Over the past four years, Canada has been feted as the country that does practically everything right. Its banks are beloved by everyone from economist Paul Krugman to Moody’s Investment Service (MCO), which rated them earlier this year as the safest in the world.
While U.S. politicians bickered for years over free-trade deals with South Korea, Colombia, and Panama, Canadians signed several pacts and launched free-trade talks with 50 other nations. Its economy has grown faster—and its debt has stayed smaller—than its Group of Seven peers. (The International Monetary Fund expects Canada’s net debt-to-GDP ratio to be 33 percent by 2016, compared with 85.7 percent in the U.S.) Even the controversy over Canada’s Keystone XL pipeline underscored the fact that Alberta has the resources to ship more than 700,000 barrels of oil a day to U.S. refineries. What a problem to have. No wonder China Investment Corp., Beijing’s sovereign wealth fund, set up its first foreign office in Toronto last year instead of in New York.
But so far, he seems disinclined to explain this curious divergence. How disappointing. We could learn so much from him, I’m sure.
After all, it wasn’t long ago that the federal opposition leader was telling anyone who would listen – including most of the national media, which dutifully reported his grave warnings – that Canada’s lofty loonie was primarily due to the impact of high oil prices, a phenomenon popularly known as Dutch disease.
This, in turn, was killing Canada’s manufacturing sector, Mulcair theorized – a theory refuted by none other than the head of the Canadian Manufacturers and Exporters Association.
CALGARY — Average home prices in Canada will likely contract 10 to 15 per cent over the next two years, says a report released Wednesday by TD Economics.
The report said that while new lending rules announced recently are not intended to severely impede household spending and housing demand, their impact will be substantial.
“In particular, the previous rule changes had a significant impact on home sales, particularly in the six months following implementation. The policy changes, combined with modestly higher interest rates and a gradual deterioration in affordability, are expected to trigger a welcomed unwinding of excesses in the Canadian housing market,” said the report.
As Thomas Mulcair can attest, it is rather easier to speak about the oil sands than it is to actually get up here and see what is going on. Fort McMurray, Alta. is remote, and while my first visit was rather longer than Mr. Mulcair’s, it was still only a full day.
Three years ago, upon the occasion of the merger of oil sands pioneer Suncor with Petro-Canada, this column examined some of the ethical questions posed by oil sands development. The argument then was just emerging about “ethical oil,” namely that Alberta oil is morally and strategically superior because it does not support odious regimes, from Venezuela to Saudi Arabia to Russia. The argument has only become stronger since then, propelled by Ezra Levant’s eponymous book, and adopted in the rhetoric of the federal government.
The warning comes from Moody’s Investor’s Service, following last week’s announcement from Finance Minister Jim Flaherty that rules on government-back mortgages would be tightened to reduce the risk of a housing market crash.
“The government’s moves may have come too late, owing to the buildup in consumer debt that has already occurred,” Moody’s said in a research note Monday.
The changes included reducing the maximum amortization on a government-backed loan to 25 years, from 30 years and reducing the amount consumers can borrow against their home to 80 per cent, down from 85 per cent.
Flaherty had previous said the government would step in “if necessary” but Moody’s is concerned the government waited too long, making a soft landing difficult to engineer.
Reversing a year of rising optimism, Canadian and U.S. chief financial officers are suddenly more downbeat on the prospects for the economy and their own companies, according to a quarterly survey by Deloitte being released Thursday.
Earnings are rising at the strongest pace in more than a year, a turnaround after wage gains lagged the pace of inflation through much of 2011.
A common lease clause to negotiate is the “Operating Cost” definition and its inclusions and exclusions. One of the prime concerns for each party is how “capital costs” are addressed. Over the years many cases have dealt with whether or not a landlord was entitled to charge back costs incurred for a major repair or replacement. Of course much hinged on the wording of the lease. An April 2012 decision of the Ontario Superior Court of Justice in RioCan Holdings Inc. v. Metro Ontario Real Estate Limited [2012] ONSC 1819 indicates the significance of the lease language once again. In 2002, Riocan carried out extensive repairs (costing $430,000.00) to the pavement of a plaza parking lot in Windsor, Ontario. The process involved “pulverizing the asphalt and underlying granular base, compacting it, and adding a new layer of hot mix.” Riocan amortized the costs over twenty years (its lease form did not require it to do so) and charged its tenants. After 3 years of payments, the Plaza’s anchor tenant disputed the additional monthly cost of $858.00, refused to make further payments and then set-off all of the payments made from its future rent instalments notwithstanding there was no express set-off right in the lease. Read the full article here.
CALGARY — Canada and Israel are joining forces over energy.
The two countries signed an agreement on energy cooperation Tuesday that will allow for more collaboration over resource development projects and renewable power research. Joe Oliver, Canada’s Minister of Natural Resources, signed the agreement along with Israeli Energy and Water Resources Minister Uzi Landau in Tel Aviv.
Ahead of a news conference planned for Thursday, Mr. Oliver said in a statement there was “tremendous opportunities for Canada and Israel to cooperate more closely on energy issues.”
Despite the uncertainty in the broader economy, Canadian auto sales are expected to return to their pre-recession levels this year driven by dealer incentives, accessible auto loans, high fuel prices and aging vehicles that need replacement, according to a report from the Conference Board of Canada.
Canadian motor vehicle manufacturers are expected to swing to a collective profit of $1.5-billion this year, their highest level since 2002 and a complete reversal of the $1.5-billion they lost as recently as 2009, the board reports.
OTTAWA – Finance Minister Jim Flaherty says he realizes tightening mortgage rules could slow economic growth and cool the housing market, but that he’s prepared to take the risk.
Flaherty says he took action last week because there was no sign of a let-up in the hot condo market in major cities and because many Canadians can’t seem to resist the lure of low mortgage rates.
When my husband and I were shopping for a home, a basement apartment seemed like a no-brainer.
House prices in downtown Toronto were already sky-high, so we loved the idea of someone paying us $800 a month to live in a space we could do without. We knew we’d have to find tenants, fix leaky taps, spruce the place up, and comply with various bylaws, but these seemed like tasks we could easily deal with in order to buy in the neighbourhood we wanted and become mortgage-free sooner.
Yields on overnight index swaps (OIS) show that traders are betting more on a rate cut than a rate hike in the next year.
Take your pick of their reasons: modest inflation, risk from the European debt saga, Canadian mortgage rule impact, lacklustre North American growth, et cetera.
These and other factors are keeping a lid on rate expectations, despite Mark Carney’s intentional hints otherwise.
The Canadian economy’s ability to keep generating jobs was put the test in May, with employment gains slowing sharply to 7,700 after two straight months of massive increases.
Last month’s more tame result was not altogether unexpected, given the country’s economic growth rate slipped below two per cent in the first quarter.