Canadian Economic Outlook

September 2, 2010

Compared to retail sales tax, HST definitely the better tax

It seems that the consensus view regarding the recently introduced harmonized sales tax in British Columbia and Ontario has been negative, primarily on account of the perception that the HST is a tax grab that also increases new house prices.

August 31, 2010

Canada’s second quarter GDP growth lower than expected

Canada’s gross domestic product (GDP) growth in 2010’s second quarter was only +2.0% annualized, according to today’s report from Statistics Canada. This was at the low end of the range (+2.0% to +3.0%) expected by most economists.

August 30, 2010

The phrase ‘jobless recovery’ oversimplifies the message

U.S. employment fell by 131,000 in July, the Bureau of Labor Statistics recently reported. This was less than June’s decline of 221,000, but it was disappointing nonetheless after the substantial month-to-month gains earlier in the year. From January to May, the U.S. picked up 1.0 million jobs.

August 26, 2010

Montreal is approaching 2011 at full speed

As Montreal heads into the second half of 2010, it’s clear that the city must be doing something right. For the past seven months it has consistently exhibited stronger year-over-year job growth than all but two of the 10 largest metro areas in the country.

August 26, 2010

Canadian housing starts will weaken but won’t be infected with U.S. virus

Housing starts in the second half of this year will weaken versus the first half, according to CanaData’s latest forecast. There are five obvious reasons.

August 25, 2010

Have U.S. and Canadian shoppers taken a vow of frugality?

Canadian retail sales were +0.1% this June versus May and +3.8% when compared with June of last year, Statistics Canada reports. The U.S. Census Bureau recorded a 0.4% month-to-month increase in retail sales in July, which yielded a year-over-year gain of 5.5%. The numbers reported for the U.S. are usually a month ahead of Canada’s.

August 24, 2010

Wage settlements in public sector continue to outpace private sector

According to the Ontario Collective Bargaining Review, 2,025 collective agreements were negotiated in 2009.

August 23, 2010

All’s not right in the world of Canadian and U.S. foreign trade

The shapes of the monthly foreign trade curves for both Canada and the U.S. are cause for concern. In Canada’s case, the merchandise trade (as reported by Statistics Canada) has remained near zero for a year and a half.

August 20, 2010

Canada’s Consumer Price Index back on target in July

Canada’s all-items inflation rate in July moved up to +1.8% from +1.0% in June, according to Statistics Canada. The rise was partly due to July 1st harmonized sales tax (HST) introductions in Ontario and B.C., plus a 2% increase in Nova Scotia’s blended sales tax.

August 19, 2010

Strong fundamentals driving Kitchener-Waterloo into 2011

Kitchener, Ont.’s economy is heading into the second half of 2010 in high gear, based on the employment report for July and the building permits statistics for June.

August 18, 2010

U.S. housing market is more dynamic than first appears

To all appearances, the U.S. housing market is moving sideways. That is what several recent data releases suggest. June new home sales increased to 330,000 units from a cyclical low point of only 267,000 units the month before.

August 18, 2010

Infrastructure Stimulus Fund: Better late than never

It has been a challenge to assess the impact on the economy of the Infrastructure Stimulus Fund (ISF), introduced by the federal government in the 2009 budget.

August 17, 2010

Canada’s labour market catches a summer cold from the U.S.

Canada lost 9,000 jobs in July, Statistics Canada recently reported. That was after six months of solid back-to-back increases totaling over 300,000 new jobs in the first half of this year. Relative to most other countries, Canadians have had little to whine about on the jobs front.

August 12, 2010

After a pause, growth in U.S. and Canada should regain momentum

Over the past several weeks, there has been an increase in concern about the health of the U.S. economy.

August 11, 2010

Want a home in Vancouver? Be prepared to spend two-thirds of a million dollars

There is a strong tie-in between consumer confidence and the housing market. Homeowners derive a large measure of their sense of financial worth from the value of the property they live in.

August 10, 2010

Although the housing market is still quite warm, it’s starting to cool

Housing demand in Canada’s six major cities was still quite strong midway through the second quarter, based on the most recent (May) Teranet/National Bank House Price Index.

August 6, 2010

Canada’s foreign trade in need of a boost; U.S. shortfall returning to normal

Canada’s foreign trade position continues to flounder, according to the latest numbers from Statistics Canada. Since the onset of the recession in fall 2008, the nation’s merchandise trade account has been registering as many small deficits as small surpluses.

August 5, 2010

Lumber supply, employment in B.C. will feel mountain pine beetle’s bite

One of the major clouds hanging over British Columbia’s economy and forest products industry is uncertainty about the mountain pine beetle epidemic.

August 4, 2010

Waiting to see if the other shoe drops in Canada

Statistics Canada’s leading indicator index for June recorded a 1.0% gain versus May. This was only a slight pullback from upwardly revised gains of 1.1% in both May and April.

August 3, 2010

Don’t sweat climate change, Nobel Prize-winning physicist says

The construction industry is a major energy consumer. Given recent concerns about the significant potential impact of carbon taxes and/or cap and trade legislation on all energy consumers, it is useful to try and get some perspective on the world’s current “hot” button issue: climate change.