Saskatchewan housing suffers hangover following last year’s party: RBC
RBC’s recently released “Housing Trends and Affordability” study suggests that housing affordability in the province saw some modest improvements over the third quarter but the Saskatchewan housing market is experiencing a “hangover” after a year of partying hard.
“Like Alberta and British Columbia before it, Saskatchewan is about to feel the downside of frenzied markets. Housing demand in the province greatly benefited from the red-hot prairie economy (thanks largely to strong demand and prices for commodities) and the inflow of people into the province. However, housing markets got carried away as skyrocketing prices significantly overstepped historical relationships with household income. RBC’s provincial affordability measures spiked in all housing segments last year, reaching the poorest levels on records dating back to the mid-1980s. As is often the case, a wild party ends with a hangover and Saskatchewan’s fête last year will be no different. Housing resales and prices are already showing clear signs of weakening. More is likely to occur.”
Take two Tylenol and call me in the morning.
Read RBC’s Housing Trends and Affordability study here.
The Star Phoenix covers the story here.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Follow our daily updates on Twitter @SaskatoonHomes.
Norm Fisher
Royal LePage Saskatoon Real Estate
49 comments so far. We'd love to hear your thoughts.
April 24th, 2009 at 9:04 AM
I love the “Oops” on the graph!
Truth be told, looking at that % change YOY, I’d far rather be where we are now than where we were a year ago (as a potential buyer, anyway). Still not good, though.
In other news this morning, the BOC really seems to be motivated about something:
Bank of Canada Cuts Lending Rate to Lowest Since 1958
http://tinyurl.com/5m6ypk
“Bank of Canada lowered its benchmark interest rate by more than anticipated to a half- century low and signaled more action may be needed as economic growth sputters amid a “broader and deeper” global slump.
Governor Mark Carney and his rate-setting panel slashed the target rate for overnight loans between commercial banks by three-quarters of a point to 1.5 percent, the lowest since 1958. Canada’s economy “is now entering a recession,” the central bank said in a statement from Ottawa today, the first time it has made that assessment outright. “The Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required.”
“Entering a recession”, huh? Wow, now that is one bold statement. Whocouldanode?
It’ll be interesting to see what the banks do with those lending rates now.
April 24th, 2009 at 9:04 AM
Interesting thing is that year over year is still positive and even if prices stay the same now (with evidence of some further moderate price decline), in half a year’s time we’ll be into year over year losses. This can be well imagined from the slope of the line on the above graph.
Even a conservative estimate for a further 5 to 10% decline in prices over the next year is on top of losses of 10% from peak, so next June, will we be seeing a 15 to 20% year over year loss? A $240,000 average by next June is still up about $100,000 from a few years ago, so seems reasonable, just unforunate for any one who bought when the average was (gasp) $310,000 earlier this year.
Now I have to decide if I believe RBC’s evidence based estimate of a cooling housing market, or Remax Saskatoon, which says “buy, buy, buy or forever be priced out” which is being seconded by local “booster” media outlets.
Canada’s biggest and most successful bank says Saskatoon housing “is about to feel the downside of frenzied markets” (assumed from provincial) and “housing markets got carried away as skyrocketing prices significantly overstepped historical relationships with household income” (Saskatoon housing most expensive in province and incomes trail Regina substantially)
BUT local real estate company says stuff is looking up, buy now at a bargain (still only $70,000 MORE than Merrill Lynch thinks we’re worth, down from $100,000 over valued a few months ago)
April 24th, 2009 at 9:04 AM
Bah!
I guess RBC forgot to consult CHMC and News Talk 650!
“Housing Starts Down:
Paul Caton with the Canada Housing and Mortgage Corporation says that doesn’t mean things are on the down turn in Saskatchewan, simply builders are hard at work finishing all the new houses that began the year before.”
http://www.newstalk650.com/story/20081208/9552
April 24th, 2009 at 9:05 AM
Crikey,
Yes, it’s a pretty big cut at one time. Mortgage guy was telling me today that the lenders are starting to get a little more competitive again and going after business more aggressively. Laurentian dropped their four-year fixed to 4.95% today.
Nick,
Good point. We are likely facing year-over-year losses through most of next year, likely starting around March.
“Now I have to decide if I believe RBC’s evidence based estimate of a cooling housing market…”
Lol. I’ll bet this is a real struggle for you.
guy_in-regina,
I think there are a couple of builders who have found themselves with a fair bit of spec inventory. On the other hand, we have some really good builders who put up 10-20 homes a year. I think most of them are in fairly good shape and didn’t get caught with a boat load of inventory. I’m somewhat encouraged that most builders see the writing on the wall and they’re cooling their jets, at least for now. I hear that the city has a whack of cash budgeted for servicing lots next year. It will be interesting to see how well they sell.
April 24th, 2009 at 9:05 AM
Interest rates coming down, wages are going up and house prices are going down. Great combination for buyers in the near future. I wonder if we will see ZIRP in the near future. Zero Interest Rate Policy, it won’t be for mortgages ( we wish) but they would be low.
As we head into the new year I would expect more releases like this from other big banks.
April 24th, 2009 at 9:06 AM
I don’t like Saskatchewan being accused of having bad lifestyle habits. I prefer to look at it as cancer gone into remission. LoL
My husband and I are currently being approved for that 4 year interest rate through Laurentian bank. Having calculated our mortgage payments half a year ago at 6.1% we’re saving almost $200/mo with current rates! Maybe by March when we’re ready to sign the papers we’ll be able to get 4.5%! Good times people. :’D
April 24th, 2009 at 9:06 AM
Wow, almost a postive vibe going on here. The charts in that RBC report are very interesting. They all exhibit the same behaviour, but have different numbers. Regina is curious. Even with the spike, and mild correction, it’s not much over 30 percent (household imcome towards housing). Away from historical trends of the late 90′s aned early 2000s for sure, but not that expensive. And what do these graphs really show then, other than a break from history? I mean sure, the report notes that 32 percent of household income to housing is ideal, but Vancouver and Victoria have been over 50 percent forever, not just recently, but forever. Ontario as a whole has been 40 plus forever. Toronto too. So being in the 40s as an average at large is clearly not a crisis. Saskatoon and Regina look wacky short term, but if you compare the actual numbers to the rest of the country, they aren’t ridiculous. Cheaper than many markets. Is there a reason Regina has to return to 20 percent? Or Saskatoon to below 30? Other than recent history. The report points out a break from a trend, but if you believe our province has more to offer now than it has in some while, then a break from a trend, a pretty low one, is somewhat justifiable.
April 24th, 2009 at 9:06 AM
“Regina is curious. Even with the spike, and mild correction, it’s not much over 30 percent”
Gotta love Regina, average income thousands more anually than Saskatoon, average housing, still about $50,000 less, with less inventory than Saskatoon
And Saskatoon has a higher crime rate
Now why is housing more in Saskatoon again?
April 24th, 2009 at 9:10 AM
‘Now why is housing more in Saskatoon again?’
I do have a theory about this. It may be that our Washington Park area skews our average down. Houses are still very cheap in there. I don’t think Saskatoon has many 40 and 50 thousand dollar houses. That said, our established areas might be more affordable too. I’d like to see a comparison of similar areas.
April 24th, 2009 at 9:12 AM
Norm:
if “We are likely facing year-over-year losses through most of next year, likely starting around March.”
… is there any room at all anymore for a fella to find a good flipper over the next couple months?
‘Now why is housing more in Saskatoon again?’
I also have a theory; Government towns. Maybe it is just me but I get the impression government towns are dirty and no one wants to live there.
Edmonton is doing well but still nothing compared to Calgary…
April 24th, 2009 at 9:15 AM
Some definitely interesting perceptual tricks going on with those graphs which will catch the unwary or uneducated viewer.
The biggest fudge is how they continually change the scale on the left hand side of the graph so that you can never get a good graph-by-graph comparison. The best example of this is on page 7. Look at that Winnipeg graph! It peaks even higher than the Regina and Saskatchewan ones, and it has that huge run-up period as well! Not until you realize that one has a left index of 0-20 and the other two of 0-70 and 0-60 do you see the differences that scale makes… and you still can’t get that image out of your mind no matter how much you rationalize it.
The most interesting graph to me was Page 5 – Mortgage Carrying Coste by City, which compares average income to average housing prices. Again we see the problem of shifting scales, but even ignoring that… Saskatoon has gone from a historical value of ~22-25% for a detached bungalow to > 40% for the last couple of years. What was interesting to me was that our our ‘cheap houses’ are actually quite in line with our ‘cheap wages’ … right up to 2006/2007, that is. With those wages staying relatively static and the house price rising, this graph now shows higher costs for an SDH than EVERYWHERE except Toronto, Vancouver, and Victoria. Yup, that’s right, the graph shows us as worse than Edmonton, and pretty much dead-even with Calgary on the affordability index. That’s sort of scary, and sort of ridiculous, if you ask me. Why exactly is our index suddenly 10 points higher than London, Halifax, Winnipeg, or Montreal? and 20 points higher than Kitchener, Hamilton, or Thunder Bay?
Last thought – I’m with Norm and Heather on the ‘mortgage coming up for renewal in February’ boat. What sorts of terms are you looking at? I was absolutely going to do a variable rate this time after running the numbers last time, but they changed the rules on me (Prime minus .5 to prime plus .6) so it doesn’t necessarily pay any more. You going to go short and hope for further cuts in the next year, or go long and lock in against any potential inflationary bubble?
April 24th, 2009 at 9:16 AM
Michael,
“is there any room at all anymore for a fella to find a good flipper over the next couple months?”
That’s certainly a far safer bet when values are stable or increasing. I wouldn’t be doing it, but…
Bookrat,
I’m feeling like almost anything could happen over the next few years. If I can lock up for four to five years at better than 5 points that’s the direction I’ll be going.
April 24th, 2009 at 9:21 AM
“this graph now shows higher costs for an SDH than EVERYWHERE except Toronto, Vancouver, and Victoria. Yup, that’s right, the graph shows us as worse than Edmonton, and pretty much dead-even with Calgary on the affordability index. That’s sort of scary, and sort of ridiculous, if you ask me. Why exactly is our index suddenly 10 points higher than London, Halifax, Winnipeg, or Montreal? and 20 points higher than Kitchener, Hamilton, or Thunder Bay?”
Excellent point, bookrat. With the manufacturing sector (among other sectors) being hit the way it is in Ontario, that affordibility doesn’t bode well for the chances of those recently laid-off workers coming here, unless they are able to find very well paying jobs. I noticed on page 8, where the affordibility index was broken down by province for Q3 2008, Saskatchwan’s affordibility index % was 47.7, higher than all provinces listed except for BC.
I also noticed that the RBC document affordibility measures are based on a “25% down payment and a 25 year mortgage at a 5 year fixed rate”. It would be interesting to find out what percentage of people are actually buying at these terms.
April 24th, 2009 at 9:21 AM
Norm, Heather -
You won’t have to wait long. Our mortgage company is apparently gritting their teeth at our prime – .6 variable rate. They sent a letter out the end of last month offering a fixed rate at 4.75% for 5 years; 4.25% for 4 years; or 4.0% for 3 years. I think our broker is able to get that rate as long as you qualify well. Since the overnight rate has since been significantly lowered, I’m working on getting them to better those rates yet. And they actually seem as if they feel like talking about it. I’m just not sure if I want to drop the less than 3% we’re at now lol. But long term might be better at this point – rates don’t have much farther to come down IMHO. Good luck guys!
April 24th, 2009 at 9:21 AM
“Why exactly is our index suddenly 10 points higher than London, Halifax, Winnipeg, or Montreal? and 20 points higher than Kitchener, Hamilton, or Thunder Bay?”
Good question bookrat. Some folks seem to think Vancouver, Toronto, and Saskatoon are all perfect substitues. I see Saskatoon more like winnipeg, only less than half as big, and with better wage growth (probably). The day Saskatoon hosts the Olympics, I’ll say it’s on par with Vancouver and Toronto. Until then, things don’t add up housing wise.
April 24th, 2009 at 9:23 AM
“With those wages staying relatively static and the house price rising, this graph now shows higher costs for an SDH than EVERYWHERE except Toronto, Vancouver, and Victoria”
Interesting, 4 th least affordable place in Canada, among some pretty infamous company.
-
So not sure if any one has checked it out yet, but thebench.ca has a commentary on one example of quite one sided media “booster” coverage which is again proclaiming the housing market is turned around and ready for another upswing… despite all the evidence, including SRAR itself, which pegs Saskatoon as in the middle of a correction, which may see prolonged and steady price declines (low wages for high house prices one of many reasons)
April 24th, 2009 at 9:23 AM
Norm,
Heart attack it is! ;’)
Where are these interest rates going?!?! LOWER!!!
Ringo,
Our mortgage broker pulled out a chart dating from the 1960′s to present outlining various interest rates. The lowest rate came in around 3.5%, but that was exceptional. Of course 2009 is starting to shape up to be pretty darn unique! Good luck to you too.
Bookrat,
I saw that variable mortgages aren’t looking so hot right about now. I myself am not ballsy enough to try it. With interest rates going further south and reviewing the historical lows, I would think a fixed term isn’t such a bad idea.
April 24th, 2009 at 9:23 AM
Nick,
seems like Report on Business read your letter to the Star Phoenix yesterday
Consumer debt defaults could rise, bank warns
http://business.theglobeandmail.com/servlet/story/RTGAM.20081211.wbankofcanada1211/BNStory/Business/home
April 24th, 2009 at 9:24 AM
George,
I love the first comment in the thread, “Thanks Cap’n Obvious!”
April 24th, 2009 at 9:27 AM
Crikey, http://www.thestarphoenix.com/Business/Cameco+cuts+staff/1060413/story.html
good call makes sense a slow down in commodities would eventually lead to layoffs in commodity dependent Saskatoon, especially cameco
93 total layoffs is a fair number of high paying jobs gone, hope none of them bought a condo this past spring,
should be a lesson to us all, don’t buy what you can’t afford based on future income
April 24th, 2009 at 9:28 AM
Also, apparently 400 employees being laid off in Vanscoy
http://www.thestarphoenix.com/Business/Agrium+laying+nearly+employees+Vanscoy/1063798/story.html
400 high paying jobs lost near Saskatoon
Can some one post a link to my letter?
I can never find them online after a day
April 24th, 2009 at 9:31 AM
Here you go, other nick. Are you “The Bench” Nick? I’m losing track of which the Nick is which…
http://tinyurl.com/644f8a
I’m afraid there was more bad news for that sector today:
Oilsands Quest curtails northwest exploration- Company seeks flexibility in dealing with effects of stock market turmoil
http://tinyurl.com/6blsb2
PotashCorp to cut production-Global economic crisis pushes company to reduce output by two million tonnes
http://tinyurl.com/5uf62l
April 24th, 2009 at 9:32 AM
the other nick said: “93 total layoffs is a fair number of high paying jobs gone, hope none of them bought a condo this past spring”
I believe if you read the article, you will realize that 33 of the 93 jobs are in Saskatchewan.. The 33 Saskatchewan workers laided off, were at the Cigar Lake property and at the corporate office in Saskatoon. Assuming you do not need more than 1 office worker for each home field worker that amounts to 17 layoffs that effects Saskatoon not 93
April 24th, 2009 at 9:35 AM
This was from the Star Phoenix:
Potash Corporation Announces 4 year expansion plan
November 27, 2008
Potash Corp. of Saskatchewan will require the equivalent of 32,526 direct and indirect positions during construction of capacity expansion projects over the next four years, says a company executive.
This should make up for the Agrium and Cameco layoffs I think.
April 24th, 2009 at 9:35 AM
There are a few of us with the bench, was a big group back in the day…
And I’d argue any lost job from Saskatoon area, including 400 from Vanscoy, is bad for the local economy and provincial tax revenues, some probably commute from Saskatoon anyway
April 24th, 2009 at 9:38 AM
Potential Buyer, sounds like more forecasts and plans to me, when right now, actual result is lay offs at Cameco and Agrium
I remember a while ago when they predicted Saskatchewan would lead in wage and economic growth for 2007, both categories Alberta handily defeated us in.
I remember when Remax predicted we were in for another real estate “boom”
Right now, numbers don’t back up predictions, potash corp (according to Crikey who has more cred than Remax, or most media)is about to cut production, by a lot
So there may be plans to expand Potash Corp
Until it gets done, just another announcement with no results yet
April 24th, 2009 at 9:39 AM
“Demand for all fertilizers — including potash, nitrogen and phosphate — is declining due to the global economic crisis”
20 % drop in potash production for next year?
Sounds like right now, not doing so hot.
April 24th, 2009 at 9:41 AM
“I remember a while ago when they predicted Saskatchewan would lead in wage and economic growth for 2007, both categories Alberta handily defeated us in.”
Oh, only first place good enough for you Nick. You want numbers? Tell me where Sask stood this past 12 months, numbers wise, compared to all districts in North America, provincial and state. Pretty gloomy I bet. Also, as far as I know, Potash Corp’s stocks rose on the news they were cutting production. Apparantly, current global stockpiles of Potash have a lot more to do with short term financing issues than a lack of demand. It’s going to be pretty tough going, for the next few months. You are one sour puss buddy.
April 24th, 2009 at 9:42 AM
would wanting to come in first once be so bad in our supposed best year ever?
we’re definitely priced like a place that should occasionally come in first in something!
once again alberta beats is the more desirable place to live
<>
April 24th, 2009 at 9:43 AM
Dan,
“a place that should occasionally come in first in something!”
Sask leads country in international exports.
http://tinyurl.com/67t8wv
“the fastest pace of employment growth so far in 2008 has been in Saskatchewan…”
http://tinyurl.com/67t8wv
Sask leads country for retail trade
http://tinyurl.com/6xpaas
April 24th, 2009 at 9:43 AM
Good God! Did someone call a Nick convention?
Nick, since you have such extremely high standards for truthfulness I know you’ll want to set the record straight on your bench post that clearly implies Cameco is laying off 90 Saskatchewan workers.
sounds like more forecasts and plans to me, when right now, actual result is lay offs at Cameco and Agrium.
According to today’s newspaper the Agrium layoffs are also forecasts and planning. They say that they are hoping to avoid having any people out of work.
April 24th, 2009 at 9:44 AM
Dan,
Seems we also have the unfortunate distinction of leading the country for rental rate increases. Can’t seem to find the story on their website, but that according to the Star Phoenix today.
April 24th, 2009 at 9:45 AM
Norm or others,
Does anyone have a suggestions where to find good information on the various options for mortages and a discussion of their merits and weaknesses. We have always used a Home equity line of credit (and used it fairly responsibly). But we are wondering if it would be better to look at a mortage? Suggestions or comments?
Thanks to all
April 24th, 2009 at 9:45 AM
Here’s the link to the SP article referenced above:
Record rise for rent in city, 20 per cent hike in 12 month-span
http://tinyurl.com/5bjokw
Pam,
Do you mean you’re looking for information on pros and cons of a second mortgage vs. a HELOC?
April 24th, 2009 at 9:46 AM
Crikey, Thanks for the response. We are considering selling our current house and moving in the next year or so. We are not sure if we should stay with the HELOC or change to a mortage. We like the flexibity of a HELOC, but are not sure that is the best plan over the next little while. We have never had a mortage – so are unsure as to what the various options are and what would work best in the next little while. I’ve noticed some comments about people renegotiating their mortages – so thought there might be some insight here. We will be able to put about a 30% downpayment on our house.
Thanks
Pam
April 24th, 2009 at 9:47 AM
Pam,
I don’t have a great deal of expertise in the mortgage department. I think it’s really a matter of what your most comfortable with. I prefer the security of knowing what my payment will be for the longer term because income in my business can be unstable from one month to the next. Having said all of that, if your plan is to sell within a years time (give or take) you might be better off sticking with what you have. I assume that works on a variable rate. I’m under the impression that there is some consensus that rates will be lower over the short term. You may want to stick with the Heloc and reconsider your options when you do the move.
I have found this mortgage blog to be pretty good and I expect they’d even be happy to field your question.
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/
Crikey,
Thanks for posting that link.
April 24th, 2009 at 9:54 AM
First of all, I’d recommend talking to a banker, mortgage “specialist” or financial planner and going over your personal circumstances with them. Secondly, take any advice you get with a *boulder* of salt (including mine, of course!) and research all your options as much as you can before acting.
I’m not aware if it’s possible to obtain a HELOC with a fixed rate. Interest rates are now as historical lows, and if you’re looking lock in those low rates, you might want to get a fixed-rate mortgage. That being said, there are dozens of types of mortgages out there. The major banks have lots of information about them on their websites. If you just want to play out how different down payment amounts, amortizations, interest rates, and payment frequencies will affect your monthly payments and interest costs, there are lots of online mortgage calculators out there.
Here’s a link to one:
http://tinyurl.com/69frh2
Good luck!
April 24th, 2009 at 9:55 AM
Pam,
If you own a home but you’ve never had a mortgage, do you know something we don’t?
What’s your secret?!
Here’s my 2 cents on your question. Your best option certainly depends on how and when you plan to use/repay the money, and how much you’re planning to borrow. I hate paying interest and fees, so I always do a little math (okay, spreadsheets) with my various borrowing scenarios to know I’m getting the best deal.
I think an unsecured line of credit is the best value for smaller amounts of borrowing (less than $20,000 or so), especially if you can repay it within a couple of years; the fees charged for setting up and closing out HELOCs can be larger than any interest savings over the unsecured LOC in situations like that. If you’re planning on spending a lot immediately after you move in a very short period and then taking a while to pay it back (like new furniture and major renovations) lumping it into your mortgage is best, while if you’re planning to borrow a lot but either not right away, or only very gradually, or to invest long-term (Smith manouver?), a HELOC might be your best option.
Since you’re moving, you might be able to negotiate a mortgage AND a small HELOC (your 10% equity above the 20% required to avoid CMHC fees) for no additional charge, as long as you set them both up at the same time. That way you’ll have the flexibility of the HELOC if you ever want it. However, there will probably be a fee (from the bank and possibly your lawyer) to close the HELOC the next time you move after this one (unless you manage to negotiate that up front with the bank, too). Before the credit crisis, at least, the interest rate on a mortgage was better than on a HELOC. Plus, sometimes you can get a extra discount if your mortgage is larger than a certain threshold, and most mortgages give you pretty generous freedom to pay them down if you can (20% lump payments annualy, and increase your regular payments by 20% annualy as well is common).
Good luck!
April 24th, 2009 at 9:56 AM
Interesting article in the G & M this morning:
How high-risk mortgages crept north:
The untold story of how elements of the first Conservative budget in 2006 encouraged big U.S. players such as AIG to make a push into Canada, creating our version of subprime mortgages
http://tinyurl.com/5gs7xn
“New mortgage borrowers signed up for an estimated $56-billion of risky 40-year mortgages, more than half of the total new mortgages approved by banks, trust companies and other lenders during that time, according to banking and insurance sources. Those sources estimated that 10 per cent of the mortgages, worth about $10-billion, were taken out with no money down.
“Virtually unavailable in Canada two years ago, high-risk mortgages proliferated in 2007 and early 2008 and must now be shouldered by thousands of consumers at a time when the economy is sinking quickly and real-estate prices are swooning. Long-term mortgages – designed to help newcomers get into the housing market sooner – are the most expensive in terms of interest costs, and least flexible when mortgage-holders cannot meet their payments and need extensions.
The Bank of Canada this week warned that the perilous economy could lead to a doubling of so-called “vulnerable households” – those unable to meet their debts – and perhaps cost thousands of Canadians their homes. The central bank, which is always cautious with its words, said in a report that there is the potential for “a substantial increase in default rates on household debt.”
April 24th, 2009 at 9:57 AM
River Landing developer readies for big dig.
http://tinyurl.com/6kx5pn
Sask. car sales remain strong with at least one Saskatoon auto dealer claiming a 100% increase in units sales this year. Wow.
http://tinyurl.com/67mm9d
Rent increase bylaw now in effect.
http://tinyurl.com/5f2dsg
April 24th, 2009 at 9:57 AM
A lengthy article from the National Post:
“End of the oil sands’ building frenzy?”
http://www.financialpost.com/story.html?id=1068172
“as the sector struggles with its first downturn since the rush started 11 years ago, there’s increasing discussion this is not a short-term pullback, but the end of the oil sands’ building frenzy.
The economic crisis and collapse in oil prices have pushed the sector to the brink, resulting in the delay of some $40-billion in new projects, taking 800,000 barrels a day of expected production growth — about half of what had been expected — off the table, according to CIBC World Markets….
Industry watchers say companies that scaled back won’t be rushing to jump back in, even if oil prices recover above US$90, the level many say is required to build new projects.
Other problems would have to be resolved: mounting costs, tight financing and, of course, environmental challenges. The oil sands’ poor image could lead to even tougher environmental legislation.
The effects of those cancellations are already being felt. Contracts are being cancelled. Construction jobs in Fort McMurray are drying up. The construction industry slashed its workforce requirements estimate by half for 2010 — to 22,000 from 44,000 jobs — in what was to be a peak building year. Workers in Calgary are being sent home.”
So much for Saskatchewan’s oilsands, speculation of which contributed to the boom.
April 24th, 2009 at 9:58 AM
On the topic of oil sands. It is a very different scenario up here now forsure. True they have cancelled/put on hold many projects, but what we’re actually seeing is a change in strategy in regards to construction.
There will no longer be T&M contracts put out with huge budgets, instead they are being replaced with hard dollar contracts. This way the Oil Companies will be to have a firmer grasp on the actual costs of construction up here. If you ask me though I think this will cause the projects to be more expensive, but that’s just my theory.
Are far as Sask Oil Sands development I believe/hope they are dead in the water. Sask doesn’t need a place like Fort McMurray in the North, it will lead to way to much pollution and deterioration of Sask’s fresh water supply. I’m guessing they are already being polluted from Fort McMurray, but actually having production in Northern Sask will make the current pollution ten-hundred times more severe. Lets everyone hope that Oil Sands development never materializes in the Sask North.
April 24th, 2009 at 10:26 AM
guy,
Isn’t this just fairly typical of the cyclical nature of the oil business? Whether it’s going up, or it’s going down, people always seem to think it’s going to go that way forever, yet it never does. All of these projects get delayed and production is cut by 800,000 barrels a day. Prices start to climb again and everybody rushes to get back in.
April 24th, 2009 at 10:29 AM
On that note, check out this 12-or-so year history of US spot oil prices:
http://tinyurl.com/56kt2h
This cycle is a doozy, huh?
April 24th, 2009 at 10:30 AM
Crikey,
Very similar to “Norm’s Oops graph”!
Interesting!
April 24th, 2009 at 10:33 AM
Wesco,
totally agree with you. I love our Northern Lakes and would hate to see them destroyed for oil. With oil at low prices, more alternative energy choices and more environmental policies coming forth, I believe the oilsands development in Sask is dead…for now anyway. Until peak oil happens again, like in the 70′s,80′s and this past year:)
Obama does not like dirty oil.
http://www.marketwatch.com/news/story/CORRECT-Obama-energy-duo-boost/story.aspx?guid=%7BA79ABCA8%2D01B4%2D4A8D%2DA942%2D6E13697E4A1C%7D
April 24th, 2009 at 10:33 AM
US Congressman Ron Paul: Future Homeowner Bailout?
Nationalize the insurance companies
Nationlaize the mortgage companies
Nationalize the financial banks
Nationalize the auto companies
Nationalize homeowners?
Would lead to a big devaluation of the US dollar and high inflation.
http://www.youtube.com/watch?v=3WyedeJzcXY&NR=1
April 24th, 2009 at 10:34 AM
I think the bench is pretty fair in saying 50 lay offs @ Cameco and 43 temporary, which fits with what Cameco released. The Vanscoy layoffs sound more a prediction than actual Cameco layoffs.
Norm, again, with out wage growth matching Alberta’s, not sure we can be proud of consumer spending since it’s spending beyond our means, and international trade is good, but year end we still have yet to beat Alberta, BC, Toba GDP wise.
April 24th, 2009 at 10:34 AM
Nick,
“not sure we can be proud of consumer spending since it’s spending beyond our means”
I agree as I have a pretty strong feeling that most of that money is coming from home equity. We can’t be proud of being number one for rent increases either.