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A Clean Energy Program is on the Horizon for Albertans. Will it Work?

For Immediate Release, Calgary – A 2018 survey reported that 68 per cent of Albertans believe the provincial economy would benefit by transitioning to lower carbon energy sources. The Property Assessed Clean Energy program (PACE) has worked in several jurisdictions in the U.S. as well as Canada and with newly enacted legislation, Alberta is poised to implement its own PACE program.

PACE can help Albertans by providing financing for clean energy upgrades to their properties. The funding would take the form of a loan repaid through an annual amount added to their property taxes.

The School of Public Policy with author Mukesh Khanal released a report that examines PACE and experiences with similar programs in both the U.S. and Canada. The report also offers a solid framework for creating an Alberta model.

According to Khanal, “Alberta is in an ideal position to develop regulations that address the program’s main issues.

Still at square one with newly enacted legislation, the Alberta government must address such issues as the size of PACE loans, eligibility requirements for property owners, what types of environmental upgrades will be permitted and even the interest rate on loans funding the program.

The mayors of Calgary and Edmonton along with officials of smaller Alberta municipalities have expressed their enthusiasm for a provincial PACE program. However, Alberta will face a number of unique challenges first. The downturn in the provincial economy, combined with the decline in household income, the highest personal debt levels in Canada and the highest unemployment rate in the country, may make Albertans averse to taking on more personal financial obligations. Finding trustworthy contractors, getting estimates and researching the products available for the desired upgrades can also add up to an exhaustive effort that could deter busy homeowners.”

Clarity around the terms of the PACE lien will be a key factor for the program’s success in Alberta, as the lien has proven problematic elsewhere. The lien is supposed to be attached to the property and not the owner, but the U.S. has seen numerous instances in which buyers insisted the PACE lien be paid off before the sale closed or demanded that the seller lower the asking price to account for the loan’s outstanding balance.

The Alberta government will need to find a way forward that combines best practices from other jurisdictions with a regulatory framework that addresses PACE’s shortcomings. The research offered in the report is a starting point from which the Alberta government can fashion a strong and equitable PACE program that would be a model for other jurisdictions.

The paper can be downloaded on from The School of Public Policy’s website.

Media contact:
Morten Paulsen
morten.paulsen2@ucalgary.ca
403.220.2540

U of L Study a First in Looking at the Use of Precision Agriculture in Irrigation Farming in Alberta

Given the importance of irrigation to the southern Alberta economy, two University of Lethbridge economists wanted to know if agricultural producers who irrigate are using precision agriculture technologies.

Drs. Lorraine and Chris Nicol have conducted the first study in Alberta examining the adoption of precision agriculture in irrigation farming. Their survey shows users are reducing farm inputs and seeing positive economic benefits as a result.

Last fall, they conducted a survey of irrigators in the Taber Irrigation District (TID) to find out the extent to which precision agriculture technologies are being adopted, the types of tools being used and the satisfaction with the technologies. They also looked at those who didn’t use precision agriculture technologies and their reasons for not adopting. Twenty-seven percent of irrigators in the TID participated in the survey.

“Based on the data collected, 81 percent of irrigators have adopted some form of precision agriculture, an average of five technologies per irrigator. Overall, those who have adopted are very satisfied with the technologies and almost all plan on using even more technologies in the future” says Lorraine. “Among non-adopters, most said their operations were too small to justify the high investment costs.”

Precision agriculture involves parsing fields into small parcels based on variability, allowing more precise application of irrigation water, fertilizer, chemicals and seed, compared to conventional methods. The study identified 20 technologies including auto-steering equipment, variable rate fertilizer and irrigation application, soil-moisture monitoring, terrain mapping and analysis, unmanned aerial vehicle mapping, satellite imagery and various data management tools, for example.

“Precision agriculture has fundamentally changed the way farming is done and it has the potential to reduce costs and increase profits for farmers. Precision agriculture is also critical for sustainable agriculture. Using less fertilizer and less irrigation water, for example, helps lessen run-off and conserve water so it’s also better for the environment,” says Chris.

The TID, one of 13 irrigation districts in the region, has one of the highest concentrations of specialty crops, including potatoes, sugar beets, canola seed, beans, peas, corn, sunflowers and onions. These inputs are vital to processing industries as well as the confined feedlot industry in the region. The TID consists of 115 to 120 irrigation producers who irrigate more than 80,000 acres. Its irrigation infrastructure also supplies water to several communities and many individuals.

The survey showed under precision agriculture, crop yields have increased an average 20 per cent and yearly crop quality has increased by an average of 16 per cent. Yearly reductions in irrigation water, fertilizer, herbicides and pesticides have ranged between 14 and 24 per cent.

Non-adopters consist entirely of farms less than 2,000 acres. Those irrigators generally cited the smaller size of their operations, high investment costs and incompatibility of machines as the main reasons for not adopting.

“These results suggest irrigators are embracing precision agriculture and experiencing the benefits,” says Lorraine. “This also has positive implications for economic and community development, as well as environmental stewardship.”

…..

The study found:

  • 81% of irrigators have adopted some form of precision agriculture;
  • yearly crop yields have increased an average 20% and yearly crop quality has increased an average 16%;
  • yearly reductions in irrigation water, fertilizer, herbicides and pesticides have ranged from 14% to 24%;
  • precision agriculture technologies are being applied largely to specialty crops;
  • for 85% of adopters, precision agriculture has affected their overall farm management approach;
  • 89% of adopters are highly satisfied with the technology;
  •  92% of adopters plan to adopt additional precision agriculture technologies in the future;
  • non-adopters indicate small operations, high investment costs, and incompatibility of machines are the main reasons for their non-adoption of precision agriculture technologies.

 

 

Read the full report here. The study was funded by a grant from the Alberta Real Estate Foundation.

Why Alberta Should Say No to a Land Transfer Tax

For Immediate Release, Calgary – Alberta’s deficit is high and might be growing. There are two solutions to fix that – either cut spending or raise new revenue.  The School of Public Policy has launched the Alberta’s Fiscal Future program to study various options for getting us back on track.

As part of that program, The School is looking at various tax revenue options. One is a tax used by BC and Ontario.  It’s the Land Transfer Tax.  That’s a tax on the sale of property.  That tax is generating a lot of revenue in BC and Ontario.  So, should we consider it in Alberta?

The answer is a definitive “no” according to noted tax expert Prof. Bev Dahlby and his co-author Braeden Larson.

This paper examines previous research on land transfer taxes in Canada, Australia and Europe, and concludes that such a tax would only add more volatility to Alberta’s resource revenue-based economy. A one-per-cent land transfer tax in Alberta would have yielded between $460 million and $500 million for provincial coffers in 2017. However appealing that amount of revenue sounds, the tax benefits do not outweigh the drawbacks. Land transfer values in Alberta can undergo substantial change from one year to the next, making a land transfer tax a highly precarious revenue source. Nor would a land transfer tax benefit Albertans who are in the market for a home. Studies show that such taxes discourage residential real estate transactions. If land transfer taxes are burdensome for homebuyers, they are equally so for sellers who may be compelled to lower their asking prices to make up for the extra costs. This leads to a drop in fair market value of homes with a negative impact on the volume and value of real estate transactions.

According to Dahlby, “While a land transfer tax could potentially raise a significant amount of revenue for the Alberta government it still would be insufficient to cover the province’s current fiscal deficit. The situation would be made worse by a negative spin-off effect for the economy due to the reduction of transactions, and a slippage in tax revenues because of declines in the value and volume of land transfers. This paper estimates those declines to be between five and 15 per cent.”

If tax reform is needed to re-align the revenue/expenditure formula for Alberta, a sales tax is preferable to a land transfer tax.

The paper can be downloaded on from The School of Public Policy’s website.

Media contact:
Morten Paulsen
morten.paulsen2@ucalgary.ca
403.220.2540

University of Calgary researcher launches Evict Radon campaign

Study encourages all Albertans to test homes for cancer-causing radon gas

By Kelly Johnston, Cumming School of Medicine

Cumming School of Medicine researchers are launching a provincewide campaign to encourage all Albertans to have their homes tested for radon gas, for their own safety and to help map household radon throughout the province. Radon is a known carcinogen. According to the Canadian Cancer Society, radon is the second most frequent cause of lung cancer, after cigarette smoking.

“We are launching the Evict Radon awareness campaign to educate people about the effects of radon gas and encourage as many Albertans as possible to test their homes while also gathering data for medical research,” says Aaron Goodarzi, PhD, assistant professor in the departments of Biochemistry and Molecular Biology and Oncology and a member of the Arnie Charbonneau Cancer Institute. “We’ve proven radon is prevalent throughout southern Alberta and in Calgary area homes. Now we want to expand our research to include all areas of the province.”

Goodarzi and team tested radon levels in more than 2,300 Calgary and area homes. One in eight homes exceeded Health Canada’s acceptable radon levels. The study was published March 29, 2017, in CMAJ Open.

“Radon is a significant issue in Alberta, and while there is an effective solution, the subject is embedded with scientific technical language.” says Brent Alexander, chair of the Alberta Real Estate Foundation that is providing funding for the campaign. “The Evict Radon awareness campaign will clearly communicate the value of testing for radon and mitigation to all Albertans which will result in healthier homes across our province.”

Goodarzi says now is the best time to test for radon. “The winter months, now to April, are the ideal time to test your home for radon. That’s when we spend more time inside, and due to the cold our homes are sealed up tight – the perfect conditions for radon exposure,” he says.

Learn more about the Evict Radon campaign and sign up for your radon kit at www.evictradon.ca. The radon kits used in the study cost $60.

New U of L study finds water issues a major concern of housing developers in the Calgary region

The final report of a study investigating challenges and solutions in acquiring water for housing development in the Calgary provides some insights into this critical issue.

Principal investigator, Dr. Lorraine Nicol of the University of Lethbridge issued the final report after analysing the findings from interviews with 15 major developers working in Rocky View County, M.D. Foothills and/or Okotoks. Challenges in acquiring water have housing developers in the Calgary region worried about the effects on their industry and real estate, on home buyers and the economy in general.

The study found:

  • 100% of developers interviewed believe there are challenges in acquiring licensed water allocations for housing development in the three municipalities under study;
  • 73% stated acquiring a licensed water allocation is the ‘primary issue’ for developers;
  • 60% of interviewees believe water management in the region is political, to the detriment of the housing industry;
  • another 53% believe the source of the problem also relates to government processes;
  • 87% of developers believe water challenges are having a negative effect on the industry, either now or in the future;
  • two-thirds of developers say the cost of acquiring water licenses increases the price of homes;
  • on average, approximately 200 homes sold yearly in the three municipalities under study comprised the resale of new homes. A 10% decline in houses constructed, by reducing the stock of homes, could translate in a decline of 20 houses hold; a 20% decline in new home construction could translate in a decline of 40 homes sold;

All developers believe a solution lies in working together as a region but there was no clear consensus on what type of regional model will work.

For more information about this study, visit the University of Lethbridge’s website here or Alberta WaterPortal’s Blog here.

Real Estate Council of Alberta Partners with University of Alberta School of Business to Raise the Bar in Commercial Real Estate Education

Calgary, Alberta – Commercial real estate education in Alberta will take an enormous step forward with a new partnership between the Real Estate Council of Alberta (RECA) and the University of Alberta.

RECA and the Alberta School of Business at the University of Alberta have entered into an agreement that will see the University’s business school develop a completely new Practice of Commercial Real Estate course. RECA will offer the course to individuals entering Alberta’s commercial real estate sector.

“RECA is extremely excited about this new partnership,” says Council Chair, Krista Bolton. “This is the first time RECA has partnered with a university for course development. Commercial practitioners have told us the current commercial real estate education in Alberta doesn’t go far enough; the new commercial course will be a game-changer.”

The Alberta School of Business already offers real estate courses as part of its Bachelor of Commerce and MBA programs. Its experience in these areas makes it the perfect partner to develop RECA’s new leading-edge, university-level commercial real estate course.

Edmonton commercial real estate professional Chad Griffiths, who was Council Chair when RECA and the University of Alberta signed a Memorandum of Agreement, strongly supports the partnership and the new course. “From what I have seen of the planned course content, this truly is going to be the pre-eminent commercial real estate course in Canada.”

The new Practice of Commercial Real Estate course offered by RECA will launch in phases, beginning in Fall 2016. As each phases launches, RECA will incorporate it into the current Practice of Commercial Real Estate course.

The Alberta Real Estate Foundation, a funder and supporter of the Real Estate Program, has provided the Alberta School of Business with a $150,000 grant to partially fund the development of the new course.

To read the Real Estate Council of Alberta’s (RECA) announcement please visit their website here.