November 2012 Canadian Economic Fundamentals

[Ally]

OECD says Canada to lead G7 growth for the next 50 years




The Paris-based Organization for Economic Co-operation and Development predicts Canada will lead the Group of Seven industrialized economies in growth over the next half century.




In a report released Friday, the OECD says it expects Canada's real gross domestic product will average 2.2 per cent growth annually over the next 50 years.




Canada, it predicts, will be near the top on a per capita basis ` possibly a truer measure of success ` with only Japan sneaking ahead.





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[Ally]

Western Canada's forest products industry rebuilds, thanks to U.S. housing rebound




EDMONTON - Western Canada`s forest products industry is back in gear, riding a rebound in the U.S. housing market and surging lumber prices.




The turnaround is reflected in the shares of major Vancouver-based producers like West Fraser Timber (TSX:WFT), International Forest Products (TSX:IFP.A), Western Forest Products (TSX:WEF) and Ainsworth Lumber (TSX:ANS).




All are up sharply over the past year, with Ainsworth`s shares more than tripling in value and West Fraser`s stock closing Friday at an all-time high.





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[Ally]

More Canadians using RRSPs for non-retirement reasons






One-third of Canadians report having dipped into their RRSPs.




A recent Scotiabank poll found that more Canadians are using their RRSPs for more than just sheltered retirement savings.




The top reason cited for withdrawing the money from an RRSP was to buy a first home (40%), but 14% of Canadians took money out of their RRSPs to cover day-to-day living expenses, and 6% took money out to pay for a vacation.





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[Ally]

It's not a pension crisis, it's a savings crisis





Canadians don`t get a grip on growing gaps in retirement planning, we are quickly approaching a time when life after work for a large swathe of the population will mean some serious lifestyle downgrades.

The generally accepted target is to replace 60% to 70% of our working incomes in retirement. Some are already missing that goal and are faced with the loss of the cars, homes and travel that had been financed by their 9-to-5 income. And things are getting worse, says Craig Alexander, senior vice-president and chief economist at Toronto-Dominion Bank.





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[Ally]

Carney stepping down as Bank of Canada governor






OTTAWA - Bank of Canada governor Mark Carney will leave his post next June to become the first foreign national to head the Bank of England.




Finance Minister Jim Flaherty made the announcement Monday with Carney at his side.




"It is bittersweet," Flaherty said about losing Carney. "It is our loss, of course it is. He has been a superb Bank of Canada governor."





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[Ally]

As tougher mortgage rules slow housing market, critics call for reversal




The real estate industry has ramped up its attack on rules making it harder to borrow but its challenges face one big obstacle ` mortgage restrictions are working exactly the way the federal government wants them to.




In the past week the Canadian Association of Accredited Mortgage Professionals weighed in with complaints that Ottawa`s restrictions were killing consumer confidence and even raised the stakes further by suggesting the entire Canadian economy was at stake.





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[Ally]

Top Canadian banks will end 2012 on a high note: Analyst




Royal Bank of Canada, Toronto-Dominion Bank and other lenders will report quarterly profit growth of as much as 17 per cent, demonstrating the banks` resilience even as the world`s 11th-largest economy slows.




Market-related revenue such as trading and advisory fees will be the highest in at least five quarters, said Sumit Malhotra, an analyst at Macquarie Capital Markets in Toronto. The banks begin reporting results for the fiscal fourth quarter on Thursday, starting with Royal Bank.





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[Ally]

Economy still growing but OECD warns of possible economic shocks




The Organization for Economic Co-operation and Development gives mostly a passing grade to Canada's economy in a new outlook Tuesday, despite noting growth has been soft in the second half of 2012 and will remain so until mid-2013.




However, it warns Canada is not out of the woods yet. Beside the usual risks from Europe and elsewhere, the OECD says the domestic economy has become somewhat unbalanced since the 2008-09 recession.





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[Ally]

World needs oil sands crude, IEA economist says




An energy-thirsty world will need `every drop` of growing production in Canada`s oil sands, but the industry will need to reassure a skeptical public that development can be done in an environmentally sustainable way, the International Energy Agency`s chief economist says.




With countries gathering in Qatar this week for the annual United Nations climate change talks, Canada`s expanding oil sands production is again in the spotlight. Canada is routinely vilified at such meetings for being a laggard in battling global warming and for developing one of the world`s most emissions-intensive sources of crude.



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[Ally]

Did you know? Canada has the strongest job growth in the G7





The Honourable Jim Flaherty, Minister of Finance, announced the launch of pre-Budget consultations in preparation for Budget 2013. Our Economic Action Plan has resulted in Canada having the strongest job growth in G-7, with over 820,000 jobs created since July 2009. Furthermore, our Government announced that the next Budget will build on our pro-growth initiatives and will continue to create jobs and long-term prosperity for Canadians. We will not engage in dangerous and risky new spending schemes or in endless spending that will increase deficits and we will not increase the tax burden on Canadians. It is due to our Government`s responsible fiscal management, government program spending is projected to steadily decline over the next four years as a proportion of our economy and will return to pre-recession levels. While we remain committed to controlling government spending, we have made a deliberate choice to protect funding for health care and education. Our Government is committed to ensuring the most efficient use of Canadian taxpayers` dollars and this will continue to be core to our agenda.





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