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Sunday, October 23, 2016

Gloomy economic outlook: Bank of Canada confirms

   Canada column for Sunday, Oct. 23/16

   By Jim Fox

   Canada’s central bank has presented a gloomier picture of the country’s economic growth.
   The Bank of Canada downgraded economic predictions noting an expected drop in housing sales due to new government rules and a lingering decline in exports.
   Bank governor Stephen Poloz said the economy also continues to struggle from the plunge in oil prices that began two years ago.
   The economy isn’t expected to return to full capacity until mid-2018 instead of the late 2017 time frame it had expected a few months ago, he said.
   The Gross Domestic Product is expected to expand by 1.1 percent this year, down from the July projection of 1.3 percent, with growth of 2 percent next year, down from 2.2 percent.
   Bank members considered lowering the trendsetting key interest rate of 0.5 percent where it has been since July 2015 but has again kept it there for now.
   Finance Minister Bill Morneau will deliver his fall economic update to the House of Commons on Nov. 1.
   There are indications it will include ways the Liberal government can stimulate the stalled economy.


   Soaring house prices in Greater Vancouver might have had their last hurrah, said Phil Soper, ceo of Royal LePage.
   Prices were up by 30.6 percent in the past year, hitting an average of $1.19 million compared with $693,154 or 13.6 percent more in Greater Toronto and $545,414, up 12 percent, nationally.
   Things have started to level off in Vancouver as the provincial government now imposes a 15-percent tax on foreign investors and the federal government has tightened mortgage-lending qualifications nationally.


   News in brief:
   - The appointment of 24 new judges should help fill vacancies on the bench that have led to many trial delays. Justice Minister Jody Wilson-Raybould made the appointments that include seven new justices in Alberta to address “urgent needs” there. Fourteen of the new judges are women and two are aboriginals. There are also 61 vacancies in federal courts to be considered.
   - Postmedia, one of Canada’s largest news media companies, plans to reduce its salary costs by 20 percent through voluntary staff buyouts and possible layoffs. The company cut 90 jobs and merged newsrooms in four cities after it acquired Sun Media’s English-language newspapers and digital properties last year. Postmedia, with 4,000 employees, reported a current annual loss of $352.5 million compared with $263.4 million a year earlier.


   Facts and figures:
   Canada’s dollar has dropped to 74.99 cents U.S. while the U.S. dollar returns $1.333 Canadian, before exchange fees.
   The Bank of Canada’s key interest rate remains at 0.5 percent while the prime-lending rate is 2.7 percent.
   Stock markets are higher, with the Toronto exchange index at 14,939 points while the TSX Venture index is 790 points.
   The average price for gas in Canada has dropped to $1.048 a liter or $3.98 (Canadian) for a U.S. gallon.
   Lotto 6/49: (Oct. 19) 4, 21, 28, 33, 38 and 41; bonus23. (Oct. 15) 8, 29, 30, 37, 41 and 44; bonus 6. Lotto Max: (Oct. 14) 14, 18, 22, 25, 36, 39 and 44; bonus 34.


   Regional briefs:
   - Ontarians got some good news that electricity rates won’t be rising again this fall but bad news about auto insurance rates. The rates are increasing by 1.5 percent even though the Liberal government promised an average 15-percent reduction when elected in 2013. The average decrease since then is 8.35 percent but these reductions are “taking time,” said Finance Minister Charles Sousa.
   - Alberta has extended its tuition freeze for university and college students for a second year. The New Democratic government is conducting an overall review of post-secondary funding. The current annual university tuition is about $5,600 Canadian in the province.
   - When the Austin family couldn’t find enough employees for its country store in Nova Scotia, a novel idea attracted more than 50,000 applicants. The family offered free land to anyone who would come and work for five years in the rural Cape Breton island town of Whycocomagh.
The offer on Facebook resulted in the hiring of the first three families who each received three acres of land.


Jim Fox can be reached at canadareport@hotmail.com

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