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Varcoe: Population boom driving Alberta economy, even as provincial energy revenues dip – Calgary Herald

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Alberta hasn’t seen this type of population influx since 1981, and it’s providing a turbo-boost to the economy

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Energy royalties are dipping and the province has trimmed its budget expectations for both oil and natural gas prices this year, yet economic growth in Alberta isn’t gearing down.

In fact, it’s picking up steam.

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The province’s first-quarter financial update on Thursday predicted Alberta’s economy will expand by three per cent this year — up from estimates made in February’s budget — while the unemployment rate has been “contained.”

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What’s behind the gravity-defying trend?

Alberta’s soaring population is on pace to increase by 4.4 per cent for the census year (the period ending in June, once final data is released by Statistics Canada).

It’s the fastest annual growth since 1981, back when Peter Lougheed was the province’s premier and the original Raiders of the Lost Ark was tops at the movie theatres.

In other words, it’s been a very long time since we’ve seen this type of population influx and it’s providing a turbo-boost to the economy.

“That’s a very, very high number,” Finance Minister Nate Horner told reporters.

“I know our economists within the department have a hard time believing it, but we’re seeing strong (increases) not only immigration, but interprovincial migration and a lot of Ukrainian refugees adding to that number in a big way.”

In the latest financial report card, the province projects a $2.4-billion surplus in this fiscal year — up about $94 million from the February budget — even as it trimmed expectations for oil and natural gas prices.

The province sliced its projections for benchmark West Texas Intermediate crude prices to US$75 a barrel for the 2023-24 fiscal year. That’s down $4 a barrel from the initial budget estimates after global oil markets softened during the April-to-June period.

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Calgary skyline
More than 46,000 people have relocated to Alberta from other parts of the country so far this census year. Photo by Gavin Young /Postmedia

(Oil prices have rebounded over the past month and closed Thursday at $83.63 a barrel.)

The government also chopped its expected royalty take from Alberta natural gas by 47 per cent, cutting it to an estimated $1.3 billion this year.

The forecast price for Alberta natural gas has been lowered to C$2.50 per gigajoule (down from $4.10) reflecting weak prices, high inventory levels and growing production in North America.

Although bitumen royalties are anticipated to rise by another $515 million in this financial year to $13.1 billion, natural resource revenues have collectively fallen by nearly $700 million in just a few months.

This would normally be an ominous sign for the government’s finances.

Yet, the economy is outperforming initial budget expectations.

The province has now hiked the economic growth this year to three per cent in the fiscal year, up slightly from budget figures, and 2.9 per cent next year. “The majority of the uplift in the outlook for this year is being driven by recent population trends,” the report states.

The population growth has come from several different areas, with more than 46,000 people relocating to Alberta from other parts of the country so far this census year.

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“Net international migration is also on track to reach a record high, bolstered by unprecedented net inflows of non-permanent residents,” which includes international students, refugee claimants and temporary foreign workers, it stated.

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Marc Desormeaux, an economist with Desjardins, said the budget estimates were in line with expectations, given the relative state of energy prices.

“One number really stood out, which is the population growth forecast for 2023,” he said.

“The first thing it signifies is Alberta’s draw to people in other parts of the country at this time. Rates of interprovincial migration, particularly from Ontario, have been very strong in the past year.”

There have also been increases in international immigration to the province, along with natural population growth, which means these trends should persist into the next few years, Desormeaux added.

After several years of young Albertans moving to other places last decade following the drop in oil prices, the province is now seeing younger Canadians relocate here, said Janet Lane, director of the Human Capital Centre at the Canada West Foundation.

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Kelly Ernst
“The infrastructure does need to be there . . . We’ve got to do this really quickly,” said Kelly Ernst, vice president, vulnerable populations, with the Centre for Newcomers on the need for housing. Gavin Young/Postmedia

Unlike past population booms, this upswing isn’t as directly tied to rising energy prices, but to people taking jobs in many different economic sectors — and due to the lower cost of living compared with larger provinces, she said.

“It’s a combination — I can live a little cheaper (here) and I can get a decent job,” she said.

From an economic standpoint, a growing population means greater economic momentum, but also more demand on services and infrastructure.

Recent reports of surging rent levels and escalating housing prices, and the need for more teachers and doctors, are signs of a province grappling with growth pressures.

In Calgary, Kelly Ernst with the Centre for Newcomers said the front-line group is seeing rising demand for its services, such as housing and language training, and waiting lists are expanding.

“First and foremost, they see Alberta as a place of opportunity where they can get a job. So that’s our reputation right now,” said Ernst, the centre’s chief program officer.

“The infrastructure does need to be there . . . We’ve got to do this really quickly.”

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Next year, the province projects the population increases will slow to 2.3 per cent.

Horner agreed that it’s “inevitable” Alberta could lose some of its affordability advantages over provinces as housing prices rise and inflation hits.

And housing starts are down over the past year, with the Danielle Smith-led government now projecting lower housing starts than it did in the budget, noted NDP MLA Samir Kayande.

On the employment front, the report said the province has added more than 60,000 jobs since December.

University of Calgary economist Trevor Tombe pointed out the government now anticipates the jobless rate will average six per cent in 2023, which is down 0.4 percentage points from the budget.

“That’s a pretty meaningful drop,” he said.

“So there is real broader-based economic strength in the province, beyond just the scale effect that comes from the population changes.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com

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Business

A timeline of events in the bread price-fixing scandal

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Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.

Here’s a timeline of key events in the bread price-fixing case.

Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.

Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.

Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.

Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).

Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.

June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.

Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”

Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.

July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.

Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 250 points, U.S. stock markets also higher

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TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.

The S&P/TSX composite index was up 254.62 points at 23,847.22.

In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.

The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.

The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.

The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.

This report by The Canadian Press was first published Sept. 19, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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