Canada posted its first trade surplus since last summer in May as the auto sector helped boost exports to a record level and the economy continued to show signs of rebounding.
Statistics Canada said Wednesday a jump in exports helped the economy to a $762-million international merchandise trade surplus in May.
The surplus was the first since the economy eked out a $10-million surplus in July 2018.
Economists had expected a deficit of $1.5 billion for the month, according to Thomson Reuters Eikon.
“May’s international trade data joins a suite of other data releases confirming that the Canadian economy is recovering from the soft patch seen in late 2018 and early 2019,” TD Bank economist Omar Abdelrahman wrote in a report.
Abdelrahman said there was little to complain about in the trade report, though part of the surge should be discounted given the one-off transactions including the resumption of motor vehicle production following shutdowns and spikes in the volatile aircraft and boats and other transportation equipment categories.
“Still, a solid report is a solid report, with today’s data revealing an encouragingly broad-based May export picture,” he said.
The Canadian economy hit a weak patch late last year as oil prices plunged and the country posted its weakest back-to-back quarters of growth since 2015 at the end of 2018 and the start of this year.
However, recent data has suggested the weakness was temporary and the economy has been growing in strength.
The Bank of Canada, which is expected to make its next interest rate announcement next week and release its updated monetary policy report, has been expecting the pick up in growth.
The Canadian central bank’s position stands in contrast to that of the U.S. Federal Reserve which has suggested it is prepared to cut interest rates later this year.
Benjamin Reitzes, Canadian rates and macro strategist at BMO Capital Markets, said the Canadian economic data continues to outperform despite the increasingly dour global backdrop.
“There’s still plenty of data to go for Q2, but it looks as though the economy is rebounding strongly from the near-zero growth in Q4 and Q1,” Reitzes said.
“The question now is whether this strength persistent into June and Q3 when the global backdrop was much more challenging.”
One of the watchdogs for Canada’s investment industry says it’s working towards creating regulatory safeguards for clients who may be targets of financial exploitation, particularly seniors.
The Investment Industry Regulatory Organization of Canada says a survey done for IIROC found wide public support for having tools and rules in place to protect vulnerable clients.
The idea of having a “trusted contact” on file, who can be consulted by an investment professional who suspects a client is being exploited or vulnerable, was supported by 93 per cent of 1,000 people surveyed for IIROC.
IIROC is a private-sector body that shares responsibility for regulating about 160 Canadian investment dealers, including subsidiaries of the country’s major banks.
Andrew Kriegler, IIROC’s chief executive officer, says that the next step is to work out the details with other regulatory bodies including the provincial and territorial regulators represented by the Canadian Securities Administrators.
While there’s strong support for putting protections in place, he says “Canadians want us to do it right.”
“And doing it right . . . means respecting privacy and not compromising that in a rush to do a simple answer.”
The desire for privacy runs deep with many people and investment professionals want to be sure they don’t overstep a line if they interfere with a client’s decision, Kriegler suggests.
“Viewed from one perspective, that’s an intrusive act. It’a surrendering of control,” he says.
“It may be done for exactly the right reasons . . . but, inherently, that’s a surrendering of control, a surrendering of privacy, a surrendering of mastery over your own life, over your own decisions.”
“And I think that’s inherently a tricky question.”
But Kriegler says there’s also evidence, from one of Canada’s largest groups representing older people, that there is need for some sort of protection for seniors.
He cites an estimate from the Canadian Association for Retired Persons that about one-in-five older Canadians are subject to elder financial abuse and notes that dementia may also reduce the abilities of people as they age.
Immigrants are another potentially vulnerable group, although IIROC hasn’t collected information on that front.
“We didn’t address that question in the survey work,” Kriegler says. “It would be speculation but I think reasonable speculation.”
In fact, he says, all of the issues are likely magnified when a client is uncomfortable or unfamiliar with the system and that’s one reason IIROC wants to tread carefully in conjunction with other Canadian regulatory bodies.
They would include the CSA members and the Mutual Fund Dealers Association, another of the financial industry’s self-regulating organizations.
The survey, conducted by The Strategic Counsel, involved 1,000 people selected from IIROC’s online advisory pool of 10,000 investors.
Besides support for establishing a trusted contact, the Strategic Counsel survey of 1,000 people found 89 per cent of respondents supported giving investment advisers and firms the ability to put a “temporary hold” on account activity.
Support was also high (86 per cent) for providing a regulatory “safe harbour” to protect investment advisers who second-guess a client’s instructions, either by placing a temporary hold or consulting the trusted contact.
“I think investment dealers want regulatory certainty and that’s what’s behind the whole safeharbour idea,” Kriegler says. “This gives them the cover to take the right actions on behalf of the client.”
Tolko’s operations near Merritt will be audited by the Forest Practices Board.
The Board will examine Tolko’s forestry activities in the Cascades Natural Resource District during the week of July 8.
Auditors will examine whether Tolko’s harvesting, roads, silviculture, fire protection and associated planning between June 1, 2018, and July 12, 2019, met the requirements of the Forest and Range Practices Act and the Wildfire Act.
Once the audit work is complete, a report will be prepared and any party adversely affected can respond. The board’s final report and recommendations then will be released to the public and government.
The Forest Practices Board is B.C.’s independent watchdog for sound forest and range practices, reporting its findings and recommendations directly to the public and government. The board audits forest and range practices on public land, as well as appropriateness of government enforcement.
Safeway employees have a tough decision to make in the next few weeks.
United Food and Commercial Workers Union Local 1518 secretary-treasurer Patrick Johnson says closing Safeway stores in Kelowna’s Dilworth area and downtown Vernon and reopening them as FreshCo locations will have a major impact on current employees.
Sobeys announced this week it would be converting six Safeway stores in smaller BC communities to FreshCo discount grocery stores.
“It’s a drastically different collective agreement,” says Johnson, adding the Safeway agreement is far superior to FreshCo’s. “It certainly does have a big impact on the members and their families.”
Employees have 30 days to decide whether they’ll transfer to FreshCo or take a voluntary buyout.
Most employees who stay on with FreshCo will take a hefty pay cut. Only 25% of employees will be able to keep their full benefits and wages, a decision that will come down to seniority, says Johnson.
The next step for those affected is talking with their families about what to do.
Stores in the Lower Mainland have converted, but it’s had less of an impact in bigger cities than it has in smaller communities. Employees in more populated areas have more options to transfer to other Safeway stores nearby.
Johnson says there’s no sense yet of when the FreshCo stores will open after the Safeway stores close.
The conversion is part of a western Canadian plan that was first announced in 2017 by parent company Empire Co. Ltd.
Impacted stores are also in 100 Mile House, Powell River, Kamloops and Williams Lake.
The first three FreshCo stores in B.C. opened their doors in May and are currently operating in former Safeway locations in Mission and Richmond.
Ebus BC announced they will be adding two new routes in B.C. — Salmon Arm and Prince George.
“With seven months of operations under our belt in B.C., we’re excited to have the chance to increase connectivity for people in our current and 14 potential new communities,” Ebus says in a release.
The Salmon Arm route will be an addition to other existing run between Kamloops and Kelowna, providing service to Chase, Sorrento, Salmon Arm, Enderby, and Armstrong. The Prince George service will be a new route from Kamloops, heading up Hwy. 97 through Cache Creek, 70 Mile House, 100 Mile House, Lac la Hache, Williams Lake, Quesnel, and Hixon to Prince George.
“We’re currently working on stop locations, schedules, and pricing, with a goal to launch service as soon as possible after receiving approval from the Passenger Transportation Board,” the company said.
The majority of millennials are now in the market for recreational real estate.
A new RE/MAX survey conducted by Leger found 56% of millennials are looking to purchase a recreational property — up 14 per cent from 2018, when 42% were considering buying recreational property.
RE/MAX says the increase in buying intentions among younger people marks the beginning of a new trend in the recreational market.
“We are finally witnessing the long-anticipated generational shift of purchasing power from baby boomers to millennials,” says Christopher Alexander, executive vice-president, RE/MAX of Ontario-Atlantic Canada.
“With the high cost of urban living taking many young homebuyers out of those markets, more millennials are turning to recreational properties as a viable option for home ownership.”
RE/MAX says price remains the top consideration for recreational property buyers. Liveability also plays a crucial role in the selection process.
“This new buyer demographic comes with a different lifestyle and property criteria than those of their boomer counterparts,” Alexander adds. “Factors like Internet connectivity, recreational activities and proximity to towns with urban conveniences are becoming a more important selling feature.”
However, real estate experts say first-time homebuyers aching to get into the real estate market should be cautious about trying to bypass expensive urban housing by purchasing a recreational property first.
“It’s more of a lifestyle choice than it is a great investment choice,” says Brad Henderson, former president and CEO of Sotheby’s International Realty Canada.
While more affordable than urban housing, recreational properties typically appreciate at a slower pace than city homes, Henderson said in an interview with The Canadian Press.
“So if not on a lake or close to mountains, those properties follow the market versus lead it, whereas well-located properties in Toronto, Vancouver, Calgary and Montreal will tend to appreciate at a faster rate.”
Canadians have been buying recreational land before a principal residences for decades, often parking a motor home or pitching tents until ready to build.
However, the rising cost of urban housing may be opening the idea to more buyers.
The fourth-quarter numbers are in, and 2018 was another strong year for the Central Okanagan economy, according to numbers released by the Central Okanagan Economic Development Commission on Tuesday.
The most stunning number in the economic indicators report was job postings, as the region experienced a whopping 49.3 per cent increase in that category last year. There was an average of 1,938 job postings per month, with sales and service jobs leading the listings at 30.4 per cent.
There was a 1.4 per cent increase in the Central Okanagan’s labour force, the average unemployment rate was five per cent, and the number of business licences jumped by 4.5 per cent.
The District of Peachland led the region in 2018 with a 14.2 per cent increase in business licences, while Westbank First Nation was next with 5.9 per cent growth.
Housing starts decreased by 28.6 per cent from 2017, which was expected after the area’s record numbers from 2014 to 2017.
Other notable numbers from the report were an increase in median newly constructed house price (up 25.3 per cent to $901,250), household income (a 19.5 per cent increase to $71,127) and population growth (two per cent growth to 208,864).
There is another conservation officer working the North Okanagan.
Last spring, 20 conservation officers were sworn in and they are now working at various locations throughout the province.
The new faces mark the largest influx of recruits the B.C. Conservation Officer Service (BCCOS) has had in a decade and will fill existing vacancies and newly-funded positions in locations with the highest need and areas where retirements are imminent.
“We have some communities that haven’t seen a new conservation officer for a very long time, so these new recruits will significantly improve services,” said George Heyman, Minister of Environment and Climate Change Strategy.
The 160 conservation officers throughout B.C. are located in 45 communities and work on a zone-coverage basis, where they respond to complaints and concerns anywhere in the zone.
Sixteen of the new recruits are fresh out of the Western Conservation Law Enforcement Academy in Hinton, Alta. and will spend the next six months working with a field trainer. The other four officers come from law enforcement jurisdictions elsewhere.
“It’s an exciting time for the B.C. Conservation Officer Service. Communities and stakeholder groups are excited to see new officers out in the field protecting B.C.’s fish and wildlife, keeping citizens safe and ensuring our environment is sustainable for years to come,” said Doug Forsdick, chief conservation officer. “The new resources will enhance officer safety with a doubling of all of our single-officer posts. Areas with high-call volume and emerging pressures will also see an increase in staffing.”
Vernon is the only Okanagan community to get a new conservation officer.
BC Housing has announced plans to operate a new cold weather shelter at a motel on the south end of Penticton.
The Swiss Sunset Inn at 2604 Skaha Lake Rd. will host 20 cold weather beds, possibly to be operated by ASK Wellness, which manages the Fairhaven transitional housing development next door.
BC Housing would not comment on the arrangement that will see the beds used for the homeless, but a manager at the Swiss Sunset Inn told Castanet they are leasing the rooms out to the organization on a temporary basis with plans to resume regular tourist motel operations in the spring.
The 20 beds at the Swiss Sunset Inn will be in addition to 27 at the former site of the Super 8 on Main Street and 29 at Compass House, which is open all year.
The cold weather shelter at the old Super 8 and at Compass House is operated by the Salvation Army.
Shelter manager Roger Evans is optimistic there will be enough space to keep people off the streets this winter, noting they were able to manage last year.
The shelter at the Super 8 will be open Nov. 3, he said, and a mad dash is underway to get everything prepared. “Everything is coming together, and we will be ready.”
Evans estimated the renovations at the Super 8 to convert it into a transitional housing project, like the Fairhaven, should be complete in March.
The Salvation Army shelters are always accepting donations of blankets, warm clothing, slippers, toques and gloves. Donors can also help the homeless by gifting the same items to SOREB’s annual “warm up the winter” blanket drive, which has donations bins spread throughout the community.
Paul Ferley, assistant chief economist at RBC, will tell a Kelowna audience next month how red-hot economies on both sides of the 49th parallel can coexist in the time of Trump.
Ferley is scheduled to be keynote speaker during a noon-hour speech at the Urban Development Institute’s annual general meeting on Sept. 20.
The event is scheduled to begin at 11:30 a.m. at the Coast Capri Hotel. Tickets are $45 for members and $65 for non-members.
The title of the event is the “Canadian economy at capacity and confronting challenges.”
While Canada’s unemployment rate is matching lows not seen since the 1970s, that’s also putting pressure on the Bank of Canada to keep gradually tightening policy in order to keep growth moderate.
Ferley is to also discuss how rising rates can have negative implications for the real estate market with residential investment particularly vulnerable on the downside given current high levels of activity.
A key challenge for the Bank of Canada is to set policy to help sustain some growth but not at too strong a pace that generates inflationary pressures.
However, the U.S. economy is also operating at capacity, which is expected to keep the Federal Reserve tightening policies there.
And while President Donald Trump’s tax reductions are keeping the U.S. economy growing, it might be too strong for too long, putting more pressure on inflation and resulting in further aggressive Fed policy.
Such implies even greater upward pressure on mortgage rates and borrowing costs.