February 2011 Canadian Economic Fundamentals

[Ally]

Flaherty trims Canada's growth forecast





OTTAWA ` The Canadian government trimmed its estimate of 2011 economic growth on Tuesday and the finance minister said he expects to encounter "resistance" to efforts to bring the unemployment rate down.




Ottawa lowered its growth estimate to 2.4% from 2.5%, based on the median of private sector forecasters. It sees the economy growing at 2.8% in 2012, unchanged from its previous estimate.




The government surveyed private sector economists in December and their forecasts will be used for budget planning purposes.




Finance Minister Jim Flaherty repeated his concerns that the economic recovery remains fragile and said that it could be difficult to lower the unemployment rate.








Read the full article here.

 

[Ally]

Inflation worries hit factories





OTTAWA ` Factories around the world shifted into high gear in January figures released on Tuesday showed, but a surge in raw materials costs has sparked worries advanced economies are about to get whacked with the same inflationary pressures emerging countries are now grappling with.




The debate is heated. One camp says there remains too much spare capacity in major economies for firms to pass on price increases. Others contend companies are starting to do just that, as consumers pick up the pace of spending and the overall economic backdrop improves.




The U.S. Institute of Supply Management said its much-watched index of manufacturing activity increased in January to 60.8 from an upwardly revised 58.5, its best reading since May 2004 and the 18th consecutive month of expansion. All the index`s subcomponents rose ` with employment index surging to a 38-year high of 61.7 and new orders at a seven year peak.




Read the full article here.

 

[Ally]

Canada-U.S. pipe would cut Middle East oil imports







WASHINGTON (Reuters) - A proposed pipeline from Canada's oil sands to refineries along the Gulf of Mexico would help "essentially eliminate" U.S. oil imports from the Middle East in a decade or two, according to a new study commissioned by the Department of Energy.





Oil deliveries from the $7 billion pipeline, combined with a projected drop in U.S. fuel demand, would potentially turn the United States into a net exporter of products like gasoline, jet fuel and diesel, said the report, called "Keystone XL Assessment."





The Obama administration is divided over Keystone XL, a project that could ease reliance on oil from politically unstable regions, but boost dependence on Canadian oil sands, a crude that many environmental groups oppose.





The State Department, which is determining whether the pipeline would be necessary to improve U.S. energy security, recently put the report by energy consultancy EnSys on its website. .



Read the full article here.

 

[Ally]

Why your T-shirts could drive food inflation




As global food inflation surges to ever greater heights, fears are mounting prices will be driven even higher by a commodity that`s not even edible: cotton.




The price of cotton is at highs not seen in more than 140 years, sparking concerns that farmers in many countries will switch their crops for the more lucrative commodity, and stop planting food staples such as corn, soybeans and sugar.



Read the full article here.

 

[Ally]

Canada's inflation rate heats up while U.S. home prices cool further




The December year-over-year change in Canada`s overall price level, as measured by the all-items Consumer Price Index (CPI), was +2.4%, according to Statistics Canada. December and October (also +2.4%) recorded the fastest rates of inflation since October 2008`s +2.6% figure. Wedged between October and December 2010, November`s gain was more modest at +2.0%.




Canada`s core inflation rate in December was +1.5%, up from +1.4% in November. The core rate omits eight items judged to be highly volatile and governed by forces outside national control, such as the weather (i.e., impacting on food prices) and international oil prices (i.e., setting the tone for the energy price sub-index).




By way of comparison, the U.S. all-items inflation rate in December was +1.5%. Less food and energy, it was +0.8%. For both countries, prices remain in check. This is in stark contrast to many emerging nations, where inflation is anywhere from +5% (China and Brazil) to nearly +10% (India and Russia).




Although varying from province to province, the items most often mentioned by Statistics Canada as increasing rapidly in price were gasoline, electricity and insurance coverage for homes, mortgages and passenger vehicles. The cost of car insurance Canada-wide increased 4.3% year over year. For the same period, the purchase price of a new passenger vehicle rose 1.5%.



Read the full article here.

 

[Ally]

IMF chief warns of civil wars around the world





IMF Chief Dominique Strauss-Kahn has warned that the currently unstable and varied nature of the global recovery could lead to civil war within countries (via Ambrose Evans-Pritchard and @alea_).






The potential for conflict stems from high levels of unemployment around the world, and a sudden surge in workers entering the workforce.




Read the full article here.

 

[Ally]

Reduce CMHC role in mortgage insurance: CD Howe





TORONTO ` The federal government should limit taxpayer exposure to potential problems in the housing market by reducing the role of the Canada Mortgage and Housing Corp. in the provision of mortgage insurance, CD Howe Institute said in a report Monday.




The CMHC has a pervasive presence in the domestic mortgage market, potentially resulting in `unmanageably large risks in financial markets` that are ultimately borne by the Canadian public, according to the report.




Under current rules, people who borrow more than 80% of the value of the home they want to buy must also take out insurance, and the CMHC is by far the most dominant player in that market.




Read the full article here.

 

[Ally]

Teranet House Price Index





A wonderfully accurate view of the Canadian housing market using historical data rather than stright averages.



See the graphs here.

 

[Ally]

CIBC: Corporate Canada - Full of Life









In some ways, Corporate Canada has never been stronger than it is right now. Better-than-expected profitability and a reluctance to spend in recent years has left Canadian businesses sitting on a record amount of cash and confident about the future.





Read the full article here.

 

[Ally]

January job gains dwarf expectations





OTTAWA ` Canada's job growth was almost five times stronger than expected last month.







Statistics Canada on Friday said there were 69,200 additional people working in January, much more than the 15,000 in job gains economists had been predicting.







The unemployment rate rose to 7.8 per cent from 7.6 per cent in December, as more people joined the job hunt. Economists had expected the jobless rate to remain the same.







The unexpectedly high rate of job gains for January means the labour market has gained back all the positions lost during the recession, and then some. Recent revisions to the data had put the job count down 30,000 from before the downturn, despite previous data showing all recession-related job losses had been recovered.








Read the full aritcle here.

 

[Ally]

Flaherty trims Canada growth forecast





OTTAWA ` The Canadian government trimmed its estimate of 2011 economic growth on Tuesday and the finance minister said he expects to encounter "resistance" to efforts to bring the unemployment rate down.




Ottawa lowered its growth estimate to 2.4% from 2.5%, based on the median of private sector forecasters. It sees the economy growing at 2.8% in 2012, unchanged from its previous estimate.




The government surveyed private sector economists in December and their forecasts will be used for budget planning purposes.




Finance Minister Jim Flaherty repeated his concerns that the economic recovery remains fragile and said that it could be difficult to lower the unemployment rate.








Read the full article here.

 

[Ally]

What's so great about Canadian jobs




OTTAWA ` Markets were hit with positive dose of economic news as Canadian jobs data for January ` a gain of 69,200 jobs ` surged past all expectations (nearly 4.5 times greater than market consensus). Government of Canada bond yields climbed, with the 10-year note hitting a seven-month high. The Canadian dollar also traded higher.





Here are the highlights, nearly all positive, from the January jobs data





HEADLINE: Gain of 69,200 net new jobs, well above market consensus for a 15,500 gain. With this report, Canada can go back to bragging that it has recovered all the jobs lost during the recession (last week`s data revision from Statistics Canada pushed that back by 30,000). The January gain was the biggest since April of last year (roughly 80,000).




Read the full article here.

 

[Ally]

Most Americans don't know oil comes from Canada



Most Americans remain unaware that Canada is the top foreign supplier of energy to the United States, former U.S. ambassador to Canada David Wilkins says in a letter in the Washington Post.





`Most Americans are shocked to learn that Canada ` and not the Middle East ` is our country`s top foreign supplier of oil, natural gas and uranium,` he said in the letter, included in his weekly dispatch, Carolina-Canada Connections, written in response to a column by the newspaper`s Ezra Klein.





Mr. Wilkins said Canada is a perfect example of why the United States should aggressively pursue free-trade agreements and reject the policies of protectionism that have been economically devastating to the United States.


Read the full article here.

 

[Ally]

Come to Canada!: Van Loan





NEW YORK ` Canada`s international trade minister is on a mission: convince Americans that boring is good and socialism went out with the 1970s.




Peter Van Loan says dispelling long-held myths about Canada is a top priority as the country seeks to capitalize on its newfound economic might and low corporate taxes to woo investors north.




Canada still suffers from a perception as a socialist country, perhaps because of its government-funded healthcare system, Mr. Van Loan told a handful of reporters here on Thursday. `But the reality is we really do represent a free-market alternative.`




To spread the message, Mr. Van Loan and other Canadian envoys have embarked on a seven-city, U.S. `Focus on Canada` tour, part of a global investment series by U.K. newspaper the Financial Times in partnership with Canada.




Read the full article here.

 

[Ally]

Canadian jobs: What the economist's say




TORONTO ` Canada`s economy created far more jobs than expected in January, adding 69,200 new positions on strength in the service sector, Statistics Canada data indicated on Friday.




Here's what the economists say:






DOUG PORTER, DEPUTY CHIEF ECONOMIST, BMO CAPITAL MARKETS




"Obviously the job growth in the month was way above expectations. This ranks right up there with the strongest months of the year that we saw in 2010."




"And it seems to be relatively broadbased and real. Most industries were up. It was nicely split between public and private employment, it was nicely split between employees and self-employed and it was nicely split between full-time and part-time. And it was even well split between goods and services. It just seems to be near across-the-board gains."




Read the full article here.

 

[Ally]

Tax cuts for businesses and individuals




Tax cuts are an essential part of the Government of Canada's effort to stimulate the economy and to create and maintain jobs. Whether you are an individual or a business, you can benefit from the numerous credits, benefits, and tax cuts outlined below.



Visit the website here.

 

[Ally]

Putting household debt in context




You`re not alone if you`re mystified by the headline number being used to repeatedly bludgeon Canadians about high debt levels.




The widely quoted debt-to-income ratio is vague enough to have prompted several readers of this column to ask what it means. Economist Benjamin Tal understands their bewilderment.



Read the full article here.

 

[Ally]

Harper appeals to Obama to support $7B pipeline





Prime Minister Stephen Harper made a personal pitch Friday for President Barack Obama to support a controversial $7-billion pipeline that could double the amount of Alberta oilsands crude exported to the United States.




Harper confirmed he pressed Obama on Calgary-based TransCanada's proposed Keystone XL pipeline during the two leaders' hour-long meeting at the White House.




The planned 3,200-kilometre pipeline, which would run from Hardisty to the Gulf Coast of Texas, is currently in limbo as the State Department weighs whether to grant a presidential permit allowing construction to begin.




Speaking to reporters, Harper was asked if he discussed Canada's role as a secure supplier of oil and whether he sought assurances the U.S. would look favourably on the Keystone XL project. "Yes, we did discuss the matter you raised," Harper said.




Read the full article here.

 

[Ally]

Discount realtor eyes national expansion





CALGARY - A young Calgary realtor is expanding his discount realty business to the national level with plans to open offices in Vancouver and Toronto.




In November 2009, Roy Almog, who was based in Edmonton at the time, brought his discount commission business to Calgary.




Now, 2% Realty plans to open offices across the country: one in Vancouver in the next three to six months, and another in Toronto by the end of the year.




"The Calgary numbers are impressive just in the short time we've been here," he said. "It's definitely catching on."




Read the full article here.

 

[Ally]

Venezuela sees $200 oil if Suez Canal closes





CARACAS - Oil prices could more than double to $200 per barrel if the Suez Canal closes because of the crisis in Egypt, though there is no sign of that happening at the moment, Venezuela's oil minister said Friday.




Oil Minister Rafael Ramirez, who is usually hawkish on prices, said OPEC would call an emergency meeting if the canal closed, but he saw no need for such an extraordinary gathering of member states right now despite Egypt's turmoil.




"There is sufficient oil (in the market) and there have been no interruptions, but if they close Suez, that could take the oil price to $200," Ramirez told reporters.




Read the full article here.