More good news about 2005 and the future from the Edmonton Sun...
Outgoing Edmonton Real Estate Board (EREB) president Jim Kulak drew his 2005 bottom line, and announced sales records almost too numerous to list.
Next Wednesday, new-crowned EREB boss Madeline Sarafinchan will try to repeat Jim's magic when she holds her big housing forecast seminar at the Westin. It could be a tough act to follow for the Jayman Realty managing partner.
Or maybe not.
Yesterday, the Bank of Montreal's chief economist Richard Egelton checked in with an analysis of where we go from here. If Egelton's crystal ball is anywhere close to being in focus, then Sarafinchan should have no problem topping Kulak's year in the realty czar's chair. And I'm sure Jim won't mind a bit.
"Oil's well" Egelton whooped about Alberta's long-range economic outlook. "A gusher of activity in the energy sector has Alberta on a roll ... fuelled by high prices and development of the oilsands."
And he listed all the advantages of being Canada's energy province when oil and gas is on a roll - the fastest growing population in the nation, the highest incomes in Canada and the lowest tax burden. Alberta's hyped economy "accounts for a disproportionate amount of national activity," the economist determined. Even though Albertans only amount to 10% of the national population, our jacked economy makes up one-seventh of all economic activity in Canada.
It's little wonder that Albertans have a deep-felt resentment that we don't get any respect from eastern Liberal politicians - we're largely responsible for keeping Canada going.
If Egelton is halfway right, the best is yet to come. Oilsands production is expected to jump by 170% by 2015. To make that happen, the BMO guru predicts massive oilsands investment over the next 10 years.
"We believe spending has the scope to ramp up considerably," Egelton said. "To about $10 billion annually by the end of this decade."
Considering 2004 oilsands investment was $6.1 billion, that's quite a ramp-up.
While conventional oil production will decline by one-third (those old 1950s oilfields can only be squeezed for so long) natural gas production will remain flat. Which translates into massive exploration and development drilling to replenish reserves - including controversial coal-bed methane.
Labour markets will remain super tight; population growth will be 1.2% a year.
As a result "housing markets will remain vibrant."
And real estate board guys love vibrant.
It only gets better if you are a provincial politician. Egelton foresees "surpluses as far as the eye can see."
This year, the provincial surplus should have hit $8.7 billion if Ralphy hadn't gone on his pre-Christmas spending spree, plus hadn't given us prosperity dividends.
Next year, it will be $6.2 billion with no rebates. And on a status quo basis, the provincial government will still be banking $5 billion annual surpluses by 2015.
But it's not all wine and roses. There are risks out there too, the economist warned.
Because what Santa gives us, Santa can also take away. Namely low energy prices.
Back in the 1980s, when oil prices were scraping along at $16-US-a-barrel, Alberta's economy was the national underdog. Heck, we even got transfer payments one year.
"With production of conventional oil likely to decline," Egelton warned, "Alberta's economy will become increasingly reliant on production from oilsands."
But that deal's off when prices hit $25- to $30-US-a-barrel and recovery costs are more than revenues. There are the usual labour, pipeline capacity, infrastructure and environmental hassles that could also cook our golden goose.
"This could lead to a glut of residential and non-residential development in the province," Egelton cautioned.
Which is about the last thing the happy folk in the EREB's 142 Street bunker want to hear.