CANADA ECONOMICS

OECD

The Globe and Mail. 20 Jun 2017. In pursuit of inclusive economic growth. OECD chief of staff makes the case for moving toward prosperity that is more fairly shared across societies
DAVID PARKINSON

In an exclusive interview with The Globe and Mail, Gabriela Ramos, chief of staff of the OECD, discussed the challenges of pursuing an inclusive growth model in the fast-evolving global economy.
The Organization for Economic Co-operation and Development’s No. 2 official has a message for Canada’s economic policy makers: We’re doing a decent job in including a broad range of Canadians in the fruits of our economic recovery, but there’s still lots of room to do better.
Gabriela Ramos, chief of staff of the OECD, made that case in a paper she presented last week to the Conférence de Montréal, a major international economic forum. The paper examines Canada’s successes and failures in “inclusive growth” – a key focus for the global economic advisory body for the past five years, as it looks beyond traditional economic growth metrics to try to encourage its member countries, including Canada, to pursue prosperity that is more fairly shared across their societies.
Canada ranks fifth out of 38 countries on the OECD’s “Better Life Index,” which attempts to gauge how a country’s economic growth translates to the wellbeing of its citizens. Canada has also enjoyed better-than-average improvement among OECD countries in the past 20 years in standard of living, as measured across a broad range of indicators including longevity, income, employment and equality in addition to economic growth.
Still, there’s work to be done. For example, Canada’s share of children covered by child-care services is far below the OECD average. Women are both underpaid and under-represented in the labour force relative to men. And the country’s Indigenous peoples are not participating anywhere near fully in the country’s economic success.
In an exclusive interview with The Globe and Mail, Ms. Ramos discussed the challenges of pursuing an inclusive growth model in the fast-evolving global economy. Here are some highlights of that conversation. On whether economic policy can maximize growth and maximize inclusiveness at the same time:
That’s exactly what we are trying to encourage our countries to do. Not to go for this opposite view [that] either you’re inclusive or you go productive. We call it “the Nexus”… how to become more productive by being more inclusive. How do you prioritize your investments in the most vulnerable groups? Not just to help them live in general, the moral responsibility that we all have not to just leave these people home. But to enhance their own capacities to contribute to the more dynamic economy.
But to do that, our economic models and our economic metrics may need to change. You would need to think of an inclusive growth test. … See how much a specific policy is going to have distributional impact. Which is something that we never do. Now at the OECD, we are trying to target measures to look at how they impact the bottom 10 per cent, the bottom 20 per cent, the bottom 30 per cent – and whether there are unintended consequences of policies that look very positive from the productive point of view, from the competitive point of view.
It means putting people at the centre of policy making. That’s what we don’t have. We have production. We have GDP per capita. We have consumption. We don’t have people. On rethinking the welfare state:
We need to change the growth model, and think about investment in those areas and assets that are wasted, to ensure that they fulfill their full potential. … Government investments, the public budget, should be more strategically applied, to enhance the capacities of regions, of firms and of people that are lagging behind. You really need to change the axiom of “I grow, and I redistribute” … That’s why I was thinking on this question of early-childhood education. If you recommend something that will really level the playing field for families that are facing socioeconomic disadvantage. … These kids usually would not have as embracing environment at home as more wealthy children, so the more you invest in those groups of people, in their skills when they are very young, the better. We are calling this “the empowering state.” … This is a different way of framing the policies and framing the actions. It’s inclusiveness, but also contributing to competitiveness at the very same time. On the challenges posed by the increasingly technology-driven services economy:
In the context of the next production revolution and the emergence of all these technologies that are changing the way we produce and the way we connect and the way we network, there are some winner-takes-all kind of dynamics, because of the nature of the business. We were taught before that in any market, the more [competitors] you have, the better. But if you have Airbnb or you have Facebook or one of these big platforms, that does not apply. You cannot have the ‘more,’ because you really need to have the critical mass to make them profitable. Therefore, then, you have this concentration of a lot of economic power in certain big technology firms.
Frontier firms, those that are technologically advanced, continue to enjoy productivity growth rates of 3 to 5 per cent, while the rates of the small and mediumsized firms in our economy are just stagnant. … If the destruction is because they have a massive presence in the economy and a massive control of their own technologies, [which] prevents others from participating in that market, then the outcome is not as positive for the economy.
We know now at the OECD that around 9 per cent of jobs will disappear because of technological progress, and another 20 per cent are going to be transforming. Of course, there will be other jobs that will be created. But in the meantime, the transition is very hard. On what that technology revolution suggests for policy makers:
You should not protect jobs; you should protect people, investing in their skills and looking at ways that they could make the transition. It’s easier said than done. It’s very complicated. I don’t think that employment services in any of the OECD economies are really on top of this issue. They’re trying, and there are some very good experiments. But it’s complicated. On what Canada’s aging demographics mean for pursuing inclusive growth:
The fact is that [populations] are going to age very rapidly. And therefore you have to enhance your labour force participation. One way is extending the work life of people; because of [increased] longevity, I think that’s feasible … of course, that requires also to keep on investing in the skills of the older population, and to look at the kinds of jobs they can do.
Second, I think there’s one area in which Canada has invested a lot, and probably we can learn from your own experience, is in integrating migrants, trying to do a good skills recognition of migrants and match them with the demands in the labour market. It’s not easy, it’s quite complicated … [but] that will help a lot with the decreased labour force participation of the aging population. On the participation of women in Canada’s labour force:
In terms of labour force participation of women, Canada is one of the top countries in the OECD, with seven percentage points’ difference between female and male [versus the OECD average of 16 points] and 74-per-cent participation of women [versus the OECD average of 64 per cent]. But still, you have seven points. And still, women’s representation in the leadership in the private sector is low. And you still have a wage gap of 18 per cent between men and women. That means you create incentives to women not to get a great attachment to the labour market.

BRICS

The Globe and Mail. Bloomberg News. 20 Jun 2017. Emerging-market investors: BRICs are back. One of the past decade’s hottest trades is set for a revival as a pickup in the global economy is expected to fuel demand
BEN BARTENSTEIN
ALINE OYAMADA

Resurgent growth is reviving one of the past decade’s hottest trades.
Emerging-market investors are again piling into the so-called BRIC countries – Brazil, Russia, India and China – pushing monthly inflows and stock prices to nearly two-year highs. The bet is that a pickup in the global economy will fuel demand for the countries’ commodity exports, drive an expansion of middle-class consumption and help them shore up fiscal accounts.
Wooed by India’s efforts to streamline regulations, Brazil’s economic rebound, stabilizing prices for Russian oil exports and China’s stronger currency, traders are warming to the countries’ higher yields and better outlook for equities. It’s an abrupt reversal after they were scorched by a 40-per-cent drop in the biggest BRIC exchange-traded fund from the end of 2012 through early 2016 as Brazil lost its investment grade, Chinese growth slowed from a meteoric pace, Russia’s oil revenue plummeted and India’s current account deficit swelled.
“Improving fundamentals, attractive valuations, and high yields in a yield-starved world make emerging markets once again attractive, including some of the BRICs,” Jens Nystedt, a New York-based money manager at Morgan Stanley Investment Management overseeing $417billion (U.S.) in assets, wrote in an e-mail.
Non-resident portfolio flows into BRIC countries rose to $166.5-billion last month, up from $28.3-billion in outflows 12 months prior, according to data compiled by the Institute of International Finance and EPFR Global. Chinese equities saw their biggest quarterly inflows in two years, while traders piled into Indian bonds at the highest level in almost three years, Bloomberg data show.
Mark Mobius, executive chairman of Templeton Emerging Markets Group, favours Brazil,
China and India, adding that Russia will also benefit from a growth rebound. Brazilian assets will benefit as Latin America’s largest economy bounces back from two years of contractions, while Chinese investment will pick up as its foreign reserves recover from a six-year low in January, according to Steve Hooker, who helps oversee $12billion of assets as an emergingmarket money manager at Newfleet Asset Management. Fastest growth
Coined in 2001 by former Goldman Sachs economist Jim O’Neill, “BRICs” became a ubiquitous shorthand for the fastestgrowing
emerging economies (other investors later capitalized the S and added South Africa to the mix).
In the decade ended Dec. 30, 2012, developing-country equities had annual returns of 17 per cent, twice those of developed nations. That changed in the taper tantrum years amid fears that the Fragile Five, which included Brazil and India, would struggle to meet high external funding needs. Responding to changing sentiment, Goldman Sachs Group Inc. shut its BRIC fund in October, 2015, after losing 88 per cent of its assets since a 2010 peak.
Earlier this year, Goldman signalled its partial return, urging investors to “stay the course” with a bet on currencies from Brazil, Russia and India. Meanwhile, Mr. O’Neill, who later served as commercial secretary to the U.K. Treasury, said last month that fears of an economic slowdown in China are “completely overblown.” To him, the world’s top story remains the rise of emerging-market consumers, led by China’s mushrooming middle class.
In India, measures designed to fuel growth and investment spearheaded by Prime Minister Narendra Modi could remake the world’s second-most populous country into one of the more dynamic markets over the next several years, according to Charles Knudsen, who helps oversee $16.5-billion in emergingmarket assets for T. Rowe Price Group Inc. from Baltimore.
The country is expected to reclaim its crown from China as the world’s fastest-growing large economy over the next three years, according to the median estimates of 37 economists surveyed by Bloomberg.
And while recent political turmoil has dimmed the outlook for unpopular changes to Brazil’s pension system, which would set a minimum age for retirement among other measures, traders like the country’s high real interest rates and expected rebound from its worst recession in a century.
“It requires quite a bad scenario in Brazil to drive the investor community into a large and structural underweight,” said Arnab Das, the London-based head of emerging-market macro at Invesco Ltd., which oversees $841-billion in assets. “It is structurally difficult to be underinvested in Brazil.”
Russia’s diversification away from dependence on energy and materials will help support its rebound from two years of contraction, according to Mr. Mobius. Meanwhile, investors have been unfairly pessimistic toward China, where growth is forecast to exceed 6 per cent over the next three years, he said.
“The reality is that as a planned economy and with the government having control of the major banks and large companies, a financial crisis is simply not in the cards,” Mr. Mobius said.
Although developing-country assets rallied over the past year, with stocks surging 25 per cent and currencies gaining about 7 per cent, investors say there’s room for further gains.
“The flows to emerging-market funds have been quite strong this year, but I think people are still underweight,” said Morgan Harting, a portfolio manager at AllianceBernstein, who is investing more in Asian equities and Latin American debt.

S&P/TSX AND EMERGING MARKETS: LOCKSTEP NO LONGER.

Canadian investors should buy emerging-market stocks as they’ve stopped moving in lockstep with domestic equities, according to one of the top strategists at the world’s largest money manager.



While emerging markets have increased their exposure to technology and consumer companies, Canada is still focused on the financial, energy and materials sectors, said Kurt Reiman, chief strategist for Canada at BlackRock Inc.
The gap between the S&P/TSX composite index and MSCI emerging markets index is one of the biggest on record.
“Investing in emerging markets today gives Canadians access to sectors that are underrepresented in Canada and also to the theme of the emerging market consumer,” Mr. Reiman said in a recent phone interview. He prefers Asia, but said broad exposure through the MSCI EM index is “a good place to start.”
A decade ago, financial stocks accounted for 21 per cent of the MSCI EM index and energy and materials made up 15 per cent each. Today, the top three sectors are technology at 25 per cent, financials at 24 per cent and consumer discretionary at 11 per cent, according to Bloomberg data.
By contrast, the S&P/TSX looks a lot like emerging markets did in 2007 – 34 per cent financials, 20 per cent energy and 11 per cent materials. The MSCI EM index is up 17 per cent year-to-date, while the S&P/TSX has lost 0.6 per cent.
Mr. Reiman sees five reasons to like emerging-market equities if you’re a Canadian investor: they’re relatively cheap, return on equity is improving, the global economy is accelerating, risks in China are abating and the correlation with Canada is breaking down.
“I’ve been rather surprised by the gap in performance between Canada and emerging markets despite the fact that we were overweight,” he said. “The relative performance and the sharp decline in correlations has exceeded even my initial expectations.”

NAFTA

BLOOMBERG. 2017 M06 19. Perdue Meeting on Agriculture a Prelude to Nafta Renegotiation
by Alan Bjerga

• Talks with Mexico, Canada officials focus on trade ‘irritants’
• USDA chief says Nafta benefits farmers but adjustments needed

Agriculture Secretary Sonny Perdue meets Tuesday with his counterparts from Canada and Mexico for what he called candid talks on “irritants” in the three-way trade relationship that will be a prelude to a renegotiation of Nafta set to begin later this summer.

New rules on Canada’s dairy-supply system and how Mexico plans to enforce a recently concluded agreement limiting its sugar exports to the U.S. will be among the topics of discussion when Purdue plays host to Canadian Agriculture Minister Lawrence MacAulay and Mexican Agriculture Secretary Jose Calzada in Savannah, Georgia.

Farmers tend to support the North American Free Trade Agreement, but agricultural shifts since its 1990s implementation require a review of the accord, Perdue said in an interview. Frank discussions now may make farming issues less divisive during the formal negotiations on revamping Nafta that may begin as soon as August.


“All three countries in the ag sector have benefited from the Nafta relationship but there are some important differences in things we need to deal with,” Perdue said. "This is not a ‘hide the ball’ strategy where we go in and sneak-attack them."

President Donald Trump’s talk of pulling the U.S. from Nafta spooked markets this year, pushing the Mexican peso to a record low in January. But the prospect of a major upheaval in North American trade eased in recent weeks after Trump backtracked on his threats and started the process of renegotiating the terms of the deal.

Friction With Canada

While Mexico drew most of Trump’s ire over trade during the campaign and early in his presidency, there’s been greater friction recently with Canada. Trump in April pledged to aid U.S. dairy farmers claiming harm from new Canadian policies that match domestic production with demand through quotas. U.S. producers contend that has depressed U.S. exports.

"If you have a supply management system, the supply has to be managed," Perdue said. "They have created a glut on the market."

Perdue said changes to Canada’s system of wheat classification and the policy in the Canadian province of British Columbia to only allow local wines on grocery-store shelves also will be up for discussion.

Canada’s MacAulay said in a statement that he is committed to working on ways that “agriculture trade can continue to grow between our three countries.”

Sugar Accord

With Mexico, enforcement of an agreement that cuts the amount of refined sugar that Mexico can send the U.S. will require further talks, Perdue said. Mexico, meanwhile, has been seeking out alternative corn sellers in case trade relations with the U.S. sour.

In addition to their meetings Perdue, the former governor of Georgia, will give MacAulay and Calzada a tour of the Georgia Ports Authority and some of the state’s farmland. They are scheduled to conduct a joint news conference at 11:15 a.m. local time.

After China, Canada and Mexico are the second- and third-biggest buyers of U.S. farm goods. The three nations sold $91.6 billion of farm goods to one another last year, according to United Nations data. Mexico buys more U.S. corn and dairy products than any other country. The U.S. is the biggest export market for Canadian beef and pork and the U.S. buys about two-thirds of Canada’s canola oil.

Since its adoption, Nafta has knit the three agricultural economies more tightly, with effects ranging from cattle being raised and processed across borders to U.S. dependence on Mexican avocados for guacamole at Super Bowl watch parties. It’s widely seen as a success in agriculture, said Joe Glauber, a former USDA chief economist and the top U.S. agricultural negotiator during the Doha round of global trade talks.

A withdrawal from Nafta would be “devastating” to rural America, a point Perdue said he’s impressed upon Trump, who won election to the White House in part due to wide victory margins in small towns and farming communities.

“By and large, the agriculture sector feels like it’s fared fairly well,” under Nafta. But, he said, “There are things that need to be changed, because the world has changed quite a bit.”

BOMBARDIER

The Globe and Mail. Bloomberg News. 20 Jun 2017. Bombardier’s C Series buoyed by interest from Qatar Air and Air Baltic. Bombardier Inc.’s marquee C Series jet, which hasn’t won a major new contract in more than a year, got a boost from interest at Qatar Airways and Air Baltic Corp. and from a new jet-leasing venture between the plane maker’s largest outside shareholder and General Electric Co.
CHRISTOPHER JASPER
BENJAMIN KATZ

Qatar Airways CEO Akbar Al Baker said on Monday at the Paris Air Show that the single-aisle C Series model could be suited to an Indian operation that Qatar Air has won permission to establish.
The single-aisle model could be suited to an Indian operation that Qatar Airways has won permission to establish, the Persian Gulf carrier’s chief executive officer, Akbar Al Baker, said on Monday at the Paris Air Show. Air Baltic said the first jets from an order for 20 CS300s have outperformed fuel-burn targets and confirmed it is progressing with an evaluation of the smaller CS100 variant.
“We’ve had several conversations with Akbar and he is watching the program,” Fred Cromer, president of Bombardier’s commercial aircraft unit, said in an interview at the expo. “His interest level increased when he was able to see the aircraft for the first time in Paris a couple of years ago.”
Qatar Air said in March that it aims to set up a short-haul airline in India with a fleet of 100 narrow-body planes as its renews a push to tap one of the world’s fastest-growing travel markets. That project remains on track, with the Doha-based company gaining the right to establish the unit when it is ready, Mr. Al Baker said. The airline has come close to buying the C Series before, though it shelved those plans at the 2011 Paris Air Show.
Bombardier shares gained 14 per cent this year through June 16 while Canada’s benchmark S&P/ TSX composite index was little changed.
GE Capital Aviation Services, one of the world’s largest jetleasing companies, said Monday that it would create a $2-billion financing platform with Caisse de dépôt et placement du Québec, Canada’s second-largest pensionfund manager, to capitalize on global demand for commercial aircraft.
The move involving the Bombardier investor “may be be a positive” for the C Series, Mr. Cromer said, while declining to speculate further about the implications.
Bombardier is confident of winning more C Series orders this year. The company has delivered 14 of the aircraft to date. Certification to take off and land at London City Airport – which has a short runway unable to handle most jetliners – has piqued the interest of carriers. Bombardier (BBD.B) Close: $2.59, up 12¢

REUTERS. Jun 20, 2017. Bombardier to supply, maintain 750 rail carriages for UK's South Western

(Reuters) - Canadian plane and train manufacturer Bombardier Inc has signed a $1.14 billion contract to supply passenger trains to the two new operators of Britain's South Western rail franchise.

Bombardier Transportation will sell and maintain 750 Bombardier Aventra rail carriages to Britain's FirstGroup and Hong Kong's MTR Corp.

FirstGroup, also operator of the Great Western franchise, will run the Southern Western franchise - trains to London from cities such as Bristol and Exeter - along with MTR from August 20.

Bombardier will also enter a technical services and spares supply agreement for the duration of the seven-year franchise, with an option to extend it later, it said.

Bombardier and Siemens have been identified in recent media reports as holding talks to unite their rail operations, although such a tie-up would be difficult because of anti-trust concerns and questions over which company would retain control of the combined venture.

($1 = 0.7845 pounds)

(Reporting by Rahul B in Bengaluru; editing by Louise Heavens and Jason Neely)

BOEING. REUTERS. Jun 20, 2017. Boeing lifts 20-year industry demand forecast to $6 trillion
By Tim Hepher and Victoria Bryan

PARIS (Reuters) - Boeing revised up its rolling 20-year industry forecast for passenger and freight planes by 4 percent on Tuesday, though signs at the world's biggest air show suggest a cooling of demand at the moment after years of red-hot growth.

The U.S. planemaker continued to rack up orders at the Paris Airshow for a new version of its best-selling 737 aircraft, which was launched amid a flurry of deals.

Leasing firm Aviation Capital Group (ACG), for example, said on Tuesday it had placed an order for 20 of the new 737 MAX 10 jets, worth a total of $2.5 billion at list prices.

"It is getting a big endorsement from airlines and that is leading to more lessors endorsing it too," Ihssane Mounir, Boeing vice president for sales and marketing, told reporters.

But analysts expect demand at the June 19-25 event to fall short of recent years, and some aviation companies themselves have cut back staff and hospitality at the show.

Over the longer-term, though, Boeing sees an industry in rude health, forecasting 41,030 industry deliveries over the next two decades, up from 39,620 in a similar projection a year ago and topping $6 trillion in value.

That includes a five percent increase in the 20-year forecast for deliveries of single-aisle aircraft like the Boeing 737 and Airbus A320 families, respectively the cash cows of the world's two largest aircraft manufacturers.

Boeing now expects 29,530 deliveries in the medium-haul single-aisle category, which is popular with low-cost airlines.

Planemakers also see growing opportunities in aviation services. Boeing forecast that market could be worth $8.5 trillion over 20 years, growing at an average 4 percent a year.

Air travel has been on a sharp uptrend, led by emerging economies as China looks set to replace North America as the world's biggest transport market in coming years.

But China's growth is now slowing even though it remains above 6 percent a year. Boeing trimmed its 20-year forecast for average global traffic growth to 4.7 percent from 4.8 percent.

Airbus took a similar step in its own 20-year forecast released earlier this month, while increasing the projection for total deliveries by 6 percent, compared with last year's edition, to 34,899 aircraft.

Boeing's overall tally is a bigger number partly because it counts aircraft with 90 seats or more, whereas Airbus starts at 100 seats.

BIGGER NOT BEST?

In a symbolic change likely to rankle with its European rival, Boeing ditched its forecast for very large four-engined airplanes such as the Airbus A380 and its own 747-8.

For the first time, it lumped these together with large two-engined jets such as the Boeing 777 and largest A350.

Boeing has long argued that the "very large" category is on its way out as airlines switch to smaller twinjets. Both manufacturers have had to cut output of four-engined jumbos.

"In fact, frankly, we look at the demand for really big airplanes and we find it hard to believe that Airbus will be able to deliver the rest of their A380s in backlog," Marketing Vice-President Randy Tinseth said in a briefing.

Boeing also expects to deliver only "a handful" of 747-8 passenger jets.

Airbus insists the double-decker A380 has a future due to airport congestion and predicts 5 percent of aircraft delivered over the next 20 years will be very large people carriers or freighters, even though its forecast has been revised lower.

Despite slower growth in some of the hottest aviation markets, Boeing said it continued to see "resilient" demand with a long-term growth trend in traffic of 5 percent a year.

Passenger travel tends to outpace the economy, reflecting growing numbers of people with some disposable income, while cargo is a barometer of trade and business confidence.

Boeing predicted demand for 920 cargo planes, down 1 percent from its previous forecast. Much air cargo nowadays goes in the belly of wide-body passenger planes rather than freighters.

(Additional reporting by Andrea Shalal, Matthias Blamont, Giulia Segreti, Mike Stone, and Alwyn Scott in Seattle; Writing by Mark Potter, editing by David Evans)

BLOOMBERG. 2017 M06 20. Boeing Drops Iconic 747 in New Forecast for Passenger Planes
by Julie Johnsson

• Planemaker drops jumbo jets from its 20-year market forecast
• Strategy contrasts with Airbus’s view on airlines’ fleet needs
• Boeing's Muilenburg Is Bullish on Paris Air Show Orders

Boeing Co. sees the future, and it doesn’t include jumbo passenger jets. Not its own iconic 747. Not the Airbus SE A380.

The U.S. planemaker has dropped the category reserved for four-engine behemoths from its annual forecast for the commercial-aircraft market. Instead, Boeing predicts that airlines will use more efficient twin-engine jets for long-range flights -- like its 787 Dreamliner and 777X, or a mid-market plane that’s on the drawing board.

By leaving so-called very large aircraft off its two-decade projection for a $6.05 trillion jetliner market, Boeing said it was reflecting a market reality: There is little to no chance of reviving sales of those models. The Chicago-based company and Airbus already had pared production of their biggest aircraft as orders dwindled, and Boeing has warned it may stop making the passenger version of the 747-8, the latest generation of the model.

“We don’t see much demand for really big aircraft going forward,’’ Randy Tinseth, Boeing’s vice president for marketing, said at a briefing ahead of the Paris Air Show, which began Monday. “We find it hard to believe that Airbus will deliver the rest of their A380s in backlog.’’

Airbus still sees a long-term market for the planes although it didn’t log a single A380 sale last year. The Toulouse, France-based manufacturer says airlines will need larger jets as passenger traffic doubles and congestion limits the number of flights into megahubs, particularly in Asia and the Middle East.

The European company projects potential industrywide sales of 1,400 of the largest commercial aircraft, valued at $454 billion through 2037. That compares with Boeing’s 20-year forecast for 80 deliveries that Tinseth outlined Tuesday at a Paris show presentation.

“They would do that,” John Leahy, Airbus’s sales chief, said of Boeing’s slashed forecast for very large airliners. “The 747-8 isn’t selling. We have no intention of sharing that market with them.”



As the jumbo era ends at Boeing, the planemaker sees a new market emerging for mid-range airplanes overlapping the largest single-aisle and smallest twin-aisle jets. That differs from the stance at Airbus, which announced plans at the Paris show to make enhancements to the A380 in the hopes of one day reviving orders.

Lighter Gauge’

“They went big and heavy, we went small and efficient,” said Mike Delaney, Boeing vice president and general manager for airplane development. “We’ll overfly our competitors, put a lighter gauge on things.”

Airbus is refining the double-decker A380’s design, including adding 4.7-meter (15-foot) winglets, to boost fuel efficiency by as much as 4 percent. Tinseth dismissed the strategy. “Putting winglets on an airplane that’s too big doesn’t make that airplane any smaller,” he said.

The mid-range model Boeing is developing would seat between 220 and 270 travelers and fly about 5,000 nautical miles. The goal is to spur growth with jetliners that avoid hubs and link smaller cities on routes that aren’t properly matched to today’s aircraft. Think Washington to Prague, Japan to India, or within China’s “Golden Triangle’’ of Shanghai, Guangzhou and Beijing.

Airlines also could use the new jet -- dubbed the 797 or NMA, for new mid-market airplane -- on transcontinental flights to replace aging Boeing 757 and 767 jets. Budget carriers could graduate from single-aisle jets to the larger planes for more-popular routes.

Tinseth projects a potential market of 4,000 to 5,000 sales in that segment over 20 years.

Airbus has already made advances in that market with its largest single-aisle plane, the A321neo, and is exploring a stretched version that would carry more than 240 passengers. While that narrow-body would probably be cheaper than the new Boeing dual-aisle, the U.S. company sees a competitive advantage in a design that lets people board and disembark far more quickly.

Single-Aisles Dominate

Single-aisle aircraft like the Airbus A320 and Boeing 737 will still rule the market, accounting for nearly three-quarters of total sales, according to Boeing’s forecast. The planemaker predicts a need for 29,530 narrow-bodies valued at $3.18 trillion through 2036.

The next most popular type will be small wide-body aircraft, like the Boeing 787 Dreamliner and Airbus A330, accounting for 5,050 deliveries or 12 percent of forecast sales, Boeing predicts.

Read more: Boeing sees 747 as cargo hauler

Sales of very large aircraft will probably be confined to Boeing’s niche-market 747-8 freighter and a handful of jets for VIPs, like the next Air Force One for the U.S. president.

The hump-backed 747 -- which in 1970 ushered in a new era of mass long-range travel -- eventually will be replaced at the top of the jetliner food chain by Boeing’s 777X. The first delivery for that 400-seat plane is scheduled for 2020.

“The biggest airplane in the market moving forward is going to be the 777X,” Tinseth said.

BLOOMBERG. 2017 M06 19. Boeing Hits Airbus With $30 Billion Order Plan for Longer 737
by Julie Johnsson , Guy Johnson , and Benjamin D Katz

• Max 10 narrow-body receives formal launch at Paris Air Show
• Company says plane will carry 230 people while saving on fuel
• Boeing's Muilenburg Is Bullish on Paris Air Show Orders
• Boeing's Muilenburg Sees Upside for Paris Air Show Orders

Boeing Co. received more than three dozen pledges to buy the planned Max 10 on the first day of the Paris Air Show, as the U.S. company stretches its 737 workhorse to challenge Airbus SE’s sales lead for the largest single-aisle airliners.

Boeing expects to win 240 orders or expressions of interest for the new model valued at roughly $30 billion from at least 10 different carriers during the industry event this week, the company said at the Max 10’s launch announcement on Monday. Including other models and conversions of earlier contracts to Max 10s, Boeing’s Paris show order tally at the end of the day exceeded $37 billion, versus $12 billion at Airbus.

“We think the timing’s just right” for the Max 10, Chief Executive Officer Dennis Muilenburg said in an interview with Bloomberg Television at the show. “Max 8 and Max 9 continue to be at the heart of the market. The Max 10 is going to add” to a portfolio that boasts a production backlog of seven years.

Chicago-based Boeing is confident the Max 10 will stem customer defections to the Airbus A321neo, which has racked up a considerable order lead since its introduction three years ago. Airbus fired back Monday, downplaying the Boeing plane’s capabilities and securing orders worth about $12.3 billion at list prices from lessors GE Capital Aviation Services and Air Lease Corp. for Neo planes, including the smaller A320 version. Boeing’s Toulouse, France-based rival has also mulled further improvements to the A321neo variant.

The Max 10 will seat as many as 230 passengers, roughly matching its European rival, while burning 5 percent less fuel thanks to a lighter construction, Boeing says. SpiceJet Ltd. of India signed an agreement for 20 new orders for the largest 737 variant and converted existing commitments for the same number of smaller Max 8s. Tourism group TUI AG converted 18 orders to the new plane. BOC Aviation Ltd. and China Development Bank’s leasing arm signed memoranda of understanding for the purchase of 10 Max 10s each.

In addition to signing a contract for 100 Airbus planes, Gecas converted 20 orders for current Max versions to the larger variant. United Airlines and Indonesia’s Lion Mentari Airlines PT are also expected to place contracts at the Paris expo, people familiar with the negotiations said earlier this month. Airbus executives said the big 737 poses a bigger threat to other Boeing models than to the Neo.

No Threat

“Do we see the 10 as a competitor of the A321? I think if you look at the numbers, the answer is no,” Airbus’s chief salesman, John Leahy, said Monday, adding that the Neo version has 10 more seats and can fly over 10,000 miles farther. “Put that all that together and we think the 10 is a competitor to the 9, and I think that’s why you’re seeing a lot of people converting.”

At least one potential Max 10 customer also voiced reservations. Norwegian Air Shuttle ASA CEO Bjorn Kjos wasn’t convinced the plane’s range is compatible with the discount carrier’s strategy of plying the North Atlantic with single-aisle aircraft.

“I’m not sure the price is giving us the right bottom line,” Kjos said at the Paris expo. “It may be perfect inside the U.S., but not for us.”

The Max 10, which will be Boeing’s first new model since the unveiling of the 777X series at the Dubai Air Show in 2013, will be 5 1/2 feet (1.68 meters) longer than the $119.2 million Max 9, currently the biggest member of the re-engined 737 family, which was launched alongside the Max 7 and 8 in 2011. Boeing said demand for single-aisle planes as well as wide-bodies remains buoyant despite concerns about economic and political turbulence in the Middle East and low fuel prices serving as disincentive to invest in more efficient aircraft.

“We are continuing to see strong energy in the marketplace,” said Muilenburg, predicting that new orders should roughly match deliveries this year. “I think there’s a little upside here this week” at the Paris show.

Higher Thrust

The stretched version of the 737 will be achieved by adding a 40-inch (102-centimeter) segment in front of the plane’s wings, and a 26-inch plug behind them, with the wings themselves slightly modified to reduce drag at lower speeds. In order to carry the extra payload, the Max 10 will be equipped with larger, higher-thrust engines. The engines’ position on the wings will be moved to affect the aircraft’s center of gravity.

The plane will also get taller landing gear to help resolve balance and tail-skid issues that cropped up with the 737-900ER, Keith Leverkuhn, general manager of the Max program, said in an interview at the show site at Le Bourget Airport on Sunday. The longest earlier-generation model is prone to tipping up if baggage isn’t balanced carefully in the hold.

The cumulative changes, which Boeing reckons it has achieved on a shoestring budget, are resonating well with customers, Kevin McAllister, who heads Boeing’s commercial-airplanes arm, said Sunday.

The U.S. planemaker projects that the Max 9 and 10 will together capture 25 percent to 30 percent of 737 sales over the next 20 years. The mid-sized Max 8 -- ordered by carriers including Southwest Airlines Co. -- will remain the “core” offering and account for the bulk of demand.

Airbus is also considering a response and could stretch the A321neo should demand be sufficient, sales supremo Leahy said in Mexico earlier this month, while dismissing the new Boeing plane as “very marginal.”

“I can understand how our competition is upset,” said Randy Tinseth, a Boeing marketing vice president. The Max 10 “has the same capacity as our competition, flies a bit further, has better economics. I think over the next few days our customers will stand up and say it’s a good airplane too.”

LOCKHEED MARTIN. REUTERS. Jun 20, 2017. Lockheed launches new version of Super Hercules aircraft

(Reuters) - Lockheed Martin Corp LMT.N launched on Tuesday a new version of its Super Hercules military transport aircraft at the Paris Air Show, meant for use in special operations.

The multi-mission airlifter, C-130J-SOF, comes with special mission equipment options and can be configured for armed overwatch that includes a 30 millimeter gun and Hellfire missiles, the largest U.S. weapons maker said.

The C-130J variant can touch down on austere landing zones or makeshift runways and have been deployed both in combat operations and in humanitarian relief missions, the company said.

The latest one, configured for special forces, is the tenth variant of four-engine turboprop Super Hercules, which is used by 17 nations and has clocked more than 1.5 million flight hours, Lockheed said.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Arun Koyyur)

HOUSING BUBBLE

THE GLOBE AND MAIL. JUN. 20, 2017. Toronto, Vancouver: Housing bubbles or simply world-class cities
MICHAEL BABAD

Bubbles or something more?
Fitch Ratings is the latest to project a “soft landing” for bubbly Canadian housing markets, notably Toronto.

Which raises an interesting question posed by economist David Rosenberg: What if the Toronto and Vancouver markets aren’t bubbles at all?

In a global economic outlook released Monday, Fitch joined a number of Canadian analysts in forecasting nothing harsher for a cooling period for Toronto.

Indeed, some economists raise the possibility of Toronto rebounding in time, following the lead of Vancouver, which slumped after government intervention but has since perked up again.

“Transactions in the frothy Toronto housing market have recently slowed following Ontario’s measures to cool the market, and a shock to a non-bank mortgage lender,” Fitch said without naming Home Capital Group Inc., which is the only lender to have been shocked.

“Our base case is for a soft landing in house prices as we see no immediate risk of a shock to either the labour market or interest rates.”

The B-word has been on the lips of many as prices in Toronto and Vancouver rise ever further out of reach.

But Mr. Rosenberg, the chief economist at Gluskin Sheff + Associates, wonders if, rather than being in bubbles, those cities have simply been “re-rated” globally.



Certainly, observers around the world are alarmed by Toronto home prices, from the Bank of Canada, the Bank for International Settlements and rating agencies to the International Monetary Fund and Organization for Economic Co-operation and Development.

But much of the concern relates to the run-up in prices and associated mortgage debt, though affordability is certainly a big issue for policy makers.



High prices in and of themselves aren’t unique to Toronto and Vancouver, however.

“When you look at these cities’ home price-to-income ratios, benchmarked against their own individual histories and to the rest of Canada, it looks like a gigantic bubble,” Mr. Rosenberg said in his report.

“But when you look at the two of them in a global context, they don’t stand out as bubbles at all,” he added.



“What they have done is to join the big leagues – and even on that stage, there many other cities from London to Rome to Tokyo to New York to even Sydney, that still command a premium to the Greater Toronto Area.”

Mr. Rosenberg isn’t saying the increases aren’t extreme, rather that the prices themselves befit “major cosmopolitan areas” in a country deemed desirable and stable.

Add to that a cheap currency that means more buying power for certain expats, economists say.

Other studies have agreed Canada is a desirable destination for expat employees, and that elevated home prices aren’t a deterrent for certain people.

A recent report from ECA International, for example, ranked Canada as No. 15 in terms of expense for expat middle managers, below the average, with the company saying at the time that compensation packages are lower because employers don’t need big incentives to attract people here.



A recent report from ECA International, for example, ranked Canada as No. 15 in terms of expense for expat middle managers, below the average, with the company saying at the time that compensation packages are lower because employers don’t need big incentives to attract people here.

REUTERS. Jun 20, 2017. Home Capital to sell C$1.2 billion commercial mortgage book
By Matt Scuffham

(Reuters) - Canadian lender Home Capital Group Inc HCG.TO said on Tuesday it would sell a portfolio of commercial mortgage assets valued at C$1.2 billion ($904 million) to private equity firm KingSett Capital.

Proceeds from the sale will bolster its liquidity and trim outstanding debt on a C$2 billion emergency facility it agreed with the Healthcare of Ontario Pension Plan (HOOPP) in April.

The expensive bridge financing of C$2 billion provided by HOOPP came with an effective interest rate of 22.5 percent on the first C$1 billion drawn down. That affected the company's ability to originate new mortgages since it could not afford to lend money at lower rates than its cost of borrowing.

"The transaction will help the company further stabilize its liquidity position," said Bonita Then, Home Capital's interim chief executive. "Proceeds from the transaction are expected to have an immediate impact by enabling us to enhance our liquidity and reduce the outstanding debt under the company's $2 billion credit facility."

Shares of Home Capital were up 4 percent in early trading.

The company said gross proceeds from the sale, which is expected to be completed in the third quarter, would be equivalent to 97 percent of the outstanding value of the mortgages. It expects net cash proceeds of C$1.16 billion.

Home Capital had said it was pursuing new financing and strategic options, including the possible sale of some assets.

Depositors have withdrawn 95 percent of funds from Home Capital's high interest savings accounts since March 27, when the company terminated the employment of former Chief Executive Martin Reid.

The withdrawals accelerated after April 19, when the Ontario Securities Commission (OSC), Canada's biggest securities regulator, accused Home Capital of making misleading statements to investors about its mortgage underwriting business.

Home Capital said last week it agreed a settlement with the OSC and accepted responsibility for misleading investors about problems with its mortgage underwriting procedures.

The company still faces significant hurdles, including finding a permanent chief executive, rebuilding relationships with brokers, and winning back the support of depositors and borrowers.

Top of its priorities is securing long-term financing at a cheaper rate to replace the HOOPP facility.

Last week, Reuters reported Home Capital is in talks with a syndicate of banks, including some of Canada's biggest lenders, to secure a new loan of about C$2 billion.

($1 = 1.3274 Canadian dollars)

(Additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Bernadette Baum)

BLOOMBERG. 2017 M06 20. Home Capital Sells Mortgage Assets to KingSett For C$1.16 Billion in Cash
by Scott Deveau  and Allison McNeely

• Portfolio of commercial mortgages valued a C$1.2 billion
• Proceeds to be used to improve liquidity and pay down debt

Home Capital Group Inc., the embattled alternative lender, agreed to sell a clutch of commercial mortgages to affiliates of KingSett Capital Inc. for C$1.16 billion ($874 million) in cash.

Proceeds will be used to boost liquidity and reduce the amount drawn on its C$2 billion credit facility, the Toronto-based company said in a statement on Tuesday. While the mortgages are valued at C$1.2 billion -- some 6 percent of Home Capital’s total C$18.5 billion loan portfolio -- about 97 percent of this will be realized with the balance subject to credit losses.

“This transaction will help the company further stabilize its liquidity position and highlights the flexibility and options created by the quality of our assets,” interim Chief Executive Officer Bonita Then said in the statement.

The sale is the latest step in the turnaround of the 30-year-old lender from near-collapse after the regulator in April accused it of misleading shareholders on mortgage fraud, which could have disrupted Canada’s real estate sector that’s driving the economy. Home Capital has since seen its deposits stabilize and stocks surge, and last week it settled with the Ontario Securities Commission.

Shares have risen 28 percent since June 14, when Home Capital and three former executives agreed to pay more than C$30 million to settle with the OSC and other investors, paring this year’s drop to 51 percent. Still, the company hasn’t managed to refinance the onerous one-year rescue loan and is yet to find a fulltime CEO.

It’s been paying about 22 percent on the first half of the credit line from Healthcare of Ontario Pension Plan, and Home Capital hired RBC Capital Markets and BMO Capital Markets to advise on “strategic options" as deposits dwindled. High interest savings account balances have fallen to C$98.5 million from around C$1.4 billion at the time of securing the HOOPP loan.

"We view the transaction positively in light of the very high cost of the credit facility," Laurentian Bank of Canada analyst Marc Charbin wrote in a report. He raised his target price on Home Capital to C$15 from C$11 a share and maintained a hold recommendation, saying that while Home Capital’s financial assets add up to C$25.52, "it could take years for investors to monetize this return."

Home Capital’s shares rose 4.8 percent to C$15.5 as of 10:35 a.m. in Toronto on Tuesday.

The mortgages are being sold by Home Trust Company, a subsidiary of Home Capital, and will be managed by KingSett Real Estate Mortgage LP and KingSett High Yield Fund, the company said. KingSett Capital is a Toronto-based real estate private equity firm. The transaction is expected to close during the third quarter of 2017.

WHOLESALE TRADE

StatCan. 2017-06-20. Wholesale trade, April 2017

Wholesale sales — Canada
$61.0 billion
April 2017
1.0% increase
(monthly change)
Source(s): CANSIM table 081-0011.

Wholesale sales increased 1.0% to $61.0 billion in April, a seventh consecutive monthly advance. Gains were recorded in three of seven subsectors, accounting for 41% of total wholesale sales, and were led by the machinery, equipment and supplies subsector.

In volume terms, wholesale sales increased 0.7% from March to April.

Chart 1   Chart 1: Wholesale sales increase in April
Wholesale sales increase in April



Higher sales in three subsectors

The machinery, equipment and supplies subsector recorded the largest gain in dollar terms in April, up 7.3% to $12.4 billion. Higher sales were recorded in three of four industries, with the farm, lawn and garden machinery and equipment, and the other machinery, equipment and supplies industries contributing the most to the gain after both posted declines in March.

Sales in the food, beverage and tobacco subsector rose 1.5% to $11.8 billion, a third consecutive monthly gain. Higher sales in the food industry (+1.4%) contributed the most to the gain.

The motor vehicle and parts subsector recorded a third consecutive decline in April, with sales down 1.7% to $11.3 billion. The motor vehicle industry accounted for most of the decline as sales receded 2.1% to $9.1 billion. Manufacturing sales of motor vehicles also declined in April, down 3.7% to $5.7 billion.

Following a 3.3% increase in March, the miscellaneous subsector declined 1.5% to $7.9 billion, with decreases reported in three of five industries. The chemical (except agricultural) and allied product (-5.1%) and the recyclable material (-8.1%) industries accounted for most of the decline.

The building material and supplies subsector and the personal and household goods subsector both declined 0.7% in April following gains in March.

Sales up in seven provinces

Wholesale sales rose in seven provinces in April, representing 79% of total wholesale sales. In dollar terms, Ontario contributed the most to the gain.

Sales in Ontario rose for a fifth consecutive month, up 1.3% to a record high $31.5 billion in April. The machinery, equipment and supplies subsector was the largest contributor to the gain.

Quebec recorded a second consecutive increase, rising 1.4% to a record high $11.0 billion. Gains were recorded in six subsectors, led by the building material and supplies subsector and the machinery, equipment and supplies subsector.

In Saskatchewan, sales were up 5.4% to $2.3 billion, primarily on higher sales in the machinery, equipment and supplies subsector. This was the province's second consecutive gain.

Sales in Manitoba grew 5.4% to a record high $1.7 billion in April on the strength of gains in three subsectors.

In Nova Scotia, sales grew 3.3% to $838 million, a second consecutive gain. The food, beverage and tobacco subsector and the building material and supplies subsector contributed the most to the gain.

Sales in New Brunswick rose 2.7% to $522 million, with gains in four subsectors. Sales in Prince Edward Island edged up 0.2% to $74 million, with gains in five subsectors. This was the second consecutive increase for both provinces.

Newfoundland and Labrador recorded its first decline in three months, with sales dropping 36.3% to $308 million, more than offsetting a 28.0% gain in March. The miscellaneous subsector was the largest contributor to the decrease.

Following six consecutive gains, sales in Alberta edged down 0.3% to $6.4 billion, led by the motor vehicle and parts subsector.

In British Columbia, sales edged down 0.2% to $6.2 billion, led by the machinery, equipment and supplies subsector. This was British Columbia's third monthly decrease in the past four months.

Inventories increase for the eighth time in nine months

Wholesale inventories increased 0.8% in April, the eighth increase in the past nine months. Five of seven subsectors rose, representing 84% of total wholesale inventories.

Chart 2   Chart 2: Inventories rise in April
Inventories rise in April



The motor vehicle and parts subsector (+1.9%) posted the largest increase in April, a third consecutive monthly gain.

The miscellaneous subsector (+2.1%) recorded the second largest increase in inventories, the subsector's seventh consecutive monthly increase.

The personal and household goods subsector (+1.1%) rose for the fourth time in five months.

The food, beverage and tobacco subsector (+1.7%) recorded its second increase through the first four months of 2017. This subsector recorded gains in each month in the 2016 calendar year.

The machinery, equipment and supplies subsector (+0.3%) rose after recording a 4.2% decline in March.

The building material and supplies subsector (-1.0%) recorded the largest decline in April. This was the subsector's first decline since November 2016.

The inventory-to-sales ratio declined from 1.29 in March to 1.28 in April. The last time the inventory-to-sales ratio was this low was in December 2014, when the ratio was 1.24. This ratio is a measure of the time in months required to exhaust inventories if sales were to remain at their current level.

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170620/dq170620a-eng.pdf

REUTERS. Canada wholesale trade rises more than expected in April

OTTAWA (Reuters) - Canadian wholesale trade rose more than expected in April, led by the machinery industry, but only two other sectors showed gains, data from Statistics Canada showed on Tuesday.

The 1.0 percent increase topped economists' estimates for a gain of 0.5 percent, while the national statistics agency revised March up to a 1.2 percent rise from an initially reported 0.9 percent.

Of the seven major sectors, the three with April gains accounted for 41 percent of total sales. Stripping out the effects of price changes, overall volume was up 0.7 percent.

Sales rose 7.3 percent in the machinery, equipment and supplies sector due to an increase in purchases of farm, lawn and garden items.

The food, beverage and tobacco sector rose 1.5 percent, its third monthly gain in a row on higher food sales, while sales of farm products rose 5.2 percent.

Sales of motor vehicles and parts fell 1.7 percent, the sector's third consecutive month of declines.

Excluding autos, overall wholesale trade rose 1.7 percent.

(Reporting by Leah Schnurr; Editing by Lisa Von Ahn)

ENERGY

StatCan. 2017-06-20. Pipeline transportation of oil and other liquid petroleum products, April 2017

Closing Inventories of crude oil and equivalent products
11.5 million cubic metres
April 2017

Crude oil receipts

Pipelines received 18.5 million cubic metres of crude oil and equivalent products from Canadian fields and plants in April, up 8.0% compared with the same month in 2016. Receipts from Alberta and Saskatchewan accounted for 97% of total receipts.

Chart 1   Chart 1: Pipeline receipts of crude oil from fields and plants
Pipeline receipts of crude oil from fields and plants



Crude oil deliveries

Pipelines delivered 6.4 million cubic metres of crude oil to Canadian refineries in April, up 4.4% from the same month in 2016. Of this total, 59% was sent to refineries in Western Canada, while the remainder (41%) was delivered to Ontario and Quebec refineries.

Exports and imports

Pipelines exported 14.4 million cubic metres of crude oil to the United States in April. Exports were 14.6% higher than the previous year, while imports rose 11.5% to 2.4 million cubic metres.

Chart 2   Chart 2: Exports and imports of crude oil by pipeline
Exports and imports of crude oil by pipeline



Closing inventories

Closing inventories of crude oil in April totalled 11.5 million cubic metres, down 3.0% compared with the same month in 2016.

Chart 3   Chart 3: Pipeline closing inventories of crude oil and equivalent products
Pipeline closing inventories of crude oil and equivalent products



FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170620/dq170620c-eng.pdf

TOURISM

StatCan. 2017-06-20. Travel between Canada and other countries, April 2017

Travel abroad
4,563,976 - April 2017
2.4% increase (monthly change)

Travel from abroad to Canada
2,638,896 - April 2017
2.9% increase (monthly change)

Source(s): CANSIM table 427-0005.

More US travellers to Canada by car and by plane

US residents made 2.0 million trips to Canada in April, up 3.7% from March when cross-border travel was affected by a heavy snowstorm that hit much of Central and Eastern Canada and the northeastern United States.

Ontario, which received just over half of all US travellers to Canada in 2016, accounted for most of the monthly increase. Ontario saw a 6.4% increase in US travellers in April following declines in February (-1.0%) and March (-3.1%).

There were more US travellers to Canada coming both by car and by plane. Same-day car trips to Canada were up 4.6% to 687,000 in April, while the number of overnight US car trips rose 1.9% to 679,000. The number of US travellers making overnight trips to Canada by plane continued its four-year upward trend, rising 3.5% to 408,000 in April. This was 12.1% higher than in April 2016 and the highest figure for the month since modern recordkeeping began in 1972.

Travel to Canada from overseas continues to rise

Overseas residents made 589,000 trips to Canada in April, up slightly (+0.2%) from March and a 16.2% increase from April 2016. The number of overseas residents travelling to Canada has risen each year since 2009.

The number of travellers from Asia, which has grown at an even faster pace, continued to rise in April, up 5.0% from March and 18.7% higher than in April 2016.

The number of travellers from Europe was down 2.8% in April following a 7.7% increase in March, but was 13.8% higher than in April 2016.

Car travel by Canadians to the United States bounces back after storms in March
The number of Canadian residents travelling to the United States rose 3.4% to 3.5 million trips in April, following a 3.4% decline in March. This figure was 5.2% higher than April 2016 but 23.6% lower than in April 2013 when the Canadian dollar was close to par with the US currency. The value of the Canadian dollar was just under 75 US cents in March and April 2017.

The increase in April was mainly attributable to 3.9% more Canadian residents crossing the border by car, following a heavy snowstorm in Central and Eastern Canada in March. In particular, the number of cross-border car trips by Canadian residents at Ontario borders rose 6.1% in April, following declines in February (-1.1%) and March (-7.5%).

Meanwhile, Canadians made 700,000 overnight trips to the United States by air in April, up 1.8% from the previous month and a 13.0% increase compared with 12 months earlier.

Canadian travel to overseas countries declines in April

Canadian residents made 1.0 million trips to overseas destinations in April, down 0.8% from March but 4.3% higher than April 2016 and a new high for the month.

Who's coming to Canada in 2017? Year-to-date results

From January through to the end of April 2017, the number of travellers to Canada from abroad was 3.3% higher than during the same four months of 2016.

The gain was almost entirely attributable to a 17.4% increase in overseas travellers to Canada, while the number of US travellers was unchanged (+0.1%). Conversely, the number of US travellers to Canada for the first four months of 2016 was 15.6% higher than for the same four months of 2015, compared with an 8.9% increase in overseas travellers.

For US travellers, a 2.4% decrease in trips to Canada by car was offset by a 6.3% increase in trips to Canada by air. In 2016, US travellers represented 8 out of every 10 non-resident travellers to Canada, and more than 5 of those 8 US travellers came to Canada by car.

In the first four months of 2017, 9 of Canada's 10 largest source countries for overseas travellers posted double-digit year-over-year increases compared with the first four months of 2016. There were more travellers from Europe (+13.3%), Asia (+17.5%), North America (excluding US), Central America and Caribbean (+36.9%), Australia and Oceania (+22.6%) and South America (+16.4%).

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/170620/dq170620d-eng.pdf

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LGCJ.: