Canada’s Best Cities To Live 2013

Date: March 21st, 2013

Christina Commisso,

Canadians looking for the best place to live, work and raise a family should set their sights on Alberta, where high income and low unemployment helped a number of cities come out on top of an annual ranking of communities across the country.

Calgary was ranked the top city to live in in Canada, taking MoneySense Magazine’s number one spot on three of its rankings: best overall city, best large city and best place to raise children.

Cowtown jumped from the 14th spot in 2012 to dethrone Ottawa as top Canadian city in 2013.

The national capital had held onto the title for three consecutive years, but has now slipped to the number six spot in the latest overall ranking.

Released Wednesday, MoneySense’s yearly lists show that Alberta’s thriving energy sector has fuelled the development of healthy communities.

“A lot of these other cities, the underlying numbers have not really changed. But Alberta is so strong, it’s pushing those cities (in Alberta) up above everyone else,” MoneySense Magazine’s managing editor Mark Brown told Canada AM Wednesday.

“It’s a young, vibrant community,” Brown continued. “Calgary is really coming into its own and there’s a lot of evidence in all of the numbers this year.”
Top 10 overall cities:

  1. 1. Calgary
  2. 2. St. Albert, Alta.
  3. 3. Burlington, Ont.
  4. 4. Strathcona County, Alta.
  5. 5. Oakville, Ont.
  6. 6. Ottawa
  7. 7. Saanich, B.C.
  8. 8. Lacombe, Alta.
  9. 9. Lethbridge, Alta.
  10. 10. Newmarket, Ont.

The same holds true for the small cities (less than 100,000 in population)  in Alberta, where communities located within about an hour’s drive from Edmonton  captured the top three spots.
Top 10 small cities

  1. 1. St. Albert, Alta.
  2. 2. Strathcona County, Alta.
  3. 3. Lacombe, Alta.
  4. 4. Newmarket, Ont.
  5. 5. Halton Hills, Ont.
  6. 6. Stratford, Ont.
  7. 7. Boucherville, Que.
  8. 8. North Vancouver, B.C.
  9. 9. Milton, Ont.
  10. 10. Canmore, Alta.

Burlington, Ont. captured the number one spot for mid-sized cities  (population between 100,000 – 400,000) with its eastern neighbour Oakville, Ont.  taking the number two spot.

Brown said the municipalities are “perfectly situated” in the Golden  Horseshoe, with easy commutes to both Toronto and the U.S. border.

“It’s great for weather and it has a lot going for it,” said Brown. “You’re  on the lake and later in the afternoon if you want to go on a hike you can go  out to the Bruce Trail, it’s just around the corner.”
Top 10 mid-sized cities

  1. 1. Burlington, Ont.
  2. 2. Oakville, Ont.
  3. 3. Saanich, B.C.
  4. 4. Lethbridge, Alta.
  5. 5. Saskatoon
  6. 6. Regina
  7. 7. Kingston, Ont.
  8. 8. Vaughan, Ont.
  9. 9. Richmond Hill, Ont.
  10. 10. Lévis, Que.

Toronto, Canada’s most populated city, captured the number seven spot the  MoneySense ranking of the top large Canadian cities (400,000-plus population)  and the 28th spot overall. Montreal, the country’s the second most populated  city, didn’t crack the top 10 for large cities and sits at the 134th position  overall.
Top 10 large cities

  1. 1. Calgary
  2. 2. Ottawa
  3. 3. Edmonton
  4. 4. London, Ont.
  5. 5. Winnipeg
  6. 6. Halifax
  7. 7. Toronto
  8. 8. Mississauga, Ont.
  9. 9. Québec
  10. 10. Vancouver

The rankings are based on: commuting, housing, health care, weather, crime,  culture, demographics, taxation, wealth and amenities.

The wealth and demographics categories are most-heavily weighted, followed  by housing, commuting and weather.

The 2013 rankings were the first that categorized based on population and  overall ranking. The magazine added a ‘best place for new immigrants’ category  to this year’s list, which was captured by Burlington, Ont. The new category  compliments the magazine’s ‘best place to raise a child’, and ‘best place to  retire’ categories.

Bank of Canada holds interest rate at 1 per cent

Date: March 6th, 2013

The Star – Les Whittington

OTTAWA — Bank of Canada Governor Mark Carney kept the central bank’s influential interest rate at 1 per cent Wednesday and let Canadians know that borrowing costs are unlikely to go up any time soon.
Carney, who has kept interest rates at historically low levels for more than two years, will be long gone from Canada before the economy is growing fast enough to warrant an increase in borrowing charges, based on the bank’s latest statement.

He is leaving his Ottawa post this summer to take over the Bank of England, and economists say the Bank of Canada’s current stance means it will not be inclined to hit consumers and business borrowers with higher interest rates until next year at the earliest.

Carney, 47, will preside over two more interest-rate decisions in Ottawa before he heads for Britain in June. Having put the central bank governor’s job in the spotlight as never before, the high-flying former investment banker and Finance Canada official is going out with a bang. On Wednesday night, he was slated to join Foreign Affairs Minister John Baird as co-host of a glitzy gathering of politicians, authors and business people at the annual Politics and the Pen gala in Ottawa.

Given the continued slack in the Canadian economy and “the muted outlook for inflation,” the current level of the bank’s influential overnight rate “will likely remain appropriate for a period of time,” Carney said after holding the rate at 1 per cent Wednesday.

The bank’s current stance reflects the weak performance of the economy in the last months of 2012. Canada’s gross domestic product (GDP), which measures total output of goods and services, grew by a meagre 0.6 per cent on an annual basis in the final three months of last year. For 2012 as a whole, Canada’s economy recorded growth of 1.8 per cent, down from 2.6 per cent in 2011.

The central bank uses its key interest-rate setting to influence the level of borrowing costs at commercial banks. In doing so, the Bank of Canada tries to balance the need for low borrowing costs to stimulate the economy against the risk that too much activity by business and consumers will create unwanted inflationary pressure.

But, with the economy sputtering, economists say the bank is likely to stand pat until 2014.

“The Bank of Canada has just made it a bit more official that interest rates are almost certainly not going anywhere this year,” BMO Capital Markets economist Doug Porter commented.

“The domestic economy has been consistently disappointing in recent months,” Porter observed. “Growth has been a bit weaker than expected and inflation has been much lower than expected, and that’s really why the bank is now softening its language and suggesting there’s absolutely no urgency on raising rates.”

Still, Carney said “the bank expects growth in Canada to pick up through 2013, supported by modest growth in household spending combined with a recovery in exports and solid business investment.”
The bank predicted in January that the economy will expand by 2 per cent this year, but many economists have revised their predictions well below Carney’s forecast.

While borrowing costs are unlikely to rise soon, Carney and Finance Minister Jim Flaherty have been warning that consumers were taking on too much debt at a time of unusually low borrowing costs — a trend that could lead to widespread defaults if interest charges eventually rise in keeping with stronger economic growth.

Carney said Wednesday the warnings to consumers are having an effect and “residential investment is expected to decline further from historically high levels.”

The prospect of higher interest rates in Canada tends to bolster the value of the loonie on exchange markets, so the latest Bank of Canada announcement appears to have contributed to a sharp drop in the currency. The Canadian dollar closed Wednesday at 96.95 cents (U.S.), down 0.33 of a cent from Tuesday’s close.

The next scheduled date for announcing the central bank’s overnight rate target is April 17.

Crucial Bit of Missing Information May Be Driving Canadian Home Prices

Date: March 4th, 2013

The Globe and Mail
Published Monday, Jan. 28 2013

Canada’s housing market is a bubble about to burst in some cities, or in the midst of a soft landing. Either way, a crucial piece of information on just what’s driving the market is missing in action.

Unlike in other countries such as the United States and Australia, neither the Canadian federal government nor industry keeps track of the numbers of foreign buyers or where they come from. Anecdotal evidence about foreign buyers abounds, yet hard evidence is lacking.

It’s a crucial bit of missing information. Understanding what’s sparking demand in real estate can offer insights into the health of the market and what’s driving prices, and to better predict cycles – by knowing, for example, how a slowdown in China’s economy might affect local markets.

It can also help politicians make wiser decisions about the sector, such as whether restrictions may be needed if speculation becomes too high.

“It’s very hard to have a policy debate about what we should do when we don’t really know what’s going on,” said Tsur Somerville, director of the University of British Columbia’s centre for urban economics and real estate.

On a quiet leafy street north of Toronto, Mr. Zhang – who asked that his full name not be used – taps the walls and inspects the furnace of a $2.68-million home.

He’s got five days in the city to make his decision. This five-bedroom house, with Jatoba cherry wood floors and a home theatre, is a little over his $2-million budget, but he’ll see half a dozen others this week before making a selection.

He’s looking to buy because his 15-year-old daughter will be attending private school in Canada later this year. The owner of a steel business in Beijing has applied to immigrate to Canada, and figures he may as well purchase a home now.

“Canada is a beautiful country. It is good for living, for higher education and it is not that populated,” said Mr. Zhang, who ultimately bought a $2.2-million home in Oakville, Ont.

Rumours are rife about foreign buyers. In Toronto, Russian and Iranian buyers, flush with cash, are snapping up condos. In Vancouver, Chinese investors are buying luxury apartments. In the Maritimes, wealthy Americans and Europeans are acquiring coastal vacation property.

Estimates of the level of foreign buying are all over the map. In the Toronto and Vancouver markets, they can range from 3 per cent to – in some pockets of the condo market – upward of 60 per cent.

Debate percolated last year about whether Canada should place restrictions or slap fees on non-residents who buy property in the country. But “we definitely had policy recommendations in advance of knowledge,” Mr. Somerville said.

Published stats would help analyze ebbs and flows of demand, occupied units versus vacant ones, and the dynamics of over-supply – how foreigners factor in to the equation of household formation to new construction.

Shifts in the housing market can have huge spillover effects on the broader economy, on everything from retail sales to employment and the building of new shopping malls.

And yet, “we’re missing quite a meaningful part of housing activity in this country,” said Sherry Cooper, chief economist at Bank of Montreal.

Canada’s housing market has boomed since the recession, until lately. Without knowledge of the source of buying, Ms. Cooper said, “we have difficulty assessing just how sticky this money is, how vulnerable we might be to international capital flow changes, or what are the fundamentals that determine what has been extraordinary building and buying in our major cities.”

Canadians, meanwhile, are flocking to the U.S. market, snapping up holiday homes in the sun. They are now, by far, the biggest bunch of foreign buyers of American real estate.

Just how do we know this? Each year, the National Association of Realtors publishes a study on international buying activity in the U.S. It shows who the biggest buyers are, the fastest-growing nationalities of buyers (Canada, China), where they’re buying (Florida, California), why (bargain vacation homes!) and how levels of foreign buying change from year to year.

The industry has collected this info for more than five years, gleaned from questionnaires and followup emails to 50,000 real-estate agents. It’s valuable information for the public, government officials – and the industry itself, helping realtors better understand their markets, says Jed Smith, the association’s Washington-based economist.

Australia, for its part, tightened its rules in 2010 to ensure that investment in its market by foreign non-residents “doesn’t place pressure on housing availability for Australians.”

In London, U.K. property broker Savills asks its clients about their nationality and why they’re buying. Its latest report shows foreigners now comprise a third of buyers of prime residential properties, up from a quarter in 2007. It also found the biggest buyers are Western Europeans.

It’s a contrast to Canada. CMHC does not monitor or compile data on foreign investors. Its mortgage loan insurance isn’t available for foreign buyers, meaning someone outside the country would need a down payment of at least 20 per cent, and have to get conventional financing . The Canadian Bankers Association doesn’t keep data on this. Nor does the Canadian Real Estate Association. The Bank of Canada doesn’t track it, though Governor Mark Carney has noted that heavy investor demand – much of it foreign – “reinforces the possibility of an overshoot in the condo market in some major cities.”

He has implied that the bank could compile data if it chose to. “We have, through partners, access to all mortgage insurance transactions and all real estate, effectively all real estate transactions, the residency of those transactions, and we can do deeper drills in various areas, if we wish, to establish that.”

As for the federal government, Finance Minister Jim Flaherty told The Globe and Mail last April that it doesn’t have a good handle on the amount of foreign money in the country’s housing market. “It’s mainly anecdotal, so I don’t have a statistical grasp of it, no,” he said, adding that he hears about lots of people in emerging economies paying cash for condos in Toronto and Vancouver .

Monitoring foreign buying in Canada poses challenges. Some buyers purchase homes through local family or a lawyer’s office, so on paper they appear to be living in the country. Plus there may be privacy concerns around asking buyers where they come from or why they’re buying.

Still, Lawrence Kobescak, mortgage agent at, is among many who’d like more clarity on the trends. “Without a clear picture of foreign ownership in the residential market in Canada, we cannot predict the impact shifting foreign investor sentiment may have on the Canadian housing market,” he said.

For example, it’s tough to gauge whether Canada’s hot market since 2008 partly stemmed from a flight to security by foreign investors. Conversely, a global recovery could spur interest rate hikes, put the squeeze among foreign investors’ returns and cause them to retrench. “Without accurate statistics of foreign ownership of residential properties in 2008 and in 2012, we would only be guessing.”

International interest in Canadian property is unlikely to abate any time soon. Volatile stock markets and Canada’s reputation for economic stability are luring investors. So are housing prices that are still lower than other major global centres. And, unlike many countries such as Australia and Switzerland, foreigners face no restrictions on home buying.

Interest in Canadian residential real estate among foreign buyers has been steady in recent years, with particular interest from Asia, says Luis Lopez, head of business development, credit, international private banking for RBC Wealth Management. “The investment dollars are coming here and we are seeing them stay here, it is not for the short term,” he said. adding that “much remains to be seen” on how China’s slowdown will affect real-estate markets in Vancouver and Toronto .

There’s also more wealth sloshing around, looking for a safe place to park. Globally, 175,000 people crossed the millionaire threshold last year, led by growth in emerging markets like China and India, according to Boston Consulting. In China alone, the number of millionaires hit 1.4-million in 2011 from 1.2-million the year before, and that number will keep growing “strongly” in the coming years, it said. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.

“Most Mainland Chinese investors buy properties in Canada because their children study there,” said Derek Lai, director of international properties, last year. “Now we also witness an emerging trend of younger buyers, such as Chinese students, purchasing bigger apartments or luxury properties.”

Foreign appetite for Canadian homes will persist, says Michael Adelson, Toronto-based sales rep for ReMax Realtron, who recently represented a seller that sold their bungalow for $421,800 over asking to a foreign buyer.

He has worked in the industry for 25 years, and seen interest from Hong Kong, Korea and Iran flourish. As someone in the industry, he’s happy to see such strong demand. As a citizen, he’s worried some local people might be getting priced out of the market.

“People have recognized this is a relatively cheap country to buy,” he says. “I think it will continue unless they put some controls in place.”

Tony Ma agrees. The agent in Markham, Ont., has hosted several groups of visiting Chinese buyers in recent months alone. They typically buy a house for $1-million or $2-million, either to live or as an offshore investment. Canada’s multicultural communities, affordability and democratic system will continue to lure buyers, he says. “I don’t see this market cooling any time soon.”

Bank of Canada Leans Away From Interest Rate Hike

Date: January 23rd, 2013


The Bank of Canada lowered its growth forecast for 2013 today, keeping its benchmark interest rate steady at one per cent for the 19th consecutive time.

The bank also lowered expectations for how much it thinks the economy will expand in 2013 to two per cent. In October, it had estimated 2.3 per cent growth in gross domestic product for the year.

“The slowdown in the second half of 2012 was more pronounced than the Bank had anticipated,” the bank said in a statement posted on its website today.

As well, Canada’s economy can no longer count on household spending and the housing sector to propel it forward.

In a change from previous reports, the bank says Canadian household debt is stabilizing at around the record 165 per cent of annual disposable income, and credit growth has sharply declined from a peak of 12 per cent in 2008 to 5.5 per cent in 2012, and 3.0 per cent in the three months to November.

Home sales have fallen, as has construction activity, and prices may follow suit.

The bank ended its policy announcement by saying: “Some modest withdrawal of monetary policy stimulus will likely be required over time … [but] the timing of any such withdrawal is less imminent than previously anticipated.”

In layman’s terms, that’s the bank’s way of saying it is less likely to raise rates than it used to be.

“At a minimum that removes talk of 2013 hike risk and should cause a change in consensus forecasts,” Scotiabank economist Derek Holt noted.

The value of the Canadian dollar in U.S. currency fell 0.7 per cent to $1.0012 US in the afternoon, and briefly passed below par in the morning before rebounding.

The central bank’s benchmark rate has been at one per cent for more than two years.

“This is an even more dovish turn for the Bank of Canada than we had anticipated, but it supports my bias that the [bank] is very possibly on hold through 2013-14,” Holt said.

2013 Bank of Canada Interest Rate Announcement Dates

Date: December 30th, 2012

The 2013 Bank of Canada scheduled announcement dates for interest rate policy are:

• Wednesday, January 23*
• Wednesday, March 6
• Wednesday, April 17*
• Wednesday, May 29
• Wednesday, July 17*
• Wednesday, September 4
• Wednesday, October 23*
• Wednesday, December 4