July 2012 Canadian Economic Fundamentals

[Ally]

Canada continues modest growth






OTTAWA ` Canada has so far skirted much of the impact of the global economic storm, but the world`s biggest lending body is warning few countries will feel safe until Europe deals with its financial crisis ` and quickly.




`Simply put, the euro periphery countries have to succeed,` Olivier Blanchard, the International Monetary Fund`s chief economist, said Monday.







While progress was made at last month`s Europe summit to ease the `adverse links between sovereigns and banks and create a banking union,` the IMF said in a report that `timely implementation of these measures, together with further progress on banking and fiscal unions, must be a priority.`





Read the full article here.

 

[Ally]

Canadian's debt burden to get worse, Bank of Canada warns




OTTAWA ` Canadian households will see their debt burden worsen further in coming months even after the government stepped in to tighten mortgage rules, the Bank of Canada said on Wednesday, pointing to signs of `overbuilding` in the housing market.




The warning came as the central bank downgraded all of its quarterly economic growth forecasts until the second quarter of 2013 to reflect weaker-than-expected domestic demand. On Tuesday, the bank held its benchmark interest rate at 1% but signaled it may need to raise rates.







Some investors are betting Carney will cut rates as the world`s 10th largest economy is dragged down by Europe`s fiscal crisis and a prolonged U.S. recovery.





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[Ally]

The new style for student rental units




Parents investing in `kiddie condos` for their university-level children is not a new phenomenon ` many parents-turned-landlords have scooped up rental properties for their kids, leasing the other rooms as an alternative to paying rent.




But when a Toronto-based real estate developer launched a 58-unit condo development in the university town of Waterloo, Ont., in January, most of the purchasers weren`t parents. Buyers snapped up all the units of Sage Condos ` starting at $359,900 for 1,800 square feet ` in four days.




`The day you take it over, it`s fully rented and occupied,` said Toronto-based retail estate developer Darryl Firsten, who is behind Sage.





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[Ally]

Investors want to know why Carney is still talking about rate hikes




Bank of Canada Governor Mark Carney will offer a rationale today for why his next move may be a rate increase even as he reduces Canada`s growth forecast and investors bet on a cut.




Carney signalled the chance of tighter policy for a third straight time Tuesday, while he kept his key lending rate at 1% and pared his 2012 and 2013 forecasts for Canadian growth. He will elaborate on that outlook in a Monetary Policy Report at 10:30 a.m., followed by a press conference at 11:15 a.m., in Ottawa.





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[Ally]

Canadian housing market showing clear signs of cooling




TORONTO, ONTARIO, Jul 16, 2012 (MARKETWIRE via COMTEX) -- Canadian home sales numbers for June, released today by the Canadian Real Estate Association, show the first annual decline since April 2011, suggesting the housing market is beginning to show clear signs of cooling, according to BMO Economics.




Canadian home sales fell a seasonally adjusted 1.3 per cent in June from May and 4.4 per cent below year-ago levels. Similarly, average prices fell 0.8 per cent, year-over-year, in June, although they continue to be skewed down by the sales mix (i.e., sharply lower sales in pricey Vancouver). In fact, about 70 per cent of Canada's cities are still reporting price increases despite the headline decline, with a median 1.9 per cent year-over-year rise among the 26 largest markets.





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[Ally]

Canadian dollar, commodities lower as Chinese trade growth tumbles




TORONTO - The Canadian dollar closed lower Tuesday as prices for oil and metals slid in the wake of disappointing trade data from China.




The loonie was down 0.32 of a cent to 97.79 cents US as weak U.S. and European demand sent China`s trade growth down sharply in June.




Import growth fell by half from May`s level to 6.3 per cent, as factories facing weak foreign orders cut purchases of raw materials and domestic demand softened despite stimulus efforts. Export growth declined to 11.3 per cent from May`s 15.3 per cent.




Growth in the world`s second-largest economy has tumbled to its lowest level since the 2008 global crisis due to anemic export demand and government efforts to cool overheating and inflation. That is bad news for companies and investors that were looking to relatively strong Chinese growth to shore up global demand as the United States and Europe struggle.





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[Ally]

Landlords are responsible for working fire alarms






What Happened?




On July 4th, 2012 the Georgina Fire Department responded to a fire in a residential house in Keswick, Ontario.






How Strong was the Fire?




There are reports from witnesses the flames were rising more than 20 feet above the house.






Was Anyone Hurt?




All occupants, including a child, who were renting the Keswick home were out of the house with no injuries when the fire department arrived.





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[Ally]

Northwest Territories oil play as big as Bakken





CALGARY ` The Northwest Territories has switched its engine for economic independence to oil from natural gas as majors start exploring a promising shale play in the central Mackenzie region.




The Canol shale formation could be as big as the prolific Bakken light oil play which stretches across Montana, North Dakota, Saskatchewan and Manitoba, said David Ramsey, minister of industry and of transportation for the NWT, Wednesday.






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[Ally]

Consumer debt growth down 30% as Canadians real in spending




TORONTO ` Consumer debt growth was about 30 per cent lower in the second quarter than a year earlier ` the biggest slowdown since before the recession, according to a consumer credit study released Thursday.




Equifax Canada`s quarterly consumer credit trends report found that consumer indebtedness, excluding mortgage debt, grew 3.1 per cent year-over-year in the second quarter, down from 4.4 per cent in the same period of 2011.




The study also found that high-interest credit card debt fell by 3.8 in the quarter and consumer bankruptcies were down 4.5 per cent from a year earlier. Meanwhile, bank loans and lines of credit showed very moderate growth compared to a year ago.





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[Ally]

Energy powerhouse Canada, adapt to 'new world order' to capitalize on resource wealth: Senators




OTTAWA`Canada needs to take significant steps to broaden its energy export markets and come to grips with the `new world order` if it is to truly capitalize on its natural resource wealth while preserving the environment, a new Senate report suggests.




The report, compiled over the last three years by a committee of Canadian senators, seeks to define an energy strategy for Canada with 13 priorities developed over three years of consultations.




The strategy is based on creating a clear and responsible path for Canadian energy development and a low-emissions economy ` maximizing returns by broadening the global market for the country`s energy exports ` while minimizing the environmental impact.





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[Ally]

Worst U.S. drought in 50 years threatens to send food prices into overdrive






WASHINGTON/CHICAGO ` Oppressive heat and a worsening drought in the U.S. Midwest pushed grain prices near or past records on Wednesday as crops wilted, cities baked and concerns grew about food and fuel price inflation in the world`s top food exporter.




The worst drought in more than 50 years is wilting crops in the U.S. Midwest and sending prices into overdrive.




Soybean prices at the Chicago Board of Trade set a record high and corn closed near a record as millions of acres of crops seared in triple-digit heat in the Corn Belt. Corn fields have been plowed up in many locations for lack of rain. Now soybeans, which develop later than corn, are in the bull`s eye.





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[Ally]

Consumer debt growth slows 30% in Q2




TORONTO - Consumer debt growth was about 30 per cent lower in the second quarter than a year earlier ` the biggest slowdown since before the recession, according to a consumer credit study released Thursday.




Equifax Canada's quarterly consumer credit trends report found that consumer indebtedness, excluding mortgage debt, grew 3.1 per cent year-over-year in the second quarter, down from 4.4 per cent in the same period of 2011.




The study also found that high-interest credit card debt fell by 3.8 in the quarter and consumer bankruptcies were down 4.5 per cent from a year earlier. Meanwhile, bank loans and lines of credit showed very moderate growth compared to a year ago.





Read the full article here.

 

[Ally]

Canada will gain influence as Europe descends into chaos





With most of Europe trapped in a bleak cycle of economic deterioration and despair, Stephen Harper's assertion that Canada is "a great nation rising" has a special resonance here today.




"Canada is No. 1," the editor of France's usually patriotic L'Express magazine gushed in a special edition this month that encouraged its readers to emigrate not only to Quebec but to every corner of the country.






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[Ally]

Are daily financial updates more harmful than helpful?



If someone knocked on your door every night to tell you what your house was worth, you`d likely see that as a waste of time. Some people see their house strictly as a home, while others see it as a long-term investment.





But for both groups, a dip in housing prices is unlikely to trigger putting their home on the market. A drop in financial markets, however, is more likley to trigger a portfolio sale and part of the reason why could be that people don`t get bombarded with daily analysis on the fluctuations of their homes.





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[Ally]

'Average' house prices don't tell the whole story




When someone asks how house prices are doing in a particular neighbourhood, the question seems easily answered.




The big real estate boards all issue monthly price reports that spell out what the average selling price was in the previous month and how that compares to the month, and the year, before.




But there's a problem with trying to divine market direction from average price data. It's just too blunt a tool.





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[Ally]

LRT projects across the country



A connector of far-flung suburbs. A solution to rapid population expansion. In a way, light rail is seen as a panacea ` albeit an expensive one ` to the growing pains in several Canadian cities where plans for new lines are underway.







These projects can also serve as lessons to Ottawa as other cities find out what works well, and encounter unexpected challenges.





Below are summaries of projects ongoing in Vancouver, Edmonton, Calgary and the Region of Waterloo, as well as what planners learned as they worked through the design and construction.





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[Ally]

The first charts top economists check when they wake up in the morning




Business Insider reached out to some of the world`s most influential analysts, economists, hedge-funders and traders and asked them a simple question: what charts are you always keeping your eye on?




Their responses were surprisingly varied, from slides that delved into S&P earnings, to another that broke down US demographics, and another that found new and improved ways to look at European borrowing, and much much more.





Read the full article here.

 

[Ally]

If Redford can sell McGuinty on the oil sands, there's hope for us yet




On Thursday night, Alberta premier Allison Redford dined with Ontario premier Dalton McGuinty in downtown Toronto. The event was a chance for the two of mend fences needlessly and recklessly damaged by Mr. McGuinty earlier this year, when he sought to pin the blame for Ontario`s fiscal woes ` blame which belongs more to his government than any external factor ` on Alberta`s booming oil sector hiking up Canada`s dollar, to the detriment of Ontario manufacturers.




After the meeting, both Ms. Redford and Mr. McGuinty seemed pleased with how it had gone. Particularly welcome were comments from Mr. McGuinty, who seemed to walk back his earlier criticisms of Alberta`s energy sector. Mr. McGuinty said that it was important that the provincial premiers start `seeing ourselves as strong players on the same team, Canada, so that we can face the world together and compete as one when it comes to securing growth and prosperity for our economy.` He`s right, and it`s good that he`s now ready to admit what he should have believed all along.





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[Ally]

Will tight oil change the world?




CALGARY ` The quick rise of tight oil in the United States and Canada is dominating oil patch chatter as players take stock of what it could all mean ` are we on the verge of a global energy revolution, or on a trend that is encouraging, but unlikely to meet lofty expectations?




Tight oil is unconventional oil resources extracted by horizontal drilling and fracking technologies.





Read the full article here.

 

[Ally]

Canadians trimming credit card debt





Growth in non-mortgage debt is down 30 per cent this year over last year, mostly because Canadians are paying off their credit cards, the latest report from Equifax Canada shows.




Canadians are still taking on more debt, but at a much slower pace than they were last year, said Nadim Abdo, vice-president, Consulting and Analytical Services, Equifax Canada.






Read the full article here.