New home prices in Canada climbed 0.1 percent in December from November, as expected, for an average annual increase in 2013 of 1.8 percent, the slowest since 1999, according to Statistics Canada data released on Thursday.
The monthly advance matched the median forecast in a Reuters poll of analysts and reinforces the view that the country’s housing market is stabilizing after a recent boom.
The closely-watched Toronto-Oshawa region was the top contributor to the monthly advance in the new housing price index with a gain of 0.2 percent in December and of 1.4 percent year-on-year.
Vancouver, another hot market for real estate, saw a 0.1 percent monthly decline in prices and a 1.1 percent decline from a year earlier.
Nationwide, prices rose 1.3 percent in the 12 months to December, down from 1.4 percent in November and the fifth straight month of slowing growth.
Overall, prices were unchanged in 11 metropolitan regions, down in five and up in five.
The Canadian government has intervened in the mortgage market several times since 2008 to cool the sector, and most economists expect a gradual softening rather than a U.S.-style crash.
The new housing price index excludes condominiums, which the government says are a particular cause for concern.
Canada Scraps 'Millionaire Visa,' Sends B.C. Property Market Reeling
Real estate agents in Vancouver say property prices could take a hit, after Canada scrapped a program which allowed wealthy immigrants to fast-track the visa process.
The Immigrant Investor Program, launched in 1986, offered visas to business people with a net worth of at least $1.6 million who were willing to lend $800,000 to the Canadian government — for investment across Canada — for a term of five years.
By 2012, the scheme had to be temporarily frozen due to a huge backlog of applications from wealthy mainland Chinese hoping to come to B.C. Now, the government has announced it will end the program for good and scrap all 59,000 applications backlogged worldwide.
The decision came less than a week after the South China Morning Post published a series of exclusive investigative reports into the controversial scheme.
Property prices could take a hit
In West Vancouver, real estate agent Clarence Debelle is still receiving offers from mainland China for luxury property, but she’s concerned the end of the investor program will have an impact on the local economy and the high-end housing market.
“I deal directly with these people who bring a lot of wealth, who are creating lots of jobs for local Canadians — builders, trades, architects, realtors like myself,” said Debelle.
“Most of the buying is coming from Chinese immigrants who are wealthy, so if we make it difficult for them to come into this country, we have killed 80 to 90 per cent of the buying in West Vancouver.”
Immigration lawyer Richard Kurland agrees.
“When you suddenly stave off the intake of literally hundreds of millionaires in the Vancouver property market, prices can only go one way and that’s down,” said Kurland.
Market impacted by more than investors
Others aren’t so sure. Even with the investor program frozen, housing prices continued to rise.
Tom Davidoff with UBC’s Sauder School of Business says the market is driven by other things like low interest rates and the local and global economies.
“Given that in the last couple of years, we haven’t seen the market cool off, it’s hard to believe that freezing the investor market is going to kill even the high-end in Vancouver,” said Davidoff.
The government has also announced the end of the Entrepreneur Program, a smaller scheme for business people who plan to own and manage a business in Canada.
However, wealthy investors can still come to Canada through the Start-up Visa Program, which encourages immigrant entrepreneurs to partner with private sector organizations to invest in local start-ups.
The Immigrant Investor Program, launched in 1986, offered visas to business people with a net worth of at least $1.6 million who were willing to lend $800,000 to the Canadian government — for investment across Canada — for a term of five years.
By 2012, the scheme had to be temporarily frozen due to a huge backlog of applications from wealthy mainland Chinese hoping to come to B.C. Now, the government has announced it will end the program for good and scrap all 59,000 applications backlogged worldwide.
The decision came less than a week after the South China Morning Post published a series of exclusive investigative reports into the controversial scheme.
Property prices could take a hit
In West Vancouver, real estate agent Clarence Debelle is still receiving offers from mainland China for luxury property, but she’s concerned the end of the investor program will have an impact on the local economy and the high-end housing market.
“I deal directly with these people who bring a lot of wealth, who are creating lots of jobs for local Canadians — builders, trades, architects, realtors like myself,” said Debelle.
“Most of the buying is coming from Chinese immigrants who are wealthy, so if we make it difficult for them to come into this country, we have killed 80 to 90 per cent of the buying in West Vancouver.”
Immigration lawyer Richard Kurland agrees.
“When you suddenly stave off the intake of literally hundreds of millionaires in the Vancouver property market, prices can only go one way and that’s down,” said Kurland.
Market impacted by more than investors
Others aren’t so sure. Even with the investor program frozen, housing prices continued to rise.
Tom Davidoff with UBC’s Sauder School of Business says the market is driven by other things like low interest rates and the local and global economies.
“Given that in the last couple of years, we haven’t seen the market cool off, it’s hard to believe that freezing the investor market is going to kill even the high-end in Vancouver,” said Davidoff.
The government has also announced the end of the Entrepreneur Program, a smaller scheme for business people who plan to own and manage a business in Canada.
However, wealthy investors can still come to Canada through the Start-up Visa Program, which encourages immigrant entrepreneurs to partner with private sector organizations to invest in local start-ups.
Foreign Worker Program Works Fine, If Properly Done, Unions Say
EDMONTON - While the federal government’s temporary foreign worker program has been criticized for allowing some firms to undercut Canadian wages and lay off staff, two unions support the program in principle.
“Some trades cannot supply the manpower needed during peak periods, and for us that is spring and fall when energy firms do their turnarounds and close for several weeks,” said Joseph Maloney, an international vice-president of the Boilermakers union.
His union trains boilermakers and works closely with “quality contractors” to ensure properly trained staff are available. And when they are short, they use the TFW program.
“We bring in about 400 journeymen in the spring and fall from our pools in the U.S. and Ireland, where they are trained to the same standards as Alberta boilermakers and welders. When they come they are paid the same as Canadians and are treated the same,” he said.
“When properly used, this program is able to assist contractors and unions to get these jobs completed on time and on budget, and safely.”
The Ironworkers union, which saw 65 of its members laid off last week and replaced by Croatian TFWs, still supports the program, says Harry Tostawaryk, business manager of Local 720.
“We assist contractors, we go to trade fairs, and we work with them to ensure workers meet the criteria,” he said.
But the problem with the Pacer-Promec Joint Venture (PPJV) at Imperial’s Kearl oilsands project goes back several months when Tostawaryk said his union “told (PPJV) that the Croatians did not meet the standards, but they brought them anyways.”
The federal government has promised to investigate this incident and Tostawaryk said that will impact other companies.
“The other contractors who are doing the program correctly, the PCLs, KBRs and Horton CBIs, will have a harder time bringing people in here because the government is going to scrutinize more.”
Tostawaryk said none of the ironworkers who were laid off last week have been called back, and the Croatian workers are still on the site.
“Some of the guys want to go back to the (PPJV) project, but others have taken other jobs. I told them that if (PPJV) called we would work with them and get them back, but other contractors have also put in extra calls to pick up these (laid off) ironworkers.”
Meanwhile, Alberta Federation of Labour president Gil McGowan said Monday that the actions of PPJV are “a perfect example of how this (TFW) program is being used to drive down wages. And this situation is not unique. This is happening at work sites all over the country because this is how the TFW program is designed to operate,” he said in a statement.
“Some trades cannot supply the manpower needed during peak periods, and for us that is spring and fall when energy firms do their turnarounds and close for several weeks,” said Joseph Maloney, an international vice-president of the Boilermakers union.
His union trains boilermakers and works closely with “quality contractors” to ensure properly trained staff are available. And when they are short, they use the TFW program.
“We bring in about 400 journeymen in the spring and fall from our pools in the U.S. and Ireland, where they are trained to the same standards as Alberta boilermakers and welders. When they come they are paid the same as Canadians and are treated the same,” he said.
“When properly used, this program is able to assist contractors and unions to get these jobs completed on time and on budget, and safely.”
The Ironworkers union, which saw 65 of its members laid off last week and replaced by Croatian TFWs, still supports the program, says Harry Tostawaryk, business manager of Local 720.
“We assist contractors, we go to trade fairs, and we work with them to ensure workers meet the criteria,” he said.
But the problem with the Pacer-Promec Joint Venture (PPJV) at Imperial’s Kearl oilsands project goes back several months when Tostawaryk said his union “told (PPJV) that the Croatians did not meet the standards, but they brought them anyways.”
The federal government has promised to investigate this incident and Tostawaryk said that will impact other companies.
“The other contractors who are doing the program correctly, the PCLs, KBRs and Horton CBIs, will have a harder time bringing people in here because the government is going to scrutinize more.”
Tostawaryk said none of the ironworkers who were laid off last week have been called back, and the Croatian workers are still on the site.
“Some of the guys want to go back to the (PPJV) project, but others have taken other jobs. I told them that if (PPJV) called we would work with them and get them back, but other contractors have also put in extra calls to pick up these (laid off) ironworkers.”
Meanwhile, Alberta Federation of Labour president Gil McGowan said Monday that the actions of PPJV are “a perfect example of how this (TFW) program is being used to drive down wages. And this situation is not unique. This is happening at work sites all over the country because this is how the TFW program is designed to operate,” he said in a statement.
CANADA FX DEBT-C$ firms to 1-week high, helped by producer prices
The Canadian dollar strengthened to its highest level in a week against the greenback on Monday, helped by a bigger than expected rise in Canadian producer prices and as investors consolidated positions after the currency’s recent declines.
The loonie was also given a boost by U.S. data that showed a sharp drop in manufacturing in January, hinting at a slowing economy. That sparked investor speculation that the U.S. Federal Reserve may have to refrain from a further reduction of its stimulus program.
The Canadian dollar has come under pressure in recent months, with selling intensifying in January, as investorsturned increasingly bearish toward it. The U.S. dollar appreciated nearly 5 percent against the loonie in January.
“This is probably a move that had run very quickly and is looking just a bit fatigued as we take a step back and assess the landscape and try to figure out why exactly we moved so far so fast,” said David Tulk, chief Canada macro strategist at TD Securities in Toronto.
The possibility of a fast Fed wind-down of its stimulative asset purchases has typically boosted the greenback against the Canadian dollar and other currencies. But Monday’s weak U.S. manufacturing data made that possibility look more remote and the U.S. dollar took a hit,falling 0.4 percent against a basket of currencies.
“To see the Canadian dollar catch a bit of a break in that environment does make a bit of sense,” Tulk said.
Data at home showed the recent weakness in the Canadian dollar helped producer prices rise by 0.7 percent in December, with higher energy prices also contributing to the gain.Economists had forecast an increase of 0.3 percent. Rawmaterials prices also rose.
The figures were the first release in a busy data calendar this week, which will culminate with the closely watched unemployment report on Friday. Hiring in Canada is expected to have picked up in January after the economy unexpectedly shed jobs the month before.
The Canadian dollar ended the North American session at C$1.1097 to the greenback, or 90.11 U.S. cents, stronger than Friday’s close of C$1.1138, or 89.78 U.S. cents.
Data on Friday showed investors had pared back their shortpositions on the Canadian dollar.
“A lot of people have booked a lot of profits on the Canadian dollar weakness story, something that was quite compelling as a narrative to start the year, but just appreciating how far we’ve come, maybe some of the momentum has scaled back a little bit,” Tulk said.
The Canadian dollar briefly fell through the psychologically important C$1.12 area on Friday before bouncing higher. That the currency was not able to sustain the move past C$1.12 helped the loonie gain some strength on Monday, said Scott Smith, seniormarket analyst at Cambridge Mercantile Group in Calgary.
“The trade has been a little crowded for a while, we needed a little washout and reset,” Smith said. “So it’s along the lines that we expect a little bit of a consolidation here until we see the catalyst for the next move higher” for the U.S. dollar-Canadian dollar pairing.
Canadian government bond prices were higher across the maturity curve, with the two-year up 3.7 Canadian cents to yield 0.931 percent and the benchmark 10-year up 35 Canadian cents to yield 2.297 percent.
The loonie was also given a boost by U.S. data that showed a sharp drop in manufacturing in January, hinting at a slowing economy. That sparked investor speculation that the U.S. Federal Reserve may have to refrain from a further reduction of its stimulus program.
The Canadian dollar has come under pressure in recent months, with selling intensifying in January, as investorsturned increasingly bearish toward it. The U.S. dollar appreciated nearly 5 percent against the loonie in January.
“This is probably a move that had run very quickly and is looking just a bit fatigued as we take a step back and assess the landscape and try to figure out why exactly we moved so far so fast,” said David Tulk, chief Canada macro strategist at TD Securities in Toronto.
The possibility of a fast Fed wind-down of its stimulative asset purchases has typically boosted the greenback against the Canadian dollar and other currencies. But Monday’s weak U.S. manufacturing data made that possibility look more remote and the U.S. dollar took a hit,falling 0.4 percent against a basket of currencies.
“To see the Canadian dollar catch a bit of a break in that environment does make a bit of sense,” Tulk said.
Data at home showed the recent weakness in the Canadian dollar helped producer prices rise by 0.7 percent in December, with higher energy prices also contributing to the gain.Economists had forecast an increase of 0.3 percent. Rawmaterials prices also rose.
The figures were the first release in a busy data calendar this week, which will culminate with the closely watched unemployment report on Friday. Hiring in Canada is expected to have picked up in January after the economy unexpectedly shed jobs the month before.
The Canadian dollar ended the North American session at C$1.1097 to the greenback, or 90.11 U.S. cents, stronger than Friday’s close of C$1.1138, or 89.78 U.S. cents.
Data on Friday showed investors had pared back their shortpositions on the Canadian dollar.
“A lot of people have booked a lot of profits on the Canadian dollar weakness story, something that was quite compelling as a narrative to start the year, but just appreciating how far we’ve come, maybe some of the momentum has scaled back a little bit,” Tulk said.
The Canadian dollar briefly fell through the psychologically important C$1.12 area on Friday before bouncing higher. That the currency was not able to sustain the move past C$1.12 helped the loonie gain some strength on Monday, said Scott Smith, seniormarket analyst at Cambridge Mercantile Group in Calgary.
“The trade has been a little crowded for a while, we needed a little washout and reset,” Smith said. “So it’s along the lines that we expect a little bit of a consolidation here until we see the catalyst for the next move higher” for the U.S. dollar-Canadian dollar pairing.
Canadian government bond prices were higher across the maturity curve, with the two-year up 3.7 Canadian cents to yield 0.931 percent and the benchmark 10-year up 35 Canadian cents to yield 2.297 percent.
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