Lloydminster

www.reincanada.com $9.99

Released: October 2014

© The Real Estate Investment Network Ltd.

6 – 27250 58 Cr

Langley, BC V4W 3W7

Tel (604) 856-2825 Fax (604) 856-0091

E-Mail: info@reincanada.com

Web Page: www.reincanada.com

Cover Photo Provided By: Makaristos

Important Disclaimer:

This Report, or any seminars or updates given in relation thereto, is sold, or otherwise provided, on the understanding that The Real

Estate Investment Network Ltd and their instructors, is not responsible for any results or results of any actions taken in reliance upon

any information contained in this report, or conveyed by way of the said seminars, nor for any errors contained therein or presented

thereat or omissions in relation thereto. It is further understood that the said authors and instructors do not purport to render legal,

accounting, tax, investment, financial planning or other professional advice. The said authors and instructors hereby disclaim all and

any liability to any person, whether a purchaser of this Report, a student of the said seminars, or otherwise, arising in respect of this

Report, or the said seminars, and of the consequences of anything done or purported to be done by any such person in reliance,

whether in whole or part, upon the whole or any part of the contents of this Report or the said seminars. If legal, accounting, tax, in-

vestment, financial planning or other professional advice or assistance is required; the services of a competent professional person

should be sought.

The following content has been researched and published in good faith without warranty or liability for any erroneous, incomplete or

misleading information.

All Rights Reserved. No part of this Report may be reproduced, or stored in a retrieval system or transmitted, in any form or by any means,

electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher.

Lloydminster has the unusual geographic distinction of straddling the border between Alberta and Saskatchewan. Unlike most cases, Lloydminster is not a pair of twin cities on opposite sides of a border that merely share the same name, but is actually a single city with one municipal office.  The Yellowhead Highway runs directly through the city, offering residents and businesses excellent access to both Western and Eastern Canada. Lloydminster provides businesses the unique opportunity to benefit from the country’s two strongest provincial economies. The city serves a trade area of over 165,000 people within an hour’s commute and is exempt from Saskatchewan’s Provincial Sales Tax (PST), which has attracted numerous service and retail companies over the last couple of years. It is easy to see why the city is consistently ranked as a top Canadian city in which to start a business. Lloydminster enjoys a strong economy, with agriculture and the energy industry providing the economic base. Agriculture has played a vital role in the development of Lloydminster since it was first settled in the early 1900’s. The industry is now the city’s second-largest industry, contributing over $1 billion dollars into Lloydminster’s economy annually1 and providing Lloydminster residents with plenty of job opportunities. The energy industry is Lloydminster’s most profitable sector. The city is in the centre of a 2,500-square-mile oil field, and oil production has occurred within the city in some form since 1926. The Lloydminster area is currently the focus of Cold Heavy Oil production, with many technologies successfully developed in the region over the last 20 years. The city’s major employers include Husky Energy and Canadian Bioenergy Corporation2. Lloydminster’s major oil and gas employers continue to invest in the region, stimulating the local economy and providing a growing number of job opportunities, attracting people from across Alberta and Saskatchewan. Lakeland College is one of Lloydminster’s largest employers and is also a strong driving force for the local economy. Lakeland College operates a Lloydminster campus and a Vermillion campus and has a combined enrollment of 7,000 students. Located in the southwest portion of Lloydminster (the Alberta side), the college ensures there is a continual need for student housing in

the city, particularly for mature students who are less inclined to want to live in student housing on campus and seek rental accommodations near the university. Post-secondary institutions provide communities with great economic stability, as in both good and bad economic times, people go to school. Implementation of new drilling methods in tight oil plays across the province, as well as new provincial royalty incentives, have increased drilling activity and production3. Major new oil sands projects are expected to drive the province’s job growth to 2023. According to CAPP’s 2014 Crude Oil Forecast, total Canadian crude oil production will increase to 6.4 million barrels per day by 2030 (from 3.5 million barrels per day in 2013)4. As a manufacturing base for major oil companies, Lloydminster will continue to see job creation in the energy services, manufacturing, and transportation sectors.

The city will see increased production in the energy sector when Archer Daniels Midland (ADM) Co. and Canadian Bioenergy Corp. complete construction on a 265 million litre canola biodiesel plant. The plant will be located next to ADM’s existing canola crushing facility, which exports oil to European biodiesel markets and Asian food markets. The increase in demand for canola will benefit the canola industry overall and specifically Lloydminster’s canola growers. The facility will require oil from 500,000 tonnes of canola annually once construction is completed in 20155. Lakeland College recently began construction of a Petroleum Centre at its Lloydminster campus. The $17 million facility will enable the college to meet industry demand by offering full-time and part-time oil and gas pro-gramming for students. The lab will also serve as a fully-functioning power plant that will heat the campus6. Once completed, the program will attract even more young people to the town. It’s not just the oil and gas industry that fuels this city’s economy. Lloydminster continues to attract employees and workers in many economic sectors, creating a booming real estate market and low average vacancy rates. In coming years we will see the population of Lloydminster continue its rapid growth as people experience the benefits this smaller city has to offer.

Economy 

 Outlook 

Source: scazon

©The Real Estate Investment Network Ltd. 1

Population Growth As of the last Federal Census (2011), the population of the City of Lloydminster was 27,804, a growth of 15.7% from the 2006 Census7. The 2011 Federal Census also revealed that nearly two-thirds of the city’s population lived in Alberta. According to the City of Lloydminster’s latest Civic Census, the population of the city rose to 31,483 in 2013, and experienced an annual growth of 4.4%8. According to the results of Lloydminster’s 2013 Municipal Census, the city had a population of 31,483 residents. The 2013 census revealed that 11,472 people now reside on the Saskatchewan side of the border while the number of people living on the Alberta side of the city has risen to 20,0119. Lloydminster’s Economic Development team believes the city’s population will continue its rapid population growth, hitting 58,000 by 202910. The city’s employment opportunities have and will continue to draw people to the area, people who need a place to live. In turn, housing values and rents will continue to climb. Median Age Job opportunities in the Lloydminster area continue to attract young workers and families to the city. According to the 2011 Federal Census, the median age of the Lloydminster Census Area was 31.7, over four years younger than Alberta’s median age and five years younger than Saskatchewan’s median age11. In fact, 47.6% of Lloydminster’s population is below the age of 3012. A young population means good things for a city: there are more services geared to young people and young families, which will attract even more young families to the area. Younger age groups have more movement in the housing sector, meaning they move in and out of homes (renting, buying, and selling) as their life stage changes. This means more potential renters for investors and more buying and selling as these people age, stimulating the housing market.  

Rental Market A couple of boom years in Lloydminster have set not only the residential development market on fire, but the city’s rental market as well. Several years of decreasing vacancy rates in Lloydminster have caused the average rent to increase dramatically while continued high levels of immigration have meant that some people simply aren’t able to find a unit available for rent. A quick look at rental websites such as Kijiji show that rental rates in Lloydminster have continued to rise over the last several months. In fact, it was almost impossible to find a rental listing in-between all the “wanted” posts. The adjacent table outlines the average rental rate by the housing type and number of bedrooms.

Different neighbourhoods command different rents and values depending on their desirability. Buying new versus old inventory has its pros and cons. It is often harder to cash flow newer properties, (although they may be more desirable to tenants), but repairs and maintenance are much lower and lower operation costs means just as much when it comes to the bottom line. Sales Activity Job creation leads to more people moving to an area, causing an eventual rise in housing values. This trend is evident in Lloydminster. The majority of newcomers prefer to locate on the Alberta side of the border, as evidenced by the increase in sales and average prices. However, a continued increase in demand to live on the west side of the provincial border may cause average prices to skyrocket, making this portion of the city unaffordable. According to the Canadian Real Estate Association, the average price of a house in Lloydminster (Alberta and Saskatchewan combined) was $321,405 as of August 201413. The following table outlines the activity in the Lloydminster real estate market over the past five years. Recent Residential Developments Lloydminster is currently experiencing a development boom. Construction values have consistently risen over the past couple of years, breaking city records. In fact, between 2006 and 2011, the City of Lloydminster has seen a 74.9% increase in construction value numbers14. In 2013, the city witnessed 267 homes begin construction, with 124 single-family homes started and 143 multi-family units started15. As of June 2014, the city had already seen 124 units break ground, an increase of 31.6% over the same time period in 201316. New residential projects include Crystal Landing by Loreck Homes, currently under construction at 8602 102 Avenue. Riverstone is another new housing development by Loreck Homes currently under construction at 92 Avenue and Willow Drive17. 

Demographics 

Housing 

Average Rents in Lloydminster

# of Bedrooms

Average Price

Lowest Price

Highest Price

Basement Suite1 $1,116 $950 $1,300 2 $1,450 $1,400 $1,500

Townhouse 2 $1,250 $1,250 $1,250 3 $2,400 $2,400 $2,400

Condo/Apartment1 $950 $850 $1,050 2 $1,543 $1,375 $1,700

Source: www.kijiji.com (October 2014).

©The Real Estate Investment Network Ltd. 2

It’s important to remember that residential building permits are a reaction to demand in the past. What is important to take note of is if supply is keeping up with demand. A high level of inventory can diminish values and rents, giving renters and buyers ‘too much’ to choose from, from an investor’s point of view, while a low level of inventory means supply is lower than demand, which will increase prices as people compete for available units. Currently, it seems as though demand is outstripping supply, and while the future remains to be seen, with the pro-business, pro-economic development attitude of the city, it appears as though there will remain housing demand in the mid-term future.

While growth is positive for a city, the rapid increase in Lloydminster has strained its existing infrastructure and capital budget. As the city’s population continues to grow, Lloydminster’s leadership must ensure that the city’s infrastructure keeps up with resident demands. Infrastructure is important to meet the needs of the residents. People will leave a city that doesn’t have the capacity to educate its children, mend its ill-stricken, or arrest its bad guys. Hospitals, schools, emergency services, as well as water, sewer, and roads are of paramount importance. Here is what Lloydminster has on its books as prioritized projects:

New Lloydminster RCMP Detachment building to accommodate current and future population and personnel growth - $17.1 million (Completed Summer 2014)18

New Dr. Cooke Extended Care Centre to accommodate future growth – (end of 2014)19

Lloydminster Service Operations Centre - $40 million (end of 2014)20

New K-9 elementary school in Northeast Lloydminster - $23.4 million (end of 2014) 21

Transportation Construction is also ongoing on Lloydminster’s 2014 Street Improvement Program. Significant projects that are part of

the 2014 capital budget include converting 50 Avenue to a one-way southbound and 49 Avenue to a one-way northbound transitioning at 42 Street and 57 Street, respectively, and 44 Street rehabilitation and overlay22. These changes benefit not only residents but make it even more attractive for businesses to locate here, once again, creating jobs and increasing the coffers of the local economy. Future projects on the city’s radar include constructing a Highway 16 bypass south of the city to allow

fast, safe, and efficient movement of goods and people through Lloydminster. It would also provide an option for large trucks to avoid the city’s downtown entirely if it is not necessary for their business. The construction of the bypass would happen in stages, with the first stage being at-grade intersections before eventually transforming into two grade-separated interchanges. Investors should keep an eye out for any updates on the Highway 16 bypass. Where the bypass connects to the highway, commercial land value will likely increase in value. Public Transit Lloydminster does not currently offer residents public transit. The City conducted the Public Transportation Viability Survey in the summer of 2013 and is currently reviewing the results to decide whether or not public transit is a viable option for Lloydminster at this time23.

Infrastructure 

Source: scazon

Lloydminster MLS Residential Statistics 2007 - 2013 

Province  Alberta  Saskatchewan 

Year # of

sales 

Gross Sales

(Millions) 

Average Home Price 

# of sales 

Gross Sales

(Millions) 

Average Home Price 

2009  309  $80.35  $281,917  120  $23.95  $215,739 

2010  313  $90.74  $289,900  162  $36  $224,082 

2011  429  $132.31  $308,410  245  $57.10  $233,073 

2012  482  $153.28  $326,137  305  $65.05  $249,219 

2013  461  $158.33  $343,440  251  $69.53  $277,026 YTD 2014      $319,979       Source: M.I.T. Appraisals Ltd. (2013). Lloydminster Retail Market Survey. 

©The Real Estate Investment Network Ltd. 3

Rental Rules Unlike other provinces in Canada, there are no controls on the amount of rent increases in Alberta. Rent may be increased if there has not been a rent increase within the previous 365 days or since the start of the tenancy, whichever is later. The City of Lloydminster’s Land Use Bylaw allows secondary suites in some single-family zones, but a secondary suite requires a development permit. For more information on the city’s secondary suite rules, click here. Business Incentives The City of Lloydminster does not currently have a structured business incentive program, choosing instead to focus on other policy efforts to keep the economy strong. That being said, Business Taxation was eliminated

by Bylaw 14-97, leaving only property tax on both commercial and industrial operations. The city’s Commercial Mill Rate Factor is low, sitting at 1.6% since 2011. Straddling the border of both Alberta and Saskatchewan, the city was able to secure Lloydminster for the Saskatchewan exemption from the Saskatchewan Provincial Sales Tax (PST)24. Economic Development If the Economic Development office is pleasant to deal with, you can often assume that they will be the same for potential employers looking to move into the region. Thankfully, investors will find no problems with Lloydminster’s economic development. The team was quick to respond, answering all of our questions and even preparing a custom report for us. Their website is full of useful data and statistics that will help you determine if Lloydminster is the right place for your business.

Poli cal Climate 

Economic Risk    6/12 

Yield Growth    10/12 

Local Poli cs Conducive to Business   8/8 

Access to Transporta on  5/8 

Investors’ Insights   9/10 

Total   38/50 

Investment Ra ng 

©The Real Estate Investment Network Ltd. 4

1. City of Lloydminster. (2013). Oil & Gas. Retrieved from http://www.lloydminsterdevelopment.ca/key-sectors/oil-gas 2. City of Lloydminster. (2013). Lloydminster advantage. Retrieved from http://www.lloydminsterdevelopment.ca/lloydminster-advantage 3. BuildForce Canada. (2014). Alberta Leads Canada Through Next Wave of Construction. Retrieved from BuildForce Canada online http://

www.buildforce.ca/en/media/press-releases 4. CAPP. (June 2014). 2014 Crude Oil Forecast, Markets and Transportation. Retrieved from CAPP online http://www.capp.ca/forecast/Pages/

default.aspx 5. The Western Producer. (November 17, 2012). ADM announces plan for canola biodiesel plant in Alberta. Retrieved from http://

www.producer.com/2011/11/adm-announces-plan-for-canola-biodiesel-plant-in-alberta/

6. Lakeland College. (2013). Petroleum Centre project hits the ground with sod-turning. Retrieved from http://www.lakelandcollege.ca/about-lakeland/news/news09111204.aspx

7. City of Lloydminster. (2009). Civic Census Results. Retrieved from http://www.lloydminster.ca/DocumentCenter/Home/View/111 8. Statistics Canada. (2011). Lloydminster (Part), Alberta (Code 4810039) (table). Retrieved from http://www12.statcan.gc.ca/census-

recensement/2011/dp-pd/prof/details/page.cfm?Lang=E&Geo1=CSD&Code1=4810039&Geo2=CD&Code2=4810&Data=Count&SearchText=lloydminster&SearchType=Begins&SearchPR=01&B1=All&Custom=&TABID=1

9. City of Lloydminster. (2013). 2013 Municipal Census: City of Lloydminster population increased. Retrieved from http://www.lloydminster.ca/CivicAlerts.aspx?AID=554

10. Ibid. 11. City of Lloydminster. (2009). Civic Census Results. Retrieved from http://www.lloydminster.ca/DocumentCenter/Home/View/111 12. Statistics Canada. (2011). Lloydminster (Part), Alberta (Code 4810039) (table). Retrieved from http://www12.statcan.gc.ca/census-

recensement/2011/dp-pd/prof/details/page.cfm?Lang=E&Geo1=CSD&Code1=4810039&Geo2=CD&Code2=4810&Data=Count&SearchText=lloydminster&SearchType=Begins&SearchPR=01&B1=All&Custom=&TABID=1

13. City of Lloydminster. (2013). Lloydminster advantage. Retrieved from http://www.lloydminsterdevelopment.ca/lloydminster-advantage 14. Canadian Real Estate Association. (July 2014). Record July for Alberta home sales. Retrieved from CREA online http://creastats.crea.ca/area/ 15. City of Lloydminster. (2013). Lloydminster advantage. Retrieved from http://www.lloydminsterdevelopment.ca/lloydminster-advantage 16. CMHC (Q1 2014). Housing Now - Prairie Region - Date Released - First Quarter 2014. Retrieved from CMHC online https://www03.cmhc-

schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=70&itm=47&fr=1410373210421 17. CMHC (Q3 2014). Housing Now - Prairie Region - Date Released - Third Quarter 2014. Retrieved from CMHC online https://www03.cmhc-

schl.gc.ca/catalog/productDetail.cfm?lang=en&cat=70&itm=47&fr=1410373210421 18. BuzzBuzzHome. (2014). All new construction homes in Grande Prairie. Retrieved from BuzzBuzzHome online http://www.buzzbuzzhome.com/

city/canada/alberta/grande-prairie 19. City of Lloydminster. (14 August, 2013). New RCMP detachment on track for completion. Retrieved from City of Lloydminster online http://

www.lloydminster.ca/CivicAlerts.aspx?AID=534 20. Alberta Health Services. (2013). Lloydminster continuing care. Retrieved from http://www.albertahealthservices.ca/2190.asp 21. Government of Alberta. (August 2014). Inventory of major projects. Retrieved from the Government of Alberta online http://

www.albertacanada.com/business/statistics/inventory-of-major-projects.aspx 22. Ibid. 23. City of Grande Prairie. (2014). Capital planning & construction. Retrieved from the City of Grande Prairie online http://www.cityofgp.com/

index.aspx?page=342

24.  City of Lloydminster. (2014). Public Transportation Viability Survey. Retrieved from City of Lloydminster online http://ab-lloydminster.civicplus.com/index.aspx?NID=867  

Sources 

©The Real Estate Investment Network Ltd. 5