These are stories Report on Business is following Friday, June 6, 2014.
As the election nears
There’s much food for thought in today’s jobs report where Ontario’s concerned just days before next week’s election.
The jobless rate in Canada’s most populous province certainly went in the right direction in May, inching down to 7.3 per cent from 7.4 per cent, which is good news for incumbent Kathleen Wynne and her Liberals.
The straight numbers from Statistics Canada also went in her favour as the ranks of the unemployed eased to below 549,000 from more than 555,000 in April.
But – and it’s a big but - you want to look at the breakdown: More than 30,000 full-time jobs disappeared, while part-time positions climbed by 45,000.
This mirrored the trend across the country and comes as the election campaign, which has focused on jobs, heads into its final stretch.
Today’s numbers allow the challengers, Tim Hudak’s Progressive Conservatives and Andrea Horwath’s New Democrats, to talk about job quality.
The May unemployment rate is exactly where it was a year ago, with some 40,000 jobs created in the last 12 months.
Full-time employment is now down by more than 18,000 in that period, and part-time work up by almost 58,000.
The employment rate, at 61.2 per cent, is down half a percentage point, and the participation rate, at 66.1 per cent, is down 0.4 of a point.
Across Canada, The Globe and Mail’s Tavia Grant reports, the economy churned out 25,800, while the unemployment rate inched up to 7 per cent.
As in Ontario, the drop in full-time positions was outpaced by the rise in part-time jobs.
"Although today’s number was much improved, it still leaves the six-month trend running an anemic 3,000, suggesting some potential for catch-up given expectations of an economic acceleration in Q2," said Nick Exarhos of CIBC World Markets.
U.S. gains jobs
The United States, in turn, marked something of a milestone today.
The U.S. economy created 217,000 jobs in May, according to the Labour Department, bringing the level of employment back to pre-recession levels.
The rate of unemployment remained at 6.3 per cent, our Washington correspondent Kevin Carmichael reports.
“With the May job gain, nonfarm payrolls have finally reclaimed pre-recession levels,” said Sal Guatieri of BMO Nesbitt Burns, referring to the more than 8.5 million jobs lost to the crisis.
“The labour market is making good progress, locking in continued [quantitative easing] tapering, but there is sufficient slack in the economy to keep interest rate hikes at bay for another year,” he said, referring to the Federal Reserve’s pullback on the stimulus measure known as QE.
CMHC moves on condo builders
Canada Mortgage and Housing Corp. says it will no longer offer mortgage insurance to developers to finance the construction of new condo buildings, The Globe and Mail's Tara Perkins reports.
The Crown corporation has not actually provided any of the controversial insurance since 2011, but is now officially removing the product.
The change is part of a review that the Crown corporation has been doing to ensure that it’s not taking on too much risk. The federal government has been seeking to rein in the amount of exposure that CMHC has been racking up to Canada’s housing market.
CMHC also said that it is tightening up its standards for homeowners who have a down-payment of more than 20 per cent. Mortgage insurance is only mandatory when a federally-regulated lender sells a mortgage to someone who has a down-payment of less than 20 per cent.
Toronto the Good
Toronto has won a global “intelligent community award” that honours the best in information and communications technology.
And, yes, the folks who awarded it were well aware of the shenanigans at city hall. They even mentioned it as a “unique public challenge.”
Toronto’s win yesterday in New York also marked the return of the award to a Canadian city since Waterloo, Ont., BlackBerry Ltd.’s home town, won it in 2007.
The Intelligent Community Forum, a think tank, hands it out at the end of its annual summit and a year-long study of the community.
The group, which “studies and promotes the best practices of the world’s intelligent communities as they adapt to the demands and seize the opportunities presented by information and communications technology (ICT) and create jobs,” gave the award last year to Taiwan’s Taichung City.
Besides Waterloo, and now Toronto, Calgary has also been awarded the top honour, in 2002.
“Toronto has both the assets and the liabilities that come with being Canada’s largest city,” the group said.
“On the asset side is its diverse economy, with key clusters in finance, media, ICT and film production, and success as a magnet for immigrants that have made it one of the most multicultural cities in the world,” it added in announcing the award.
“Major carriers offer high-quality broadband to 100 per cent of residents, and its five major universities and multiple colleges have attracted 400,000 students and helped ensure that Toronto has more residents with undergraduate degrees than London, England.”
It cited the waterfront as one of several public-private partnerships, the MaRS Discovery District, the Ryerson University Digital Media Zone, and the Centre for Social Innovation, also lauding the city’s libraries and outreach programs.
The group also gave the “visionary of the year award” to Toronto’s Suneet Singh Tulie, the chief of DataWind, who developed what Forbes says is the world’s cheapest computer.
On the downside, Toronto suffers the country’s highest cost of living and severe gridlock, the group said.
And it didn’t shy away from the scandal that has made the city the laughingstock of the world.
“Despite a controversial political situation with Toronto’s Mayor Rob Ford that provided a unique public challenge, Toronto has achieved economic growth,” it said.
Energy bills rise
Canadian have seen their household energy bills climb by 5 per cent this year, an increase that will divert $4-billion from other spending if sustained over the year, a senior Bank of Nova Scotia economist warns in a new report.
Economist Adrienne Warren said the higher energy prices will crowd out spending for other consumer goods, The Globe and Mail's Shawn McCarthy reports.
The economist added there is likelihood that energy prices will continue to outpace broader inflation – and incomes – in the coming years, creating a strong incentive for Canadians to reduce their energy consumption, or at least slow its rise.
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