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Oil price woes a ‘serious problem’ for Canadian economy, says Notley

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Alberta Premier Rachel Notley says the low price of western Canadian crude has become a serious problem for the country’s economy, adding her government is “furiously” seeking solutions.

But while the province and the oilpatch explore their options, Notley said there’s a lack of agreement around the sector on the controversial call for her government to mandate temporary production cuts.

Though the province has an obligation to look at everything, she said, they also want to explore solutions where they might find more consensus with similar results.

“The [price] differential is obviously a very, very serious problem for the energy industry here in Alberta and, quite frankly, for the economy across this country,” Notley told reporters on Thursday.

“We don’t want [oil] racing out of the ground at $10 a barrel. So what we need to do is we need to find a way to get at that differential and, as I’ve said, there are a suite of options that are in front of us right now.”

Cenovus Energy CEO Alex Pourbaix, among others, has called for the Alberta government to mandate temporary production cuts to help correct what he’s termed an ’emergency.’ (Jeff McIntosh/Canadian Press)

The price of Western Canadian Select closed at $13.46 US a barrel on Thursday. Meanwhile, the American benchmark price, West Texas Intermediate, closed at $56.49 US.

“We need to work very, very quickly to address it,” Notley said. “We’re going to have conversations and discussions with all the players about the most effective way to move forward.”

Notley suggested there would be some answers “within weeks and perhaps sooner.”

The province has been pushing Ottawa to support more crude-by-rail shipments. Last week, the province sent a written business case to the federal government on a proposed strategy.

“There’s a range of options for partnering with the federal government, but we are quite committed to being able to provide some kind of solution on a short-term basis as it relates to rail,” Notley said.

Western Canadian oil prices crashed in September because of a backlog of oil in Alberta.

Oilsands production has increased throughout the year, but export pipelines are full and several refineries in the U.S. that process heavy oil from Alberta, shut down for maintenance.

Those refineries are coming back online but experts think low prices for Canadian heavy crude could persist into 2020. 

One estimate pegged the cost to Alberta’s energy sector at $100 million a day. 

Richard Masson, an executive fellow at the University of Calgary’s School of Public Policy, said the provincial government will be motivated to find a solution quickly. (Anis Heydari/CBC)

The situation has spurred Cenovus Energy’s CEO Alex Pourbaix, among others, to call for the Alberta government to mandate temporary production cuts to help correct what he’s termed an “emergency.”

But other companies — including Suncor, Husky Energy and Imperial Oil — believe the market is working and the government should not get involved in production cuts.

Richard Masson, an executive fellow at the University of Calgary’s School of Public Policy, said the provincial government will be motivated to find a solution quickly.

He said the provincial and federal governments are likely losing out on tens of millions in revenues every day.

“We’re losing, as a province and as a country, so much money right now by selling our product at way-below-market prices,” said Masson, who is also a former head of the Alberta Petroleum Marketing Commission.

“Finding a way to to balance the market quickly is going to be in the interests of all the producers and even for the refiners. They need to make sure that the producers don’t end up in financial distress.

“This is an unprecedented situation we’re in.”

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Real Estate

Montreal real-estate prices climbing much faster than Toronto or Vancouver: study

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MONTREAL — The cost of housing per square foot has skyrocketed in Montreal while other cities saw little change over the last year, according to a new national survey.

The study found that condominium prices in downtown Montreal are up 13.5 per cent from last year to, on average, $805 per square foot.

That’s not as high as other cities, but it’s catching up — and Montreal’s rate of growth is outpacing other major Canadian cities.

Toronto’s condo prices grew to $1083 per square foot, an increase of just under 10 per cent, according to the study. In Vancouver, where you can find some of Canada’s most expensive condo prices, rates are down 4 per cent to $1192 per square foot.

To make the comparisons, Canadian real estate giant Century 21 collected data from real estate boards across the country to calculate the home costs per square foot.

“It’s important to compare apple to apples,” said Todd Shyiak, the company’s vice president of operations.

Montreal’s rise was even more explosive for detached homes and townhouses.

Detached houses in Montreal’s downtown and southwest rose to $958 per square foot, 40 per cent up from last year.

“It’s wild,” said Century 21 broker Angela Langtry. She says the pandemic raised demand.

“People had a lot of time to figure out they don’t like the home they’re in,” she said. “They all want pools.”

There was a big spike in sales, she noted, following a pause in brokerage during the spring, at the peak of the pandemic.

Experts say the pandemic will push people into the suburbs as they search for affordable housing and home office space.

“A huge portion of our society’s housing needs changed overnight,” said Shyiak. People “no longer need to be 10 minutes from the office.”

He says that could mean less demand for condos in the future. “People want their own front door,” he said.

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Carttera buys prime downtown Montreal development site

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Carttera has acquired a prime downtown Montreal site at 1455 De La Montagne St. which will mark its third development on the thoroughfare.

“We think it’s probably one of the best, if not the best, locations in the whole city,” Carttera founding partner Jim Tadeson told RENX. “We’ve had great success on De La Montagne.”

The two earlier projects are: L’Avenue, a building with 393 residential units, 84,000 square feet of office space and 34,000 square feet of retail that was developed with Broccolini and occupied in 2017; and Arbora Residences, a two-phase development with 434 rental and condominium units in three buildings being built in partnership with Oxford Properties.

Thursday’s latest acquisition, for $48.5 million from 630745 Ontario, is a 31,750-square-foot surface parking lot with flexible mixed-use zoning on the corner of De La Montagne and De Maisonneuve Boulevard West.

The site is near the Vogue Hotel Montreal Downtown, the new Four Seasons Hotel Montreal and high-end retail.

“It’s zoned for up to 203,000 square feet of density, which we’re going to take advantage of,” said Tadeson. “Our vision for the site is a condominium project with some retail.”

Since there is no demolition required and no heritage issues to contend with, Toronto-based Carttera plans to move ahead quickly with the luxury project.

It’s in the concept design phase and Tadeson said it could take six months or more before it’s prepared to make a submission to the city.

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Montreal Has the Hottest Real Estate Market in Canada Right Now

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If you thought Toronto’s real estate market was on fire, it’s time for a second take, because the market in Montreal is the hottest in all of Canada right now.

A newly-released annual report from CENTURY 21 Canada reveals that, following an early-spring decline due to the COVID-19 pandemic, sales numbers are bouncing back and house prices across the country are maintaining their strength. The study compared the price per square foot of properties sold between January 1 and June 30 of this year, compared to the same period last year.

In Toronto and Vancouver, unsurprisingly, prices remain high. But while regions across the country are seeing varied stories when it comes to their housing market fluctuations, Montreal stands out — there, prices have increased dramatically since 2019. While the numbers remain lower than Toronto and Vancouver, that housing market is proving to be the country’s strongest right now.

In Quebec’s largest city, prices have increased significantly since last year, particularly in the downtown detached house and townhouse markets. For example, the price of a detached house in Montreal’s downtown and southwest rose 42.14% to $958 per square foot, while townhouses went up 44% to $768, and condos, 13.55% to $805. Comparatively, in Toronto and Vancouver, prices saw more modest increases or, in some cases, even declines.

“Even though real estate in Quebec was not considered an essential service, we have seen strong demand and a jump in prices in 2020,” said Mohamad Al-Hajj, owner of CENTURY 21 Immo-Plus in Montreal.

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