Canadian Real Estate

Current Financial Crisis and Housing Market

First Published Date: February 15, 2009

When the current financial crisis hit, the first industry shaken was the housing market. After all, one of the catalysts for the so-named “credit crunch” was the vexation in the United States’ “sub-prime” mortgage market, where irresponsible lending at unsustainable levels caused banks to lose solvency with terrifying rapidity.

As a result, the real estate market in the US and beyond fell victim to a major crisis of confidence, and the knock-on effects of this continue to shake the world’s economy. Injections of capital by some governments, and lock, stock and barrel takeovers of banks by others have introduced some measure of stability, but even now that stability is under almost permanent threat.

The consequence of this uncertainty has been a fall in house prices, as home owners have defaulted on mortgages and had to sell up and the market, for so long a seller’s domain, has turned to favour the buyer. Getting a mortgage to buy for the first time may have become a little more difficult, but for those of us lucky enough to have amassed some disposable income the market suddenly looks altogether more favourable.

Although house prices have fallen in Canada – just as has happened everywhere – the fall has been markedly less steep than elsewhere, particularly just south of the border in the US. In the past year, the Canadian real estate market has seen a drop in prices to the tune of 8.9%, and sales themselves have fallen month-on-month. But despite the more troubled market, Canadian banks continue, thanks to judicious management, to make mortgages available to those looking to buy a house. Set against the open panic in the States, where once it was too easy to get a mortgage and now has become a quest on a par with the search for the Holy Grail, this is resulting in a far more serene market in Canada.

Indeed, in some cities it is believed that the market is bottoming out in Ca nada, and ready to at least stabilize if not yet commence an upward climb. While prices have fallen, senior analysts are making the point that even if they continue to fall, the rate at which they are falling has slowed, and anyone waiting for the housing market to hit rock bottom so that they can jump on board will have a long and forlorn wait. As more potential buyers realize this, it is likely that we will see the numbers of sales starting to rise again. If, however, the strong employment numbers nationally take a hit, then the market could yet have austere days ahead of it.

The moral here certainly seems to be that sensible and realistic management of the banking and lending system is equipping Canada to see out the current global crisis in much finer fettle than many of its more storied counterparts. It could just be the case that Canada becomes a model for the other nations to follow.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Feb 15, 2009.

Environmental Job Market To Expand

Green Jobs Will Flourish

First Published Date: December 7, 2013 ADawnJournal.com

The current financial situation worldwide has reached such a point that a number of industries are suffering from severe cutbacks, and experts in a range of areas are finding their job prospects marginalized, if not altogether blocked. This is not a situation that anyone is overjoyed about, but for the individuals who find themselves in such situations, public sympathy is pretty cold comfort. Trying to find a way of improving the situation is something that involves a lot of effort – both for the authorities whose place it is to create and nurture the circumstances where it will be less of a problem, and for the individuals who are currently in a position they would not have chosen.

In such a set of circumstances, you can hope that the efforts to improve the situation prove successful – which will inevitably take time – or you can take steps yourself to improve your situation. If you are currently unemployed this may mean taking on short term work in another field. Or you can take steps to increase your employment prospects by up-skilling. The latter is something you can even do if you are in a job at the moment, but fear that it may come under threat in the near or immediate future. And if you are seeking to take this step, one potentially very wise option is in the environmental sector. Although the credit crisis is biting in a range of areas, governments are still aware that they have responsibilities to the environment, and are wisely avoiding taking their eye off that ball.

Alternative energy sources and environmentally-friendly manufacturing – among a number of other things – are being looked at closely by governments and businesses. This is partly out of altruism – no-one really wants to have “I destroyed the planet” as their legacy, after all – and partly out of the fact that eventually, renewable energy sources and materials are going to be vital in terms of keeping a business afloat – the scarcer a product becomes, the higher a premium it will have placed on it. This makes f or opportunities in the environmental science sector, as there remains a lot to be discovered in the sector, and indeed a lot of current knowledge to be refined and put into practice.

There is no way of putting this particular genie back in the bottle. Governments and businesses are now tied to legislation that makes environmental issues impossible to ignore. However much it costs up front, it will save in return when the situation is normalized. And for the individual who learns the ropes of environmental compliance, there will be opportunities to turn that knowledge into a secure job, an income stream and something they can really put into practice. It may even allow some of us to set up our own businesses, thus allowing thousands, even millions of us worldwide the chance to draw our own road map to a greener, brighter future. It’s a journey we are all going to have to take – isn’t it better to be in the driving seat?

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Thegreenlivingblog.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on May 14, 2009.

Is Canada Going To Be A Future Global Business Centre?

Canada – The Global Business Centre

First Published Date : February 9, 2011 ADawnJournal.com

Canada has one of the largest economies on the planet and is a world leader in terms of investment, resources and more. Go anywhere in the world and people will speak highly of Canada and the people there. It should come as no surprise then that the country is well known for being a great place for companies to do business and this is why Canada has the strong possibility of becoming a future global business centre for the world. While many people tend to think more of the United States than Canada, Canada has many things going for it. For one, it typically has better relations with other countries than their southern neighbour and while 75 per cent of the country’s trade is with the United States, that is rapidly changing as emerging markets in India, China, Brazil and Russia begin trading with Canada.

Currently, the Foreign Direct Investment into Canada, over the course of the first decade of the 21st century, has amounted to nearly $400 billion, which happens to be higher than Brazil, India, Mexico and Russia, all emerging superpowers. Foreign direct investment is how much a country trades, long-term, with another country and can include goods, experience, technology and more.

Currently, the total exports and imports of merchandise for Canada make up 58.9 per cent of the Canadian economy, making it one of the most open economies on the planet.

Canada also has one of the highest levels of economic freedom in the world, a very low level of employment and it was one of the few countries to get through the global financial crisis with not too much difficulty.

Another important fact showing how much foreign investment is coming into Canada and why it is a global business centre is based on the fact that according to Forbes magazine in 2008, Canada has 69 of the worlds largest companies working in the country, putting it fifth next to France. In addition, the government debt of the country is one of the lowest on the planet and the lowest of all the top eight (G8) economies on the planet.

International trade is an immense part of the Canadian economy because of its high amount of natural resources. The largest exports in Canada are found in the agricultural, energy, mining and forestry sectors, accounting for 58 per cent of the country’s exports. Canada also exports machinery, equipment, automotive products and other manufactured goods make up 38 per cent of the exports in the country. With the combined exports and imports of the country, Canada ranks eighth on the planet.

Another main reason that Canada is a global business centre of the future is because it has several free trade pacts in place, as well as in the works. Current free trade pacts include the Canada-U.S. Free Trade Agreement, the North American Free Trade Agreement, the Canada-Israel Free Trade Agreement, the Canada Chili Free Trade Agreement, the Canada-Costa Rica Free Trade Agreement, the Canada-European Free Trade Association Free Trade Agreement, the Canada-Peru Free Trade Agreement, the Canada-Colombia Free Trade Agreement, the Canada-Jordan Free Trade Agreement and the Canada-Panama Free Trade Agreement.

Currently, Canada is negotiating having a free trade agreement with the following countries and political entities: Ukraine, Morocco, India, South Korea, Dominican Republic, Singapore, Andean Community, Caricom (Caribbean community), European Union and a possible Canada Central American Free Trade Agreement.

Canada is working hard to become a global business centre and that is evident through several programs running within the country, including ConsiderCanada.com, which is helping to get countries investing within Canada to help themselves and the Canadian economy.

The government of Canada has also created the Invest in Canada organization, which promotes and attracts foreign direct investment in Canada. The organization operates as a bureau of the Department of Foreign Affairs and International Trade. The goal of Invest in Canada is to get companies planning on investing in Canada more information to do so, and to get those already invested in Canada to expand their operations within the country.

Invest in Canada, as does ConsiderCanada.com, helps guide companies through the investment process from giving information to helping them choose a site for their business.

With organizations devoted to helping Canada become the global business centre of the future, and an economy already suited to foreign investment, what more evidence is there that Canada is the global business centre of the 21st century? Well, these facts are what companies are looking at when they are thinking of putting their operations in a country.

1.   Canada has the soundest banking system on the entire planet, which is incredibly important right now in tough economic times. While the United States had several banks fail during the global recession, Canada had none. This is why the World Economic Forum chose Canada as the best banking system country on Earth.

2.   Canada has the highest proportion of post-secondary graduates in the Organization for Economic and Cooperative Development.

3.   Canada has the fastest economic growth in 2011 for all the G7 countries, which include the largest economies on the planet. In addition, it also has the lowest debt-to-GDP ratio in the G7 and the lowest taxes on new business investment in the G7. Canada also has the lowest research and development costs in the G7.

4.   Canada has a very high quality of life and is often chosen as the best country to live in on Earth.

One major factor to Canada becoming a global business centre in the coming years was put in place by the Government of Canada in 2010 when they announced the initiative to reduce tariffs on all manufacturing inputs down to zero per cent by 2015.

So, is Canada the global business centre of the future? According to these statistics, yes it is and many companies are now investing heavily in the great white north because it is the right country to be in at this time.

How the Loonie Affects the Canadian Economy

How Strong Canadian Dollar Affects Economy

First Published: ADawnJournal.com April 11, 2010

If you ask a Canadian what the dollar is at, they will probably tell you that it is near the American dollar in value. Most Canadians know where the dollar sits, and that when the dollar is good, so is the economy. However, many citizens do not truly understand just how important the Canadian dollar, or Loonie, is to our economy. So, let’s learn about the Canadian dollar and its effect on the Canadian economy.

For much of the 1990s, the Canadian dollar was well below the American dollar, often hovering around 65 cents. Things were at their worst on January 21, 2002, when the Canadian dollar hit 61.79 cents. From there, things began to improve and the Canadian dollar began to gain immense value, roughly 70 percent, within a few years. By September 20, 2007, the Canadian dollar did something it had not done in 31 years; it reached parity with the American dollar.

During the 1970s, the Canadian dollar was worth more than the American dollar, specifically in the years 1972, 1974 and 1976. On April 25, 1974, the Canadian dollar was actually worth four cents more than the American dollar. In August of 1957, the dollar was worth six cents more than the American dollar.

Typically the Canadian dollar will do better when commodity prices are higher. We have many resources, so when resources are more expensive, we make more money. Some of the resources that we have which are the most valuable are oil, copper, gold and wheat. When the price for goods and services increases, the value of the dollar also goes up, along with the Canadian economy. What does this mean for the Canadian economy then?

Well, when our dollar is at par with the American dollar, which means that goods in the United States are 60 percent cheaper than they were in 2002. This means that we can buy items in the United States for much less, and the government can then import items from the United States for less. For Canadian investors, things are not as good because the gains in the Canadian dollar wipe out the gains they have enjoyed. For example, when the Canadian dollar rose to par with the American dollar, the Dow Jones had enjoyed an 11 percent increase since the beginning of the year. In contrast, the Canadian dollar went up 23 percent in that same time period, thereby eliminating the gains felt by Canadian investors.

While it is cheaper to import goods from the United States, it is much more expensive to export goods, which makes Canadian exporters hurt. American companies are not coming up here as much because it is now more expensive to do business. Between 2002 and 2007, 250,000 manufacturing jobs were lost as a result of this surging dollar.

As we can see, there is a flip side to all of this. When the Canadian dollar is down, it costs more to import but more American businesses are funneling money into Canada because it is cheaper. In contrast, when the Canadian dollar is up, it is cheaper to buy from the states but exportation of our goods is more expensive which means less American companies buying from Canada.

Canada Exceeds Economic Expectations

Canada Sees Improved Economic Forecast

First Published: ADawnJournal.com February 15, 2010

While places like the United States are struggling to cope with the impact of the recession, the Canadian economy seems to be rising above the recession and moving back into the black. This is in no small part to the housing market in places like Vancouver and Toronto, which have seen record rebounds after hitting all-time lows in early-2009. As a result, Jim Flaherty, the Finance Minister of Canada, has revised the economic forecast of the country upward.

Ottawa revised its growth estimate from 2.3 percent for 2010 to 2.6 percent. That .3 percent may not seem like much, but it accounts for millions upon millions of dollars in the Canadian economy and any growth is good growth in these tough economic times. The government has also forecasted that the growth will reach 3.2 percent in 2011, before falling over the next three years to 2.6 percent by 2014.

Of course, this is all just speculation and there is no way to completely know how the economy is going to do. During the 2008 Federal Election, Prime Minister Stephen Harper stated there would be no deficit for the government if they were elected, but come March the country was running in a deficit. It is impossible to predict how the economy will do; all that can be done is to speculate.

Currently, the Canadian debt-to-GDP ratio is about 30 percent, which is the lowest in the G-7 countries, and about half of the level in the U.S. and U.K. Unemployment rate of the country is a full 1.5 percent lower than what is seen in the United States right now.

All things considered given the potential growth, the government is not stating when Canada will have a balanced budget as there are still sectors in the country struggling and the largest trading partner of the country is still running in a recession. For the next two to three years, there is really no way to know when there will be a balanced budget, even if the economy continues to grow at over two percent per year.

It is estimated that by 2015, the government’s budget should be balanced, but again there really is no way to know for certain.

* * *

Speaking of the housing market, across the country there were major gains in January, including in Toronto where the highest-ever gains for the month of January were seen. Toronto and Vancouver, along with other places like Calgary, are bringing the housing market out of its pit falls and the surging market sales are expected to continue until June of this year. It is at this point that the Bank of Canada will increase the record low interest rate, which currently sits at .25 percent. Once this happens, the housing market will slow and many are worried that the country will go through another housing bubble as those who got mortgages when they were cheap can no longer afford them. This is just another reason why it is so hard to predict how the economy will do. Enough people not being able to pay their mortgages – thanks(!) to a higher interest rate could send everything back into a tail spin.