberta economy in general, with Edmonton property prices in 2010 outlook and forecasting expecting a high single digit gain through the year. Variable rate mortgages are very low right now, and waiting even 6 months may mean a difference in one or two per cent over a course of a five year term. Any drop in Edmonton real estate prices in 2009 or 2010 will be offset by the increase in mortgage interest rates, so there would be no real advantage to wait if you, as a homebuyer, are ready to make a new Edmonton home purchase. Secondly, the Edmonton real estate outlook 2010 and beyond is that with many home buyers waiting it out to see where the market goes this year, and with forecasts for 2009 and 2010 in Edmonton real estate calling for a big dip in sales volume and a small decrease in sales price, there will be many more people looking to buy a home in Edmonton property market in 2010. with an increase in homebuyers, comes competition again, meaning that the new Edmonton home of your dreams may have multiple offers and possibly bidding wars for lower priced houses and condos. Why go through the tense wait of bidding wars when you can submit a single offer in 2009 Edmonton real estate outlook and forecast and end up with a great home that you love. Thirdly, oil and gas make up a big part of the Edmonton economy and is a driving force for the province of Alberta in terms of revenue, infrastructure, business and population growth. As commodity prices are at their all-time lows in the past 20 years and with the rise and growth of both China and India coupled with the insecurity of other gas and oil producing nations, Edmonton real estate forecast for 2010 and 2009 is much better than what most headline news portrays. With a growing demand in these developing nations, it is important for Edmonton to make sure that it gains the respectable relationships with these nations and to promote other clean energy sources for the future of Alberta. With a rebound of oil and gas prices expected in late 2009 and through 2010, the Edmonton real estate outlook and forecast is very good as property prices here have always had a direct relationship to commodities. With more people moving into the Edmonton area in 2010 and with an increase in the number of jobs coupled with a stagnant home building industry for the last two years, there will be a shortage of rental and owner occupied housing in Edmonton real estate in 2010 again. For all of these reasons, Edmonton real estate outlook 2010 and beyond is for a strong and stable market for both buyers and sellers.

Alberta Oilsands Companies Feature: Husky Energy

Husky Energy and the Alberta Oilsands

Husky Energy is an integrated energy and energy related company. Incorporated in Calgary, Alberta, Husky Energy has operations all across Canada. Vertically integrated oil company with a listing on the TSX: HSE, Husky Energy is a developer, an integrator, and a retail seller of oil. Husky Energy is a large player in the Alberta Oilsands in Northern Alberta. Husky energy has a 100 percent interest in oil sands leases east of Kearl Lake, about 60 kilometers northeast of Ft. McMurray. The company’s website is www.huskyenergy.com.

BP Energy and Husky Energy

In December 2007, BP Energy acquired half share in Sunrise field in Northern Alberta, operated by Husky Energy. The deal will have Husky acquire a half share of BP’s Toledo oil refinery in Ohio US. This joint venture will form an integrated North American oil sands business. A 50/50 joint venture will be independently operated and developed. BP’s purchase of Husky’s Sunrise project gives BP a bigger stake in the Alberta oil sands market. The Sunrise oil sands field is expected to have its first production of bitumen in 2010 with up to 200,000 barrels of oil per day (bpd) within 10 years. The total production cycles is expected to last 40 years. Husky’s Sunrise projects is located in the Athabasca oil sands region in the north-eastern part of Alberta. The joint venture gives Husky an integrated oil sands venture with upstream and downstream businesses. BP is one of the world’s largest oil and gas companies with operations in 100 countries over six continents.

Husky Energy and Husky Market and Mohawk Gas

Husky Energy operates retail gas stations and a retail restaurant. Its own brand of gas stations, Husky Gas has been around for more than a decade in the Canadian market. Husky Energy has teamed up with CAA, the Canadian Automobile Association, to collect CAA points on every fill up of gas. The other retail outlets at certain Husky gas stations include the convenience store Husky Market and the restaurant Husky House. Very well known in the Western Canadian Provinces, the Husky Energy brand is becoming a bigger player in the retail space. Husky Energy has also recently purchased Mohawk Gas and added their brand to its own. Consumers who visit a Mohawk Gas are now filling up their cars with a Husky Energy product and can collect CAA points along with their purchases. Currently Husky has more than 500 retail locations which make it the third largest retail oil and gas company in Canada.

Recent News with Husky Energy

Husky Energy follows other Alberta Oilsands companies in slowing its production in the Alberta oilsands for 2009. Husky Energy has decreased its investment from $300 million in 2008 to $65 million for 2009. While this is a strategic move in the current low US oil price environment, Husky Energy has not commented on whether it is pulling out of the Alberta oilsands market. Husky did say they are continuing with the Sunrise oil sands project, located about 60 kms northeast of Ft. McMurray, Alberta. BP and Husky expect costs to continue come down in the Alberta Oilsands. The Sunrise project is at the pre-engineering stage where its optimal design is being assessed. Other companies that have announced slowdowns in 2009 include Royal Dutch Shell PLC, Statoil ASA, ConocoPhillips, Petro-Canada and Suncor Energy Inc.

US $40 Oil per barrel and the Alberta Oilsands

US $40 Oil price per barrel – what does this mean for Alberta Oilsands

When US $40 oil price per barrel hits the world economy it means that there are more uncertain times to come for the Alberta Oilsands. A gauge for the strength of the US economy, the $40 per barrel price of oil in the US is signalling to the world that we are still in the midst of uncertainty. The January price per barrel of oil was in the mid $30 US and our current level is only slightly better. To the Alberta Oilsands that is still not a strong enough signal for players to make bold investments in new projects. I think what the big players are looking for is a stable US oil price at $50 per barrel or perhaps $60 per barrel. Not $40 per barrel of oil because at this price all projects related to the Alberta Oilsands is just marginally profitable. With an overhanging financial crisis, marginal projects are better put off than to be started. The direction of the market will tell Alberta Oilsands companies what they should do.

US Recession and Alberta Oilsands

The price of $40 US oil per barrel has been watched closely along with the US stock markets. The ups and downs of the Dow Jones Industrial Average has been a common pastime with viewers around the world. Especially with the slide of the DJIA mirroring the slide in the $40 US oil price per barrel and the fortunes of the Alberta oilsands. What is happening in the US with the continuous layoffs in the thousands from company’s such as Lowe’s, Home Depot, Walmart, and J.C. Penney just to name a few of the bell weather companies. The price of oil in the US has fallen to record lows and the price of the stock market is also at record lows. Is there a link between the price of oil and the US stock market? Will the US Recession lead to a slowdown in the production in the Alberta Oilsands as well. While the questions remain unanswered, the big players are on a wait-and-see approach to investing in the Alberta Oilsands. We will wait and see what happens before we take a bigger position in our Alberta Oilsands investments.

OPEC supply and Alberta Oilsands

OPEC or the consortium of Middle Eastern oil companies which stands for Oil and Petroleum Exporting Countries has long been the major player in deciding oil prices. A signal from OPEC regarding their supply usually signals to the world the direction of what oil prices should go. However recently OPEC has cut supply signalling the oil price per barrel to rise but the price has not done so. This cut is confirmed by the Energy Information Agency which reported a drop in inventories of US Crude. What can Alberta Oilsands companies do when even OPEC has no power to control the price of oil. Alberta Oilsands is the second largest supply of oil after Saudi Arabia, a member of OPEC, and has the worlds largest proven reserves even greater than the middle east. However Alberta Oilsands reserves are only proven if the price of oil remains above US $40 per barrel as this is the lower limit of the cost it would require to convert the oilsands to viable oil production. OPEC’s cut in supply should affect world oil prices in a more direct manner but in today’s uncertain economic environment, consumer confidence is a bigger key in unravelling the price of oil.

Alberta oil sands project cancellations

Over 200 billion to be lost in Alberta oil sands investment

As more and more projects are halted on a daily basis in the Alberta oil sands, estimates of $97 to $241 billion will be loss in investment. (read article: http://www.financialpost.com/story.html?id=1258599) A loss of this magnitude will affect the investment environment in Alberta and the Canadian economy. With a big loss will also come a reduction in the amount of labour employed by the Alberta oil sands companies and loss revenue to the province of Alberta. The figure of 200 billion may seem arbitrary but this would represent 1/3 of the proposed investments in the Alberta Oil sands over the next decade. Imagine the loss in revenue to the Alberta and Canadian government and all the well paid Alberta oil sands jobs that will never be started. Alberta oil sands investments may seem to be risky in light of this figure and the potential of even bigger numbers to come. Depending on the severity of the global financial crisis and the ability of Alberta oil sands companies to survive the Alberta recession, we may see Alberta oil sands investments become the jewel once again in Canada.

Alberta oil sands project cancellations

BA Energy became the first Alberta oil sands company to file for bankruptcy in 2009. Imperial Oil and Exxon and Husky Oil are all slowing down existing projects or have project cancellations and postponements. If a project cancellation occurs there is an indeterminate amount of time before it may be started. The effect on labour is huge as many existing workers are laid off and no new labour is required or forecast. This will inevitably lead to an Alberta Recession as the Alberta oil sands projects account for a significant share of the labour demand. Alberta oil sands project cancellations are not a bad thing on the other hand. If you think about it, the Alberta oil sands have been running at near full capacity for the last five years. The impact can be felt by the labour force through increased injuries and WCB claims and increased job dissatisfaction as a result of over work and too much stress. The other big impact is the environment and Alberta oil sands negative image as dirty oil or tainted oil. With a slow down in production the Alberta oil sands companies including the Alberta government now have the resources to invest in improving the processes that are used in developing the tarsands. Perhaps we will not hear the word dirty oil or tainted oil in the following decade.

US Oil Prices and Alberta oil sands

US oil prices have a big impact on the Alberta oil sands. It seems that no matter how high the price of US oil we all need to drive. When the price of US oil reached $4 a gallon there was a revolt in many parts of the World including the US. But people still drove their SUVs and trucks still delivered their goods. The oil companies made record quarterly profits silently in the background of all the outrage. With low US oil prices we see a shift in production of the Alberta oil sands and a reduction in production and new projects. The Alberta oil sands companies must make a profit as like any other business and when the profits are low or negative then it becomes survival mode. The large Alberta oil sands companies have been around for up and down markets and realize that the prices will fluctuate 2 to 3 times during the expected life of their projects. These Alberta oil sands companies keep large cash reserves and tightly guard this as their strategic weapon in times such as these. It is sometimes a blessing for them to be in a global financial crisis as they get to pick up distressed junior oil and gas companies without the financial resources at bargain prices.

Alberta Oil Sands Bust – Is the end really over?

Alberta recession and the Alberta Oil Sands

What is happening in Alberta these days? With so much happening with the world including the global financial crisis, global credit crunch, and US $33 a barrel oil, it’s no doubt that Alberta would suffer along with the rest of the world. The Alberta Oil Sands was the best thing to happen to Canada in the last ten years. It gave Canada a national treasure that was poised to bring it to the forefront of being a global energy leader. With the high US oil prices at even $50 US a barrel, the Alberta Oil Sands could not have been a safer investment. The Alberta oilsands had many players and investors over the last decade. As with many of the Canadian Industries, Alberta oil and gas industry is also filled with a majority of junior oil and gas companies. The Alberta recession, or what may be just a few negative quarters of growth, may bring a halt to the boom of the last decade. Could we see an Alberta Oil Sands Bust in the near future??? With a global recession, anything is possible and speculation is everywhere. Many of the large Alberta Oilsands companies are finding this an ideal time to go bargain hunting and picking the jewels to add to their portfolio of Alberta oil sands companies and assets.

Global Credit Crunch and Junior Alberta Oil and Gas companies

A global credit crunch means that major financial institutions will not be as willing or able to lend money to fund company projects. Whether the project is to start a new franchise or fund the daily operations of a Junior Alberta oil and gas company, the decisions that are being made these days are quite dire. No major or minor financial institution has been unharmed by the global credit crunch due to the interrelated nature of the business. Junior Alberta Oil and Gas companies are tied to the global credit crunch as their financing is tied to one of the major financial institutions. Another source of their usual financing, the equity markets or stock markets have also been unavailable during this time of global financial crisis. It is for such a reason that the major Alberta Oil sands companies are shopping for the bargains that are starting to pile up as one after another Junior company starts to feel the crunch. Instead of filing for bankruptcy, the next alternative is to sell at a loss and lose all your equity. While some of the Alberta Junior oil and gas companies may make it with some federal and provincial government funding from Canada, this will not help many of them soon enough.

US $33 a barrel Oil and Alberta Oil Sands

With US $33 a barrel oil prices we are seeing a halt in any new Alberta Oil Sands projects. Alberta oilsands projects that are just started or announced to be started are now currently on hold until further notice. Of course no one knows when oil will go up so the timeframe can stretch longer than anyone is comfortable with. Current US $33 a barrel oil seems like an enigma in todays society. With the bustling growth in population in India and China alone, the price of US $33 a barrel oil would seem silly as the current supply of oil is insufficient to meet global demand. The current $33 US a barrel oil price is more of overreaction to the global financial crisis and once confidence builds up we should see a spike in oil prices again. With a spike in oil prices even to a stable $50 US a barrel oil we will see the commencement of a lot of projects overnight.

Low Risk RRSP Investments Offered by Banks in Edmonton, Alberta

In this articles I’ll look at some of the safer and conversative alternatives currently offered for R.R.S.P. investments that can be found in edmonton’s region. In future articles I’ll review mutual funds, stocks and my all time favourite using RSP to invest in Edmonton real estate.

What is a low risk RSP?

A low risk RRSP is bacially a RSP that will guarantee your investments regardless of whatever happens in the Edmonton market. They are usually guarantee by the bank of canada security act. These types of investments are usually for people that have no tolerance for risk and wishes to sleep better at night. I called these types of investments low risk because the money deposited into these accounts are guarantee by the governement of Canada.

Which banks guarantee your principal investments in Edmonton for RRSPs?

The five largest banks in Edmonton are relatively safe. These banks are: the Royal Bank of Canada, the Toronto Dominion Bank, the Bank of Montreal, the Bank of Nova Scotia and the Canadian Imperial Bank of Commerce. These banks are fully guaranteed by the Government of Canada and is protected under the Canadian Deposit Insurance Corporation (CDIC). Money deposited in these accounts are protected up to $100,000 per depositor per bank. The deposits must also be made in Canadian currency, payable in Canada and must be repayable no later than five years from the date of deposits.

In addition some of the second tiers banks such as the National Bank of Canada, the Mouvement Desjardins (credit unions), HSBC Bank Canada and ING Bank of Canada also have the similar protections given to the top five largest banks in Edmonton.

Current RSPs rates offered by the five largest banks in Edmonton

All top 5 banks in Edmonton offered pretty much the similar rates for GIC (guarantee investment certificate) with a minimum $500 deposits and three years terms. The only exception is RBC. They’re offering 0.85% for the first year, 2.25% for the second year and 1.9% for the third year. The other 4 banks, TD Canada Trust, BNS, BMO, & CIBC are offering 1.0% for the first year, 1.6% for the second year and 1.9% for the third year. You can start investing and contributing into your 2008 or 2009 R.S.P. account for as low as $500. just visit any of your local Edmonton top 5 banks and start savings for your retirement.

Current R.R.S.P. rates offered by 2nd tiers banks in Edmonton

The second tires banks or trust companies generally are viewed as a little bit more risks and that’s why you’ll often see a bit of higher returns compare to the top 5 banks in Edmonton which are protected under the CDIC by the Government of Canada. The best rates that I found for the 2008/2009 RSP seasons are:

1. Equitable Life, 2.0% for the first year, 3.25% for the second year, 3.5% for the third year;
2. Canadian Western Bank, 2.25% for the first year, 3.05% for the second year, 3.35% for the third year;
3. ING Direct, 2.0% for the first year, 3.0% for the second year, 3.25% for the third year;
4. B2B Trust, 2.0% for the first year, 3.0% for the second year, 3.3% for the third year;
5. Desjardins Fin. Security, 1.85% for the first year, 2.0% for the second year, 2.95% for the third year;
6. Citizens Bank of Canada, 2.0% for the first year, second & third year;
7. HSBC Bank Canada, 1.2% for the first year, 1.6% for the second year, 1.9% for the third year.
You can also start investing into any of these second tiers bank with as low as $500 and you can easily find them around Edmonton as well.

Many of the top 5 banks and 2nd tiers banks also offered shorter 1 year term. Just visit any of your local Edmonton branch to ask for more details.

Low $30 Oil and the effects on the Alberta Oilsands

Why is oil at US $30 and what effects will it have on Alberta Oilsands

It is Feb. 12 and US oil prices have settled at US $33.98 a barrel. What has happened to the price of oil and can Alberta oilsands companies still remain profitable at this level? The price of oil fell 5.5% to settle at its lowest point in recent memory. We seen the US price of oil fall from $140 US a barrel in less than 6 months to $33 US a barrel. Can the Alberta oilsands companies survive this level of low oil prices? It has been the uncertainty of the future price of oil that concerns Alberta oilsands companies and not the current price levels we see in the market. It is in this unstable financial market that we the halt of further development of any new Alberta oil sands companies’ projects and a stand still in development. While many companies including large oilsands companies Syncrude Oil continue to be optimistic of the future, many smaller oilsands companies have had to file bankruptcy. What is a sustainable level of US oil prices a barrel and will there be a mass file for bankruptcy soon for this industry?

Large inventory of Oil means continued low US oil price per barrel

It is a straight supply and demand equation for why oil prices are low right now. The financial crisis can be blamed for this but so can the rapid rise in US Oil prices per barrel and the frenzied speculation we have seen for investing in anything related to the Alberta oil sands. Currently we have a glut in demand leading to a stockpiling and buildup of inventory in the US and the world. We frankly have record levels of inventory of oil meaning that the US oil price per barrel remains low. Until this glut is consumed and demand for oil resumes, we will continue to experience record low levels for US oil prices. It is hard to imagine a situation like this since we have been so accustomed to the opposite. The demand for oil has been so robust leading to the quick and rapid development of the Alberta Oilsands. The Alberta oil sands represents a significant source of Oil and is only second to Saudi Arabia. However, with the current glut and oversupply we are seeing the slowdown of massive proportions. In the US we expect to continue to see a glut in demand as unemployment data continues to be negative and the forecast the same for the next few months. More and more people will choose to conserve and thus the US oil price per barrel will be at $30 or even lower to come.

Can global demand for oil shrink in 2009

Aside from the question of a glut of demand for oil in the US is the bigger question of the world demand. What is going to be the demand for Oil from the world in 2009 and 2010? There are many reports from well known International Agencies reporting that the demand for oil in the world will shrink to levels in the early 80’s. This means that we may see a low US oil price per barrel for some time to come. What will the global demand for oil mean to Alberta oilsands developments? It is a hold and see approach for 2009 and possibly the first quarter of 2010 as major Alberta oilsands players are reacting to the numbers of global demand. If the demand for oil continues to shrink in 2009 then we will see a low level of economic development in Northern Alberta, Athabasca regions where development has been brisk for the last 5 years. While no one can see the future, it is the job of companies such as Shell, Syncrude, and Imperial Oil to forecast the demand and thus the development schedule of oilsands development. It is these large Alberta oilsands companies that can change their production and development schedule to closely match global demand.

Slower pace of development good for Alberta Oilsands

Alberta Oilsands will benefit from the slower pace

The slow down of the development in the Alberta Oilsands and Northern Alberta region will actually have a positive long term affect on the environment. The past few years have been a frenetic pace for Alberta oil sands companies and oilsands developers to quickly develop and buy up more land in Northern Alberta. The higher price of oil caused a euphoria in investment capital being poured into Alberta oilsands companies without any consequence to the environmental impact. The recent slowdown in development will actually benefit Fort McMurray and the Athabasca Region as the region gets some time and breathing room. Some much needed time to take a look at what can be done to develop the valuable resources that the Alberta oilsands offers and to positively impact the communities that they operate in. Yes, the slower pace of development is actually a blessing in disguise and will give Alberta Oilsands companies time to develop a long term strategic plan that will take into account the communities and the environment in relation to the profit potential.

Developing an Environmental plan for the Alberta Oilsands

Many environmentalists and governmental agencies have criticized the Alberta Oilsands companies in their lack of a solid plan for the development of the Alberta oil sands region. This lack of a plan will not only have long term negative consequences to the environment but also affect all the surrounding people living in the communities of Northern Alberta and the Athabasca region and Fort McMurray. A lack of a solid plan is a direct correlation to a lack of responsibility and accountability for the environment that these Alberta Oilsands companies have. It is unacceptable to not have a viable environmental plan for the Alberta Oilsands and many environmentalists around the world are lobbying their governments to take actions to prevent any further damage to the Northern Alberta and Athabasca regions. It is important to immediately address the long term consequences of developing the Alberta tarsands and making sure that the environmental impact is minimized. Having a solid environmental plan for the Alberta oil sands will be a first step in reaching this shared goal and the Alberta Government is also in agreement with this position.

Alberta Oilsands and the Aboriginal Communities

Many Aboriginal Communities, including the Metis Settlement, are affected by the development activities of the Alberta Oilsands. The concerns for health and the destruction of their lands is a primary objective that the Aboriginal communities including Chief Allan Adam of the Athabasca Chipewyan First Nation is striving so hard to achieve. As so many Aboriginal Communities will be affected by the Alberta oil sands companies, it is vital that the rights and concerns of these people be dealt with immediately. We cannot build first and make a plan later for the environmental impact. This is not acceptable and will be a major obstacle for the further rapid development of many Alberta oilsands projects. On the other hand, there has been some good news regarding the environmental plan for the Alberta oilsands and the Aboriginal Communities. There has been a lot of positive development towards drafting of solid plans to protect the environment from the rapid development happening in the Athabasca region. However, as with most talk, people want to see action and it is this action that will help the Aboriginal Communities.

Alberta Oilsands and the Cap-and-Trade System

What is Cap –and-Trade System and its impact on the Alberta Oilsands Companies

Cap-and-Trade system is a name given to an environmental initiative to reduce greenhouse gases. Essentially, all industries would be given limits on the amount of greenhouse gases that it could release. The Alberta Oilsands companies in particular would be monitored closely under the Cap-and-Trade system. It is well known, at least publicly believed, that the Alberta Oil Sands companies are big emitters of greenhouse gases. Al gore has shown in his video that greenhouse gases pose a significant threat to the planet and unless we are aggressive in reducing our levels we will continue to face harsher environmental impacts. The Cap-and-trade system would fine Alberta Oilsands companies who exceed the caps placed on them by imposing heavy fines. These fees would actually go from the Alberta Oilsands companies who exceeded their limits to those under the limits. In effect this would benefit the companies who are good to the environment and reward them for reducing greenhouse gases.

US Barack Obama and the Cap-and-Trade System

In the US, President Barrack Obama has set environmental goals to lower greenhouse gases to 1990 levels by 2020. The Cap-and-Trade system will be a tool used to achieve this goal. In Canada, Prime Minister Harper has set a similar goal of 3 percent less than 1990 levels by 2020. The Conservative Government and the Obama administration has set very similar goals in using the Cap-and-Trade system to and other tools to aggressively reduce the impact from green house gases. The Conservative Government commented on the timing of Canada in implementing this strategy now that the Bush administration is gone and US Barack Obama is now the President. It would have been wrong timing to have released Canada’s plans if the US was also not in favour of the Cap-and-Trade system or at least supporting our mutual goals of reducing greenhouse gas emissions.

Kyoto Accord is now the Cap-and-Trade System

The Kyoto Accord, an International Treaty to reduce greenhouse gases, was previously agreed upon by the Liberal Government. The Kyoto Accord differs from the Cap-and-Trade system and was eliminated under the Harper government. Though many countries still adopt the Kyoto Accord as their goal to reduce greenhouse gases, both the US and Canada have went their own ways and are currently looking at the Cap-and-Trade system to achieve the similar goal. Under the Kyoto Accord, each country would reduce greenhouse gases and their neighbours would be expected to do a similar reduction. By reducing greenhouse gases, a country would earn pollution credits. It is possible for the neighbouring country to buy pollution credits from their neighbours who are doing more to reduce greenhouse gases. In the end, the country that is emitting less greenhouse gases will be rewarded and the world will benefit from reduced emissions under the Kyoto Accord. However, as you can predict, all neighbouring countries need to buy into the system for it to work effectively. The Cap-and-Trade system will also have a similar trading mechanism but it is expected that both the US and Canada to play by the rules and reduce greenhouse gases.

Edmonton Century Park Master Planned Condominium Community - Construction Update on Century Park Condo High-Rises & LRT Expansion

Century Park Club & Residences Newsletter Update

Beautiful condos – Community living – Modern luxury – Location and style – Access, access, access, Close to University, Club Century Park – Convenience – Exciting Community – Excellent Location – Close to LRT – Great Quality. This is Edmonton Century Park Club and Residences, a master planned community marketed by Rennie. Club Century Park: At Century Park Club & Residences Edmonton pre-construction condos, ownership has its privileges. While membership at most private clubs costs a fortune, at Century Park it’s a lifestyle benefit. Club Century Park Edmonton offers an amazing array of activities and amenities to all owners/residents at this wonderful community. Some of the great amenities at the Club Century Park Edmonton property includes a modern reception and lobby, food and juice bar with lounge, multimedia theatre, bar and grill, games room, gymnasium: play basketball, badminton and volleyball, racquetball courts, swimming pool and whirlpool, sauna and steam rooms, change rooms, locker rooms and showers, fitness and weight room, aerobics and yoga studio.

Central Living at Century Park Club & Residences

Edmonton’s most spectacular new pre-construction condo residential development, featuring wolrd-class architecture and interior design by internationally renowned James KM Cheng Architects. This beautifully appointed collection of resort style Edmonton condominiums is surrounded by 43 acres of tranquil gardens with a recreational lake, paths and park. Century Park Club & Residences is a fully integrated, sustainable community offering exquisite design and state of the art technology. Enjoy carefree living, convenient transportation and LRT, signature restaurants, shops and cafes – plus exclusive access to Club Century Park, your own private fitness centre and retreat! Central Condos at the Edmonton Club Century Park. Location, location location. Lcoated in southwest Edmonton, the pedestrian friendly Century Park Central condo pre-construction properties locale with onsite new LRT station and public transportation means you are just minutes away from everything, including South Edmonton Common, the largest retail in the city. Central Condos Edmonton is ideally situated adjacent to Club Century Park, overlooking the spectacular setting. Recreation at your door. The resort style atmosphere features convenient in house fitness facilities and exclusive access to your own private Club Century Park at the Edmonton Central condos with a spectacular swimming pool and collection of luxury amenities. Your pre-construction condo Edmonton home is a tranquil oasis, surrounded by jogging, cycling and walking trails intermingled with courtyard and public gardens, public art, recreational and green spaces, including a lake. Conveninece at the Central at Century Park Edmonton condos is a lifestyle. Live carefree. Book a session with your trainer at the Club Century Park or make a dinner reservation from the comfort of you home via a personal electronic concierge. There’s no maintenance to worry about, no lawn to cut. Everything is taken care of for you at the Central Condos at Century Park in the Edmonton real estate market.

Construction Update

At Century Park Edmonton Club & Residences, construction is proceeding rapidly and it’s an exciting time on site. The full community development real estate is phased over 10 years and we are currently working Phase 1 and Phase II. Century Park Phase One – South Building – completing roof, floor 4 installing steel studs and floor 2 installing mechanical and electrical while the North Building – floor 2 is completing concrete. Edmonton Century Park Regent Condos – South Building – parking level 1 – completing concrete and North Building at the same point. Century Park pre-construction condos availability includes: Regent pre-sales Edmonton Condos from Unit 603N at $407,000 facing E, 1 bed plus den and 775 sq ft with N views to Unit 402S at $557,000 facing NW with 1121 square feet, 2 bedroom Plan N. The Central Condos at Century Park Edmonton pre-sales includes units from PH4 at $1,595,000 with 2 bed plus den plus family room with 1978 square feet of living space and SW views to Unit 806 at $368,900 at 1 bedroom, 679 sq ft and S views. More information about availability and the various condo developments are located online at centurypark.ca or you can call 780.410.1738 or visit the Century Park Presentation Centre at 2395 111 St. SW, Edmonton which is open daily 12 pm to 6 pm and closed Fridays.

RRSP can be use as a tool to invest in Edmonton, Alberta real estate

It’s true that you can also use RSP to as an investment tool to invest in Edmonton properties. I’ll look at the benefits of how to do this in a series of upcoming articles and the best ways to tap into this form of investing versus investing in the traditional stuff such as mutual funds, GIC, stocks, etc.

What is a RRSP?

Investing in Alberta real estate with RSP is easy once you understand the basic. Let first look at what is a RRSP. RRSP is Registered Retirement Savings Plan and is one of the few tax benefits that are still available to individual Canadian taxpayers. I called this a tax benefit because you invest in RRSP with before taxes dollars. This is done by using a special investment account that is registered with CRA (Canada Revenue Agency). The amount invested into RRSP is based on before taxes dollars and allows you at the same time to also reduce your taxes for that year based on the amount that you contributed. This amount is calculated by CRA and can be found in your last year taxes return. If you have not contributed before or have not contributed to your maximum you therefore, have an unused contribution room. In any given year you are entitle to contribute to the maximum that you can afford and reduces your taxes at the same time. You might also borrow money to invest in RSP as well up to your annual contribution limit.

Annual Contribution Limits for RRSPs for your 2008 Alberta’s taxes Return

The maximum one can contribute in a year is called the “RSP deduction limit.” It is also known as the “annual contribution room” or “deduction room.” Your RRSP deduction limit is found on your Notice of Assessment or Notice of Reassessment from CRA. For example your 2008 limit would be on your 2007 Notice of Assessment. The annual limits in a nutshell are as follows:

Annual Contribution Limits
Year RRSPs
2007 $19,000
2008 $20,000
2009 $21,000
2010 $22,000

The Canadian government allow us taxpayer to deduct for example, in this case in your 2008 return $20,000 from your “earned income”. If this number is higher in your 2007 Notice it just mean that you have not contributed to your maximum RSP deduction room from your other previous years and this extra cap room can be use in your 2008 to help you save some money when you do your filings for your Alberta’s tax return by the April 30th deadline.

Why is the Canadian government so generous?

You might asked why is our Canadian government being so generous and giving us a tax break if we invest with them by buying RRSP? This is because the government know that the more people put away the less they will have to pay us down the road when we retired. Also the government might not have enough funding to pay everyone if we all decided to calculate CPP or Canadian pension plan when we retired. Depending on when you retired this money might not be so available by the time you retired as it might be used up by others such as the baby boomers when they retire over the next 10 to 15 years. This is especially the case if you’re just currently entering the workforce. And this is more likely so as Edmontonians have such a young workforce! To give us more incentive the Canadians government have long came up with a plan to allow us to save taxes and at the same time save for our future. This to them is a win-win philosophy and that is why there is always such a big push to put money into RSP around the February 28th taxes deadline times.

An example of Tax Savings using RSPs

For most Canadians investing in RRSPs is an excellent ways to save money for their future rather they retired at age 65 or earlier. Lets use a simple example here of how substantial this taxes savings can be for you in your next 2008 Alberta tax returns. Suppose you are one of those hard working Albertans and make over $100,000 a year and decide to contribute $20,000 to your RSP this year.

Earned Income - $100,000
Less RSSP contribution - (20,000)
New Earned Income or Taxable Income - $80,000

Providing this is your only deduction for your 2008 Alberta’s filing this year, this can equate to a tax savings of $7,800 just base on your contributing your maximum RRSP for 2008. Here is a simple

Tainted Alberta Oilsands and Environmental impact

The current Alberta Oilsands environmental problem

A recent study stated that Alberta Oilsands production is releasing four billion litres of tainted water into Alberta and surrounding regions including Saskatchewan, Northwest Territories, and the Athabasca River. This report states that it’s a matter of fact that the Alberta Oilsands poses a significant environtmental problem to the areas affected and to the global ecosystem. Alberta Oilsands or Tarsands produces leaks called tarsand tailings which are held in tarsand ponds. The environmental problem is that some scientists and environmentalist believe that there is no way to control the leakage and the negative effects of this Tarsand leakage will destroy the delicate ecosystem including fish, animal and plant life. The Alberta Oilsands poses an increasing environmental problem which will worsen by five fold over the next ten years as more projects are started. It is for this reason that the Alberta Government and Alberta Oilsands companies have invested heavily into studying the environmental impact of the oilsand and ensuring that the public is well educated on its findings. Part of the role of the Alberta Government and Alberta Oil sands companies is to dispel myths and lies about the environmental impact.

Tailing ponds and Alberta tarsands

A tailing pond is created as a result of how Alberta tarsands are produced. A process that uses hotwater to separate the Alberta oil from the sand leaves behind the tailing pond. The tailing pond holds contaminated material from the original product and can continue to be contaminated for decades to come. Alberta Tarsands tailings ponds have been continuously examined to assess its environmental impact on humans, wildlife, and vegetation. It is believed that Alberta tarsands tailing ponds poses significant threat to the surrounding area. Studies on birds have found increased mortality rates. Birds that live in the area or migratory birds that come to the area have been tested and negative effects have been noticed in their expected life. Another significant impact is to plant life and studies have been done on germination. These studies have found that lower seedling weights have been a result. While Alberta Oil Sands companies have been increasing their ability to control the leakage of tailing ponds through use of better technology, some scientists still believe that we are a long way away from having no environmental impact on the environment. It is impossible to stop tailing ponds as a result of the Alberta tarsands production to leak.

Differing view of environmental impact of Alberta Oilsands

Differing views of the environmental impact of the Alberta Oilsands is a matter of where you are standing and what effect you are testing for. A scientist for the Alberta’s Environmental Department said the reports are misleading on the tailing ponds. While tailing ponds do hold waste from Alberta Oilsands production, this waste is overstated and the environmental impact is not as significant. The tarsands waste is going into deep aquifiers that are already naturally contaminated by the geology of the Alberta Oilsands. Another false myth that these scientists are trying to dispel is that tarsands leakage is a big environmental problem. This is a myth and there has not been a serious run off of toxic tailing ponds into surrounding regions. The scientists are confident that they can prevent any serious contamination of groundwater and ecosystems. Of course problems will existing with tainted Alberta oilsands but with continuous research and action taken by the Alberta Government and Oil sands companies, any siginificant environmental impact should be avoided.

Alberta Oil Sands companies – BA Energy files for credit protection

Alberta oil sands and BA Energy

A major player in the Alberta Oil Sands projects, BA Energy Inc., filed for credit protection in early 2009. BA Energy Inc. was developing a $4 Billion Dollars Alberta Oil Sands Upgrader project near Edmonton in what is known as the Heartland Upgrader. These projects require significant capital in order to run its daily operations and would require funding from its credit facilities. Credit facilities for BA Energy Inc. are secured via a $507 Million US$ loan from Credit Suisse and due to the worsening financial crisis, this credit line is not guaranteed to be around for 2009. What this means for BA Energy Inc and its Alberta Oil Sands Upgrader projects is that there could be a callback of their loans in 2009 which would lead to credit protection. This has lead BA Energy Inc. to be the first Alberta Oil Sands developer to file for credit protection in 2009.

Financial crisis and BA Energy

How has the financial crisis affected BA Energy Inc. and other Alberta Oil Sands companies and what further developments will come in 2009? The financial crisis is a worldwide event that resulted from defaults in asset backed securities and the housing crisis in the US. Because there has been a dramatic default and loss as a result of the Financial Crisis and defaults of loans, the worldwide credit markets have literally been frozen. BA Energy Inc. and other Alberta Oil Sands Companies depend on vast amounts of credit to fund their daily operations. The funds that BA Energy Inc. require are provided by global credit facilities offered through banks such as Credit Suisse. Because of the mounting defaults in the US and the exposure that these global credit facilities companies including Credit Suisse has, the need to recall existing loans has been created. The global credit companies will recall loans with the highest risk first. Alberta Oil Sands projects including BA Energy Inc.’s Heartland Upgrader project are now considered high risk because of the drop in oil prices to sub $50. Not only have BA Energy Inc. filed for credit protection but it has also been one of many Alberta Oil Sands companies to postpone projects indefinitely. This will be a continuing theme while we are in the middle of the financial crisis and oil prices remain low.

Are more Alberta Oil Sands companies needing credit protection

Which Alberta Oil Sands companies will survive the financial crisis? Or more to the point which Alberta oil sands companies will have a strong enough balance sheet to weather out the financial crisis storm for 2009. Afterall, it is a result of the lower oil prices in Alberta that have created the lower profit expectations of all the companies. With Alberta oil sands companies projects being viable at a stable oil price of over $50, the current level is going to create significant problems for some of the smaller firms to survive. Large Alberta Oil Sands companies such as Suncor have significant cash reserves set aside to ride out rough patches including a short term lower oil price. However smaller companies such as BA Energy Inc. will need to file for credit protection. The forecast in 2009 will probably see a consolidation of the smaller Alberta Oil Sands companies with the larger ones and thus avoiding credit protection. However for existing shareholders of these smaller companies the outlook is poor that they will receive much value from their existing shares.

Canadian Oil Sands Trusts and Alberta oil prices

Dividends cut at Canadian Oil Sands Trusts in Alberta

Canadian Oil Sands Trusts invests in Northern Alberta and provides a regular dividend to its investors. Recently, Canadian Oil Sands Trust announced a cut in their regular distribution to its investors. In fact this cut in distribution to its investors was more than expected by the market. Canadian Oil Sands trusts slashed its regular distribution in response to Syncrude Oil’s cut in its quarterly distribution by 80% to 0.15 per unit. Canadian Oil Sands Trust is the largest investor in Syncrude Oil, a major oil sands player. This cut in distribution by the company may lead to increased selling pressure of the company’s shares as investors who are looking for higher yielding shares sell their stock. Canadian Oil Sands trusts has been a high yielding income play of the Alberta Oil Sands and has been able to deliver a high return to its investors. But with the recent financial crisis and the fall in Alberta oil prices to sub $50 levels, this has caused increased pressure for all Alberta oil sands company to slash their quarterly distributions.

Alberta Oil prices and Canadian Oil Sands Trusts

How linked are Alberta oil prices and the prices of shares of Canadian oil sands trusts? There is obviously a very close relationship between the level of Alberta oil prices and Canadian oil sands trusts. As the price of oil falls, the income levels of the companies that the Canadian oil sands trust invests in is significantly reduced. Companies such as Syncrude Oil is one of the companies that has had to aggressively slash its quarterly dividend in order to maintain its financial position. Other Alberta oil companies will surely follow suit and this will lead Canadian Oil Sands Trust to have less income to distribute to its shareholders. However, the price of oil is expected to stabilize around the $50 level with increases expected in 2010. Most analysts currently have a long term buy on Canadian Oil Sands Trust investment as this represents a cheap buy in the current market. However a short term sell is also recommended for this stock.

Canadian Oil Sands Trusts as Investments

Canadian Oil Sands Trust gives investors in Alberta Oil with a solid Oils Sands investment through its 36.74% interest in Syncrude Project. Syncrude Oil is a leader in the Alberta Oil Sands industry and has been in operation since 1978. Currently Syncrude Oil can produce Alberta light high quality crude oil at 350,000 barrels per day. Syncrude Oil operates oil sands operations in the northern Alberta region of Athabasca. By investing in Canadian Oil Sands Trusts as an investment vehicle, investors get a high quality Alberta oil sands investment and can take part in the growth of the oil prices. Canadian Oil Sands trusts provide a regular dividend that gets paid back to investors as a distribution and a return of their initial capital. By returning a larger percentage of an investor’s investment over time, the return on Canadian Oil Sands Investment is seen as a conservative investment.