March 2013 Canadian Economic Fundamentals

[Ally]

Flaherty to make skills training a budget focus




Thursday`s federal budget will take a new look at how provinces handle the $2.5-billion a year Ottawa spends for job skills training programs, following on the Harper government`s rising concern that they are not delivering Canadians the skills they need to fill empty jobs.




A close look at how provinces spend a portion of that money, the $500-million-a-year Labour Market Agreement fund, found that they spent 79 per cent of their allotment on `generic employment information` rather than more specific options, such as hands-on training that matches workers to jobs, according to a report prepared for Human Resources and Skills Development Canada.



Read the full article here.

 

[Ally]

Business spending, U.S. restraint to slow economic growth





Cautious business spending and looming fiscal restraint in the U.S. will slow Canadian economic growth, says a new Royal Bank of Canada report just ahead of Thursday`s federal budget.




Greater-than-expected fiscal discipline in the U.S. as it implements its sequestration expenditure cuts in March is likely to act as a drag on Canadian exports, according to the bank`s latest Economic and Financial Market Outlook.






Read the full article here.

 

[Ally]

Manulife follows BMO as mortgage wars heat up




Lenders are driving mortgage rates lower, despite Finance Minister Jim Flaherty`s warnings of the impact that low rates could have on consumer debt levels and the housing market.




Manulife Bank has just begun promoting a new five-year fixed mortgage rate of 2.89 per cent, down from 3.09 per cent, about two weeks after Bank of Montreal drew public comment from Finance Minister Jim Flaherty by lowering its advertised five-year rate to 2.99 per cent from 3.09 per cent.



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[Ally]

Commercial property 'the belle of the ball'




Perhaps it sounds like a broken record at this point: Economically, Canada is in a good spot. Just look at the bustling commercial real estate market. A wall of capital is waiting to be placed, and its investors are fighting over core assets in Canada, experts say.




High-quality commercial real estate has become a good alternative to bond investments for a large pension fund, or other investment vehicles, says Ian MacCulloch, national research director with Colliers International, a real estate investment advisory company.



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[Ally]

There's not going to be a housing crash





The latest phrase in use to predict the future of Canada`s over-inflated housing market is: `A gradual, modest downward adjustment.`





The more sober call for a `gradual adjustment` comes from a recent TD Bank report. The report, released this week, suggests that the real rate of return for housing prices, post 2015, will be about 3.5%. This shift from the average 5.4% return we`ve seen year after year for the last decade is due, in part, to a number of macroeconomic fundamentals, such as a slow rise in average incomes, a close to stagnant national economic growth rate, Canada`s aging population and immigration figures.





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[Ally]

Approach 'teaser' mortgage rates with caution




One major bank's decision to shave the posted rate it charges for five-year mortgages from 3.09% to 2.99% in an effort to woo new borrowers in advance of the prime real-estate market has many asking if this a good time for first-time buyers to enter the housing market.




Experts say the short answer is yes, but not without caution.





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[Ally]

Foreigners pile into Canadian corporate debt




Foreigners resumed their net purchases of Canadian securities in January, making their largest acquisitions of private corporate debt instruments since October 2001, Statistics Canada reported on Monday.




Investment in Canadian securities stood at a four-month high of $13.34 billion, after net sales by foreigners of $1.92 billion in December.





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[Ally]

Baby boomers to sway Canadian housing market




The Baby Boom generation that helped drive up home sales in recent decades will be part of its gearing down as seniors retire and settle down for longer in one place.




Canada`s aging population will have `important implications` for future housing demand in the coming decades, according to a new report from Scotiabank. That includes a slowdown in overall housing sales, balanced somewhat by a steady number of condos purchased as Baby Boomers downsize and more people wind up living alone.





Read the full article here.

 

[Ally]

Canada's best places to live in 2013




What makes a city great? When we were determining our 8th annual list of Best Places to Live in Canada, we looked at all the data we could find to name the communities that offer the best overall quality of life. We started with incomes and employment. After all, most people`s experience in a city is more positive when they have a high-paying job`and the ability to get a new one if they so choose. We looked at the price of housing, giving high scores to cities where home prices are affordable when compared with local salaries. Weather was also key. Sure, some Canadians love cold weather, but most will agree that extra sunny days, days above zero and days without precipitation are nice to have. Crime rates and access to medical treatment are also important factors, so we awarded points to communities with low rates of crime, good access to hospitals and high numbers of medical professionals.





Read the full article here.

 

[Ally]

6th consecutive decline for home resales




TORONTO - The Teranet-National Bank house price index had its sixth consecutive month-to-month decline in February, providing more evidence of the cooling trend that has beset home sales since last summer.




The index fell 0.2 per cent from January and increased only 2.7 per cent on a year-to-year basis from February 2012.





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[Ally]

What high net worth investors are doing right now




Every quarter Tiger 21 surveys its 185 U.S. and Canadian members about the composition of their portfolios. It`s a small sample, but the data can give you a good idea of where high-net-worth investors are currently putting their money. (Tiger 21 is an exclusive peer-to-peer investing and wealth management network for individuals with investment capital of at least $10-million.)



Read the full article here.

 

[Ally]

What high net worth investors are doing right now




Every quarter Tiger 21 surveys its 185 U.S. and Canadian members about the composition of their portfolios. It`s a small sample, but the data can give you a good idea of where high-net-worth investors are currently putting their money. (Tiger 21 is an exclusive peer-to-peer investing and wealth management network for individuals with investment capital of at least $10-million.)



Read the full article here.

 

[Ally]

Home ownership in the cards for generation Y




CALGARY ` Members of Generation Y strongly desire a house of their own, according to a new Royal LePage Real Estate survey released on Wednesday.




The survey, which was conducted by Leger Marketing, said 80.9 per cent of the Generation Y (born between 1980 and 1994) respondents said they have plans to move to another primary residence at some point in the future with 39 per cent stating a move is planned within the next two years.



Read the full article here.

 

[Ally]

Budget for condo fees to increase after one year






Q We just purchased a new condo eight months ago and I hear our condo fees may increase significantly once the developer`s budget ends this year. Why would we need any significant increase when everything is so new and doesn`t need significant repairs or anything? I can understand a small increase but not a significant one. Your comments please!








A The condo fees you are referring to are calculated from a master budget, prepared three or more years before construction of your building began. Many of those expenses could change significantly over a year or two, especially utility rates. Hydro, water and gas are anywhere from one-third to one-half of the total condominium budget. Many common elements such as elevators may have a one-year warranty and no monthly maintenance contracts are required in the first year. However, the second year is a different story. Now that yearly warranties are over, maintenance contracts are vital.





Read the full article here.

 

[Ally]

Despite challenges, Canada's generation Y still plan to own homes






TORONTO, March 20, 2013 /CNW/ - Although there are genuine hurdles to owning a home for Canadians, a new Royal LePage Real Estate survey shows that Generation Y (born between 1980 and 1994) and Baby Boomers (born between 1947 and 1966) still strongly desire a house of their own.




The survey conducted by Leger Marketing found that four-in-five (80.9 per cent) of the Generation Y sample indicated that they have plans to move to another primary residence at some point in the future, with significant proportion (39 per cent) stating that they have a move planned at some point in the next two years. Baby Boomers were less interested in moving, with 56.6 per cent stating that they currently have no plans to move to another residence.





Read the full article here.

 

[Ally]

Flaherty blasted for pressuring Manulife to pull low mortgage rate




OTTAWA ` Insisting that he will not tolerate a `race to the bottom` on mortgage rates, Finance Minister Jim Flaherty has succeeded in pressuring Manulife Bank to cancel its plans to offer consumers a lower interest rate on its five-year-fixed mortgage. The intervention drew fire Tuesday from critics, inside and outside the House of Commons, accusing the minister of manipulating market prices.





Garry Marr: The bigger problem Mr. Flaherty might face ` and this is where he`s really going to need speed dial ` is there are plenty of people loaning money in Canada these days for a five-year term below 3%. That includes the banks.





Manulife Bank said Tuesday it was withdrawing its offer to borrowers, first made late Monday, for a five-year-fixed mortgage rate of 2.89%, which it had discounted from 3.09%.





Read the full article here.

 

[Ally]

Lukewarm growth expected in Canadian economy





Growth in the Canadian economy will be lukewarm in 2013 as consumers and governments keep their wallets shut and businesses remain cautious, according to two forecasts released separately on Tuesday.






On the bright side, inflation will stay under wraps, meaning that the Bank of Canada is unlikely to raise its key interest rate in the coming year.






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[Ally]

Fewer Canadians to buy home prices




TORONTO -- Canada's housing market is expected to continue to soften this year, as fewer people look to buy and home construction begins to slow down, a report released Monday shows.




The report says housing prices are beginning to level out and home-building rates are decreasing, in response to the market getting back into balance.





Read the full article here.

 

[Ally]

Flaherty need to address long-term challenges, notably population




As he approaches his eighth and possibly final budget, Jim Flaherty will no doubt be thinking about his legacy, the last acts that will shape how he'll be remembered. The air is thick with leaks, speculation and flat-out guesses of what he might have in mind: from reclaiming federal funds for job training from the provinces, to sweeping tax reform, to more prosaic measures like trimming the federal public service.




These are all worthy suggestions, but what will be noticed about all of them is that they amount to undoing the damage done in Flaherty's first seven budgets. It was Flaherty, after all, who first handed the training envelope over to the provinces in the 2007 budget, with results that have evidently been unsatisfactory. It was under Flaherty that the federal payroll ballooned to a record 380,000 employees - nearly one-third higher than in 2000 - as it was Flaherty who tarted up an already complex tax code with all sorts of frilly tax credits, for children's fitness and the like. The finance minister will wish to be congratulated for balancing the budget sometime in the next two years, but it was this finance minister who plunged us so far into deficit, needlessly, in the first place.





Read the full article here.

 

[Ally]

Despite Flaherty's intervention, better mortgage deals are available to hagglers





No matter what Jim Flaherty says, as with hotel room rates or Turkish carpets, what you pay for your mortgage depends a lot on your willingness to shop around and haggle.




Despite the federal Finance Minister`s intervention this week, which led Manulife Bank to withdraw its offer of a five-year 2.89-per-cent fixed rate, borrowers can still easily find better deals, either through mortgage brokers or by bargaining with their banks.




Read the full article here.