Skip to main content
top business stories

These are stories Report on Business is following Tuesday, March 26, 2013.

Follow Michael Babad and the Globe's top business stories on Twitter.

Homebuyers cautious
Canadians are growing increasingly uneasy about buying a house in this cooling market.

Indeed, just 15 per cent of those polled by Ipsos Reid say they'll probably buy a house in the next two years. That's down from 27 per cent last year, and marks the biggest drop in buying intentions ever in the annual poll, now in its 20th year, done for Royal Bank of Canada.

This comes amid a cooling housing market with an uncertain outlook, tamed, among other things, by the Canadian government's attempt to bring it back to earth via changes in mortgage rules, though residential real estate is still seen as a good investment. And most observers still expect a soft landing.

About 75 per cent of the 3,000 people polled between Jan. 31 and Feb. 8 cited the mortgage market restrictions for delaying buyers, though this could be "more perception than reality," RBC said.

That's because six of 10 survey respondents don't see a 5-per-cent minimum down payment and a shorter amortization – now 25 years versus 30 years – as being that big a deal.

And almost half of those polled believe mortgage rates are going to be at the same level next year, suggesting they see no rush at this point.

There are regional differences, of course. More than half of those polled in British Columbia, where Vancouver is in the eye of the storm, believe they're now in a buyer's market. That compares to 35 per cent across the country.

"B.C.'s housing market is catching its breath after a period of historic activity and price increases," said RBC's Inde Sumal, a regional vice-president.

"It makes sense that buyers are taking their time to decide if they should buy now or wait."

Ontario, where Toronto is the other market in the spotlight, pretty much tracks the national average, with 86 per cent saying they don't plan to buy in the next two years.

OSFI labels banks
Canada's bank regulator has deemed the country's Big Six too big to fail, to use the common phrase.

The Office of the Superintendent of Financial Institutions today deemed as "of domestic systemic importance" Royal Bank of Canada, Bank of Montreal, Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and National Bank of Canada.

What that means is that those big banks will have to carry higher capital levels than their peers, The Globe and Mail's Tara Perkins reports.

As such, they will have to meet a common equity capital "surcharge" of 1 per cent, which is on top of the 7 per cent minimum, by the beginning of 2016.

The move, expected and discussed in last week's federal budget, is part of the ongoing efforts among global regulators to protect the financial system in the event of another crisis.

"Due to their conservative nature and desire to steer well clear of perceived conflicts with the regulator, we expect the banks will build in an additional capital buffer, over and above the minimum requirement, for good measure," said analyst Michael Goldberg of Desjardins.

"Beyond that, we expect the banks to continue to explore opportunities for capital deployment either via acquisitions or by returning capital to shareholders through dividends or share buybacks."

Munk eyes successor
Peter Munk, the iconic founder and leader of Barrick Gold Corp., is looking for a successor to lead the board of the world's largest gold producer, The Globe and Mail's Pav Jordan reports.

In a message to shareholders in the company's annual report for 2012, published today, Mr. Munk said he has been working with directors to find someone with the drive, ambition, global experience and contacts to lead the board, and all but pointed at co-chairman John L. Thornton as that man.

"Over the past year, John and I have been working in lock-step with the entire board and our management team, focused on the singular and exclusive goal of setting the stage for Barrick's long-term success," Mr. Munk said in the letter to shareholders.

Suzuki to end Canada sales
Suzuki Canada Inc. plans to halt automobile sales in Canada after the 2014 model year, The Globe and Mail's Greg Keenan reports.

Today's decision comes several months after American Suzuki Motor Corp. went into chapter 11 bankruptcy protection.

Japan-based Suzuki Motor Corp. decided recently it would discontinue production of new automobiles for Canada.

Airlines to eke out gains
If you can't bring 'em in, charge 'em more.

As The Globe and Mail's Bertrand Marotte reports today, Canada's airlines face a challenging year given the economic climate, meaning traffic is expected to increase at a slower pace.

But the Conference Board of Canada says revenue gains will come from higher prices.

"As well as keeping increases in costs under control, limiting capacity growth also provides Canadian airlines with stronger pricing power," the group said.

Streetwise (for subscribers)

Economy Lab

ROB Insight (for subscribers)

Business ticker

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 17/05/24 4:00pm EDT.

SymbolName% changeLast
Royal Bank of Canada
Canadian Imperial Bank of Commerce
Bank of Montreal
Toronto-Dominion Bank
Bank of Nova Scotia
National Bank of Canada
Barrick Gold Corp

Interact with The Globe