April 2012 Canadian Economic Fundamentals

[Ally]

Pump rage




Rising gas prices have long been a rite of spring. We drive more as the weather improves and prices go up. But this year, there is a little extra frustration in the air.




As gas prices topped $1.40 a litre last week`reaching records not seen since 2008`a gas station in Oromocto, N.B., decided to drop its prices to 92.3 cents a litre as part of a promotion with a local radio station. It took minutes for anxious motorists to flock to the station, which went through 3,000 litres of gas before ending the sale after just 30 minutes. In Miami Beach, Fla., an impatient driver tried to beat one gas station`s traffic snarl and ended up slamming her SUV into the pump, setting it on fire. High prices have sparked an angry backlash among motorists. Police in Ontario have reported an increase in gas-and-dash thievery, while several campaigns on Facebook and across social media platforms are calling for nationwide gas boycotts.





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[Ally]

Whitehorse rents reach reach record high




The Yukon Bureau of Statistics reports the median rent in Whitehorse last month was $825 ` the highest on record for the city.




The figures also show that the rental housing vacancy rate in Whitehorse was 1.3 per cent last month, up slightly from one per cent in March 2011. Out of 1,010 rental apartments surveyed, 13 were vacant.




The statistics do not count legal suites, rooms-for-let in homes or outbuildings for rent.




Porter Creek edged out Riverdale for the first time as the priciest Whitehorse neighbourhood. The median rent in Porter Creek in March was $900, compared to $875 in Riverdale. Upper Whitehorse had the lowest median rent at $750.





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[Ally]

Foreign buying of Canadian bonds hits 2-year high



OTTAWA ` Foreign investors resumed their purchases of Canadian securities in February after a brief sell-off in January, making the biggest monthly acquisition of bonds since May 2010, Statistics Canada said on Monday.





Total foreign investment in Canadian securities jumped to $12.5 billion from a divestment of $4.3 billion in January, according to revised figures. In the last six months of 2011, non-residents had consistently added Canadian bonds and stocks to their portfolios.





Reead the full article here.

 

[Ally]

Bank of Canada say economy off to a good start, but challenges remain



OTTAWA ` Canada`s economy is steadily gaining strength but is still being constrained from robust growth by heavy household debt, a strong dollar, soft export markets and weak employment growth, the Bank of Canada said Wednesday.





Rising oil prices, which have been a significant contributor to the dollar`s strength, were also listed as a drag to the economy because higher costs for businesses and households is offsetting gains from crude exports.





Building on Tuesday`s policy rate announcement that predicted 2.4 per cent annual growth this year and next, the central bank`s quarterly monetary policy review provides a more in depth analysis.





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[Ally]

Oil prices force Carney to revisit the rules on growth






Here`s the biggest surprise in the Bank of Canada`s policy statement on Tuesday: `The international price of oil has risen further and is now considerably higher than that received by Canadian producers. If sustained, these oil price developments could dampen the improvement in economic momentum.`





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[Ally]

Start-up visas: Ottawa floats way to bring the next Steve Jobs or Google founder to Canada




In the global competition for entrepreneurial talent, Ottawa is hoping a new kind of immigration program will help attract the next Google founder ` not just more convenience store investors.




Federal immigration minister Jason Kenney was expected to announce in Toronto on Wednesday the next step in launching a `Startup Visa` program, one that would attract entrepreneurs who are rich in ideas rather than cash.




While the details were vague, Kenney and Dragon`s Den TV star and venture capitalist Kevin O`Leary were to announce the government`s intention to create `a Startup Visa program,` according to an advisory put out by the minister`s office late Tuesday.





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[Ally]

Harper's budget: An opportunity for environmentalists?




As Samuel Johnson wrote several centuries ago, `When a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully.`




The measures announced in the federal budget dealing with environmental assessments ` to reduce duplication and impose a two-year time limit for large, particularly resource-based projects ` have many environmentalists expecting the worst. But although this is indeed a time for concentrating minds, it should not be due to some predicted demise. On the contrary, despite the cries of calamity and ruin from some quarters, there is an opportunity to be seized.





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[Ally]

Bank of Canada says economic growth stronger than forecast




The momentum in the Canadian economy is stronger than predicted earlier this year, the Bank of Canada said Wednesday, though it still faces strong headwinds in the form of high household debt levels, a strong dollar and a weak export market.







In its quarterly Monetary Policy Report, released Wednesday, the bank said its outlook for economic growth both around the world and in Canada is stronger than predicted back in January.







Based on its new outlook, the bank projects the Canadian economy will grow by 2.4 per cent in 2012 and 2013, and 2.2 per cent in 2014. The bank predicts that Canada's economy will return to full capacity in the first half of 2013.





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[Ally]

Housing starts rise sharply in March




OTTAWA - Canada's home-building industry was unexpectedly hot in March ` particularly the condo sector in Toronto.




The latest data on residential construction surprised analysts Wednesday, with Canada Mortgage and Housing Corp. reporting 14,517 actual starts in March, giving a seasonally adjusted rate of 215,600 units a year.




That constitutes a five per cent jump from the previous month and the highest level of starts since the fall of 2008.




As well, CMHC upgraded its estimates for January and February, suggesting home construction was a key component of economic growth for Canada in the first quarter of this year.




Ontario, particularly Toronto, had the country's biggest increase in multiple-dwelling units, a group that includes condos and apartments. Multiple starts in the province jumped by 50 per cent on a seasonally adjusted basis.





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[Ally]

Canada's inflation eases in March





OTTAWA - A drop in Canada's year-on-year inflation rate to an 18-month low in March will not delay interest rate hikes by the Bank of Canada, which is paying closer attention to economic growth, analysts said on Friday.




Statistics Canada said the annual inflation rate fell to 1.9 percent in March from 2.6 percent in February, the lowest level since the 1.9 percent recorded in September 2010. Analysts had forecast a rate of 2.0 percent.




The Bank of Canada, which targets a 2.0 percent inflation rate, this week made it clear it might have to start raising rates from near-historical lows because of reduced slack in the economy and increased underlying inflationary pressures.






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[Ally]

Canada should be firing on all cylinders by next year, report says




The Canadian economy is on track to regain its full productive capacity sometime early next year, according to the Bank of Canada.




That means plants going at full tilt and the economy soaking up all spare resources.




Wednesday`s quarterly monetary policy report from the central bank acknowledged there`s less `slack` in the economy than it thought just a few months ago as spending by businesses and consumers picks up.





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[Ally]

Most home buyers would walk away from bidding war: Poll




A new Canadian survey reports that one-quarter of those polled would willingly get into a bidding war when buying a home.




The web-based survey of 1,000 house and condo owners was conducted last month by Leger Marketing for BMO Bank of Montreal.




It found that 75 per cent of respondents said they would walk away from a bidding war on a home they wanted to buy.





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[Ally]

Ottawa looks to unemployed Canadians to fill labour shortage




Ottawa is preparing to tackle one of the country`s most sensitive labour questions: Why won`t healthy, unemployed Canadians get their hands dirty?




The Conservative government is preparing legislative and policy changes that, for the first time, will link the federal Employment Insurance program to the Temporary Foreign Worker program.





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[Ally]

Canada to keep AAA rating despite coming downgrade wave: Citigroup




Canada is set to become one of a handful of countries in the world that will retain its illustrious AAA credit rating in the coming years, economists at Citigroup said on Thursday.







Only 13 countries currently have a AAA rating, which credit agencies award to nations considered the safest for bond investors.







But that group of 13 is set to become smaller said Citi economists Michael Saunders and Mark Schofield. That`s because a wave of downgrades and negative watches will hit Europe over the next two to three years. Ratings agencies such as Standard & Poor`s and Moody`s have already warned some of the nations still in the AAA club about potential future downgrades.





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[Ally]

What happens to a $300,000 mortgage if interest rates go up by 1.5%?



The Bank of Canada announced on Tuesday it`s going to leave the key interest rate at one per cent. No big surprise there. But the Bank was sounding more optimistic than it has been recently on the state of the Canadian economy`hinting that rates may start climbing soon. Now, governor Mark Carney has sounded hawkish before and then held off. As CIBC wrote in a note to clients:

`It`s dÃjà vu all over again ` recall that in mid-2011, Governor Carney`s team was even more convinced that the need to tighten policy was at hand ` but an economic bump in the road waylaid those plans, including a [...] drop in Canadian GDP and the subsequent eurozone crisis.`

The Bank may well hit a similar bump again this year, with Europe struggling with gaping budget holes again and the U.S. recovery wobbling. So if you want to shrug it all off and keep wallowing in cheap credit, you can quote the pros.





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[Ally]

Alberta election will have national implications





The Alberta provincial election campaign heads into its final sprint this weekend, leading up to Monday's vote, in a race that is as exciting as it is important for the rest of the country.




Danielle Smith's upstart Wildrose party is ahead in the polls and appears on the verge of defeating Alison Redford's ruling Progressive Conservatives and toppling the 41-year Tory dynasty.




At stake are the keys to the premier's office and control over one of the richest jurisdictions in North America, as two conservative parties battle it out in what's a messy political civil war.






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[Ally]

Canadian market watching to see if Genworth sells




Investors are watching to see whether Genworth Financial (GNW-N5.99-0.07-1.16%)`s Australian troubles might prompt the mortgage insurer to sell some holdings in its Canadian business.




Virginia-based Genworth Financial, which trades on the NYSE, announced Tuesday that it is delaying its planned initial public offering of up to 40 per cent of its Australian business, because it is being hit with higher losses there ` making it a bad time to go hat-in-hand to the market.





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[Ally]

BRICs slowdown casts pall on global economy




Growth among the emerging economic powers of Brazil, Russia, India and China is slowing fast, dashing hopes that they will become much-needed drivers of the world`s fragile recovery.




Brazil on Wednesday slashed its benchmark lending rate by 0.75 percentage points to 9 per cent ` marking the sixth cut in the past eight months ` in an effort to strengthen an economy that is seeing its growth decelerate at an alarming pace. The country grew 2.7 per cent last year, compared with 7.5 per cent in 2010.





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[Ally]

Court denies realtor $11,000 commission




The agreement you sign with a real estate agent should set out clearly and simply what you can expect from the agent and what the agent can expect from you. But this important document may be one of the least well understood, based on emails I get from buyers and agents




Here`s an example. Though it took over three years to get to trial, the lesson is clear; understand what buyer agency means before you start working with an agent or visiting agents at open houses.





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[Ally]

Canada's average debtor is not who you'd think




Imagine someone saddled with monstrous debt. What do they look like? Are they a member of the working poor with little education and even less financial acumen? A poor rube who doesn`t realize the hole they`ve dug for themselves? Wrong`at least in Canada. New data released by Statistics Canada suggest our worst debtors have high incomes, good educations and solid financial literacy. And they live in Alberta, which has the best-paying jobs and lowest unemployment in the country. In short, Canada`s debtors understand what they`ve done and can likely afford to pay it off. Here, we present a look at the (reasonably attractive) face of Canadian debt.





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