December 2011 Canadian Economic Fundamentals

[Ally]

'Sensible environmentalist' reviews reclaimed oil sands sites






Dr. Patrick Moore, co-founder and former leader of Greenpeace and a self-described sensible environmentalist, said today that reclamation work under way in Alberta`s oil sands demonstrates the resource is being developed in an environmentally responsible way.









`I've seen the land reclamation progress at oil sands sites,` Dr. Moore said. `It`s a necessary, staggeringly complex process and evidence shows the land will be reclaimed as thriving ecosystems after oil sands are developed to help meet the world`s growing energy needs.`





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[Ally]

Western provinces show strong economic growth: BMO





OTTAWA ` The country's economic momentum has mostly been in the western part of the country this year and is likely to stay there next year, according to a report released Wednesday.




A forecast from BMO Capital Markets showed western provinces, for the most part, likely to finish 2011 with stronger economic growth than others, and then continuing to see their economies push ahead faster than eastern provinces in 2012.




Among the exceptions to that pattern this year is Newfoundland and Labrador, which BMO said would have the most growth of any province this year at 3.5 per cent. Next year, however, it's expected to drop to 1.6 per cent, largely as a result of declining oil production.




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[Ally]

EPA says fracking likely polluted Wyoming water





WASHINGTON ` Fluids from a company employing a drilling technique known as "fracking" likely polluted an aquifer in Wyoming, the U.S. Environmental Protection Agency said in a draft report that countered industry claims the technique has never led to water contamination.







The EPA said "the best explanation" for the pollution seen in the deep monitoring wells in Pavillion, Wyoming, is a release of hydraulic fracturing, or fracking, fluids into the aquifer above the production zone. The pollution includes benzene, alcohols and glycols, the report said.







EnCana Corp. , an energy company that owns the field did not immediately comment on the report, saying it had only just seen it.




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[Ally]

Economist warns global slowdown will be of Biblical scale





OTTAWA ` Such is the severity of post-recession malaise engulfing the world that CIBC's chief economist invokes Biblical comparisons to warn the end of the "famine" is years away.







"Akin to Pharaoh's dream for Egypt, the global economy could well be in the midst of seven lean years, as the debt-financed bounty of the prior expansion left a growth famine in its wake," Avery Shenfeld said in his year-end economic outlook.







The Pharoah's dream, contained in Genesis, portends seven years of prosperity followed by seven lean years. Now halfway though those leans years, which began with the recession in 2008, Canada, and the world around it, will be mired until mid-decade in a prolonged slump, Shenfeld said.




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[Ally]

Odds of another financial crisis on the rise: Bank of Canada





The Bank of Canada is warning that the strength of the global financial system has `deteriorated significantly` since the summer because of the worsening European debt crisis and weaker world-wide economic outlook.







Despite the relative health of the domestic banking system, worsening conditions internationally will likely have a `considerable impact` in this country, the central bank said in the latest edition of its biannual Financial System Review.







The comments come the same day as leaders of European countries are set to gather to hammer out a deal on revisions to the decades-old eurozone treaty aimed at avoiding a potential collapse of the currency region.






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[Ally]

The resource sector is providing some of the highest paying jobs in Canada




One of the most notable features of November`s labour market report from Statistics Canada was the stellar performance of Alberta.




The wild rose province recorded a year-over-year increase in jobs of 4.8%. That was a percentage gain significantly higher than the Canada-wide figure of +1.2%.




Regionally, the second-place finisher was Prince Edward Island, at +3.1%.





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[Ally]

European crisis puts Canadians at elevated risk




OTTAWA ` The Bank of Canada is warning of a global epidemic of contagion spreading from Europe, saying Canada`s economy and financial systems are already being affected and risks of further damage are elevated.




The central bank`s semi-annual financial stability review released Thursday states bluntly that Canadians need to start worrying about the worsening debt mess in Europe and its ability to hit home hard.




`The (bank`s) governing council judges that the risks to the stability of Canada`s financial system are high and have increased markedly over the past six months,` it stated.




`Since June, the global retrenchment of risk associated with the European crisis has indeed resulted in a significant correction in the prices of equities and other risky assets, as well as a widening of credit spreads in Canada.





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[Ally]

Dropoff in condo, apartment building pushes home construction to 31-month low



TORONTO ` A slowdown in apartment and condo construction in November resulted in the biggest one-month drop in Canadian home construction since early 2009, a report found Thursday just as the Bank of Canada warned of a ``heightened risk of a correction'' in the multiple-dwelling segment of the market.





The Canada Mortgage and Housing Corp., a Crown corporation, reported the seasonally adjusted annual rate of housing starts dropped 13 per cent to 181,100 units in November, down from 208,800 in October.







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[Ally]

Multiples slide, single units increase as housing starts slow in November: CMHC




OTTAWA - The Canada Mortgage and Housing Corporation says the seasonally adjusted annual rate of housing starts was 181,100 units in November, down from 208,800 in October.




Mathieu Laberge, deputy chief economist at CMHC`s market analysis centre, says the decrease was due to a moderation in the multiples segment.




Urban starts decreased 14.4 per cent to an annual rate of 158,900 units in November.





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[Ally]

Vancouver agent sued for breaching sales contract



B.C. Supreme Court Justice Randall Wong ruled Monday that defendant Hwang Soo Lee, a real estate agent with New Star Realty Ltd., had acted `beyond belief.` Especially for a real estate agent, he should have known better, said the judge. New Star Realty was not held liable, however.





Lee originally agreed to sell his property, a house on Morgan Creek Way in Surrey, in January 2009 for $740,0000 to Kundan and Puja Khullar. But when he got an offer for $779,000 from another couple, he tried to ask the Khullars to cancel their agreement three days after the deadline to accept the original offer.





Wong found this activity had broken an already binding contract. To try to discourage the Khullars from the agreed contract, Wong said Lee told them the closing costs had been upped by $80,000, bringing the total price to $820,000.





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[Ally]

Canadian banks envy of the world





MONTREAL - What`s wrong with this picture?




Banks in the U.S. and Europe are struggling to adjust to new rules that limit their speculative trading and boost their capital requirements.




They`re bracing for a big hit in credit markets if the European debt crisis gets any worse.






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[Ally]

Alberta Securities Commission rules Shire deals were fraud





CALGARY ` Investors who lost millions of dollars investing in real estate funds promoted by Jeanette Cleone Couch of Calgary are victims of fraud, the Alberta Securities Commission ruled on Thursday.




The finding that securities laws were breached follows a hearing last summer in which Couch represented herself and maintained she did no wrong.




Jennifer Lofgren, who has launched a civil lawsuit against Couch and the project companies to recover funds on behalf of herself and other investors, said Thursday`s decision was welcome and expected.






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[Ally]

Oil and Gas sector shakes off gloom, ramps up spending




Has the market lost its relevancy? It certainly seems that way in the Canadian oil-and-gas sector, which is cranking up spending like it no longer believes in the market`s gloomy view of the future.




While oil and gas shares are getting pummelled daily ` collateral damage of the European debt melodrama ` spending plans for 2012 reflect optimism and a scramble to get projects built.




`Economic uncertainty is fast becoming the new norm and leading companies aren`t letting it put a hold on their growth agendas anymore,` said Kevan Holroyd, associate partner at Ernst & Young`s oil and gas transaction advisory group in Calgary.





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[Ally]

Five economic themes to watch for in 2012




With the eurozone on the precipice of collapse, the United States grappling with its own debt issues and even China slowing down, what does 2012 hold for the global and Canadian economies?




CIBC World Markets Inc. released a handful of economic forecasts Thursday. Here are five key developments to look for in the year to come:









A hurdle for Canada`s unstoppable real estate market?




Benjamin Tal, CIBC`s deputy chief economist, said data on household debt and the health of the residential real estate market suggests a levelling off in prices in the next year or two with a more dramatic drop down the road.





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[Ally]

Bank of Canada warns condo boom could be ending




The Bank of Canada has a warning for condo investors ` the boom times may be over.




In its December economic review, the central bank said that "certain areas" of the housing market could see prices fall as the economy weakens.




"Certain areas of the national housing market may be more vulnerable to price declines, particularly the multiple-unit segment of the market, which is showing signs of disequilibrium," the bank warned. "The supply of completed but unoccupied condominiums is elevated, which suggests a heightened risk of a correction in this market."





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[Ally]

Risk of China hard landing rising




BEIJING ` China`s industrial output growth dropped in November to its slowest pace in more than two years and inflation tumbled as economic conditions deteriorated, raising expectations that Beijing will pursue a more pro-growth policy to support jobs.




Easing inflation pressure on consumers at the same time as data signals a serious risk of a sharp industrial slowdown is potentially perilous for policymakers trying to engineer a soft economic landing against a backdrop of a deepening crisis in China`s main export market ` debt-ridden Europe.




`The sharp contraction in the real economy, the external uncertainties lingering on, plus the easing inflationary pressure all point to a larger scope for further policy easing. So the basic tone of the macro policy will lean towards the pro-growth side,` said Nie Wen, analyst at Hwabao Trust in Shanghai.





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[Ally]

'Super cycle' ahead for recession-weary lumber sector: Analyst





One of North America`s largest exporter of logs warns that a timber supply `shock` is fast approaching that will lead to significantly higher prices for logs and lumber as early as 2014.




`There will be some real tightness in softwood going forward and who gets it will be based on ability to pay,` Reid Carter, managing partner of Brookfield Timberlands, told an online seminar Wednesday. Carter was speaking on the future of log exports to China, but branched out into the longer-term timber supply crisis he sees in North America.




Vancouver-based Brookfield Timberlands owns over one million hectares of forest land in Canada, the U.S. and Brazil, including 264,000 hectares on southern Vancouver Island and tracks global timber demand closely. In B.C. its log export business is highly controversial, with critics accusing log exporters of exporting jobs along with the timber.




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[Ally]

Income inequality isn't as simple as it's portrayed





Occupy Wall Street and growing unease over unemployment have heightened interest in the near perpetual issue of inequality. Far too many analyses of inequality, however, treat it as a simple, straightforward issue when the opposite is true. Inequality is terribly complicated and simplistic diagnoses risk worsening the problem.




Take the measurement of inequality, which normally relies on both official income statistics as well as surveys. The simple comparisons normally employed ignore the influence of unreported income. Numerous studies have concluded that certain types of income are consistently underreported in Canada. For instance, self-employment income is usually under-reported by 12 to 24 per cent. Similarly, transfers from government for employment insurance have been demonstrated to be under-reported by 20 per cent and social assistance by 40 per cent.




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[Ally]

This couple had a two-dog condo problem




Jack and Susan thought they found the condominium of their dreams at 5 Rowntree Rd. in the Kipling and Finch Aves. area of northwest Toronto. They loved the building, the view and the amenities. They could take their two dogs on long walks in the area.




So they bid on the unit, got involved in a bidding war and won the auction. The deal was conditional on their being satisfied with the building`s certificate of status.




The status certificate has all the condo rules along with other important information, such as who the management company is, the financial statements, the amount of money in the reserve fund and when the last reserve fund study was completed.





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[Ally]

Canada's richest postal codes: Where the money's at




While the European economies tumble like so many dominoes courtesy of the sovereign debt crisis and the United States juggles its own unwieldy debt and unemployment problems, it is comforting to know that Canada`s richest people are safe and snug in their tony neighbourhoods and spectacular mansions.




With the help of Environics Analytics, we have listed Canada`s richest neighbourhoods by Forward Sortation Area (the first three letters in your postal code) based on the most recent average net worth of the residents.




Not all rich neigbourhoods are created equal however. The homes in the leafy, ravine-crossed area of Rosedale (Canada`s 3rd richest postal code), where generations of Canada`s bluebloods have grown up, looks quaint and tiny when compared with the castles that dot the landscape in Toronto`s rural suburb, Kleinburg (the 10th richest). While the homes of Springbank (5th richest), outside of Calgary, nestle in the foothills of the Rockies, where the deer and the antelope play, Montreal`s Westmount (2nd richest) sits in the centre of one of Canada`s busiest cities.





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