August 2012 Canadian Economic Fundamentals

[Ally]

Beleaguered pipeline industry vows to rally around 'Integrity First' campaign




OTTAWA --- Canada's pipeline industry continued Thursday to counter a string of public relations disasters by announcing an "Integrity First" strategy to improve pipeline safety and the industry's "social performance."

Canadian Energy Pipeline Associationhttp://http://www.cepa.com/ President Brenda Kenny acknowledged at a news conference that the strategy was actually launched four years ago, and that a news release was issued as recently as a year ago.

But Kenny told reporters here that Calgary-based CEPA is taking a "much more aggressive and organized" approach under the Integrity First banner to convince Canadians pipelines are crucial to Canada's economy and safer than other forms of energy transportation.






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[Ally]

Apartment valuations soar




Record-setting prices, record lows for borrowing costs. It may sound like a housing-sector story but it`s the valuations on apartment deals that are going through the roof.




A handful of recent transactions have grabbed the attention of some in the real estate industry because of returns that are not much better than government of Canada bond yields ` considered almost risk-free.




Capitalization rates ` the ratio between the annual operating income and the value of a property ` have dropped to as low as 2.5% on some deals. Compare that with government of Canada five-year bonds trading around 1.35%.





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[Ally]

Many first-time homebuyers wish they had a second chance





Buying a first home is one of life`s most significant purchases, and a new poll shows many first-time homebuyers wish they had done things differently.




More than half of those who were asked said they would make a bigger down payment and that they would buy a home sooner, the 2012 TD Canada Trust First Time Home Buyers Report found.




`The survey results reveal that people generally want the best of both worlds, to be able to buy a home sooner and to have a bigger down payment,` said Brett Currah, district vice-president, TD Canada Trust. `What it means at the end of the day, though, is that planning becomes critical.`






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[Ally]

Job gains, family incomes remain stagnant





OTTAWA- The growing economy hasn't done very much to boost Canadian incomes, a new report from Statistics Canada confirms.




The agency reported Monday that median, after-tax income for families of two or more amounted to $65,500 in 2010, virtually unchanged from 2009 or the year before after adjusting for inflation.




The result was slightly better for two-parent families with children. That segment saw median, after-tax income grow to $78,800 from $77,200 the year before.





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[Ally]

Economy slowing, interest rates to stay low for longer






OTTAWA - Canadians are in for at least two more years of slowing economic activity and low job creation, a condition that should keep interest rates low until 2014, says the Bank of Nova Scotia.




In a new forecast, Scotiabank economists Derek Holt and Dov Zigler estimate the economy will likely average 1.9 per cent growth this year, and 1.8 in 2013.




The forecast is slightly below consensus, and well south of the Bank of Canada's recently revised projections of 2.1 and 2.3 per cent growth in 2012 and 2013.




The forecast comes on the same day as a Conference Board report that suggests Canada's labour market has run out of gas, and could even register a loss of jobs for the month of July.




Scotiabank's take on the economy also follows this week's disappointing gross domestic product performance in the month of May, a 0.1 per cent gain that suggests second-quarter growth will be below two per cent.





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[Ally]

Potential grows for food as prices surge



(Reuters) - The world could face a food crisis of the kind seen in 2007/08 if countries restrict exports on concerns about a drought-fuelled grain price rally, the U.N.'s food agency warned on Thursday, after reporting a surge in global food prices in July.




A mix of high oil prices, growing use of biofuels, bad weather, soaring grain futures markets and restrictive export policies pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt, Cameroon and Haiti.





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[Ally]

Tempering U.S. shale potential






It`s tough to get a word in edgewise as U.S. producers beat their chest over their shale oil and gas finds and impending energy independence, but one analyst has managed to deflate some of the hype.




Bob Brackett, an analyst at New York-based Bernstein Research, says oil wells in Montana, part of the giant Bakken shale basin, are rapidly deteriorating.







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[Ally]

Canada emerging as confident global leader







The Olympics are more than an exhibition of excellence in sport. They are also inherently political events where the fortunes and stature of countries are displayed and compared. As such, they offer Canadians a moment when we can take stock - and take pride - in where we stand.




Consider the comment made on the eve of the Olympics by Minister of Sport Bal Gosal, who boldly predicted a Top 12 finish for Canada and added what once would have been considered an "un-Canadian" remark: "We want to have winners."




Calling for a Top 12 finish may seem a characteristically modest Canadian goal - not No. 1 nor even Top 10 - but it would be our best ever finish for a summer Olympics.






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[Ally]

Brighter employment picture masked by loss of part-time jobs





At first glance, July`s sharp drop in employment seems an ill omen for the Canadian economy at a time when the U.S. rebound is slowing and parts of Europe are deep in recession.




But a closer look reveals a brighter picture of full-time job gains and modest, yet steady, job growth over the rest of 2012 ` the kind of employment that will support domestic demand amid the global slowdown.






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[Ally]

Syndicated mortgages expert uncovers the real deal behind the new mortgage rules







Marcus Arkan, experienced mortgage expert and CEO of Canada`s premiere mortgage brokerage SMI has recently shared an analysis of new a mortgage policy. In his analysis, Mr. Arkan shed light not only over the effects but also on the possible reasons that prompted Mr. Jim Flaherty to change the rules for the fourth time in a row.




In this aspect, a new BMO study also unveiled what Mr. Arkan has suspected for a long time, nearly half of Canadian citizens don`t understand the new mortgage rules and how they are affected by them.




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[Ally]

Canada's stability eludes U.S. markets




Toronto - There continues to be a significant dichotomy between the performance of Canadian office markets and that of their U.S. counterparts. While Canada has displayed stability, progress in the U.S. has been more uneven, as many American markets continue to bounce near the bottom of the recovery curve.






Canada Overview






Most of Canada`s office leasing markets are characterized by limited supply, stable-to-rising rental rates and active development pipelines. Midway through 2012, Canada`s office vacancy rate was 7.1%, down from 7.8% at mid-year 2011, 9.9% at mid-year 2010 and 8.4% at mid-year 2009 - the low point of the recession. Of the 12 Canadian markets surveyed, eight saw vacancy rates decline between 10 and 350 basis points (bps) over last year, while the remaining four markets experienced vacancy rate increases of 20 to 240 bps. Apart from Mississauga (Toronto West) and Lethbridge, city-wide vacancy rates remain in single- digit territory, with six of the 12 markets posting vacancy rates below the national average. The biggest swings in vacancy occurred in Calgary (4.6%, -350 bps) and Quebec City (6.8%, +240 bps). Driven by commodities, largely the oil and gas sector, the spread in vacancy between Western and Eastern Canada widened from 60 to 160 bps.





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[Ally]

Canada can expect to start paying higher prices for food




OTTAWA ` Canadians can expect to starting paying higher prices for food in the coming months, peaking at about four per cent more sometime next year, the CIBC says in a new report.




The bank`s chief economist, Avery Shenfeld, said the estimate is based on projections of the impact of the severe U.S. drought, which has hit corn and soybean yields but is also pushing wheat and barley prices higher.





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[Ally]

Canada's unemployment rate rises in July






OTTAWA ` The Canadian economy`s job creation came to an abrupt end in July, suffering the first major reversal in almost a year with the shedding of 30,400 jobs, pushing up the national unemployment rate up by one-tenth of a point to 7.3 per cent.




Economists had been warning that employment growth was likely to moderate in the second half of 2012, but still expected a modest pick-up of about 6,000 new jobs for July.




Instead, the month brought the biggest decline since last October, predominantly in Quebec and among older women, and all in the part-time category.





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[Ally]

Job creation stalls in July



The Canadian economy's job creation came to an abrupt end in July, suffering the first major reversal in almost a year with the shedding of 30,400 jobs, pushing up the national unemployment rate up by one-tenth of a point to 7.3%.



Economists had been warning that employment growth was likely to moderate in the second half of 2012, but still expected a modest pick-up of about 6,000 new jobs for July.




Instead, the month brought the biggest decline since last October, predominantly in Quebec and among older women, and all in the part-time category.





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[Ally]

Fracking industry's guar bean dependence leaves companies looking for substitutes





Aug 13 (Reuters) - Oil and gas companies are racing to find a new substitute for India's guar bean, a key ingredient used in hydraulic fracturing, the drilling technology that has revolutionized the energy industry by opening up vast new fields for production.







Hydraulic fracturing, or "fracking," first created a boom in natural gas drilling over the past decade that brought huge new supplies of the fuel to market, and that technology is now being used to unlock giant oil fields that were long considered too difficult to tap.







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[Ally]

Where is Canada's housing market headed this summer?





Toronto, Ontario (PRWEB) August 13, 2012




Marcus Arkan, CEO of renowned mortgage brokerage Syndicate Mortgages, has once again stepped forward to help homeowners and borrowers make the right mortgage decision by informing them regarding current happenings and future possibilities in the housing industry. In this aspect, Mr. Arkan has shared latest stats and figures from Canada`s major housing markets.




Major financial institutions and banks including ScotiaBank and Bank of Canada revealed that Canada`s housing market is cooling down even in Toronto and Vancouver. Both Vancouver and Toronto were among the hottest spots during the first quarter of 2012. According to Mr. Arkan, this could most probably be the effect of the new mortgage policy introduced last month.




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[Ally]

Many Canadians don't have emergency funds set aside




CALGARY ` A new CIBC poll conducted by Harris/Decima reveals that 45 per cent of Canadians do not have an emergency savings fund, meaning an unexpected expense or emergency could have them dipping into RRSPs or taking on debt to get by.




The poll, which was released Monday, also shows that experience counts when it comes to planning ahead, with younger Canadians less likely to have an emergency savings fund.





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[Ally]

Canadian companies shop for European assets




Canadian companies and pension funds are on a European acquisition binge, even as U.S. and Chinese buyers slash spending on takeovers there. Europe`s low valuations and the robust Canadian dollar are spurring deals by Canadian companies such as Brookfield Asset Management (BAM) and Alimentation Couche-Tard. `Canadian companies are basically punching above their weight in the European market,` says Julian Brown, head of corporate finance for Canada at Pricewaterhouse-Coopers in Toronto.




The transatlantic dealmaking is part of a shift in Canada`s outward focus away from the U.S. in favor of other foreign markets. America`s economic recovery has lifted stock prices, making assets more expensive, and cash-rich Canadian buyers are looking for new markets outside North America to deploy resources.







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[Ally]

Canadian housing market to slow moderately this year, into 2013: CMHC





Canada Mortgage and Housing Corp. is forecasting a moderate slowdown in new-home construction starts as well as sales of existing housing.




The Ottawa-based federal agency isn`t calling for a major decline, but its latest forecast suggests next year will be somewhat softer than estimates CMHC issued in June while 2012 may be somewhat stronger than previously expected.






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[Ally]

Science, not economics, will determine fate of pipeline, Harper says




OTTAWA ` Prime Minister Stephen Harper says science ` not politics ` will ultimately determine whether the Northern Gateway pipeline proceeds, and he is refusing to get into an argument with British Columbia about how to share `hypothetical revenues` from the project.




Harper also maintains it`s `in the vital interest` of British Columbia and Canada to diversify export markets with infrastructure projects that can help get Canadian resources to Asia.





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