Economic losses surpass $1 billion from Alberta wildfire

   Canada column for Sunday, June 26/16

   THE CANADIAN REPORT

   By Jim Fox

   The economic toll from the massive wildfire that devastated Fort McMurray, Alberta could cost the oil sands industry more than $1.4 billion.

   While the losses continue to add up, local councilors have unpopularly voted themselves big pay increases to cover their increased workload due to last month’s fire.

   The Athabasca oil sands’ community’s 80,000 residents were forced to leave and 2,400 houses and businesses were destroyed.

   The oil industry estimated a loss of 30 million barrels and it is taking longer than expected to restart operations because of damage and clogged pipelines.

   Suncor Energy could end up losing $1 billion over lost production, an Edmonton refinery outage that led to gasoline shortages in Western Canada and restarting costs, analysts said.

   Paul Cheng of Barclays said about half of the 1 million barrels a day of interrupted production has been restored.

   Councilors from the Regional Municipality of Wood Buffalo, which includes Fort McMurray, voted 7-4 to pay Mayor Melissa Blake and three of its members $150,000 a year to work full time on a recovery committee.

   The seven other part-time councilors’ pay will increase to $75,000 a year from $36,000.

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Walmart Canada and Visa in a battle over fees; will drop card

   Canada column for Sunday, June 19/16

   THE CANADIAN REPORT

   By Jim Fox

   Walmart Canada has taken its battle with Visa over what it calls high credit card fees directly to its customers.

   The U.S.-based retail giant said that due to “unacceptably high fees” it will stop accepting Visa cards beginning July 18 in Thunder Bay, Ontario and expand the ban to its more than 400 Canadian stores.

   Walmart said it is trying to trim the more than $100 million in fees it pays annually for accepting credit cards.

   Visa stepped up the feud with newspaper ads accusing Walmart of using consumers as pawns.

   “Walmart is unfairly dragging millions of Canadian consumers into the middle of a business disagreement that can and should be resolved between our companies,” it said.

   Visa said it offered Walmart one of the lowest rates of any merchant in Canada but that hasn’t been enough.

   Fees charged to businesses – generally between 1.5 percent and 4 percent – have long been an issue and the Retail Council of Canada is calling on the federal government to legislate lower rates.

   Walmart has its own branded MasterCard but has not said whether this might be part of the issue.

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House price acceleration a concern in Toronto, Vancouver

   Canada column for Sunday, June 12/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   Soaring double-digit house price increases in Vancouver and Toronto are putting many buyers out of the market and are being called “unsustainable.”

   Bank of Canada Governor Stephen Poloz expressed concern for the economy as the average price for single-family houses in the two cities is more than $1 million.

   Fueled by foreign buyers seeking safe havens for their wealth, the climbing real estate prices have outpaced local economic fundamentals such as job creation, immigration and income growth, the central bank governor warned.

   There is growing evidence prices are reacting to “self-reinforcing” expectations among prospective buyers and lenders that property values will keep rising, Poloz said.

   In reality, there is the “possibility” that prices could decline in these circumstances, he said while releasing an assessment on the state of Canada’s financial stability.

   Evidence “continues to accumulate” of a coming market correction but the possibility of it triggering a severe recession remains low, Poloz said.

   Year-over-year house prices have risen 30 percent in the greater Vancouver area while Toronto prices are up 15 percent in the past six months as household debit is increasing, the bank said.

Alberta wildfire evacuees start to retun to their homes

   Canada column for Sunday, June 5/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   The first group of emotionally drained residents returned to see what’s left of their homes after the devastating wildfires in Alberta.

   But, many people who lost their homes to the fires might never return to Fort McMurray after 2,400 houses and businesses were destroyed – about 10 percent of the city.

   Last month’s wildfires abruptly changed direction and made a direct hit on the city in the heart of Alberta’s oil-producing region.

   Authorities are planning the return to the city in stages as more than 80,000 people had to flee when the flames and smoke approached.

   The return started last Wednesday for people who lived in areas that were mostly spared by the fires.

   “These are the points of light in the midst of some very, very hard days,” Alberta Premier Rachel Notley said.

   She welcomed home the first group returning and thanked the crews who worked to get the city running again.

   The Canadian Red Cross has begun allocating the $125 million raised so far to assist with the recovery efforts – money that is to be matched by the federal government and partially by Alberta.

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