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| ECONOMY |
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Household Spending Slowed, Manufacturing Continues to Recover in April 2007
The leading indicator rose 0.4% in April, matching its increase in March as well as its average gain in 2006. Household spending slowed from its recent torrid pace, while manufacturing continued to recover from a prolonged slump.
For the second straight month, none of the three manufacturing components fell. New orders posted the largest gain with a 0.9% increase. Aircraft and autos led this advance. The steady growth of orders in 2007 was reflected in a rebound in manufacturing shipments, which helped stabilize the ratio of shipments to inventories. The average workweek also edged up.
Financial market conditions continued to strengthen, with the stock market setting new record highs. Prices rose across the board in April, unlike previous gains which often were concentrated in metals and energy.
Household spending was mixed. Furniture and appliance sales continued to expand steadily. Housing levelled off, largely because housing starts returned to more normal levels after receiving a boost from the unseasonably warm start to the year. Purchases of other durable goods fell for a second straight month, largely due to slower auto sales.
| Leading indicators |
| |
November 2006 |
December 2006 |
January 2007 |
February 2007 |
March 2007 |
April 2007 |
Last month of data available |
| |
| | | | | |
% change |
| Composite leading indicator (1992=100) |
220.1 |
220.7 |
221.9 |
223.3 |
224.2 |
225.2 |
0.4 |
| Housing index (1992=100)1 |
139.8 |
139.3 |
143.4 |
144.0 |
144.8 |
144.7 |
-0.1 |
| Business and personal services employment ('000) |
2,769 |
2,781 |
2,794 |
2,805 |
2,820 |
2,827 |
0.2 |
| S&P/TSX stock price index (1975=1,000) |
12,158 |
12,373 |
12,565 |
12,817 |
12,981 |
13,114 |
1.0 |
| Money supply, M1 ($ millions, 1992)2 |
155,228 |
157,277 |
159,525 |
161,732 |
162,507 |
163,104 |
0.4 |
| US Conference Board leading indicator (1992=100)3 |
126.7 |
126.7 |
126.8 |
127.0 |
126.9 |
126.9 |
0.0 |
| Manufacturing |
|
|
|
|
|
|
|
| Average workweek (hours) |
38.3 |
38.3 |
38.3 |
38.3 |
38.4 |
38.6 |
0.5 |
| New orders, durables ($ millions, 1992)4 |
26,078 |
25,819 |
25,868 |
26,290 |
26,507 |
26,752 |
0.9 |
| Shipments/inventories of finished goods4 |
1.85 |
1.83 |
1.82 |
1.81 |
1.81 |
1.81 |
0.005 |
| Retail trade |
|
|
|
|
|
|
|
| Furniture and appliance sales ($ millions, 1992)4 |
2,589 |
2,604 |
2,615 |
2,638 |
2,663 |
2,681 |
0.7 |
| Other durable goods sales ($ millions, 1992)4 |
8,729 |
8,752 |
8,801 |
8,852 |
8,819 |
8,787 |
-0.4 |
| Unsmoothed composite leading indicator |
221.8 |
222.4 |
225.7 |
225.6 |
225.3 |
226.7 |
0.6 |
| 1. | Composite index of housing starts (units) and house sales (multiple listing service). |
| 2. | Deflated by the Consumer Price Index for all items. |
| 3. | The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the month immediately preceding. |
| 4. | The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the second preceding month. |
| 5. | Difference from the previous month. |
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Study: Service offshoring and employment 1987 to 2006
A new StatsCan study [using dated information] found no clear evidence that occupations potentially subject to service offshoring displayed smaller employment growth than other occupations in recent years.
The study identified industries with a large share of occupations subject to foreign outsourcing of services, or service offshoring, in 1994 and 1995. Then it compared employment trends in these industries to those observed in other industries between two periods: 1987 to 1995 and 1996 to 2006.
The study found no evidence that industries with a relatively large share of occupations subject to service offshoring in the mid-1990s had recently undergone a deceleration in employment growth relative to other industries.
Furthermore, there was little evidence that employment in these occupations had grown at a slower rate in industries that experienced substantial increases in service offshoring to non-Organisation of Economic Co-operation and Development (OECD) countries than in similar occupations located in other industries.
Overall, the findings suggest that if foreign outsourcing of services has indeed had an impact on Canadian employment, this impact is likely to have been modest so far. Thus, it is unlikely to be detected with either industry-level data or occupation-level data.
Some Canadian firms recently implemented service offshoring. That is, they have started to contract out abroad activities for certain services such as architecture, engineering, informatics, data entry and payroll administration.
Countries such as India, China and other non-OECD countries have often provided the work force required for these jobs, some of which pay relatively high wages in Canada.
These new forms of foreign outsourcing have led to an increase in Canada's imports of computer, information and other business services from non-OECD countries. One concern is that they may reduce employment in Canada.
Roughly half of the jobs potentially subject to service offshoring are in clerical occupations such as telephone operators, payroll clerks and data entry clerks. The other half are in professional occupations such as engineers, computer programmers and architects.
It should be emphasized that employment in specific firms in certain industries might well have been affected positively or negatively by service offshoring in recent years. However, the data currently available in Canada are not detailed enough to allow thorough analysis of the impact of service offshoring at the firm level.
No clear link between service offshoring and slower employment growth
Concerns that international competition is driving jobs offshore are not recent. In the early 1980s, it was argued that many manufacturing jobs in advanced economies were being lost to developing countries.
Recently, some observers have argued that employers now use foreign outsourcing not only for manufactured goods, but also for labour services such as engineering, informatics and payroll administration.
Concerns have been expressed that employment growth in these occupations might decline or even stop. The study found little evidence consistent with that view.
Between 2000 and 2006, employment in occupations potentially affected by service offshoring grew 1.8% per year, on average. Employment in other occupations grew at the same rate.
While employment grew a solid 2.8% per year in professional occupations potentially subject to service offshoring, it was almost stagnant among clerical occupations potentially subject to service offshoring. This suggests that service offshoring might have restricted employment growth in these clerical occupations in recent years.
The study offers several pieces of evidence that do not support this conjecture.
First, employment in clerical occupations potentially subject to service offshoring was stagnant well before 2000. In fact, it fell almost continuously between 1987 and 2000, a period during which service offshoring was likely negligible.
Second, industries that had a relatively high percentage of jobs in clerical occupations potentially affected by service offshoring in the mid-1990s did not see their employment growth decelerate (relative to other industries) between the period from 1994 to 2000 and the period from 2000 to 2006. A similar conclusion was held for the two following periods: 1987 to 1995 and 1996 to 2006.
Third, clerical occupations potentially subject to service offshoring did not display smaller employment growth in industries that experienced substantial increases in service offshoring to non-OECD countries, as compared to similar occupations located in other industries.
Taken together, these findings suggest that the poor employment record of clerical occupations potentially subject to service offshoring between 2000 and 2006 might result from other factors such as technological changes that led to the automation of tasks previously performed by clerical employees.
Canadian firms increasingly involved in foreign "insourcing" of services, as well as outsourcing
The study measured service offshoring using Canada's imports of computer, information and other business services.
In 2004 — the year for which the most recent data are available — Canadian firms imported roughly $18 billion of computer, information and other business services. Of these, roughly $1 billion came from non-OECD countries.
While some Canadian firms purchased these services abroad, others sold these services outside Canada. In 2004, exports of computer, information and other business services totalled roughly $20 billion. Of this, $3.5 billion went to non-OECD countries.
In fact, Canada's exports of these services to non-OECD countries exceeded its imports between 1996 and 2004, a period during which consistent data on these services are available.
This indicates that while some Canadian firms were increasingly involved in the foreign outsourcing of services, others were also benefiting from foreign insourcing.
Occupations included in analyses of service offshoring have specific characteristics
Occupations that may have been subject to service offshoring were included in the study. These occupations have particular characteristics.
They make intensive use of information and communication technologies (ICTs), produce an output that can be traded or transmitted by ICTs, have a knowledge content that is highly codifiable, and require no face-to-face contacts.
Using these four criteria, the study identified a set of occupations that could be included in any analysis of service offshoring.
About one-half of these occupations were found in high skill service industries such as professional, scientific and technical services, finance and insurance, real estate as well as information and cultural industries. About one-third paid $25 or more per hour (in 2006 dollars).
Clerical occupations and professional occupations each represented roughly one half of the jobs included.
Since women are overrepresented in clerical occupations, they hold a large share of these jobs. In 2006, almost two-thirds of the jobs included in the study were held by women.
In contrast, since men are overrepresented in professional occupations, they hold most of the high-paying jobs that should be included in any analysis of service offshoring. In 2006, 61% of the jobs included that paid $25 or more per hour were held by male workers.
The research paper "Offshoring and employment in Canada: Some basic facts" is now available as part of the Analytical Studies Branch Research Paper Series (11F0019MIE2007300, free) from the Analytical Studies module of our website.
Note to readers
This release is based on a research paper "Offshoring and employment in Canada: Some basic facts," available today.
The study uses a wide variety of data sets to produce a first set of stylized facts about service offshoring and the evolution of Canadian employment in recent years.
In this release, the terms "service offshoring" and "foreign outsourcing of services" are used interchangeably. They are measured using Canada's imports of computer, information and other business services. These imports include transactions between non-affiliated firms as well as those conducted between affiliated parties. Data are from the Balance of Payments Division.
In 2004, Canada's imports of computer, information and other business services totalled $18 billion. In contrast, Canada's imports of goods amounted to $364 billion that year.
Occupations potentially subject to service offshoring are defined based on four criteria: they make intensive use of information and communication technologies (ICTs); they produce an output that can be traded or transmitted by ICTs; they have a knowledge content that is highly codifiable; and they require no face-to-face contacts.
High-skill service industries include: information and cultural industries, finance and insurance, real estate and rental leasing, professional, scientific and technical services, management of companies and enterprises and administrative support, waste management and remediation services.
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Toronto's Highest mid-month re-sale total ever
TORONTO - The resale housing market got off to a roaring start in May, with 5,003 sales reported during the first 15 days of the month, Toronto Real Estate Board President Dorothy Mason announced May 16, 2007. This is an 11 per cent increase over the first half of May 2006 and the highest mid-month sales total in TREB's history.
"All signs point to a very healthy market for the remainder of the
spring," Mrs. Mason said. "In terms of activity, this year is about six per
cent ahead of last year's pace, and that's an indication that there's a lot of
confidence in this market. Now is an excellent time to get started in the
market or make a move."
The average price in the first half of May was up two per cent to
$377,612 from the $369,543 recorded during the first half of May 2006.
Year-to-date prices were nearly five per cent ahead of the same time last
year. Meanwhile average time-on-market for a listed home fell to 28 days, and
the average list-to-sale price ratio rose to 99 per cent of the asking price.
In Scarborough's West Agincourt neighbourhood (E05), condominium
transactions more than doubled as the area saw a 39 per cent overall increase
compared to mid-May of 2006.
Strong condominium activity also pushed Mississauga's City Centre (W15)
to a 49 per cent overall increase compared to the same timeframe a year ago.
In the Downtown Toronto/Harbourfront area (C01), 34 per cent more homes
changed hands compared to mid-May of last year, fueled mostly by high-rise
condominiums.
In central Vaughan (N08), detached homes and town homes were the most
active types as overall transactions increased from mid-May of last year by 59
per cent.
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Consumer Prices increased at the fastest pace in almost 4 years
Consumers paid 2.2% more in April for the goods and services in the Consumer Price Index (CPI) basket than they did in April 2006, a slightly slower growth than the 2.3% increase recorded in March. However, excluding energy components, consumer prices increased at their fastest pace (+2.4%) in almost four years.
Much of the upward pressure on the all-items index in April again came from the owned accommodation sector, while energy components exerted relatively less influence. In April, average gasoline prices were slightly lower than they were last year. Prices at the pump, although relatively high, jumped 13.5% between March and April 2006, while they increased only 2.6% over the same months this year, pushing the 12-month variation of the gasoline index in the negative territory (-0.6%).
The all-items index without energy components advanced by 2.4% in April, up from 2.1% in March. This was the strongest year-over-year rise posted by this index since May 2003.
In April, the Bank of Canada's core index was up 2.5%, compared with the same month of the previous year. The growth in this index, which is used by the Bank of Canada to monitor the inflation-control target, increased in relation to the previous month, when it was 2.3%. This was the strongest rise posted by this index since March 2003.
On a monthly basis, the all-items index increased by 0.4% between March and April. This was much slower than the 0.7% and 0.8% increases in the two previous months. Two energy components, gasoline and natural gas, accounted for most of the increase in the index in April.
The all-items index without energy components increased by 0.2% in April. The rate of increase in this index dropped for a second straight month, after rising 0.3% in March and 0.6% in February.
The core index rose by 0.2% between March and April following a 0.3% increase the previous month.
Year-over-year: Owned accommodation costs push up all-items index
Once again in April, costs associated with owned accommodation were the primary factor behind the 2.2% rise in consumer prices across the country.
Mortgage interest cost rose by 5.6% in April, compared with the same month last year. This was the fastest 12-month growth since January 2001. This increase was mainly driven by higher prices paid by consumers for houses.
Mortgage interest cost, which measures changes in the amount of mortgage interest owed by homeowners, has posted a 12-month change above 5.0% since early 2007.
Although its contribution to the rise in the all-items index remains substantial, homeowners' replacement cost, which represents the worn-out structural portion of housing and is estimated using new housing prices (excluding land) rose 6.5% in April. This index has showed some signs of tapering off since November 2006.
Consumers paid 3.8% more for food in April compared with April last year, spending 2.3% more for restaurant meals and 12.9% more at the grocery store for fresh vegetables.
In April, motorists in Canada saw their car insurance premiums rise by 4.3% over April 2006. However, they paid less to fill up their tanks and to purchase or lease new vehicles.
The 1.1% drop in the price of vehicle purchases and leases offset the upward trend in consumer prices to some extent. Consumers were able to get vehicles that were often better equipped for prices lower than those of last year.
Compared to last year, gasoline prices were down 0.6% in April after posting increases of 10.0% and 2.9% in previous months. In April, average gasoline prices were lower than those observed in the same month last year.
In April, consumers paid 4.5% less for natural gas compared with April 2006. Benefiting most from this downturn in prices were residents of Ontario, where prices fell 12.4%, and Manitoba, where they dropped 8.3%.
Natural gas prices declined for a 10th consecutive month in April on a year-over-year basis. However, the rate of decline in this energy component dropped sharply over the past three months.
Prices for computer equipment and supplies (-18.7%) as well as video equipment (-8.4%) continued the downward trends observed in recent months.
Above-average consumer price gains in Alberta and Saskatchewan
Although prices paid by consumers were up in all provinces, only residents of Alberta (+5.5%) and Saskatchewan (+2.4%) experienced increases higher than the national average.
In those two provinces, the strong increase in homeowners' replacement cost accounted for most of the upward pressure on consumer prices.
Manitoba posted a 12-month change in consumer prices equivalent to the national average. All other provinces, however, recorded increases of less than 2.0% between April 2006 and April 2007.
Consumers in the Atlantic provinces experienced the smallest rises. Residents of Ontario (+1.8%) and British Columbia (+1.9%) faced increases larger than those in the Atlantic provinces, but smaller than those of the Prairie provinces.
In Alberta, homeowners' replacement cost shot up by 29.1% in April, compared with the same month last year, while in Saskatchewan it climbed by 20.0%.
In Alberta, the growth in homeowners' replacement cost has shown a steady decline since the 48.6% record level posted in September 2006. In Saskatchewan, it has been over 10.0% since December 2006. Driven by the strength of the natural resource sector, economic vitality in these two provinces has stimulated the housing sector.
Upward pressure on consumer prices for residents of Newfoundland and Labrador, Prince Edward Island and New Brunswick was caused mainly by increases in electricity rates that occurred between April 2006 and April 2007.
Month-over-month: Consumers pay more for gasoline, natural gas
Between March and April, prices for all goods and services rose an average of 0.4%. This was a pronounced slowdown in relation to the 0.8% rise recorded the previous month.
Average gasoline prices were up between March and April for a third month in a row. Although gasoline prices accounted for most of the increase in the monthly CPI, the 2.6% increase observed in April was relatively moderate, compared with the 12.5% rise posted in March.
Given that stocks have declined since February and should normally increase in this period of the year to support summer growth in demand, motorists had to spend more to fill up.
Except for Ontario, where gasoline prices were down slightly (-0.2%), all other provinces posted increases ranging from 3.0% in Nova Scotia to 7.1% in British Columbia.
For Ontario motorists, this slight decrease provided some respite after the substantial increases of the past two months.
Natural gas prices surged by 9.1% between March and April. This was the strongest rate of growth posted by this energy component since January 2001.
Monthly increases in the price of natural gas observed in Ontario (+11.8%) and Alberta (+14.3%) mainly drove the increase in the national index.
Costs of municipal water rose at their fastest pace in 15 months between March and April. Metered and flat running water rates rose 3.8%, the fastest gain since January 2006.
Water costs rose fastest in Alberta (+6.5%) and Ontario (+4.7%). Edmonton residents had to spend 17.4% more for running water in April than they did in March, while in Toronto, the increase was 10.0%.
The 2.4% increase in the price of automotive repairs and maintenance also exerted upward pressure on overall price levels.
Although it cost more to fill up the tank and to maintain a vehicle between March and April, the 0.7% drop in the price of vehicle purchases and leases offset the upward pressure on the monthly all-items index to some extent. Vehicle manufacturers continued to enhance incentives offered to new vehicle purchasers, thus bringing down prices in relation to the previous month.
Lower prices for non-alcoholic beverages (-4.7%) and women's clothing (-1.2%) also mitigated the monthly increase in prices in April.
| Consumer Price Index and major components |
|
(1992=100) |
| |
Relative importance1 |
April 2007 |
March 2007 |
April 2006 |
March to April 2007 |
April 2006 to April 2007 |
| |
|
Unadjusted |
| |
| | | |
% change |
| All-items |
100.002 |
132.8 |
132.3 |
130.0 |
0.4 |
2.2 |
| Food |
16.89 |
135.0 |
135.0 |
130.0 |
0.0 |
3.8 |
| Shelter |
26.75 |
132.2 |
131.3 |
127.7 |
0.7 |
3.5 |
| Household operations and furnishings |
10.58 |
117.5 |
117.5 |
116.4 |
0.0 |
0.9 |
| Clothing and footwear |
5.37 |
102.8 |
102.5 |
100.8 |
0.3 |
2.0 |
| Transportation |
19.79 |
159.4 |
158.2 |
158.5 |
0.8 |
0.6 |
| Health and personal care |
4.52 |
123.4 |
122.9 |
122.3 |
0.4 |
0.9 |
| Recreation, education and reading |
11.96 |
127.5 |
127.4 |
126.6 |
0.1 |
0.7 |
| Alcoholic beverages and tobacco products |
4.13 |
153.9 |
153.4 |
150.7 |
0.3 |
2.1 |
| All-items (1986=100) |
|
170.1 |
|
|
|
|
| Purchasing power of the consumer dollar expressed in cents, compared to 1992 |
|
75.3 |
75.6 |
76.9 |
|
|
| Special aggregates |
|
|
|
|
|
|
| Goods |
48.84 |
126.4 |
125.9 |
125.1 |
0.4 |
1.0 |
| Services |
51.16 |
139.9 |
139.3 |
135.5 |
0.4 |
3.2 |
| All-items excluding food and energy |
74.27 |
127.7 |
127.4 |
125.2 |
0.2 |
2.0 |
| Energy |
8.84 |
180.3 |
176.1 |
180.1 |
2.4 |
0.1 |
| Core CPI3 |
82.75 |
131.2 |
131.0 |
128.0 |
0.2 |
2.5 |
| 1. | 2001 CPI basket weights at June 2004 prices, Canada: Effective July 2004. Detailed weights are available under the Documentation section of survey 2301 at (http://www.statcan.ca/english/sdds/index.htm). |
| 2. | Figures may not add to 100% due to rounding. |
| 3. | The measure of Core Consumer Price Index (CPI) excludes from the all-items CPI the effect of changes in indirect taxes and eight of the most volatile components identified by the Bank of Canada: fruit, fruit preparations and nuts; vegetables and vegetable preparations; mortgage interest cost; natural gas; fuel oil and other fuel; gasoline; inter-city transportation; and tobacco products and smokers' supplies. For additional information on Core CPI, please consult the Bank of Canada website (http://www.bankofcanada.ca/en/inflation/index.htm). |
|
| Consumer Price Index by province, and for Whitehorse, Yellowknife and Iqaluit1 |
|
(1992=100) |
| |
April 2007 |
March 2007 |
April 2006 |
March to April 2007 |
April 2006 to April 2007 |
| |
Unadjusted |
| |
| | |
% change |
| Newfoundland and Labrador |
130.3 |
129.9 |
128.5 |
0.3 |
1.4 |
| Prince Edward Island |
133.8 |
133.4 |
131.9 |
0.3 |
1.4 |
| Nova Scotia |
134.7 |
134.0 |
132.9 |
0.5 |
1.4 |
| New Brunswick |
131.9 |
131.2 |
130.5 |
0.5 |
1.1 |
| Québec |
127.8 |
127.5 |
126.0 |
0.2 |
1.4 |
| Ontario |
133.4 |
133.0 |
131.0 |
0.3 |
1.8 |
| Manitoba |
136.5 |
135.9 |
133.6 |
0.4 |
2.2 |
| Saskatchewan |
138.3 |
137.3 |
135.1 |
0.7 |
2.4 |
| Alberta |
145.9 |
144.5 |
138.3 |
1.0 |
5.5 |
| British Columbia |
129.5 |
129.1 |
127.1 |
0.3 |
1.9 |
| Whitehorse |
127.9 |
127.0 |
125.8 |
0.7 |
1.7 |
| Yellowknife2 |
128.4 |
127.7 |
125.5 |
0.5 |
2.3 |
| Iqaluit (Dec. 2002=100) |
107.7 |
106.7 |
104.5 |
0.9 |
3.1 |
| 1. | View the geographical details for the city of Whitehorse, the city of Yellowknife and the town of Iqaluit. |
| 2. | Part of the increase first recorded in the shelter index for Yellowknife for December 2004 inadvertently reflected rent increases that actually occurred earlier. As a result, the change in the shelter index was overstated in December 2004, and was understated in the previous two years. The shelter index series for Yellowknife has been corrected from December 2002. In addition, the Yellowknife All-items CPI and some Yellowknife special aggregate index series have also changed. Data for Canada and all other provinces and territories were not affected. |
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Note to readers
In January, Statistics Canada announced a major update of the CPI to reflect changes in the spending patterns of Canadian households. This update, which will occur on June 19, 2007, is designed to ensure the CPI's reliability as a measure of inflation, a statistical series deflator and a tool for indexing various payments and transfers. Documentation is now available. Please see the What's new announcement in CANSIM.
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The Fraser Institute: Security and Shared Border Agreement Key to Preserving Canada's Trade Relationship With U.S.
VANCOUVER, BRITISH COLUMBIA-
Reaching an agreement on shared border security and defence is the best way for Canada to maintain an open border with the United States and safeguard our trade relationship, says a new study published by The Fraser Institute, an independent research organization with offices across Canada.
"Recent trade disputes such as softwood lumber and the so-called mad cow disease were allowed to fester and drag on primarily because Canada had no political capital with the White House that it could call on to help diffuse the disputes," said Dr. Alexander Moens, author of the report and a senior fellow with the Fraser Institute.
"Rather than approach each trade-related issue on a piecemeal basis, our government should be working with the U.S. to reach a comprehensive agreement on security measures and a shared border to ensure we have continued access to the U.S. market."
The report, Canadian-American Relations in 2007, looks at the recent history of Canada and U.S. relations and trade disputes. It concludes that changes in governments on both sides of the border offer an opportunity to revive the bilateral relationship and co-operation that has traditionally existed between Canada and the U.S.
"The Conservative government elected in 2006 has moved to improve political relations with the United States and President George W. Bush. Given the need for the Bush administration to score success in a foreign area outside of Iraq, a window of opportunity has opened for a new deal with Canada," Moens said.
Moens points out that Canada has an enormous stake in the free flow of trade and investment to and from the United States. In 2005, 78 per cent of Canadian exports went to the U.S. with 65 per cent of our imports coming from the U.S. The total value of trade with the U.S. was $709 billion - about 51.8 per cent of Canada's GDP in 2005. Since the implementation of the Canada-U.S. Free Trade Agreement, Canadian trade with the U.S. has grown 120 per cent in real terms, with exports outpacing imports.
The U.S. expression "security trumps trade" signals what is at stake should another terrorist attack take place on U.S. soil. While trade is the single largest Canadian interest in its relationship with the United States, the events since September 11, 2001 show the United States considers a stable security relationship of greater importance. When the U.S. perceives that its security interests are not met and its political ties at the highest level are distant, the free flow of trade may be endangered.
"The growing distance between Canadian and American defence, security, and foreign policy began in the mid-1990s when Canada aligned its international objectives with soft, Western European, security goals and disconnected them from American diplomatic and security interests," Moens said.
"The problem worsened between 2001 and 2005 when Jean Chretien and Paul Martin were in power. The lingering discord came into plain view and there was friction at many levels -- divergence on security and defence policies, several highly publicized trade disputes, and political aloofness at the highest level."
In that environment, when trade disputes erupted, it was virtually impossible for Canada's voice to be heard or for the country to plead its case to the highest levels of the U.S. government, Moens concludes.
And while Moens suggests that Canada still has much work to do to resolve the root issues of the softwood lumber dispute (stumpage fees) and the BSE issue (recognition that Canada and the U.S. are a single market for beef cattle), working towards a comprehensive border security and defence agreement would go a long way to helping minimize future trade disputes.
The report recommends a treaty to create a secure border permitting the free flow of trade and people and including:
- a customs union to remove differential external tariffs and costs associated with certificates of origin and whether products qualify for tariff-free shipment;
- a security-perimeter and border-management strategy that includes pre-clearing of all commercial crossings, joint border management and infrastructure, and harmonized biometric checks on people;
- common security criteria and harmonized processing systems for visas, refugees, and immigration;
- binational border command to deal with crime, smuggling, and terrorist threats; and
- enhanced labour mobility across the border.
The report also recommends negotiating a new binational defence treaty that includes:
- a single North American binational defence arrangement based on building out the NORAD model;
- a combined air, space, sea, and land binational command structure reporting directly to U.S. and Canadian decision-makers;
- a strategic plan for joint response to deal with any threat to North America; and
- Canada to invest in defence capacity in all areas, including Arctic security.
"It will require enormous diplomatic effort to generate political momentum in the United States to create a new paradigm where common security and trade policies and a continental perimeter gradually replace the physical barriers we know today," Moens said.
"The U.S. agenda is fixated on Iraq and the 2008 race for the White House. But this preoccupation does not historically mean that the Executive Branch cannot be engaged on bilateral issues. In the past, presidents in their waning years have reached out to foreign partners to accomplish things. The Canadian government should begin preparing the ground for big changes that may be consummated from 2009 onward."
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WATERLOO REGIONS KITCHENER (CMA) EXISTING HOME MARKET TO STAY STRONG
TORONTO - The Canada Mortgage and Housing Corporation (CMHC) released its Spring Housing Market Outlook report for the Kitchener Census Metropolitan Area (CMA) today. New home starts will weaken again in 2007. Existing home sales will flatten, but prices will continue to increase.
Highlights of this report include:
• Rising new home prices, lower employment growth, and greater choice in the resale home market will combine to weaken demand for new homes. The focus will shift toward multiple-family types of housing which include semi-detached homes, townhouses and apartments.
• Total home starts will move lower to 2,400, down eight per cent from last year. Single-detached starts will fall by 35 per cent as a result of growing home prices and a lower supply of serviced residential lots. A significant increase in apartment construction, both rental and ownership, will propel multiple-family home starts up by 30 per cent.
• Sales through the Kitchener-Waterloo Real Estate Board will plateau at a very high level, reaching 6,100 sales, down just 0.2 per cent from last year. The supply of homes listed for sale will continue to trend higher.
• The resale market will continue to favour sellers. Price growth will be more subdued, but continue to outpace the general rate of inflation. The average resale price will increase by 3.8 per cent to $247,000.
“A combination of a slowing economy, strong Canadian dollar vis-à-vis the U.S. dollar, and moderate inflation will keep mortgage rates low in 2007,” said Erica McLerie, CMHC Market Analyst for the Kitchener CMA. “Home prices will continue to rise faster than the rate of inflation and nudge mortgage carrying costs higher. Affordability will continue to be a factor for many potential homebuyers. Homebuyers will turn to resale homes and more affordable types of new construction, especially townhouses and apartments, at the expense of new single-detached homes.”
“The residential housing market will benefit from stable mortgage and labour market conditions, “said Ted Tsiakopoulos, CMHC’s Ontario regional economist. “Ontario’s existing home market will capture a larger share of housing activity. This in large part is due to more choice in the resale market and to the cost gap between a new and resale home purchase. Still, new home starts will remain near historical averages,” added Tsiakopoulos
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ONTARIO RESALE HOME VOLUMES GAINING MARKET SHARE
Toronto - While total Ontario residential home sales moderate over the next several years, Ontario’s existing home market will continue to capture a growing share of activity, according to the 2007 Second Quarter CMHC Housing Market Outlook - Canada Edition released May 15.
Highlights of the Ontario Quarterly forecast include:
Ontario economic growth will continue to lag behind the Canadian average this year, but will move closer to potential by 2008.
A narrowing economic growth gap between the west and central Canada suggests that the net outflow of Ontarians headed west will subside
Ontario resale volumes will be on par with last year’s levels reaching 196,000 units in 2007 before moderating to 185,000 units in 2008.
Ontario existing home prices will grow by 5.3 per cent this year and 3.4 per cent in 2008, an upward revision from the previous quarter.
Hamilton, Sudbury and London will be home to the hottest resale markets, registering price gains above the provincial average.
Ontario home starts will moderate to 68,000 units in 2007 and 64,000 units in 2008. Multiple family home starts will remain at high levels, offsetting weakness in the pricier detached home category.
A more balanced resale market suggests that the long term trend in new home starts will remain down.
“Generally, the residential housing market will benefit from stable mortgage and labor market conditions, “said Ted Tsiakopoulos, CMHC`s Ontario regional economist. “Ontario’s existing home market will lead--capturing a larger share of housing activity. This in large part is due to more choice in the resale market and to the cost gap between a new and resale home purchase. Still, new home starts will remain near historical averages,” added Tsiakopoulos.
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Waterloo Region Named in Foreign Direct Investment (fDi) Magazine’s Top Rankings for North American Cities of the Future
Waterloo Region - Waterloo Region has garnered a top 5 ranking among “Small Cities of the Future” in North America. Canada’s Technology Triangle Inc last night accepted the award in Boston on behalf of partners in the Waterloo Region and the cities of Cambridge, Kitchener and Waterloo. It’s the second consecutive year that Waterloo Region has fared well in fDi’s Cities of the Future rankings.
The North American award reception was held in conjunction with Bio2007, the major event held by the Biotechnology Industry Organization (BIO) each year. The international conference has been part of investment attraction initiatives for CTT Inc and partners since 2003.
Recognized in the “Top 10 Small Cities of the Future” category, Waterloo Region ranked 5th overall. The “Small Cities” category covers communities of 100,000 to 500,000 people. The area also achieved:
· 2nd for “Best Human Resources”
· 2nd for “Quality of Life”
· 4th for “Best Infrastructure”
· 5th for “Best Development and Investment Promotion”.
Courtney Fingar, Editor, fDi Magazine, says there has been far greater take-up from North American cities to participate in the research rankings. “Waterloo impressed fDi's judges in several areas, particularly for the region's infrastructure, development and investment promotion, human resources and quality of life."
fDi is the premier publication for the business of globalization and is produced by the renowned Financial Times group of London, UK. The judging panel represented public and private leaders from New York, Washington and Chicago, and included Steve Demmings, president, Site Selection Canada.
The prestigious 2007/08 competition had entries from 108 cities across North America. Submissions were evaluated for economic potential, cost effectiveness, human resources, quality of life, infrastructure, business friendliness and FDI promotion strategy. This year, the competition was changed from the previous survey ranking for Canada and moved to a broader North American-wide ranking among locations in the United States, Mexico and Canada. The ranking is based on data submitted covering the Waterloo Region including the cities of Cambridge, Kitchener and Waterloo.
John Tennant, CEO, Canada’s Technology Triangle Inc, says fDi’s report spotlights North American locations that firms that are expanding or locating should carefully evaluate. "Our Top 5 ranking is yet another independent indicator of the attractiveness of our Region to international business", according to Tennant. "The high ranking for Best Human Resources is a testimony to our outstanding post-secondary educational institutions and highly skilled talent pool. The community leadership should take pride and credit for Waterloo's high standings in terms of quality of life and infrastructure.”
Last year, Canada’s Technology Triangle took the title of Canada’s “Most Cost Competitive” area and was also the location for fDi’s Global Personality of the Year Awards which honoured Ontario Premier Dalton McGuinty. It was the first time the esteemed awards celebrations were held in North America. The “Cities of the Future” competition is now in its fifth year.
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United States accounted for 65.5% of Canada's imports,China remained second largest, third-place goes to Mexico slightly stronger than Japan
The combination of strong demand and rising prices for Canada's natural resources products, specifically metals, crude petroleum and grains, pushed the nation's total merchandise exports to a record high in 2006, according to a new report.
An annual review of the trends of merchandise trade shows that both the value and volume of merchandise exports hit a peak in 2006, as did import values and volumes.
In total, the value of exports rose 1.1% from 2005, while export volumes were up 1.6%. Overall export prices decreased as downward pressure on lumber and natural gas prices offset record prices for metals and crude petroleum.
A major factor in exports was the industrial goods and materials sector, specifically metals. Exports of metal ores and alloys surged to a record high of $45.2 billion, a 25.5% gain over 2005. This was nearly double the value of $26.0 billion in 2003, thanks mostly to increased demand from China, which sent prices skyrocketing.
The report also showed a growing propensity among Canadian companies to do business with countries other than the United States. While the United States was still by far Canada's largest trading partner last year, its share of both exports and imports declined.
Contributing to this shift were rising exports of metals, aircraft, wheat and canola to the rest of the world, combined with lower exports of autos, forestry products and natural gas to the United States.
The United Kingdom edged out Japan as Canada's second largest export destination last year, after the United States. Exports to the United Kingdom hit $10.1 billion, compared to $9.4 billion for Japan. The major factors in the United Kingdom's increase were export values for gold, uranium and nickel as well as higher exports of aircraft.
In addition, while imports from the United States rose last year, they were outpaced by imports from countries such as China and Mexico, and oil-exporting nations such as Algeria, Iraq and Nigeria.
Exports: Higher commodity prices yield big gains in export values
The value of Canada's exports hit $458.2 billion last year, a 1.1% increase from 2005, largely on the strength of surging foreign demand and rising prices for natural resources.
The overall gain was the result of rising export receipts for nations other than the United States. Canada's exports to the United States fell 2.0% last year, the first decline in three years. However, exports to other nations rose 14.6%.
Export values to countries other than the United States were buoyed by higher-priced metals and grain products, as well as larger shipments of aircraft, heading to the United Kingdom and the rest of Europe, as well as to Mexico and Asia.
As a result, the US share of Canada's exports fell from 81.4% in 2005 to 78.9% last year.
Prices for zinc, nickel and copper continued to soar in 2006, as supplies tightened and demand from emerging economies, particularly China, increased. Nickel exports to China doubled last year.
Countries other than the United States accounted for 40% of the increase in exports of metal ores and alloys in 2006. The United Kingdom was the largest market for Canadian metals, followed by China, Japan, Norway, South Korea and the Netherlands.
The value of exports of aircraft and parts rose 5.7% to $10.2 billion, thanks to an 80% surge in exports to countries other than the United States, offsetting a 20% decline in sales to the United States. Although the United States remained the top destination for these exports, over 40% of Canada's aircraft exports were shipped to other destinations, compared with only 25% in 2005.
Agricultural products also contributed to the export gains. Wheat exports rose 34.1% last year, driven by a gain in overseas shipments, particularly to Mexico, Indonesia and Sri Lanka. Wheat exports to the United States rose by $150 million, but the gain to other countries surged by nearly six times that value. Canola exports rose by more than one-third to $1.8 billion, thanks to higher exports to Pakistan and China as well as to the United Arab Emirates, which imported Canadian canola for the first time.
In contrast, declines in prices and demand led to a 13.3% decline in lumber and sawmill exports to $16.4 billion in 2006. The main factor was the weakening housing market in the United States. Exports of automotive products and natural gas also reported lower export values for the year as US demand waned.
Imports: Gains with foreign nations outpace increase with United States
Canadian companies imported a record high of $404.5 billion in merchandise last year, up 4.2%, while volumes were up 6.7%.
Imports from the United States increased 1.9% to $264.8 billion. However, this pace was surpassed by imports from countries such as China, Mexico, and countries from which the Eastern provinces import oil, such as Algeria, Iraq and Nigeria.
As a result, the United States accounted for 65.5% of Canada's imports in 2006, down from 66.9% the year before. (Canada's trade surplus with the United States fell from $108.8 billion in 2005 to $96.5 billion, the first drop in three years.)
China remained Canada's second largest source for imports, posting a gain of 16.8% to $34.5 billion.
Imports from third-place Mexico remained stronger than those from Japan for a second consecutive year. The value of merchandise from Mexico rose 9.5% in 2006 to $16.0 billion, compared with a 3.6% gain in imports from Japan (for a total of $15.3 billion).
Strong demand for machinery and consumer goods leads to record-high imports
Last year's record-high imports were pushed up by strong imports of machinery, electronics, cars and trucks, home furnishings and clothing.
One of the principal factors was Alberta's booming economy, as construction in the oil sands expanded and people moved in droves to the province to capitalize on higher wages created by a tight labour market.
Imports of industrial machinery poured into the Western provinces in 2006, contributing to a 3.4% gain in machinery and equipment imports, worth $114.7 billion. This increase was due partly to a stronger dollar, which spelled lower import prices, and to rising prices for crude petroleum and metals that drove up profits and provided incentives to expand production.
The rise in household incomes contributed to additional consumer spending in 2006, with Alberta, in particular, driving auto sales up to their highest level ever. The increase in sales was concentrated in Japanese and German models manufactured outside of North America, pushing automotive import values up 1.8% to $79.8 billion. Real imports of automotive products were stronger, up 5.2% for the year.
More than $1.3 billion worth of high definition televisions, which are imported primarily from Mexico, but also from China, made their way into Canadian electronics stores in 2006.
There was also increased demand for personal electronics equipment, such as cellular phones, mostly originating in China, South Korea and Malaysia.
Despite lower clothing prices, the value of imports rose 6.5% to $8.3 billion. In real terms, however, the increase in the value of clothing imports was more pronounced (+11.0%).
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WATERLOO REGION NEW CONSTRUCTION NUMBERS DROP IN APRIL
Waterloo Region - The Canada Mortgage and Housing Corporation (CMHC) released Kitchener’s preliminary housing starts data for the month of April 2007.
April starts were at their lowest level since April 1991. Construction began on a total of 119 homes in the Kitchener Census Metropolitan Area (CMA), a decrease of 61 per cent from the 309 units started in the same month last year.
Only 72 single-detached foundations were poured in April, a decline of 65 per cent from the same month last year and the twelfth consecutive monthly year-over-year decline.
At 47 units, multiple family home starts (which include semi-detached homes, townhouses and apartments) were down from the 106 units which were started in April 2006. Despite strength in apartment construction, housing starts for the first four months of 2007 were eight per cent lower than in the same period of 2006.
“New home starts this year have been affected by several factors,” said Erica McLerie, Market Analyst for the Kitchener CMA. “More choice in the resale home market, a low supply of available residential lots, relatively more expensive new homes, and slower employment growth have contributed to the unusually weak new construction figures,” added McLerie.
ONTARIO NEW HOME STARTS EDGE HIGHER IN APRIL
As expected, Ontario home starts edged higher in April. The Seasonally Adjusted Annual Rate (SAAR) of urban* starts reached 55,600 units, up from 50,800 unit starts registered in March. Most of the increase was registered in the volatile multi-family home segment which includes semi-detached, town homes and apartments.
The longer term trend for Ontario housing starts has been one of high starts levels, gradually edging lower. For example, while actual urban Ontario home starts for the year are 21 per cent lower compared to 2006, home starts are expected to remain above historical averages this year.
“The pace of new home demand has weakened vis-à-vis the record level of demand registered in Ontario’s existing home market,” said Ted Tsiakopoulos, CMHC`s Ontario regional economist. “While Ontario new home starts reflect this weakening trend, a pick-up in new home starts is to be expected for two important reasons. First, resale markets have tightened thanks to improved borrowing conditions—a good news story for the new construction market. Secondly, new home starts continue to remain below trend. This is particularly true for the multi-family home segment. Given that the multi-family sector performs relatively better at the mature phase of a real estate cycle, they are expected to move back on trend in the months ahead,” added Tsiakopoulos.
Housing starts continue to ease in April
OTTAWA - The seasonally adjusted annual rate(1) of housing starts was 211,900 units in April, down from 214,000 units in March, according to Canada Mortgage and Housing Corporation (CMHC).
"Housing starts in April remain strong and are in line with our new home
construction forecast for 2007," said Bob Dugan, Chief Economist at CMHC's
Market Analysis Centre. "The slight decrease in housing starts is the result
of declines in single-detached and rural area starts. Multiple starts
continued to move upwards in April."
April's seasonally adjusted annual rate of urban starts was 179,000
units, up 0.6 per cent from March. The urban multiple component rose
2.3 per cent to 94,700 units in April, while single starts decreased
1.2 per cent to 84,300 units.
Seasonally adjusted urban starts decreased in April in all regions except
Ontario, where starts were up 9.4 per cent. Urban starts were down
4.0 per cent in Quebec, 3.2 per cent in British Columbia, 3.1 per cent in the
Atlantic, and 1.8 per cent in the Prairies. Urban single starts decreased in
all regions except Ontario and the Prairies, while urban multiple starts were
down in all regions except Ontario and the Atlantic.
Rural starts were estimated at a seasonally adjusted annual rate of
32,900 units in April.
Actual starts, in rural and urban areas combined, were down an estimated
6.6 per cent in the first four months of 2007 compared to the same period in
2006. Actual starts in urban areas alone were down an estimated 9.3 per cent.
Actual single starts in urban areas were 14.5 per cent lower than they were a
year earlier, while actual urban multiple starts were down 4.7 per cent. "The
larger decrease in single starts reflects the growing interest in less
expensive multiple units, which was expected after several years of strong
price growth" added Bob Dugan.
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CWB Applauds Government's Free-Trade Push With Peru, Colombia
WINNIPEG, MANITOBA - The CWB welcomes the Government of Canada's upcoming free-trade talks with Peru and Colombia, which are crucial to protecting more than $200 million worth of annual Prairie wheat exports.
Speaking to the Council of the Americas in Washington on May 2, International Trade Minister David Emerson said he expected the talks to be underway in 2007.
"We are heartened by Minister Emerson's comments and we urge the federal government to move quickly in securing free-trade agreements to protect the interests of Prairie producers," said Larry Hill, an elected farmer director from Swift Current who chairs the board's trade committee.
Canadian wheat worth about $220 million a year risks being shut out of these markets by free-trade agreements concluded between the United States and the two Andean nations. The deals, awaiting ratification by the U.S. Congress, would put Canada at a serious tariff disadvantage for wheat exports to these countries.
The U.S. Wheat Associates recently said it expects the agreements with Peru and Colombia to double American sales to more than $400 million. This would come largely at the expense of western Canadian wheat farmers.
Peru purchased a record 575 000 tonnes of western Canadian wheat in 2006, up 33 per cent from 2005, while Colombia purchased 400 000 tonnes. Canada has more than doubled its exports of grains, pulse and special crops to Peru since 2002, mainly due to a 155-per-cent increase in wheat exports. Total Canadian exports to Peru in 2006 reached a record $288 million, with combined wheat and durum exports comprising 43 per cent, or about $124 million.
"The CWB has built excellent customer relations in these Andean nations," Hill said. "We have also partnered with others in the agricultural industry to raise our concerns with Ottawa about the risk to Canadian exports. Now that the goal is close at hand, we urge Minister Emerson to keep forging ahead."
In 2003, the CWB and other major Canadian agricultural exporters formally began advocating for more progress on bilateral trade agreements. The group is concerned that Canada is falling behind other countries - most notably the U.S. - in forging such deals, risking a serious competitive trade disadvantage. Concerned exporters include the Canola Council of Canada, Pulse Canada, the Canadian Federation of Agriculture, the Canadian Pork Council, Canada Pork International, Cavendish Farms, the Canadian Oilseeds Processors Association and the Canadian Grain and Oilseeds Exporters Association.
Controlled by western Canadian farmers, the CWB is the largest wheat and barley marketer in the world. One of Canada's biggest exporters, the Winnipeg-based organization sells grain to over 70 countries and returns all sales revenue, less marketing costs, to farmers.
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Enhancing productivity of Small and Medium Enterprises
The Information and Communications Technology Council has released a report prepared for it by the Institute for Competitiveness & Prosperity, “Enhancing productivity of Small and Medium Enterprises through greater adoption of Information and Communication Technology”. The report reviews the contributions of information and communication technology (ICT) to productivity growth in advanced economies and assesses factors leading to the lower rate of adoption by small and medium enterprises (SMEs) in Canada. Given the importance of SMEs to Canada’s economy, this limits our overall productivity and prosperity performance.
The report, written by Roger Martin, Dean of the Rotman School of Management and Chairman of the Institute and James Milway, the Institute’s Executive Director, reviews the reasons for this lower adoption rate through its framework of the innovation system which includes supply of innovation, demand for innovation, and financing of innovation.
On the supply side, the report concludes that while Canadian SMEs are generally well supported by providers of ICT goods and services, many have not been completely persuaded of the benefits of ICT investments. The challenge for suppliers is to increase their skills and capabilities of reaching SMEs in a cost- effective manner to communicate benefits and implement solutions.
On the demand side, the under education of managers and owners in SMEs is inhibiting support for ICT adoption. This is especially important given the research evidence that more complex use of ICT along with sophisticated management practices drives the benefits of ICT productivity. Ongoing investments in post secondary education and creative solutions to the training needs of current managers and owners will help address this challenge. In addition, increasing educational attainment of e-essential skills for younger Canadians, still in the educational system, will pay long-term dividends.
On the financing side, the report concludes that special tax incentives are not the most effective way to stimulate ICT adoption. Instead tax policy focus should be on reducing overall tax rates on new business investment.
The Information and Communications Technology Council (ICTC) is a not-for-profit organization dedicated to creating a strong, prepared and highly educated Canadian ICT industry and workforce.
Report
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Gross domestic product by industry on whole grew by .2% - less utilities and oil/gas extraction in February 2007
After growing 0.1% in January, the Canadian economy increased 0.4% in February as energy production returned to a more normal level. Excluding oil and gas extraction and utilities, economic activity grew 0.2%. Both goods and services production rose. Wholesale trade, manufacturing and financial services posted gains. However, these gains were partly offset by declines in construction, retail trade, rail transportation and the accommodation and food services sector.
Increase in output of the energy sector
Electric power generation (+3.4%) as well as oil and natural gas extraction (+3.6%) posted significant gains. Overall, the energy sector advanced for a second consecutive month with a gain of 2.9% in February, following an increase of 2.1% in January. These increases were attributable to a return to more seasonal temperatures after two months of mild weather conditions. Although the February rise in electricity output was significant, it only brought the level of output 0.8% higher than its previous peak reached in July 2006. Natural gas production also rebounded to mid-2006 levels in light of a sharp reduction in inventories. Crude oil output leaped forward as production returned to a level not seen since early 2006. However, oil and gas exploration posted a slight decline (-1.0%).
The output of the mining sector, excluding oil and natural gas, rose 1.5% on the strength of the non-metallic mineral mines (which include diamond mines).
Industrial production (the output of mines, utilities and factories) advanced 1.3% in February, with all three sectors posting gains. In the United States these three sectors also increased, utilities notably, leading to a growth of 0.8% in industrial production.
Motor vehicle and parts production push manufacturing activities ahead
The manufacturing sector rose 0.3% in February. Motor vehicle and associated parts production were both robust in February after declining in January. Manufacturing activities excluding motor vehicle and parts production decreased 0.2%. The 0.8% gain in the production of durable goods outpaced the 0.4% decline in non-durable goods manufacturing. Of the 21 major manufacturing groups, 10 increased, accounting for 45% of total manufacturing value added.
Motor vehicle manufacturing increased 4.9%, while parts production gained 2.6%. The textile and clothing industries moved forward, as did machinery, plastic and primary metal products manufacturing. However, declines were recorded in chemical, fabricated metal, food, beverage and tobacco products manufacturing.
Construction retreats
The construction sector fell for the first time in eight months in February (-0.2%). A decline in residential construction (-1.4%) was only partially offset by gains in non-residential building construction (+1.0%) and engineering and repair work (+0.2%). Both single-family homes and apartments recorded declines, whereas activity increased on new industrial and commercial buildings.
The home resale market moved higher-priced residences in February, leading to an increase of 0.2% in the activities of real estate agents and brokers.
Wholesale and retail trade
Wholesale trade posted a healthy 1.0% gain in February. This increase was propelled by strong trade in computers and other electronic equipment, household and personal products, pharmaceuticals and petroleum products.
Retail trade slipped 0.7% in February. This decline was due to a slump in new car sales. Excluding new motor vehicle dealers, retail trade increased 0.1%.
A strike in rail transportation hinders exports
A strike by rail employees led to a drop of 5.4% in output of the rail transportation industry. This negatively affected exports in February, and led some enterprises to increase their use of trucking services (+0.6%) to move their goods.
Other industries
Output in the finance and insurance sector grew 0.4%. This gain was fuelled by modest increases in lending activities and mutual fund sales. The accommodation and food services sector retreated for a second consecutive month (-1.0%). The number of overnight visitors to Canada from abroad was down 2.5% compared to January. In particular, overnight visitors from the United States declined 3.5% from the previous month.
| Monthly gross domestic product by industry at basic prices in chained (1997) dollars |
| |
September 2006r |
October 2006r |
November 2006r |
December 2006r |
January 2007r |
February 2007p |
February 2007 |
February 2006 to February 2007 |
| |
Seasonally adjusted |
| |
month-to-month % change |
$ millions¹ |
% change |
| All Industries |
-0.4 |
0.1 |
0.3 |
0.4 |
0.1 |
0.4 |
1,108,217 |
2.1 |
| Goods-producing industries |
-1.2 |
0.2 |
0.1 |
0.1 |
0.2 |
1.0 |
336,766 |
-0.1 |
| Agriculture, forestry, fishing and hunting |
0.8 |
-0.1 |
1.2 |
0.1 |
1.5 |
0.7 |
25,700 |
0.7 |
| Mining and oil and gas extraction |
-1.6 |
1.3 |
-2.0 |
-2.1 |
2.1 |
2.9 |
40,583 |
2.4 |
| Utilities |
-1.9 |
1.8 |
-2.2 |
-0.3 |
1.8 |
3.2 |
28,319 |
1.1 |
| Construction |
0.3 |
0.3 |
0.4 |
0.9 |
0.5 |
-0.2 |
70,183 |
3.8 |
| Manufacturing |
-1.7 |
-0.5 |
1.1 |
0.8 |
-1.1 |
0.3 |
170,379 |
-3.0 |
| Services-producing industries |
0.0 |
0.1 |
0.4 |
0.6 |
0.1 |
0.2 |
773,128 |
3.2 |
| Wholesale trade |
-2.4 |
-0.9 |
0.6 |
1.7 |
-0.3 |
1.0 |
71,777 |
3.3 |
| Retail trade |
0.1 |
-0.4 |
-0.4 |
2.0 |
-0.3 |
-0.7 |
66,303 |
3.7 |
| Transportation and warehousing |
-0.3 |
-0.6 |
1.0 |
0.5 |
0.2 |
-0.1 |
53,398 |
2.0 |
| Information and cultural industries |
-0.1 |
0.7 |
0.2 |
-0.2 |
-0.2 |
0.8 |
45,140 |
3.0 |
| Finance, insurance and real estate |
0.5 |
0.3 |
0.4 |
0.4 |
0.4 |
0.3 |
228,640 |
4.6 |
| Professional, scientific and technical services |
0.3 |
0.4 |
0.5 |
0.2 |
0.5 |
0.3 |
50,126 |
3.6 |
| Administrative and waste management services |
0.3 |
0.3 |
0.2 |
0.4 |
0.2 |
0.5 |
26,373 |
5.1 |
| Education services |
0.4 |
0.3 |
0.1 |
-0.0 |
-0.1 |
-0.1 |
48,189 |
0.9 |
| Health care and social assistance |
0.1 |
0.1 |
0.6 |
0.2 |
0.2 |
0.1 |
62,792 |
2.0 |
| Arts, entertainment and recreation |
1.1 |
0.4 |
1.7 |
0.9 |
-2.2 |
-0.1 |
9,357 |
2.6 |
| Accommodation and food services |
0.7 |
0.3 |
1.5 |
1.2 |
-0.8 |
-1.0 |
24,558 |
2.5 |
| Other services (except public administration) |
0.3 |
0.1 |
0.3 |
0.2 |
0.2 |
0.2 |
27,304 |
2.7 |
| Public administration |
-0.2 |
0.2 |
0.1 |
0.2 |
0.2 |
0.1 |
61,467 |
1.3 |
| Other aggregations |
|
|
|
|
|
|
|
|
| Industrial production |
-1.7 |
0.2 |
-0.1 |
-0.1 |
0.0 |
1.3 |
242,458 |
-1.2 |
| Non-durable manufacturing industries |
-1.8 |
0.2 |
0.2 |
-0.6 |
0.2 |
-0.4 |
67,922 |
-3.0 |
| Durable manufacturing industries |
-1.6 |
-1.1 |
1.8 |
1.7 |
-1.9 |
0.8 |
102,344 |
-3.1 |
| Business sector industries |
-0.4 |
0.1 |
0.3 |
0.5 |
0.1 |
0.5 |
943,053 |
2.3 |
| Non-business sector industries |
0.1 |
0.2 |
0.3 |
0.1 |
0.1 |
0.0 |
165,652 |
1.2 |
| Information and communication technologies industries |
0.0 |
0.8 |
-0.1 |
0.2 |
-0.2 |
1.0 |
66,555 |
4.1 |
| Energy sector |
-1.6 |
0.9 |
-2.4 |
-1.8 |
2.1 |
2.9 |
65,288 |
0.7 |
| r | revised |
| p | preliminary |
| 1. | Millions of chained (1997) dollars, seasonally adjusted at annual rates. |
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Note to readers
The monthly gross domestic product (GDP) by industry data are chained volume estimates with 1997 as their reference year. This means that the estimates for each industry and aggregate are obtained from a chained volume index multiplied by the industry's value added in 1997. For the period 1997 to 2003, the monthly estimates are benchmarked to annually chained Fisher volume indexes of GDP obtained from the constant-price input-output tables.
For the period starting with January 2004, the estimates are derived by chaining a fixed-weight Laspeyres volume index to the prior period. The fixed weights are the industry output and input prices of 2003. This makes the monthly GDP by industry estimates more comparable with the expenditure-based GDP data, chained quarterly.
Revisions
With this release of monthly GDP by industry, revisions have been made back to January 2006.
For more information about monthly GDP by industry, see the National Economic Accounts module on our website (http://www.statcan.ca/nea).
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Ontario exports to decline in 2007, level off in 2008, says EDC
OTTAWA- Ontario's export growth is forecast to decline by 3 per cent in 2007 before flattening out in 2008, according to a provincial export outlook by Export Development Canada (EDC). EDC Economics also forecasts that the auto and forestry sectors will begin to emerge from the bottom of their business cycles through 2008.
"Ontario exporters will continue to struggle in the near term. This
year's 3 per cent decline comes on the heels of a 1.4 per cent drop in 2006,
as U.S. weakness hits exports of motor vehicles, forestry and consumer
products, and industrial goods," said Stephen Poloz, Senior Vice-President of
Corporate Affairs and Chief Economist. "2008 will see exports level off, as US
economic performance picks up."
The auto sector accounts for more than 41 per cent of Ontario's exports,
and is projected to fall a further 6 per cent in 2007 as U.S. auto sales fall
to a 9-year low. In 2008, EDC expects auto exports to stagnate, as the US auto
market begins a modest recovery and the restructuring of domestic auto
producers nears completion. Strong global demand for industrial inputs and
robust commodity prices supported exports of industrial goods, including
metals, chemicals and plastics, in 2006. However, industrial export receipts
are expected to post zero growth in 2007 and a 1 per cent decline in 2008 as
commodity prices ease further. The industrial goods sector accounts for 26 per
cent of Ontario's exports.
Nationally, Canadian export volumes are forecast to decline by 1 per cent
in 2007 before rising by a modest 1 per cent in 2008. Canadian economic growth
is forecast to remain stable at 2.3 per cent in 2007 and 2.9 per cent in 2008.
Internationally, EDC is forecasting 4.5 per cent global economic growth in
2007 and 4.6 per cent growth in 2008. EDC's Global Export Forecast is
available at http://www.edc.ca/gef.
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G8 Industry Warns Leaders Over Protectionism, Trade
“Industry heads from the G8 nations urged political leaders in a novel
joint declaration on Wednesday to push ahead with the Doha trade round and
warned them against trying to create national champions.
Industry lobby groups from the eight leading economies…have for the first
time drawn up a list of issues they want addressed by G8 leaders at their
June summit. The six-point declaration, presented to the German Chancellor
Angela Merkel on Wednesday, included a plea to governments not to stand in
the way of cross-border mergers. … [and is] largely in line with the
agenda set by this year's G8 host Germany. They also include calls to
improve intellectual property rights, increase financial market
transparency, boost energy efficiency and support Africa. …”
[Reuters/Factiva]
Dow Jones writes that “… During her speech, Merkel also reaffirmed that
she opposes suggestions to enlarge the G8, stressing that issues with
other countries can be discussed in the group's outreach talks with
emerging economies.
Turning to calls by the G8 business lobby groups earlier Wednesday for
governments to provide freedom of investment including cross-border
investment, Merkel stressed that ‘foreign direct investments must be
welcomed.’ … ‘We have our experience with this in Europe. It seems every
country has grown accustomed to its own national champions,’ Merkel said,
pointing to fears by some countries over losing out in cross-border
mergers. …” [Dow Jones/Factiva]
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Study: Demographic changes across an urban-to-rural gradient 1971 to 2001
The growth in Canada's population during the past 30 years has been concentrated in the nation's largest metropolitan areas, and in rural areas on which these urban areas have a strong influence, according to a new report.
In general, rates of growth are weaker as the degree of rurality increases.
The report also found that migration from one part of the country to another was a key factor behind these varying growth patterns.
The most urbanized areas, except for Montréal, Toronto and Vancouver, experienced strong population growth as well as significant gains resulting from interregional migration. This was also the case with rural regions that had a strong metropolitan influence.
The most rural regions experienced weak demographic growth, and in some cases their population declined. This occurred despite the fact that their fertility was higher than other regions. Migration was in general less favourable to these regions.
The strong growth in Canada's three largest urban centres, Montréal, Toronto and Vancouver, has been due largely to the high numbers of international immigrants who decided to settle there.
The report found that the concentration of newcomers in these three big urban centres has helped increase the gap between them and the rest of the country in terms of ethnocultural diversity.
Also, interregional migration affected the age structure of the different regions, partially due to the movement of young adults toward the largest urban centres.
Population in metropolitan areas rose at three times the pace of rural areas
Between 1971 and 2001, the population living in metropolitan areas jumped by 45%, more than three times the rate of growth of only 13% in rural areas.
However, there were important differences in rates of growth among various types of urban and rural areas. The areas that experienced the strongest growth were either the most heavily populated metropolitan areas, or the rural areas with a strong metropolitan influence.
For example, there are six census metropolitan areas with populations of between 500,000 and 1.1 million, and these had a growth rate of 55% combined between 1971 and 2001. This was just slightly faster than the growth rate of 52% in Montreal, Toronto and Vancouver combined. These were the fastest growth rates in the nation.
In rural areas that were strongly influenced by metropolitan areas the population rose by 47%. This was faster than rates for medium and small urban areas.
For the other rural areas, demographic growth was considerably below the national average of 37%. In fact, it was negative in the regions without any metropolitan influence. These rural regions experienced a decline in their population over the 30-year period.
The study also found that strong population growth in the largest metropolitan areas appeared to depend on growth in their peripheral municipalities.
During this period, the population in the peripheral municipalities of the largest urban centres increased by more than 100%, four times the rate of growth of only 23% in the central municipalities. This phenomenon illustrates urban spread, which consists of a higher growth around, compared to within, the central municipalities.
Fertility rates lowest in the largest metropolitan areas
In 1971, every woman had slightly over 2.1 children, on average, just above what is known as the "replacement level". By early 2000, it had declined to about 1.5. In fact, 1971 was the last time fertility surpassed the replacement level.
The study found that fertility was lowest in the largest metropolitan areas and tended to rise steadily with the degree of rurality.
In fact, if population increases between 1971 and 2001 had depended only on fertility, the rural areas would have grown at a faster pace than the metropolitan areas.
Migration played a key role for demographic growth
The areas with the highest increase in their population all experienced a large number of migrants coming there to settle. In the three largest urban centres of the country, Montréal, Toronto and Vancouver, population growth came mostly from international immigration over the last 30 years.
This sustained immigration, along with the diversification of the immigrant's origins, contributed to the ethnocultural diversity in these three large regions. The percentage of visible minorities, of allophones, and of people with religious denominations other than Christian, is higher there than in all the other types of regions.
The strong growth observed in the other metropolitan areas with more than 500,000 inhabitants and in the rural areas with strong metropolitan influence was supplemented by gains in their migratory exchanges with the rest of the country.
The propensity of young adults from rural areas to move to the largest urban centres, along with the inverse trend for older adults, affected the age structure of the various types of areas. The proportion of seniors is lower in the largest metropolitan centres than in most of the other types of regions.
Executive Summary and Full Study
Note to readers
This report is based on the research paper "Demographic changes in Canada from 1971 to 2001 across an urban-to-rural gradient", released April 26, 2007.
The study used census data to examine demographic differences between urban and rural areas in Canada by analyzing regions along a gradient ranging from the largest metropolitan regions to the most rural areas. A constant geographic structure is applied to census data from 1971 to 2001 in order to maintain constant borders across the diverse regions over time.
In this study, the terms " | |
