St Albert decides not to freeze wages

It was announced Thursday that the Premier Ed Stelmach would freeze the wages for civil services managers in an ongoing effort to solve some of Alberta’s financial woes. To some, the actions seem drastic, and city officials do not believe that they need to freeze their management’s wages because they see signs that the economy is improving much quicker than people anticipate.

The city council believes that a modest 3% tax hike on earnings of the city’s staff will be enough to make it though the questionable times. The city council has actually been raising wages for their employees. The RCMP also saw a solid 7% gain in their wages. Also, the city is negotiating new salary contracts with the local firefighter’s union. A raise for the fire fighters is also expected. The city just doesn’t believe that wage freezes will spur any type of economic growth.

City council members said they would be able to meet any budget deficit with a slight increase in property taxes, but claim the increase will be less than 3%.

The salary freeze on civil service managers will save the province an estimated $600 million this year. Although one public sector will prevent wages from increasing, very few expect to see other sectors follow the example. Many people don’t even agree with decision by Ed Stelmach.

Stelmach said he also plans to ask teachers, nurses, doctors, and other public workers to voluntarily accept the freeze in an effort to save money over the next few years.

Edmonton LRT cost could fall by $70M

Proposed line to NAIT won’t require as much land as originally estimated, report says.

The proposed LRT line to NAIT could see construction costs drop by about $70 million because the city needs to buy less land than first expected, a new report says.

Although staff want permission to start expropriation proceedings for seven key properties, the number of lots required to complete the project is down from what was anticipated last spring.

The original budget included $150 million to purchase homes, apartment buildings, shops and other sites along the LRT right-of-way from downtown to NAIT, but a report released Thursday estimates only $80 million is now required.

Most of the drop came as a result of council’s decision last fall to put tracks along 105th Street beside the Victoria School of Performing and Visual Arts rather than using a nearby alley, transit projects manager Wayne Mandryk said.

Further engineering work also shifted the alignment on Kingsway Avenue, meaning much of the Kingsway Mews shopping centre and other nearby sites won’t be taken as planned, he said.

If this scheme is accepted by councillors, the estimated cost of the line would be $800 million, he said.

More precise figures should be available by June.

The land identified for possible expropriation covers three properties on 105th Avenue at 105th Street, one on 105th Avenue at 104th Street, a slice of the Kingsway Mews parking lot, the McDonald’s on 111th Avenue and the 1.3-acre Kingsway legion site.

But Mandryk said negotiations will continue for six or seven months before expropriation would be considered, adding that it wasn’t necessary on the south LRT.

“The expropriation report only addresses some of the critical properties we need in order to meet the construction schedule in the concept plan to see it completed by 2014.”

Barry Wood, first vice-president and treasurer of the Kingsway legion, said his non-profit group is working on a voluntary expropriation in which they’d receive enough money for an equivalent building and lot.

With 1,800 members, they’re the largest legion north of Red Deer and plan to reopen somewhere else with good transit service, he said, adding they’ve been asked to leave by the end of 2010.

“There are no hard feelings with the city. We want to co-operate with them. It’s just a matter of sitting down and negotiating,” Wood said.

While construction of the three-kilometre NAIT line depends on the provincial government providing $520 million from its green transit incentives program, the fund application process still hasn’t been published, the report says.

Coun. Kim Krushell said the city has heard informally this is the sort of project the province wants, especially as the capital area moves toward regional planning in transit and other areas.

“We definitely need to go ahead. We have told citizens that the northwest LRT line will start downtown and go to NAIT, and eventually go to St. Albert. I think it would be worth it.”

REALTORS® report that residential sales were positive in January

Residential sales in January are always slow as buyers recover from their holiday excesses and stay bundled up from the cold. January sales were slow at the beginning of the month but picked up steam as the days grew longer. REALTORS® sold 730 residential properties in January compared to 608 in December (sales up 20%). Sales prices were also up in all categories as compared to the previous month.

“Nobody rings a bell when prices hit the bottom,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “The bottom is evident only after several months of rising prices. One month does not make a trend but the market is certainly welcoming to home buyers.” He pointed to the lowest interest rates in years, the large selection of homes available and recently announced economic stimulus packages as reasons for the increasing market activity. The amount of RRSP savings that can be applied to a first-time home purchase was increased from $20,000 to $25,000 and a tax rebate for home renovation expenses were announced in the recent federal budget. Both measures will encourage home buyers.

The average* price of a single family home in January was $352,689 – up a quarter of a percent as compared to December. Condo prices were up 1.8% to $238,535 and duplex/rowhouses sold on average for $299,222 (a 2.2% price increase). Total residential sales through the MLS® for the month were $231 million – down 43% from the previous January.

Listing activity also increased in January. There were 2,443 residential properties listed in January – an 85% increase over December listings. With 730 residential sales the sales-to-listing ratio was just 30%. At the end of January there were 6,573 properties available on the residential MLS®. At current sales rates this is a nine month supply. Time to sell was up from 65 days-on-market in December to 68 days in January.

“The housing market changes every day and consumers need to work with a REALTOR® who can advise on pricing, sales and negotiation strategies,” said Ponde. “REALTORS® are the only professionals with current sales prices (as compared to asking prices) and can do up-to-date comparisons for properties similar to the one you are attempting to buy or sell.”

The good news behind lower oil prices

Call it the petroleum industry’s Christmas gift to the world.

The collapse in crude prices is causing a lot of financial misery in Alberta and every other oil-producing region. But the benefit to energy consumers — individual and corporate — is huge. This massive reduction in energy costs will be a major contributor to recovery from the global economic recession.

The problems created by moribund oil prices are reported daily. Oilsands projects cancelled or postponed. Layoffs in the oil-fields and head offices. The Alberta government will go from massive surpluses to deficits. Hundreds of billions of wealth in the form of oil company shares and real estate values vapourized. Many oil and gas developers and their myriad of support companies will disappear this year.

But the enormity and impact of the savings to everyone who consumes hydrocarbon fuel must be calculated to be appreciated. The current economic mess is being blamed on a credit bubble and U. S. subprime mortgages. The real villain is high oil prices, meaning that substantially lower energy costs should accelerate a turnaround.

The world produces and consumes about 87 million barrels of oil daily. The price is down from $147 in July to about $37, a reduction of $110 a barrel. Those purchasing petroleum and its byproducts are paying $9.6 billion per day less than six months ago.

Annualized, this will save the world about $3.5 trillion per year.

This is a huge number, greater than the gross domestic product of every country in the world except the United States and Japan.

According to Washington’s Department of Energy, the United States burns one billion litres of gasoline and 492 million litres of diesel fuel each day. The cost is down about $2.50 per gallon ($0.66 per litre) from its peak last summer. Using an average reduction of $2 per gallon, this will leave Americans $300 billion richer each year.

For incoming president-elect Barack Obama, this is a financial stimulus gift from heaven. The economy enjoys a massive cash injection and the federal government doesn’t borrow a nickel.

The fuel cost savings in Canada are also enormous. According to the Canadian Association of Petroleum Producers, in 2007 we purchased nearly 34 billion litres of gasoline and 28 million litres of diesel fuel. At an average cost reduction of $0.60 per litre, Canadians will save $42 billion annually. No federal political party –or coalition of left-leaning politicians–would dream of a deficit-funded, federal economic aid package of this magnitude.

There are other, indirect financial benefits of the oil price collapse.

The significant accumulation of wealth by oil-producing countries has created a new class of petro-bullies; governments with enough extra cash to be able to make trouble well beyond their borders. Russia, Iran and Venezuela are but three. Having these countries focused on domestic problems will reduce western defence spending.

Russia is largest and most influential, so its readjustment is the best reported. Foreign currency reserves are being used to support the ruble to prevent further erosion of the wealth of ordinary Russians. The state is also bailing out the infamous oligarchs who, not surprisingly, accumulated a lot of their wealth with borrowed money. Levies have been placed on imported cars to protect a pathetic domestic auto industry. More store shelves are going empty.

Russia’s recent economic success and its attempts to re-establish itself as a global military superpower have been bankrolled by high oil prices. How the mighty have fallen.

As the price of oil rose for six straight years, analysts have wondered when the increased cost would finally result in recession, reduced demand and collapsed prices. This has been the pattern for 35 years.

It was perplexing to many how oil prices and demand could both rise simultaneously. Noted CIBC economist Jeff Rubin was one of the few who blamed the current financial mess on the relentless rise in the price of petroleum.

The credit bubble also came into play. As consumers endured lower disposable income because of rising energy costs, they could borrow their way out of it with home equity loans or another credit card. Finally, the combination of record high oil prices and record household debt reached the point of no return.

No wonder everything fell so hard, so fast and so far.

Alberta’s unhappiness will be a significant contributor to the financial recovery of the rest of the world.

If high prices caused the problem, low prices should fix it. It’s comforting that there’s some good news out there somewhere.

Source – Calgary Herald – http://www.calgaryherald.com/business/good news behind lower prices/1139755/story.html

Realtor Bashing?

Realtors have now joined hotels, professors, lawyers and books with their own website where customers can praise, or criticize, their performance.

www.What-Customers-Say.com is a site where clients can rate the real estate agent who worked on their deal.

This website is an excellent idea, but recently there has been some friction between the sites developers, local Edmonton Realtors and the Edmonton Real Estate Board.

I think in order for this site to grow it needs to understand that its customers are the Realtors and their local boards, not getting along with these groups will makeit difficult for them to succeed.

Personally, I don’t have a problem with the site. Currently it is free to sign up for the sitebut come January it will cost you some dough.

Here is the article written by the EREB in regards to the website.

“What-customers-say ranks REALTORS®

A group of four young entrepreneurs have just launched a new web site which

allows customers to rate their relationship with a REALTOR®. The service has

been profiled by the Edmonton Journal and was promoted at the recent trade

show. While this new “service” may have some positive benefits for REALTORS® it

also has the potential for abuse and slander.You can review the site at

www.what-customers-say.com.

While the name implies that a number of services may be ranked, the site is

targeted directly at REALTORS® and is operational only in Edmonton at this

time. The company has scraped the names and company affiliation of many of our

members off the Internet and posted them on the site, in most cases without your

knowledge or consent.

The site has a blog which has attacked some REALTORS® who have asked that

their name be removed from the site.

The REALTORS® Association of Edmonton has met with a principal of the

company and expressed concerns raised by some of our members. Despite the

company claims, they do not have arelationship with the Association and will not

be given access to MLS® data.

In our opinion this is an advertising opportunity

which some members may want to explore. However, customers may perceive a

bias inherent in a service which rates the very people who are paying for it.

If you do not wish to be listed on the what-customers-say.com web site, you should

contact the principals directly in writing to ask that your name be removed or to

have a specific comment amended.”