Do we really need a Bullet Train?

There has been a lot of talk in the last few years about how Alberta may need a bullet train. The subject has recently come up again when the PC government said a committee will look into this yet again. There will be hearings in Edmonton , Calgary, and Red deer. They will report their findings within a few months.

My take on this is that we absolutely, categorically do not need a bullet train. In fact the bullet trainwhole idea is a little crazy. First off who would use it? The most obvious answer would be business people, but really how many of them need to go from Calgary to Edmonton or vise versa every week? Even if that number is in the thousands, it wouldn’t be enough. What if you were going to visit friends or relatives in Edmonton – how often would you use the train? Also the assumption is that the train would go from downtown to downtown. Well what if you needed to go to the suburbs? Then you would either have to take a taxi which is expensive or you would have to use public transit which is time consuming. Even if you could make the trip in 90 minutes would it be worth the cost and hassles?

The alternative is the status quo which is you either fly, drive, or take the bus. I think we have enough options. A better idea would be to use any available money to slowly triple lane the QE2 highway. Most people are still going to drive because it just gives them way more flexiblilty once they get to their destination. That way can just drive where ever they want and don’t have to rely on someone else’s schedule be it the train, a taxi, a plane, or transit.

The cost of a train ride would presumably cheaper than flying but not by much. What about the cost of building the thing in the first place? This is where it gets really scary. There have been estimates that vary wildly from 3 billion dollars to 20 billion dollars. With the PC government we have today freely spending on everything and anything, we are already about 7 billion dollars in debt. They just wiped out Ralph’s legacy in no time. They would have to borrow the money and increase our debt dramatically in the process. The whole thing would become a white elephant.

I know Alberta’s population is growing rapidly and there is a strain on our existing infrastructure. You just have to look at the way the Edmonton and Calgary real estate markets are performing. Prices are back to the levels we saw in 2007 and rental vacancies are very low. But I have to argue that a large amount of money spent on a bullet train would be a very poor use of our limited funds.

Places like southern California with a population about 8 times as high as Alberta have struggled to make a bullet train economical. Lets be smart about this

Calgary Real Estate Market update

Calgary skylineThe Calgary real estate market continues to do well with sales up around 20% when compared to last year. Both condos and houses are selling quickly and prices are rising. It is basically a seller’s market for people that have a good property in a good location. It is not however, like the boom of 2006 to 2007 where sellers could almost ask any price they wanted and get it. Now that prices have rebounded to the same level they were at in 2007, buyers still remember what can happen when prices get too high. After the peak of the boom in 2007 and the subsequent global recession in 2008 when prices dropped dramatically, people know that they shouldn’t get too enthusiastic about the future, so they are sticking to a reasonable price when they make an offer. There are still multiple offers, but only on great properties in fantastic and popular neighbourhoods.

Prices have increased in Calgary by twice as much as the rest of the country. The average increase for a home in Canada was around 4%, but Calgary had average increases of 8% in 2013. The average price for a single family detached house in December was $527,043 and $280,786 for an apartment style condo according to the Calgary Real Estate Board. Townhouse condos had an average price of $$327,391.

So what is keeping the Calgary real estate market going? Well I think that it is a combination of a good economy that continues to chug along because of strong oilsands activity which in turn is creating a lot of jobs. Alberta and Saskatchewan are still the places to be for employment and will be for the foreseeable future. In-migration to Calgary is very strong and is expected to reach 30,000 new people on a net basis this year – that is taking into account the people that left the city. The rental market has it’s lowest vacancy rate in years approaching 1% for apartments, and if you want to rent a townhouse or single family home you need to be prepared to pay.

This all bodes well for 2014 where most economists, realtors, and business people predict more of the same. Not everything is rosy, but with the southeast portion of the ring road recently opening, and a new deal on the Southwest portion with the Tsuu T’ina Nation we do have a lot of good things going when it comes to transportation. However, transit will continue to be a problem in the city’s southeast and North  where new C-train lines would seem to be decades away because of the cost.

So, the future looks pretty good for real estate and Calgary in General. If you need a good site that has all the houses for sale in Calgary from every realtor, try Carmen Paradis at RE/MAX Real Estate Central 206, 2411 4 Street Northwest (403) 703-8516 www.carmenslistings.ca

If you are interested in Edmonton, try RE/MAX at 102 12650 – 151 Ave (780) 457-3777

Stucco or Vinyl siding?

With Calgary’s real estate market still humming along, I get quite a few people asking me for advice on whether or not now is a good time to buy. I would say if you can find a great property that you love in a good neighourhood, you should go ahead and make the move. Interest rates are still really low, although they have moved up a bit in the last few weeks, and prices are increasing.

I also get asked what I think of Stucco and Vinyl siding. Obviously Stucco is much nicer to look at, and if you want to buy in a higher end neighbourhood, that is what you will probably get. Although some really nice communities have a mixture of both stucco and vinyl, but I personally don’t like the look of that. I think it cheapens an estate area that has a bunch of stunning mansions beside houses with vinyl. I don’t know why the developers didn’t just implement architectural controls to limit the siding to just stucco.

On the other side of the coin, most of the more affordable Calgary neighbourhoods use only vinyl because it is much cheaper. Drive through any community that is marketed to young families on a budget, and it will almost always contain vinyl houses, townhouses, and condos. In this case, it is totally understandable that they would do this because they need to keep the cost of the homes as low as possible while still providing a good product.

So which is better? Here are some features for each:

Stucco

  • Much more expensive than vinyl
  • Generally looks more attractive and sophisticated
  • Can be painted
  • Requires occasional maintenance and repairs
  • Provides good insulation from both hot and cold weather
  • Requires a professional to install

 

Vinyl

  • Much cheaper than Stucco
  • Can be installed by yourself but a professional is recommended
  • Comes in pretty much any color you want
  • Does not fade over time
  • Vinyl is very strong and durable so it can withstand very harsh conditions
  • It is maintenance free

You can get Vinyl that is formed in different styles with the look of a log cabin or shakes that actually look like shakes on the side of your house, but almost all the houses that have vinyl in Calgary have that same appearance that looks like smaller versions of the wood siding you used to see on all the old bungalows. It is called solid core vinyl siding.

Stucco siding can also have many appearances or styles ranging from the smooth look to a more textured finish or anything in between.

Since your home is probably the most expensive item you will ever buy and it will be a source of pride and joy for many years, I would choose stucco. However that is only if you can do it without putting yourself in an unreasonable amount of debt. Since stucco homes tend to be found in more expensive neighbourhoods, you may have to pay a lot more than you would for the same type of house that has vinyl.

If you already own a house and want to spruce it up by having stucco installed I would recommend Brandon and his crew at 5.0 Stucco Calgary

Why you need an accountant for your small business

If you have a small to medium sized business, like many Calgarians, you need to stay on top of all the paperwork. This includes the day to day accounting for your business and also could include payroll.

I have known more than one person who thought it would be a good idea to start a small business or buy an existing business. I think it is a great idea too, but there is a great deal of work that needs to be done. First, you need to get a business number from revenue Canada. This number is the nine digit base number or identifier. Then you need an extension for every type of account you need. For GST it starts with RT, and for Payroll it starts with RP.

You need to have a corporation set up which can be just a numbered company or you can Calgary accountingapply for a trade name – this would be something like “Bob’s Drywall”. If no one else is using that name or a name similar to that, you can register it as yours through a registry office anywhere in Calgary. Once you have the corporation, you must setup a business bank account which will be totally separate from your personal money. One thing people have trouble with is understanding that the corporation’s money is not their money even though they own the company. If it is a very small company there may be only one shareholder and that person may also be the director of the company as well. However, you can have as many shareholders as you want and each person must purchase their shares and pay the corporation for them with their personal money. A minute book must be kept to record any transactions that happen through the corporation.

You should get the company credit cards and only use those for business – no personal use. That way it will be easy to add up all of your business expenses at tax time. You also need to keep all of your original receipts in case the CRA asks to see them. As for payroll, if you will be taking a salary for yourself or another employee, you need to remit deductions to revenue Canada every month or at least every quarter. These deductions include Canada pension plan, EI premiums, and income tax. For the CPP the corporation must match 100% of what the employee pays, and for EI the corporation must pay 140% of what the employee pays. So, probably every month when you cut a cheque for yourself or your employee, you need to calculate how much the employee gets and how much you have to send to the government. Do not forget to do this. The government charges interest on any late fees and no excuses will be accepted.

Just remember to be organized and keep records of everything. You can do this, but if you would rather focus on building and nurturing your business instead of doing paperwork, I recommend Daniela and her Calgary team of accountants at Padgett Business Services 2808 41 ST SW

If you have an office in Edmonton, try Rajiv at Padgett Business Services 3-10020 29A Avenue Northwest

 

Calgary’s Economy right now

Calgary skylineAs we near the end of 2013 Calgary’s economy seems to be doing quite well. Oil is hovering over $100 a barrel and Fort McMurray is humming along with many projects still under construction and others just getting into production.

Housing sales are good for both resale and new construction as many new downtown condos are either planned or are already under construction. In addition the downtown office market continues to defy expectations with several more buildings on the drawing board. After the last round of office tower development experts were predicting that there would be a glut of office space with the completion of the Bow and other buildings. However, most of that new space has been absorbed and a new round of construction is set to get underway with the most prominent building being at the old Calgary Herald site where the city’s new tallest building will soon rise higher than the Bow.

The unemployment rate in Calgary sits at around 5.0% which is the second lowest in the country after Saskatoon and Regina. Many companies are a little cautious about hiring with all the uncertainty being caused by the situation in Syria, and the Obama administration’s dithering on a decision about the Keystone pipeline. However many people continue to migrate to Alberta from within Canada, and more international immigrants are choosing to come to Calgary instead of Toronto or Vancouver because they know the job situation is quite good here.

Calgary’s entrepreneurial spirit also helps attract newcomers who would like to be around like minded people and a young population with money to spend on whatever product or service they hope to offer. Growth should continue at around the same pace for the foreseeable future unless something happens to throw the world economy into a tailspin similar to what happened in 2007.

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