Briefing highlights
- Canadians having trouble paying bills
- Canada's economy on the ropes
- Bombardier cuts outlook for business jet demand
- Video: Why rudeness at work is contagious
Canadians struggling
Many Canadian homeowners are scrambling to make ends meet, a new survey suggests.
One of the more startling findings in today’s report from Manulife Bank Canada is that about 37 per cent of homeowners were “caught short” at least once in the last year, which means they couldn’t cover their expenses.
The survey also shows that 60 per cent of us are worried we won’t have enough saved for retirement.
“Rising housing costs are making it difficult for homeowners to balance paying down their mortgage, saving for retirement and managing day-to-day expenses,” the report said.
While housing costs differ greatly across the country, the average mortgage balance outstanding has climbed to $181,000 from $175,000 last fall, Manulife said.
It’s highest in Vancouver, at $259,000, and stands at $194,000 in Toronto, and $217,000 in Calgary and Edmonton.
On the ropes
Canada’s economy is on the ropes again, believed to be contracting in this second quarter of the year, though observers predict a fast, sharp rebound.
The severity of the current slump ranges among observers - and some believe the economy is still growing a bit - and not just because of the wildfires that ravaged Fort McMurray and hampered the oil sands.
Toronto-Dominion Bank believes the economy will shrink by a mild 0.2 per cent, annualized, this quarter, while BMO Nesbitt Burns forecasts a deeper contraction of 1 per cent or more.
“The economic slump in Canada isn’t expected to last long, however,” said TD economist Dina Ignjatovic.
“While we caution that the stronger the housing market becomes, the higher the risk of a correction down the road, we still expect it to remain healthy this year, moderating gradually over the second half of the year, and continuing to support domestic growth,” she added in a recent report, also noting the recent drop in the Canadian dollar, which should buoy exports, along with a pickup in U.S. demand.
“This, combined with the resumption of oil production and the onset of reconstruction efforts in Alberta, should lead to a sizable rebound in economic activity in the second half of the year.”
BMO chief economist Douglas Porter said the economy may be contracting by 1 per cent in this month alone, given the hit to the oil sands.
Canada’s gross domestic product is likely to shrink at an annual pace of 1 per cent or more in the second quarter, even if the economy perks up in June, he said, as BMO cut its forecast from its previous projection of a flat reading.
“Assuming production can recover in June, and along with rebuilding efforts and some already-planned fiscal measures, this sets up a strong rebound in Q3 of around 4 per cent annualized,” said Mr. Porter, who expects annual economic growth of 1.6 per cent.
Emanuella Enenajor, the North America economist at Bank of America Merrill Lynch, expects Canada’s economy to expand in the second quarter, but at an annual pace of just 0.2 per cent.
For the year, she expects growth of 1.6 per cent.
Bombardier cuts business jet outlook
Bombardier Inc. has revised downwards its annual 10-year forecast for business-jet demand, The Globe and Mail’s Bertrand Marotte reports.
The Montreal-based plane and train maker’s private-jet division predicts up to 8,300 new business jet deliveries, representing a total value of about $250-billion (U.S.), between 2016 and 2025, in the segments in which it competes.
That compares with last year’s forecast of 9,000 deliveries representing a total value of about $267-billion.