House price acceleration a concern in Toronto, Vancouver

   Canada column for Sunday, June 12/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   Soaring double-digit house price increases in Vancouver and Toronto are putting many buyers out of the market and are being called “unsustainable.”

   Bank of Canada Governor Stephen Poloz expressed concern for the economy as the average price for single-family houses in the two cities is more than $1 million.

   Fueled by foreign buyers seeking safe havens for their wealth, the climbing real estate prices have outpaced local economic fundamentals such as job creation, immigration and income growth, the central bank governor warned.

   There is growing evidence prices are reacting to “self-reinforcing” expectations among prospective buyers and lenders that property values will keep rising, Poloz said.

   In reality, there is the “possibility” that prices could decline in these circumstances, he said while releasing an assessment on the state of Canada’s financial stability.

   Evidence “continues to accumulate” of a coming market correction but the possibility of it triggering a severe recession remains low, Poloz said.

   Year-over-year house prices have risen 30 percent in the greater Vancouver area while Toronto prices are up 15 percent in the past six months as household debit is increasing, the bank said.

Alberta wildfire evacuees start to retun to their homes

   Canada column for Sunday, June 5/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   The first group of emotionally drained residents returned to see what’s left of their homes after the devastating wildfires in Alberta.

   But, many people who lost their homes to the fires might never return to Fort McMurray after 2,400 houses and businesses were destroyed – about 10 percent of the city.

   Last month’s wildfires abruptly changed direction and made a direct hit on the city in the heart of Alberta’s oil-producing region.

   Authorities are planning the return to the city in stages as more than 80,000 people had to flee when the flames and smoke approached.

   The return started last Wednesday for people who lived in areas that were mostly spared by the fires.

   “These are the points of light in the midst of some very, very hard days,” Alberta Premier Rachel Notley said.

   She welcomed home the first group returning and thanked the crews who worked to get the city running again.

   The Canadian Red Cross has begun allocating the $125 million raised so far to assist with the recovery efforts – money that is to be matched by the federal government and partially by Alberta.

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Canada's economic growth hampered by oil prices, fires in Alberta

   Canada column for Sunday, May 29/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   The oil price shock has been compounded by this month’s devastating Alberta wildfires to hurt Canada’s economic growth.

   The Bank of Canada said the fires that destroyed sections of Fort McMurray, forcing about 80,000 to flee and with the loss of 2,400 houses and businesses, are exacting a toll on the economy.

   In the oil-rich province, the flames forced several oilsands operations to close and sent workers fleeing.

   The central bank said the impact of the fires will cut 1.25 percent off Gross Domestic Product growth in the second quarter.

   Even so, the bank kept its key interest rate steady at 0.5 percent, expecting better days ahead.

   In its assessment, the bank said Canada’s economy is expected to rebound in the third quarter as oil production resumes along with rebuilding after the fires.

   The economy continues making a “structural adjustment” to lower world oil prices, the bank noted.

   Retail sales figures for March along with manufacturing and wholesale numbers were lower.

   Statistics Canada said the annual pace of inflation rose to 1.7 percent last month, up from 1.3 percent in March.

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Senators cleared in long-running Canadian Senate expenses scandal

   Canada column for Sunday, May 22/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   The long-standing Senate expenses scandal is winding down with a former senator being cleared of fraud and breach of trust while a second senator won’t be arrested.

   Charges were dropped against Mac Harb, who retired three years ago, over housing expenses that were called inappropriate.

   Mounties decided that criminal charges were not warranted after a “thorough investigation” of Sen. Pamela Wallin’s travel claims, said assistant commissioner Gilles Michaud.

   “It has been a very long three years and I’m glad this nightmare is over,” Wallin said.

   She repaid $150,000 in expenses, blaming a “lynch mob” mentality in the Senate, and will consult with her lawyer about possible legal action.

   Prosecutors said Harb will not face a criminal trial because there isn’t a reasonable expectation of a conviction.

   He repaid $231,000 in housing expenses that were under investigation.

   This follows Sen. Mike Duffy being cleared of 31 charges of defrauding the Canadian government last month during a 62-day trial.

   Only one case remains, with Patrick Brazeau facing fraud and breach of trust charges.

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Canadian government to aid in rebuilding fire-ravaged Fort McMurray, Alberta

   Canada column for Sunday, May 15/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   Prime Minister Justin Trudeau has pledged support in the rebuilding effort for those affected in wildfire-devastated Fort McMurray, Alberta.

   The massive wildfire, nicknamed “the beast,” roared into the oil-producing city, destroying neighborhoods and forcing 94,000 people to flee on short notice.

   It burned through 2,400 houses and businesses and the deaths of two people in a car crash as they fled the city were blamed on the wildfire.

   The Liberal government has formed a special cabinet committee to co-ordinate Fort McMurray aid and reconstruction efforts, Trudeau said during a visit on Friday.

   As well, the government is “fast tracking” claims for unemployment insurance by displaced workers.

   The Alberta government is giving residents and families immediate emergency financial support and the Red Cross has started distributing the $87 million donated so far and matched by the government.

   Municipal Affairs Minister Danielle Larivee said it isn’t yet known when people can return as workers are restoring power, inspecting properties and working to repair the hospital.

   The fire, which now covers about 10,000 square miles, has moved away from the city and is expected to burn in forested areas for several more weeks.

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Wildfire "beast" drives thousands from Alberta city

   Canada column for Sunday, May 8/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   A wildfire of epic proportions has now driven almost all 80,000 residents from the oilfields’ capital of Fort McMurray, Alberta as much of the community has gone up in flames.

   Spawned by high winds, scorching heat and low humidity, the fire changed course and took aim at the city, causing residents to flee in a mass exodus that included huge convoys by road and some evacuations by air.

   Police and the military were escorting a procession of 1,500 vehicles carrying evacuees stranded at oilfield camps north of the city to safer ground.

   Heavy smoke was hampering their travel that was continuing this weekend to the Edmonton area, about 270 miles to the south.

   “The beast is still up, it’s surrounding the city and we’re here doing our very best for you,” regional fire chief Darby Allen said in assessing the situation.

    Thousands of houses and buildings have been destroyed and Premier Rachel Notley said she cannot speculate on when it might be safe for residents to return to the city.

   The Red Cross has raised $11 million and Prime Minister Justin Trudeau said his government will match the donations to help those displaced.

   The Alberta government is also matching donations up to $2 million.

   “We will weather this storm together and together we will rebuild,” Trudeau said.

Canadian oil and gas industry still facing "dire times"

   Canada column for Sunday, May 1/16

   THE CANADIAN REPORT

   (c) By Jim Fox

   Canada, the largest supplier of oil to the United States, still faces grim predictions for a financial comeback in its hard-hit oil and gas sector.

   “These are dire times for the Canadian oilfield service, supply and manufacturing sector, with no indicators for positive change in the near future,” said Mark Salkeld, ceo of the Petroleum Services Association of Canada.

   Due to low crude oil prices, the association predicts drilling activity will be 36-percent lower than what it anticipated six months ago.

   The Conference Board of Canada said the country’s oil and gas industry should remain in the red for a second year but pre-tax losses shouldn’t be as severe with a return to profitability next year.

   The board predicts oil producers will collectively lose more than $3 billion this year compared with a record $7 billion loss last year.

   As well, the economic think tank said the natural gas extraction industry should lose $1 billion this year, down from $1.1-billion in 2015.

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