GDP growth in February: ‘a ray of sunshine’

By Erica Alini - Tuesday, April 30, 2013 at 11:43 AM - 0 Comments

To recap:

• The Canadian economy beat the forecasts in February, growing 0.3 per cent following an upwardly revised gain of the same magnitude in January. It was the strongest two-month period of growth since July-August 2011.
• Most of the growth came from goods-producing industries, where activity rose 0.9 per cent. The strongest gains were in the resource sector, with output in mining, quarrying and oil and
  gas extraction jumping 2.2 per cent compared to January.
• Manufacturing also delivered a remarkable performance, with production rising 0.8 per cent.
• The service sector was overall virtually flat, inching up a mere 0.1 per cent. The arts and entertainment industry, however, bucked the trend, with a 3.3 per cent gain that likely reflects a recovery from the NHL lockout.

What the analysts are saying:

• The February release was “a ray of sunshine in an economy that needs all it can get,” wrote CIBC’s Avery Shenfeld, who predicts first-quarter growth of two per cent. TD revised its expectation for the first three months of the year to two per cent as well, up from 1.6 per cent.
• Growth for the year seems to be on track to come in slightly above the latest Bank of Canada projection of a 1.5 per cent expansion, noted RBC’s Paul Ferley. The pickup, however, is unlikely to be enough to significantly reduce unemployment.
• “It’s not time to break out the champagne just yet,” warned TD’s Leslie Preston. There are signs that the U.S. economy is slowing down, which could put the breaks on Canada’s momentum.

Could gold’s fall be the start of a broader resources slump?

By Chris Sorensen - Tuesday, April 30, 2013 at 11:00 AM - 0 Comments

Snamil Zhumatov/Reuters

For investors and producers alike, gold’s recent rout was as devastating as it was unexpected. The price plummeted by $200 an ounce over a two-day period last week, suffering its biggest single-day drop in 30 years. Though it eventually stabilized at around $1,400 an ounce, stocks of gold mines—many of them Canadian—continued to be hammered by investors for days afterward, with some reports suggesting that as many as 15 per cent of the world’s gold mining companies are now wallowing in red ink.

There are many theories as to what caused gold to fall so far, so fast. They range from rumours that Cyprus planned to sell off some of its reserves to pay for its bailout, to the easing of fears that central bankers are destroying currencies with their unprecedented stimulus measures. “People thought loose monetary policies lead to rampant inflation,” says Keith Head, a professor at the University of British Columbia’s Sauder School of Business. “But gold prices stayed high, even when the underlying theory was repudiated by actual evidence, and that’s a vulnerable situation to be in.”

The big question now is whether other commodity prices will follow suit. Though gold, which traded as high as $1,888 an ounce in 2011, is unique in many respects—it is valued mostly as a way to store wealth, as opposed to as an industrial input—prices of everything from aluminum to zinc have slumped over the past several years after hitting historic highs, creating fears of a broader crash. Edward Morse, the head of commodities research at Citigroup, recently wrote that “the questions over gold and some overly securitized commodities like copper relate to whether their recent robustness is bubble-like and about to burst.” He claims that 2013 could be the year the decade-long boom in raw-material prices driven by China’s rapid growth finally hears its “death bells ring.”

How it all plays out will be crucial in determining Canada’s future prosperity. Nearly one-fifth of the country’s GDP can be attributed to resource industries and their spin-offs, not to mention half of all exports. “It’s been well-recognized, including by Mark Carney [the governor of the Bank of Canada], that commodities pretty much saved our bacon over the past few years,” says Pierre Gratton, the president of the Mining Association of Canada. But now global forces appear to be working against us, with resource prices falling, just as a once-hot housing market falters and consumers are awash in debt. “Higher prices bring on more supply, which brings down prices,” Gratton says. “That’s the cycle and we’re in a bit of that now.”

The latest shoe to drop came earlier this month when China revealed its growth was slowing more than expected. It said GDP came in at 7.7 per cent in the first quarter, down from 7.9 per cent in the fourth quarter of 2012. That threatens to translate into less demand for everything from lumber needed to frame buildings to the nickel used to make stainless steel.

The news helped suck the air out of Canada’s already lagging stock markets, home to roughly 60 per cent of the world’s mining firms. The S&P/TSX Composite Index has fallen 10 per cent since early 2011 and was one of the world’s worst-performing major indexes in 2012, while the S&P/TSX Venture Composite Index, which tracks mostly junior mining companies, is down by nearly 60 per cent as investors shelve their appetite for risky, early-stage projects. Meanwhile, the Dow Jones Industrial Average, which tracks some of America’s best-known companies, is up 25 per cent over the same period.

It’s a much different environment than just a few years ago, when theories of “peak oil” and even “peak copper” were prevalent. The prices of energy and minerals, when adjusted for inflation, more than doubled between 2003 to 2008, while the price of food increased 75 per cent, according to a 2012 report by the UN department of economic and social affairs. The report called the run-up in prices “unprecedented in its magnitude and duration” and suggested the world is witnessing the early phases of a decades-long “super-cycle expansion” in commodities driven by “the rapid pace of industrial development and urbanization in China, India and other emerging economies.” It seemed like a historic shift in the world’s economic balance of power (previous super-cycles resulted from the industrialization of the United States in the late-19th and early-20th centuries, and the rebuilding of Europe and Japan in the postwar years). Some estimates suggested that the world’s developing economies will represent nearly 80 per cent of global GDP by 2050, compared to about 50 per cent today.

Demand is only part of the equation, though, as every economist knows. Rising prices cause producers to boost production and seek out new reserves of key resources. That, in turn, boosts supply and eventually causes prices to drop—which is why commodity markets have historically been prone to major swings. Copper, for example, hit a high of $4.66 a pound in 2011 amid talk of a looming global shortage. (Copper is used in a variety of industrial applications, including wiring and plumbing.) There were reports of thieves trying to steal church roofs in Britain, and even power lines, with some electrocuting themselves in the process. Just two years later, the price has fallen back to about $3.20 a pound as new mines begin to come online.

With similar price declines under way for other key materials, producers are suddenly being forced to rethink multi-billion-dollar projects. Australia’s BHP Billiton said last year it was postponing several projects worth an estimated $50 billion. Brazilian miner Vale SA has suspended a potash project in Argentina, while Rio Tinto Group, the world’s second-biggest miner of iron ore, is in the midst of a major cost-cutting effort.

How bad this will be for Canada depends on whether this is a mere blip, or the beginning of the end of the Chinese-powered commodities super-cycle. The federal government estimates that the energy, mining and forestry industries contribute more than $30 billion annually to public coffers and employ up to 1.6 million people when related industries are taken into account. Ottawa is counting on revenue from the country’s natural-resource industries to help it meet its goal of balancing the budget by 2015, noting in its “action plan” that there are “more than 600 major resource projects, worth over $650 billion” planned over the next decade.

Citigroup, however, argues that the next 10 years will be defined mainly by a series of commodity-specific booms and busts, as opposed to broadly based increases. “The first quarter provided a clear precursor of what’s to come—the majority of commodities saw prices fall across the board, and those that rose did so for commodity-specific reasons,” Morse’s team wrote. Examples of the latter included natural gas prices that rose because of a temporary stall in production, and cotton prices that spiked because of uncertainty about Chinese buying following reduced plantings.

Others maintain that global raw-material prices will be only temporarily moderated as producers catch up with demand. “I don’t think it’s the end of the bull run in commodities, but I think we will go through a number of years of industrial metal prices being somewhat lower than they have been,” says Patricia Mohr, the vice-president of economics and head of commodities-market research at the Bank of Nova Scotia. “China’s demand will continue to grow, although at a slower pace. But the level of demand is already huge.”

British investment guru Jeremy Grantham is particularly bullish. He argued in a recent U.S. television interview that the combination of China’s rapidly urbanizing population combined with dwindling amounts of cheap, easy-to-access resources points to a future where prices of key commodities continue to soar. He says a sustained rise in the price of oil is helping to further magnify those increases, since it makes extracting and transporting other resources more expensive. Calum Turvey, a professor at Cornell University who is a past editor of the Canadian Journal of Agricultural Economics, says oil’s impact on the price of food is even more direct. “As oil prices rise, ethanol becomes more profitable, which increases the price of corn,” he says. That, in turn, causes farmers to plant more corn, decreasing the supply of other grains and oilseeds and driving up their prices.

In a sector where constructing a new mine can take up to 20 years, the industry is necessarily taking a long-term view. “You’ve also got India and a bunch of smaller economies in Africa that are growing at a very fast rate,” says Gratton. “So even as China’s growth abates, you’ve got other industrializing countries coming behind it that, we believe, will keep demand for materials robust.” He says the current slump is even being welcomed in some parts of Canada, where the recent boom was accompanied by skyrocketing equipment costs and a persistent shortage of labour. “I was in Saskatchewan recently, and they’ve got a lot of investments in uranium and potash and other things,” Gratton says. “You almost get this sense of relief that things have calmed down a little.” Investors, on the other hand, are almost certainly feeling their heart rates rise.

Inflation turning into non-story in Canada as prices stabilize near 1%

By The Canadian Press - Friday, April 19, 2013 at 11:21 AM - 0 Comments

OTTAWA – Canadian consumers can expect to see only moderate if any price increases across the broad spectrum of goods and services in the foreseeable future, analysts said Friday after release of new data showing inflation fell to one per cent last month.

Friday’s fresh data from Statistics Canada trimmed the annual inflation rate two-tenths of a point to one per cent, and pegged the month-to-month rise in prices at a tame 0.2 per cent.

That follows a wild February which saw the annual rate climb 0.7 points and prices jump 1.2 per cent in one month.

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Fall in gas prices tames Canadian inflation to one per cent in March

By The Canadian Press - Friday, April 19, 2013 at 9:24 AM - 0 Comments

OTTAWA – A reversal in the year-to-year fluctuation of gasoline prices took Canada’s annual inflation rate down two-tenths of a point to one per cent last month, putting the rate in line with the Bank of Canada’s expectations.

The March decline takes some of the volatility out of the measure following February’s surprising 0.7 percentage point jump to 1.2 per cent, confirming widely-held views that Canada remains in a tepid inflation environment.

The key contributor to March’s lower rate was a 0.3 per cent decline in the price of gasoline from a year ago, following February’s 3.9 per cent increase. Statistics Canada said gasoline prices declined in seven of the 10 provinces.

Six of the eight major components that go into the inflation rate rose, but all by less than two per cent. As a result, core inflation, which excludes volatile items such as gasoline and fresh fruit, also remained in check, staying unchanged at 1.4 per cent.

In a new economic outlook released Wednesday, the Bank of Canada said it expected inflation to remain at about one per cent throughout the year and to stay below its preferred two per cent target until sometime in 2015.

On individual items, there were some more pronounced movements, both up and down, including a 7.2 per cent increase for fresh vegetables and 8.7 per cent jump for fresh fruit. But overall, food prices rose only 1.8 per cent over last year, slightly less than February’s rise.

As well, tuition fees were up 3.7 per cent on an annual basis, and property taxes rose 2.8 per cent.

Significant downward movements included a four per cent dip on mortgage interest costs, a 9.6 per cent fall for video equipment, a 3.7 per cent slide in air transportation and a 3.6 per cent decline in non-alcoholic beverages. Travel tours were also less expensive, down 4.8 per cent.

On a monthly basis, prices increased by 0.2 per cent from February to March as gas rose slightly, while clothing and footwear increased by 4.3 per cent. But food prices were down overall by 0.4 per cent.

Regionally, the inflation rate was highest in Manitoba at 2.3 per cent and lowest in British Columbia, at 0.5 per cent.

Spin cycle: Owner of shop where Jim Flaherty made budget appearance says he was deceived

By The Canadian Press - Wednesday, April 17, 2013 at 12:37 PM - 0 Comments

OTTAWA – The owner of a bicycle shop where Finance Minister Jim Flaherty last year trumpeted the benefits of his budget says he feels misled.

Despite what the federal Conservatives say, they are raising consumer taxes by increasing tariffs on goods imported from dozens of countries, Jose Bray told a news conference at his Joe Mamma bike store on Wednesday.

“It was a little misleading and I think calling it a tariff and saying we’re not raising taxes is trying to pull the wool over the eyes of the consumer,” he said.

“I feel misled more than anything.”

Bray’s shop was the backdrop last October for a Flaherty news conference, where the minister announced measures to be included in his 2012 omnibus Budget Implementation Act.

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Bank of Canada lowers 2013 growth forecast, keeps key rate unchanged

By The Canadian Press - Wednesday, April 17, 2013 at 10:44 AM - 0 Comments

OTTAWA – The Bank of Canada cut its 2013 growth forecast Wednesday and said it now thinks the economy won’t get back up to full speed until mid-2015 — about six months later than predicted earlier this year.

The central bank’s announcement suggests it will need to keep interest rates in Canada at historically low levels well into 2014,if not beyond.

As universally expected, the central bank kept its overnight trendsetting rate — which influences borrowing costs in the country — at one per cent, where it has been since September 2010.

Also expected, the bank did a full climb-down on its optimistic reading for the economy for this year by cutting the growth forecast to 1.5 per cent from 2.0, admitting the economy is performing well below capacity.

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With economy weak and at risk, IMF tells Canada to keep supporting growth

By Julian Beltrame - Tuesday, April 16, 2013 at 9:54 AM - 0 Comments

OTTAWA – The International Monetary Fund is advising Canadian policy-makers against pulling too hard on the reins of austerity, saying in a new forecast that the economy remains weak and vulnerable to shocks.

The IMF said Tuesday that Canada’s economy will likely slow to about 1.5 per cent this year from 1.8 last year, before picking up to 2.4 per cent in 2014.

As well, the Washington-based global financial organization warns that the risks for Canada are mostly tilted to the wrong side, with a chance of a weaker outcome should the European crisis worsen, the United States not grow as strongly as projected, commodity prices fall or household indebtedness grows.

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Housing correction to slow economic growth to 1% this year, says forecaster

By The Canadian Press - Wednesday, April 10, 2013 at 12:04 AM - 0 Comments

OTTAWA – A leading international forecasting firm says Canadians should brace for tough economic times lasting another two years, lifting the jobless rate once again beyond eight per cent and setting back Ottawa’s plans to balance the budget.

In one of the gloomiest forecasts issued on the Canadian economy since the recession, Capital Economics predicts a sharp and protracted housing correction, in conjunction with muted business investment and government austerity, will keep Canada’s economy in stall mode throughout 2013 with a one per cent growth rate, only improving slightly to 1.3 per cent in 2014.

That’s half the current Bank of Canada estimate on both years, and well below the 1.6 per cent consensus used by Finance Minister Jim Flaherty in the March budget for the current year.

“Canada’s economy has lost considerable momentum and signs unfortunately point to continued slow growth ahead,” says the new outlook.

“With the housing downturn intensifying, business investment intentions softening and government plans to restrain spending, we expect GDP (gross domestic product) growth of only one per cent in 2013 and 1.3 per cent in 2014.”

In an interview, the firm’s chief Canadian economist David Madani agreed that his view is darker than most, but noted the consensus — the average of forecasts — has been steadily dropping for months and coming closer to his position.

And recent indicators all point to weak growth, he added. Job creation for the first three months of the year has been non-existent. In fact, there has been a net loss of about 26,000 jobs, while exports remain weak.

On Tuesday, the Canada Mortgage and Housing Corp. reported housing starts inched up to 184,028 annualized in March from the previous month, but were still 13.6 per cent below a year ago. As well, Statistics Canada said February building permits for residential construction fell 7.2 per cent.

Madani said where he differs from many other economists is that he believes Canadians are in for a rough ride in the housing market, one of the pillars of economic growth until recently.

“I wouldn’t be surprised to see housing starts fall to 150,000 by the end of the year,” he said. “Historically housing markets are either overbuilding or underbuilding and this boom we’ve been in the last decade has been enormous … and that why I think the correction process will be fairly severe and protracted.”

Over the long term, Madani says Canadian home prices, which have held up remarkably so far in the face of falling sales and starts, will drop by 25 per cent.

The only bright spot in the outlook is exports, said Madani, which will benefit from the recovery in the United States, particularly in the auto sector and housing market that support shipments of Canadian lumber.

But given the size of the Canadian housing market, and weakness elsewhere, Capital Economics sees only minimal employment growth in the next two years, in the range of 11,000 jobs a month. That won’t be enough to absorb population growth causing the unemployment rate to rise from the current 7.2 per cent to 8.1 per cent by the end of 2014.

With the economy underperforming, and low inflation, government revenue growth will also suffer, the firm says.

The Harper government has staked political capital on eliminating the deficit in 2015 so it can fulfil several campaign promises to bring in partial income splitting and doubling tax-free savings account limits in time for the next election.

“Unfortunately, eliminating deficits will take much longer than federal and provincial governments currently expect, even if the focus remains on controlling spending,” the report states.

Fortunately, Madani said most Canadian governments have sufficient fiscal room to be able to quickly transition to stimulus spending if the economy performs even worse than he expects.

Canada loses 54,500 jobs in March, unemployment rises to 7.2 per cent

By The Canadian Press - Friday, April 5, 2013 at 8:48 AM - 0 Comments

OTTAWA – Statistics Canada says 54,500 jobs disappeared from the economy in March and the unemployment rate climbed two-tenths of a point to 7.2 per cent.

The surprisingly weak employment report took back all of the gains of February and then some, leaving job creation in Canada in negative territory for the first three months of the year.

Economists had expected a modest 6,500 pick-up during the month, anticipating that February’s large gain could not be sustained. But few saw the cut in the labour market would run so deep.

To make matters worse, all the pay-back was in the full-time category, and in the economically significant private sector, the losses were mammoth — 85,400 workers joining the ranks of the unemployed.

The only gain was in the less desirable self-employment category, where almost 39,000 Canadians created their own employment, likely an indication many could not find permanent work.

The agency says that over the past year, only 111,000 private-sector jobs have been created.

Regionally, employment fell in six of the 10 provinces, with Ontario and Quebec leading that way, each shedding about 17,000 workers.

What happened to Canada’s economic miracle?

By Chris Sorensen - Tuesday, April 2, 2013 at 10:50 AM - 0 Comments

Our latest cover story is actually two stories, comparing the state of the Canadian and American economies. View the companion piece to this story, here.

To outsiders looking in, Canada must seem like a potent place. In the midst of a global recession, our banks were profitable, home prices soared and lost jobs were quickly replaced—all feats Ottawa was fond of boasting about. “We have the soundest financial system in the world and that’s a strong point that we can share with others,” Finance Minister Jim Flaherty told reporters in 2008. A few years later, at the World Economic Forum in Davos, Prime Minister Stephen Harper promised to set the stage for a generation of economic growth with changes to immigration and a focus on selling oil and gas to Asia—part of a grand vision to make Canada an “emerging energy superpower.” The country’s new-found reputation for punching above its weight may have also played a role in the U.K.’s decision to hire Bank of Canada governor Mark Carney to run the Bank of England, the first time a foreigner has been sought for the job.

Carney doesn’t start his new gig until July 1. But already the holes in Canada’s narrative of economic exceptionalism are big enough to drive an oil sands dump truck through. Our banks, though still sound, have been downgraded by rating agencies because of their exposure to a potential Canadian housing bubble and high levels of consumer debt. Economists are worried that a pullback in government spending won’t be offset quickly enough by a ramp up in exports. And Alberta’s vaunted oil and gas sector is suddenly in trouble as a glut of new U.S. crude threatens prices and future investment. The stiff headwinds are reflected in GDP forecasts now expected to come in well under the previously anticipated (and already dismal) two per cent growth for 2013.

Canadians previously took pride in the fact that our small, resource-based economy was doing far better than that of our bigger neighbours to the south—Harper reminded CNBC viewers as recently as 2011 that Canada was still “outperforming the average, or the pack, in the industrial world”—but in the space of just few months the tables have seemingly turned. What happened?

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Real GDP up 0.2 per cent in January, led by manufacturing

By The Canadian Press - Thursday, March 28, 2013 at 11:10 AM - 0 Comments

OTTAWA – The manufacturing sector helped drive the Canadian economy’s return to better than expected growth in January after ending 2012 with a mild contraction in December.

However economists cautioned that growth remained below the two per cent pace for the year expected by the Bank of Canada.

Statistics Canada said Thursday that Canada’s gross domestic product grew by 0.2 per cent in the month after shrinking 0.2 per cent in December, beating the 0.1 per cent gain that had been predicted.

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Inflation picks up as February sees biggest month-to-month increase since 1991

By The Canadian Press - Wednesday, March 27, 2013 at 12:44 PM - 0 Comments

OTTAWA – Consumer prices in Canada jumped by a surprisingly strong 1.2 per cent in February as a big hike in gasoline helped fuel the biggest month-to-month pop in inflation since January 1991 when Ottawa introduced the GST.

The one-month increase lifted the Canadian annual inflation rate by 0.7 point, also to 1.2 per cent, reversing a trend that had reduced annual inflation to 0.5 per cent in January, the lowest in more than three years.

Economists had expected inflation to start edging up, particularly as gasoline prices were known to have risen, but their best estimate was for a year-to-year increase of 0.8 per cent and a month-to-month increase of 0.7 per cent.

Despite the one-month inflation shock, analysts said Canadians had little to worry about and that the Bank of Canada will likely discount the report as an anomaly.

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New house prices rose 0.1 per cent in January: StatsCan

By The Canadian Press - Thursday, March 14, 2013 at 11:18 AM - 0 Comments

OTTAWA – Statistics Canada says its price index for new homes rose 0.1 per cent in January, following a 0.2 per cent increase in December.

The agency says the metropolitan region of Toronto and Oshawa, as well as the Calgary region, were the top contributors to the increase.

Builders cited market conditions as the primary reason for higher prices in Toronto and Oshawa, while increased material and labour costs contributed to higher prices in Calgary.

The largest monthly price advance in January occurred in Charlottetown, where prices rose 1.0 per cent as builders returned to list prices after having reported lower negotiated selling prices the previous month.

Monthly prices declined 0.2 per cent in Ottawa–Gatineau, as a result of builders offering larger bonus packages to generate interest and stimulate sales.

New home prices fell 0.1 per cent in the combined region of Saint John, Fredericton and Moncton, as well as in Kitchener–Cambridge–Waterloo, Edmonton and Vancouver as builders in those areas also reduced prices in an attempt to generate sales.

Canadian Centre for Policy Alternatives: Balance books through stimulating growth, jobs

By The Canadian Press - Tuesday, March 12, 2013 at 6:41 AM - 0 Comments

OTTAWA – Canada’s leading left-wing think-tank believes Canadians can have their cake and eat it too in the next federal budget — more spending to create jobs while still moving toward balancing the books.

The proposals are contained in the Canadian Centre for Policy Alternatives’ annual alternative federal budget, being released this morning, which Finance Minister Jim Flaherty has already dismissed out of hand, sight unseen.

Flaherty said on Friday he has no intentions of ramping up spending to stimulate the weak economy, and instead plans to trim further in order to meet his 2015 balanced budget target.

But the CCPA argues that Flaherty is going about it all wrong, and that his policies will only guarantee continued slow growth for Canada.

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Canada’s economic growth to remain weak as U.S. shows improvement: OECD

By The Canadian Press - Monday, March 11, 2013 at 11:29 AM - 0 Comments

OTTAWA – The OECD says Canada’s economy is in a funk and may no longer be a leader among the other G7 industrialized nations in terms of growth.

The Paris-based organization’s latest analysis of the global economy cites firming growth in the United States and Japan, as well as improving prospects for Germany.

It says Canada’s conditions point to continued growth but at a weak pace.

The federal government has long boasted that Canada’s growth was tops among the Group of Seven industrialized economies following the 2008-09 recession

But Canada’s growth has been losing steam amid declining prices for key resource exports as well as a slower real estate market and other domestic factors.

A group of about a dozen Canadian economists advised Finance Minister Jim Flaherty last week to expect growth will remain below two per cent in 2013 following last year’s rate of 1.8 per cent growth.

The Organization for Economic Co-operation and Development’s report of leading indicators does not give a specific growth figure for economies, but shows momentum is stalled in Canada, while it is trending up in the U.S., Japan and Germany.

Analysts point out that growth rates are not the final world on economic health, however. Canada’s superior performance the past four years means the economy has already recovered all the losses in output and jobs lost during the slump — and more — while many others are still in catch-up mode.

Employment surges on both sides of border in welcome good news to economy

By The Canadian Press - Friday, March 8, 2013 at 10:45 AM - 0 Comments

OTTAWA – Canada’s economy showed signs it may be ready to bust out of its half-year funk by churning out a surprisingly strong 50,700 new jobs in February, most of them full-time, in the private sector and in Ontario.

The outsized gain was enough to keep the unemployment rate at the four year low of 7.0 per cent despite the fact over 60,000 Canadians joined the labour force in the month, another good signal for the economy.

Regionally, Ontario was the biggest generator of new jobs, adding 35,300, followed by British Columbia with an increase of 19,800. Quebec had the biggest drop in employment, shedding 13,100 jobs.

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Bad news expected for Flaherty at meeting with private sector economists

By The Canadian Press - Friday, March 8, 2013 at 5:35 AM - 0 Comments

OTTAWA – Finance Minister Jim Flaherty is expected to receive a dose of bad news today when he meets with private sector economists.

They are expected to update the minister with their latest forecasts for the economy ahead of the upcoming federal budget.

Last week, Statistics Canada reported the economy was pretty much stalled at the end of last year as it recorded another disappointing quarter of growth in the last three months of 2012.

However, Flaherty has already ruled out any new stimulus, which he has referred to as “risky spending schemes.”

He has said the government will need to work harder to find the savings to meet its goals in its economic action plan.

Flaherty has suggested the government could close some tax loopholes and may also look at program spending, including trimming programs that are no longer a high priority.

Flaherty to double down on spending cuts despite weakening economy

By The Canadian Press - Friday, March 1, 2013 at 4:49 PM - 0 Comments

OTTAWA – The federal government will attempt to make up for the weaker economy by doubling down on spending cuts in hopes of balancing the budget in time for the next election in 2015, Finance Minister Jim Flaherty said Friday.

The statement follows the announcement by Statistics Canada that the economy suffered through another disappointing quarter of growth in the last three months of 2012, confirming that output in the country has essentially been stalled for half a year.

Real domestic product output inched forward by a mere 0.6 per cent in the fourth quarter, following an equally soft 0.7 per cent in the third. For the year, the economy grew by an average of 1.8 per cent.

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Disappointing end of 2012, sets economy up for second consecutive weak year

By The Canadian Press - Friday, March 1, 2013 at 2:07 PM - 0 Comments

OTTAWA – The Canadian economy suffered through its second consecutive below-par quarter at the end of 2012, setting the stage for another year of disappointing growth and job creation in 2013.

Statistics Canada reported Friday that the economy squeezed out a mere 0.6 per cent advance in the last three months of last year — following a 0.7 per cent increase in the third quarter — and was on a downward path in the final month, when output retreated by 0.2 per cent.

The sickly production numbers were in line with economist expectations, but that is only because analysts had been hurriedly batting down their forecasts in the weeks before the report.

In reality, the final tally is still about half what the Bank of Canada had predicted in January, and about one-quarter what it had said was likely in October.

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Canadian economic growth remains weak in fourth quarter, December GDP shrinks

By The Canadian Press - Friday, March 1, 2013 at 9:31 AM - 0 Comments

OTTAWA – Statistics Canada says the economy grew by 0.6 per cent on an annualized basis in the fourth quarter of 2012.

The annualized growth was slighly lower than a revised 0.7 per cent rate for the third quarter.

The agency says real gross domestic product shrank 0.2 per cent in December on a month-to-month basis, in line with the consensus estimate.

There were increases in household and government consumption, business fixed capital investment and exports.

However, inventory investment slowed sharply from the third quarter and imports were down.

Statistics Canada says mining and oil and gas extraction were the main sources of industrial growth in the fourth quarter.

Fewer homes sold last month than January 2012 but average price up two per cent

By The Canadian Press - Friday, February 15, 2013 at 9:33 AM - 0 Comments

OTTAWA – The Canadian Real Estate Association says the number of homes sold by its members last month was down 5.2 per cent from January 2012, although about half of the country’s local markets saw an improvement from December.

The January national average sales price compiled by the industry group was $354,754, up two per cent from a year.

CREA says sales in the ultra-expensive Vancouver area were down year-to-year, skewing the national averages.

Excluding Vancouver from the mix, CREA’s national average price would have been up 3.3 per cent.

Vancouver and Toronto were among the local markets that saw improved sales activity last month, compared with December.

In the Greater Toronto area, there was a month-to-month increase of 5.6 per cent and in the Greater Vancouver area the increase was 4.7 per cent.

Among the cities with softer sales were Ottawa, the Fraser Valley in B.C.’s Lower Mainland, Montreal, Regina, London and St. Thomas in southwestern Ontario and Calgary.

Flaherty previews budget goals during Economic Club speech

By The Canadian Press - Wednesday, February 6, 2013 at 1:36 PM - 0 Comments

OTTAWA – Finance Minister Jim Flaherty says the best thing his government can do in uncertain times is to not blow the budget.

And he says the government remains on track to balance the books in 2015.

The minister tells the Economic Club the top goal of his upcoming budget will be to maintain a sound fiscal position.

He says no one should expect major spending initiatives in the budget, which is expected next month.

Even when it comes to renewing the $33-billion infrastructure program, he says any extension will have to be affordable.

Flaherty says the country cannot afford to mortgage the future by spending in the short term.

Economy grew by better-than-expected 0.3 per cent in November: StatsCan

By The Canadian Press - Thursday, January 31, 2013 at 9:46 AM - 0 Comments

OTTAWA – Statistics Canada says the economy grew by 0.3 per cent in November, following a 0.1 per cent rise in October.

The November number for real gross domestic product is better than the 0.2 per cent analysts were predicting.

Most major industrial sectors increased production in November, with goods production up 0.6 per cent. Service industries were up just 0.1 per cent.

The statistics agency says manufacturing and mining, quarrying and oil and gas extraction were the main contributors to the November increase.

Wholesale and retail trade, utilities as well as transportation and warehousing services also rose, while construction and the public sector were unchanged.

Accommodation and food services and the finance and insurance sector shrank.

Canadian consumer confidence at 19-month high

By The Canadian Press - Tuesday, January 29, 2013 at 9:47 AM - 0 Comments

OTTAWA – Canadian consumer confidence appears to be improving, according to a monthly index compiled by the Conference Board of Canada.

The index rose 5.1 points to 83 in January, the highest since June 2011 and the first increase in four months.

The Ottawa-based economics forecaster says the improvement was mainly due to confidence in future jobs and future income.

When asked about the employment outlook in their community in the next six months, about one-fifth of respondents said they expected there would be more jobs.

That was an increase of nearly four percentage points from the December survey.

Asked about their income in six months, nearly one-quarter of the respondents said they expected an improvement — up 1.4 percentage points from last month.

The index was based on a survey conducted from Jan. 4 to 14.