February 2011 Canadian Economic Fundamentals
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Migration at 20-year high
MONTREAL ` The number of Canadians moving to another province has punched to a high not seen in 20 years as people pack up in search of better jobs and salaries elsewhere.
Roughly 337,000 Canadians were on the move in 2010, says a report on interprovincial migration published Thursday by TD Economics. That`s 45,000 more than the year before and the most since the late 1980s. It also represents the largest share of the overall population since 1998.
`It`s a good sign in the sense that whenever you see that kind of movement, it`s an expression of a labour market that`s healing after a pretty severe recession,` said TD senior economist Pascal Gauthier, who wrote the study. `People are either returning home or moving to areas that didn`t have employment before. For those that are already employed, they`re finding potentially better prospects.`
Read the full article here.
MONTREAL ` The number of Canadians moving to another province has punched to a high not seen in 20 years as people pack up in search of better jobs and salaries elsewhere.
Roughly 337,000 Canadians were on the move in 2010, says a report on interprovincial migration published Thursday by TD Economics. That`s 45,000 more than the year before and the most since the late 1980s. It also represents the largest share of the overall population since 1998.
`It`s a good sign in the sense that whenever you see that kind of movement, it`s an expression of a labour market that`s healing after a pretty severe recession,` said TD senior economist Pascal Gauthier, who wrote the study. `People are either returning home or moving to areas that didn`t have employment before. For those that are already employed, they`re finding potentially better prospects.`
Read the full article here.
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CIBC reports household debt levels at their lowest since 2001
It seems that all the messaging about slowing down with the accumulation of debt is resonating with Canadians.
According to a new report released by CIBC, Canadian household debt levels are at their lowest levels since 2001.
Read the full article here.
It seems that all the messaging about slowing down with the accumulation of debt is resonating with Canadians.
According to a new report released by CIBC, Canadian household debt levels are at their lowest levels since 2001.
Read the full article here.
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Loonie rises amid strong Canadian growth data
TORONTO - The Canadian dollar moved higher against the greenback Monday morning as risk aversion subsided somewhat and data showed the economy growing at a faster than expected pace in November.
The loonie was up 0.39 of a cent to 100.28 cents US as Statistics Canada reported gross domestic product grew 0.4 per cent, better than the 0.3 per cent reading that economists expected.
Growth was led by a 2.4 per cent rise in oil and gas extraction during November.
Read the full article here.
TORONTO - The Canadian dollar moved higher against the greenback Monday morning as risk aversion subsided somewhat and data showed the economy growing at a faster than expected pace in November.
The loonie was up 0.39 of a cent to 100.28 cents US as Statistics Canada reported gross domestic product grew 0.4 per cent, better than the 0.3 per cent reading that economists expected.
Growth was led by a 2.4 per cent rise in oil and gas extraction during November.
Read the full article here.
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Canada's economy grows in November on oil, gas extraction
Canada's economy racked up the strongest growth since March 2010 in November and solidified expectations for a more robust economic performance in the fourth quarter.
The economy grew 0.4 percent in November due to increased oil and gas extraction as well as higher wholesale and retail prices, Statistics Canada said on Monday.
Analysts polled by Reuters had expected gross domestic product to climb by 0.3 percent after a 0.2 percent gain in October.
Economists said the November figures bode well for fourth-quarter GDP achieving the 2.3 percent growth forecast by the Bank of Canada. The economy grew by 1 percent in the third quarter.
Read the full article here.
Canada's economy racked up the strongest growth since March 2010 in November and solidified expectations for a more robust economic performance in the fourth quarter.
The economy grew 0.4 percent in November due to increased oil and gas extraction as well as higher wholesale and retail prices, Statistics Canada said on Monday.
Analysts polled by Reuters had expected gross domestic product to climb by 0.3 percent after a 0.2 percent gain in October.
Economists said the November figures bode well for fourth-quarter GDP achieving the 2.3 percent growth forecast by the Bank of Canada. The economy grew by 1 percent in the third quarter.
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Economy expands more than expected in November
OTTAWA ` Canada's economy grew more than expected in November, led by the oil and gas extraction sector, Statistics Canada said Monday.
Gross domestic product edged up 0.4 per cent during the month, the federal agency said, following an advance of 0.2 per cent in October.
Economists has expected GDP to grow by about 0.3 per cent in November.
"This increase was mainly attributable to higher synthetic crude petroleum production following the completion of maintenance to upgraders," the agency said.
The Bank of Canada has forecast economic growth of 2.3 per cent for the fourth quarter of 2010.
Read the full article here.
OTTAWA ` Canada's economy grew more than expected in November, led by the oil and gas extraction sector, Statistics Canada said Monday.
Gross domestic product edged up 0.4 per cent during the month, the federal agency said, following an advance of 0.2 per cent in October.
Economists has expected GDP to grow by about 0.3 per cent in November.
"This increase was mainly attributable to higher synthetic crude petroleum production following the completion of maintenance to upgraders," the agency said.
The Bank of Canada has forecast economic growth of 2.3 per cent for the fourth quarter of 2010.
Read the full article here.
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Flaherty to unveil fresh stimulus numbers
OTTAWA ` Finance Minister Jim Flaherty will unveil Monday the government's latest update on its economic-stimulus package.
Flaherty is to announce that roughly 26,000 projects have been completed or started under the stimulus plan. He will also note that the government's corporate tax cuts have benefited about 110,000 businesses across the country, according to a senior government official who spoke on condition of anonymity.
Corporate taxes have emerged as a wedge issue as Parliament convenes for the first time in 2011 on Monday.
The Conservatives will make the case that the tax cuts are helping sustain the recovery as the government withdraws stimulus spending and looks to the private sector to pick up the slack as an engine of growth.
Read the full article here.
OTTAWA ` Finance Minister Jim Flaherty will unveil Monday the government's latest update on its economic-stimulus package.
Flaherty is to announce that roughly 26,000 projects have been completed or started under the stimulus plan. He will also note that the government's corporate tax cuts have benefited about 110,000 businesses across the country, according to a senior government official who spoke on condition of anonymity.
Corporate taxes have emerged as a wedge issue as Parliament convenes for the first time in 2011 on Monday.
The Conservatives will make the case that the tax cuts are helping sustain the recovery as the government withdraws stimulus spending and looks to the private sector to pick up the slack as an engine of growth.
Read the full article here.
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Higher food prices coming, Metro says
Among the discount supermarkets, No Frills, Food Basics and Price Chopper, the food price war is in high gear.
Some of this week`s flyers feature fresh pineapple, grape tomatoes and whole grain bread for as little as $1.
Others are touting brand name orange juice, cheese and pasta sauce at a third of their regular price or less.
Sparked by Wal-Mart`s continuing expansion into grocery ` 40 more stores are coming this year ` this kind of retail competition, along with a higher Canadian dollar, has so far spared Canadian consumers the kind of food price inflation that threatens to erupt in violence in other parts of the world.
Read the full article here.
Among the discount supermarkets, No Frills, Food Basics and Price Chopper, the food price war is in high gear.
Some of this week`s flyers feature fresh pineapple, grape tomatoes and whole grain bread for as little as $1.
Others are touting brand name orange juice, cheese and pasta sauce at a third of their regular price or less.
Sparked by Wal-Mart`s continuing expansion into grocery ` 40 more stores are coming this year ` this kind of retail competition, along with a higher Canadian dollar, has so far spared Canadian consumers the kind of food price inflation that threatens to erupt in violence in other parts of the world.
Read the full article here.
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Canada comes up short on jobs
OTTAWA ` Canada can no longer brag that it recouped all the jobs lost during the recession. The economy is roughly 30,000 jobs short, according to Statistics Canada.
The data agency revealed Friday it has revised its labour data to reflect 2006 census figures, as opposed to using 2001 population data. The new census data suggest the labour force is not as large as previously assumed.
As a result, `the employment increase from July 2009 to December 2010 based on the new estimates was not as strong as with the old estimates,` Statistics Canada said in a paper discussing the changes.
However, it added the unemployment rate, at 7.6% as of December, remains unchanged.
Read the full article here.
OTTAWA ` Canada can no longer brag that it recouped all the jobs lost during the recession. The economy is roughly 30,000 jobs short, according to Statistics Canada.
The data agency revealed Friday it has revised its labour data to reflect 2006 census figures, as opposed to using 2001 population data. The new census data suggest the labour force is not as large as previously assumed.
As a result, `the employment increase from July 2009 to December 2010 based on the new estimates was not as strong as with the old estimates,` Statistics Canada said in a paper discussing the changes.
However, it added the unemployment rate, at 7.6% as of December, remains unchanged.
Read the full article here.
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Egypt chaos could push oil to $100 a barrel
Oil prices moved up to near $90 a barrel Monday as anti-government protests continued to rock Egypt and threatened to spread unrest across the oil-rich Middle East.
By early afternoon in Europe, benchmark crude for March delivery was up 40 cents at $89.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract shot up $3.70, or 4.3 per cent, to settle at $89.34 on Friday.
Amid the instability in Egypt, jittery traders have pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.
The uprising in Egypt follows protests this month that forced out the president of Tunisia, who fled to Saudi Arabia. Anti-government protests have also rocked Lebanon and Yemen.
Read the full article here.
Oil prices moved up to near $90 a barrel Monday as anti-government protests continued to rock Egypt and threatened to spread unrest across the oil-rich Middle East.
By early afternoon in Europe, benchmark crude for March delivery was up 40 cents at $89.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract shot up $3.70, or 4.3 per cent, to settle at $89.34 on Friday.
Amid the instability in Egypt, jittery traders have pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.
The uprising in Egypt follows protests this month that forced out the president of Tunisia, who fled to Saudi Arabia. Anti-government protests have also rocked Lebanon and Yemen.
Read the full article here.
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IMF: Jobless rate, rising prices could spark war
SINGAPORE ` The world economy is beset by problems such as high unemployment and rising prices which could fuel trade protectionism and even lead to war within nations, the head of the International Monetary Fund warned on Tuesday.
Rising food and fuel prices in recent months have already hit poorer countries and are one of the factors behind massive anti-government protests in Egypt and in Tunisia, whose president was ousted last month.
`As tensions between countries increase, we could see rising protectionism ` of trade and of finance. And as tensions within countries increase, we could see rising social and political instability within nations - even war,` Dominique Strauss-Kahn said in a speech in Singapore.
Strauss-Kahn noted two `dangerous` imbalances that he said could sow the seeds of the next crisis.
Read the full article here.
SINGAPORE ` The world economy is beset by problems such as high unemployment and rising prices which could fuel trade protectionism and even lead to war within nations, the head of the International Monetary Fund warned on Tuesday.
Rising food and fuel prices in recent months have already hit poorer countries and are one of the factors behind massive anti-government protests in Egypt and in Tunisia, whose president was ousted last month.
`As tensions between countries increase, we could see rising protectionism ` of trade and of finance. And as tensions within countries increase, we could see rising social and political instability within nations - even war,` Dominique Strauss-Kahn said in a speech in Singapore.
Strauss-Kahn noted two `dangerous` imbalances that he said could sow the seeds of the next crisis.
Read the full article here.
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Global inflation appears deeply rooted, PMI index surveys indicate
LONDON/BEIJING ` Costs for Asian and European manufacturers jumped in January as firms ramped up production, surveys showed on Tuesday, the latest evidence of growing pressure on global inflation from food and fuel prices.
Inflation has rapidly hurtled to the top of the policy agenda around the globe, but in many cases it is not clear if rises in the cost of raw materials will lead to consumer price hikes that would force central banks to up interest rates soon.
Purchasing managers` indexes (PMIs) suggested both that the economic recovery was gaining momentum in Europe ` boosting demand for goods ` and also that firms have managed to pass on some of their increased costs to their customers.
Read the full article here.
LONDON/BEIJING ` Costs for Asian and European manufacturers jumped in January as firms ramped up production, surveys showed on Tuesday, the latest evidence of growing pressure on global inflation from food and fuel prices.
Inflation has rapidly hurtled to the top of the policy agenda around the globe, but in many cases it is not clear if rises in the cost of raw materials will lead to consumer price hikes that would force central banks to up interest rates soon.
Purchasing managers` indexes (PMIs) suggested both that the economic recovery was gaining momentum in Europe ` boosting demand for goods ` and also that firms have managed to pass on some of their increased costs to their customers.
Read the full article here.
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Federal government should get out of the mortgage insurance business
Federal Finance Minister Jim Flaherty not only changed the rules governing Canada`s mortgage market last month, he also rekindled a debate about how and how much Ottawa ought to intrude into the home-financing arena.
Flaherty flexed his muscles on three of the feds` policy levers in order to raise the bar for a minimally qualified borrower to get a mortgage. First and most significantly, he shortened the maximum amortization period on any government-insured mortgage from 35 to 30 years (and since any borrower with a downpayment of less than 20 per cent must have government-backed insurance, that means almost every buyer who wants or needs a loan stretched out for that long). Then he reduced the upper limit Canadians can borrow against their home equity from 90 to 85 per cent, and he made lines of credit secured by home equity ineligible for government-backed insurance.
But he left in place both the requirement for a five-per-cent downpayment, and a provision that just 50 per cent of condo fees are treated as an expense against income when assessing an applicant for a mortgage.
Read the full article here.
Federal Finance Minister Jim Flaherty not only changed the rules governing Canada`s mortgage market last month, he also rekindled a debate about how and how much Ottawa ought to intrude into the home-financing arena.
Flaherty flexed his muscles on three of the feds` policy levers in order to raise the bar for a minimally qualified borrower to get a mortgage. First and most significantly, he shortened the maximum amortization period on any government-insured mortgage from 35 to 30 years (and since any borrower with a downpayment of less than 20 per cent must have government-backed insurance, that means almost every buyer who wants or needs a loan stretched out for that long). Then he reduced the upper limit Canadians can borrow against their home equity from 90 to 85 per cent, and he made lines of credit secured by home equity ineligible for government-backed insurance.
But he left in place both the requirement for a five-per-cent downpayment, and a provision that just 50 per cent of condo fees are treated as an expense against income when assessing an applicant for a mortgage.
Read the full article here.
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Mideast makes our oil look best
For all the work done by Canadian oil sands producers to rehabilitate their image, it`s the protests in Egypt that seem to be doing all the heavy lifting.
Shares of Canadian oil sands producers climbed again Monday, chasing oil prices that soared to their highest level in more than two years, as markets were reminded that Canada produces secure, large and growing supplies of oil, while Middle East production is vulnerable to disruption due to spreading unrest. Higher energy shares helped push the S&P/TSX to 13,551.99, up 114.41 points.
Concerns about oil sands operations` environmental impacts contributed to keeping a lid on Canadian oil stocks over the past couple of years. Industry and Canadian governments have been spending heavily to promote environmental advancements and economic benefits of the oil sands in the face of anti-oil sands campaigns.
Read the full article here.
For all the work done by Canadian oil sands producers to rehabilitate their image, it`s the protests in Egypt that seem to be doing all the heavy lifting.
Shares of Canadian oil sands producers climbed again Monday, chasing oil prices that soared to their highest level in more than two years, as markets were reminded that Canada produces secure, large and growing supplies of oil, while Middle East production is vulnerable to disruption due to spreading unrest. Higher energy shares helped push the S&P/TSX to 13,551.99, up 114.41 points.
Concerns about oil sands operations` environmental impacts contributed to keeping a lid on Canadian oil stocks over the past couple of years. Industry and Canadian governments have been spending heavily to promote environmental advancements and economic benefits of the oil sands in the face of anti-oil sands campaigns.
Read the full article here.
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Canadian debtors take the hint
Bank of Canada Governor Mark Carney`s plea for households to cut debt, which surpassed the U.S. for the first time in 12 years, is starting to get through to homeowners like Gary Taitt. That may crimp earnings at the country`s biggest banks.
Taitt, a Toronto realtor, said he plans to cut his $40,000 credit line at Toronto-Dominion Bank in half and pay off the $25,000 balance on his CIBC Aerogold Visa this year.
`We try every year,` said Taitt, 46, who shaved $20,000 off the credit line in 2010. `I`m bound by fear with my debt.`
Taitt is among a growing number of Canadians paring debt, a shift that will pressure lending revenue this year at companies such as Royal Bank of Canada, forcing them to rely on asset management and other products to boost profits.
Read the full article here.
Bank of Canada Governor Mark Carney`s plea for households to cut debt, which surpassed the U.S. for the first time in 12 years, is starting to get through to homeowners like Gary Taitt. That may crimp earnings at the country`s biggest banks.
Taitt, a Toronto realtor, said he plans to cut his $40,000 credit line at Toronto-Dominion Bank in half and pay off the $25,000 balance on his CIBC Aerogold Visa this year.
`We try every year,` said Taitt, 46, who shaved $20,000 off the credit line in 2010. `I`m bound by fear with my debt.`
Taitt is among a growing number of Canadians paring debt, a shift that will pressure lending revenue this year at companies such as Royal Bank of Canada, forcing them to rely on asset management and other products to boost profits.
Read the full article here.
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Mideast unrest stirs oil price questions
With the price for Brent crude oil breaking through $100 US per barrel on Monday -- the result of the ongoing turmoil in Egypt, Tunisia, Algeria and Yemen, as well as protests in Jordan -- the question on the minds of many is how much higher it might go, which events would trigger further increases and whether it's sustainable.
The fact Egypt is on fire is not a big surprise. The demographic picture -- with the majority of people under 30, many feeling disenfranchised and a high unemployment rate -- coupled with the three-decade long rule of Hosni Mubarak has long been viewed as a situation ripe for upheaval. "At some point," said one longtime observer of the region, "tyrant fatigue will set in."
Read the full article here.
With the price for Brent crude oil breaking through $100 US per barrel on Monday -- the result of the ongoing turmoil in Egypt, Tunisia, Algeria and Yemen, as well as protests in Jordan -- the question on the minds of many is how much higher it might go, which events would trigger further increases and whether it's sustainable.
The fact Egypt is on fire is not a big surprise. The demographic picture -- with the majority of people under 30, many feeling disenfranchised and a high unemployment rate -- coupled with the three-decade long rule of Hosni Mubarak has long been viewed as a situation ripe for upheaval. "At some point," said one longtime observer of the region, "tyrant fatigue will set in."
Read the full article here.
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Some Home Truths
The resiliency of the Canadian housing market has to impress even the most cynical observer. And while the consensus even among industry insiders is the days of double-digit percentage price increases are over, nobody is expecting an American-style housing collapse in Canada. "The fear proved to be unfounded," says Pascal Gauthier, a senior economist at Toronto-Dominion Bank. He points out average prices in Canada only dropped 13% from peak to trough. Other than a brief blip in 2008, the average home price has been on a tear since 1996, reaching almost $340,000 in 2010. A decade ago, it was $163,992.
Alas, the good times are about to end. Gauthier says prices will actually go down in 2011, albeit by less than 1%. By 2012, the loss could be 1% to 2%. Even real-estate companies are not overly optimistic. For example, Re/Max says Canadians can expect an average 3% price increase in 2011. Such uncertainty doesn't necessarily mean abandoning the housing market in the coming years. Indeed, it may even be time to take some of that bloated equity in your principal residence and bet on an investment property, such as a condominium, cottage or perhaps even something in the moribund real-estate market down south.
Scott Plaskett, a certified financial planner at IronShield Financial Planning in Toronto, isn't opposed to using home equity to buy other assets. "I recommend it in the right circumstances," says Plaskett. "I wouldn't suggest just real estate. But real estate is a great option, because it's one of those assets that can produce cash flow while holding the assets."
Read the full article here.
The resiliency of the Canadian housing market has to impress even the most cynical observer. And while the consensus even among industry insiders is the days of double-digit percentage price increases are over, nobody is expecting an American-style housing collapse in Canada. "The fear proved to be unfounded," says Pascal Gauthier, a senior economist at Toronto-Dominion Bank. He points out average prices in Canada only dropped 13% from peak to trough. Other than a brief blip in 2008, the average home price has been on a tear since 1996, reaching almost $340,000 in 2010. A decade ago, it was $163,992.
Alas, the good times are about to end. Gauthier says prices will actually go down in 2011, albeit by less than 1%. By 2012, the loss could be 1% to 2%. Even real-estate companies are not overly optimistic. For example, Re/Max says Canadians can expect an average 3% price increase in 2011. Such uncertainty doesn't necessarily mean abandoning the housing market in the coming years. Indeed, it may even be time to take some of that bloated equity in your principal residence and bet on an investment property, such as a condominium, cottage or perhaps even something in the moribund real-estate market down south.
Scott Plaskett, a certified financial planner at IronShield Financial Planning in Toronto, isn't opposed to using home equity to buy other assets. "I recommend it in the right circumstances," says Plaskett. "I wouldn't suggest just real estate. But real estate is a great option, because it's one of those assets that can produce cash flow while holding the assets."
Read the full article here.
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The 11 Countries at the risk of becoming the next Egypt
Morocco: Reforms already lined up
Investments to watch: SPDR S&P Emerging Middle East & Africa ETF (GAF)
Style of government: Constitutional Monarchy
Inflation: 2.6% year-over-year in December
Read the full article here.
Morocco: Reforms already lined up
Investments to watch: SPDR S&P Emerging Middle East & Africa ETF (GAF)
Style of government: Constitutional Monarchy
Inflation: 2.6% year-over-year in December
Read the full article here.