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business briefing

Toronto home prices surge

Home sales and prices are surging across the Toronto region.

Sales hit a September record last month, up 2.5 per cent from a year earlier, to reach 8,200, according to the Toronto Real Estate Board today.

The average price climbed 9.2 per cent from a year earlier to $627,395. But more importantly, the MLS home price index, deemed a better measure, soared 10.5 per cent.

And here’s the eye-catcher: A detached home in Toronto is now going for almost $1.1-million, while one in the surrounding region is at $732,852.

That Toronto price is up 10.7 per cent from a year earlier.

Put it all together, and it means more bidding wars.

“While September was the second straight month where annual growth in new listings outstripped annual growth sales, total active listings at the end of the month still remained below last year’s level,” said Jason Mercer, the board’s director of market analysis.

“This, coupled with the record pace of sales experienced so far this year, suggests that competition between buyers will remain strong as we move into the fourth quarter,” he added.

“Expect strong rates of price growth to continue through the remainder of 2015 and 2016.”

TPP deal done

Canada is joining a massive Pacific Rim free trade zone, but has sacrificed some long-held protections for the country’s dairy, poultry and auto industries to gain entry.

Negotiators for the 12 members of the Trans-Pacific Partnership struck a tentative deal in Atlanta early today to eliminate most tariffs in a region spanning roughly 40 per cent of the global economy.

But that will come at a hefty price for some sectors, and for taxpayers, The Globe and Mail’s Barrie McKenna reports.

Ottawa said today it will spend $4.3-billion over 15 years to compensate dairy, chicken and egg farmers, who are ceding what Canadian officials called “limited access” to their now highly protected markets under the TPP deal. The subsidies will “keep producers whole,” according to a government press release.

What the TPP deal is all about


Suncor bids

Suncor Energy Inc. is proposing a big deal for Canada’s oil patch.

The energy giant said today it’s launching a $4.3-billion bid for Canadian Oil Sands Ltd., whose stock surged on the news, The Globe and Mail’s Bertrand Marotte reports.

“We’re offering a significant premium to COS’ current market price and also providing exposure to a meaningful dividend increase,” Suncor chief executive officer Steve Williams said in unveiling the unsolicited bid of one-quarter of a Suncor share.

Glencore surges

Shares of Glencore surged more than 70 per cent in Hong Kong trading and rose 20 per cent in early London trading on speculation that it is open to takeover offers and is close to selling its Canadian agriculture business, The Globe and Mail’s Eric Reguly reports.

The share surge came after a week of wild price swings that saw the world’s biggest commodities trader lose 30 per cent of its value last Monday, only to recoup the loss by the end of the week.

On Friday, Reuters reported that Glencore is in talks with a Saudi Arabian sovereign wealth fund, a Chinese grain trader known as COFCO, along with Canadian pension funds, to sell a stake in the Canadian agriculture assets that operatss under the Viterra banner.

American Apparel in court protection

American Apparel filed for bankruptcy protection today, the latest blow to the teen retailer.

The company said it will operate throughout Chapter 11 proceedings, having struck a restructuring deal with the bulk of secured lenders.

What to watch for this week

Some key reports are on tap, notably the last reading of Canada’s jobs market before the Oct. 19 federal election.

While Statistics Canada’s employment reports are always difficult to predict, economists generally believe Friday’s reading will show a gain of somewhere between 6,000 and 10,000 jobs created in September, with the unemployment rate at 6.9 per cent or 7 per cent.

“Canadian employment growth continues to hold up relatively well, with average monthly job growth running at 14,300 through August, just a shade below the average of the past decade,” said BMO’s Mr. Kavcic.

First, though, comes Statistics Canada’s measure of trade in August, with the deficit believed to have widened to about $1-billion or more.

“Although export volumes may look weak in the upcoming report, the news won’t be that bad for manufacturing since the previous gains likely had come out of inventories, not production,” said economists at CIBC World Markets.

Then on the Thursday, the Federal Reserve releases minutes of its mid-September meeting, which will be parsed for signals on when the U.S. central bank will finally launch its first rate hike.

And just before the jobs report on Friday comes the Bank of Canada’s business outlook and senior loan officers survey.

Overseas, the Bank of England meets this week, on Thursday, though no change in stance is expected.

Population growth slows

The oil shock is taking its toll on Alberta’s population, though they’re still breeding like rabbits out there.

And it’s going to mean a further hit to an already ailing economy.

According to the latest numbers from Statistics Canada, population growth in Alberta led the provinces in the past year, to July 1.

But it also led the country in terms of a slowing rate of population growth, which eased to 1.8 per cent from 2.8 per cent a year earlier.

This was largely because of far fewer immigrants, coupled with a slowdown in the number of people heading to Alberta from other provinces.

Its population is now pegged at 4.2 million people, or almost 12 per cent of the country.

“These developments in migration flows no doubt partly reflect the economic challenges faced by Alberta since mid-2014; however, recent changes to the Temporary Foreign Workers Program (TFWP) by the federal government have also likely been a factor,” said Royal Bank of Canada senior economist Robert Hogue.

“Perhaps a bigger issue for Alberta in the year ahead will be the flows of interprovincial migrants and permanent migrants from other countries,” Mr. Hogue added.

“We expect further deterioration in labour market conditions in Alberta (both in absolute terms and relative to other provinces), which in the past contributed to weaken such flows –particularly on an interprovincial basis. We therefore expect Alberta’s population growth to slow further in the period ahead.”

One of the things Alberta does have going for it is the “natural increase” in the population, or the number of births minus the number of deaths.

Alberta is still going strong there, with 57,677 births and 24,096 deaths in 2014-15, compared to 52,230 and 21,491, respectively, in 2011-12.

It’s good to know they’re having some fun amid the economic wreckage, though that natural increase has slowed over the past several months (For the record, Nova Scotia, New Brunswick and Newfoundland and Labrador have the distinction of more dead than born.)

Population growth plays into the fortunes of Alberta’s economy, in terms of consumer spending, among other things.

“Interprovincial migration flows to Alberta continued to weaken on a seasonally adjusted basis, but remained positive in the second quarter,” BMO Nesbitt Burns senior economist Robert Kavcic said of the latest Statistics Canada numbers.

“At the current rate, inward migration is running at about 26,000 people per year, down from a near-40,000-per-year clip before oil prices hit the skids,” he added.

“Hence the slowdown in housing and retail sales in the province.”

Expect this to continue, at least for now.

“Implications for Alberta’s economy are that household demand growth is likely to slow,"said RBC’s Mr. Hogue.

How about that economy? (How about those Jays?)