March 20, 2009
This weeks top stories include inflation rises in the month of February for Toronto as well as how the net worth of Canadians is on the dive. We will also talk about how Ottawa has loosened its approval rules for the stimulus project as commercial real estate vacancy rates rise in the first quarter.
For the month of February inflation was on the rise. Our inflation rate was 1.1% in January of this year but February closed off with and increase of 0.3% to a whopping 1.4%. This was the first time in 2 months that none of our provinces experienced deflation but the first time in 5 months that there has been an increase in the cost of living. The first reaction to this was a jump in our food prices but be expecting rises in the costs of many commodities in the up and coming months.
With stocks continuously declining in the past few months, the grunt of it is being shown now with a decline of net worth within Canada. Household net worth was down a staggering $14 000 per household across Canada in the final quarter of 2008. Statistics are even showing an increase in the amount of credit that Canadians are using, with and average of 24.5 cents of credit for every dollar of net worth. Maybe this is a sign that although money movement has slowed, maybe our spending hasn’t.
The feds have found a way to make the federal infrastructure dollars flow easily. They have decided to make the environmental review process for bridges, roads and public projects less stringent than before. “These new rules will focus Canadian resources by cutting down on unnecessary environmental assessments for projects the government knows won’t have environmental consequences.” This was the statement made by John Baird who is the federal minister in charge of infrastructure. But we have to ask ourselves if fast-tracking the environmental assessments will actually leave us with an appropriate measure as to what impact construction will have on that area.
The first quarter of 2009 has shown a rise in commercial real estate vacancy all across the country. The 2008 statistics show a vacancy rate of 6.3% this time last year but in 2009 we have reached a rate of 7.5%. This could be from the effects of auto sector losing momentum in the early parts of this year or even from consumers trying to hold off on their spending. Either way, companies are closing and more commercial real estate is available on the market right now. If you were thinking of picking up some commercial real estate, now might be the time.
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