May 2015 Canadian Economic Fundamentals

[Ally]

Remember When: What have we learned from the 1980s and that 21% interest rate?

The house Steve Douglas and his wife bought in Brampton, Ont., back in the 1980s, seems like a steal by today’s standards: It cost just $189,000. But the interest rate on his mortgage was anything but a deal – it was a whopping 18 per cent.

“We were paying about $2200 a month, and back in those days it was pretty much all we had and our entire incomes were basically sucked up by the mortgage and bills and the whole bit,” he said. “It was a horror show.”

Read the full article here.

 

[Ally]

Why higher taxes don’t raise extra revenue in Canadian political soundbite proposals

The Liberals have sketched two planks of their fiscal platform for the upcoming election. Good. The more specificity about what the different parties would do, the easier for voters to make an informed choice and then, just as important, hold a new government accountable — assuming, that is, voters wish to be informed, and a disturbingly large number appear not to.

Given their self-righteousness about “evidenced-based policy,” it’s surprising the Liberal website provides so little documentation, either for their leader’s claim that higher marginal tax rates for people making more than $200,000 a year will produce $3 billion of new revenue or for their streamlined system of fiscal support for children that, strangely, would return us to the 1990s when small-l liberal lobbyists decried Canada for being the only OECD country without universal support for children: Under the new Liberal plan, if you make more than $150,000 a year and you have a kid, good luck, you’re on your own. A grateful nation thanks you.

Read the full article here.

 

[Ally]

DTZ to buy Cushman & Wakefield in $2-billion deal, further consolidation in the works

Cushman & Wakefield and DTZ say they will combine in a deal creating one of the world’s largest real estate companies.

Exor SpA, an Italian investment firm that owns most of Cushman & Wakefield, said Monday that DTZ will buy Cushman for $2.04-billion.

Read the full article here.

 

[Ally]

Sadly: Why Statistics Canada’s jobs data accuracy should be treated with caution

Recall about a year ago the mystery of how widespread business claims of labour shortages, and their calls to preserve the Temporary Foreign Workers program, could co-exist with critics who pointed to a job vacancy rate of 1.5% in a Statistics Canada survey. Some of the mystery was cleared up last week, when Statistics Canada quietly put out a technical paper called 2011 Workplace Survey Summary and Lessons Learned. It holds lessons not just for understanding vacancy rates but also for anyone relying on data alone to provide the answer to all policy questions and conundrums.

Read the full article here.

 

[Ally]

Thank you @tedescott for real perspective. The debt ‘crisis’ in Canada, Is it real or just bad math?

According to newly released data from Statistics Canada, 71 per cent of all Canadian families carried some form of debt in 2012 — yes, that includes mortgages, but it also includes a growing pile borrowed to buy cars, new kitchens and many of the fashionable material trappings of the modern middle-class lifestyle.

What that means is that the vast majority this debt isn’t due to out-of-control credit cards or the working poor digging a hole just to pay for groceries. The Canadian debt nation is mostly made up of middle and upper earners.

Read the full article here.

 

[Ally]

Real estate projections for Ontario in relation to Alberta and the U.S.

Last week, I sat down with Don Campbel, Founder and Senior Analyst at the Real Estate Investment Network, to ask him some pressing questions relating to real estate projections in Ontario with relation to Alberta and the US. Don provided very interesting insights — you can read the exchange below.

Read the full article here.

 

[Ally]

CIBC Poll: Majority of Canadians would seize the opportunity to lock in their mortgages for longer

Some Canadians think now is the time to lock into rarely used 7 or 10 year terms given today's record low rates

A new poll from CIBC (TSX: CM) (NYSE: CM) conducted by Nielsen finds that the majority of Canadians (74 per cent) would opt for a medium-term or longer-term mortgage if they were to acquire, refinance or renew a mortgage today, including 27 per cent who think now is the time to look beyond the traditional 5-year fixed mortgage for a term of up to 10 years.

Read the full article here.

 

[Ally]

If you overtax the rich, they may not come to dinner

I was having dinner at a local restaurant with one of my good friends just prior to the tax deadline, and the conversation turned to the federal government's round of tax cuts offered two years ago. My friend thought he'd see a larger cut in his taxes for 2001.

"I'm now opposed to those tax cuts," the retired college instructor said, "because they benefit the rich. The rich get much more money back than ordinary taxpayers like you and me and that's not fair."

Read the full article here.

 

[Ally]

Why Environmentalists oppose oil and not coal

In the last blog, we referenced climate scientist and Green Party MLA Dr. Andrew Weaver’s analysis that burning coal is 41 times worse for the environment than Alberta’s oil sands product.

Then we asked the logical question: why, then, are environmentalists focused on opposing oil, when combating coal would have a much greater payoff?

Read the full article here.

 

[Ally]

Canada should be the world leader in energy markets - so why isn't it?

Canada is a world leader in democratic freedom, transparency, environmental protection and worker rights. So why is it not also a world leader—the supplier of choice—to energy markets all over the world, selling more oil and gas to global markets, not less?

Read the full article here.

 

[Ally]

Six reasons you should pay more attention to Canada

TORONTO: North of the world’s largest economy sits Canada, a wealthy, peaceful nation that is often overlooked in discussions of the global economy and financial markets.

It’s a country that policymakers and investors ignore at their peril.

Contrary to popular belief, Canada is far more than its relationship with the U.S.


Read the full article here.

 

[Ally]

Impact of unprecedented Alberta minimum wage increase disputed

EDMONTON - Alberta is among a small number of jurisdictions with plans to significantly boost pay for low-income workers, becoming the first Canadian province and fifth place in North America to set its sights on a $15-an-hour minimum wage.

In just three years, the province’s base wage will go from the lowest to highest in Canada, rising to $15 from $10.20, a nearly 50-per-cent increase that University of Toronto economist Morley Gunderson believes is unprecedented in Canada.

Read the full article here.

 

[Ally]

CMHC expects provincial disparities in housing market activity for 2015 and 2016

OTTAWA, ONTARIO--(Marketwired - May 25, 2015) - According to CMHC's second quarter 2015 Housing Market Outlook, Canada Edition1, housing markets will remain stable with housing starts moderating slightly in 2015 and 2016. There are, however, a number of risks and vulnerabilities that can affect the market outlook for Canada and each province. To account for these risks and vulnerabilities, CMHC produces forecast ranges for resale and new home markets.

"Lower oil prices are contributing to disparities between provincial housing markets. A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates," said Bob Dugan, Chief Economist for CMHC.

Read the full article here.

 

[Ally]

Stop blaming the rich for income inequality

The world’s third-richest man weighed in on the national debate over rising levels of income disparity in the United States yesterday, saying that while the gaps between the country’s haves and have nots are definitely increasing, it is not the fault of those at the top. Nor will it be solved by traditional methods, like improving education or hiking the minimum wage. His solution: a pragmatic, direct way of helping incomes rise for the working poor across America by increasing access to the Earned Income Tax Credit.

Read the full article here.

 

[Ally]

CMHC expects provincial disparities in housing market activity for 2015 and 2016

OTTAWA, May 25, 2015 — According to CMHC’s second quarter 2015 Housing Market Outlook, Canada Edition1, housing markets will remain stable with housing starts moderating slightly in 2015 and 2016. There are, however, a number of risks and vulnerabilities that can affect the market outlook for Canada and each province. To account for these risks and vulnerabilities, CMHC produces forecast ranges for resale and new home markets.

“Lower oil prices are contributing to disparities between provincial housing markets. A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates,” said Bob Dugan, Chief Economist for CMHC.

Read the full article here.

 

[Ally]

CMHC says housing starts to slow in 2015 and 2016

OTTAWA - Canada's federal housing agency on Monday gave a cooler outlook for housing starts this year and next, saying that lower oil prices are contributing to differences across the country's regional markets.

In addition, with the inventory of completed but unabsorbed homes above the historical average, the pace of new construction is expected to moderate over the next couple of years, the Canada Mortgage and Housing Corporation (CMHC) said in a report.

Read the full article here.

 

[Ally]

Is stock ownership a better idea for young adults than home ownership?

A veteran Bay Street entrepreneur wants to demolish the idea that it’s smart to buy a house as soon as you can after graduating and starting a career.

Joe Canavan urges young adults to invest in the stock market and avoid home ownership until their mid- to late-30s. Young keeners who buy homes are limiting themselves, he says. They’re tying themselves down at a time when flexibility is a real asset, and they’re building less wealth.

Read the full article here.

 

[Ally]

Two thirds of Canadians have the cash for TFSAs says CIBC

Ten per cent of Canadians surveyed in a new poll say they typically contribute the maximum amount to their Tax-Free Savings Account and will now invest $10,000.

The poll done for CIBC found an additional 17 per cent said they will try to increase their contributions above $5,500.

Read the full article here.

 

[Ally]

Study Reveals Habitat for Humanity had REAL impact on children: New Study

(Toronto, ON) May 26, 2015 – Every $1 invested into Habitat for Humanity Canada’s domestic homeownership program initiates $4 worth of benefit to society, which equated to $39 million in 2014, according to a new social return on investment study released today by The Boston Consulting Group (BCG). “We are constantly hearing from the families we serve about the significant impact that Habitat homeownership has had on their lives and we wanted to quantify this in terms of its benefit to broader society,” said Mark Rodgers, President and CEO, Habitat for Humanity Canada. “This study proves that Habitat for Humanity is a leader in creating transformational change for families and that our program is a wise investment of donor dollars.”

Read the full article here.

 

[Ally]

Oil deficit coming? World may be consuming more than it pumps by year end

Make the most of abundant oil because by the end of the year the world may be consuming more than it pumps.

The global crude market will shift into a deepening deficit in the fourth quarter amid a draw-down in U.S. stockpiles, according to Standard Chartered Plc. While Qatar’s former oil minister says there’s currently a surplus of 2 million barrels a day, Sanford C. Bernstein Ltd. sees demand outpacing supply by 1.5 million a day by the fourth quarter.

Read the full article here.