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Yesterday and Tomorrow … Some interesting statistics about Canada’s economic performance in 2015 and some interpretations of the information


Happy New Year everyone! 

May you and your families enjoy good health, peace and prosperity in 2016!


Yesterday and Tomorrow …

Some interesting statistics about Canada’s economic performance in 2015 and some interpretations of the information

According to such reliable sources as the Canada Mortgage and Housing Corporation, the Bank of Canada, Statistics Canada and the Export Development Corporation two key indicators have emerged for 2016:

  • the housing market is not going to tank.
  • the Canadian economy is holding its own despite being battered and bruised by the oil marketplace.


boc Monetary Policy Report - October 2015

The Canadian economy continues to adjust to lower prices for oil and other commodities. The required reallocation of labor and capital across sectors and regions is a complex process that will take time to unfold, particularly in view of the need to rebuild non-commodity-exporting capacity.

Several important factors are helping to facilitate these adjustments. The stimulative effects of previous monetary policy easing are working their way through the Canadian economy, supporting household spending in particular. Non-commodity exports are being boosted by solid growth in the U.S. economy. In addition, the depreciation of the Canadian dollar associated with the decline in commodity prices is improving Canada’s international competitiveness, increasing net exports.

…. Economic momentum is building, and real GDP growth is estimated to have rebounded to about 2 per cent in the second half of 2015, following a modest contraction in the first half of the year. On an average annual basis, real GDP is expected to grow by just over 1 per cent this year, before firming to about 2 per cent in 2016 and about 2 1/2 per cent in 2017.


edcEDC Export Performance Monitor – December, 2015

Exports fell by 1.8% in October, … three consecutive months of declines in exports, … leading to a broadening of the trade deficit from $2.3 billion in September to $2.8 billion in October. Through the first ten months of 2015, total exports were down 1.5% compared to the same period in 2014.

The decline in Canada’s exports to the United States (-2.8%) for October was the main drag to overall exports for the month, outweighing demand growth to Europe and Japan. Through the first ten months of 2015, Canadian exports to the US trailed those from the same period last year by 1.4 %.


scStatsCan, The Daily – December 22, 2015

The value of investment in new residential building construction rose 4.3% year over year to $4.7 billion in October, following a 4.8% gain the previous month.

The increase at the national level was mainly attributable to higher construction spending on apartment and apartment-condominium buildings, which offset declines in investment related to single-family and semi-detached dwelling construction.

Investment in new housing construction increased in five provinces, led by Ontario, followed by British Columbia and Nova Scotia.

In Ontario, construction spending rose 20.8% year over year to $1.9 billion in October. The increase came mainly from higher investment in the construction of apartment and apartment-condominium buildings, which rose 36.7% to $628 million, and single-family dwellings, which advanced 18.4% to $953 million.

cmhc Canada Mortgage and Housing Corporation

According to the Fourth Quarter 2015 CMHC Housing Market Outlook, Ontario housing activity is expected to maintain its momentum in 2016 before easing in 2017, Ontario housing starts are expected to range between 61,000 and 70,500 units in 2016 with a point forecast of 65,100. In 2017, starts are expected to range between 50,000 to 68,000 units with a point forecast of 59,900 units. If homeownership costs and inventories rise faster than expected, new home starts could be closer to the lower end of the forecast range.

What could we conclude from this data?

That the Ontario and Canadian economies are not headed for disaster.  That housing sales in 2016 will likely be slightly higher than those in 2015. As well, the supply and demand for both resale and new housing will likely be similar to the figures of 2015, which means that prices will likely remain stable in 2016 and possibly edge up.

What does it mean for you?

There doesn’t appear to be any substance to claims of a wholesale housing price collapse.  The demand for housing exists.  There is a good supply of all types of housing.  Mortgage interest rates are relatively low.  Home purchasers, although slightly affected by new affordability rules that will take effect on February 15, 2016, should still be able to enter the marketplace in Ontario or trade up.
- Lou Perotta, CPMB


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