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If Albertans want to avoid fiscal disaster, the only choices left are difficult ones





Alberta’s economy is facing a “crisis,” according to Premier Rachel Notley.

She’s right.

Pipeline constraints and lower oil prices are hurting our energy sector and our provincial budget. 

As Notley says, it’s a “real and present danger to the Canadian economy.” When Prime Minister Justin Trudeau visits Calgary later this week — ground zero of Canada’s fiscal and economic challenges — he will hear this message.

Today, federal Finance Minister Bill Morneau delivers the fall fiscal update. It’s an update about where we are as a nation — but Alberta is a big part of that story.

Prime Minister Justin Trudeau and Alberta Premier Rachel Notley met in Edmonton in September 2018. (Jason Franson/Canadian Press )

After all, the immediate challenges are here.

The price for Alberta conventional oil fell from $70 per barrel in July to barely over $20 recently. And the oilsands benchmark fell from $50 to $15. University of Alberta economist Andrew Leach tweeted a stark illustration of the drop.

While the province is undergoing gradual economic recovery, these recent drops could derail that.

While all this is going on, we’re also facing a slow-moving financial time bomb unless we take relatively immediate action. The time for debating the problems has passed. We should accept what we cannot change and focus on solutions.

And that means less spending, new taxes, or a better mix of both.

Ditch the resource rollercoaster

Historically, Alberta depended on high oil and gas prices to balance its budget.

For all the talk of diversification and change, Alberta is still betting its financial future on unstable oil and gas royalties.

The government’s “Path to Balance” hopes to balance the books by 2023. But it depends on rising resource revenues to do so. This just won’t work. It’s not a solution. It’s a hope.

The plan was tenuous when it was released, but now — given the growing oil price discounts and pipeline delays both in Canada and the United States — it’s completely off the rails.

My more conservative projection, made in a recent examination of Alberta’s fiscal future for the University of Calgary’s School of Public Policy, suggests resource revenues are unlikely to fund any more than what we saw between the mid-’80s and early ’90s. If it does, we’d be lucky. And we shouldn’t bet the bank on dreams.

Low resource revenues matter.

I find current policy is pointing us toward deficits on the order of $40 billion by 2040. And that’s just for that one year. Borrowing to cover all the deficits along leads to debt levels beyond any point in Alberta’s history (yes, even the Great Depression), with the resulting interest costs consuming one in six dollars raised by government.

In short, Alberta’s finances are not sustainable.

We can endlessly debate the problems, but we need — right now — to come up with proper solutions.

Our many difficult choices

The bad news is that there are only difficult choices ahead for Albertans. The goods news is that there are many different options. We must pick some. And stick with them.

Balancing the books within the term of the next government — whichever party that may be — is entirely credible. But as we move deeper into the 2020s, the fiscal challenge grows larger.

Currently, Alberta’s debt levels are set to balloon to unmanageable levels. To avoid this, revenue must rise and/or spending must fall. A lot.

For perspective, the required action is the equivalent of introducing a 10 per cent sales tax or cutting one in every six dollars spent by government.

Implementing either of these options immediately would be unwise, politically and economically. There are no simple solutions here. And shock therapy with massive immediate changes is not the way to go.

Rather, Alberta must consider more gradual approaches.

Spending restraint — even aggressive restraint — is not enough on its own. Consider if we restricted spending to rise only with inflation and population growth. This in itself is a tall order, but would solve only about half the long-run challenge.

And so, we must slow the growth rate of government spending (especially in health), and introduce modest new taxes. Yes, I’m talking about a sales tax.

At the same time, instead of either cancelling the carbon tax, as the opposition proposes, or spending its proceeds, as the government is, we could put the revenue toward the deficit.

Of course, other options are available.

We could and perhaps should seek higher federal transfers — something other provinces would echo. And we should conduct a detailed review of our health-care spending and cut what can be cut.

Most if not all of the above will cause anger, resentment and pain. But the time has come to have an honest conversation about where our money comes from today, where it will come from tomorrow, and how best it should be spent.

The right thing to do

There are many paths forward. All involve trade-offs. To ensure we make the best decisions possible, long-term planning is necessary.

To quote the former Auditor General Merwan Saber’s final report: “considering the impact of today’s decisions on future generations of Albertans is not just important but without question the right thing to do.”

He goes on to note that “risks and opportunities are likely to be missed in absence of putting pen to paper and projecting a fiscal path.”

Alberta Finance Minister Joe Ceci delivers the provincial budget in Edmonton in March 2018. (Jason Franson/The Canadian Press)

So let’s put pen to paper. Let’s recognize and prepare for the long-run challenges ahead.

Government — any government — should lead the way with regular analysis and clear, consistent goals. Forecasts shouldn’t be aspirational, but rather be an honest, hard headed reflection of our fiscal reality.

In turn, we Albertans must understand challenges ahead, be open to them, and be aware that at this point only painful options are available.

We did little long-term planning when times were good. We did little when times were bad.

It’s time we do something different.

This column is an opinion. For more information about our commentary section, please read this editor’s blog and our FAQ.

Calgary: The Road Ahead is CBC Calgary’s special focus on our city as it passes through the crucible of the downturn: the challenges we face, and the possible solutions as we explore what kind of Calgary we want to create. Have an idea? Email us at

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Real Estate

7 Tips For First-Time Home Buyers In Calgary





Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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Real Estate

‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market





The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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Real Estate

10 Tips For First-Time Home Buyers





Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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