Home sales rise for 5th month in a row in July - Canadanewsmedia
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Home sales rise for 5th month in a row in July

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Canada’s housing market is showing signs of coming out of the slumber it had been in since mortgage stress tests were implemented last year, as sales and prices have started to rise again, the Canadian Real Estate Association says.

CREA said Thursday that the average price of a Canadian home sold in July was up by 3.9 per cent compared to the same month a year earlier, and the number of homes sold has risen, too, by almost 13 per cent.

After hitting a six-year low in February of this year, activity seems to be rebounding across the country, as sales were up in about 60 per cent of all markets across the country.

“Sales are starting to rebound in places where they dropped when the mortgage stress test took effect at the beginning of 2018, but activity there remains well below levels recorded prior to its introduction,” CREA’s chief economist Gregory Klump said.

The average sale price of a resale home that sold in July was $499,000, a figure that has risen by 3.9 per cent in the past year. CREA says the average figure can be misleading because it tends to be skewed by activity in big, expensive cities. So they say another number, the House Price Index (HPI), is a better gauge of the market because it adjusts for the size of the market and the type of housing.

The HPI rose by 0.2 per cent on an annual basis in July. That’s the first uptick since January.

Eleven of the 18 housing markets tracked by the index were higher, especially in central and eastern Canada.

The Greater Vancouver and Fraser Valley areas were down by 9.4 and 6.7 per cent, respectively, in the past year. Despite the price decline, the sales figure rose by 26 per cent during the month. “Gains in Vancouver push the market back toward balanced market territory, suggesting the city is through the worst in terms of price declines,” Toronto-Dominion Bank economist James Marple said of Vancouver’s data.

City by city breakdown

The index fell by 3.5 in Calgary, 3.2 per cent in Edmonton, 4.4 per cent in Regina and 1.3 per cent in Saskatoon in the past year. In all four of those places, the index is lower today than it was five years ago. Everywhere else in Canada, the index has risen by between 20 and 80 per cent over that time period.

“The home pricing environment will likely remain weak in these cities until demand and supply return to better balance,” CREA said.

Ontario saw solid gains, including:

  • Guelph (up 6.9 per cent).
  • The Niagara Region (up 5.9 per cent).
  • Ottawa (up 8.9 per cent).
  • Hamilton-Burlington (up 5 per cent).
  • Oakville-Milton ( up 5 per cent).
  • The GTA (up 4.4 per cent).
  • Barrie (down 1.3 per cent).

Moving east, Montreal’s HPI rose by 7.23 per cent in the past year while Moncton’s was up  by 2.21 per cent.

“This can only be described as a solid month for the Canadian housing market,” Marple said. “As they have in the past, strong population growth, solid job growth and lower mortgage rates appear to be doing the job of supporting Canadian housing demand.”

“The immediate downside risk to home prices have diminished considerably,” he added. “While affordability will remain a constraint in major high-priced markets, prices appear more likely to increase than decrease over the next year.”

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Toronto Star shutting down StarMetro newspapers

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The Toronto Star is shutting down its StarMetro newspapers across Canada.

A Torstar spokesperson tells News media the final print editions in Vancouver, Edmonton, Calgary, Toronto and Halifax will be published Dec. 20, but that digital content will still be available.

“We are going digital-only outside of Ontario as more and more of our commuter readers are using their smartphones, laptops and tablets to access their news on their way to and from work,” Bob Hepburn told CBC News in an email.

“This trend, coupled with a corresponding decline in print advertising volumes, has decreased the need for a free daily commuter newspaper in these cities.”

An internal email sent to staff by Torstar president and CEO John Boynton stated “print advertising volumes have decreased significantly in recent months to levels below those required to make them commercially viable.”

Boynton’s memo, provided to CBC News, suggested 73 employees would be affected by the closures of the papers.

The memo also said there are plans to open new Star bureaus in the coming weeks in Vanouver, Edmonton, Calgary and Halifax that will be staffed by Star journalists. The jobs were going to be posted internally on Tuesday and externally on Wednesday.

CBC News has learned the new digital bureaus will be staffed by five reporters in Vancouver, five reporters in Alberta and one in Halifax.

It was only a year ago the company rebranded its free Metro daily newspapers across Canada. The rebrand included an investment that more than doubled the number of Metro journalists, The Star reported at the time.

By Tuesday afternoon, reporters for the paper were tweeting about the shutdown.

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Thousands of CN Rail employees on strike amid contract talks

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The federal government has urged Canadian National Railway Co. and the Teamsters Canada Rail Conference to continue negotiating as the roughly 3,200 conductors, trainpersons and yard workers went on strike.

Labour Minister Patty Hajdu said Tuesday the government is concerned about the impact of a work stoppage on Canadians, but remains hopeful the two sides will reach an agreement.

The rail workers walked off the job after failing to reach a deal by a midnight deadline.

Union spokesperson Christopher Monette said they were still in talks with CN in hopes of reaching a negotiated settlement and ending the dispute as soon as possible.

The union has said passenger rail services in the country’s three biggest cities would not be affected by the strike.

CN workers walk a picket line in Brampton, Ontario, after going on strike shortly after midnight. (Meagan Fitzpatrick/CBC)

It represents workers at commuter rail services including Go Transit in Toronto, Exo in Montreal and the West Coast Express in Vancouver, where passengers would remain unaffected.

The workers, who have been without a contract since July 23, say they’re concerned about long hours, fatigue and what they consider dangerous working conditions.

“We have members out there who are operating trains when they should in fact be resting,” Monette told CBC News after the strike began.

The dispute comes as CN confirmed Friday that it was cutting jobs across the railway as it deals with a weakening North American economy that has eroded demand.

“We are disappointed that the TCRC has initiated strike action which will result in a significant disruption to service,” Janet Drysdale, CN’s vice president of financial planning, said at the Scotiabank Transportation and Industrials Conference on Tuesday.

“We apologize to our customers, but we do appreciate their understanding that safety is always our first priority. Negotiations are expected to continue later today, under the watchful eye of federal mediators.”

Industries react

CN currently handles more than half of all Canadian chemicals production. It is the only railway to service the three major petrochemical centres in North America, which includes the Alberta’s Heartland, the U.S. Gulf Coast and southwestern Ontario.

The Canadian Association of Petroleum producers said in a statement that they are concerned about the strike and “any developments that can negatively impact on the availability of rail capacity, particularly in light of the current shortage of available pipeline capacity relative to oil production in western Canada.”

The association said they will be monitoring the potential impact the strike will have on the industry’s competitiveness.

Chemistry Industry Association of Canada (CIAC) urged the Canadian government, CN, and Teamsters to work together to prevent serious damage the strike will have on the Canadian economy.

“Fully $38 million worth of industrial chemical products rely on CN’s network to get to their destinations every single day, and … the economic impact of the work stoppage is $1 million per day per facility that is shutdown,” Bob Masterson, chief executive officer of CIAC, said in a statement.

Mining said to be 52.3% of revenue

The Mining Association of Canada (MAC) also expressed “serious concern” regarding the strike and how it will affect the mining sector.

According to the association, the mining industry accounted for 52.3 per cent of rail freight revenue in 2018.

“In the minerals and metals sector, experience has demonstrated that a rail stoppage significantly impacts the ability of companies to bring essential inputs to their mines, and the ability to move mineral products and by-products to downstream customers,” said Pierre Gratton, chief executive of MAC.

“MAC members have advised that this strike will result in a severe reduction or elimination of railway capacity and will trigger the closure of mines with concurrent lay-offs of thousands of employees beginning in a matter of days.”

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Major Encana shareholder rejects company move to the U.S.

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CALGARY – A firm that owns about four per cent of Encana says it will be voting against its proposed plan to move its headquarters from Calgary to Denver, Colorado.

Letko, Brousseau & Associates Inc., an investment firm based in Montreal, says the company’s move would affect Canadian investors and put pressure on the company’s shares.

“The company argues that new U.S. index fund investors would replace Canadian shareholders,” Letko Brosseau said in a release. “That expectation is at best speculative, and is outweighed by the certainty of forced sales by, and significant losses for, Canadian investors.”

The firm says a move to the U.S. is against the company’s best interests and shows it is not concerned about its shareholders.

Letko is the fourth largest shareholder in the company.

It’s unclear whether or not other shareholders will get on board to oppose the move but if they do, it’s likely the move to the U.S., the name change and share consolidation won’t happen.

Encana first announced it would be moving its headquarters on Oct. 31 and renaming itself Ovintiv Inc.

CEO Doug Suttles says the changes will not impact the day-to-day operations of the company and does not anticipate any changes to its Canadian workforce.

Since Sept. 30, 2018, Encana shares have dropped by almost 70 per cent.

Encana needs 66 per cent support for the ‘re-domiciling’ to proceed.

The vote is expected to take place in early 2020.

(With files from BNN’s Tara Weber and BNN Bloomberg)

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