Archive for the ‘Canada’ Category

Dutch Disease: Alberta Canada vs. Norway

Wednesday, April 1st, 2015

The term ‘Dutch Disease‘ refers to an increase in natural resource based economy crowding out manufacturing and other sectors. It’s also a stand in descriptor for taking all your winnings in a booming market and re-investing them in the same market.

When Oil prices were high, both the province of Alberta and the country of Norway benefited from a petroleum based economy, but they approached the future in different ways.

Brian Ripley over at CHPC summarizes Bruce Campbells take-away of the differences between these two economies approach to oil wealth:

Alberta’s so called “progressive” conservative governments; 7 consecutive iterations since 1971, have squandered their provincial energy resources leaving their treasury with a CAD 12 billion dollar debt and a 500 million dollar deficit.

Norway, a county of 5.2 million people (Alberta’s population is similar at 4.2 million), began their first successful North Sea oil drilling in 1971 and by maintaining sovereign control and creating partnerships with the private sector “… now sits on top of a CAD ONE TRILLION DOLLAR pension fund established in 1990 to invest the returns of oil and gas. The capital has been invested in over 9,000 companies worldwide including over 200 in Canada. IT IS NOW THE LARGEST SOVEREIGN WEALTH FUND IN THE WORLD”

Read the full article over at CHPC.

Where’d yo job go? Build or perish.

Tuesday, March 31st, 2015

Good news!

There was a big jump in full time jobs in February!

The bad news?

Some people think this is ‘unsustainable‘ because most of the jobs were in construction or ‘public sector’ and the recent drop in oil prices may have an effect on these parts of the economy.

Screenshot 2015-03-29 18.03.24

 

But in the meanwhile if you’re looking for work and want to know who’s hiring find your nearest construction pit or government office.

Read the original article over at wolfstreet.

US claims stolen Chinese money washed in Van RE.

Monday, March 30th, 2015

Anyone who’s read this site for a while has probably noticed a couple of things:

1. A number of regular reader and commenters here blame wealthy Chinese ‘investor immigrants’ for the high cost of real estate in Vancouver.

2. The administration of this site disagrees and thinks that over-stretched house-horny locals and government insured lending on real estate are primarily to blame for high prices.

Yet we must admit this story has us thinking perhaps the truth is a blend of those two viewpoints:

U.S. alleges Metro Vancouver homes were part of scheme to launder money embezzled in China

Authorities allege that in the summer of 2011, shortly after they qualified for U.S. green cards, Qiao and Zhao began surreptitiously using accomplices to transfer millions of dollars into bank accounts in Wenzhou city, Hong Kong and Canada. At least two Canadian banks were used, HSBC Canada and the Royal Bank of Canada.

Zhao recently put the White Rock property up for sale for $689,000. Paulo Leung, a real estate agent with Regent Park Realty, said he had also sold the property to her in 2012 as an investment. He declined to say more. Both properties are being managed by Vancouver-based Chartell Properties. A receptionist there said they knew Zhao.

A search of property and title records conducted by The Vancouver Sun show that Zhao’s numbered company bought the properties outright. However, a few months later, it took out mortgages on both, totalling $1.1 million, that represented almost their entire market value. According to the U.S. indictment, a few weeks later Zhao and Qiao took money from their Canadian RBC account to pay for a Bellevue home.

Officials for the RCMP and Citizenship and Immigration Canada said they did not know if their departments assisted U.S. and Chinese investigators, and could not comment if they did.

Read the full article over in the Vancouver Sun.

Economic Inaction: Record low job growth in Canada

Wednesday, March 25th, 2015

There’s not a whole lot of hiring going on across Canada at the moment.

For the last 15 months year over year job growth has been under 1 percent.  Apparently this makes it the longest stretch of such low growth outside of recessions in almost 40 years of record keeping.

Employers shed 1,000 positions last month, according to Statistics Canada, and the jobless rate rose two notches to a five-month high of 6.8 per cent as more people looked for work. Annual employment growth has hovered at about 0.6 per cent in the 15 months since December, 2013.

The last period of least 15 months of growth below 1 per cent was during the 2008-2009 recession, when often it slumped into negative territory, according to Statistics Canada.

It’s not all bad news though. While full time employment is not seeing gains temporary and self employment is growing:

In the past year, temporary employment has climbed 2.3 per cent while permanent positions are up 0.1 per cent.

Temp employment – which includes seasonal, contract and casual jobs, accounts for 12 per cent of the total. Self-employment has jumped 2.2 per cent in that time, public-sector employment by 1.2 per cent and that in the private sector by by 0.2 per cent.

Read the full article here.

How to prepare for a housing bust

Tuesday, March 24th, 2015

Garry Marr writes about the situation in Alberta over in the Financial Post. The drop in oil prices has hit their economy first and hardest with sales down by 30-40% over a year ago and growing listings.

So how do you prepare for a surprise economic hit like that?

Simple. Save up to cover for job loss, keep your debts and bills manageable and  don’t get into a situation where you have to sell when everyone else is selling.

Unfortunately Canadians aren’t doing so well on the debt front:

Debt reached an all-time high in the fourth quarter, relative to income. Statistics Canada says the debt to disposable household income ratio is 163.3%, much of it attributable to housing costs.

Read the full article here.

About that BOC / IMF conspiracy…

Monday, March 23rd, 2015

Now normally when you hear about a conspiracy lawsuit against the Bank of Canada, the International Monetary Fund and the Queen of England you would assume Lizard People are involved right?

But in this case the government has already exhausted all but one chance to have the case thrown out and their last chance expires in the next week.

Is it possible the tin foil hats might have something here? Certainly it helps that their lawyer has a history of winning unlikely cases.

So what’s it all about?  Here’s what the Epoch Times says:

Toronto-based COMER and its fellow plaintiffs Ann Emmett and William Krehm are suing over fundamental changes to the Bank of Canada’s role that were made in 1974 when the bank stopped making loans to the government.

The Bank of Canada (BoC) was founded in the Great Depression and played a major role loaning money to the government. It helped finance Canada’s war effort during World War II and could loan money to the government, without interest, if it chose to do so. Any profits the BoC made were returned to the government minus the Bank’s operating expenses. That last point remains the case today, with $1.7 billion sent to the Receiver General annually.

COMER alleges that by no longer providing these loans, the Bank and others named in the suit have forced the government to finance budget deficits by borrowing from private markets and paying hundreds of billions of dollars in interest. Last year, $28 billion—over 10 percent of the federal government’s $277 billion in expenditures—went to servicing the debt.

That’s more than what was spent on National Defence ($21.5 billion) and nearly as much as the Canada health transfer ($30.5 billion).

The Bank of Canada Act allows, or as COMER alleges—requires—the BoC to give the federal government loans up to a total value of one-third of the government’s predicted annual revenues. For provincial governments it is a quarter of those revenues. The loans have to be repaid within the first quarter of the next fiscal year. At that point, the government just needs to pay back the loan with incoming revenues, and take out another loan to make up any deficit.

So in essence, unless our translator has the lizard people language interpretation incorrect, this case is about the national debt and the Bank of Canada’s failure to loan money to the Government of Canada for free.

What do you think? Lizard People are coming to eat your children of something is going to change?

Read the full article here.

IMF issues fresh warning on Canada housing market

Monday, March 9th, 2015

Apparently it’s not just the Bank of Canada that thinks Canadian RE buyers are suckers. The IMF is issuing yet another warning of potential problems in the Canadian Real Estate Market.

The International Monetary Fund is raising red flags about Canada’s housing market, warning that moves by Ottawa in recent years to tighten mortgage lending standards and boost oversight of the country’s financial system haven’t gone far enough.

Household debt levels remain well above those in other Western countries, the organization said in a commentary posted to its website Monday. Home prices have jumped 60 per cent in the past 15 years and remain overvalued from 7 per cent to 20 per cent, in line for a “soft landing” over the next few years, the IMF said.

At the same time, it reiterated its call for Canada to collect more data on its housing market and to centralize oversight of the financial sector. As it stands, regulation remains fractured among the Department of Finance, the Office of the Superintendent of Financial Institutions, the Canada Mortgage and Housing Corporation and provincial governments all playing separate roles in regulating the housing the market.

Read the full article in the Globe and Mail.

What do these cities have in common?

Monday, March 2nd, 2015

Take a look at this list:

Calgary
Winnipeg
Edmonton
Gatineau
Halifax
Hamilton
Oshawa
Montreal
London
Kitchener
Kingston
Ottawa
Quebec
Regina
Saguenay
Saint John
Sudbury
St.John’s
St. Catharines
Sherbrooke
Saskatoon
Thunder Bay
Toronto
Trois Rivieres
Vancouver
Victoria

Know what those 26 cities have in common?

They’re all Canadian for one, but they are also places where house prices have doubled or tripled over the last 15 years.

As special as Vancouver is, it’s apparently not unique when it comes to rising prices.

Thanks to Joe Mainlander for pointing this out, original data source is Toronto Condo Bubble.

More Canadians making early withdrawal from RRSPs

Monday, February 23rd, 2015

At this time of year most people are thinking about topping up their RSP to get a bit of a tax break, but unfortunately some Canadians are making plans to cash out their RSP before retirement to pay for living expenses.

As politicians wring their hands over Canadians’ lack of retirement savings, figures obtained by Global News from years of tax filings indicate a significant jump in the number of Canadians making early withdrawals from their RRSPs – not for housing or education, but simply to make ends meet.

The biggest increase was from 2007 to 2009, when 1.86 million Canadians took out RRSP cash early. That figure dipped slightly by 2012, to 1.82 across Canada, but remains about 7 per cent above 2007 levels nationally, 12 per cent above 2007 levels in Quebec and almost 10 per cent above in comparatively wealthy Alberta.

Read the full article over at Global News.

Where Canadian house prices are up or down

Wednesday, February 18th, 2015

The latest data from the Canadian Real Estate Association is now showing about half of the countries markets with rising and half with dropping prices.

Toronto and Vancouver are doing well so far with a year over year increase of 4.9% and 1.8% .

The big winner? That would be St. Catharines with a YOY increase of 16.1%.

The overall average house price grew 3.1 per cent in the year to January, to $401,143. That’s the smallest increase since April, 2013, but it’s largely a story of two still-hot housing markets: Toronto and Vancouver. Strip out those two cities and average house prices are down 0.3 per cent over the past year.

Home sales, meanwhile, are 2 per cent lower than they were a year ago, CREA numbers showed.

Major energy industry centres like Calgary, Edmonton, Saskatoon and Regina saw some of the sharpest declines in housing demand, TD economist Diana Petramala noted.

There is “a widening regional wedge” in Canada’s housing markets, Petramala wrote in a client note, as oil-importing cities’ housing markets benefit from lower oil prices while producer cities struggle.

Read the full article here.

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