With consecutive interest rate hikes across G7 nations, borrowing is getting more expensive for those looking to take on a mortgage.
But Canada may be facing more challenges than its G7 peers.
CTVNews.ca looks at recent data by the intergovernmental Organisation for Economic Co-operation and Development (OECD) to analyze where Canada stands in comparison with other G7 nations when it comes to housing affordability, housing prices, and indebtedness.
Central banks in G7 nations have been aggressive in addressing the rising cost of living through consecutive interest rate hikes.
High interest rates typically would mean high debt servicing costs, which eventually increase the cost of everything—from mortgages to credit cards and loans. The thought behind the hike is to discourage consumers from spending. To address the cost of living crisis, the Bank of Canada steadily raised interest rates, reaching 3.75 per cent last month, from just 0.25 per cent in January this year.
CANADA HAS A HIGH PRICE-TO-INCOME RATIO
When compared with other G7 nations, Canada has the most expensive housing market.
Data from OECD shows that the price-to-income ratio—also known as the measure of affordability—remained the highest for Canada, followed by Germany.
According to the quarterly data released by OECD, Canada’s ratio index reached 148.16 in the second quarter of 2022, the highest amongst G7 nations, which means that housing prices grew at a rate of 48 per cent faster than income since 2015. By comparison, house prices in the U.S. grew roughly 40 per cent faster than incomes since 2015.
In a virtual conference in March this year, Sharon Kozicki, the deputy governor with the Bank of Canada, said that Canadian households that have taken out mortgages with high loan-to-income ratios probably aren’t the ones who have a lot of cash in their bank accounts.
She said rising mortgages can trigger a slowdown in household spending and if enough of them reduce spending, it could impact the entire economy, resulting in slow growth and increased unemployment.
“A drop in house prices could worsen these effects,” she said.
HIGHEST NOMINAL HOUSING PRICE IN G7 NATIONS
Early in the pandemic, higher savings, and historically low interest rates encouraged some Canadians to buy homes. The buying pattern also shifted with people working remotely during the pandemic, which encouraged many Canadians to seek homes in the suburbs, where houses were larger and more affordable. A high disposable income further led to a surge in demand for home mortgages.
In the current high-interest rate environment, higher mortgage rates have contributed to a sharp decline in housing activity, leading to a decline in house prices. According to Wowa’s latest housing market report, average home prices in Canada have fallen by 22 per cent in the span of 7 months.
But the cooling housing market in Canada should not be mistaken for increasing affordability, warned Rebecca Oakes, Vice-President of Advanced Analytics at Equifax Canada in a recent press release.
She said affordability depended not just on home prices, but also on monthly payment obligations for a mortgage.“Higher interest rates coupled with high inflation can really stretch a consumer’s monthly expenditure, while many could find it difficult to qualify for a mortgage,” she said.
But despite cooling markets, recent data released by OECD shows that Canada has the highest nominal housing price. According to the annual data released by OECD, the ratio index for Canada grew 59 per cent since 2015, the highest jump recorded by any G7 nation, followed closely by Germany, which showed an annual jump of 58 per cent since 2015.
In the second quarter of 2022, Canada’s nominal house pricing index was 183.9, followed by the U.S. with a price index of 182
HIGHEST HOUSEHOLD DEBT ACROSS G7 NATIONS
Due to the soaring housing prices during the pandemic, Canadians took on more mortgage debt in order to pay for a home.
Data from OECD shows that Canadians remain the most indebted in G7 nations and tend to take on more household debt than their G7 peers.
In 2021—the most recent year for which data are available for all countries—household debt in Canada was 185 per cent of disposable income.
In 2020, household debt in Canada was equivalent to 177.3 per cent of disposable income. In comparison, the U.K. has the second-highest household debt at 148 per cent. In comparison to OECD countries, which ranks 38 countries, Canada ranks ninth after countries such as Denmark and Norway that top the list with 255 per cent and 241 per cent of disposable income with household debt, respectively.
Kozicki said high indebtedness amongst Canadians could amplify the impact of interest rates. An additional concern is that a growing share of new mortgages also has variable rates, which tend to fluctuate with the bank’s policy interest rates.
New job as head baker helps Ukrainian newcomer find familiarity in Winnipeg – CBC.ca
Life in Canada is off to a sweet start for a Ukrainian baker who has found a new home for her creations in Winnipeg.
Hanna Tokar, who has only been in Canada for just over a month, is now the head baker at the Winnipeg location of the Butter Tart Lady.
Michelle Wierda, the owner of the bakery, offered her a job after seeing a Facebook post Tokar made where she shared her struggles finding employment in Winnipeg.
“I saw her pictures and I thought, ‘I have to interview her,'” Wierda told host Marcy Markusa in a Tuesday interview with CBC’s Information Radio.
“I saw her attention to detail. Her work is just spectacular. It looked very delicious.”
Before coming to Canada, Tokar owned a bakery she operated by herself in her hometown of Kherson, a port city in southern Ukraine.
She was forced to permanently close its doors when she came to Canada, fleeing Kherson after Russia’s invasion of Ukraine.
Tokar said she was shocked to get the offer to work at the Winnipeg bakery.
“I didn’t expect [to] … have an offer to work in a bakery, because it was actually my dream to have that job here. So it was amazing for me,” she told Information Radio.
Feb. 24 will mark the one-year anniversary of the war in Ukraine.
Since then, more than 800,000 Ukrainian nationals and their family members have applied for special temporary resident visas to come to Canada, according to Immigration, Refugees and Citizenship Canada. The ministry said as of late December, more than 132,000 Ukrainian nationals had entered Canada since the start of 2022.
While Tokar’s parents are safe elsewhere in Europe, she says she prays for her grandparents who stayed in Kherson, which has experienced heavy damage due to shelling.
“I actually miss Ukraine. I actually miss my friends and my life — my previous life,” Tokar said.
“I really want them to really be proud of me, so that’s why when I have a job I called them and my grandparents really cried.”
As she settles into her new role as head baker at the Butter Tart Lady’s Winnipeg location, the return to what has been a lifelong passion provides Tokar with familiarity in a new place.
Although she is still new to the position, Tokar is already infusing the menu with traditional Ukrainian treats, something Wierda is excited about.
Of these treats is pampushky, a Ukrainian garlic bread that is traditionally served with borscht, Tokar explained.
On the two days she made pampushky, it sold out immediately, said Wierda.
As they look toward to the future, the two women are excited for their partnership.
“I love to be so creative and imaginative, and that’s what I’ve seen in Hanna, is that she’s very determined,” Wierda said. “She has a strong ambition to excellence and she’s always researching, looking for new ideas, new things.”
For Tokar, this experience provides hope for what life in Canada can be.
“You know, I never expect that, like, some foreign people can support me like that,” she said.
“And I really like appreciate the kindness of people.”
Information Radio – MB6:15Baker from Ukraine is frosting cupcakes while connecting with a new community in Winnipeg
Canadian team discovers power-draining flaw in most laptop and phone batteries – CBC.ca
The phone, tablet or laptop you’re reading this on is likely having its battery slowly drained because of a surprising and widespread manufacturing flaw, according to researchers in Halifax.
“This is something that is totally unexpected and something that probably no one thought of,” said Michael Metzger, an assistant professor at Dalhousie University.
The problem? Tiny pieces of tape that hold the battery components together are made from the wrong type of plastic.
Batteries release power because of a chemical reaction. Inside each battery cell, there are two types of metal. One acts as a positive electrode and one as a negative electrode.
These electrodes are held in an electrolyte fluid or paste that is often a form of lithium.
When you connect cables to each end of the battery, electrons flow through the cables — providing power to light bulbs, laptops, or whatever else is on the circuit — and return to the battery.
Trouble starts if those electrons don’t follow the cables.
When electrons move from one charged side of the battery to the other through the electrolyte fluid, it’s called self-discharge. The battery is being depleted internally without sending out electrical current.
This is the reason why devices that are fully charged can slowly lose their charge while they’re turned off.
“These days, batteries are very good,” Metzger said. “But, like with any product, you want it perfected. And you want to eliminate even small rates of self-discharge.”
In the search for the perfect battery, researchers have to watch how each one performs over its full lifespan.
“We do a lot of our tests at elevated temperatures these days. We want to be able to do testing in reasonable time frames,” Metzger said. Heat makes a battery degrade more quickly, he explained.
At Dalhousie University’s battery lab, dozens of experimental battery cells are being charged and discharged again and again, in environments as hot as 85 C.
For comparison, eggs fry at around 70 C.
If researchers can learn why a battery eventually fails, they can tweak the positive electrode, negative electrode, or electrolyte fluid.
During one of these tests, the clear electrolyte fluid turned bright red. The team was puzzled.
It isn’t supposed to do that, according to Metzger. “A battery’s a closed system,” he said.
Something new had been created inside the battery.
They did a chemical analysis of the red substance and found it was dimethyl terephthalate (DMT). It’s a substance that shuttles electrons within the battery, rather than having them flow outside through cables and generate electricity.
Shuttling electrons internally depletes the battery’s charge, even if it isn’t connected to a circuit or electrical device.
But if a battery is sealed by the manufacturer, where did the DMT come from?
Through the chemical analysis, the team realized that DMT has a similar structure to another molecule: polyethylene terephthalate (PET).
PET is a type of plastic used in household items like water bottles, food containers and synthetic carpets. But what was plastic doing inside the battery?
Tale of the tape
Piece by piece, the team analyzed the battery components. They realized that the thin strips of metal and insulation coiled tightly inside the casing were held together with tape.
Those small segments of tape were made of PET — the type of plastic that had been causing the electrolyte fluid to turn red, and self-discharge the battery.
“A lot of companies use PET tape,” said Metzger. “That’s why it was a quite important discovery, this realization that this tape is actually not inert.”
Tech industry takes notice
Metzger and the team began sharing their discovery publicly in November 2022, in publications and at seminars.
Some of the world’s largest computer-hardware companies and electric-vehicle manufacturers were very interested.
“A lot of the companies made clear that this is very relevant to them,” Metzger said. “They want to make changes to these components in their battery cells because, of course, they want to avoid self-discharge.”
The team even proposed a solution to the problem: use a slightly more expensive, but also more stable, plastic compound.
One option is polypropylene, which is typically used to make more durable plastic items like outdoor furniture or reusable water bottles.
“We realized that it [polypropylene] doesn’t easily decompose like PET, and doesn’t form these unwanted molecules,” Metzger said. “So currently, we have very encouraging results that the self-discharges are truly eliminated by moving away from this PET tape.”
U.S. escalates trade concerns over Canada's online news and streaming bills – The Globe and Mail
Washington has escalated its concerns about the trade implications of Ottawa’s online streaming and online news bills, prompting a legal expert to predict the issue will be raised during President Joe Biden’s planned visit to Canada in March.
Deputy United States trade representative Jayme White stressed “ongoing concerns” about the two Canadian bills at a meeting last week with Rob Stewart, Canada’s deputy minister for international trade.
Senior Democrat and Republican senators on the influential U.S. Senate finance committee also weighed in last week, writing a letter to U.S. Trade Representative Katherine Tai about Canada’s “troubling policies,” which they said target U.S technology companies.
Both bills are making their way through Canada’s Parliament. Bill C-11 reached a third-reading debate in the Senate on Tuesday.
The U.S. is concerned that the two bills unfairly single out American firms, including Google, Facebook and Netflix.
Bill C-11 would update Canada’s broadcast laws, giving the Canadian Radio-television and Telecommunications Commission (CRTC) the power to regulate streaming platforms such as Netflix, YouTube, Amazon Prime and Spotify.
The streaming platforms would have to promote Canadian content – including films, TV shows, music and music videos – and fund its creation.
Bill C-18 would force Google and Facebook to strike deals with news organizations, including broadcasters, to compensate them for using their work. The CRTC would have a role in overseeing the process.
Two sources told The Globe and Mail that the CRTC’s lack of experience regulating print media and digital platforms was raised by Ms. Tai and her team in previous talks with Canada’s Trade Minister, Mary Ng. The Globe is not naming the sources because they were not authorized to speak publicly on the issue.
A U.S. readout of Mr. White’s meeting with Mr. Stewart said the American official had “expressed the United States’ ongoing concerns with … pending legislation in the Canadian Parliament that could impact digital streaming services and online news sharing and discriminate against U.S. businesses.”
Shanti Cosentino, a spokeswoman for Ms. Ng, said the Minister “has reiterated to Ambassador Tai that both Bill C-11 and C-18 are in line with our trade obligations and do not discriminate against U.S. businesses.”
Last week, Democrat Ron Wyden, chairman of the U.S. Senate committee on finance, and Republican Michael Crapo, a senior member of the committee, raised concerns in a letter to Ms. Tai that the bills could breach the terms of the United-States-Mexico-Canada Trade Agreement (USMCA).
Michael Geist, the University of Ottawa’s Canada Research Chair in internet law, said the intervention from both parties means it is now likely the issue will be on the agenda when Mr. Biden visits Canada.
“To see this raised in a bipartisan manner by two U.S. Senators from the powerful finance committee suggests that the issue is gaining traction in Congress,” he said.
The senators urged Ms. Tai to take enforcement action if Canada fails to meet its trade obligations.
Their letter said the online streaming bill would “mandate preferential treatment for Canadian content and deprive U.S. creatives of the North American market, access they were promised under USMCA.”
It added that Bill C-18 “targets U.S. companies for the benefit of Canadian news producers and raises national treatment concerns under USMCA.”
But Toronto-based trade lawyer and former diplomat Lawrence Herman, founder of Herman and Associates, said the U.S. politicians’ intervention is “a reflection of a well-orchestrated lobbying effort by the major digital platforms.”
He said there is no evidence that either bill discriminates against American companies.
“Canada is well armed to defend any trade complaint,” he said.
On Thursday, as Canada’s Senate debated Bill C-11 at third reading, Senator Dennis Dawson, sponsor of the bill in the Senate, said the legislation has been thoroughly scrutinized and should now be passed.
The Senate was due to begin debating C-18 this week. But that could now be delayed because of an error in the printed text of the bill sent over from the Commons, the Speaker of the Senate said.
The incorrect text included a sub-amendment that had not actually passed in a Commons committee. It will now have to be pulped and reprinted.
IMF raises growth outlook for first time in a year, expects inflation has peaked – Financial Post
Marner shows off custom All-Star Game skates at Maple Leafs practice – NHL.com
OMERS names capital markets head as next chief investment officer – The Globe and Mail
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Search for life on Mars accelerates as new bodies of water found below planet’s surface
Sports18 hours ago
Jays Sign Chad Green
Business20 hours ago
Stock market news live updates: Stocks wrap up strong January as Fed decision looms
Business19 hours ago
Canadian economy grew slightly in November, expected to slow further
Investment19 hours ago
Intel Cuts Pay Across Company to Preserve Cash for Investment
Tech19 hours ago
Canadian discovery could help batteries last longer
Science18 hours ago
New AI algorithm helps find 8 radio signals from space
Science19 hours ago
How to spot the green comet in Manitoba
Sports20 hours ago
Broncos trade for former Saints HC Payton