BC Business and Economic News

[Yellow Fever]

B.C. unemployment rate falls on new part-time jobs


BY PAUL LUKE, THE PROVINCE; WITH FILES FROM POSTMEDIA NEWS AUGUST 8, 2010


B.C. saw its unemployment rate fall last month as the province added a nation-leading 16,300 jobs, all of them part-time.

The province's jobless rate fell to 7.5 per cent in July from 7.8 per cent in June, Statistics Canada's labour-force survey shows.

The province added 25,800 part-time jobs, easily offsetting the loss of 9,500 full-time positions, survey data show.

That performance handed B.C. the monthly prize for the largest number of new jobs in Canada.

"Relative to July 2009, employment [in B.C.] has grown by three per cent, the third-fastest growth rate among the provinces," TD Economics said.

Among the provincial winners, by industry, were professional, scientific and technical services, up 9,900 jobs; manufacturing, up 8,700 jobs; and transportation and warehousing, up 8,100.

Losers included health care and social assistance, down 15,300, and finance, insurance, real estate and leasing, down 11,200.

Meanwhile, Canada's labour market posted a disappointing performance in July: the economy eliminated 9,300 positions in the month. Most analysts had expected a gain of 12,500 jobs.

Across the nation, full-time employment tumbled by 139,000, while part-time gains of 130,000 weren't enough to offset that decline.

As a result, the national jobless rate edged up 0.1 percentage points to eight per cent.

Among the provinces, Quebec and Ontario were the big losers, shedding 21,000 and 15,000 jobs, respectively. Still, most economists don't believe the setback is enough to knock the Bank of Canada off its plan to gradually raise interest rates.

The U.S. Federal Reserve, however, will likely come under intense pressure to provide another push to the recovery after U.S. jobs data for a July showed a job market in a deep slump. Outside the farm sector, U.S. employers cut a total of 131,000 positions from payrolls.

Revisions for May and June indicated the economy lost 97,000 more jobs than U.S. officials previously believed.

The private sector did add 71,000 to its payroll, but that was below the 90,000 expected.

The July data mark the third-straight month the U.S. economy produced less-than-stellar employment results.

pluke@theprovince.com



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[Yellow Fever]

A budding menace

Marijuana legalization in California could hurt Canada's economy, experts say

BY DOUGLAS QUAN, POSTMEDIA NEWS AUGUST 7, 2010


A looming referendum in California on whether to legalize marijuana has fuelled a debate among bloggers and pundits over this question: Could legalization in the United States cripple the Canadian economy?

In a column on the Guardian's website this week, B.C. writer Douglas Haddow writes that a move to legalization would be "devastating to the Canadian economy, halting the flow of billions of dollars from the U.S. into Canada."

B.C. marijuana activist Marc Emery -- the self-styled "Prince of Pot" who is awaiting sentencing in the U.S. for distributing cannabis seeds -- recently told a Vancouver indie website that "the homegrown market will evaporate."

Are they just blowing smoke? Not necessarily, some academics say.

Marijuana production generates at least $3 billion annually in B.C. alone -- due, in large part, to heavy demand from potheads south of the border, said Darryl Plecas, a criminology professor at Abbotsford's University of the Fraser Valley.

Plecas estimated that about 70 per cent of the marijuana grown in B.C. is sent to the U.S. and much of it goes to California.

"[Producers] are probably frantically looking where they can ship it to" besides California, he said.

Eugene Oscapella, a criminology lecturer at the University of Ottawa and founding member of the Canadian Foundation for Drug Policy, said there is no doubt that if California legalizes marijuana, producers there will be able to sell the product more cheaply -- thus making it difficult for producers here to compete and driving some out of business.

"Increased availability for a lesser price in that country will have an effect on suppliers in Canada," he said.

Of particular concern, he said, are the mom-and-pop producers in rural parts of B.C. who turned to marijuana as a way to make ends meet after the forest industry declined.

Other observers, however, are more circumspect about how crippling legalization would be for Canadian producers, pointing out that "B. C. Bud" still enjoys a reputation in many circles as "the Rolls-Royce" of marijuana and that there are many other U.S. states -- besides California -- that covet Canadian-grown marijuana.

Also, Mexico, which exports far more pot to California than Canada does, would probably be stung a lot harder, they say.

Even as the Canadian dollar has appreciated -- making Canadian-grown marijuana more expensive for Americans to buy -- the industry has continued to thrive, said Stephen Easton, a professor of economics at Simon Fraser University and a senior fellow at the Fraser Institute.

"It's a very resilient industry and very adaptive," he said.

Chuck Doucette, a retired RCMP staff-sergeant who specialized in drug enforcement, adds the black-market exchange of Canadian marijuana for U.S. cash and cocaine is so "thoroughly entrenched" that it is unlikely that those lines will disappear overnight.

The California marijuana initiative is headed to a vote in November. If it passes, it likely will go through a series of court challenges, experts say.

An Angus Reid poll earlier this year showed that 53 per cent of Canadians favour legalizing marijuana -- regulating and taxing it like alcohol and tobacco.

Supporters say they hope passage of the initiative in California will create a domino effect that leads to more lax pot laws in other parts of the U.S. and in Canada.

In addition to raising huge amounts of tax revenue, legalization would severely undercut organized crime groups and free up police resources to tackle more serious crimes, they say.

Marijuana and cocaine are consistently reported to be the illicit drugs most frequently trafficked by organized crime groups, according to annual RCMP reports assessing the drug situation in Canada.

Prime Minister Stephen Harper's Conservative government has repeatedly said it has no intention of decriminalizing or legalizing marijuana.



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[Yellow Fever]

Vancouver firm's open-pit mine plan panned in the U.S.


By Randy Boswell, Postmedia News August 9, 2010 5:01 PM


A Vancouver company's controversial plan for a massive open-pit mine near Alaska's key sockeye salmon fishing ground has sparked some high-level political manoeuvring in the U.S., where a recent tour of the contested area by the head of the Environmental Protection Agency was followed days later by a Republican congressman's bid to legislate the EPA out of a role in deciding the mine's fate.

Vancouver-based Northern Dynasty Minerals — a 50-50 partner with the British-based firm Anglo American in developing the proposed $300-billion Pebble gold, copper and molybdenum mine — envisions a sprawling but ecologically-sound operation in the rugged terrain above southwest Alaska's Bristol Bay, heart of the state's $400-million annual sockeye industry.

But EPA administrator Lisa Jackson's late-July visit to the region revealed strong opposition to the planned mine among fishing communities and native groups in the Bristol Bay area.

Then, last week, the controversy took an unexpected turn.

Rep. Don Young — Alaska's longtime Republican member of the U.S. House of Representatives — inflamed passions surrounding the Pebble mine by introducing a bill calling for the EPA to be stripped of powers that could help the federal agency scuttle the project.

"This legislation streamlines the permitting process by eliminating a level of the bureaucracy," Young said, in announcing his bid to reform the U.S. Clean Water Act by eliminating the EPA's veto power over development decisions made by the U.S. Army Corps of Engineers.

"The Corps of Engineers is a very efficient and effective engineering and management agency that is more than capable of making decisions regarding permitting, without being second guessed by an agency that has no real interest in resource or infrastructure development," Young stated. "Projects in Alaska have been shut down or delayed time and time again by the EPA."

The move sparked outrage among opponents of the mine.

Curyung Tribal Council president Tom Tilden, head of the largest native group in the Bristol Bay region, called Young's bill an "inappropriate" and "misguided" attempt to sidestep federal authority when it comes to protecting Alaska's environment.

"We live and make our living from where the Pebble mine would be built," Lindsey Bloom, an official with the Alaska Independent Fisherman's Marketing Association, stated recently. "We want our country's top environmental experts to look into whether the Kvichak and Nushagak drainages are the right place for large-scale metallic sulphide mining that could permanently harm the world's largest wild sockeye salmon fishery."

Bloom claimed that "80 per cent of the region opposes Pebble."

Sean Magee, Northern Dynasty's vice-president of public affairs, told Postmedia News on Monday that the Canadian company is staying out of the debate about U.S. regulatory protocols and has pledged to meet whatever "rigorous standards" are in place as the mining project is scrutinized for environmental compliance.

"We know we are going to have to protect the water and fisheries resource," said Magee. "We set the bar high for ourselves."

He said the company expects to launch the permit process next year, which could take about three years to complete.

Post-approval construction needed to ready the mine for operation could take another three years, he said, putting the earliest date for metal production at about 2017.

Northern Dynasty describes the Pebble site as "one of the world's most extensive undeveloped copper-gold porphyry systems, with the potential to produce up to one-quarter of America's domestic copper supply for more than 50 years."

Since 2008, under their Pebble Fund for Sustainable Bristol Bay Fisheries and Communities, Northern Dynasty and Anglo American have distributed close to $2 million to non-profit groups, school districts, municipal and tribal councils.

The companies have agreed to contribute a total $5 million by 2012 to support various community development projects.

The fund offers "an effective means of working with local communities to strategically invest in projects that demonstrably improve socioeconomic opportunities and quality of life in southwest Alaska," Northern Dynasty president Ron Thiessen said after a new round of funding was announced last November.

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[Yellow Fever]

Focus should be on money, not emotions

Entrepreneur's company helps couples reach independently negotiated resolutions rather than face off in court

BY FIONA ANDERSON, VANCOUVER SUN AUGUST 6, 2010


Earlier this month, the B.C. government released its white paper on Family Relations Act reform, which included plans to steer divorce away from the courts.

Karen Stewart couldn't agree more with that approach. She figures she spent $500,000 and four years of her life fighting her ex-husband by hiring lawyers, filing countless affidavits and fighting constant battles before a judge that ended up depleting the money that was left to divvy up.

"It was insane, it was absolutely a gong show," Stewart said. "There was no strategy,"

"And quite frankly, the winners were the lawyers. And I'm not anti-lawyer, but it's just the fact of the matter. The losers were my kids, my assets, my business, my ex [and] myself."

Stewart divorced right after her third child was born, but divorce is now growing more common among the older crowd, whose children have already left home or are close to doing so. Stewart says that according to Statistics Canada, while overall divorce rates are on the decline in Canada, baby boomers have seen an increase of more than 40 per cent since 1997. With later-in-life divorce, preserving the assets, and not blowing a wad on the divorce, is a must.

"When you're 50 years old, or 53 or 55, you don't have another 30 years in the workforce [to rebuild your assets]," Stewart said.

For some, who gave up their careers to stay at home with the children, getting back into the workforce is not even an option at age 50, she said.

So Stewart created Fairway Divorce in 2006 to help couples reach an independently negotiated resolution that costs less than a full-court press and takes less time. Fairway now has 40 franchises across Canada and the United States, with three in British Columbia.

Fairway uses negotiators with financial backgrounds who take the spouses and their lawyers through a 10-step process. While the same negotiator works with both sides, he or she deals with the parties separately, so that emotions are less likely to get in the way, Stewart said.

And it's emotions that tend to cloud the real issues in a divorce: how to divide assets, the level of support payments and how to make sure the children are looked after.

The No. 1 pitfall Stewart sees is that people look to the divorce process as the way to get revenge.

"People look to the system to slap their ex-spouse in the face," Stewart said. "I hear it all the time: 'I just want someone to tell him or her he or she was wrong.'

"Well guess what? That's not going to happen," she said.

Fairway starts with the money, asking the parties to agree on a list of assets and their value, before arguing about who gets what. That way the assets can be divided according to financial value, not emotional value.

"Because as soon as something comes onto my side of the equation I'm going to reduce the value," Stewart said.

"If I'm going to get the house it's going to have a much lower value than if my ex gets the house.

"So you're removing as much of the emotional decision-making, and then you're making decisions about what makes sense financially."

If the parties can't agree on the value an asset, the party who values it more gets it, she said.

"And when you use that tactic, it's amazing what happens," she said. "If you really think the house is [worth] $1.5 million then guess what, you got it for that."

But it's not just a matter of splitting the value of the assets 50-50. The parties also need to take into consideration what will happen to those assets over time.

For example, if the wife gets the house worth $500,000 and the husband takes junior oil and gas stocks of the same value, four years later his portfolio may be worth $5 million if times are booming, but her house may be only worth $750,000.

"She feels cheated," Stewart said. "And the opposite can happen: You go into a bust economy and his $500,000 is worth nothing."

So varying levels of risk and tolerance for risk have to be considered as well.

"Part of the measure of a good outcome is, is it going to stand the test of time?" she said.

The key is recognizing the importance of the economics of divorce, which many people don't because divorce is very emotional, Stewart said.

It might be easier "if people could realize if you want revenge, then the best revenge is get through this as fast as you can, get on with your life, get sexy, get appealing," Stewart said. "That's revenge."

fionaanderson@vancouversun.com



Read more: http://www.vancouversun.com/business...#ixzz0wMZNRWKP

[Yellow Fever]

B.C. posts dramatic drop in July real estate sales


Vancouver Sun August 12, 2010



VANCOUVER — A year ago, British Columbia's real estate markets were rising to a peak in sales. In July, they dramatically fell off it.

Sharp drops in sales in B.C.'s biggest markets led the province to a 42-per-cent decline in July sales through the Multiple Listing Service compared with the same month a year ago, the B.C. Real Estate Association reported Thursday.

"What we've seen is that the province was buoyed up by Vancouver, Victoria and to some extent the Fraser Valley earlier in the year as those markets were very strong indeed," Cameron Muir, the association's chief economist, said in an interview.

"Now of course, those markets have shifted back toward being more in favour of buyers, so they've brought the entire province into that category."

Muir said a considerable part of 2009's real estate rebound represented "advance buying" by consumers who expected to buy in future years, but were drawn in by lower prices and record-low mortgage rates.

Now, tighter lending requirements for first-time buyers, higher prices and the expectation that mortgage rates will rise are dampening demand.

Thursday's news on resale markets follows Tuesday's Canada Mortgage and Housing report on new-home starts, which showed a slower pace of construction. Both phenomena have implications for B.C.'s "housing-led" economic rebound.

"In terms of the [economic] growth aspect, we expect residential investment to be a positive, at least through 2010 overall, though the growth is slowing," Bryan Yu, economist with Central 1 Credit Union, said in an interview.

Yu said the economic impact of home resales, which comes more from the "multiplier effects" spending homebuyers do to spruce up homes, is smaller than for the new-home sector.

With resales on the decline, Yu expects 2010's overall sales to be lower than 2009's.

In July, sales declined in Metro Vancouver by 45 per cent from a year ago and the Fraser Valley's sales fell 48 per cent. Five other regional real estate boards, including Victoria and Kelowna's Okanagan Mainline, reported sales declines of 30 per cent or more.

The average home price in B.C. hit $491,832, up six per cent from a year ago, but down 1.6 per cent from June.

Real estate association chief economist Cameron Muir said total inventories of homes were 21 per cent higher in July than at the start of 2010, which created "the most favourable supply conditions for homebuyers in more than a year."

However, Muir said the pace of new property listings has also slowed over the past few months, which is beginning to reduce overall inventories of homes for sale.

B.C.'s July inventory sat at 57,801, which was 16 per cent higher than in the same month a year ago, but down slightly from 59,232 in June.

"As a result, we'll see firmer market conditions in many markets by the time we reach the fall," Muir said.

Yu added that the drawdown of both resale and new-home inventories will lead to a modest increase in new-home construction in 2011.


depenner@vancouversun.com



Read more: http://www.vancouversun.com/business...#ixzz0wSyjJWYB

[ssiguy2]

What a farce. Truly amasing how real estate agents and developers can keep prices artificially high and the public buys it. They are always duping the public into this "if you don't buy now, you'll never get into the market" crap.
They could be building like a house on fire as they would be in any other place on the planet and still make money hand over fist.
Case and point...................in White Rock the developers bribed the mayor into allowing a 20 story condo tower. The units were and the building ugly but started at 699k for a 600 sq foot condo. Well even in White Rock they weren't selling.........so they dropped the price continually for 8 months til they "bottomed out" at 349k. In other words that extra 350k was obscene profit and had nothing to do with labour or land prices.
Vancouver new homes could be easily built for a third of the price they are going for but the developers would rather lay off their workers than have a dip in their incredible profit margins.
Calgary houses are half the price but wages are MUCH higher.
I think interest rates are going to have to soar to REALLY bring down the real estate prices. Even if the house prices drop by 50% they would still be the most expensive in the country.

[Yellow Fever]

well, as long as people can afford to buy it, the house price would remain high!

[ssiguy2]

This is why I am very glad that Harper did two things to stop some of this madness of people buying homes they cannot possibly afford praying to god that interest rates don't go up even one percent or they head to bankruptsy court.
First he lowered the amortization length of CMHC mortgages to 35 years from 20 which artificially increased prices. If you can't afford to pay off your house in 35 years then you can't afford the house. Personally I think it should have been 25 years. Even 30 years ago a 20 year mortgage was considered a very long one but by stretching th allowable time to pay for it it just encouraged people to go in over their heads and allowed developers to take advantage of it.
Second, as of last April you must qualify for a 5 year mortgage to get a CMHC loan even if you only take a one year term. This makes a lot of sense as it secures the market from mass bankruptsys when people have to renew.
Even a one percent increase in a mortgage renewal rates can have devestating effects on disposable income. If people can only afford their house because the rates are only 1% then they can't afford the house, it's as simple as that.
I think this has a lot to do with small recent decreases in prices since May and that is a great thing for first time buyers, affordability, and stability in the market. The whole lesson from the US housing collapse is that people were buying houses they couldn't possibly afford just praying prices will continue to rise continually so they can create some wealth. We desperately need to avoid that and these measures go a long way to avoid that situation and speculation.

[ssiguy2]

Sorry meant to say he lowered amortiization lengths from 40 to 35 years........Doh!

[Yellow Fever]

There are two million reasons for high prices in Vancouver

City’s housing affordability problem boils down to too many people on too little land

By Don Cayo, Vancouver Sun columnist August 20, 2010

What drives Vancouver’s house prices so relentlessly to levels four times higher than Winnipeg’s, and more than half again what Torontonians pay?

It’s simple, says Tsur Somerville of UBC Centre for Urban Economics and Real Estate.

“If you want Winnipeg-level house prices here, all you have to do is tear down the mountains and fill in the ocean.”

Well, that puts slow or stop to the steady influx of people — though the massive loss of amenities if our landscape were to be suddenly levelled might do that automatically.

“Depending where you draw the circle,” Somerville says, “70 per cent of the land isn’t developable. It’s mountains or water or the United States.”

Then, on top of this insurmountable geographic limitation, add the relentless population growth that, in good years and in bad, ranges from 1.3 to 1.5 per cent a year.

“The higher the population of a city, the higher the house prices,” he says. “If we lose 70 per cent of the land, our metropolitan area of two million will have the same house prices as a seven-million metropolitan area. Because people have to commute the same distance.”

The myths

Does this mean there’s no truth to some, or all, of the pervasive myths? You know, the ones that maintain our housing costs are driven by rich immigrants looking to get families and/or mistresses out of Hong Kong or other Asian cities. Or by criminals laundering ill-gotten gains. Or speculators. Or empty nesters who reap big tax incentives to not budge from big houses on the best land. Or all that acreage tied up in parks and the Agricultural Land Reserve. Or the rules and fees imposed on developers. Or the property transfer tax on all home sales, and the HST on new ones. Or the civic amenities for which buyers pay through the nose. Or imprudent young buyers willing to take on massive debt. Or an inherent result of a good economy. Or ....

One reader even suggests it’s the fault of public employees, who are so numerous and so well paid they over-invest in property. And an academic study on my desk argues it’s the high hidden cost of the city’s ubiquitous “free” parking.

This short series will look at several of these myths, which collectively point one finger or another at most Metro residents, no matter which group we fall into. The conclusion is, in short, that many of them are, like all good myths, rooted in a little truth. But none come close to matching the impact of the Law of Supply and Demand.

“That’s why, even if the economy collapses, house prices don’t tank,” says Jock Finlayson of the B.C. Business Council. “You get some drop, but it’s typically modest because there’s a growing population and there just isn’t a lot of land.”

@Subhead:Maintaining demand

@Body:What helps maintain this demand, says Cameron Muir of the Real Estate Council of BC, is that much of the population growth stems from international immigration, and it, unlike internal migration, tends not to follow the business cycle.

“When the economy is performing weakly, immigrants still come,” Muir says. “This not only bolsters our population, but also housing demand.”

And: “Our immigrants tend to be the cream of the crop,” Muir says, citing statistics showing 55 per cent of Canada’s investor immigrants come to B.C., mostly to Metro Vancouver.

But for people already here and newcomers who don’t arrive with money, Finlayson notes, “Incomes aren’t that high here. They’re less than in Calgary, Edmonton, Toronto, Ottawa or London, Ontario. But our houses cost a lot more. So people cope by getting less house. They commute farther than they would in another community. Or they get less space than they would settle for in another city.

“They live in condominiums and raise children, which is not common in other parts of the country.”

Or, in the case of a growing number of young people, they’re coping in a far more worrisome way, says Andy Yan, a planner and researcher with Bing Thom Architects.

Yan has looked at what’s happened with housing in a few other high-priced cities.

In Hong Kong, which ironically is seen as a bastion of free enterprise, 60 per cent of the people live in government-subsidized housing, he said.

On the other hand, prices in San Francisco shot so high that demand has flattened or even decreased over the last 20 years, and huge numbers of the city’s workers live somewhere else and commute in daily.

Two-thirds of Metro’s people also live outside the City of Vancouver, though we haven’t yet hit the downward pressure on price seen in San Francisco.

Instead, Yan sees a lot of young Vancouverites, especially those who have an artistic bent and who thrive on the energy of a vibrant city core, packing up to leave for Montreal or Toronto simply because it’s cheaper to live there and pursue creative goals.

“Because Vancouver is going through a very destructive real estate market,” he says.

“High housing costs have a great way of killing innovation and creativity. Can the next Facebook or the next Apple computer really come from Vancouver if you’re too busy trying to pay the rent?”

The upshot, he says, is that Vancouver is increasingly seen by the young as a nice place to hang out for a couple of years, but not a place to settle down.

“That’s serious. You’ve got to think about what’s down the road. They’re not going to be here to support us, to pay for our social infrastructure and all of that.”

dcayo@vancouversun.com



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[Yellow Fever]

Kootenay partners forge ahead with $900-million power project

Columbia Basin Trust, Fortis to expand generating capacity on Waneta Dam

BY DERRICK PENNER, VANCOUVER SUN AUGUST 27, 2010



The Columbia Basin Trust intends to complete its mandate to develop hydroelectric facilities with a $900-million expansion of generating capacity on the Waneta Dam south of Trail, the trust and its construction partner, Fortis Inc., announced Thursday.

The expansion involves building an additional 335-megawatt generating station on the Waneta Dam on the Pend d'Oreille River, just south of Trail. It is expected to take a little more than four years to build, would provide employment for 400 construction workers and inject some $200 million in direct wages into the region.

"In terms of jobs and benefits to workers and people who live in the region, it's fairly big news," Victor Jmaeff, Columbia Power's vice-president of sales and development, said in an interview.

Jmaeff said the project adds a side benefit in wringing additional electricity from water that has already been sequestered by an existing dam.

"It is a project that will generate clean power in that it's being built on an existing dam and power plant and doesn't involve any additional dam construction," Jmaeff said.

The Waneta expansion is one of three potential hydroelectric developments, along with facilities at the Arrow Lakes and Brilliant dams, that the Columbia Basin Trust was endowed with when the provincial government created the trust in 1994 as a vehicle to mitigate damage caused in the region by damming of the Columbia River system in the early 1960s.

Now Columbia Power and the Columbia Basin Trust have reached an agreement in principle with Fortis to jointly develop and share ownership of the project, with Fortis retaining 51 per cent of its equity and the trust taking the balance.

"From the Columbia Basin Trust's point of view, the funds we earn from [this] investment will be spent in the Columbia basin area supporting social and environmental initiatives," Neil Muth, CEO of the Columbia Basin Trust, said in an interview.

"So there are construction impacts that are extremely important, but there are also ongoing benefits to the province and the region."

The project still needs to pass a 15-day notice-of-intent period giving any other interested parties a chance to express interest in the development, but barring that, the engineering firm SNC Lavalin will be the partnership's preferred bidder to take on construction.

The Waneta expansion's power-sale agreement has to be approved by the B.C. Utilities Commission.

Under the agreement, electricity from the Waneta expansion will be sold to BC Hydro on a long-term contract, but Fortis subsidiary FortisBC, which is the successor to the regional electric utility West Kootenay Power, would have the right to purchase a large amount of the Waneta expansion's power at firm rates.

FortisBC serves 110,000 customers in communities including Kelowna, Osoyoos, Trail, Castlegar and Princeton, plus wholesale customers, and owns hydroelectric plants that generate 225 megawatts of electricity.

However, that is not enough to serve its entire customer base.

Under the Waneta agreement, it would buy an average of 234 megawatts worth of the project's power generation.

"We don't need [Waneta's full power] all year round, but we do need a large amount, especially in the winter," said Barry Perry, Fortis Inc.'s vice-president and chief financial officer.

"Right now we're buying [the additional electricity FortisBC needs] on the open market. With this, they'll have that stable access at stable prices."

Perry said the Waneta project is the type of development opportunity that Newfoundland-based Fortis Inc. pursues.

Fortis, which is Canada's largest private-sector power company, also operates the Columbia Trust's other facilities under contract as well as the existing Waneta dam and power station for Teck Resources Inc.

depenner@vancouversun.com



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[Huhu]

Lol, $1 billion doesn't even buy you a whole dam anymore.

[Yellow Fever]

Office vacancy rates continue to climb


By Garry Marr, Financial Post September 23, 2010 10:02 AM




TORONTO — Vacancy rates for office space across the country continued to climb during the third quarter, says a new report from CB Richard Ellis Ltd.

The real estate company said Thursday Canada’s overall vacancy rate for downtown and suburban office markets rose to 9.8 per cent from 9.4 per cent a year earlier. The overall availability rate of the country’s industrial space fell to 7.7 per cent from 7.9 per cent a year earlier.

Office vacancies rose in most major cities with smaller centres in Ontario such as Ottawa, London and the Waterloo region bucking the trend.

“There have been no surprises this quarter,” said John O’Bryan, vice-chairman of CB Richard Ellis. “The recovery and rebound of the commercial real estate market in the third quarter is tracking as expected, and we anticipate that commercial real estate activity will continue to improve through to year-end, albeit, at a slower pace. Pent-up demand due to the uncertainty of the market from the start of the year is now starting to make its way through the system.”

The real estate company says the current improving market conditions are ideal for real-estate investors. “The combination of limited new construction, available mortgage funds and low interest rates created near-perfect conditions for the commercial real-estate investor to re-enter Canada’s market, bolstering both the office and industrial sectors,” CB Richard Ellis said.

However, the company’s own statistics show office vacancy rates are still on the rise. In Vancouver they jumped to 10.1 per cent in the last quarter from 8.1 per cent a year earlier. CB Richard Ellis says new construction in the suburbs pushed the vacancy rate up.

“With no new construction in the downtown area, Vancouver’s office market is poised to significantly tighten,” said Mark Renzoni, managing director of the real estate company’s Vancouver branch. “Looking ahead, I anticipate that Vancouver will be a landlord’s market in 2011.”

The oilpatch continues to have the highest vacancy rate in the country and it jumped to 14.4 per cent in the third quarter from 13.1 per cent a year earlier. The addition of Eight Avenue Place boosted the vacancy figures.

In Toronto, the office vacancy rate in the third quarter jumped to 9.4 per cent from a 9.1 per cent a year earlier.

Ottawa’s office market just got tighter in the third quarter with the vacancy rate dropping to five per cent from 5.8 per cent a year earlier. Suburban locations like Kanata have recovered from the recession, pushing rates down.

Postmedia News



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[Huhu]

Vancouver's downtown needs some new office space, spreading the offices into the suburbs is not the answer. The DT needs to be the hub of regional commerce and since the region is growing, the amount of commercial space in DT needs to grow as well.

[Yellow Fever]

agreed. most of the office space in Calgary, Edmonton and Regina are concentrated in the downtown cores.



Port Metro Vancouver volumes up as economy rebounds


By BRIAN MORTON, Vancouver Sun September 23, 2010

VANCOUVER - Shipments through Port Metro Vancouver are up substantially this year, Chris Badger, the port’s chief operating officer, said Thursday.

Badger said there were some concerns about coal shipping, but there was no overall shipping crunch.

He said 2008 was the port’s record year “and I think [2010] will fall short of 2008, but we’ll be close.”

“The surprise is the recovery [from the recession] happened in one year and we anticipated it to be longer,” he said in an interview.

Port Metro Vancouver handled a total of 58.4 million tonnes to the end of July, an increase of 20 per cent over the same period in 2009.

Bulk shipments were up 22 per cent, resulting from growth in Asian economies and strong demand for Canadian commodities such as coal and potash.

Container traffic was up 12 per cent as a result of consumer spending, with demand for consumer goods increasing as the recovery takes hold.

However, Teck Resources Ltd., Canada’s largest diversified mining company, said this week it is cutting its coal-sales forecast because of capacity constraints at a B.C. port, Bloomberg reported.

Third-quarter sales will be 5.2 million to 5.5 million metric tonnes, compared with a previous target of 5.8 million to 6.2 million tonnes, the Vancouver-based company said in a statement. Teck reduced its 2010 sales forecast to 23 million to 23.8 million tonnes, from 23.5 million to 24.5 million tonnes.

The company said coal sales were hindered by constraints at Westshore Terminals south of Vancouver, which has been operating at less than its annual capacity of 29 million tonnes during the third quarter.

As well, CP Rail’s shipments of export potash are up 200 per cent this year after the market stalled last year during the recession, chief financial officer Kathryn McQuade said this week.

At the same time, CP Rail’s intermodal traffic, which involves transport by more than one form of carrier, in this case rail and truck, was up 40 per cent so far this year through the port of Vancouver.

“We did anticipate growth, but we didn’t see the West Coast kind of being on fire like we are seeing today,” McQuade told a CIBC investor conference.

However, Badger said that despite growth in most sectors, including coal and potash, there is no capacity crunch at the port other than at Westshore.

“Everything’s moving fine,” Badger said. “We have 30 terminals doing very well and one [Westshore] bringing equipment up to speed.”

He described Westshore as having “some challenges ... because equipment they purchased to deal with increased growth is not yet in operation.”

He said a new stacker-reclaimer — which moves coal from trains to coal piles, and then to ships — will be operational in a few weeks. “It should alleviate some of the pressure.” In the meantime, he said, there is extra capacity for coal at other terminals, including the Neptune terminal.

“We have a lot more capacity in our terminals. If more comes, we can [handle] it.”

Badger said he expects shipping activity to drop off in the near future, because most Christmas-related shipments have already arrived.

bmorton@vancouversun.com

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[Yellow Fever]

PetroChina’s $5.4-billion gas investment a portent for future


By DERRICK PENNER, Vancouver Sun February 13, 2011 8:01 PM



The potential for British Columbia to develop an offshore export market for its swelling natural resources was given a considerable boost last week with PetroChina’s announcement it wants to spend $5.4 billion to buy half of EnCana Corp.’s Cutbank Ridge resource in the province’s north east.

In the short term, the deal — the biggest investment to date by a Chinese company in the North American energy sector — is about finding capital to develop gas fields at a time when low commodity prices aren’t providing companies with enough cash flow to do it as quickly as they want to.

PetroChina, in its news release, said it expects the joint venture to “unlock greater value for our shareholders, and will strengthen the competitiveness of [the] Canadian natural gas business.”

“For years, PetroChina has been looking for opportunities to work with major Canadian oil and gas companies in areas including LNG and oilsands in Canada, and projects in China,” the company added.

In the long term, however, B.C. Energy Minister Steve Thomson sees it as another step toward eventual shipments offshore.

Thomson noted that Apache Canada and EOG Resources are moving toward a final construction decision for their proposed KM LNG natural gas liquification plant at Kitimat, which would be key to opening exports.

“I think this investment helps move those projects forward as well as to make sure there is that opportunity to open up those markets to us,” Thomson added.

Thomson said the industry is suffering through a period of low domestic natural gas prices and modest prospects for growth in the North American market.

“But the opportunity for the industry in China and the Asia Pacific is very significant,” he said.

Encana spent nine months working with China National Petroleum Company, PetroChina’s parent company, to come up with a joint venture to develop its resources.

The PetroChina deal is still subject to a foreign-investment review by Industry Canada, but Alan Boras, EnCana’s vice-president of media relations said their goal was clear.

Boras said the Cutbank Ridge field, has “tremendous potential, but given [natural gas] prices and the cash flow we’re able to generate, we can develop that at a certain pace” Boras said. “We want to accelerate that pace because we believe [that is] best way to bring additional value to [Cutbank Ridge].”

And to do so, Encana needed an outside investor for what the industry calls a “farm in” agreement, as it has done in the past.

“This is certainly the largest,” Boras added.

And while exports weren’t explicitly part of their discussions, Encana CEO Randy Eresman, during the company’s fourth-quarter conference call with analysts, acknowledged that the potential to export gas likely influenced PetroChina’s decision.

“I fully understand and appreciate the desire of PetroChina to link up with LNG in North America,” Eresman said. “We’ve thought about the need for LNG export capacity in North America. More specifically, we think there’s an opportunity with Asian players who demand more natural gas in their energy portfolios.”

Industry analyst Gordon Currie, with the firm Salman Partners, said Asian countries, China in particular, have some pretty big reasons to seek out gas supplies.

“They’ve obviously got a growing economy and growing energy needs of their own,” Currie said. “They can meet them with coal, or meet them with oil, but gas would be the most environmentally friendly option.”

Currie added that Asia and Europe’s existing natural gas supplies are expensive, so developing a relief valve for North America’s glutted market would be helpful on both sides.

“If we could move gas around the world more freely the way we do oil, it would probably bring the prices down in Europe [and Asia], but bring prices up in North America,” Currie said.

And that, Thomson said, would help the province in terms of the royalty revenue it receives from what is a Crown resource.

“Royalties relate to the market,” he said. “We’ve got a royalty program that facilitates investment, then as markets improve and grows, the royalty level adjusts and [revenues] improve to the province.”“We’re obviously, as a province, interested in seeing new investment from Asia, and the opportunities for the industry come to fruition.”

depenner@vancouversun.com

With a file from Postmedia News



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[Yellow Fever]

China’s surging demand for lumber straining depleted B.C. forest sector

Heavy cuts during the downturn left the logging sector ill-equipped to ramp up again now

By GORDON HAMILTON, Vancouver Sun March 4, 2011 7:02 PM



An early-season spike in lumber prices prompted by renewed buying from China has caught recession-strapped forest companies short of trucks and rail cars to get logs out of the bush and their lumber to market, several industry sources said Friday.

“Everybody is always touting lumber sales to Asia, which is wonderful — we have mills that have re-started, mills adding a second shift and getting back closer to traditional capacity — but we lost a lot of the workforce during those down years,” said MaryAnne Arcand, of the Central Interior Loggers Association. “They have gone to oil or gas or mining, or different things, so we have a massive shortage of trucks. It’s finally dawned on the mills that they have a problem.”

She said the resource sectors are “poaching” drivers and equipment operators from each other by offering better wages or working conditions.

“Everybody is poaching from everywhere, trying to get anyone they can get,” she said.

“I have loggers who have wood on the ground and they are not sure they are going to get to a mill before breakup because they can’t get a truck.

“Mackenzie alone is short 60 trucks. Conifex reopened one of the sawmills there, the pulp mill got going again and Canfor got going again. They just don’t have the capacity [in logging trucks.]”

David Livingstone, president of Lomak, a B.C. bulk carrier company that hauls wood chips to pulp mills, said Lomak has been able to retain its drivers by keeping equipment up to date and ensuring that 90 per cent of the drivers get to sleep at home each night.

“It gives us an edge,” he said.

Doug Routledge, forestry vice-president at the B.C. Council of Forest Industries, said rail car shortages are a chronic problem for the industry.

He confirmed there is a shortage of logging trucks and drivers, particularly in regions like Mackenzie, where the recession shut down nearly every mill.

Routledge said the shortages vary from region to region.

The problem is not just a shortage of drivers but of logging equipment as well.

Logging equipment has been idle or used very little over the past few years, Arcand said. Getting parts to bring the mothballed machinery back into operating condition is proving to be difficult, she said.

Keta Kosman, publisher of Madison’s Lumber Reporter, said a six-per-cent spike in lumber prices this week has sharpened the focus on transportation issues.

Prices for 1,000 board feet of lumber broke through the $300 level to $306 for the first time in five years, with the exception of a very brief spike last spring, she said.

Railroads are sending rail cars directly from mothballs to shippers to meet the demand for lumber, largely brought on by “massive” buying from China, Madison’s reports in its March 4 issue.

“Rusty cars are arriving in some places with eight feet of snow piled on them, obviously having been sidelined for a couple of years with no maintenance,” Zara Heartwood reports in Madison’s. Many rail cars had to be taken out of service, she said in her report.

Madison’s also reports that truckers are being offered bonuses to desert their usual routes, heading east with loads of oriented strand board, to carry lumber west to Vancouver.

“Truckers were offered bonuses of hundreds of dollars per load to haul dimension lumber from central B.C. to the Port of Vancouver for trans-shipment to China.”

Truckers say that the forest industry cut too much during the recession and that there is very little loyalty left.

From driving down contractor rates to cutting back on road maintenance, the logging sector now finds itself ill-equipped to ramp up to meet demand from China.

Contractors who were being pinched either went out of business, or switched into other sectors. In Williams Lake alone, 18 logging truckers went broke or sold out in a single six-month period. Truckers say they have work elsewhere or in other sectors and are not interested in going back to an industry that broke them.

ghamilton@vancouversun.com



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[Yellow Fever]

Vancouver’s economic plan focuses on trade, growth


Vancouver Economic Action Strategy includes marketing Vancouver to the world and reducing taxes on small businesses


By Brian Morton, Vancouver Sun September 29, 2011


A new economic plan for Vancouver was unveiled Thursday, aimed at creating a climate for growth, supporting new investment and attracting and retaining talent.

The Vancouver Economic Action Strategy: An Economic Development Plan for the City — created by the Vancouver Economic Commission, an agency of the City of Vancouver — provides 160 measures to enhance the local economy through business support programs.

Developing a green economy, including showcasing green technology and green buildings, is an important aspect to the report, which said environmental issues are inseparable from economic issues.

“Green products and services make up one of the fastest growing emerging sectors of the global economy,” the report stated. “Vancouver has significant momentum in this area and is levering this as a strategic advantage to promote economic development objectives that will complement important mature industries.”

Strategies include an expedited review of the city’s regulatory framework on job spaces, taxes and regulatory burden on business; a global communications and events program that markets Vancouver to the world for investment and talent; boosted support for Port Metro Vancouver; a Green Enterprise Zone; helping develop a technology incubation centre; and increased trade with new global markets targeting Asia and South America.

Business Council of B.C. executive vice-president Jock Finlayson said in an interview that the plan “accurately describes what makes up the city’s economy, and the areas they’ve identified for growth and development make sense.”

He said it recognizes that the city has an economy based on a number of industry sectors: the port, manufacturing, tourism, the advanced technology sector, “plus what I would describe as the ‘corporate office economy’ that includes mining, forestry, and related service supplier companies.

“Unlike some other documents produced by the city, the [VEC] plan isn’t wholly preoccupied with the ‘green’ economy. It presents a more balanced and realistic picture of what makes the city’s economy and business community tick.”

Finlayson noted that the report’s goal of doubling the number of green and creative jobs by 2020 is probably achievable, although the city has limited tools to drive economic development, because the other two levels of government control most of the key policy levers that influence job creation and business growth.

He said growth in a regionwide context is necessary because Metro Vancouver is really a single, integrated regional economy, not a plethora of distinct “municipal economies.”

VEC CEO Lee Malleau said city or regional governments are increasingly critical to the economy.

“A big part of the background [in this] is that Vancouver has realized the importance of how city regions compete in the global economy,” she said.

“We have adopted a focused approach that identifies where we think there are gaps to fill, improvements to make in our business climate, and the best ways to support the many organizations that are already doing great work in Vancouver.”

Mayor Gregor Robertson said the plan envisions a high-performing economy that levers the city’s global profile and its momentum as a centre of innovation and entrepreneurship.

“Implementing practical measures, like reducing taxes for small business, streamlining regulation and process, and creating innovative new opportunities will help create the kind of environment we want in our city — one where businesses see the opportunity to invest, where they can draw on local services and skills and they can grow and prosper, to the benefit of the entire city.”

However, NPA council candidate Mike Klassen criticized the report as being politically motivated because it’s coming out during a municipal election campaign.

“Gregor Robertson’s photo was on Page 2 of a 35-page document. It inherently becomes a political document rather than an expression of the will of the city.”

Klassen said the plan, with 160 measures, should be more focused.

He also said that it’s more important to develop a regional plan, as opposed to one that focuses on Vancouver alone.

“There’s talk about lowering taxes, but no suggestion about how they’ll do that. There’s no specific actions on how to get municipal spending under control.”

Klassen also said that there’s no real discussion on how to improve the prospects of the tourism industry.


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