August 2012 Canadian Economic Fundamentals

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     News articles for August 2012.
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    Six factors affecting economic growth in Canada

    The Canadian economy is anticipated to grow by only two per cent this year, rather than four per cent.


    Alex Carrick, chief economist of Reed Construction Data — CanaData, explains why.


    Carrick explains how inflation, the merchandise trade balance, commodity prices, foreign exchange rates, foreign inflow of capital and government spending influence economic growth, housing prices, consumer spending and interest rates.



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    Canada mortgage rates hit record low

    Canada’s fiscal policymakers are working to cool off the country’s overheated real estate market, tightening lending restrictions and warning buyers about the dangers of excessive debt.


    But maybe someone should tell the country’s independent mortgage lenders. They’re working overtime against the government’s policies, engaging in a mortgage rate war that on the one hand could make homeownership more affordable for many Canadians, but but on the other hand scuttles efforts to cool down the housing market before it overheats to the point of collapse.



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    Economy slowing, interest rates to stay lower for longer, say Scotiabank analysts

    OTTAWA - Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.

    In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.

    The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.



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    Canada job market set to dive, Conference Board Report predicts

    OTTAWA -- The Conference Board says its research suggests Canada's labour market has run out of gas, and could even register a loss of jobs for the month of July.


    The Ottawa-based think-tank's help-wanted index fell 4.5 points to 120.5 in June, a reading suggesting only modest job gains in the near term.


    It predicts July's employment report from Statistics Canada, which will be released next Friday, will show a loss of 5,500 jobs, marking the first setback since February.



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    Allyssa Fischer
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    Flat confidence good for investors?

    The CFIB Business Barometer, which uses a scale of 0 to 100 to measure how companies feel about their expected performance, recorded its fourth straight month of decline. In boom times an index level reads between 65 and 70, but as the optimism of small business owners continues to fall, the index is currently at its lowest level in three years at just 58.6.


    Jacques Marcil, Senior Economist at TD Economics confirms that Canada’s prospects – at least for the short term – are limited.


    “In addition to the continuing difficulties in Europe and the sluggish recovery in the U.S., elevated household debt levels in Canada will keep personal spending growth in check in the near to medium term”, he said.


    Compared to the GDP, the index indicates that Canada’s economy could be grinding to a halt. But in addition to the soaring rate of household debt and current unemployment rate, small business owners now fear Flaherty’s new mortgage rules will cripple spending even further.


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  • Ally

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    Canada's economic growth slows

    OTTAWA • Canada’s economy slowed to a crawl in May, surprising analysts who had expected growth to continue after a relatively strong performance the previous month.


    With the U.S. economy also dragging and the European crisis mounting, the focus is now on the Federal Reserve and what options it will offer — if any — when its two-day monetary policy meeting ends Wednesday.



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  • Ally

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    Pipelines remain economy's lifeline

    According to Natural Resources Canada, the country's crude oil and natural gas pipeline network is over 700,000 kms in length and extends to all provinces and territories except P.E.I. and Nunavut.


    The safety record of this huge and vital national energy distribution system for the past few decades is impressive, but the reality is not every drop gets to its intended destination. Accidents are going to happen.


    Recently Enbridge, Canada's largest operator of pipeline systems, has been accused of carelessness in its handling of a number of spills that have occurred in both Canada and the United States.



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    Allyssa Fischer
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  • Ally

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    Two more years of slow growth

    OTTAWA -- Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.


    In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year and 1.8 in 2013. The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.



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    Allyssa Fischer
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  • Ally

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    Who's sitting on all the cash? Corporate Canada

    We’ve all heard about Corporate America’s still-growing mountain of cash. But in relative terms, Corporate Canada is sitting on Mount Everest.


    Indeed, Canada’s corporate stash is so big that if even a small fraction of it were deployed, it could significantly enrich investors and jump-start the country’s economy all at the same time, argues Capital Economics.



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  • Ally

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    Northern Gateway pipeline could go north

    Should B.C. Premier Christy Clark follow through her promise to block the proposed Northern Gateway pipeline if her conditions for the project aren't met, Northwest Territories Premier Bob McLeod says he would be prepared to step in and support a "northern route" that would see bitumen shipped from Alberta north to the N.W.T. and out to Asia.


    That's because the Mackenzie Valley pipeline, a $16.2-billion project intended to transport natural gas from the Beaufort Sea through the Northwest Territories, south to a hub in northwestern Alberta and out to North American markets, has been put on hold after its investors suspended the funding.



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  • Ally

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    U.S. stands between Canadian oil and Asian market

    When it comes to sports we know that Canada’s national obsession is hockey. For those who discuss Canadian politics, however, there is no bigger subject today than oil pipelines.


    Whether it was Natural Resources Minister Joe Oliver’s remarks about “radical” environmental groups, NDP leader Thomas Mulcair’s “Dutch disease” analogy, the federal opposition parties’ furore over provisions in Bill C-38, or the recent war of words between the British Columbia and Alberta premiers, all relate back to the struggle to export Canada’s oil resource to international markets.


    What few of us realize, however, is how much of our nation’s biggest spat has been influenced from outside our borders.



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  • Ally

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    Property line nightmare may cost homeowners $25,000


    Ever wanted to build your own dream home complete with spiral staircase, an open concept kitchen and spacious living area, all to your specifications? Haven’t we all. Steven Boyd and Karen Bursey of Conception Bay, Newfoundland were in the process of doing just that when a stop-work order was issued on their home. The problem? Their house was being built too close to their neighbour’s property. It wasn’t as if the homes were rubbing eaves troughs though. They were too close by a mere 9 centimetres! 


    While the house was supposed to be 1.5 metres away from the property line, the couple’s home was built just 1.26 metres away. Even though they were given an exemption by the Conception Bay South town council for up to 1.35 metres, they’re still off by 9 centimetres – or the length of a poker-sized playing card, says CBC news. 


    An inspector picked up on the problem while walking the site. Unfortunately, it was discovered after the foundation was already laid. As a result, Conception Bay South town council has issued a stop-work order. The only way work can continue is if the problem is rectified in one of two ways. The couple can choose to either tear down the wall – a move that could cost them an additional $25,000 – or pay their neighbours for the 9 cm of land. Incidentally, their neighbours want $25,000 for the 9 cm of space. 



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  • Ally

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    Selling a condo? Beware the taxman

    When you sell a property that isn’t your principal residence and make a profit, half of the amount is taxable. This is the so-called capital gains tax and it’s pretty straight forward, but every situation is different. It all depends on how the Canada Revenue Agency views the transaction.


    Real estate agent Romano Giusti bought a condo on Richards St. in Vancouver in November 2006 and re-sold it in June 2007 for a profit of $30,831. When he filed his tax return, he paid no tax on the profit, saying it was his personal residence



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  • Ally

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    How to keep a cottage in the family

    Dear Jeanne & Leonard:


    My siblings, first cousins and I together own two cabins on a beautiful lake. This retreat has been in our family for many years, and the eight of us recently took it over from our parents. Some of us want to make sure the property stays in the family forever (we have 27 children between us). But others think we should establish a way for any owner who might want out to easily sell his or her share to the highest bidder. What's the best way to handle this and other disagreements? - Janet


    Dear Janet:


    Start by agreeing on a process for making decisions. Majority rule? Electing one person or a three-person board to make decisions? Designating an outside arbitrator? Drawing straws or flipping coins? Any approach will do, as long as you all agree to abide by it.



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