Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada To Become A Dystopian Nightmare, Households Will Flee: Gov Report
Canada is heading in the direction of becoming a dystopian nightmare. That was the take from a new report from Horizons Canada, the Government of Canada (GoC) agency in charge of foresight on policy. The authors warn we’re heading towards less prosperity, and eliminating class mobility. Social regression is set to become the norm, as households get used to worse conditions than their parents. Intergenerational wealth will be perceived as a prerequisite for success, or even buying a home. The emerging trends can quickly transform Canada from a place where immigrants seek opportunity, to one where its citizens flee looking for it.
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Canadian Housing Starts Collapse As Ontario Falls To 2009 Levels
Canadian policymakers are boasting of stimulus and deregulation they see stimulating homebuilding. Unfortunately, the data shows the exact opposite happening as hundreds of billions in stimulus produce fewer homes. The stimulus is preserving market inefficiencies, becoming counter productive. As a result, housing starts in Ontario have plummeted to the lowest level since 2009, during the Global Financial Crisis. So much for red tape being the primary drag on building new homes.
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Canadian Labor Market Weaker Than Pre-Pandemic, May Get Worse: BMO
Canadians should prepare for a much harder job market than they’ve become used to. The job vacancy rate, the share of total jobs that remain unfilled, fell to just 2.9% in February—about half the peak seen in 2022. At the same time the unemployment rate has climbed to 6.7%, much higher than the 6% it hovered at in the years leading up to the 2020s. Consequently, economists at BMO are warning economists the job market has gone from the best on record to worse than it was pre-pandemic. A problem they see amplified in the coming months as the impact of the trade war finally begins to reach the market.
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Canada Lost 370k Payroll Jobs As Tariff Conflict Began… Or Gained 80k
Canada’s unadjusted data shows the economy shed 370k payroll jobs in February, the first full month since tariff threats began. Seasonally adjusted data shows the economy gained roughly 80k jobs over the same period. At first glance this seems like an overadjustment, but a quick look at historical data shows it was much smaller than prior years. It’s typical of the market at this time of year, throwing another wrench into the gears of analysis. If this is seasonal, tariffs have yet to materially impact the data.
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Canadian Real Estate Shortage Overstated, Condos Won’t Fix Costs: BMO
Canada’s real estate shortage has been greatly overstated and condos won’t fix affordability. That was the take in a new report from BMO, one of the country’s biggest banks. Despite the narrative, their analysis argues that Canada has generally kept up with supply until 2022. That’s when policymakers ramped up immigration, and manufactured a housing shortage. One that’s not millions of units as policymakers have suggested but a much more manageable and reasonable amount closer to 500k units.
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Canada Likely To Face Deep Recession Despite Lower Tariffs: Oxford Econ
Canada is being hit with much lower tariffs than originally anticipated, but the economic outlook is still worsening. A new report from Oxford Economics, reveals the tariff impact is much smaller than modeled. That should be good news, but unfortunately consumer perception is worse than anticipated. Anxious households don’t consume, delaying large purchases and consumption. It may seem like a smart idea, but excessive risk aversion slows the economy down further, and amplifies the downside.
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