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These are stories Report on Business is following Wednesday, March 12, 2014.

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Victoria, and everywhere else
The Vancouver and Calgary housing markets are on fire in what a new report says is a more pronounced Canadian east-west divide.

Prices across the country rose 0.3 in February from January, and 5 per cent from a year earlier, according to the Teranet-National Bank house price index released today.

The pricey city of Vancouver set a record for the fourth consecutive month, while home prices in Calgary set a fresh high for the first time since September, 2007, according to the report.

Today's reading may well get tongues wagging again over the Canadian housing market.

But, as The Globe and Mail's Tara Perkins reports, some of the pessimists who have signalled a bubble may be using flawed measures.

According to today's report, Canadian prices are again at a record, though only Vancouver and Calgary set new highs among the 11 cities measured, with prices up 7.7 per cent from a year earlier in the former, and 9.6 per cent in the latter.

Other gains:

  • Toronto, up 6.1 per cent over the 12 months
  • Edmonton, up 5.3 per cent
  • Hamilton, up 5 per cent
  • Winnipeg, up 3.5 per cent
  • Montreal, up 1.9 per cent

Prices fell almost 5 per cent in Halifax, 0.6 per cent in the Ottawa area, 3.4 per cent in Victoria and 2 per cent in Quebec City.

Victoria is something of a special case, given that prices have declined for 12 months in a row, though they rose 0.9 per cent in February alone to end a string of erosion. For Quebec City, it was the first drop in 15 years.

Notable, too, is that February's reading marked the first time since October, 2009, of "price deflation in at least four of the regions covered."

Also notable is that the report cited how the "east-west dichotomy became more pronounced than ever" last month, with prices up in all of the five western markets measured, while Montreal stood alone in central and western Canada with an increase.

On a monthly basis, prices slipped 0.1 per cent in Toronto, 0.8 per cent in Ottawa, and 1.7 per cent in Quebec City and Halifax.

"The fact that the national housing market is not homogeneous is highlighted by the fact that the national composite index is at a record level while there is price deflation in four out of the 11 regions covered," said economist Marc Pinsonneault of National Bank.

"The latter situation has not been seen since the aftermaths of the last recession, 4 ½ years ago," he added.

Mr. Pinsonneault broke down those regions into three categories: Ontario and west, but for Victoria and Ottawa, with markets "either hot or balanced," some areas east of Ontario where "markets are rather favourable to buyers," and, third, Victoria, where "price deflation has prevailed for the last few years."

Economists generally expect Canada's housing market to cool, but in soft-landing fashion.

"Price increases are still outpacing income gains by a wide margin in many markets, a situation we deem unsustainable in the longer run," economic analyst Sonny Scarfone of Toronto-Dominion Bank said of the Teranet-National report.

"A low supply of new listings remains a key contributor to upward pressures on real estate prices," he added.

As well, he noted how headline numbers can skew results and hide divergence within a city.

"Indeed, larger real estate markets such as the Greater Vancouver and the Greater Toronto Area are made up of several different markets with varying fundamentals," Mr. Scarfone said.

"For example, in Toronto, we still see robust price gains in single-detached homes and low-rise units, while the high-rise segment will increasingly be exposed to a rising level of supply. Accordingly, we expect a disproportionate amount of the cooling in home prices to stem from the condo market."

Shenfeld on Carney
A legacy of plant closings is part of the mess former Bank of Canada governor Mark Carney left behind when he departed for the Bank of England last year, says CIBC World Markets economist Avery Shenfeld.

Mr. Shenfeld slammed Mr. Carney for allowing a "serious overvaluation" of the dollar by not stemming a flood of "hot money" into Canada as the country's trade deficit ballooned between 2010 and mid-2013, The Globe and Mail's Barrie McKenna reports.

"In effect, monetary and exchange rate policy traded off more condos for fewer factories," Mr. Shenfeld argued – a rare shot at the widely praised Mr. Carney.

"The legacy of … plant closures will be with us for years to come."

A spokesman for Mr. Carney said the Bank of England governor would not comment.

King seeks up to $24 a share
The maker of Candy Crush Saga is looking to go public at between $21 and $24 (U.S.) a share, a price that would value the Irish company at more than $7.5-billion at the high end of that range.

King Digital Entertainment PLC, which makes the wildly popular game for mobile devices, is selling more than 22 million shares, some 15.5 million of its own and 6.5 million from its shareholders.

King, which will go public on the New York Stock Exchange under the symbol KING, says in regulatory documents that it had some 124 million active daily users in the fourth quarter of last year, and 408 million monthly active users.

It cited revenue of $602-million and a profit of $159-million in the quarter.

"Our recent annual revenue and gross bookings growth rates should not be considered indicative of our future performance," King said in documents filed with the Securities and Exchange Commission.

"As we grow our business, we expect these annual growth rates to slow in future periods as the size of our player network increases and as we achieve higher market penetration rates," it added.

"Although we were profitable in the past, we expect to make significant investments in growing our business and significantly increase our employee headcount, which could reduce our profitability compared to past periods," it added.

Campari buys FCD
One of the giants of the drinks industry, Gruppo Campari, is spending more than $185-million for an Ontario spirits firm, marking what it says is its "first move into the growing and attractive Canadian whisky category with high-end premium products."

Forty Creek Distillery also produces vodka, brandy, rum and liqueurs, though Forty Creek Whisky is its core, and has won several awards.

In its last fiscal year, it chalked up sales of more than $34-million, which Campari expects to increase to almost $40-million by the time the current year winds up at the end of this month.

"Via the entry to the large and growing Canadian Whisky segment this acquisition further increases our exposure to the highly attractive brown spirits category whilst continuing to enhance our premium portfolio," Campari's chief executive officer, Bob Kunze-Concewitz, said in a statement.

"Moreover, the addition of FCD will enable us to further build our critical mass in key North American markets, providing us with a strong market position in Canada and positioning us for further growth in our core U.S. market."

Harrison 'irate'
The head of Canadian Pacific Railway Ltd. says he's "irate" over federal politicians' criticism of his company's grain shipping during a harsh winter and plans to meet "eyeball to eyeball" with them to discuss it.

Ottawa last week imposed an order on the country's two railways requiring they double shipments of wheat, canola and other crops to clear a backlog that has left prairie grain elevators at capacity and hammered farmers' cash flow.

Mr. Harrison told a transportation conference in New York today that the government's move was a political "sideshow" that had little to do with moving grain, The Globe and Mail's Eric Atkins reports. He said the order was a misguided response to the coldest winter in years, which made it impossible to operate full-length trains safely.

New threads
A global "Menaissance" is gathering speed as the male species tries to look ever more dashing.

Sales of menswear rose last year by just shy of 5 per cent, outpacing womenswear around the world and in crucial retail markets like the United States, Germany and Britain, Euromonitor reports.

In new research - "The global Menaissance gathers momentum" - Euromonitor cited the rise in personal grooming and appearance and dedicated "fashion weeks."

The consumer research group also noted how the Internet is a "key educational and transactional platform" for men's clothing.

Men still have some catching up to do: They now account for 25 per cent of the global clothing and footwear market, while women represent 39 per cent, by far the largest.

The news website Quartz, which also reported on Euromonitor's findings, noted that sales of suits have climbed by 107 per cent since 1998, adjusted for inflation, nightwear by 100 per cent, swimwear by 92 per cent, underwear by 84 per cent, jeans by 77 per cent, shorts and pants by 76 per cent, and shirts by 73 per cent.

(Jumper sales rose almost 40 per cent. I didn't know men wore jumpers, or even exactly what a jumper is, so I Googled it, and they do.)

As The Globe and Mail's Marina Strauss reports, by the way, men's clothing prices fell 8.8 per cent in Canada between 2002 and 2013, while prices for women's apparel plunged 22 per cent.

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