Canadian real estate sales had a record July. July housing sales across the country were the best on record for the month and the largest year-over year increase in two years, the Canadian Real Estate Association said.

The Ottawa-based group, which represents about 100 boards across the country, said there were 50,270 units sold via the multiple listing service last month. That’s an 18.2% jump from a year ago. It also marked the first time sales had topped 50,000 in July.

“The difference in the resale housing market now, compared to the beginning of the year, is night and day and nowhere is this more evident than in the west,” said Dale Ripplinger, president of CREA. “Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher.”

A five-year fixed rate mortgage, the most popular product among consumers, is still available for under 4% at some financial institutions. Variable rate mortgages, tied to prime, remain in the 3% range and are not expected to rise until June. The Bank of Canada has pledged not to change its lending rate until then – but it is not an ironclad guarantee.

More..

Canadian Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney will travel to China next week to promote the country’s financial industry and help win business for its banks.

Mr. Flaherty will also be joined by the head of the country’s regulator of financial services, Julie Dickson, and financial industry executives, the Finance Ministry said in a statement. Mr. Flaherty will visit Beijing and Shanghai during the six-day trip.

“Most of Canada’s large financial institutions are active in China and they are looking to expand,” Mr. Flaherty said in the statement. “The Canadian financial sector is also eager to partner with Chinese companies in their global transactions.”

More..

Canada’s Industry Strengths

• Advanced Manufacturing: Canada’s global share of the aerospace industry has tripled in the last 20 years, and it is the third-largest exporter of automotive products in the world.

• Agri-food: Canada is the world’s fourth-largest exporter of agricultural products.

• Chemicals: 10 out of 10 G7 top locations for chemicals manufacturing.

• Enabling Technologies: The Canadian Government has established a range of institutions and initiatives to create a supportive business environment for transformative technologies.

• ICT: The strongest growth in exports occurred in wired (+20.4%) and wireless (+16.9%) communications equipment.

• Life Sciences: The Canadian Government plans to double research and development (R&D) investments by 2010 to make Canada one of the five most research-intensive countries in the world.

• Plastics: Canada is the world’s fourth largest exporter of moulds and eighth largest exporter of plastics processing machinery.

• Wood Processing: Canada is the world’s leading producer and exporter of newsprint, and the world’s largest exporter of wood pulp.

Consumer confidence edged slightly higher in Canada in July, according to a survey by the Conference Board of Canada.

More importantly, confidence didn’t go down. The July increase, while small, was the fifth month in a row for a rise, from the worrisome depths reached last winter.

The Conference Board’s index climbed a marginal 0.8 points to 82.9 – a level that is 12.7 points higher than at the start of the year when the recession was at its worst in Canada. The index was set at 100 in 2002.

The increase this year “perhaps [indicates] that consumers do indeed see a light at the end of the tunnel,” the Conference Board said in a press release.

Still, confidence is much lower than the levels near 100 reached last summer. And respondents had mixed feelings about their prosperity.

More..

The Bank of Canada said on Tuesday that a recovery from the “intense” recession is in the early stages, and as a result it has revised upward its economic outlook for the next year and a half.

Further, in a sign that it believes credit conditions in capital markets have improved, the central bank announced it would make less liquidity available to market participants in special transactions.

In its latest scheduled rate announcement, the central bank, as widely expected, kept its key policy rate at a record low 0.25%, and reiterated its commitment to keep it there until end of June of 2010.

But it provided a slightly more upbeat take on the road ahead, roughly 48 hours before the release Thursday of its quarterly economic forecast – although cautioning that a recovery is “nascent.”

More..

The Bank of Canada will stick to its conditional pledge to keep its benchmark interest rate at its current near-zero level through the second quarter of next year, most Canadian primary securities dealers said on Friday.

Eight of Canada’s 12 primary dealers polled by Reuters predicted the slow pace of economic recovery will prevent the Bank of Canada from lifting its key interest rate above the current 0.25% level, an historic low, until after the first half of 2010.

“Given the state of the economy and the fact that we expect the recovery to be very mediocre and modest, there is really no need to tighten any earlier than that,” said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal.

More..

Surprisingly positive results from two Bank of Canada business surveys would suggest the country is poised for a quarter or two of 10% growth, says a report released Wednesday from Merrill Lynch Canada.

The surveys, unveiled this week, said businesses are the most optimistic about their future sales prospects in almost a decade, and obtaining new loans is becoming less difficult.

Sheryl King, the firm’s chief Canadian economist, said the central bank’s surveys imply that the country is headed for year-over-year growth in the 4.25% range, given there is generally a strong correlation between the survey results and real GDP growth.

More..

Companies issuing speculative-grade debt are the riskiest borrowers in the corporate credit universe because they are most likely to default on their debt. They have all sorts of bad habits such as high levels of indebtedness and highly volatile earnings. At the end of 2008 when the U. S. financial sector was collapsing, investors bailed out of this sector fearing heavy defaults and losses.

Those fears were realized as speculative-grade borrowers have been squeezed in a vise — on one side by falling earnings and on the other by contracting credit. The old story that credit is easy to get — until you really need it, best describes the plight of these companies.

More..