May 2012 Canadian Economic Fundamentals
- Thread starter Ally
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Canadian GDP falls in February
OTTAWA`The Canadian economy unexpectedly shrank in February due to a slowdown in the mining and manufacturing sectors, dampening expectations that the Bank of Canada will raise interest rates soon.
Statistics Canada reported Monday that the national gross domestic product declined by 0.2 per cent from January. Economists had been expecting growth of 0.2 per cent.
Bank of Montreal deputy chief economist Doug Porter said the Canadian economy `disappointed in a big way in February.`
Read the full article here.
OTTAWA`The Canadian economy unexpectedly shrank in February due to a slowdown in the mining and manufacturing sectors, dampening expectations that the Bank of Canada will raise interest rates soon.
Statistics Canada reported Monday that the national gross domestic product declined by 0.2 per cent from January. Economists had been expecting growth of 0.2 per cent.
Bank of Montreal deputy chief economist Doug Porter said the Canadian economy `disappointed in a big way in February.`
Read the full article here.
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American Petroleum claims Canada oil sands will create 600,000 U.S. jobs
Most Canadians have never seen it, but the American Petroleum Institute (API) has been running ads in the U.S. promoting Alberta's oil sands as a tool for creating American jobs. The ad features actors of various age groups and ethnicities in the role of plain-folk Americans expressing surprise`and delight`at the fact that Canada is America's top supplier of imported oil.
`Makes sense -- Canada's about the best friend we have,` a young man comments, while an older man adds approvingly, `Canada is a very good neighbour.`
Read the full article here.
Most Canadians have never seen it, but the American Petroleum Institute (API) has been running ads in the U.S. promoting Alberta's oil sands as a tool for creating American jobs. The ad features actors of various age groups and ethnicities in the role of plain-folk Americans expressing surprise`and delight`at the fact that Canada is America's top supplier of imported oil.
`Makes sense -- Canada's about the best friend we have,` a young man comments, while an older man adds approvingly, `Canada is a very good neighbour.`
Read the full article here.
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Our Loonie runs on more than oil
Bank of Canada Governor Mark Carney recently rejected the notion that the Canadian dollar was nothing more than a "petro-dollar" relying entirely on the global price of oil to backstop its value.
"It is far too simplistic to talk about the Canadian dollar as a commodity currency, let alone a currency that moves consistent with one commodity," Carney noted during a press conference in Ottawa earlier this month.
Despite the Governor's dismissal, there is no question that the Canadian dollar is receiving support from surging oil prices and the oil-producing regions of Western Canada are reaping the benefits. Meanwhile, Canada's manufacturing base in Quebec and Ontario continues to struggle as demand from foreign markets remains well below pre-recession levels.
Read the full article here.
Bank of Canada Governor Mark Carney recently rejected the notion that the Canadian dollar was nothing more than a "petro-dollar" relying entirely on the global price of oil to backstop its value.
"It is far too simplistic to talk about the Canadian dollar as a commodity currency, let alone a currency that moves consistent with one commodity," Carney noted during a press conference in Ottawa earlier this month.
Despite the Governor's dismissal, there is no question that the Canadian dollar is receiving support from surging oil prices and the oil-producing regions of Western Canada are reaping the benefits. Meanwhile, Canada's manufacturing base in Quebec and Ontario continues to struggle as demand from foreign markets remains well below pre-recession levels.
Read the full article here.
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Fixed rate popularity grows
Interest in fixed-rate mortgages has increased for the first time in four years, according to RBC`s recently-published Homeownership Poll.
The survey found 42% of prospective homebuyers plan to select a fixed-rate mortgage compared to just 21% who prefer a variable rate. (Note: This poll was done in January. We're not sure why RBC waited this long to publish the data.)
RBC's survey suggests the balance (37%) would choose a combination of fixed and variable rates. In practice, a lot of those people are probably undecided. Only 8% of people actually select combination mortgages, according to CAAMP data.
Read the full article here.
Interest in fixed-rate mortgages has increased for the first time in four years, according to RBC`s recently-published Homeownership Poll.
The survey found 42% of prospective homebuyers plan to select a fixed-rate mortgage compared to just 21% who prefer a variable rate. (Note: This poll was done in January. We're not sure why RBC waited this long to publish the data.)
RBC's survey suggests the balance (37%) would choose a combination of fixed and variable rates. In practice, a lot of those people are probably undecided. Only 8% of people actually select combination mortgages, according to CAAMP data.
Read the full article here.
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Harper government has had a good first year
It has been a year since the Conservatives won a majority government, a year in which there have been plenty of ups and downs, the latter including the robo-calls controversy and the Auditor-General`s scathing report of mismanagement and a lack of accountability on the F-35 purchase. But on most of the issues that matter, on the economy, on reining in public spending, on addressing the long-term structural challenges of Old Age Security, on immigration and on the sustainability of health-care funding, the government headed by Stephen Harper got it right.
Read the full article here.
It has been a year since the Conservatives won a majority government, a year in which there have been plenty of ups and downs, the latter including the robo-calls controversy and the Auditor-General`s scathing report of mismanagement and a lack of accountability on the F-35 purchase. But on most of the issues that matter, on the economy, on reining in public spending, on addressing the long-term structural challenges of Old Age Security, on immigration and on the sustainability of health-care funding, the government headed by Stephen Harper got it right.
Read the full article here.
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Why smaller downpayments can lead to better mortgage rates
It doesn't make much sense, but a skimpy down payment on a home might actually get you a better mortgage rate in today's market.
Blame the government subsidy known as mortgage default insurance, which ultimately makes it less risky to lend money to someone who has only 5% down compared to someone with 20%.
Consumers with less than 20% down must get mortgage default insurance in Canada if they are borrowing from a federally regulated bank. The cost is up to 2.75% of the mortgage amount upfront on a 25-year amortization but that fee comes with 100% backing from the federal government if the insurance is provided by Crown corporation Canada Mortgage and Housing Corp.
Read the full article here.
It doesn't make much sense, but a skimpy down payment on a home might actually get you a better mortgage rate in today's market.
Blame the government subsidy known as mortgage default insurance, which ultimately makes it less risky to lend money to someone who has only 5% down compared to someone with 20%.
Consumers with less than 20% down must get mortgage default insurance in Canada if they are borrowing from a federally regulated bank. The cost is up to 2.75% of the mortgage amount upfront on a 25-year amortization but that fee comes with 100% backing from the federal government if the insurance is provided by Crown corporation Canada Mortgage and Housing Corp.
Read the full article here.
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Oil politics a slippery slope for Canadians
In recent years, relations between Ottawa and the provinces have been relatively peaceful ` give or take the odd explosion from the now-retired Danny Williams.
But there may be acrimony on the horizon, battles that not only could pit the federal government against provinces but provinces against some of their provincial counterparts. And perhaps not surprisingly, money is at the root of it.
Read the full article here.
In recent years, relations between Ottawa and the provinces have been relatively peaceful ` give or take the odd explosion from the now-retired Danny Williams.
But there may be acrimony on the horizon, battles that not only could pit the federal government against provinces but provinces against some of their provincial counterparts. And perhaps not surprisingly, money is at the root of it.
Read the full article here.
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Why CRA wants $30,000 HST rebates back
Some investors who bought new homes or condos in the past few years planning to flip them in a hot Toronto market are facing HST bills of up to $30,000.
That`s because they didn`t read the fine print on the purchase agreement and they now have a problem that relates to the HST rebate that is available to buyers of new homes under certain conditions.
Read the full article here.
Some investors who bought new homes or condos in the past few years planning to flip them in a hot Toronto market are facing HST bills of up to $30,000.
That`s because they didn`t read the fine print on the purchase agreement and they now have a problem that relates to the HST rebate that is available to buyers of new homes under certain conditions.
Read the full article here.
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Canadian graphite producers prepare for a boom
Move over rare earths ` graphite is the new darling of the mining industry.
Canadian graphite miners are angling to be high-end suppliers to the global lithium ion battery market, where companies such as LG, Samsung, Mitsubishi and Hitachi are fuelling growing demand for new technologies ranging from smartphones and laptops to electric cars.
Read the full article here.
Move over rare earths ` graphite is the new darling of the mining industry.
Canadian graphite miners are angling to be high-end suppliers to the global lithium ion battery market, where companies such as LG, Samsung, Mitsubishi and Hitachi are fuelling growing demand for new technologies ranging from smartphones and laptops to electric cars.
Read the full article here.
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Monetary policy should not be used to tackle housing bubble: David Dodge
High house prices are not a serious problem in much of Canada due to low carrying costs but in Toronto and Vancouver where values have soared in the last few years it`s `a different issue,` said former Bank of Canada governor David Dodge.
That`s because foreign investment is a much bigger factor in these cities, something `we know much less about and we know much less about how stable that is likely to be,` Mr. Dodge said in an interview.
Read the full article here.
High house prices are not a serious problem in much of Canada due to low carrying costs but in Toronto and Vancouver where values have soared in the last few years it`s `a different issue,` said former Bank of Canada governor David Dodge.
That`s because foreign investment is a much bigger factor in these cities, something `we know much less about and we know much less about how stable that is likely to be,` Mr. Dodge said in an interview.
Read the full article here.
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Former Bank of Canada governor breaks rank with successor over consumer debt
Canada`s current and former central bankers seem at odds over the country`s soaring consumer debt, with former Bank of Canada governor David Dodge playing down warnings by his successor, Mark Carney.
Mr. Dodge also waded into one of the country`s most pressing infrastructure debates, suggesting Tuesday the proposed Northern Gateway pipeline, from Alberta to the West Coast, is unlikely to be built and that Alberta should instead look east to get its oil to overseas markets. Alison Redford, he added, is the first Alberta premier in two decades with the `broader view of what needs to happen.`
Read the full article here.
Canada`s current and former central bankers seem at odds over the country`s soaring consumer debt, with former Bank of Canada governor David Dodge playing down warnings by his successor, Mark Carney.
Mr. Dodge also waded into one of the country`s most pressing infrastructure debates, suggesting Tuesday the proposed Northern Gateway pipeline, from Alberta to the West Coast, is unlikely to be built and that Alberta should instead look east to get its oil to overseas markets. Alison Redford, he added, is the first Alberta premier in two decades with the `broader view of what needs to happen.`
Read the full article here.
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Canada to experience another year of two-speed economy: BMO
OTTAWA ` The latest provincial outlook from the Bank of Montreal is a stark reminder that Canada has an entrenched two-speed economy.
The bank predicts the four western provinces, led by Alberta and Saskatchewan, will be the only ones to record above two per cent growth this year.
All the rest are below what the Bank of Canada considers the potential growth rate for the Canadian economy.
Read the full article here.
OTTAWA ` The latest provincial outlook from the Bank of Montreal is a stark reminder that Canada has an entrenched two-speed economy.
The bank predicts the four western provinces, led by Alberta and Saskatchewan, will be the only ones to record above two per cent growth this year.
All the rest are below what the Bank of Canada considers the potential growth rate for the Canadian economy.
Read the full article here.
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Half of recent new home buyers were first timers
Interesting data released recently by the Altus Group on the new housing market in the country.
The group`s quarterly FIRM Survey looks at people buying homes in the 2009-2011 period.
It found that about one in three purchasers of newly-built homes bought a condominium unit and the majority of these were apartment units. Also, about half of new homebuyers were first-time buyers with mortgages, one-third were repeat buyers with mortgages and one-fifth were buyers who did not require a mortgage.
Read the full article here.
Interesting data released recently by the Altus Group on the new housing market in the country.
The group`s quarterly FIRM Survey looks at people buying homes in the 2009-2011 period.
It found that about one in three purchasers of newly-built homes bought a condominium unit and the majority of these were apartment units. Also, about half of new homebuyers were first-time buyers with mortgages, one-third were repeat buyers with mortgages and one-fifth were buyers who did not require a mortgage.
Read the full article here.
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Canadian banks didn't need - and didn't get - bailouts
The Canadian Centre for Policy Alternatives (CCPA) recently released a report, The Big Banks' Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis. A sensational title to be sure, and it made headlines in papers across the country, including this one. Some people seemed to be more than willing to believe that the banks, the federal government and the Bank of Canada had all kinds of secret deals during the global financial crisis to bail out Canadian banks and not tell the Canadian public about it.
Sounds like a great story. But, as is often the case, that's not what happened and the real story is not nearly as exciting or sensational. What really happened? No Canadian bank was in danger of failing, the Bank of Canada lent banks money on market terms and the Canadian Mortgage and Housing Corporation (CMHC) bought safe, insured mortgages from the banks, all so that the banks could continue to lend to consumers and businesses to help the economy through the recession. Important programs to be sure, but not a bailout.
Read the full article here.
The Canadian Centre for Policy Alternatives (CCPA) recently released a report, The Big Banks' Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis. A sensational title to be sure, and it made headlines in papers across the country, including this one. Some people seemed to be more than willing to believe that the banks, the federal government and the Bank of Canada had all kinds of secret deals during the global financial crisis to bail out Canadian banks and not tell the Canadian public about it.
Sounds like a great story. But, as is often the case, that's not what happened and the real story is not nearly as exciting or sensational. What really happened? No Canadian bank was in danger of failing, the Bank of Canada lent banks money on market terms and the Canadian Mortgage and Housing Corporation (CMHC) bought safe, insured mortgages from the banks, all so that the banks could continue to lend to consumers and businesses to help the economy through the recession. Important programs to be sure, but not a bailout.
Read the full article here.
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House prices: 9 reasons not to panic
With the mainstream financial media now sounding a shrill alarm about the Canadian housing bubble, is it time to sell the house? Unless you're transferring to a new job, or a retiree wanting to downsize or move to more favourable climes, you're probably better off staying put rather than capitulating to the panic of articles like "Ready to be bold? Sell the house and rent."
House prices may indeed stagnate or head south for a while, especially in the heated condo markets of Vancouver and Toronto. Those kinds of fluctuations are part of the natural course of markets. But to say house prices are going to crash like they did in the U.S. is a stretch. Here are nine reasons why.
Read the full article here.
With the mainstream financial media now sounding a shrill alarm about the Canadian housing bubble, is it time to sell the house? Unless you're transferring to a new job, or a retiree wanting to downsize or move to more favourable climes, you're probably better off staying put rather than capitulating to the panic of articles like "Ready to be bold? Sell the house and rent."
House prices may indeed stagnate or head south for a while, especially in the heated condo markets of Vancouver and Toronto. Those kinds of fluctuations are part of the natural course of markets. But to say house prices are going to crash like they did in the U.S. is a stretch. Here are nine reasons why.
Read the full article here.
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The Eurozone crisis
IN DECEMBER, The Economist warned that without dramatic intervention the euro zone could face a new depression. Soon after, the European Central Bank sprang into action, averting an immediate financial meltdown through heavy lending to banks. The resulting calm looked like an opportunity for euro-area leaders to seize the moment and escape, once and for all, from crisis. Instead, complacency set in. The ECB's financial anaesthetic has not prevented a steady economic deterioration that now threatens to engulf`and perhaps end`the euro zone.
Across the euro area, unemployment is worsening. The unemployment rate touched a new record high in March: 10.9%, up a full percentage point from the prior year.
Read the full article here.
IN DECEMBER, The Economist warned that without dramatic intervention the euro zone could face a new depression. Soon after, the European Central Bank sprang into action, averting an immediate financial meltdown through heavy lending to banks. The resulting calm looked like an opportunity for euro-area leaders to seize the moment and escape, once and for all, from crisis. Instead, complacency set in. The ECB's financial anaesthetic has not prevented a steady economic deterioration that now threatens to engulf`and perhaps end`the euro zone.
Across the euro area, unemployment is worsening. The unemployment rate touched a new record high in March: 10.9%, up a full percentage point from the prior year.
Read the full article here.
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Canada's leader of opposition targets oil sands again
Canada`s Leader of the Opposition, Thomas Mulcair, attacked again the local oil sands industry by saying that, because of the way it raises the value of the Canadian dollar, other parts of the country are paying a price for the prosperity enjoyed by natural resource sectors, such as the oil sands in Alberta
Mulcair`s comments, made Saturday on the CBC Radio show, The House, reinforce his April`s declarations, when he accused oil sands of devastating manufacturing jobs in Ontario.
The New Democratic Party (NDP) leader also called authorities to internalize the `environmental costs` of oil sands and other natural resources development, by `making the polluter pay.`
Read the full article here.
Canada`s Leader of the Opposition, Thomas Mulcair, attacked again the local oil sands industry by saying that, because of the way it raises the value of the Canadian dollar, other parts of the country are paying a price for the prosperity enjoyed by natural resource sectors, such as the oil sands in Alberta
Mulcair`s comments, made Saturday on the CBC Radio show, The House, reinforce his April`s declarations, when he accused oil sands of devastating manufacturing jobs in Ontario.
The New Democratic Party (NDP) leader also called authorities to internalize the `environmental costs` of oil sands and other natural resources development, by `making the polluter pay.`
Read the full article here.
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Western Canada driving nation's economic growth, BMO report says
While the Canadian economy continues to grow at a moderate pace, there is a widening gap between commodity-rich Western provinces and the manufacturing-heavy provinces in Central and Atlantic Canada, according to the latest edition of the Provincial Monitor report from BMO Economics.
Western Canada/Prairies
"The resource sector continues to fuel growth in Western Canada, with Alberta likely to lead the pack in 2012 after posting five per cent real GDP growth last year," said Doug Porter, Deputy Chief Economist, BMO Capital Markets. "Crude bitumen production rose 12 per cent in the province, and job growth is currently the strongest in Canada. Meanwhile, Saskatchewan is also benefiting from rising oil production in the Bakken, and continues to see a very tight labour market and strong population flows. Manitoba's diverse economy should see above-average growth in 2012."
Read the full article here.
While the Canadian economy continues to grow at a moderate pace, there is a widening gap between commodity-rich Western provinces and the manufacturing-heavy provinces in Central and Atlantic Canada, according to the latest edition of the Provincial Monitor report from BMO Economics.
Western Canada/Prairies
"The resource sector continues to fuel growth in Western Canada, with Alberta likely to lead the pack in 2012 after posting five per cent real GDP growth last year," said Doug Porter, Deputy Chief Economist, BMO Capital Markets. "Crude bitumen production rose 12 per cent in the province, and job growth is currently the strongest in Canada. Meanwhile, Saskatchewan is also benefiting from rising oil production in the Bakken, and continues to see a very tight labour market and strong population flows. Manitoba's diverse economy should see above-average growth in 2012."
Read the full article here.