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To: ms.smartest.person who wrote (1525)	10/6/2006 2:00:58 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

Sizzle turns to fizzle as Alberta's growth cools Calmer economy seen as welcome respite PATRICK BRETHOUR CALGARY -- Alberta's super-boom is gearing down to cruising speed as the pullback in commodity prices reduces the torrid pace of economic growth. Oil prices have dropped below $60 (U.S.) a barrel, and natural gas has fallen further than that. The Organization of Petroleum Exporting Countries is worried enough to talk about cutting back production. In Alberta, particularly in Calgary, some of the sizzle is fizzling. The housing market -- where sellers could virtually dictate prices in the spring -- is returning to more normal operations. Energy companies, especially those focused on natural gas production, are cutting spending. And the flood of migrants from other parts of Canada into Calgary is predicted to dwindle next year, falling by more than half from record levels this year, according to Calgary Economic Development. But the most telling sign of a return to merely good times is this: A year ago, Albertans were caught up in endless speculation about how large a cheque the government would be cutting in the rebate program that was quickly dubbed Ralphbucks; this year there are no Ralphbucks in Alberta. Instead, there is worry that the province's surplus, although still substantial, could fall below budget forecasts. According to Toronto-Dominion Bank chief economist Don Drummond, there is scant chance that Alberta's boom will turn into a bust. But he does predict a significant decline in the rate of economic growth, with the 6.8-per-cent expansion in Alberta this year dropping to just under 4 per cent in 2007. Although that is a significant cooling for Alberta, in any other part of Canada such growth would mark a major economic boom. Alberta will expand at close to twice the national average next year, a far quicker pace than Ontario and Quebec, Mr. Drummond noted. A less incandescent Alberta economy should be seen as a welcome respite from the breakneck expansion of this year, he said. "You don't necessarily want to repeat it. That's a bit too much of a good thing at one time," Mr. Drummond said after a presentation to a lunchtime meeting of Calgary Economic Development. Next year, inflation pressures will ease and unemployment will rise slightly to 3.7 per cent in Calgary, Calgary Economic Development predicted. Even with a lower level of migration from other provinces, the growth in the labour force will outpace job creation, it said. Adam Legge, director of research and business information at Calgary Economic Development, agreed that growth will moderate next year, giving "more breathing room" to the city's businesses. Shortages of labour and office space are expected to persist into 2007, remaining potential brakes on economic growth. More serious, Mr. Legge said, is the shortage of affordable housing, particularly for renters. There is an effective rental vacancy rate of 0 per cent in the city, with rapidly increasing rents. At the same time, entry-level prices for homes have risen beyond the reach of many first-time buyers, Mr. Legge said. With no rental projects slated to enter the market next year, the outlook is not promising, he added. theglobeandmail.com