September 2012 Canadian Economic Fundamentals

[Ally]

Household debt: Economic threat or 'godsend'?









Welcome to the Great Debate, in which Globe Investor invites two experts to debate one of the big questions facing the business and investing world.






This month, we look at Canadian household debt levels. Today, our debaters present their rebuttals to yesterday's opening arguments defending and opposing the motion: Canada's household debt is a major threat to our economy.






Read the full article here.

 

[Ally]

Should we stop encouraging home ownership?




Home ownership is often connected to the notion of living the "American dream." But it is as much a part of Canadian identity as it is in the U.S.




Indeed, statistics show that the percentage of home ownership in Canada is edging close to 70 per cent, which is actually higher than the ratio south of the border at the moment ` 65.4 per cent, a 15-year low, according to the most recent data. Many economists believe the Canadian government has played an active role in spurring home ownership, particularly by forming the Canada Mortgage and Housing Corporation back in 1946.




Primarily set up to address Canada's postwar housing shortage, the Crown corporation is now Canada's top mortgage insurance provider and has facilitated the purchase of millions of homes. But not all are convinced of the merits of pushing home ownership and some people question whether that ideal has been romanticized to the detriment of fiscal prudence.





Read the full article here.

 

[Ally]

We need more citizens to fill our aging shoes




A third of Canada's workforce will retire over the next five years, leaving businesses scrambling to fill vacant jobs and Canada scrambling to admit more immigrants.




Federal Immigration Minister Jason Kenney told a business audience in Hamilton Sunday massive immigration ` more than 1 million people a year ` will be needed in coming years just to maintain Canada's current average age.




Many more will be needed to fill thousands of jobs across the country.





Read the full article here.

 

[Ally]

Third of Canada's work force will retire in next five years





A third of Canada`s work force will retire over the next five years, leaving businesses scrambling to fill vacant jobs.







To do that, members of the Canadian Chamber of Commerce were told Saturday, employers are going to have to start tapping previously under-used pools of workers and change some ideas about the employment relationship.







Perrin Beatty, president of the national business lobby group, said in an interview at the group`s annual meeting in Hamilton that while many job openings today are filled by immigration, that alone won`t be enough to solve the problem in the future.





Read the full article here.

 

[Ally]

Robert Shiller says Canada heading into a slow-motion version of U.S. housing bubble






For some time, there has been talk of a growing housing bubble in Canada.




Robert Shiller, the economist who famously predicted the U.S. housing bubble, has told CBC News` Neil Macdonald, `I worry that what is happening in Canada is kind of a slow-motion version of what happened in the U.S.`





Read the full article here.

 

[Ally]

Is Canada's housing market crashing or cooling?



I can`t keep up with whether Canada`s housing market is simply cooling or crashing, which was all the buzz this week.





Like many observers, I believe the market is cooling, correcting in an orderly fashion, helped along by policy makers in the government and Bank of Canada. But some don`t see it that way, and continue to fret about a bust.





Just to give a range here, Toronto-Dominion Bank economists believe prices are overvalued by 10 per cent, while Capital Economics projects a plunge of up to 25 per cent.





Read the full article here.

 

[Ally]

New rules cool off home sales





Canada's housing market appears to be cooling across the board in the face of tighter mortgage rules that affect many first-time buyers of modest means, a new analysis from the Conference Board shows.




The think-tank's snapshot of resales for August shows a widespread decline in sales of existing homes, with 21 of 28 metropolitan markets registering a drop from July, and 16 of the markets showing a fall off of five per cent or more.





Read the full article here.

 

[Ally]

New mortgage rules cooling home sales across the country




OTTAWA ` Canada's housing market appears to be cooling across the board in the face of tighter mortgage rules that affect many first-time buyers of modest means, a new analysis from the Conference Board shows.




The think-tank's snapshot of resales for August shows a widespread decline in sales of existing homes, with 21 of 28 metropolitan markets registering a drop from July, and 16 of the markets showing a fall off of five per cent or more.




As well, listings fell in 17 of the 28 markets, an indication that owners were reluctant to place their homes for sale due to the soft conditions.





Read the full article here.

 

[Ally]

Canada to see unprecedented boom in new businesses in the coming decade: CIBC






TORONTO, Sept. 25, 2012 /CNW/ - Canadians are expected to become their own bosses at an accelerated pace in the coming decade, with more than half a million entrepreneurs in the process of establishing their own business this year, finds a new report from CIBC.




"Irreversible structural forces suggest that the next decade might see the strongest start-up activity in the Canadian economy on record," says Benjamin Tal, deputy chief economist at CIBC. "The gradual shift to a strong culture of individualism and self-betterment; the role of technology in driving the transition from boardrooms to basements; the more global and inter-connected markets that require greater specialization, flexibility and speed; as well as small business friendly demographic trends are among those forces that are likely to support a net creation of 150,000 new businesses in Canada in the coming ten years."





Read the full article here.

 

[Ally]

Why cheap money trumps job fears





Canadian corporations might be spooked by dim global economic prospects, but the same can`t be said for the country`s consumers. Canadians know what to do when money is cheap: borrow some and spend it.




Retail sales jumped 0.7 per cent in July, to $39-billion, Statistics Canada said Tuesday. The increase surprised Bay Street economists, who were anticipating a gain of about half of what Statscan actually reported. The `tentative` signs of slowing in household spending that the Bank of Canada noted remain just that: tentative.






Read the full article here.

 

[Ally]

Jim Flaherty urges Canadian companies to give economy a boost




OTTAWA ` Finance Minister Jim Flaherty is once again urging Canadian companies to use the billions of dollars in cash they`re sitting on to invest more in the Canadian economy and create jobs.




Flaherty`s message to CEOs comes a month after Bank of Canada governor Mark Carney chided Canadian companies for sitting on `dead money` and not investing more of it in the Canadian economy or returning it to shareholders. The finance minister very much echoed Carney`s concerns at the time.





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[Ally]

Most Canadians happy to go further into debt, survey finds





TORONTO - A new poll suggests that most Canadians are quite comfortable with using debt as a financial strategy ` at a time when debt loads have risen to alarming new highs.




The survey, done for bankruptcy trustees Hoyes, Michalos & Associates, finds nine out of ten respondents would consider borrowing money to cover an unexpected cost.




The poll by Harris/Decima asked respondents how confident they were about being able to raise $2,000 within a month if an unexpected need arose.






Read the full article here.

 

[Ally]

Ben Bernanke declares war on the Canadian economy






Did you smile or cheer when U.S. Federal Reserve chairman Ben Bernanke announced Quantitative Easing III (and the markets went up)?




He just declared war on your job, and the whole Canadian economy.




Of course, so did the European Central Bank, the Central Bank of the People`s Republic of China and others.




All of them are engaged in the same practice. They`re printing money. Gobs of it, in programs that have no end point.






Read the full article here.

 

[Ally]

How the 'Big Reset' changed the odds on gas prices



At the end of March, not even a seasoned gambler would have put odds on the `Big Reset.` For sure, nobody in Canada`s oil patch would have wagered two bucks (or a thousand cubic feet of natural gas) on the unlikeliest of outcomes: That the largest ever surplus of gas accumulated in U.S. storage caverns would burn off before winter.





Read the full article here.

 

[Ally]

Economy in 'soft patch' as housing correction begins, exports tumble



OTTAWA - Canada's economy has entered a "soft patch" amid a sharp slowdown in home construction and sales, poor exports and weak job creation, the TD Banks says in its latest forecast.





The chartered bank said Tuesday that the economy will barely eke out one per cent growth during the current third quarter that ends Sept. 30, and end the year with a 1.8 per cent overall advance.





That's three-tenths of a point below the bank's previous projection in June, and also shy of the Bank of Canada's 2.1 per cent target.





TD chief economist Craig Alexander said the revision was necessary because global conditions have deteriorated and the domestic economy is also faring worse than expected, in part because of Ottawa's decision to tighten mortgage rules.





Read the full article here.

 

[Ally]

Canadians flocking to self employment




Canadians have contracted the entrepreneurial bug.




More than half a million Canadians were on their way to starting their own businesses in June, a CIBC study shows.




And more than 80 percent of them were doing so by choice, rather than being "forced" to due to a lack of employment opportunities.




And CIBC expects the trend to continue.





Read the full article here.

 

[Ally]

Canada's business taxes are top notch globally





If there`s ever a time to judge whether lower business taxes spur bigger investments, now is it.



In a thorough study of the world`s most developed economies and biggest emerging markets, Canada`s business tax regime ranked first for established countries, and second only to India when analyzing the whole group. The analysis was conducted by KPMG, which looked at the G8 countries plus the BRIC nations and a few others.





Read the full article here.

 

[Ally]

China wooing Canada's pipeline companies





CALGARY -- Canadian companies were enticed Tuesday to help China build its rapidly expanding petroleum pipeline network.



While a president of state-owned PetroChina made the pitch, another Chinese executive said his country hopes to supply Canada with some of the pipe that could gain the Asian giant better access to Alberta oilsands bitumen.




Luke Lu echoed Yao Wei, president of PetroChina Pipelines, in saying his country's pipeline manufacturing sector needs Canadian expertise to produce safer, more reliable systems.





Read the full article here.

 

[Ally]

Next year to be lackluster for Canada's construction sector: Conference Board




Toronto`s skyline is studded with construction cranes, and condo towers seem to be popping up on every spare corner, but the breakneck pace of residential construction in Canada`s biggest city`and across the country as a whole`will slow in the second half of this year and into 2013, the Conference Board of Canada says.




`The residential market is destined for a soft landing, which means that it will no longer be able to fuel Canada`s post-recession growth,` said Michael Burt, director of industrial economic trends at the Ottawa-based think tank.




Next year will likely be particularly lackluster, as housing starts and industry profits are both expected to to decline, he said.





Read the full article here.

 

[Ally]

September shows market improvement in consumer confidence




OTTAWA - The Conference Board of Canada says consumer confidence showed improvement this month, following a weak showing in August.




The Ottawa-based economic forecaster says its Index of Consumer Confidence increased 6.7 points to 82.2.




That's still below where it was 10 years ago when the benchmark was reset at 100.





Read the full article here.