BC MORE FLOODING EXPECTED
When Surging Floods Meet Expanding Pipelines

The impact of last week’s deluge sends a sobering message, say engineers and activists.

Zoe Yunker 23 Nov 2021 | TheTyee.ca
Zoë Yunker is a Vancouver-based journalist writing about energy and environmental politics. She works with The Tyee as a Tula Foundation Immersive Journalism fellow. Follow her on Twitter @zoeyunker.

Construction of the Trans Mountain pipeline near Hope, BC, in October. The pipeline is currently shut down due to massive floods and landslides that hit the province last week. Photo by Jonathan Hayward, the Canadian Press.


Romilly Cavanaugh stood at the edge of the Coquihalla River north of Hope, watching big trees snap off the bank like blades of grass in a lawn mower. Some of those not swept away held dead fish in their branches three metres off the ground — a reminder of what came before.

Cavanaugh and her fellow engineers had been sent into the chaos for a sole purpose: to watch the Trans Mountain pipeline through the flood of 1995.

Over that week they held vigil in torrential rain because the pipe, usually buried in a thick blanket of soil and rock, was bare and moving up and down in the river “like a piece of cooked spaghetti.”

That was new to her. “You don’t expect metal structures to be moving.”

On the other side of the river was a less visible danger. Enbridge’s Westcoast gas pipeline also had escaped its casing, leaving it at the mercy of rushing water.

Cavanaugh left her job at the company decades ago and now works as an independent environmental engineer. But such memories worry her. “I’ve been watching the news for the last couple days, just praying that we don’t see an oil spill on top of everything else we’ve already seen.”

“It was chaos. And it’s even worse now.”

After massive floods and landslides hit the province last week, the Trans Mountain and one of three Enbridge pipelines were shut down, although oil and gas continued to sit in the pipes.

So far, neither company has reported a leak, but Trans Mountain confirmed in a statement yesterday that the pipeline has sustained damage.

“There are some areas where Trans Mountain will need to restore or cover over the pipe or make other repairs to ensure integrity of the line where it has been exposed due to flooding,” the company said in a statement.

It added that in some areas, rivers began flowing over the pipeline right of way. Workers are now attempting to redirect rivers into their normal channels.

“If all planning and work continues to progress and no further issues with the pipeline are assessed, Trans Mountain is optimistic that we can restart the pipeline, in some capacity, by the end of the week,” the company stated on Monday.

The restart would depend on access to equipment, weather and there being no new “findings of concern,” it added.

The Enbridge pipeline affected by flooding resumed operations yesterday.

Trans Mountain has said its pipeline expansion now being constructed is designed to withstand a 10-per-cent increase in flood activity to account for climate change. Research suggests that will likely be insufficient.

The Trans Mountain pipeline that is being twinned traverses one of the country’s main drainage basins — and flooding hotspots — in the Fraser-Lower Mainland region.

The Coquihalla and Coldwater rivers, which Trans Mountain follows, “are the most dangerous spots for a potential spill from a flood like this,” said Cavanaugh.


“The rivers are really fast moving, and the pipeline is super close to the river — it goes under it in several locations.”

When completed, Trans Mountain’s expansion project will triple the amount of oil flowing through its pipes to over 890,000 barrels per day.

Mayuk Manuel, a member of the Tiny House Warriors, a movement resisting the Trans Mountain expansion project, reports seeing Trans Mountain construction sites abandoned on the highway driving up to Hope.

In some regions, empty pipeline trenches had been turned into muddy rivers.

“There was so much erosion from how fast the water was moving,” she said. “How risky is this? Are we willing to take that risk?”

Kai Nagata, energy and democracy director at the Dogwood Initiative, said the construction zone has sustained damage. “The path of construction has been just hammered by debris slides and covered in mud in a bunch of different places, and the access roads are washed out.”

The government-owned project has faced three delays in just over a year, pausing for safety incidents, COVID and wildfires. That’s upped an already-dubious investment, said Nagata.

“The whole equation around using public money to build Trans Mountain deteriorates every time the project encounters a delay, and this is a significant delay with no end date in sight.”

Crews working on the project in the Coquihalla and Merritt regions have been redeployed to get the existing line back into operation, said Trans Mountain in an emailed statement, adding that it had not evacuated any of its work camps.

‘We account for this’

Dharma Wijewickreme, a professor in geotechnical engineering at the University of British Columbia and founder of the Pipeline Integrity Institute, is firm in stating, “Based on the available information, I think it’s fair to say pipelines are one of the safest ways of transporting fluid over long distances.”

But Wijewickreme also acknowledges the risks that floods pose to pipeline infrastructure.

Key among those issues is the power of soil, which under landslide and flood conditions can push the pipeline in different directions from underground.

“When that happens, the pipelines will be subjected to deformations,” he said. Such pressures can cause the pipe to pop up or bend.

The type of soil also presents a risk factor, said Wijewickreme. Areas with soft sedimentary soils, like the Fraser Valley, can increase risks to the line.

And when buried underneath rivers, pipelines are at risk of “scouring,” as fast-moving rivers scrape off the rock and topsoil meant to keep pipelines buried underground.

Concrete river weights were placed above Trans Mountain pipeline exposed in the Coquihalla River after flooding in 1995.

None of these dangers are new, said Wijewickreme. “When you design pipelines, normally as engineers, we account for this.”

He described a number of new methods he and colleagues use, including burying pipes deeper underneath waterways and reinforcing pipeline walls. Engineers also design pipelines so that they’re thicker in areas where the pipe has to withstand greater pressure, like under river crossings.

Still, flood-related spills happen.

In June 2013, Alberta suffered a major flood, triggering two spills linked directly to the disaster. That included a sour gas leak on Legacy Oil and Gas’s company’s line, caused by a puncture from floating debris to an exposed pipeline. The leak led to evacuation of 2,100 residents living nearby.

Later, a spill in northeast Alberta on Enbridge’s Wood Buffalo pipeline system spilled around 750 barrels of crude oil. At the time, the company pointed to heavy rainfall that led to the kind of underground soil movement that Wijewickreme highlighted.

When floods block access

Back at the riverbed during the flooding of 1995, Cavanaugh and her team watched with trepidation. If they did witness a leak, there would be little to do but warn those downstream.

That’s the danger of compound disasters like oil spills and floods happening simultaneously, she said. Clean up crews are subject to safety precautions and won’t be sent into a disaster zone to quell an oil spill.

“If there’s a spill, an evacuation, or if the spill occurs in a fast-moving river, no amount of equipment will help you if you can’t get there,” she said.

Road access presents another issue. Although Trans Mountain has access to networks of back country roads and bridges leading to the pipeline right of way, those roads can easily become obstructed.

In the 1995 flood, Cavanaugh said damage to roads and bridges “took years for them to recover.”

During the National Energy Board hearings for Trans Mountain expansion project, the Sto:lo Collective raised concerns about the risks of natural hazards such as flooding and landslides in the Fraser Valley, citing incidents like the floods on the Fraser over the decades.

Trans Mountain responded saying that the project was designed to withstand hazards and would “implement mitigation measures where avoidance was not possible.”

But Cavanaugh questions the power of cleanup measures. An effort that managed to salvage 10 to 15 per cent of leaked bitumen mixed with toxic diluting agents would be considered “successful spill response in a river,” she said.

So far, B.C.’s devastating flood hasn’t triggered any pipeline ruptures, but the climate crisis promises to make floods more severe, and more frequent.

As Tara Troy, associate professor in hydrology at the University of Victoria, puts it, “If a flood is bad luck, then climate change increases your probability of bad luck.”

In seeking approval of its pipeline expansion, Trans Mountain committed to meeting provincial requirements that the pipeline be designed to withstand a level of flooding at one-in-200-year levels on water crossings, with higher standards on three individual rivers.

Flooding in the Merritt region last week likely surpassed that level, said Brett Eaton, a fluvial geomorphologist at the University of British Columbia.

It’s also unclear whether those design standards apply to sections of pipeline that don’t cross water bodies, but may run alongside them, and became inundated by water in the floods Cavanaugh witnessed, and last week.

Trans Mountain was not able to provide clarification by press time.

And the company’s proposed design fix to account for a 10-per-cent increase in flood activity from climate change might not be sufficient.

A 2021 study of the climate impacts of flooding in Canada found that the Fraser-Lower Mainland region would see a 20-per-cent increase in 200-year floods in the near future, and a 30-per-cent increase in such floods from 2061 to the end of the century.

Nagata says there’s an obvious need to reassess risks posed by the Trans Mountain pipeline and expansion.


What’s at Stake with the Trans Mountain Pipeline Expansion?

READ MORE

“Nobody expected the Coquihalla to just melt,” he said, “All of the concerns that have been raised by critics of the project over the last 10 years I think have to be looked at again and taken seriously.”

Wijewickreme remains optimistic that pipelines can be the safest way to transport fossil fuels and other chemicals, as long as those who design and build them pay attention to climate science.

The way weather is trending, he said, damages “could be more than anticipated at the time of design.”

Cavanaugh is less sanguine. The engineer watches the current devastation and reflects back to the flood of 1995 that left her shaken. Last week’s deluge is “on a completely different scale,” she said, not only in terms of levels but areas affected.

“Instead of funding the Trans Mountain pipeline expansion we should be reinforcing infrastructure and planting trees and looking for jobs and things for people to do,” she said. “It’s very frustrating.”

New discovery of sunscreen-like chemicals in fossil plants reveals UV radiation played a part in mass extinction events

Peer-Reviewed Publication

UNIVERSITY OF NOTTINGHAM

 

IMAGE: ALISPORITES TENUICORPUS THE POLLEN GRAIN USED IN THIS WORK. NOTE A HUMAN HAIR IS APPROXIMATELY 70M SO THE SAMPLES ANALYSED ARE ABOUT HALF THE WIDTH OF A HUMAN HAIR. view more 

CREDIT: PROF LIU FENG FROM NANJING INSTITUTE OF GEOLOGY AND PALAEONTOLOGY

New research has uncovered that pollen preserved in 250 million year old rocks contain compounds that function like sunscreen, these are produced by plants to protect them from harmful ultraviolet (UV-B) radiation. The findings suggests that a pulse of UV-B played an important part in the end Permian mass extinction event.

Scientists from the University of Nottingham, China, Germany and the UK led by Professor Liu Feng from Nanjing Institute of Geology and Palaeontology have developed a new method to detect plant’s sunscreen-like compounds in fossil pollen grains. The research has been published today in Science Advances.

The end-Permian mass extinction event (250 million years ago) is the most severe of the big five mass extinction events with the loss of ~80% of marine and terrestrial species. This catastrophic loss of biodiversity was a response to a palaeoclimate emergency triggered by the emplacement of a continental-scale volcanic eruption that covers much of modern-day Siberia. The volcanic activity drove the release of massive amounts of carbon that had been locked up in Earth’s interior into the atmosphere, generating large-scale greenhouse warming. Accompanying this global warming event was a collapse in the Earth’s ozone layer. Support for this theory comes from the abundant occurrence of malformed spores and pollen grains that testify to an influx of mutagenic UV irradiation.

Professor Barry Lomax from the University of Nottingham explains “Plants require sunlight for photosynthesis but need to protect themselves and particularly their pollen against the harmful effects of UV-B radiation. To do so, plants load the outer walls of pollen grains with compounds that function like sunscreen to protect the vulnerable cells to ensure successful reproduction.” 

Professor Liu Feng adds: “We have developed a method to detect these phenolic compounds in fossil pollen grains recovered from Tibet, and detected much higher concentrations in those grains that were produced during the mass extinction and peak phase of volcanic activity.”

Elevated UV-B levels can have even further-reaching and longer-lasting impacts on the entire Earth System. Recent modelling studies have demonstrated that elevated UV-B stress reduces plant biomass and terrestrial carbon storage, which would exacerbate global warming. The increased concentration of phenolic compounds also makes plant tissue less easily digestible, making a hostile environment even more challenging for herbivores.

Summarising the groups findings Dr Wes Fraser based at Oxford Brookes University commented: “Volcanism on such a cataclysmic scale impacts on all aspects of the Earth system, from direct chemical changes in the atmosphere, through changes in carbon sequestration rates, to reducing volume of nutritious food sources available for animals.”

  

Photograph of the field area the fossil samples come from.

CREDIT

Prof Liu Feng from Nanjing Institute of Geology and Palaeontology

JOURNAL

Science Advances

METHOD OF RESEARCH

Experimental study

SUBJECT OF RESEARCH

Not applicable

ARTICLE TITLE

Dying in the Sun: direct evidence for elevated UV-B radiation at 2 the end-Permian mass extinction

ARTICLE PUBLICATION DATE

6-Jan-2023

Fossil pollen 'sunscreen' proves role of ozone depletion in largest mass extinction

Peer-Reviewed Publication

CHINESE ACADEMY OF SCIENCES HEADQUARTERS

 

IMAGE: THE IMPACTS OF OZONE DEPLETION AND ELEVATED UV-B LEVELS ON THE TERRESTRIAL ECOSYSTEM view more 

CREDIT: CONOR HAYNES-MANNERING, UNIVERSITY OF NOTTINGHAM

Scientists from China, Germany and the UK led by Prof. LIU Feng from the Nanjing Institute of Geology and Palaeontology of the Chinese Academy of Sciences (NIGPAS) have revealed that pollen preserved in 250-million-year-old rocks contains abundant compounds that function like sunscreen but are produced by plants to protect themselves from harmful ultraviolet (UV-B) radiation.

The presence of these compounds suggests that a pulse of UV-B played an essential role in the end-Permian mass extinction event.

The study was published in Science Advances on Jan. 6.

The end-Permian mass extinction event (250 million years ago) is the most severe of the big five mass extinction events, with the loss of ~80% of marine and terrestrial species. This catastrophic loss of biodiversity resulted from a palaeoclimate emergency triggered by continental-scale volcanism that covers much of modern-day Siberia. The volcanic activity drove the release into the atmosphere of massive amounts of carbon that had been locked up in Earth's interior, thus generating large-scale greenhouse warming.

Accompanying this global warming event was a collapse of the Earth's ozone layer. Support for this theory comes from the abundant occurrence of malformed spores and pollen grains that testify to an influx of mutagenic UV irradiation.

Plants require sunlight for photosynthesis but need to protect themselves and particularly their pollen from the harmful effects of UV-B radiation. "To do so, plants load the outer walls of pollen grains with compounds that function like sunscreen to protect vulnerable cells to ensure successful reproduction. Without the 'sunscreen' compounds, forests could have been sterilized, leading to the collapse of the terrestrial ecosystem," said Prof. Barry Lomax from the University of Nottingham.

"We have developed a method to detect these phenolic compounds in fossil pollen grains (Alisporites-type) recovered from southern Tibet and detected much higher concentrations in those grains that were produced during the end-Permian mass extinction and peak phase of volcanic activity," said Prof. LIU.

The researchers found an increase in UV-B-absorbing compounds (UACs) that coincided with a spike in mercury concentration and a decrease in carbon isotopes in the latest Permian deposits, suggesting a close temporal link between large-scale volcanic eruptions, global carbon- and mercury-cycle perturbations, and ozone-layer disruption.

Elevated UV-B levels exerted far-reaching and long-lasting impacts on the entire Earth system. Recent modelling studies have demonstrated that elevated UV-B stress reduced plant biomass and terrestrial carbon storage, thus exacerbating global warming.

In addition, increased concentration of phenolic compounds also makes plant tissue less easily digestible, making a hostile environment even more challenging for herbivores.

"Volcanism on such a cataclysmic scale influences all aspects of the Earth system, from direct chemical changes in the atmosphere, through changes in carbon sequestration rates, to reducing the volume of nutritious food sources available for animals," said Dr. Wes Fraser from Oxford Brookes University.

---

JOURNAL

Science Advances

DOI

10.1126/sciadv.abo6102 

ARTICLE TITLE

Dying in the Sun: direct evidence for elevated UV-B radiation at the end-Permian mass extinction

ARTICLE PUBLICATION DATE

6-Jan-2023

King Ralph Shills For Big Oil

Well that didn't take long. King Ralph went from Premier to Oil Lobbyist in a blink of an eye. Faster than Lougheed and even Getty, his old big oil nemesis.

Klein slams Alberta royalty recommendation

And luckily he did it in Alberta, where weak tea lobbyist legislation was only just passed this spring. So it doesn't affect him. And he is doing it as they say; pro bono. Yep the Big Guy is out defending the Oil lobby and his own political decisions when it comes to selling out Albertans to the Calgary Oil Lobby.

Remember Ken Kowalski's 1994 appointment to chair the Alberta Energy and Utilities Board? It stirred up so much oilpatch opposition that then premier Ralph Klein had to rescind the post he gave the former deputy premier who'd been freshly bounced from cabinet.

Governments in Alberta and elsewhere have traditionally rewarded loyal supporters with plum appointments, often over the hue and cry of opposition parties and the general public.

The Kowalski appointment enraged a sector with considerably more clout: Big Oil. When it said the position required somebody more qualified and less political, Klein was forced to respond.

For a decade Albertans have been ripped off of profits from our resources, shoring up the oil industry with subsidies directly and indirectly, the latter being our penny on the dollar royalty rate for developing the tarsands. The result was the famous neo-con Klein Revolution, for which he annually collected gold medals from the Fraser Institute, which then went on to hire him once he retired as premier.

Should we be surprised he defends his regimes sell out of Alberta, native and Canadian resources? Of course not. He was after all the Premier the Party of Calgary picked. The Party of Calgary has become the bugaboo of Edmonton Sun columnist Neil Waugh, who describes them as the oil aristocracy.

Which, in a sentence, is Big Oil's strategy as the Stelmach Tories attempt to claw back $2 billion a year in energy revenues - largely from Calgary's oilsands aristocrats,who have been awarding themselves multimillion-dollar annual salaries while the owners of the resource get a penny on the dollar payout until the massive capital costs are recovered.

While Rick Bell his counterpart at the Calgary Sun gleefully pulls Big Oils beard in his column. Reminding us from his window view of Petro Plaza,

The outrage from the highest offices in the tallest towers is so loud it is being heard all over the provincial government.

Tory MLAs are being reminded of who runs the show, or who think they run the show, or who did the show until now.

On Tuesday, mere minutes after a report called for the province to hike oil and gas royalties and get a fair share for the resource Albertans own, the oil industry sent the provincial powers a simple one word e-mail.

It read: "Disaster."

Interesting the oilpatch isn't commenting on the fact, on natural gas alone, Albertans are out about $6 billion. That's $6 billion that could have gone to affordable housing, schools, health facilities, other public building projects, a tax break, savings to the Heritage Fund and on and on.

The reality is that the Hunt Report outright says that Albertans have been shortchanged for a decade when it comes to oil royalties.

Royalty review calls for massive jump in oilsands payouts

A panel reviewing the fairness of Alberta's royalty take from oil and gas development said today Albertans are not collecting a fair share and recommended a massive jump in royalties paid by oilsands projects.

The six-member panel headed by Bill Hunter recommended that the government's overall take from oilsands projects be raised to 64%, from 49% today. The panel recommends leaving the 1% pre-payout royalty unchanged, but that the post-pay out royalty be increased to 33%, from 25%.

"Albertans do not receive their fair share from energy development and they have not, in fact, been receiving their fair share for quite some time," Mr. Hunter said in a letter to Alberta Finance Minister Lyle Oberg. "Royalty rates and formulas have not kept pace with changes in the resource base, world energy markets and conditions in other energy rich jurisdictions. Albertans own the resource."

Billions of dollars have been pocketed by the private interests while Ralph declared debt and deficit hysteria, cut jobs, delayed infrastructure, destroyed the health care system by laying off nurses and reducing graduates for their jobs and those of doctors, contracting out services, etc. He told us we were broke, and had to tighten our belts, the debt and deficit crisis was described by King Ralph as the need to not renovate our house, but to demolish and rebuild.

One of his would be heir apparent's is our current provincial treasurer Lyle Oberg, a true believer, who says dark days are upon us. Of course he too opposes asking for what belongs to the people, a just royalty for our resources.

In that wonderfully twisted world of social conservatism the politics of giving unto Caesar has become the economics of giving unto Big Oil. The logic goes like this, if it weren't for big oil the PC party would be nothing, so it does it all it can for Big Oil. Now like all One Party States this logic is then transformed into what is good for Big Oil is good for Alberta.

The irony is that this royalty scam was not even created by Klein. Rather it was created after the collapse of the global oil market in 1984 by then Petro Premier Don Getty. Don being the oil boys insider for the moment, Klein was able to scape goat him for all of Alberta's economic problems which were a result of the market melt down, the recession of the eighties. So when the momentary debt and deficit crunch came world wide, Klein was ready to step in. Rather than end the tax and royalty holiday for Big Oil, he continued it and turned on the people of Alberta to pay for the deficit.

Deficits are not permanent, they are a year by year accounting phenomena. A debt on the other hand exists and transfers from year to year. A debt is what you owe someone else. You cannot have a debt to yourself. But in the wonderful Wizard of Oz Topsy turvy world of neo-con logic, government financed and owned infrastructure was seen as a business cost rather than as an asset.

The wailing and gnashing of teeth from the industry lobbyists, including Klein, and those in the investment business is predictable if somewhat disingenuous. After all this is Alberta, not Saskatchewan or Manitoba. This is a Tory run one party state at the beck and call of the Petroleum Club in Calgary. And the panel doing the review well it was stacked with capitalists.

The report was written by a six-member, blue-ribbon panel named by the government. The members included two economics professors, a chief economist for an Calgary-based energy research firm, a businessman, a forestry executive and a former senior executive with an oil company.

If anything, the panel was seen as too pro-business. In fact, the appointment of Sam Spanglet to the panel caused a stir back in February when news broke that the former oil executive still had "a couple of million" dollars worth of stock options with Shell Canada.

As if to bolster the opposition's accusation, the Canadian Association of Petroleum Producers was reportedly pleased with the panel's members and their credibility.

It seemed just about everyone was predicting the panel would deliver an industry-friendly conclusion.

One of the funniest comments comes from an one of those dime a dozen investment newsletters;

"Do they really wish to kill this golden goose with one fell swing of the tax axe?" said economist Dennis Gartman, editor of the Gartman Letter, an influential investment newsletter based in Virginia, who was "shedding tears" about Alberta going "socialist" and wondering whether the provincial government has "gone mad."

Socialist, well gee where has he been. Let's see Alberta is dominated by one party, a party that has been in power so long it naturally thinks it is the government. One that has subsidized the oil industry at the cost of the owners fair share. That spells socialism to me....well state capitalism actually, but for the rabid right they are the same. As ex- King Ralph pointed out;

"It was a regime created by industry and government. Those kinds of rules don't change on a whim. Companies are nervous."

And then there are those who, like our Treasurer Lyle Oberg, are doom and gloom proponents who claim that the sky is falling and once again are declaring impending debt and deficits. The reality is that it was the royalty holiday that Getty gave the industry that led to the deficit crisis of 93-95 that gave Klein an excuse to implement the Fraser Institutes neo-con revolution in Alberta.

On page 23, for example, the report points out "The panel was constantly told by companies and by energy industry trade groups that Alberta ranked very high in Government Take." However, those companies and groups were citing from an outdated 1997 report by an international expert. The review panel commissioned the same international expert who compiled new data and concluded "the very opposite is now unequivocally true."

In this case its also the oil and gas industries who are claiming a crisis in their industry and again have their hands out asking for more state subsidies.

Yet, because of public expectations, it's unlikely the panel will recommend what's needed at this time: a reduction in royalties to salvage what's left of this vital part of the sector. Indeed, there are indications the slump is not just another cycle, but a structural change that will require new thinking from everyone -- industry, government and labour -- to reduce costs so it can compete with the cheap imports of liquefied natural gas invading the U.S. market, once dominated by Alberta producers.

Oh you didn't know there was a slump in the oil and gas business? It didn't appear that there was according to the markets this week.

Oil prices hit record highs

Oil dips, but gas prices set to rise

Taking Cues From Fed, Speculators Bid Up Oil

More oil firms hike fuel prices

Crude oil sails over $80 buoyed by bullish mkt

Oil near new high amid tight supplies

Well there is. It's called peak oil and the industry is panicking over its potential impact. Alberta's conventional oil and gas reserves will peak in 2020 and begin to decline, as will provincial revenues. And so the oil business in Alberta is focused on developing the tarsands output, regardless of costs to the public or the environment, by then.

A litany of Canadian investment banks also pulled no punches in their assessment of the proposals in the Our Fair Share report.

FirstEnergy Capital Corp. warned the proposed measures, in a report entitled "Albertastan? Misguided Intentions and the Fair Share Option," would be "negative if adopted, and will slow down the development of oilsands."

Well frankly that's a good thing since the boom is artificial and has caused untold problems in Alberta. We need a planned economy from our 'socialist' government, since the oil sands development has gotten out of control.

Since Prince Eddies government refuses to adopt such a plan, then if the royalty regime forces a slow down all the better. Alberta is an overheated economy. One that is sure to bust big, because no boom is sustainable. And woe betide Albertans if that happens. The boom of the seventies and early eighties was followed by a quarter century recession in the province. One that was used as an excuse to rack up surpluses at the expense of public services and infrastructure expenditures.

Stelmach says he'd stand up to big oil

Be still my beating heart. Anyone who thinks Farmer Ed is going to accept this report in whole, has missed the fact he has not accepted the recommendations of any public reports that he called for upon his appointment as Alberta's CEO. He has adopted the minimum to make him look good sometimes that has meant rejecting the public reports and making a big deal out of the fact he asked for them.

We need only remember the Alberta Housing Report, which called for rent controls. He rejected this outright. He has rejected the public commission calling for controlled growth and a slow down in oil sands development as well.

A columnist at the U of C student newspaper the Gauntlet sums it up well.

Furthermore, even if the provincial government does go for the whole 20 per cent increase, Alberta’s royalty rates will still be some of the lowest in the world. And don’t try to tell me that all the oil companies will uproot and flee the country the second people start talking about increasing royalties. As a fellow editor commented to me recently, “They’re in the oil business. They’ll go where the oil is.” The oil companies have invested too much money and stand to make far too much money for them to vanish in a cloud of carbon monoxide like the conservatives are arguing.

Anybody who has studied the provincial Conservatives in even the shallowest capacity knows that Premier Ed “Steady Eddy” Stelmach will likely not raise royalties at all come Oct. when he makes the decision. If royalties are increased, it will likely be by just enough for Stelmach to seem like a populist without putting even the slightest dent in Big Oil’s beer budget. This isn’t necessarily is bad thing; the quality of life in Alberta will continue to improve at the same rate it always has if nothing is done. There’s no immediate negative consequence in deferring to the oil companies on this one, and that’s likely why nothing will be done: nobody wants to rock the boat. However, it’s worth considering the possibilities of even a slight increase.

And those who are in the known when it comes to economics agree. Big Oil will stomp their feet and wail but all is for naught. They will go where the oil is and if they don't well there are the Chinese, and Japanese, and....

Alberta premier walks into lion‘s den with business leaders over royalty review

Many of the business leaders attending the event said whether Stelmach chooses in the coming weeks to adopt the report‘s recommendations or not will be his most important decision, not just for now but for generations to come.

“My view is that the province should just out of hand reject this report because ... the decisions that they made are totally out of touch with the economy and what‘s happening around the world right now,‘‘ said Doug Mitchell, co-chairman of the forum.

“I don‘t see any credibility whatsoever in the report.‘‘

But one energy specialist said regardless of what Stelmach decides, the oilsands are too rich and vast for industry to ignore.

Ken Moors, a managing partner of Risk Management Associates in Pittsburgh, Pa., said he has brokered royalty deals around the globe and he believes Stelmach has been smart to make this dispute a public one.

“This is a rare opportunity for a democracy to do things in the open,‘‘ he said.

“But you must remember that every other time these royalty situations have been advanced in other countries, they‘ve been advanced in a market in which the expectation was that supply was going down. This is the only example I‘ve ever seen where these are being introduced in a market where the supply is bound to go up.‘‘

He said the province will still be very competitive with other countries.

"It is not going to take place . . . this is the only major supply side push left in the international oil market, so people either invest here or they see their profit margins dwindling in the future -- there is no other alternative," he said.

That is rich, There Is No Alternative. TINA. The famous neo-con excuse for selling off government services to embrace the Market. And now the shoe is on the other foot for Big Oil. TINA. LOL.

Amongst the sturm and drang of capitalist outrage in columns in the National and Financial Post comes a whiff of wisdom if not prudent observation.

Royalty review just good business

Diane Francis, Financial Post

Published: Saturday, September 22, 2007

It's important to note that what is being discussed is not taxation but the royalty paid to Albertans who own the lion's share of subsurface mineral rights in the province. And they are not getting as much revenue from their resources as competing jurisdictions are, according to the report. Industry spokesmen dispute the numbers and say Alberta's take is already high enough, and any higher will drive away investment.

For instance, conventional oil and gas royalties and taxes in the U.S. average 67% while they are 50% in Alberta, said the report.

Non-conventional oil production -- offshore and heavy oil -- is another interesting story. Heavy oil royalties in Cold Lake are 60% compared with Nor-way's offshore royalties of 76%, California's heavy-oil royalties (and taxes) of 67.5% and Venezuela's 72%.

To me, both the markets and media have been hysterical about nothing. Stelmach is not some fiscal confiscator. He's the CEO of the most valuable jurisdiction in the Western hemisphere and his review of royalties is simply prudent business practice.

Just like Danny Williams is doing in Newfoundland except in order to get his folks the best deal he didn't sell the goose, just a part of the golden egg. Funny thing the same folks whining over the Alberta Royalty report said this about Danny's provincial version of Petro-Can;

Paul Barnes, the St. John's-based spokesman for the Canadian Association of Petroleum Producers, said state equity stakes are common throughout the world beyond North America and Europe. He said his members are prepared to negotiate exact figures for specific deals. "It's not overly concerning to our members that equity participation is on the table here because we experience it on worldwide basis."

Gee you don't hear that from the CAPP when it comes to Alberta's Royalty Revue.

"At first blush," gulped Canadian Association of Petroleum Producers spokesman Greg "Sky is Falling" Stringham, "this is far worse than anticipated."

So what is all the fuss about, why the chicken little exercise in outrage? What does this dastardly commie socialist pinko report say. Well it is damning of years of incompetence by an entrenched and debouched Tory party of Calgary Oil insiders.

A tired old party that instead of collecting what is owed to Albertans by Big Oil for the past decade, forget just the last few years of booming oil prices, gave them a royalty holiday paid for by Albertans. We paid in increased user fees, privatization, contracting out, wage freezes in the public sector, caps on AISH payments and claw backs,kicking the poor off welfare, selling off the ALCB at fire sale prices, systemic mistreatment of seniors in seniors homes, the Health Care premium which is a tax grab, failure to invest in infrastructure, firing of nurses and doctors, capping of nursing and doctor graduates in Alberta universities, not only closing but blowing up hospitals, lack of vocational and technical education that has led to current labour shortages, etc. etc.

The government makes more money off gambling then it does off either royalties or taxes on conventional oil and gas and the tarsands.

And no matter what Stelmach does, he cannot make up for being part of a government that at best was asleep at the wheel for two decades, at worst was implementing harsh cuts and reconstructing the state according to a neo-con agenda that was never for the benefit of the people of Alberta but to please the Fraser Institute and its pals.

Stelmach will never, ever, ask for the billions Big Oil owes the people of Alberta who had to pay for Ralph Klein's renovation of the province for their and the Fraser Institutes benefit.

The Conservative regime has forgotten that natural resources belong to Albertans and not developers, says the report from the royalty review panel appointed by the same government.

And the Alberta Energy ministry is bracing for another unsparing probe next month of how it handles royalties from Auditor General Fred Dunn.

His office has chided the government in past years for being unable to effectively track what companies owe in royalties, and suggested the problem was costing hundreds of millions of dollars in royalty losses.

But the royalty review panel took the criticisms much further, recommending a new oversight body and far better reporting to the public.

"During our review we discovered an absence of accountability from the government to Albertans, the owners of resources," panel chairman Bill Hunter told reporters this week. "We encountered significant difficulty in accessing information -- to have even simple questions answered."

"How the administration or public leaders make informed decisions in this vital arena is an open question," says the review report, made public Tuesday.

"In the case of Alberta's multibillion-dollar energy reserves, seen as an enterprise, the onus on government to inform the public should actually be orders of magnitude higher," the report said. "Stated politely, this standard of disclosure is not presently being met.

"The panel is of the opinion that the government has not built up sufficient expertise and capacity to administer and manage this complexity."

It also identified a specific problem of missing money, or "what preliminarily seems like a pattern of material deferral of payments that is not in the interests of Albertans."

Once again the real Alberta Deficit is revealed, the democratic deficit. So the next time some Alberta Conservative MLA or MP, they are after all joined at the hip, talks about accountability, transparency, honest government, usually pointing fingers at Liberals in Ottawa, just ask them if they know where the missing billions from Big Oil are squirreled away.


Read it for yourself.

Royalty Review Panel final report

SEE:

Transparency Alberta Style

Closing The Barn Door

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    BLAMING MIGRANTS FOR CAPITALI$T CRISIS

Most Canadians See Immigration Increase as Negative for Housing Costs

Two in three say the surge is worsening housing costs

Support may be eroding for Trudeau’s high immigration targets


Buildings under construction in Montreal on May 31, 2023.

Photographer: Graham Hughes/Bloomberg

By Randy Thanthong-Knight
August 8, 2023

Most Canadians view Prime Minister Justin Trudeau’s plan to raise immigration targets as adversely affecting the cost of housing, signaling a shift in public attitudes in the typically newcomer-friendly country.

Polling by Nanos Research Group for Bloomberg News shows about two out of three respondents believe increasing the annual target for permanent residents to half a million by 2025 will have a negative impact on the cost of housing. Only one in five believe it will have a positive impact.

The survey suggests Canadians’ opinions are changing at a time when Trudeau’s government is being criticized for exacerbating housing shortages by boosting the number of immigrants. Concerns about inflation and the rising cost of housing have been increasing over the last year, said Nik Nanos, chief data scientist and founder of Nanos Research Group.


“Although Canadians traditionally support immigration, increasing the number of new Canadians while there is stress on the housing market has dampened enthusiasm,” he said.

Five months ago, another poll showed 52% of participants said the government’s immigration push would have a positive impact on the economy. These views were likely connected to jobs and the unemployment rate, Nanos said.

“The research puts a spotlight on the housing pain point and the collision of increasing the number of new Canadians when housing is seen as being increasingly unaffordable.”

Immigration Increase Seen Worsening Housing Costs

Two in three Canadians say the surge has an adverse affect on housing

Sources: Nanos Research Group, Bloomberg

Question: The Government of Canada is planning to increase the annual target of immigrants as permanent residents from 465,000 in 2023 to 500,000 by 2025. Do you think this increase will have a positive, somewhat positive, somewhat negative, negative or no impact on the cost of housing?

While advanced economies globally are confronting similar challenges from decreasing birth rates and aging workforces, wider support among Canadians for immigration had for years given Trudeau leeway to steadily boost permanent resident targets to stave off long-term economic decline.

Under the current plan, the government aims to welcome 465,000 permanent residents in 2023, up from a record 431,000 last year. By 2025, the annual target will reach 500,000, with foreign students, temporary workers and refugees making up another group that’s expected to be even larger.

A worsening imbalance between housing supply and demand, combined with rising cost of living and higher interest rates, has already priced out many Canadian residents, including younger generations and recent immigrants. It has also prompted calls from economists for the government to revise its immigration policy.

But the government is so far sticking with its current plan. Last week in an interview with Bloomberg News, Immigration Minister Marc Miller said he would either keep or raise the annual targets because of the diminishing number of working-age people relative to the number of retirees and the risk it poses to public service funding.


The latest Nanos survey of 1,081 people was conducted by phone and online between July 30 and Aug. 3. It’s considered accurate within 3 percentage points, 19 times out of 20.

New condo prices in Toronto drop for the first time in a decade: Urbanation

Iva Poshnjari, BNN Bloomberg

The price of a new condominium in the Greater Toronto Area (GTA) has fallen for the first time in a decade, according to a report from Ubranation Inc.

The average price of a new condo in the region fell 2.2 per cent year-over-year to $1,411 per square foot, the figures revealed. This marks the first annual price drop in 10 years for new condos, the report said.

There were also fewer buyers interested in purchasing a new condo, it revealed.

New condo sales in the GTA fell 35 per cent on an annual basis to 4,610 units sold, and reached a decade low of 28 per cent below the average second-quarter figures, the report detailed.

On a quarterly basis, new condo sales did jump 118 per cent, however, the data revealed sales for the first half of this year were down 59 per cent compared to the first half of 2022.

As for bringing more housing supply online, developers launched 27 presale projects in the second quarter of 2023 with a total of 7,349 units, however this marked a 27 per cent decline from the same period last year, the report revealed. While there were fewer presale units constructed in Q2 of 2023, the figures were in line with the 10-year average of 7,276 units, the data showed.

The softness is being attributed to buyers being hesitant to enter the market following of the Bank of Canada’s latest round of rate increases. 

Buyers showed the most interest in the GTA, where lower priced projects in the 905 region reached a record high portion of sales at 60 per cent, while new condo sales in the city of Toronto hit a record low of 14 per cent, the report said.

“As the population expands at a record pace, the GTA’s 12-month running total for new condo sales has dropped to its lowest level since 2009,” Shuan Hildebrand, president of Urbanation, said in a press release.

Demand for lower priced projects is being reflected in the average sold price of new launches, which fell to a seven-quarter low at $1,236 per-square-foot, according to the data. That figure is down eight per cent annually and 13 per cent lower than the average of $1,426 per-square-foot of projects launched in the first quarter of last year.

Despite the price drop, condo sales remain under pressure, the report said.  

"This will soon begin to impact construction and eventually cause serious supply shortages in a few years, the extent of which will depend on how long the current slowdown in presale activity persists,” he said. 

Canada sticks with immigration target despite housing crunch

Randy Thanthong-Knight, Bloomberg News

Prime Minister Justin Trudeau’s government won’t lower its immigration targets despite growing criticism that drastic population growth worsens existing housing shortages.

In one of his first interviews a week into his new cabinet role, Immigration Minister Marc Miller said the government will have to either keep — or raise — its annual targets for permanent residents of about half a million. That’s because of the diminishing number of working-age people relative to the number of retirees and the risk it poses to public service funding, he said.

“I don’t see a world in which we lower it, the need is too great,” said Miller, who’s expected to announce new targets on Nov. 1. “Whether we revise them upwards or not is something that I have to look at. But certainly I don’t think we’re in any position of wanting to lower them by any stretch of the imagination.”

Globally, advanced economies are confronting similar challenges from decreasing birth rates and aging workforces, and many are competing for skilled workers. But while immigration for some countries is a divisive issue that can polarize voters and even topple a government, Canada has comfortably relied on public support to open its doors more widely for working-age newcomers.

Miller’s comments suggest the government is still counting on that backing to grow its population rapidly to stave off long-term economic decline. Trudeau’s government has consistently raised its target for permanent residents. Last year, foreign students, temporary workers and refugees made up another group that’s even larger, bringing total arrivals to a record one million.

In the short term, however, that massive growth has strained major urban centers and exacerbated housing shortages. In the 12 months to March, 4 to 5 international migrants arrived in Canada for every newly started unit of housing construction. That’s the highest ratio of new Canadians to new homes on record in data going back to 1977.

Many Canadians now criticize the government for not only doing too little to boost supply, but also making it worse by adding too much demand from immigration. But Miller pushed back against that view.

“We have to get away from this notion that immigrants are the major cause of housing pressures and the increase in home prices,” he said. “We tend not to think in longer historical arcs or in generational terms, but if people want dental care, health care and affordable housing that they expect, the best way to do that is to get that skilled labor in this country.”

On Wednesday, National Bank Financial’s Chief Economist Stefane Marion called on the government to revise its immigration policy until housing construction catches up with demand. Marion said the government’s decision to open the “immigration floodgates” led to a “record imbalance” between housing supply and demand, and homebuilders can’t keep up with the influx.

A recent survey by Ottawa-based Abacus Data showed 61 per cent of respondents believed Canada’s immigration target is too high, and 63 per cent of them said the number of immigrants coming to the country was having a negative impact on housing.

“What’s driving this is really rational concerns, not xenophobia,” said David Coletto, Abacus Data’s chief executive officer. “From many people’s perspective, the growth that Canada experienced hasn’t been matched with an increase in infrastructure. It’s putting a strain on public opinion toward immigration more broadly. We’d be foolish to assume that Canada’s immune to the same forces that have affected other countries.”

In another survey published in July, 39 per cent of respondents said they would be more likely to vote for a political party that promised to reduce immigration numbers. That compared with 24 per cent who said they’d be less likely to do so and 30 per cent who said it’d have no impact. This suggests there may be an appetite for campaigning on reducing immigration, according to Coletto.

Last week in an extensive cabinet shuffle, Trudeau shored up his economic bench and laid some groundwork for future elections as his government faces attacks over the rising cost of living. Sean Fraser was moved from immigration to housing and infrastructure. Miller — who as Crown-Indigenous relations minister quieted some the loudest criticisms of Trudeau on reconciliation — took the reins at immigration. 

“Politicians look in electoral cycles. But in my role, we have to look in generational cycles,” Miller said. “Canada needs to address that in a smart way, and that means attracting a younger segment of the population to make sure that people can retire with same expectations and benefits that their parents had. That’s the stark reality of it.”

- With assistance from Erik Hertzberg.

Soaring housing costs could spell 'disastrous'

political consequences for Trudeau

Laura Dhillon Kane, Brian Platt and Erik Hertzberg, Bloomberg New

The soaring cost of Canada’s housing has become a major political problem for Prime Minister Justin Trudeau as his chief rival zeros in on generational grievances over affordability. 

Trudeau has played defense on the issue this summer, appointing a new housing minister last week and shifting some of the blame to other levels of government on Monday. But with his party already sinking in recent polls, housing has become a serious vulnerability for Trudeau.

“Failure to be seen as doing enough on housing could be politically disastrous for the Liberals,” said David Coletto, chief executive officer of polling firm Abacus Data.

The issue is particularly important for Canadians under 40 years old — a critically important demographic that Trudeau’s party couldn’t have won the last two elections without, Coletto said. His firm’s most recent poll put Pierre Poilievre’s Conservatives 10 points ahead of the Liberals.

The benchmark price for a Canadian home has more than doubled over the past decade, reaching $760,600 (US$572,470) in June. Trudeau’s government, which took power in 2015, has also steadily raised its annual immigration targets, with more than one million people arriving last year, straining an already tight housing supply.

Poilievre has hammered Trudeau on the issue, focusing on the anger of younger generations. Canada’s housing affordability is among the worst in the world, he told reporters Tuesday outside the Parliament building in Ottawa.

“Rent has doubled,” he said. “Mortgage payments, doubled. Needed down payments, doubled. All after eight years of Justin Trudeau.”

To be sure, skyrocketing housing costs have many causes beyond Trudeau’s control. Provinces and cities — responsible for land-use planning, zoning and permitting — bear some of the blame, as do real estate investors, foreign buyers, years of rock-bottom interest rates and other factors. 

Still, Canada’s ambitious immigration targets have outpaced home building, aggravating the imbalance between demand and supply. In the 12 months to March, 4 to 5 international migrants arrived in Canada for every newly started unit of housing construction. That’s the highest ratio of new Canadians to new homes on record in data going back to 1977.

Poilievre, however, repeatedly sidestepped reporters’ questions on Tuesday about whether he would reduce immigration targets. 

Former Liberal lawmaker Adam Vaughan, who helped craft Trudeau’s $82 billion national housing strategy released in 2017, argued the country is better off today than it would have been without his party’s policies. If it had done nothing, federal spending for social housing this year would have been just $1 billion, he said.

However, more needs to be done, and time would be better spent focusing on solutions across levels of government than laying blame, he said. Trudeau’s comment on Monday that housing isn’t a primary federal responsibility was “problematic,” Vaughan said.

“It is a responsibility of the federal government, if not literally then it is politically, and I would argue that it is morally,” said Vaughan, who now works at public relations firm Navigator.

The federal government has a range of tools it could use to address the housing shortage without swelling its debt, said Mike Moffatt, senior policy and innovation director at the Smart Prosperity Institute.

Those measures include targeting immigration policy toward construction workers, electricians and others who could boost housing supply and slowing down international student visa approvals until provinces require universities to build more housing for them.

If the government is going to act, “they better do so quickly because time’s not on their side, and there’s a chance that one of the opposition parties could really start to own this issue,” Moffatt said.

Marci Surkes, who formerly worked as Trudeau’s policy director, said she suspects the government is working on a housing plan as a central plank of its fall budget update. 

“This should be ground that the Liberal Party should be occupying and owning,” said Surkes, who now works as an adviser to the Compass Rose Group. “They should have been making progress that was feeling more tangible at this point. And yet the circumstances being what they are economically, whatever progress has been made to date certainly doesn’t feel like enough.”

New Democratic Party Leader Jagmeet Singh, whose party has agreed to prop up the Liberal minority government in Parliament, said on Tuesday that Trudeau’s “finger-pointing” isn’t going to solve the housing issue, even though all orders of government hold some responsibility.

“We can’t ignore significant levers that the federal government has,” he said. “The levers are so significant that I would say the federal government has incredible powers to actually solve this problem if they choose to do so.”

New housing minister says closing door on newcomers is no solution to housing crunch

Nojoud Al Mallees, The Canadian Press

Canada's new housing and infrastructure minister says closing the door to newcomers is not the solution to the country's housing woes, and has instead endorsed building more homes to accommodate higher immigration flows. 

Sean Fraser, who previously served as immigration minister, was sworn in Wednesday morning as part of a Liberal government cabinet shuffle aimed at showcasing a fresh team ahead of the next federal election. 

He comes into the role at a time when strong population growth through immigration is adding pressure to housing demand at a time when the country is struggling with an affordability crisis. 

"The answer is, at least in part, to continue to build more stock," Fraser told reporters after being sworn in.  

"But I would urge caution to anyone who believes the answer to our housing challenges is to close the door on newcomers."

Instead, the minister said immigration would be part of the solution to the housing challenge.

"When I talked to developers, in my capacity as a minister of immigration before today, one of the chief obstacles to completing the projects that they want to get done is having access to the labour force to build the houses that they need," he said. 

Prime Minister Justin Trudeau's decision to hand over the federal housing file to the Nova Scotia MP has been praised by experts who say that the Liberals need a strong communicator in charge as Canadians deal with an affordability crunch. 

As part of the shakeup, the housing file has been merged with infrastructure and communities. Fraser said the goal is to look at housing and infrastructure projects together, rather than in isolation. 

"If we encourage cities and communities to build more housing where infrastructure already exists or where it's planned to be, we're going to be able to leverage more progress for every public dollar that's invested," he said. 

Ahmed Hussen, who became housing minister in 2021, has faced criticism for his handling of the file as the housing crisis worsened across the country. 

Hussen is staying in cabinet as minister of international development. 

"The selection of Sean, I think, is a recognition that the job requires fundamentally an energy and urgency and a passion in order to be able to effectively compete with the message that (Conservative Leader) Pierre Poilievre has put forward," said Tyler Meredith, a former head of economic strategy and planning for Trudeau’s government.

Meredith said the choice to shift Fraser from immigration to housing also signals the federal government knows the two files are linked. 

"If they lose the argument on housing, they will lose the argument on immigration, and they will then lose what is frankly, some of the some of the most effective pieces of their economic strategy," Meredith said.

Canada's population grew by more than one million people in 2022, a pace that experts say is adding pressure to housing demand. That, in turn, pushes up prices even further. 

A recent analysis by BMO found that for every one per cent of population growth, housing prices typically increase by three per cent. 

The Liberals have been taking a lot of heat from Poilievre  for the state of the housing market. He's blamed Trudeau's government for the crisis, as well as municipal "gatekeepers" for standing in  the way of new developments. 

Poilievre has focused on the need to build more housing and has not weighed in on whether Canada needs to change the number of people it lets into the country. 

The Conservative leader has also been particularly focused on speaking to young people struggling with affordability, commonly referring to the "35-year-olds still living in their parents' basements" in the House of Commons.

Fraser, 39, acknowledged during the news conference that housing affordability is a major challenge facing younger Canadians in particular. 

"It's a real challenge for people my age and younger who are trying to get into the market, but it's also a challenge for low-income families," Fraser said. 

"There's no simple solutions, but if we continue to advance measures that help build more stock, that help make sure it's easier for people to get into the market and make sure we're offering protections for low-income families, particularly in vulnerable renting situations, we're going to be able to make a meaningful difference."

The housing crisis that once was associated with Vancouver and Toronto is now affecting all corners of the country, and experts say a shortage of homes is at its root. 

The Canada Mortgage Housing Corporation has warned the country needs to build 3.5 million additional homes — on top of the current pace of building — to restore affordability by 2030.

Carolyn Whitzman, a housing policy expert and adjunct professor at the University of Ottawa, said the decision to combine housing and infrastructure is a good move. 

"Housing is infrastructure. It's essential, as essential as water and sewers and hospitals and schools, for the functioning of a society," she said. 

Whitzman also called Fraser a "fairly effective communicator" and noted his experience as immigration minister may also help inform his role in the housing file.

Canadian population growth to drive home prices higher and faster: Report

Iva Poshnjari, BNN Bloomberg

The expected rise in Canada’s population is likely to make the country’s limited housing supply worse – and ultimately lead to even higher home prices, a report by Zoocasa forecasted.  

The influx of immigration to Canada, alongside internal population growth and a shortage of housing, will drive shelter costs up, the report released on Wednesday said.  

“The more people who live in Canada, the more homes are needed, which will exacerbate the already limited supply of homes," it stated.  

The data showed that 2022 was a record-breaking year for the country’s housing market and immigration numbers.

“The government welcomed the largest number of immigrants in a single year (2022), according to Immigration, Refugees and Citizenship Canada, and at the same time, the national average home price soared to a monthly high of $804,900 – a 31 per cent increase from 2021,” it said.

So far, 2023 has not shown a similar trend.

One possible reason for this could be the aggressive interest rate hikes the Bank of Canada has pursued, the report said. The average home price dropped in 2023 by 5.5 per cent from the year prior, despite immigration reaching a new record of 3.9 per cent growth, it detailed.

The decline is likely to only be temporary, it said.

The report pointed to home price declines throughout the 2008-2009 financial crisis as a point of reference.

“The largest drop in the national average home price in the past 18 years was in 2009, when the price went from $320,500 in January 2008 to $296,300 in January 2009 – a 7.6 per cent decline due to the Great Recession which began in Canada in 2008. It only took a year for prices to recover and from 2010 until 2018 prices continuously climbed,” the data showed.

While overall population growth aids economic activity, the problem of where to house more people still remains.

“Population growth helps to stimulate the economy by filling labour shortages, but a side-effect of this growth is that home prices will likely be driven up higher,” the report said.

The report identified major metropolitan areas throughout Canada, such as Toronto or Vancouver, as key regions where home prices will be pushed upward due to the growth.  

“Home price growth and population growth have simultaneously trended upwards and this is likely to continue at an even faster rate in the future,” it forecasted.

Justin Trudeau is shifting some of the blame 

for eye-popping housing costs in Canada

Laura Dhillon Kane and Erik Hertzberg, Bloomberg News

Canadian Prime Minister Justin Trudeau heaped some of the blame for skyrocketing housing costs on high interest rates and inaction by other levels of government, signaling a more defensive tone on an issue where his main political rival has hit him hard.

Trudeau touted a federal investment in a housing project in Hamilton, Ontario, on Monday, telling reporters that his government is focused on making housing affordable and bolstering the supply of homes for lower and middle-income Canadians.

But he repeatedly pointed to provinces and municipalities — which control land-use planning, zoning and permitting — as crucial in solving the issue. He also said the previous Conservative government — in which now-leader Pierre Poilievre was a cabinet minister — failed to address the issue for 10 years.

“I’ll be blunt: Housing isn’t a primary federal responsibility,” Trudeau said. “It’s not something that we have direct carriage of, but it is something that we can and must help with.”

The rhetoric is a shift for Trudeau, whose government jumped into the housing arena when it was first elected in 2015. He has since rolled out an $82 billion (US$62 billion) national housing strategy and made sweeping promises, including doubling the pace of housing starts over the next decade.

\

But his efforts haven’t made a meaningful dent in housing costs, with the benchmark house price reaching $749,100 (US$567,930) in June, up 2 per cent from a month earlier. At the same time, he has set record-high immigration targets, welcoming more than a million people last year and straining already crunched housing supply.

The remarks show the government “is giving up on solving the housing crisis it created,” said John Pasalis, president of Toronto-based real estate brokerage company Realosophy Realty.

“Our federal government is supercharging the demand for housing by rapidly increasing Canada’s population growth rate without any regard for where people will live and is now blaming the provinces and cities for not doing the impossible – tripling the number of homes they build each year,” Pasalis said.

Poilievre has seized upon anger about the cost of housing, especially among young Canadians, and recent polls have put his Conservatives as much as 10 points ahead of Trudeau’s Liberals. An election could be held any time in the next two years.

Trudeau recently shuffled his cabinet to more strongly emphasize economic issues, especially housing. He selected Sean Fraser as housing and infrastructure minister to deliver the message that it understands Canadians’ struggles on housing and is doing everything it can to help.

Trudeau also said on Monday that he hopes inflation continues to fall so that interest rates will also decline, which would ease mortgage costs for Canadians.

Asked about workers demanding higher wages amid high inflation, most recently in the strike at British Columbia ports, Trudeau said he wants to avoid a wage-price spiral. 

“We want to keep inflation down so we can have interest rates start coming down again to help people be able to afford their own homes,” he said.

The Bank of Canada raised rates for a second straight meeting on July 12 to 5 per cent, the highest level in 22 years. Headline inflation has come down to 2.8 per cent in Canada, but mortgage interest costs are up 30 per cent from last June. Without mortgage costs, inflation would have been at 2 per cent.

Trudeau said during the 2021 campaign that he doesn’t “think about monetary policy,” underscoring his deference to Bank of Canada Governor Tiff Macklem and his policymakers. While the prime minister’s comments on Monday didn’t criticize the central bank, they did mark a shift in that he publicly expressed a desire to see lower rates.

Fraser also seems to be pointing to interest rates as a source of the affordability challenge in Canada. In an interview with the Canadian Broadcasting Corp., he said inflation – primarily caused by global factors – has triggered higher rates that have pushed some families with variable-rate mortgages to the limit.

'Skyrocketing population growth' drove economic expansion across Canada: Report

Daniel Johnson , BNN Bloomberg

Last time population growth was this strong was before Maple Leafs last won Stanley cup (1967)

Desjardins 7:40

A new report from Desjardins economists says population gains have supported growth in each Canadian province this year – while warning that a downturn still could occur in 2024. 

Desjardins released its report on provincial outlooks on Tuesday, which revised growth expectations higher in both Ontario and British Columbia after rebounds in each respective market. The economists behind the report noted that oil-producing regions are expected to perform better relative to non-oil-producing provinces, including B.C. and Ontario, throughout the year and into 2024.

Marc Desormeaux, a principal economist at Desjardins and one of the authors of the report, said in an interview with BNN Bloomberg Tuesday that there are three main takeaways from the findings.

“The first is that in this environment of a slowing Canadian economy, we think that the commodity-producing provinces will fare the best in terms of economic growth,” he said. “The second thing is that we've revised our projections significantly higher for Ontario and B.C., in large part because of the strength of the housing market to begin 2023.”

Thirdly, Desormeaux said “very, very strong” population growth is “supporting economic growth across Canada.”

The report also stated that amid labour shortages, “skyrocketing population growth has supported the economic expansion in all provinces so far this year.” Despite that countrywide expansion, the authors noted that all regions should feel the impact of higher interest rates over the next few months. 

“In our view, while these developments help the 2023 growth arithmetic, they delay the downturn rather than preclude it,” the report said.

“Monetary policy works with a lag, and all regions should increasingly feel the dampening impacts of sharply higher interest rates in the coming months.” 

Retail sales in Ontario and B.C. have fallen behind other regions, the report’s authors said, adding that the largest real estate markets in both provinces have “retreated in June” following another interest rate hike from the Bank of Canada. 

“As we approach 2024, housing‑exposed provinces should see the more significant slowdowns we’ve long been expecting,” the report said. 

By contrast, Alberta and Saskatchewan “remain less vulnerable” and stand to benefit from commodity prices and increased production, the report said. 

The report also noted that net international immigration trends should continue, assuming federal policy continues to focus on attracting newcomers and that immigration has benefited provincial growth across the country in 2023.

“Persistently strong population growth will play a role in stimulating demand for goods and services,” the report said. 

Immigration figures will also impact growth on a provincial basis, the report said, as Ontario and B.C. are experiencing record numbers of new non-permanent residents. However, this trend could change if admissions for temporary foreign workers decline due to an economic slowdown.