CA Economic Fundamentals 2008 (07,08)

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Bank of Canada holds line again on key interest rate

The Bank of Canada has cut its economic growth outlook for the country this year, and left a key interest rate unchanged on Tuesday.

The bank left its overnight rate — what big banks charge each other for overnight loans — steady at three per cent. Economists had widely expected the bank`s decision to stand pat on borrowing costs.

The Canadian dollar gained strength against the U.S. dollar following the rate announcement. The loonie was up 0.48 of a cent at 99.96 cents US in late morning trading; the dollar had earlier pushed back above parity with its U.S. counterpart.

In conjunction with the interest rate decision, the bank said it expects economic growth in Canada this year of only one per cent. Growth is expected to rise to 2.3 per cent in 2009 and 3.3 per cent in 2010.

http://www.cbc.ca/money/story/2008/07/15/bankrate.html

 

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Canadian home prices fall for first time in decade as listings set records

OTTAWA - Canadian home prices have started to fall for the first time this decade.

The average selling price in June was down 0.4 per cent from a year earlier to $341,096, the Canadian Real Estate Association reported Tuesday. That`s the first year-over-year monthly decline in prices since January 1999.

Meanwhile, sales of existing homes in the first half of this year were down more than 13 per cent from a year earlier, while the number being put on the market hit an all-time high.

http://www.canada.com/edmontonjournal/news...b3-efbf320e7fed

 

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China on track to become world`s No. 3 economy

BEIJING - China`s economy is slowing but growth was still in double digits in the second quarter despite a credit tightening campaign, weakening exports and the devastating Sichuan earthquake.

Gross domestic product grew 10.4 per cent in the first half of 2008 compared with the same period last year, three official sources familiar with the data said on Tuesday.

The sources did not know the growth rate for the second quarter alone, which the National Bureau of Statistics will announce on Thursday.

http://www.canada.com/edmontonjournal/news...1b-0fba288d830a

 

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Tree houses a growing flashpoint in municipalities across the country

What began as a simple tree house in a New Brunswick village is threatening to turn into a lawsuit.

Once idyllic places for children to while away time, tree houses have become flashpoints from coast to coast, sparking battles between the parents who build them and city councils from British Columbia to Newfoundland who want to tear them down.

Bob Michaud, chief building inspector with the Greater Moncton Planning District Commission in New Brunswick, said recently he had consulted an attorney over a family tree house in the nearby village of Salisbury.

http://www.canada.com/victoriatimescolonis...33-2202c7dac403

 

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No housing bubble in Canada: Flaherty

CALGARY -- Federal Finance Minister Jim Flaherty shrugged off housing worries in Canada Wednesday, saying there is no bubble and that the subprime-mortgage woes crippling financial institutions in the United States are not threatening banks north of the border.

"There is no bubble in the Canadian housing sector," he told reporters after speaking to roughly 400 people at a Calgary Chamber of Commerce event.

"That`s not been our concern. Our concern has been a tendency for longer amortization periods, like 40 years, and for purchasers putting very little money down. We`ve seen nothing in Canada like the U.S. subprime situation."

http://www.canada.com/saskatoonstarphoenix...57-962106c755cd

 

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Potash to sell for $1,000 per tonne: analyst

WINNIPEG (Reuters) -- Canpotex, the export marketing consortium for Canadian potash miners, has raised its spot price for some Asian buyers to $1,000 US per tonne, an analyst at J.P. Morgan said on Wednesday.

The new price is up 21 per cent from current delivered values, and will take effect in the fourth quarter, David Silver wrote in a note to clients, quoting fertilizer industry consultant FMB Group Ltd.

Silver said the price hike would boost earnings for Potash Corporation of Saskatchewan, Mosaic and Agrium, which jointly export potash under the Canpotex banner.

http://www.canada.com/saskatoonstarphoenix...45-023822712c13

 

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AIG, PMI consider 40-year mortgages as rules shift

TORONTO - American International Group Inc., PMI Canada and other mortgage insurers are considering ways to keep offering 40-year mortgages and zero-down-payment loans after the Canadian government tightened mortgage lending rules.

Finance Minister Jim Flaherty said this month that insured mortgages backed by the government would be limited to 35 years, and require at least a five-per-cent down payment. The government is trying to avoid a U.S.-style housing collapse that was sparked in part by easy credit.

Private mortgage insurers such as AIG United Guaranty and PMI Canada are reviewing the rules to see whether they can still offer 40-year loans, which account for more than a third of new mortgages in Canada. Traditionally, home loans in Canada have had 25-year terms. Some banks last week dropped the longer-term mortgages.

http://www.canada.com/edmontonjournal/news...8d-83791f77e5cf

 

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Economy predicted to grow 1.7%

OTTAWA - The battered manufacturing sector will find some relief in the coming months as the Canadian dollar is expected to remain stable and "de-link" itself from the rise in commodity prices, the Conference Board of Canada said Wednesday.

Its summer economic outlook projects Canada`s economy to grow 1.7 per cent this year -- a far more bullish prediction than the Bank of Canada, which on Tuesday revised downward its growth forecast to one per cent this year.

"Canada`s economy has been a mix of very strong consumer spending held back by a weak trade sector, a trend that has continued right through the early months of 2008," said Pedro Antunes, the conference board`s director of national and provincial economic forecasts.

http://www.canada.com/edmontonjournal/news...dc-60b28bfb1010

 

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`Stable` dollar will help economy: report

The battered manufacturing sector will find some relief in the coming months as the Canadian dollar is expected to remain stable and "de-link" itself from the rise in commodity prices, the Conference Board of Canada said yesterday in its summer economic outlook.

Its outlook projects Canada`s economy to grow 1.7 per cent this year -- a far more bullish prediction than the Bank of Canada, which on Tuesday revised downward its growth forecast to one per cent this year.

"Canada`s economy has been a mix of very strong consumer spending held back by a weak trade sector, a trend that has continued right through the early months of 2008," said Pedro Antunes, the conference board`s director on national and provincial economic forecasts, in a statement outlining the think-tank`s outlook.

http://www.canada.com/ottawacitizen/news/b...18-bcd793fc0a97

 

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Selling your cottage or second home needn`t be so taxing

Two months ago, a woman in her mid-sixties and her granddaughter were visiting Ontario from Alabama, vacationing in Muskoka.

They liked the region so much that they offered to buy the cottage of some friends of mine - James and Kate. Now James and Kate love their cottage, but when the woman offered 50 per cent more than the fair value of the place, they agreed to sell.

Hmm. Sounds fishy to me: A woman from Alabama with money to burn.

The first thing that came to mind was the news out of Alabama earlier this year of abuses in the financial aid program at one of the state colleges, whereby significant athletic scholarships were awarded to relatives of employees who did not even play sports - including one employee`s 67-year-old grandmother, who received scholarships in three sports. I suggested to James and Kate that they ask the woman whether she had ever received a football scholarship. But I digress.

The fact is, James and Kate are selling their cottage this year, and for a significant profit.

They`re concerned about the tax bill.

Can anything be done?

http://www.theglobeandmail.com/servlet/sto...Story/TPComment

 

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Premiers pledge to work together

With some premiers calling it a "common sense" approach to labour mobility, Canada`s provincial and territorial leaders pledged Thursday to ensure workers trained in one province can seamlessly move to jobs in another.

Premier Brad Wall said an agreement on labour mobility reached at the Council of the Federation meeting in Quebec City will be one way to address the worker shortage in Saskatchewan`s thriving economy.

"Obviously we need to have similar certifications in order for the labour force to be mobile. That`s important for a province like Saskatchewan where there is a labour shortage," said Wall in an interview from Quebec City, where Canada`s 13 premiers and territorial leaders are gathered.

http://www.canada.com/reginaleaderpost/new...52-b37407e11bea

 

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Speculators not culprits behind food inflation, think tank says

OTTAWA -- There is little evidence to support suspicions that speculators are the culprits behind rising world food prices, a new report argues.

Rather, the fundamental causes are increasing demand in developing countries for protein-based diets, stagnating agricultural productivity, demand from bio-fuels producers and government controls that limit output and trading, the Conference Board of Canada report concludes.

For example, it noted that some governments have reacted to food shortages by putting limits on exports to build up their inventories, or in other words by hoarding food, citing as examples India, Russia and Argentina.

http://www.canada.com/vancouversun/news/bu...d1-72d0cf98db57

 

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Why the world`s economies are sinking

The current economic slowdown may look global, but it might turn out to be the first in history that hits rich countries harder than developing ones.

The contagion of weak U.S. growth has spread to Europe and Japan, the world`s second- and third-largest economies, respectively. Prolonged economic booms in Australia, Ireland and Canada finally have faded; no one`s talking these days about the "Irish miracle" now that Irish job growth and housing values are in decline.

Jobless construction workers now queue up at 5 a.m. outside the Águeda Diez unemployment benefits office in the Carabanchel district of Madrid. Until 2006, Spain was building more houses – about 700,000 a year – than Britain, France and Germany combined.

But the Spanish housing market now is in a deep slump, and construction giant Martinsa-Fadesa SA, with debts of 5.2 billion euros, $8.3 billion (Canadian), last Tuesday made Spain`s largest-ever bankruptcy filing.

http://www.thestar.com/Business/article/463672

 

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A closer look at airport expansion across Canada:

Calgary

Total air carrier passengers at the Calgary International Airport hit a record 12.26 million in 2007 -- or 33,500 passengers a day -- up 8.5 per cent from 2006, with a cumulative gain of 55 per cent over the past five years.

Growth in passenger traffic is expected to continue in 2008 but officials say it will be in the three- to five-per cent range.

The longer-term outlook, meanwhile, is expected to be at 30 million annual capacity by 2030, following a wave of expansions.

Over the next 10 years, an estimated $2.8 billion will be invested in expansion and development projects at the Calgary International Airport, an important hub for domestic, transborder and international passengers as well as air cargo.

http://www.canada.com/calgaryherald/news/c...d4-17e42b785a79

 

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Airlines deal with fuel-cost turbulence

As fuel prices soar, the economy retracts and consumers recoil, the Canadian airline industry is cutting back on routes and personnel as profits crumble under the weight of its mounting woes.

Last month, the International Air Transport Association said it expects the industry to turn in a collective loss of up to $6.1 billion US if oil prices continue to hover around their then-peak $135 US a barrel. They have since peaked above $145 US.

The IATA represents 240 of the world`s largest airlines, including Air Canada.

http://www.canada.com/calgaryherald/news/c...d8-530991283535

 

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MySpace aims for bigger bite of Canadian market

Keeping up with friends on Facebook? That`s so 2007.

Or so Dave Stevens says. He wants Canadians to know that online social networking can offer so much more than messaging and picture sharing and that MySpace represents the future of social networking.

The new general manager of MySpace Canada acknowledges that Canadians love Facebook, but he says they haven`t discovered what they can do on MySpace.

http://www.canada.com/vancouversun/news/bu...15-8f62b0cf5117

 

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Despite gas hikes, we love our cars

Media abounds with tips on saving gas on the roads-- or "hypermiling." Drive slower, avoid idling, avoid driving into headwinds, use your 4-60 air conditioner (four windows down doing 60 km/h). Among the less publicly trumpeted tips is the one suggested by a Toronto talk radio host, to slow to a glide through stop signs, treating them like yields, to save fuel used during acceleration. After carefully checking the intersection you would think.

With all the attention paid to the Great Gas Hike of 2008, those taking the long view point out that public reaction to it has not even remotely approached the over-the-top proportions of gas crises of the past.

http://www.thespec.com/News/Local/article/406182

 

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Economy will slow down

OTTAWA -- The weakening U.S. economy, the strong Canadian dollar and competition from offshore companies are draining the energy out of the Canadian economy, according to Scotiabank.

"The Canadian economy is rapidly losing steam," it said Monday in its latest global, domestic and provincial forecast.

And the loonie -- buoyed by continuing strong resource prices, as well as Canada`s twin budget and trade surpluses -- will strengthen even more, it warns, projecting that the currency -- now just below parity -- will reach $1.06 US by the end of next year, while the U.S. economy will weaken further.

http://www.canada.com/reginaleaderpost/new...39-1224dbf61cca

 

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Billion$ needed to prevent hydro chaos


Canada`s aging electricity infrastructure will need billions of dollars in investments to ensure its generation stations, transmission and distribution lines don`t collapse under an exploding demand, an industry expert warned yesterday.

While engineering experts refuse to draw direct links between those needs and a pair of recent incidents that struck two of the country`s largest cities, they warn that time is running out for many steel towers, electric polls, wires, transformers and facilities.

Canada has 50-year-old infrastructure "that is in need of replacement," said Jatin Nathwani, the executive director of Waterloo University`s Institute for Sustainable Energy.

http://www.canada.com/theprovince/news/sto...a5-fd7ac2e396c7

 

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Build it bigger, and hope they still come

The Ottawa Congress Centre is just a stone`s throw from Parliament Hill - yet, ironically, at 75,000 square feet, it is too small to host a political convention.

Nor has it been very successful competing with newer and larger venues for the bread-and-butter trade shows and business conventions.

All of this helps explain why the relatively new facility is being torn down this fall, to be replaced with a $160-million, 200,000-square-foot building that will open in 2011.

It is one of a number of new or expanded convention centres that are coming on stream over the next few years as cities strive to tap the lucrative business travel market.

http://www.theglobeandmail.com/servlet/sto...PStory/Business