October 2010 Canadian Economic Fundamentals

[Ally]

Canadian retail sales rise unexpectedly in August

OTTAWA — Sales by Canadian retailers rose unexpectedly in August, led by gasoline, food and furniture outlets, Statistics Canada reported Friday.

Sales were up 0.5 per cent to $36.1 billion during the month, the federal agency said. It also revised its figure for July from a decline of 0.10 per cent to an increase of 0.10 per cent.

Economists had expected sales to decline by about 0.1 per cent in August.

"Gains were reported in six of 11 sub-sectors representing 70 per cent of total retail sales," the agency said.

The biggest gain was at gasoline stations, where sales were up 2.1 per cent — the second straight monthly increase.

"Canadian retailers ended their summer on a warm note," said Avery Shenfeld, chief economist for CIBCWorld Markets.

Read the full article here.

 

[Ally]

Consumer confidence drops to post-recession low

Canadians` confidence in the economy is continuing to waver, although some are still holding out hope that a sustained recovery could still be around the corner, according to surveys released Thursday.

TNS Canada`s consumer confidence index rose 1.5 points to 96.3 this month, even though those surveyed said the current bleak environment is clouding their view of the future.

"Canadians keep cautiously testing the economic waters with one foot then the other. But they don`t seem ready to commit, not quite yet," said Michael Antecol, vice-president of the research group.

"Maybe they would be more amenable if they felt the strong arm of long-term economic leadership rather than short-sighted stimulus and its tax-and-grab corollary," he added.

The group`s Present Situation Index, which gauges the current economic and employment environment, was down 0.7 points to 91.4 in October.

The Bank of Canada`s latest economic outlook would appear to back consumers` growing skepticism about the state of the economy.

Read the full article here.

 

[Ally]

Leading indicators take a surprise dip in September

OTTAWA — A key gauge of Canada`s near-term economic performance dropped unexpectedly in September, for the first time since April 2009, Statistics Canada said Thursday.

The federal agency`s composite leading index slipped 0.1 per cent during the month, led by declines in housing and manufacturing.

Analysts had expected the index, a measure of emerging short-term trends in the economy, to rise 0.2 per cent in September.

Jonathan Basile, vice-president of economics at Credit Suisse, said the decline reinforces the Bank of Canada`s pause on interest rates this week, holding its key measure steady at one per cent after three consecutive hikes.

"This is broader weakness than in prior reports when the leading index of housing was doing all the work to moderate the trend," Basile said in a morning note.

Read the full article here.

 

[Ally]

Canadian housing sales rise for second-straight month

Housing sales rose in September for a second straight month, while average prices reversed a negative trend with a 1.9 per cent increase from August, the Canadian Real Estate Association said Friday.

The Ottawa-based group said sales in September climbed three per cent from August on a seasonally adjusted basis. It was the highest number of sales since last May.

At the same time prices also showed some growth. The average sale price across the Multiple Listing Service last month was $331,089, on par with where it stood a year ago, and an increase from $324,928 in August.

"Supply and demand are rebalancing, and that`s keeping prices steady in many markets," said CREA president Georges Pahud.

With demand improving slightly and the supply of homes falling, the number of months of inventory in the market dropped for a second straight month, the group said. New listings remain 15 per cent below the peak reached in April.

CREA said two-thirds of local markets posted sales increases with Winnipeg, Calgary and Montreal standing out. However, compared with last year sales still lag across the country, down 19.8 per cent in September from a year ago.

Read the full article here.

 

[Ally]

History of Unemployment Rates in Canada

Monthly unemployment rates for provinces and major cities.

Click here to view.

 

[Ally]

Bank Rate likely on hold `for some time`

OTTAWA -- Another soft inflation report in Canada — suggesting the pace of price increases are closely mirroring what`s unfolding in the United States — provided further vindication to those who believe the Bank of Canada will keep interest rates exceptionally low for a long time.

Meanwhile, retail sales in August turned out to be better than expected. Still, some analysts said it was likely fuelled by a temporary bounce from a big sales tax-related drop in July.

In any event, the data points to a slowdown in growth, as the Bank of Canada indicated this week, prompting the central bank to keep its key policy rate, of 1%, unchanged. It also shows — as the central bank warned — there remains scads of excess capacity that needs to be absorbed before the economy returns to full potential.

Headline inflation rose 1.9% in September on a year-over-year basis, Statistics Canada reported Friday, on higher electricity and vehicle costs. That`s up from the 1.7% year-over-year climb posted in August, and represents the biggest increase in consumer prices since January.

Read the full article here.

 

[Ally]

Canada`s budget deficit increases

OTTAWA — Canada posted a higher budget deficit in August compared to the same month last year due to increased payments to the provinces and to First Nations for infrastructure projects.

The bigger August budget shortfall of $5.8-billion, up from the previous year`s $5.3-billion deficit, was recorded despite solid gains in tax revenue and a drop in benefits paid to the unemployed.

After the first five months of the 2010-11 fiscal year, the budget deficit stood at $13.5-billion, or down 43% from the same year-ago timeframe. Of the year-to-date shortfall, over $7-billion can be attributed to stimulus-related spending which is set to expire at the end of this fiscal year, on March 31, 2011.

The details were made available Friday in the latest edition of the Department of Finance`s fiscal monitor publication. The figures emerged over a week after the government released its economic and fiscal update, which sees a $45.4-billion deficit for this fiscal year and a return to surplus by 2016.

This week the Bank of Canada released its latest economic outlook, in which sees weaker-than-anticipated growth in Canada, due to a tepid U.S. recovery and a slowdown in consumer spending. The central bank`s rate-hiking campaign is now on hold after it opted this week to keep its key policy rate unchanged at 1%.

Read the full article here.

 

[Ally]

Canada warned to take steps to secure economy

OTTAWA — The Canadian economy may have raced ahead of others in terms of its recovery from the economic crisis, but it`s slowing down and the finish line is not yet in sight, according to separate reports released Tuesday.

The Canadian Chamber of Commerce and the Conference Board of Canada both noted in reports that the Canadian economy is weakening, at least in part due to poor economic performance in the United States and globally.

As well, the Bank of Canada on Tuesday announced it would hold interest rates at 1% and downgraded its estimates for economic growth.

"Canada`s recovery is further along than many other developed economies, especially when considering the rapid rebound in employment," said the Conference Board`s Pedro Antunes, director of its National and Provincial Forecast, in the board`s autumn outlook.

"To continue on its path of recovery, Canada will need to rely on the U.S. economy to improve trade and a steady rise in private capital investment — components that are very dependent on the state of the U.S. and global economy."

Read the full article here.

 

[Ally]

Canadian growth outlook scaled back sharply

TORONTO - Canada`s economy will expand at a much slower pace this year than forecasters expected three months ago and cool further in 2011 as the struggling U.S. economy drags on growth, according to a Reuters poll.

The median forecast of more than 20 economists published on Thursday predicts the Canadian economy will grow by 3.0% this year, compared to 3.5% expected in the July poll.

Economists expect 2.4% growth in 2011, down sharply from 3.0% expected in the July survey.

The poll was conducted after reports on Friday showed the economy unexpectedly lost jobs in September and housing starts fell, adding to evidence the recovery is flagging and making an interest rate rise this month even less likely.

"The surprise was (the slowdown) came in a quarter earlier than we thought. It`s not simply the slowing pace of U.S. growth but also the deceleration in some of the domestic elements of demand including housing," said Avery Shenfeld, chief economist at CIBC World Markets.

Read the full article here.

 

[Ally]

Home sale rules OK`d by real estate boards

Members of 101 local real estate boards ratified an agreement Sunday between the federal Competition Bureau and the Canadian Real Estate Association that will mean more choices for consumers.

It would allow consumers to choose what services they want from their real estate agent when selling their homes and pay only for those services.

"I am pleased that CREA members have voted in favour of this agreement," Commissioner of Competition Melanie Aitken said in a release.

CREA president Georges Pahud concurred.

"We are pleased that after careful consideration and reflection, real estate boards and associations from across Canada have endorsed the agreement," he said in a release.

Under the deal, CREA must eliminate its ability to adopt anti-competitive rules, including those that discriminate against real estate agents who are hired by consumers to offer a "mere posting" service, the bureau said.

Read the full article here.

 

[Ally]

CREA Ratifies Competition Consent Agreement

St. John`s NL – October 24, 2010 – The President of the Canadian Real Estate Association (CREA), Georges Pahud, today welcomed the decision of delegates to its Special General Meeting to approve CREA`s consent agreement with the Commissioner of Competition regarding the case before the Competition Tribunal.

"We are pleased that after careful consideration and reflection, real estate Boards and Associations from across Canada have endorsed the agreement," says Pahud.

The agreement was approved by CREA`s Board of Directors and the Commissioner of Competition on September 30th and was in escrow pending today`s vote. It confirms CREA`s commitment to a competitive real estate services market.

The Commissioner and CREA have agreed that its rules as well as those of its members should not deny or discriminate against REALTORS[sup]® wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or Boards will lose their license to operate under the MLS[sup]® trademarks. Board MLS®[/sup] Systems remain a member to member service designed to provide accurate and timely information critical to the delivery of professional real estate services to Canadians.

"This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and REALTORS®[/sup] to do what they do best – help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times," says Pahud.

Read the full article here.

 

[Ally]

MLS ruling a `win-win`: Realtor

Jim Stewart, the president-elect of the Vancouver Island Real Estate Board, calls Sunday`s resounding vote that ratified an agreement with the Competition Bureau preventing realtors from discriminating against real estate agents who only offer posting services a victory for all concerned.

The 97% approval allows home sellers to pay for only those services they want from their real estate agents.

"I would call this a win-win for all sides involved," said Stewart of Sunday`s vote.

The Competition Bureau was concerned that Canadian Real Estate Association`s Multiple Listing Service system unfairly restricted competition and restricts the freedom of choice for consumers, pushing up costs as a result. That`s because to list a property through MLS the consumer had to accept and pay for a broad range of services from a real estate agent even if they don`t want them.

"As far as we (VIREB) are concerned the ratification vote puts to bed any of the problems our misunderstanding may have caused with the competition tribunal," Stewart said from St. John`s NL.

Read the full article here.

 

[Ally]

Deal means cheaper real estate fees

The battle between organized real estate and the federal Competition Bureau over the high price of realtors` fees was years in the making. But it ended with a whimper not a bang, and a sense that times are indeed changing.

In a packed St. John`s, Nfld. hotel ballroom on Sunday, realtors overwhelmingly voted for a historic agreement that will radically change the nature of the industry.

Real estate fees for Canadians are expected to get cheaper in the future because of the landmark deal between the Ottawa based competition watchdog and the Canadian Real Estate Association.

"I think people realize that in this day and age the model of the real estate company telling a realtor how to do his job and telling him what price to charge is outdated," said Phil Soper, president and CEO of Royal LePage Real Estate Services.

About 350 delegates at an annual meeting of the Canadian Real Estate Association agreed 97 per cent in favour of the 10-year agreement on Sunday.

Read the full article here.

 

[Ally]

When it`s right to rent a home

Buying a home isn`t always the best way to go.

Renting can offer the ultimate in hassle-free living, the flexibility to just pack up and go if your job takes you elsewhere. And you`re not responsible for repairs or maintenance of the property.

That`s why many people choose it, even if they could afford to buy a home. It helps, of course, that you don`t have to worry about mortgage debt, or whether housing markets will go up or down. Your landlord assumes all the risk.

And as we`ve seen with the collapse of the housing market in the United States, buying at the peak or in an overheated market could be disastrous. Much of the carnage south of the border was because many people weren`t qualified to own homes in the first place. They put as little as possible down and were at the mercy of interest rates that had nowhere to go but up.

Read the full article here.

 

[Ally]

CFIB new Report: Communities in Bloom

Canada`s top entrepreneurial cities.

Download the full report.

 

[Ally]

Economic policy is more than just jobs

"Jobs, jobs, jobs" was Brian Mulroney`s winning slogan in the 1988 free trade election, and this theme continues to echo through our political discourse: recent examples include Ontario Premier Dalton McGuinty`s claim that introducing the HST will create 600,000 jobs and Finance Minister Jim Flaherty`s warning that reversing cuts to corporate taxes and the GST will cost 400,000 jobs. This emphasis is understandable: involuntary unemployment is one of the things people worry most about, so politicians find it useful to frame policy debates in terms of employment gains or losses. But as Nick Rowe notes, most economic policies – including all those mentioned above – are not about jobs, and looking at them through the prism of employment can give a distorted view of what is really at stake.

Read the full article here.

 

[Ally]

Economy too fragile for rate hike, bank says

The Bank of Canada sees slower growth on the horizon and has no plans to raise interest rates in the short term.

The central bank left its trend-setting policy rate at one per cent today, which means that consumers will not be paying more for car loans and credit.

Canada`s economy will likely grow by only 3 per cent this year, the bank said, mostly due to a strong start in the first three months of 2010. That`s down from the 3.5 per cent projection it made in July.

It forecast growth of 2.3 per cent for 2011, down from 2.9 per cent.

Read the full article here.

 

[Ally]

Improve productivity, get personal debt down: Carney

Bank of Canada governor Mark Carney said Wednesday that Canadians must look beyond the short-term economic softening and focus on longer-term concerns such as boosting productivity growth and capping growth in household debt.

The governor`s comments emerged after the release of the central bank`s latest economic outlook, which indicated economic growth in Canada lagged the United States in the third quarter.

The outlook said it anticipated annualized growth of just 1.6 per cent for the three-month period ended Sept. 30 -- a big revision from its previously anticipated 2.8 per cent expansion for the quarter.

Meanwhile, it said it estimated the U.S. economy expanded 2.3 per cent in the comparable time period.

The anticipated 1.6 per cent annualized gain is the result of a string of weaker-than-expected economic indicators, from retail sales to job losses. And due to big downward revisions in its growth outlook, the central bank decided on Tuesday to leave its policy rate unchanged at one per cent.

"Don`t obsess about the third quarter," Carney said.

Read the full article here.

 

[Ally]

Ratified real estate deal that broadens MLS access will reshape home-selling

The Canadian Real Estate Association has ratified a deal that some say will reshape the way Canadians sell their homes.

Delegates to the trade organization`s special general meeting in St. John`s on Sunday approved an agreement with the Competition Bureau that will allow home-sellers to pay for only those services they want from their real-estate agents.

The deal will prevent members of the association — which represents more than 96,000 realtors across Canada — from discriminating against real-estate agents who only offer posting services.

While association has said it does not believe such rules currently exist, it nonetheless acknowledges that if such practices are in place, they must be repealed or boards will lose their licence to operate under the Multiple Listing Service or MLS trademarks. MLS is owned by the association and accounts for roughly 90 per cent of Canadian home sales.

"This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and REALTORS to do what they do best — help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times," association president Georges Pahud said in a statement.

Read the full article here.

 

[Ally]

Smart Shift: The Future of Urban Transportation

Smart Shift`s panel of experts explores solutions to the growing demands of transportation in Canada`s cities

Read the interview here.