May 10, 2019

CANADIAN EMPLOYMENT

  • Canada added 106,500 jobs in April vs 11,600 expected.
    • Unemployment rate 5.7% April vs 5.8% March
  • Alberta added 21,000 jobs; unemployment rate 6.7% vs 6.9%
    • Edmonton added 400 jobs; unemployment rate 6.0% vs 7.1%
    • Calgary added 12,200 jobs; unemployment rate 7.6% vs 7.7%
  • Ontario added 47,000 jobs; unemployment rate 6% vs 5.9%
  • Quebec added 38,000 jobs; unemployment rate 4.9% vs 5.2%
  • BC added 5,900 jobs; unemployment rate 4.6% vs 4.7%

MONEY LAUNDERING AND THE CANADIAN ECONOMY

  • $7 billion of BC properties have been identified as purchased with ‘dirty money’ in 2018.
    • Value represents 4.6% of transactions in 2018
    • Vancouver home prices are up 70% in the past 5 years of which 3.7% – 7.5% is likely attributable to ‘dirty money’ transactions
    • 1 in 5 BC properties are purchased with cash ($212 billion since 1998)
    • Beneficial owners cannot be identified on the vast majority of $28 billion in BC residential property held by legal entities (trusts, companies, partnerships etc)
    • 4,400 grey market luxury vehicles were exported to China in 2018 vs 100 in 2013
  • Home Equity Lines of Credit (HELOC’s) are increasingly combined with traditional mortgages to make a ‘hybrid’ mortgage (65% HELOC and 15% mortgage). HELOC portion has no fixed repayment schedule.
  • Federal government is trying to take measures to stabilize housing prices in Vancouver and Toronto without “having an overly negative impact elsewhere around the country”.
  • Bank of Canada is urging lenders to encourage home buyers to opt for longer-term mortgages.
  • April Toronto home prices increased 1.9% Y/Y; Vancouver down 8.7% since peak in mid-2018.

TRADE

  • President Trump sees ‘no need to rush’ China talks after increasing tariffs to 25% on $200 billion of Chinese goods.
  • America’s dominance in technology patent filings is declining. For instance: AI 66% (2018) vs 78% (2007); internet of things 59% (2018) vs 66% (2008) and financial technology 75% (2018) vs 82% (2008).
  • Canada is demanding that the US help with the Hauwei crisis or Ottawa will stop co-operating in key areas.
  • Alberta’s international exports have grown 586% over the past 35 years to $125.3 billion (2017). Represents 37% of Alberta’s 2017 GDP (vs 15% in 1981) while interprovincial trade represents 21% vs 26% (1981).

TIDBITS

  • Fidelity Investments (US) will offer cryptocurrency trading within a few weeks.
  • Microsoft is offering free software (Electionguard) for some of the upcoming US elections.
  • Denver has become the first US city to decriminalize ‘magic mushrooms’.