May 2012 Canadian Economic Fundamentals

[Ally]

A better way for megaproject assessment decisions





Pipelines to carry bitumen from Alberta to B.C. ports have become big news, as renewed emphasis is placed on the development of fossil-fuel energy resources to stimulate Canada`s economic recovery. Both industry and government are moving forward with plans for increases in production from the oilsands to meet perceived global demand. A coalition of first nations, environmental groups, and local governments is aligned against transporting this oilsands bitumen through B.C. to reach Asian markets. The result is tension, controversy and frustration.






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[Ally]

Editor: Mulcair's diagnosis is off the mark





You don`t have to be an economist to know that the decline in the manufacturing sector in Central Canada is not entirely due to `Dutch disease,` if in fact there is such a thing.




Any consumer who looks at the country of origin of the cheap, high-quality manufactured goods that enter the country by the container load will know that a better diagnosis might be Chinese disease.






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[Ally]

Inflation edges up to 2%, but few see reason for interest rate hikes





OTTAWA - Inflation in Canada appears to have entered a period of stability near the Bank of Canada's two per cent sweet spot, providing little impetus for interest rate hikes any time soon.







Statistics Canada said Friday annual inflation edged up one-tenth of a point to two per cent in April, while the core, underlying price measure rose two-tenths to 2.1.








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[Ally]

Inflation across the country



Canada`s national inflation rate was 2.0 per cent in April, Statistics Canada says. Here`s what happened in the provinces and territories. (Previous month in brackets):

By provinces and territories

• 
  Newfoundland and Labrador 3.0 (2.5)
  
• 
  Prince Edward Island 2.4 (2.8)
  
• 
  Nova Scotia 2.6 (2.5)
  
• 
  New Brunswick 2.6 (2.4)
  
• 
  Quebec 2.4 (2.1)
  
• 
  Ontario 2.1 (2.2)
  
• 
  Manitoba 1.8 (1.4)
  
  
  Saskatchewan 2.1 (1.8)
  
  
  Alberta 0.8 (1.7)
  
  
  British Columbia 1.6 (1.6)
  
  
  Whitehorse, Yukon 2.69(2.6)
  
  
  Yellowknife, N.W.T., 3.5 (2.6)
  
  
  Iqaluit, Nunavut 1.5 (1.9)
  

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[Ally]

Quality of life across Canada depends on where you live, says study





Canadians are used to hearing their country ranks among the world's best places to live, but new research suggests that quality of life can depend a lot on where you live.







The first-ever quality-of-life comparison of provinces and territories to other countries suggests that while most Canadians live as well as anyone in the world, others are well down the list.






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[Ally]

Canada pledges oil and gas pollution rules by 2013 at climate conference




Facing questions about its upcoming withdrawal from the Kyoto Protocol and "gaps" in its existing policies, Canada told international climate change talks in Germany Thursday that it planned to crack down on oil and gas pollution through draft regulations by next year.







Guy Saint-Jacques, Canada's chief negotiator and climate change ambassador, said that the Canadian government was "working towards draft regulations for 2013" in the oil and gas sector as it continued efforts to meet commitments made by Prime Minister Stephen Harper to reduce annual greenhouse gas emissions by 2020 to 17 per cent below 2005 levels.





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[Ally]

Youth unemployment to stay at 'crisis peak' for years




The number of young people without work in the world has grown by four million since 2007. What's more troubling? Millions more `disconnected youth` have given up the job search altogether.




The global youth jobless rate this year remains stuck at `crisis peak` levels and won't likely come down until at least 2016, the International Labour Organization predicts in a grim outlook on youth employment published this week.





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[Ally]

OECD urges Canada to raise rates




An influential international body is urging Canada`s central bank to raise interest rates in the fall, and continue doing so through 2013 to cool housing prices and contain inflation.




The Paris-based Organization for Economic Co-operation and Development`s prescription for monetary policy will stoke the already hot debate about whether the Bank of Canada`s interest rate stance is inflating a housing bubble.





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[Ally]

Banks could soon be extinct





MONTREAL - Many people hate going to the bank.




They`re often not open during convenient hours, it`s a slow process, and it`s hard to find the time to make appointments.




Well, one day there may be no need to ever go into a bank, as technology is poised to replace many of the actions that now can only be done in a bank.




Read the full article here.

 

[Ally]

OECD urges Canada to hike rates this fall to cool housing market




Canada`s economy is gradually recovering and is expected to grow by 2.25 % this year and 2.5 % in 2013, according to a new report by the Organization for Economic Co-operation and Development.




Private consumption and investment will continue to be the primary drivers of growth in Canada, the report, said which was published Tuesday.




Canada`s growth will slightly outpace the OECD average, which is expected to be 1.6% in 2012 and 2.2% in 2013.





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[Ally]

Mortgage brokers warn about new refinancing rules




Canada`s mortgage brokers are warning the banking regulator that its proposed mortgage underwriting rules could result in people losing their homes.




The brokers are concerned about a number of the potential rules, but the one that worries them most outlines what banks would have to do when a consumer wants to renew or refinance their mortgage.





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[Ally]

Inflation report will do little to sway Canada's rate stance






The Bank of Canada`s nuanced effort to straddle the line between acknowledging that inflation has been firm, and hinting that it will act before it creeps up much further, while asserting that it reserves the right to delay action as long as the global backdrop is shaky, appears to be working in holding expectations steady.





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[Ally]

As the world goes to pot, the best investment option could be Canada







`It`s a complete tempest in a teapot.` -Jamie Dimon, CEO of JP Morgan on April 13th, discussing large derivatives trades that became known as the `London Whale` trade.






`In hindsight, the new strategy was flawed, complex, poorly reviewed, poorly executed and poorly monitored.` -Jamie Dimon, on May 10th, after disclosing that the losses on the `London Whale` trades exceeded $2 billion in less than six weeks.






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[Ally]

Euro crisis threatens world recovery: OECD




PARIS ` The United States and Japan are leading a fragile economic recovery among developed countries that could yet be blown off course if the eurozone fails to contain the damage from its problem debtor states, the OECD said on Tuesday.




In its twice-yearly economic outlook, the Paris-based Organisation for Economic Co-operation and Development forecast that global growth would ease to 3.4% this year from 3.6% in 2011, before accelerating to 4.2% in 2013, in line with its last estimates from late November.





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[Ally]

OECD fears Euro woes will snap brittle world recovery




PARIS, May 22 (Reuters) - The United States and Japan are leading a fragile developed world recovery that could be blown off course if Europe fails to contain the damage from its problem debtor states, the OECD said on Tuesday.





It urged euro zone leaders to embrace all options for tackling the crisis, potentially including common bonds to go with the common currency.





In its twice-yearly economic outlook, the Paris-based Organisation for Economic Co-operation and Development forecast that global growth would ease to 3.4 percent this year from 3.6 percent in 2011, before accelerating to 4.2 percent in 2013, in line with its last estimates from late November.





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[Ally]

Whatever happened to $200 oil?




Four years ago, when I was still chief economist at CIBC World Markets, I forecast that global economic growth was on pace to send oil prices (CL-FT89.50-2.35-2.56%) to $200 (U.S.) a barrel by 2012. In short, the argument was based on a supply-driven analysis that weighed the sources of future oil supply against the prices that would be needed to make the extraction and processing of that oil economically viable.





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[Ally]

What will a Greek default mean for you?




With Greece on the verge of default, we`re about to learn how little has really changed since governments around the world wrote the last round of bailout cheques to prop up failing financial institutions. Just as the collapse of the U.S. subprime mortgage market rippled into nearly every corner of the global financial system, so too will a pending default by Greece.





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[Ally]

Treasury Board president slams NDP leader comments on oil sands





CALGARY ` Tony Clement, president of the Treasury Board, blasted recent negative comments about Alberta`s oilsands by federal NDP Leader Thomas Mulcair as `reckless` and `irresponsible.`




Speaking Wednesday to the Calgary Chamber of Commerce, Clement, who is also Minister responsible for FedNor, said the conclusion of Muclair`s musings `would undoubtedly cripple an important and growing sector of Canada`s economy.`






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[Ally]

The dirty tricks sellers play to push up real estate prices





In Week 3 of the Buyer Diaries, our Winnipeg bloggers decided to walk away from a house they liked because of the seller's pressure tactics.



Corey and Angela were considering making an offer but were told by the selling agent that the owners were taking the house off the market the next day, so it was now or never for a bid.





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[Ally]

The return of the assumable mortgage





That massive amount of debt you call a mortgage could be an `asset` in the near future.




It sounds far-fetched but imagine a scenario where you sign a 10-year fixed rate mortgage at 3.89% and five years from now rates have climbed to 6% and variable rates are not much lower.




You decide it`s time to sell. Someone buying that property would very likely be interested in taking over your payments ` they might even pay more for your home knowing how much they`ll save on interest.





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