Latest news with #RobertKavcic
Yahoo
16-07-2025
- Business
- Yahoo
Canada's June housing numbers reveal a market that remains 'stagnant,' say economists
Canada's housing market perked up again in June, with sales rising from May after declining at the end of last year through to April, but economists don't think the market is out of the woods just yet. National home sales rose 2.8 per cent in June from May, according to the Canadian Real Estate Association (CREA) on Tuesday, after rising 3.6 per cent in May from April. CREA said sales have 'rebounded' 17.3 per cent since April. Prices, however, were essentially flat in June from May and down 1.3 per cent from a year ago and listings at the end of June were up 11.4 per cent from a year ago. Here's where economists think the Canadian housing market is headed for the rest of the year. 'Canada's housing market remains stagnant,' Robert Kavcic, a senior economist at BMO Capital Markets, said in a note, basing his opinion on 'subdued sales activity, solid new listings flow and falling prices.' He said the improvement in sales was because sellers backed down on seeking prices reminiscent of the hot housing days of 2022. But he thinks there are three things holding back the housing market from fully rebounding, including ongoing uncertainty from the trade war, mortgage rates of approximately four per cent 'are not low enough to improve the affordability calculus in a demand-sparking way' and 'market psychology appears bearish,' meaning buyers, who are expecting prices to fall, are holding back from purchasing. Southern Ontario, including cities such as Toronto, Kitchener-Waterloo and Barrie, was a 'weak spot,' with a condo glut pushing prices down and single-detached prices falling as well. Sales in Calgary fell 18 per cent, a major turnaround from a few years ago when that market was overheated. 'The resale housing market took another small positive step in June, but it will likely return to the doldrums if a trade deal isn't reached by the new Aug. 1 deadline when the U.S. threatens to hike tariffs on Canada to 35 per cent,' Tony Stillo, director of Canada Economics at Oxford Economics Ltd., said in a note. Despite three months of gains in home sales, he said the market has a hill to climb, with activity still 14 per cent below the five-year average. Furthermore, the multiple listings service (MLS) benchmark home price was down in June for the seventh straight month and the benchmark price has shrunk almost 18 per cent from its high in February 2022. 'Unless a deal is reached to immediately reduce U.S. tariffs, Canada's resale housing downturn could extend into 2026,' Stillo said. Oxford forecasted that a recession brought on by a trade war could result in 140,000 layoffs, more distressed selling of homes and reduced demand, which could push home prices lower. Canada's housing market has 'reversed' the gains in sales and prices made after the Bank of Canada started cutting interest rates in June 2024, Daren King, an economist at National Bank of Canada Financial Markets, said in a note. Sales increased in six of the 10 provinces in June, with activity up seven per cent in Prince Edward Island, 5.8 per cent in British Columbia, 5.3 per cent in Ontario, 3.5 per cent in Nova Scotia, 2.7 per cent in Saskatchewan and 2.3 per cent in Quebec. Sales fell 6.4 per cent in New Brunswick, 4.5 per cent in Newfoundland, 2.1 per cent in Manitoba and 1.7 per cent in Alberta. King said it looks like a cooling in trade tensions, which appears to have since evaporated, opened the door for some buyers to purchase a home. Canada's home sales rise for second month, but market 'not out of the woods yet': CREA 'From bad to terrible': Toronto's market for new condos has fallen off a cliff 'It is still too early to say whether this is the beginning of a sustained upward trend for the Canadian real estate market,' he said. For the first half of the year, total home sales shrank 4.6 per cent from the same period in 2024 and 'were at their lowest level since 2020,' he said. • Email: gmvsuhanic@
Time of India
11-07-2025
- Business
- Time of India
China the big winner as Trump slaps massive copper tariffs to crush Canada
President Donald Trump 's plan to impose a sweeping 50 percent tariff on all copper imports to the United States is sending shockwaves through North American supply chains. But while the goal is to strengthen American industry, experts warn the policy could cripple Canada's copper exports and hand China a strategic trade advantage. China exported over $866 million worth of copper to the United States in 2024, according to the United Nations COMTRADE database. Now, with Canadian and Chilean copper suddenly more expensive under the tariff, US manufacturers may be forced to turn to China's cheaper, state-backed metal, despite ongoing tensions between Washington and Beijing. Why will Canada be affected? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Beachfront Living in Mumbai at Sunteck Beach Residences Sunteck Realty Learn More Undo The hardest blow will land north of the border. Canada is America's second-largest source of imported copper, and Quebec accounts for the lion's share of those shipments. 'Regionally, Quebec remains in the crosshairs,' said Robert Kavcic, senior economist at the Bank of Montreal. 'That would leave combined metal exports exposed to high tariffs north of 3 percent of GDP, or twice the next closest province.' Live Events Quebec's economy is deeply tied to copper, with Canada's only smelter in Rouyn-Noranda and a major refinery in Montreal. Thousands of workers are directly and indirectly linked to the copper trade. Now, many of those jobs could be at risk. A strategic win for Beijing Copper is essential to modern industry, from electric vehicles to infrastructure to defense equipment. Raising prices on imports doesn't eliminate demand, it reroutes it. And right now, the cheapest and most accessible copper may be coming from China. That means US manufacturers could become more dependent on Chinese suppliers, even as the administration frames the tariff as a national security measure. Already the world's largest copper refiner, China is aggressively securing global copper supplies, from Africa to Latin America. This tariff could accelerate that dominance by pricing out allies like Canada and giving Chinese producers a bigger share of the US market. Trump's strategy may backfire at home. Copper is widely used in construction, electrical wiring, vehicles, and appliances. A sudden increase in copper prices, already rising since the announcement, will impact not only Canadian exporters but also American manufacturers. Quebec Premier François Legault has not ruled out provincial support for the industry and is urging the federal government to respond. The federal government has not yet commented on possible countermeasures.
Globe and Mail
10-07-2025
- Business
- Globe and Mail
Quebec braces for biggest hit from Trump's metal tariffs
President Donald Trump's proposed 50-per-cent tariff on all copper entering the U.S. will, like many of his other duties, disproportionately hit Canada. This country is America's second-largest source of imported copper after Chile. But as with Mr. Trump's earlier tariffs on steel and aluminum, the new U.S. copper tax, which he said would kick in on Aug. 1, will fall heaviest on Central Canada, and in particular, Quebec, wrote Robert Kavcic, senior economist at Bank of Montreal, in a note. 'Regionally, Quebec remains in the crosshairs, accounting for most of Canada's U.S. copper shipments,' he wrote. 'That would leave combined metal exports exposed to high tariffs north of 3 per cent of GDP, or twice the next closest province.' Copper is widely used in everything from construction to automobiles to appliances, and the spike in prices since Mr. Trump's tariff announcement will hit the bottom lines of a large number of industries. The impact of the tariff on jobs in Quebec, home to Canada's sole copper smelting facility and a major copper refinery, is still unclear. While it will take the U.S. years to build up its own copper mining, smelting and refining capacity, higher prices could put Quebec's copper industry at a disadvantage to rivals in China that can produce at lower costs. 'Even if a copper tariff would be relatively contained, it would be another shot that impacts business confidence more broadly,' Mr. Kavcic wrote. Decoder is a weekly feature that unpacks an important economic chart.
Yahoo
08-07-2025
- Business
- Yahoo
Posthaste: Canadians might want to brace for bigger federal budget deficit than they thought
Canadians are in the dark about Ottawa's finances as they wait for the budget to be unveiled in the fall, but economists say they should probably brace for a bigger deficit than has been projected. How much bigger? Quite a bit, according to BMO Capital Markets. 'Suffice it to say that both the Parliamentary Budget Officer's March baseline ($46.8 billion deficit) and the Liberal platform ($62.3 billion) are likely underestimating the size of the FY25/26 shortfall,' said Robert Kavcic, senior economist with BMO Capital Markets in a recent note. A lot has changed since Prime Minister Mark Carney won the election, and BMO now estimates the federal deficit could climb towards $80 billion or about 2.5 per cent of GDP. First there are the knowns. Measures in the Liberal platform to offer relief to Canadians are already coming into play, such as the July 1 personal income tax cut, cancellation of the capital gains inclusion rate hike and GST relief for some new home buyers. Then there are the unknowns. The sudden cancellation of Canada's digital services tax after U.S. President Donald Trump broke off trade talks will cost the government about $7 billion in lost revenue, BMO estimates. Defence is another 'major shift.' The increase in defence spending to 2 per cent of GDP this fiscal year and 5 per cent by 2035 means $8 billion more in incremental spending in the 2025/26 fiscal year, said Kavcic. The de-escalation of the trade war with the U.S. and possibility of a deal is good news and means the federal government can likely trim the $3 billion it had earmarked for direct support to those affected by tariffs. On the flip side, the $20 billion Ottawa put down as retaliatory tariff revenue will also likely fall short. 'Given the pause in some measures, and a looming trade deal likely to scale back some others, that figure could come in $10-to-$15 billion lower,' said Kavcic. During the election campaign, Carney said he would slow growth in government spending to about 2 per cent annually, down from 9 per cent under Justin Trudeau. And there are already signs the government is working on it. Finance Minister Francois-Philippe Champagne reportedly sent a letter to cabinet members this week urging them to find ways to cut program spending by 7.5 per cent for the 2026-27 fiscal year, which begins next April. Kavcic said government program spending climbed steadily under Trudeau to about 16 per cent of GDP by 2024/25. Before that, it was relatively stable at about 13 per cent of GDP. 'Now, it's unlikely we're going to see spending retrench back to those levels, as cuts will more likely be back-filled with updated policy priorities,' he said. But if an $80-billion deficit makes your eyes water, the economist offers some context that might help. 'While a wave of red ink is rolling over Canada's budget, it still pales in comparison to the tsunami south of the border,' he said. Trump's One Big Beautiful bill is set to raise the U.S. deficit above $2 trillion next year, more than 6 per cent of GDP. There is also reason to hope that the pro-growth policies behind Canada's deficit — tax relief and infrastructure spending — will boost the economy and have longer-term payoffs, he said. to get Posthaste delivered straight to your wins the 'standout performer' of the 21st century, returning more than 11 times its value from the end of 1999, says Deutsche Bank Research. That's compared to 6.8 times for the S&P 500. The yellow metal also had its strongest first half of the year since 1980. The Canada Mortgage and Housing Corporation will provide an update on rental market conditions in Vancouver, Edmonton, Calgary, Toronto, Ottawa, Montreal, and Halifax Today's Data: United States consumer credit, NFIB small business optimism Carney government's nation-building projects list expected to draw from these five areas, says source How the trade war is turning into a tourism win for Canada Amazon and Walmart go head-to-head in online discount battle It's a tough time to be a 60/40 investor. The model, once a reliable framework for conservative investors, has struggled to provide the downside protection it historically offered, writes investing pro Martin Pelletier. Bonds have failed to hedge equity risk and volatility has become more frequent and more emotionally charged. That's why goal-based investing works in uncertain times, says Pelletier. Find out more Recently, we published a feature on the death of the summer job as student unemployment reaches crisis levels. We want to hear directly from Canadians aged 15-24 about their summer job search. Send us your story, in 50-100 words, and we'll publish the best submissions in an upcoming edition of the Financial Post. You can submit your story by email to fp_economy@ under the subject heading 'Summer job stories.' Please include your name, your age, the city and province where you reside, and a phone number to reach you. Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@ with your contact info and the gist of your problem and we'll find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Plus check his mortgage rate page for Canada's lowest national mortgage rates, updated daily. Visit the Financial Post's YouTube channel for interviews with Canada's leading experts in business, economics, housing, the energy sector and more. Today's Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@ Here are 5 Canadian cities where you can make less and still buy a home Ready for summer travel? Your checklist may have some holes
Yahoo
17-06-2025
- Business
- Yahoo
Posthaste: What does the TSX's record run say about the economy? Maybe not as much as you'd hope
Canada's stock market has been on a tear lately. Since just before the United States election in November, the S&P/TSX composite index has outperformed both the S&P 500 and the EAFE (Europe, Australasia, and the Far East), according to BMO Capital Markets, and hit a record high this month. So is this a good omen for the Canadian economy? BMO senior economist Robert Kavcic looked at the reasons behind the rally in a recent note entitled 'Is the TSX Glitter Economic Gold?' Investors don't like uncertainty and the turmoil thrown up by U.S. President Donald Trump's trade war has been huge. The first thing to remember, though, is markets are always looking at least three to six months ahead. Kavcic said the worst-case scenario for tariffs was arguably priced in months ago and since then Canada's exemptions under the Canada-United-States-Mexico Agreement and a relative pass on Liberation Day has signalled that the tariff bark could be worse than its bite. The direct hit of tariffs on the country has been narrow, he said. Steel and aluminium producers face hefty 50 per cent duties, and some auto parts have been penalized, but these industries represent only about 1 per cent of the TSX index. Before the trade war broke out, the TSX's forward earnings multiple was around 15x, compared with above 22x for the S&P 500, 'a wide gap from a historical perspective,' said Kavcic. Canada's central bank cut earlier and deeper than most other advanced economies, leaving its policy rate at a much more neutral level than the Federal Reserve's. 'The 225 bps of easing in the past year could be taking the brakes off the economy (with a six-to-12-month lag) just when it needs some help, and the TSX could be reflecting that,' he said. Over the past 25 years, the correlation between TSX performance and economic growth has been positive, but not as strong as in the United States, where the S&P 500 proves a better bellwether, said Kavcic. This comes down to composition. The TSX is dominated by financials and energy/materials. While the former picks up on economic conditions, the latter has less sway in the economy than it used to, he said. Case in point are gold stocks which were five of the top 10 contributors to the TSX's increase this year, and account for about a third of the gain year to date. The big guns of the economy, industrials, consumer spending and real estate represent only 12 per cent, 7 per cent and 2 per cent of the index, respectively. 'The TSX is notoriously not a perfect reflection of the underlying Canadian economy given its composition,' said Kavcic. While the resilience of the Canada's equity market in this tumultuous time is impressive, Kavcic said BMO would be cautious in passing that strength into the economic outlook. However, 'if the market is indeed discounting a manageable outcome — we'll take it.' to get Posthaste delivered straight to your appears to be slipping back into Canada's housing market as data Monday showed home sales rose in May from the month before for the first time in more than six months. 'While one good month of home sales doesn't make a trend, there may be signs of cautious optimism for the resale market for those buyers who remain little affected by the ongoing trade war,' said Kari Norman, an economist with Desjardins Group. 'The combination of lower prices, more inventory and less economic uncertainty may continue to entice more homebuyers back into the market this summer.' New listings increased by over 3 per cent, but the number of months of inventory edged back for the first time in six months from 5.0 in April to 4.9 in May. G7 summit in Kananaskis, Alta. continues Today's Data: Canada international securities transactions, United States retail sales, industrial production and NAHB Housing Market Index Trump said he still favours tariffs against Canada as negotiators sit down at G7 The bond market's long slump: What it means for investors Canada's home sales rise for the first time in more than six months The U.S. bond market is in uncharted territory. The drawdown over 58 consecutive months is by far the longest such stretch in recorded history during which the market has endured a peak-to-trough decline of -17.2 per cent, a staggering figure for an asset class traditionally viewed as a safe haven, writes investing pro Martin Pelletier. It's a stark reminder for investors that even the most stable-seeming assets are not immune to structural shifts. The message is clear: The old rules may no longer apply, and adaptation is not optional, it's essential. Read on for strategies Last week, we published a feature on the death of the summer job as student unemployment reaches crisis levels. We want to hear directly from Canadians aged 15-24 about their summer job search. Send us your story, in 50-100 words, and we'll publish the best submissions in an upcoming edition of the Financial Post. You can submit your story by email to fp_economy@ under the subject heading 'Summer job stories.' Please include your name, your age, the city and province where you reside, and a phone number to reach you. Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@ with your contact info and the gist of your problem and we'll find some experts to help you out while writing a Family Finance story about it (we'll keep your name out of it, of course). Want to learn more about mortgages? Mortgage strategist Robert McLister's Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won't want to miss. Plus check his mortgage rate page for Canada's lowest national mortgage rates, updated daily. Visit the Financial Post's YouTube channel for interviews with Canada's leading experts in business, economics, housing, the energy sector and more. Today's Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg. Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@ Canadians looking for more interest rate relief might be out of luck Toronto condo sales drop 75%, leaving investors bleeding cash, CMHC says Sign in to access your portfolio
