CANADA ECONOMICS
AVIATION
BOMBARDIER. BOEING. The Globe and Mail. 13 Sep 2017. U.K. joins Canada in push against Boeing. British PM brings her government’s concerns over the plane maker’s trade complaint against Bombardier to the U.S. President
DANIEL LEBLANC
JOSH O’KANE
GLORIA GALLOWAY With reports from Adrian Morrow, Greg Keenan and Nicolas Van Praet
BOEING
The Canadian government is threatening not to go through with a $6.4-billion contract to buy 18 Boeing-built Super Hornet jets if the company does not drop its complaint against Bombardier Inc.
Canada and Britain have joined forces in their efforts to get Boeing Co. to drop its trade complaint against Bombardier Inc., with British Prime Minister Theresa May taking her concerns over the case to U.S. President Donald Trump.
The Canadian government has threatened not to go through with a $6.4-billion contract to buy 18 Boeing-built Super Hornet fighter jets in an attempt to force Boeing to back off, and applauded the involvement of the British government, which is worried about the future of Bombardier’s facility in Northern Ireland.
“You have to try everything,” Foreign Affairs Minister Chrystia Freeland told reporters on Tuesday during a break at a cabinet meeting in St. John’s. “I really believe, our government really believes [it should] leave no stone unturned, no avenue unpursued.”
Boeing has rejected attempts to link the Super Hornet contract and the Bombardier dispute. The U.S. government put a price tag of $6.4-billion on the sale on Tuesday, the first estimate of the potential cost. The acquisition process is under way, but Ottawa can still back out.
Boeing complained in April to the U.S. Department of Commerce that Bombardier’s C Series planes were unfairly subsidized by the Canadian and Quebec governments. Last year, Bombardier sold 75 109-seat CS100 planes to Delta Air Lines at a cut-rate cost, after which Boeing made a complaint of predatory pricing and product dumping.
Ms. May will visit with Prime Minister Justin Trudeau in Canada next week to discuss Boeing’s complaint. The bilateral meeting is expected to take place on Sept. 18, a source said.
Although the countries have several common interests, the dispute between Boeing and Bombardier is certain to be a priority, the source said.
Canada has already been working closely with Britain on this issue, Ms. Freeland said. “I think it absolutely makes sense to join forces,” she said, adding that she spoke on Monday to British Foreign Secretary Boris Johnson. “We are making our case, in very strong partnership and synchronicity, with our American partners, and I think that helps.”
Ms. May’s office told The Globe and Mail the Prime Minister raised her concern for the Canadian plane manufacturer with U.S. President Donald Trump in a phone call last week.
Already this month, Britain’s Secretary of Business, Greg Clark, discussed the matter with three Boeing executives, U.S. Commerce Secretary Wilbur Ross, Ms. Freeland and Bombardier chair Pierre Beaudoin, his department said.
“This is a commercial matter, but the U.K. government is working tirelessly to safeguard Bombardier’s operations and its highly skilled workers in Belfast,” a British government spokesperson said by e-mail. “… Our priority is to encourage Boeing to drop its case and seek a negotiated settlement with Bombardier.”
Bombardier manufactures wings for the C Series passenger jet in Belfast, and employs 4,500 people there. The British government has pressed Boeing to drop or settle the complaint, and has had dozens of meetings and phone calls with both plane manufacturers and the U.S. and Canadian governments.
David MacNaughton, Canada’s Ambassador to the United States, said the British decided to take a stand without urging from Canada.
“They obviously had a concern because of the factory in Belfast,” he said.
The British involvement will help Boeing to realize that being arbitrary and unreasonable is not in its best interests, the ambassador said.
“The U.K. is a big buyer of Boeing aircraft,” he said, “and I am not presuming to suggest what the government of the U.K. may or may not do, but obviously they take this seriously.”
Fred Cromer, president of Bombardier’s commercial aircraft business, called the British government’s involvement positive.
“Having that kind of support is important because it speaks to sort of the heart of the issue, which is jobs, innovation and the international supply chain” of the C Series airliner, he told reporters in Mirabel, Que., on Tuesday in an update on Bombardier’s commercial aircraft programs. He noted that the United States will enjoy $30-billion (U.S.) of investment and 20,000 jobs linked to C Series development and production.
When asked whether Bombardier would support a negotiated settlement with Boeing, Mr. Cromer declined to comment. He said the Canadian plane maker is looking beyond preliminary decisions to final rulings expected next year, striking a confident tone.
“I believe over the course of this that we will come out on top,” Mr. Cromer said. “As far as contingency plans, we’re going to continue to pursue what’s right for this airplane. And we believe that we will have access to the U.S. market.”
Boeing reiterated on Tuesday that it believes Bombardier sells its products in the United States at below cost.
“We believe that global trade only works if everyone plays by the same rules of the road, and that’s a principle that ultimately creates the greatest value for Canada, the United Kingdom, the United States and our aerospace industry,” a spokesperson said.
Supporters for the Canadian plane maker have lined up in the aerospace industry as the U.S. Commerce Department prepares a decision on its investigation into the anti-dumping complaint, expected for Sept. 25.
Major U.S. carrier Delta Air Lines Inc. defended Bombardier earlier this year, arguing that Boeing’s complaint was for too broad a range of aircraft sizes. Last year, Delta ordered 75 109seat CS100 planes from Bombardier. U.S. filings show the airline wants the anti-dumping investigation narrowed to the 125- to 150-seat range, which would include Boeing’s 737 MAX planes and Bombardier’s CS300 aircraft.
Two other U.S. carriers, Spirit Airlines Inc. and Sun Country Airlines, have supported Bombardier’s right to sell aircraft in the country.
The manufacturer remains confident in the contested range of plane sizes. In its latest market forecast released on Tuesday morning, Bombardier said 60- to 150-seat aircraft will be “a catalyst to further growth, market penetration and airline profitability.”
The International Association of Machinists is planning to protest against Boeing’s trade complaints in Montreal on Wednesday with a march to the city’s U.S. consulate. “Our members will be out there to protect their jobs and defend the aerospace industry in Canada,” the association’s Quebec co-ordinator, Dave Chartrand, said in a statement.
Jerry Dias, president of Unifor, the Canadian union that represents workers at Bombardier’s Toronto plant, met with Boeing officials in Washington on Tuesday.
He said they told him they are prepared to meet with Bombardier executives and federal government officials to try to resolve the issue before Sept. 25.
BOMBARDIER. BOEING. REUTERS. SEPTEMBER 13, 2017. Northern Ireland leaders appeal to VP Pence on Bombardier challenge
Amanda Ferguson
BELFAST (Reuters) - A dispute between Boeing Co and Canadian rival Bombardier that risks thousands of jobs in Northern Ireland could impact peace in the region, the leaders of its two main parties warned U.S. Vice President Mike Pence.
British Prime Minister Theresa May has asked President Donald Trump to urge the world’s largest aerospace company to drop its challenge against Bombardier, which could endanger a factory that employs 4,500 people in the British province.
Bombardier is Northern Ireland’s largest manufacturing employer and May’s Conservatives are dependent on the support of the small Northern Irish Democratic Unionist Party (DUP) for their majority in parliament.
“For a small economy such as ours, the significance of the contribution that Bombardier makes cannot be understated. The threat facing us as a result of the ongoing case is alarming, and goes much wider than it may immediately appear,” DUP leader Arlene Foster and Michelle O‘Neill of Sinn Fein said in letter to Pence, a copy of which was seen by Reuters.
“The security of our economy has and continues to be a crucial part of our efforts in delivering peace through prosperity. At a time when we are striving to take the next steps in our work on the Peace Process, and resolve our current political difficulties, this issue creates a new and potentially critical factor.”
Irish nationalists Sinn Fein and the pro-British DUP have for months tried in vain to re-establish a devolved power-sharing government, a key part of the 1998 peace deal that ended 30 years of sectarian violence in Northern Ireland.
Washington played a key role in helping broker the deal.
The parties confirmed that their leaders sent the letter, dated September 12.
Boeing this year asked the U.S. Commerce Department to investigate alleged subsidies and unfair pricing at Bombardier, accusing it of having sold 75 of its CSeries medium-range airliners to Delta Air Lines at well below cost price.
A U.S. trade court is due to give a preliminary ruling on Boeing’s complaint on Sept. 25.
Editing by Padraic Halpin and Matthew Mpoke Bigg
BOMBARDIER. The Globe and Mail. 13 Sep 2017. Bombardier seeks to revitalize older aircraft
NICOLAS VAN PRAET
Bombardier Inc. is trying to fire up sales of its aging regional jets by revamping the cabin interiors, part of a wider effort to replenish the backlogs for its older aircraft amid tough competition.
The Montreal-based plane maker said at a media event on Tuesday it will move forward with a previously announced concept for new interiors for its CRJ regional jets. Changes passengers will notice include more room in the overhead bins, mood lighting and washrooms that are 60-percent bigger than current versions with better access for passengers with reduced mobility and parents with children. The company did not say how much it would spend on the refresh.
Bombardier is also making changes to its Q400 turboprop aircraft. It has introduced a series of design tweaks to the planes over the past 18 months that have added three more windows to each side of the aircraft while enhancing the cabin interior and increasing capacity to as many as 90 seats. The company has earmarked $300-million for upgrades from 2008 to 2018.
Bombardier chief executive Alain Bellemare is two years into a turnaround effort at Bombardier that has seen the manufacturer raise cash, slash staff and get a new flagship aircraft, the 100- to 150-seat C Series, to market. The company is now turning its attention to its older aircraft with more urgency again in a bid to jump-start sales. It does not expect the C Series, which is now the subject of a heated trade battle between Canada and the United States, to break even on a pretax profit basis until 2020.
Colin Bole, Bombardier’s sales chief for commercial aircraft, said Bombardier is in the midst of a number of sales campaigns for the Q400 aircraft and that he expects many of those to result in firm orders. “I think you will see a dramatic change in the backlog for that program,” he said. The company in June clinched a letter of intent from India’s SpiceJet for as many as 50 turboprop planes as it begins to see the fruits of a bolstered marketing and sales push implemented after Mr. Bellemare’s arrival.
European rival ATR has commanded the global market for turboprops for years with a cheaper aircraft. Bombardier officials said they believe that dominance is set to reverse as airlines push their planes harder and further in the years ahead, which will favour the superior capabilities of the Q400. A trend by more airlines to integrate their turboprops into their jet networks and offer gate service will also favour Bombardier, the officials said.
The plane maker is working to reduce the manufacturing costs on its turboprops and confirmed on Tuesday that it is pushing ahead with plans to outsource the assembly of the wings and cockpit to suppliers outside Canada that can build them less expensively. It has not yet chosen sites for that work.
As for the CRJs, the company is tackling the biggest criticism against the aircraft, one that has persisted for years: That its cabin was inferior to that of Embraer SA’s E-Jet family.
Once the mainstay of its aircraft roster, Bombardier’s regional jets are today used by more than 100 airlines operating about 200,000 flights a month. In North America alone, they account for one in every five jets taking off. The plane maker has won firm orders for more than 1,900 CRJ aircraft, but sales have slowed in recent years.
Bombardier says there is a market for 12,550 commercial passenger aircraft of the size it produces over the next 20 years. Potential sales are worth $820-billion (U.S.) at 2017 list prices, the company said in an updated forecast. After a trend of buying larger aircraft in recent years, Bombardier says airlines are increasingly looking at taking smaller aircraft as they try to find the right size of equipment to maximize profits.
The C Series will be the centrepiece of Bombardier’s commercial aircraft offering. The company said on Tuesday that the aircraft is 3 per cent more fuel efficient than advertised in its sales brochures. With a file from Greg Keenan in Toronto Bombardier (BBD.B) Close: $2.42, up 1¢
HOUSING
HOME CAPITAL. The Globe and Mail. 13 Sep 2017. Home Capital investors say no to Buffett. Shareholders reject legendary investor’s bid to increase stake, which would have given his company an immediate $90-million profit
JAMES BRADSHAW
Shareholders in Home Capital Group Inc. have resoundingly rejected Warren Buffett’s bid to boost his stake in the mortgage lender, which must now try to rebuild its fortunes without additional support from its star investor.
Almost 89 per cent of shareholders voted on Tuesday to reject a proposal that would have allowed Mr. Buffett’s firm, Berkshire Hathaway Inc., to almost double its stake in Home Capital to 38.4 per cent.
Berkshire is already the alternative lender’s largest shareholder but was seeking to buy a second tranche of shares at the deeply discounted price of $247million.
The decision to turn down further investment from Mr. Buffett cost Berkshire an immediate paper profit of about $90-million, as the shares it had planned to buy were already worth $337million, based on Monday’s closing price.
But the vote can be interpreted as a signal that Home Capital’s shareholders are feeling better about the company’s financial stability. Since Mr. Buffett’s initial investment in June, when he struck a deal to buy $153-million in shares at a bargain price, the company has shown signs of progress and has been attracting money from depositors again.
Most shareholders saw no reason to further dilute their own stakes.
Yet, Home Capital still faces an uphill battle as it aims to rebound after surviving a brush with insolvency and a run on its deposits this year.
With Berkshire blocked from solidifying its position as a cornerstone investor, Home Capital must now rely on the stability of its own funding sources to begin rebuilding its diminished mortgage business.
“This meeting marks the end of an eventful chapter in the corporation’s history,” Brenda Eprile, chairwoman of Home Capital’s board of directors, told shareholders.
“To me, this decision on the second tranche is a clear message that the majority of our shareholders believe that Home Capital’s improved deposit inflows and liquidity position diminish the need for additional capital.”
Home Capital has a new chief executive officer, Yousry Bissada, who arrived in early August; a new chief financial officer, Brad Kotush; and a refreshed board of directors. Under their direction, the company is trying to strike a delicate balance: bringing down its funding costs while still attracting the deposits it needs to gradually increase the flow of new loans it underwrites.
But the vote’s outcome defied Home Capital’s own board, which had agreed to sell Mr. Buffett a second block of shares, subject to a vote. The board unanimously recommended selling the second tranche, arguing it would validate Mr. Buffett’s backing, enhance Home Capital’s stature in capital and deposit markets and provide extra liquidity.
Neither Ms. Eprile nor Mr. Bissada were available for interviews.
About 50 people attended the subdued, 24-minute meeting in a downtown Toronto convention centre. When the result was announced, one individual shareholder in the room, Harry Houtman, exclaimed: “Wow, great!”
Less than three months earlier, shareholders had reacted with similar relief after Mr. Buffett arrived on the scene of a crisis.
When Berkshire Hathaway agreed to acquire $400-million of Home Capital’s shares at discounted prices, the hastily negotiated deal was structured in two tranches. The first, for $153million or $9.55 a share, gave Berkshire an almost 20-per-cent stake. Berkshire also collects a fee for providing Home Capital with a $2-billion standby credit line.
Mr. Buffett’s name served as a key seal of approval, giving depositors greater confidence in the company. Since his initial investment, the flow of money into its guaranteed investment certificates has returned to more normal levels, and the company is now lowering the generous interest rates that were used to attract deposits.
“This company was in real trouble, and Berkshire stepping in – providing liquidity, making an investment in the stock – arguably saved the business,” said Jim Shanahan, an analyst at Edward Jones & Co. who covers Berkshire Hathaway.
The provisional second tranche of shares, negotiated as part of the original deal, would have cost Mr. Buffett only $10.30 a share – a 27-per-cent discount to Home Capital’s share price of $14.08 at Monday’s close on the Toronto Stock Exchange.
This second investment faced opposition from the start. Some analysts had already priced a no vote into their estimates. And the influential proxy advisory firm Institutional Shareholder Services Inc. recommended that shareholders vote against the deal. (Another firm, Glass Lewis & Co., sided with Home Capital’s board.)
Even executives at Berkshire were well aware the second tranche was never a sure bet. In June, Mr. Buffett told The Globe and Mail: “We hope the shareholders vote yes, but if they vote no, you know, we’ll be going ahead with everything we promised to do.”
A Berkshire Hathaway executive declined to comment on the vote.
It remains to be seen whether Berkshire’s long-term interest in Home Capital could be diminished now that it has a lesser stake in the company’s future.
“Since it’s small, will they stay with it?” Mr. Shanahan said. “This could be a long, slow recovery in the stock price going forward, and there just may be more attractive opportunities out there for Berkshire at some point.” Home Capital (HCG) Close: $14.33, up 25¢
REUTERS. SEPTEMBER 13, 2017. Canada home price growth cools in August as Toronto declines
OTTAWA (Reuters) - The pace of Canadian home price growth slowed in August as prices in Toronto dropped for the first time in 19 months as sales in the city have declined following provincial government efforts to rein in the market.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices rose 0.6 percent last month from July, less than the August average of 0.7 percent.
In Toronto, Canada’s largest city, prices were down 0.4 percent, the first decline since January 2016. Price weakness was seen in particular among homes other than condominiums, such as single-family homes, the report said.
Toronto prices were up 23.9 percent compared with a year ago, though that was still a moderation from the 28 percent annual increase seen in July.
Sales have declined in Toronto since the Ontario government in April imposed a number of measures to address concerns of affordability in Toronto and surrounding areas, including a foreign buyers tax.
Monthly prices in nearby Oshawa and Barrie declined 2.2 percent and 0.7 percent, respectively, while Hamilton was up 0.6 percent.
In Vancouver, where the province of British Columbia implemented its own foreign buyers tax last year, prices were up 2.4 percent, putting the index at a fresh peak.
Although the tax initially dampened activity in Canada’s most expensive real estate market, sales and prices in Vancouver have been heading back up.
Reporting by Leah Schnurr; Editing by Lisa Shumaker
INFRASTRUCTURE
BROOKFIELD. The Globe and Mail. 13 Sep 2017. Brookfield builds its capital infrastructure. Brookfield Infrastructure (BIP) Close: $50.91, down $2.34. BIP’s joining S&P/TSX composite, access to ETFs ‘opens up the door to a whole host of investors,’ CEO says.
JACQUELINE NELSON
Brookfield Infrastructure Partners LP is on the cusp of its second decade, and chief executive officer Sam Pollock is shoring up capital while preparing to welcome a new slate of index investors to mark the occasion.
As soon as next week, BIP will mark a long-awaited milestone when it becomes a fixture on the S&P/TSX composite index, after recent changes to the eligibility requirements. BIP has been seeking the recognition for years, craving not only a higher profile but also access to the fast-growing group of exchange-traded funds.
“It opens up the door to a whole host of investors,” said Mr. Pollock, who is also responsible for the expansion of the infrastructure operating platform at parent organization Brookfield Asset Management Inc. BIP is also seen as a candidate to be added to the TSX 60.
It’s been roughly a decade since Brookfield said that it would spin out its infrastructure assets and list them on the New York Stock Exchange. At the time, the country’s largest pension funds were just beginning to build up a presence in the still-emerging asset class, but there was an expectation that retail investors, too, were hungry for investments that could offer a steady income – particularly given the evaporation of income trusts.
These days, the market looks a lot different.
“What it feels like is taking place is a greater recognition by governments … that they can’t do some infrastructure themselves,” Mr. Pollock said. “Governments, at least in the developed world – Canada, U.S. and Europe – haven’t really taken advantage of the dollars out there. So they’re waking up to it.”
That’s likely to lead to an increase in public-private partnerships and privatizations in the next 10 years, Mr. Pollock said. After that, he anticipates that the asset class will be considered mature, much like the real estate industry is now.
Countries such as Canada and the United States have expressed interest in attracting more institutional investors to building projects such as toll roads, power lines and water treatment facilities in recent months. A record amount of money is being amassed by global infrastructure firms, according to alternative asset data provider Preqin, with yield-hungry investors drawn to the lower volatility, long-term nature and steady returns of the utility-like assets.
Amid the competition, BIP’s favoured approach is to pitch its own projects, rather than just shopping at auction. The company maintains that there are pockets of opportunity to be carved out in niche areas such as Indian telecommunications and parts of the energy sector.
Devin Dodge, analyst at BMO Nesbitt Burns, began covering the stock earlier this week and sees a lot of growth potential. He points to the S&P/TSX composite index inclusion, the stock’s valuation and the potential for the company to grow not only through mergers and acquisitions, but also through organic growth.
BIP has a backlog of capital projects – investments needed to maintain or improve its assets – of $2.4-billion (U.S.) and could increase by as much as $2-billion more within 12 months. Mr. Pollock said that these investment are typically where the business earns its highest returns because “we’re not competing to the same degree as we would an M&A opportunity where we have to go up against a number of pension plans.”
To fuel future deals – and fund the expanding need for capital investments needed to grow businesses BIP already owns – the company launched a $1-billion equity offering Monday. BIP’s stock is up 31 per cent in the past year, but slipped about 5 per cent on Tuesday.
Still on Mr. Pollock’s wish list are more assets in the company’s Canadian home market, which would appeal to more local investors. Ideally, he’d like to keep 25 per cent to 30 per cent of the company’s business in North America but finding good value has been a challenge.
In the meantime, BIP has spent the last few years focused on building up its investment business in Asia, establishing offices in the region and learning from the Brookfield real estate investment team’s deals in the region.
“Probably the biggest focus today is Asia – so we’ve been building teams for about the three-four years in India, Japan, South Korea and China,” Mr. Pollock said. In five to 10 years, he anticipates that one-quarter of BIP’s business will be in Asia.
ENERGY
BROOKFIELD. The Globe and Mail. 13 Sep 2017. Chinese firm SanLing buys Brookfield energy asset
JEFF LEWIS
Brookfield Asset Management Inc. has sold one of its oil and gas holdings in Alberta to SanLing Energy Ltd., extending the slow drip of Chinese capital into Canada’s oil and gas industry.
Brookfield Business Partners LP, a unit of the global asset manager, announced the sale of Insignia Energy Ltd. last month in a quarterly letter to shareholders.
The deal resulted in a small impairment for Brookfield, which said it opted to sell the company rather than commit the additional capital required to keep up production. Neither the buyer nor the purchase price were disclosed. However, sources say the buyer was SanLing, one of a handful of private Chinese companies that collectively have pumped more than $3-billion into primarily distressed assets through the prolonged industry slump. Private Chinese suitors have largely replaced the bigger state-run companies as a source of foreign capital in Canada’s oil and gas sector after multibilliondollar investments by CNOOC Ltd. and PetroChina Co. Ltd. underperformed. SanLing also bought assets out of receivership from bankrupt Spyglass Resources Corp. and is said to have purchased $200-million worth of properties from companies controlled by Calgary’s wealthy Riddell family.
A representative with SanLing was not immediately available for comment. Brookfield Asset Management (BAM.A)
Close: $48.27, up 28¢
CENSUS 2016
StatCan. 2017-09-13. Household income in Canada: Key results from the 2016 Census
- Median total income of households in 2015 — Canada: $70,336
- Proportion of population in low income in 2015 — Canada: 14.2%
- Proportion of persons younger than 18 in low income in 2015 — Canada: 17.0%
- Proportion of persons younger than 18 in low income in 2015 — Canada: 17.0%
- Proportion of households contributing to TFSA, RRP or RRSP in 2015 — Canada: 65.2%
The median total income of Canadian households rose from $63,457 in 2005 to $70,336 in 2015, a 10.8% increase.
Today, Statistics Canada is releasing data from the 2016 Census on the incomes of Canadians. This release presents incomes of Canadians as measured in 2015, and looks at trends over the 2005-to-2015 period, a decade of significant income growth and economic change.
An important factor in the economic story of Canada over the decade was high resource prices that drew investment and people to Alberta, Saskatchewan and Newfoundland and Labrador, boosted the construction sector, and more generally filtered through the economy as a whole.
This boom in the resource sector coincided with a decline in the manufacturing sector, with fewer jobs in this sector in 2015 than 2005. The bulk of these manufacturing job losses were in Ontario and Quebec.
This census release paints a picture of the income of Canadians in 2015 before the effects of the oil price slowdown in 2015 and 2016 were fully felt.
Led by growth in resource-rich provinces, median income rose 10.8% in Canada from 2005 to 2015, compared with 9.2% growth in the previous decade and a decline of 1.8% the decade before that.
This growth was not distributed evenly across Canada. Resource-based provinces and regions had the highest income growth, led by Nunavut, and Saskatchewan. Median income growth was slowest in Ontario and Quebec, the two provinces with the largest populations and significant manufacturing activity.
The low income rate was relatively stable over the last decade, rising marginally from 14.0% in 2005 to 14.2% in 2015. There were regional variations over the decade. The number of persons in low income declined in Saskatchewan and Newfoundland and Labrador, while the number increased in Ontario. There were also variations across age groups with a smaller proportion of young children living in households with low income and a larger proportion of seniors.
Almost two-thirds of Canadian households contributed to an RRSP, RPP or TFSA in 2015. Of these households, more than half contributed to only one plan, while one-third contributed to two plans and 14% contributed to all three.
In 2015, 96% of Canadian couples had both spouses reporting income, up significantly from about two-thirds in the mid-1970s.
One-third of couples had fairly equal incomes in 2015 compared with about one-fifth of couples 30 years earlier.
Provincial median income growth reflects employment trends in resources and manufacturing
According to the Labour Force Survey, two industrial sectors experienced declines in employment from 2005 to 2015: manufacturing (-22%) and agriculture (-14%). Over the same period, employment in the health care sector rose over 30% as did employment in construction and the professional, scientific and technical services sector, sectors associated with economic expansion. These changes in the economy are reflected in changes to median household income.
Nunavut (+36.7%) and Saskatchewan (+36.5%) had the highest growth in median incomes over the past decade. Newfoundland and Labrador, the Northwest Territories, Alberta, and Manitoba also saw median incomes grow by more than 20% over the decade.
The decline in manufacturing jobs in Quebec and Ontario was reflected in the lower growth of median incomes in those two provinces. Quebec (+8.9%) and Ontario (+3.8%) were the provinces with the lowest growth rates.
The metropolitan areas within these regions also tended to follow these provincial/territorial patterns. For example, almost every metropolitan area in Ontario saw income growth below the national average, while almost every metropolitan area on the Prairies had income growth above the national average.
The following sections look at regions across the country and provide further detail on the growth in median household income for provinces and metropolitan areas.
Infographic 1 Thumbnail for Infographic 1: Growth rate in median total income of households by province and metropolitan area, 2005 to 2015
Growth rate in median total income of households by province and metropolitan area, 2005 to 2015
Atlantic provinces and Quebec had the lowest median incomes
The Atlantic provinces and Quebec had the lowest median incomes in Canada in both 2005 and 2015. However, investments in the resource sector during this time led to higher incomes in Newfoundland and Labrador (+28.9%), resulting in the third-fastest income growth among the provinces and territories. This increase lifted Newfoundland and Labrador from the lowest median income in the Atlantic/Quebec region to the highest over the course of 10 years.
Every metropolitan area in Newfoundland and Labrador posted income growth above 12% over the decade. The growth was highest in Bay Roberts (+33.1%) and St. John's (+27.5%), followed by Corner Brook (+15.7%), Grand Falls-Windsor (+14.5%), and Gander (+12.4%). Among metropolitan areas in the rest of Atlantic Canada, only the median income in Miramichi, New Brunswick (+14.3%), grew at a faster pace than the slowest-growing Newfoundland and Labrador metropolitan area.
New Brunswick ($59,347) had the lowest median income in Canada in 2015, followed by Quebec ($59,822). Median household income grew by 8.9% in Quebec from 2005, the second-slowest provincial/territorial growth rate in Canada over the decade. Montréal, the largest city in the province, had a median total income of $61,790 in 2015, up 8.8% from 2005.
Despite a low median income growth rate in Quebec, several metropolitan areas in resource rich areas had relatively high income growth. Median incomes in Rouyn-Noranda (+20.4%), Val D'or (+18.0%) and Sept-Îles (+13.4%) all grew faster than 10%, as did those in Québec (+11.1%). Conversely, median incomes were 4.1% lower in Baie-Comeau.
In the Eastern Townships, Granby (+19.1%) and Cowansville (+16.0%) had among the highest growth in the number of households within the province. However, median income growth in Granby (+3.8%) and Cowansville (+1.8%) were well below the Quebec average of 8.9%. Both Granby and Cowansville had higher-than-average growth in the number of people over the age of 65 and they also had relatively high levels of manufacturing.
Ontario had the slowest growth in median income since 2005
The median household income in Ontario was $74,287 in 2015, ranking sixth among the provinces and territories, and $3,951 above the Canadian median. Ontario had the slowest growth in median income (+3.8%) of any province or territory over the decade, and as a result, its rank fell three places from third highest in 2005, when it was $8,077 above the Canadian median.
The decline in the manufacturing sector in Ontario over the decade partly underlies these trends. According to the Labour Force Survey, employment in all industries grew by about 8.5% in Ontario from 2005 to 2015, while the manufacturing sector lost 318,000 jobs, down 30.0% from 2005. A combination of factors, including technological change, globalization, lower exchange rates and low productivity, help explain why manufacturing employment has declined.
The Ontario portion of Ottawa–Gatineau ($86,451), Petawawa ($86,048) and manufacturing-based Oshawa ($85,697) had the highest median income among metropolitan areas in Ontario in 2015. Ottawa, with 4.4% growth in median income, rose from second place a decade earlier to first among metropolitan areas in the province. Meanwhile, Oshawa fell from first to third place, with median income edging up 0.1%.
While Petawawa ranked seventh in median income in 2005, its rank rose to second place a decade later, with median income growth of 11.8%. Petawawa and Timmins (+11.7%) shared the highest median income growth rates among metropolitan areas in Ontario.
Toronto had a median income of $78,373 in 2015, up 3.3% from 2005, and its ranking improved from the ninth-highest median income in Ontario to the eighth.
Among the 152 Canadian metropolitan areas, 9 saw median incomes fall, 8 of which were in Ontario and 1 in Quebec. The decline in manufacturing in Ontario affected certain manufacturing towns more than others. Windsor (-6.4%) and Tillsonburg (-5.7%) had the largest declines in median incomes in Ontario metropolitan areas and both had about one-quarter of their workforce in manufacturing in 2005.
Prairie provinces boom
Earlier results from the 2016 Census show that the population is moving west. While economic opportunities in the West underlie this trend, median income growth does not necessarily follow the growth in the number of households and in the West was more related to developments in the resource (oil) and construction sectors.
Over the decade, the Prairie provinces had the highest growth in both the number of households and household median income in Canada. Even within the Prairie provinces, however, there were differences. For example, the growth in the number of households was faster in Alberta (+21.6%) than Saskatchewan (+11.7%), yet the median income growth in Saskatchewan outpaced that of Alberta.
The median household income in Manitoba was $68,147 in 2015, ranking eighth among the provinces and territories. Despite a 20.3% increase in median income since 2005, roughly twice the national growth rate, Manitoba slipped one rank from seventh in 2005 because other regions had even stronger growth.
Winkler (+24.2%) and Brandon (+23.3%) had the highest median income growth among the metropolitan areas in Manitoba. The income growth was slower in Steinbach (+16.6%), despite having the fastest growth in the number of households at 41.8%. In Winnipeg, the largest city in Manitoba, median incomes grew 16.6%, somewhat below the provincial growth rate.
Saskatchewan (+36.5%) had the highest median income growth among the provinces, and was second highest nationally following Nunavut (+36.7%). On the strength of this income growth, Saskatchewan improved its provincial/territorial ranking from eighth to fifth over the decade.
Although Moose Jaw (+26.4%) had the slowest income growth among Saskatchewan metropolitan areas, it was faster than all but 17 of the 152 metropolitan areas in Canada. Saskatchewan was also home to the metropolitan area with the highest growth in median income in Canada (Yorkton), up 40.5% from 2005. The number of households in Moose Jaw and Yorkton grew by about 6.5% over this period—among the slowest growing metropolitan areas in Saskatchewan.
Alberta ($93,835) had the third-highest median income among the provinces and territories in 2015, down from second place in 2005. Alberta was the fifth-fastest growing province/territory in Canada at 24.0%.
Within Alberta, median total income rose the fastest in Wood Buffalo (35.2%), followed by Camrose (+29.9%), Wetaskiwin (+27.3%), Okotoks (+27.0%), Edmonton (+26.6%), Cold Lake (+23.0%) and Calgary (+22.7%). While Sylvan Lake had the slowest growth in median incomes of any Alberta metropolitan area (+7.8%), it had the second-largest increase in the number of households (+50.5%).
British Columbia just above the national growth rate
The median household income in British Columbia was $69,995 in 2015, seventh among the provinces and territories, down from sixth in 2005. Median incomes increased 12.2% from 2005, 1.4 percentage points above the Canadian average, making British Columbia the eighth-fastest growing region over the decade. Fewer manufacturing and agricultural jobs coincided with employment increases in utilities, health care and social assistance, and forestry and construction sectors.
Every metropolitan area in British Columbia experienced some growth in their median income. Median income growth ranged from 2% or less in Powell River, Port Alberni and Quesnel to over 20% in Cranbrook (+21.8%), Prince Rupert (+23.2%), Terrace (+24.6%), Fort St. John (+27.5%) and Dawson Creek (+31.6%). Vancouver, with a median income of $72,662 in 2015, experienced an income growth rate of 11.2% since 2005, somewhat below the provincial rate.
The territories: Strong income growth
Median household income rose significantly in all three territories. The overall median income growth rate of the territories was 22.4%, second only to the growth seen on the Prairies (+25.7%).
Nunavut led the country with a median income growth of 36.7%. The growth in Nunavut reflected more workers in the resource sector and government sector over the decade.
The Northwest Territories had the second-highest median income growth in the North at 24.5%, followed by Yukon (+18.9%).
People living in low-income households
Low income relatively stable from 2005 to 2015
This Census release uses the After Tax Low Income Measure (LIM-AT). The concept underlying the LIM-AT is that a household has low income if its income is less than half of the median income of all households.
The low-income rate was relatively stable over the decade, edging up from 14.0% in 2005 to 14.2% in 2015. While the rate was relatively stable, some groups and regions saw an increase in low income, while others had fewer low-income households.
Infographic 2 Thumbnail for Infographic 2: Incidence of low income by single year of age, Canada, 2005 and 2015
Incidence of low income by single year of age, Canada, 2005 and 2015
Fewer children living in low income, more low income seniors
Younger Canadians were more likely to live in low income than adults in 2015. Among children 17 years of age and younger, the low income rate was 17.0% compared with 13.4% for Canadian adults.
A smaller proportion of children aged 5 or younger were living in low income households in 2015, as the rate decreased from 18.8% to 17.8% over the decade, while it was unchanged for children 6 to 15 years of age at 17.0%. However, a larger proportion of Canadians 65 years of age or older were in low income in 2015 compared with 2005. The rate of senior Canadians in low income rose from 12.0% in 2005 to 14.5% by 2015. While the increase was particularly strong for senior men, overall, senior women were still more likely to be in low income in 2015.
Low income down sharply in Newfoundland and Labrador and Saskatchewan
From 2005 to 2015, low income fell sharply in Newfoundland and Labrador (from 20.0% to 15.4%) and Saskatchewan (from 16.8% to 12.8%). In addition, a smaller share of the population was living in low income in Alberta and Quebec. In Ontario however, the low-income rate rose from 12.9% to 14.4%.
With its decline in low income, Saskatchewan moved from having the fourth-highest low-income rate among provinces in 2005 to having the second-lowest rate in 2015, just behind Alberta (9.3%). Newfoundland and Labrador moved from the highest rate in 2005 to fifth highest in 2015, leaving Nova Scotia, New Brunswick and Prince Edward Island with the highest incidences of low income in Canada.
Low-income rates fell fastest in metropolitan areas related to the resource boom and rose fastest in manufacturing intensive Ontario metropolitan areas
Changes in low income for metropolitan areas also reflected sectoral boom and bust. The largest declines in low income occurred in metropolitan areas in resource-rich areas of the country. The low-income rate in St. John's fell from 16.0% in 2005 to 12.0% in 2015, while in Saskatoon it fell from 15.3% to 11.7%. The metropolitan areas with the largest increases in low income were in Ontario, where every large metropolitan area saw an increase in their low income rate, led by London (from 13.3% to 17.0%) and Windsor (from 14.0% to 17.5%).
For additional information on the incidence of low income for children, see the Census in Brief article "Children Living in Low Income Households."
Incomes of couples: Nearly one-third of all couples had fairly equal incomes
There were 8.2 million married or common-law couples in Canada in 2016. Among the vast majority of these couples (95.9%), each partner received some form of income in 2015, up significantly from about two-thirds of couples in the mid-1970s. Although one partner often received substantially more than the other, the incomes of nearly one-third (32.0%) of couples were fairly equal (both earning from 40% to 60% of the couple's total income). This was up from 30 years ago, when 20.6% of couples had fairly equal incomes.
Many factors have contributed to this advance, led by the increased labour force participation of women. Combined with a narrowing of the gender wage gap, women now contribute a larger portion of the couple's combined income.
Partners also receive income from sources such as government transfers, which can account for an important portion of a couple's income, particularly for seniors and couples with children. Changes to transfer programs, as well as demographic shifts such as population aging, have also contributed to a change in the relative split in income between partners.
Men are more likely to be the higher income recipient
While partner's incomes were fairly equal in one-third of couples, in 50.7% of couples a male had relatively higher income while in 17.3% a female had relatively higher income.
This too, has changed over time. In 1985, a man had relatively higher income in 71.3% of couples compared with 8.0% for women.
The combined median total income of couples was $87,688 in 2015. The higher income partner had a median income of $59,121, more than double that of the lower income partner ($25,015).
Same-sex couples have higher incomes
Median incomes were higher in same-sex couples than in opposite-sex couples, in part because a greater proportion of same-sex couples are in their prime working years. Female same-sex couples had a median total income of $92,857 in 2015, while male same-sex couples had a median income of $100,707—the highest among all couple types. In fact, over 12% of male same-sex couples had incomes over $200,000, compared with 7.5% of female same-sex couples and 8.4% of opposite-sex couples.
Lower income partners in same-sex couples also had higher median incomes than their opposite sex counterparts. The median income of lower income partners was $31,192 in male same-sex couples and $30,942 in female same-sex couples compared with $24,969 in opposite-sex couples.
In 2015, a greater proportion of female same-sex couples (38.4%) had fairly equal incomes compared with opposite-sex (32.0%) or male same-sex couples (33.2%).
Almost two-thirds of households used a tax-assisted savings option
With an aging population and longer life expectancies, the need to save for retirement is high on many people's minds. Canadians use a variety of methods to save for their retirement, including employer sponsored Registered Pension Plans (RPPs), or tax-sheltered savings in either Registered Retirement Savings Plans (RRSPs), or Tax-Free Savings Accounts (TFSAs). In 2015, almost two-thirds (65.2%) of Canada's 14 million households contributed to one of the three major types of registered savings accounts. Just over 30% of households contributed to more than one account, and 9.3% contributed to all three.
Households with lower income were more likely to contribute to TFSAs than to RRSPs or RPPs, and contribution rates generally increased with income. Among households with after-tax income below $80,000, a larger proportion contributed to TFSAs (33.8%) than to RRSPs (20.1%) or RPPs (17.6%). However, households with higher income were generally more likely to contribute regardless of the type of account.
Telling Canada's story in numbers; #ByTheNumbers
In celebration of the country's 150th birthday, Statistics Canada is presenting snapshots from our rich statistical history.
The economy of Canada at the time of Confederation and the incomes of Canadians bear little resemblance to today's modern global economy. Formal income statistics were not collected in 1867 and the vast majority of income was derived from farming, fishing, trapping, logging and, to a lesser degree, mining.
There were no income taxes at the time of Confederation and most Canadians in 1867 did not "retire." Rather, most people lived and worked until they were physically unable to continue, whereupon they were supported by their family.
The incomes of Canadians have evolved over the last 150 years. Today, most Canadians have paid jobs, pay taxes, receive transfers and, as shown in the earlier Census release, live mainly in urban areas.
Census in Brief article "Household contribution rates for selected registered savings accounts": http://www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016013/98-200-x2016013-eng.cfm
The Globe and Mail. 13 Sep 2017. Ontario’s minimum-wage hike could cost more than 50,000 jobs, watchdog warns
JUSTIN GIOVANNETTI
More than 50,000 people could lose their jobs because of the Ontario government’s plan to increase the minimum wage to $15 an hour by 2019, the province’s financial watchdog is warning.
Most of the job losses would fall on young adults and teens while the number of Ontarians paid the minimum wage would balloon from about 500,000 to 1.6 million, according to the Financial Accountability Office’s report released on Tuesday.
The wage hike, announced in July by Premier Kathleen Wynne, would increase the minimum wage from $11.40 currently to $14 by Jan. 1, 2018, and $15 the following year – an increase of 32 per cent over less than two years.
The watchdog’s report warned that the job losses could be larger than its estimate of 50,000 because the size and speed of the wage hike is unprecedented. “[It is] providing businesses with a greater incentive to reduce costs more aggressively,” according to the report.
But Ontario Labour Minister Kevin Flynn said on Tuesday that the report would not change the planned hikes. Mr. Flynn said employers should be able to find a way to pay for the increased wages because of the province’s strong economy, but he didn’t rule out that many of them would look to higher prices.
“If you put in 35 to 40 hours a week, you deserve to live a life free of poverty,” he said.
But Monte Wan, like thousands of small-business owners across Ontario, is looking at his payroll and the provincial wage hike and can’t make the math work.
For Mr. Wan, who operates two Thai restaurants and a bar in central Toronto, the increase would cost about $200,000 annually. With half of his business income already going to wages because Thai cuisine is labour-intensive, he can’t see how he can balance his costs without raising prices and outsourcing work.
“I believe absolutely in a minimum wage. I give my employees as much as I can. I had considered an increase to $15 for my staff before the government announced it, but this is absolutely the wrong way to do it,” he said.
He’s worried that as smallbusiness owners raise their prices to pay workers, most people will be left with less money and some will lose their jobs. He’s now looking at outsourcing the production of his sauces and curries to a foreign company to reduce costs.
“I don’t think anyone will see any more money in their pocket. This won’t help my employees at all,” Mr. Wan said. He has told his local MPP that he thinks a better way to help low-income workers would be by cutting income taxes.
The province’s Liberal government has also promised a series of changes to labour laws along with the wage increase that would bring in rules requiring more vacation time and emergency leave, as well as equalpay provisions, while restricting last-minute scheduling changes by employers. The Ontario Chamber of Commerce has warned as many as 185,000 jobs could be lost owing to all the changes.
Along with higher wages and new labour rules, some professionals and small-business owners are also angry about the federal government’s proposed tax changes that would restrict their ability to sprinkle income to family members or use other tools to alleviate their tax burden.
The wage increase could have a positive impact on employment, Mr. Flynn told reporters at Queen’s Park. While he warned that economists disagree on the issue, he said that research in the United States showed an increase in jobs after wage hikes.
Progressive Conservative Leader Patrick Brown said on Tuesday that he would slow the final wage hike to $15 if his party formed government after next year’s general election.
While Alberta is planning to increase its minimum wage to $15 by 2018, British Columbia’s new government had planned to increase the minimum wage to $15 by 2021. However, that province’s New Democrats have backed away from their plan. Mr. Brown said that Ontario could remain on a more aggressive timetable than B.C., suggesting an increase to $15 by 2021 at the latest.
“I support a $15 minimum wage. I don’t think anyone can live on $11 an hour. We do need to have a living wage but I think it’s about how we get there. What I’d like to see is a more reasonable implementation period that gives notice to our job creators,” he said.
THE GLOBE AND MAIL. SEPTEMBER 13, 2017. CENSUS 2016. Census 2016: Income grows in resource-rich provinces, Ontario and Quebec lag behind. Over the past decade, Canadian median income rose 13 per cent for individuals, with much variation between regions, according to the latest data. Here are the highlights
TAVIA GRANT
RACHELLE YOUNGLAI
MURAT YUKSELIR
Median household total income in 2015, by 2016 census division
Income
Number of census divisions
$80,000 and over
43
65,000 to 79,999
86
50,000 to 64,999
137
Less than 50,000
27
Sparsely populated
THE GLOBE AND MAIL, SOURCE: STATISTICS CANADA
Graphics by Murat Yükselir/The Globe and Mail
Most Canadians saw their incomes climb over the past decade as the resource sector boomed, though new census numbers underscore the dramatic variation between regions.
The median incomes of individuals in Canada rose 12.7 per cent between 2005 and 2015, to $34,204, adjusting for inflation, Statistics Canada said Wednesday. For Canadians in all household types, median income rose 10.8 per cent between 2005 and 2015, to $70,336. That is an acceleration from the prior decade's 9.2-per-cent growth and the decline of 1.8 per cent between 1985 and 1995.
The income data is the fourth tranche of information from the 2016 census following releases this year on population, age, language and living arrangements. It's the first time the agency has linked income data from the Canada Revenue Agency to all census respondents.
The findings paint a picture of growth for most households, though the gains were uneven. Households in the Prairies registered rapid increases in median incomes, led by Saskatchewan where median individual incomes jumped 36 per cent in the decade. Median incomes in Ontario and Quebec, which have the highest populations and suffered steep factory job losses, saw the weakest gains. More seniors are living in low income, while the share of young children living in poverty declined.
As a result of these shifts, Ontario's low-income rate is now close to the national average. The Atlantic provinces still have the highest low-income rates in Canada.
"The biggest thing that jumps out, when you look at median household income, is the clustering of growth in provinces and cities," said Brian Murphy, chief of analysis for census income at Statscan. "The strong growth has been in the West, the North and Newfoundland, so areas related to high resource development, so a lot of construction follows … in the flip side of that, Ontario shows up as having below-normal growth."
Canadians experienced sweeping economic changes in the 10-year period, with a 2008-2009 recession followed by a recovery and rapid price increases in the housing market, especially in urban areas such as Vancouver and Toronto, where average house prices nearly doubled in the decade. Because it's based on 2015 incomes, the data does not fully capture the impact of the 2015-2016 oil price collapse that slammed resource-dependent provinces such as Alberta and Newfoundland.
Median income: The big picture
The median income for individual Canadians rose 12.7 per cent to $34,204 over the past decade, with the heftiest gains in the oil-producing provinces.
The median individual income in Newfoundland and Labrador rose 37 per cent to $31,754. In Saskatchewan, it increased 36 per cent to $38,299 and in Alberta it grew 25 per cent to $42,717.
The multiyear boom in commodities prices was responsible for driving up wages in the three resource-dependent provinces. The fastest growth for individuals was in the oil sands region of Wood Buffalo, Alta., where the median income rose 49 per cent. Other areas that experienced rapid wage increases included Yorkton and Estevan in Saskatchewan.
Meanwhile, the loss of factory positions in the country's manufacturing heartland of Ontario weighed heavily on the province. The median individual income increased 3.8 per cent to $33,359 – the slowest growth in the country.
Change in median income, by region, by sex
2015 constant dollars
Males
Females
2005
2015
2005
2015
0
40,000
10,000
20,000
30,000
50,000
$60,000
Canada
B.C.
Alta.
Sask
Man.
Ont.
Que.
N.B.
N.S.
PEI
Nfld.
Yukon
NWT
Nunavut
THE GLOBE AND MAIL, SOURCE: STATISTICS CANADA
Change in median income, by age group, Canada
2015 constant dollars
2005
2015
0
10,000
20,000
30,000
40,000
$50,000
All age groups
15 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 to 74
75 and over
THE GLOBE AND MAIL, SOURCE: STATISTICS CANADA
In areas where manufacturing was a major employer in Ontario, the median income dropped over the decade. Windsor saw the median income fall 1.5 per cent. When looking at households, the median income in Windsor declined 6.4 per cent, Tillsonburg dropped 5.7 per cent and Leamington fell 2.8 per cent.
The release is notable for what it doesn't contain: the agency compared income trends in 2015 with the 2005 census, skipping over any comparison with the 2011 National Household Survey. That last release on 2011 incomes was controversial as a government-mandated switch to a voluntary survey resulted in lower response rates. Many researchers didn't use the data, citing it as unreliable.
The release also didn't contain details on demographics, such as how incomes by ethnicities fared in the 10-year period, how education levels affected income trends or which occupations saw the strongest gains. Nor did it detail how income inequality changed in the past decade, or changes in income distribution.
Which Canadians earned more?
Which Canadians earned more?
Cities within the oil-producing provinces experienced the steepest increase in the number of people earning more than $100,000, which is considered in the top 10 per cent of all income earners.
In Saskatchewan, the number of these high-income earners more than tripled in North Battleford and Yorkton. In Bay Roberts, Nfld., and Okotoks, Alta., the number of individuals earning at least $100,000 nearly tripled.
Toronto and Montreal continued to be the top two locations for individuals earning a minimum of $100,000 in 2015. But over the 10-year period, Calgary edged Vancouver out of the third spot. Calgary, which is home to major oil companies headquarters, nearly doubled the number of high-income earners while Vancouver increased its ranks by 55 per cent.
In contrast, Toronto's high-income earners grew by 40 per cent and Montreal rose by 35 per cent.
Which Canadians earned less?
Which Canadians earned less?
Percentage of the population that is low income*
in 2015, by 2016 census division
Number of census divisions
20% or greater
31
15 to 19.9
100
10 to 14.9
113
Less than 10
39
Not available
10
Sparsely
populated
*For a one-person household, the after-tax low-income measure is $22,133.
THE GLOBE AND MAIL, SOURCE: STATISTICS CANADA
Canada's low-income rate – as measured by the after-tax low income measure – was 14.2 per cent in 2015 from 14 per cent a decade earlier. The measure counts a household as low income if it earns less than half of the median of households. As of 2015, the low-income threshold for someone living alone was $22,133.
All told, 4.8 million people in Canada were considered as living in low income in 2015, compared with 4.3 million in 2005.
Though the rate was little changed, the poverty shifted among regions and age groups. More seniors are living in low income, while the proportion of children under the age of five in low-income households declined. "While the increase was particularly strong for senior men, overall, senior women were still more likely to be in low income in 2015," Statscan said.
By province, low income shares fell "sharply" in Newfoundland (to 15.4 per cent from 20 per cent) as well as in Saskatchewan, the agency said; in Ontario, it rose to 14.4 per cent from 12.9 per cent.
More details on low-income trends by demographic groups will come in Statscan's November release.
Children and low income
Children represent nearly a quarter of people in low-income in Canada, with almost 1.2 million kids under the age of 18 living in poorer households in 2015.
Their share in the low-income population has been falling, helped partly by the introduction of new policies. The average child benefit that families received "has nearly doubled since the 1990s," the agency noted. Among cities, Windsor, Ont. (hit hard by a manufacturing downturn) has the highest rate in Canada of children living in low-income households. Nearly one in four kids in the city lived in low income.
By province, Alberta has the lowest rate of kids living in poverty, while Nova Scotia and New Brunswick have the highest rates. Quebec – which has lower daycare costs and higher child benefits – is the only province where kids are less likely than adults to live in low-income households.
By household type, single-mother families have the highest incidence of children in low-income, at 42 per cent. Two-parent families have a lower rate, at 11.2 per cent. And households with three or more children tend to have higher child poverty rates.
INCOME IN CANADA: WHY IT MATTERS WHERE YOU LIVE
CENSUS 2016: WHAT WE'VE LEARNED SO FAR
JOYITA SENGUPTA
Canadians are richer than they've ever been, a new report says, and thanks to rising real estate and stock markets, the country now boasts four cities where the average household net worth is over $1-million: Vancouver, Toronto, Calgary and Victoria.
According to the annual WealthScapes report from Environics Analytics, national household net worth rose 12 per cent over last year to $770,635, while household debt grew 4.4 per cent. Canadians also increased their savings by 5.6 per cent and their investments by 13.2 per cent last year.
Last year's momentum has carried well into this year. On Friday, Statistics Canada said second-quarter gross domestic product grew at an annual pace of 4.5 per cent, propelled by vigorous consumer spending.
Household spending grew at an annual pace of 4.6 per cent. Real estate price appreciation could be one factor making Canadian homeowners particularly confident and spend-happy, according to Peter Miron, lead developer of the WealthScapes report.
"The biggest story by far this year is real estate. The growth in real estate prices has been jaw-dropping in the Golden Horseshoe area and Vancouver. Even if you step out of those major markets there is very strong real estate growth," Mr. Miron said. The report is based on 178 financial and investment statistics from January to December, 2016, from a variety of sources including the Bank of Canada, Equifax, Teranet-National Bank and Statistics Canada.
Once-quieter real estate markets in Southern Ontario were booming last year. Real estate values in Oshawa, just east of Toronto, grew by 25 per cent, with net worth in the region seeing a corresponding 17.3-per-cent jump. Net worth jumped by 15.1 per cent in Hamilton and 14.7 per cent in St. Catharines-Niagara, also markets that had home-price increases.
But the report warns the sustainability of some real estate-fuelled wealth is questionable. WealthScapes says Vancouver, Toronto and Victoria are seeing potential housing bubbles, as average real estate holdings value grew 21.8 per cent, 19.7 per cent and 19 per cent respectively. Though British Columbia implemented a 15-per-cent foreign-buyers tax last year in an attempt to cool the market and ward off speculators, Vancouver real estate prices rebounded from the impact of the tax measures, with a 5-per-cent jump in the first three months of 2017.
Ontario's housing measures, which also included a foreign-buyers tax, were not announced until April of this year, so its effects aren't reflected in the WealthScapes report.
Calgary, the fourth "millionaire" city, tells a different story – one that's not reliant on property values. Alberta was hit hard by the oil decline in 2014 but by 2016, the province's average household net worth grew 9.6 per cent to $1,039,607 and much of the increase was due to Canadian equity markets' strong performance. Liquid assets rose 15.7 per cent to $406,522 as a result.
"The thing about Alberta's households is that they tend to hold a higher amount of liquid assets. They're less risk averse than the rest of Canada," Mr. Miron said. "They've always been this way, even from before the financial crisis. They tend to have younger households," which encourages more equity ownership.
While Alberta was the leader in asset growth, all provinces benefited from strong markets, as total assets rose 10.5 per cent nationally. The value of stock portfolios rose 17.3 per cent to $71,990 across Canada. That and the surge in savings shows that baby boomers, a generation that accounts for 27 per cent of the population, are preparing for retirement and building their nest eggs. However, Albertans were stashing away money as well, despite the population skewing younger.
"Alberta was stocking away around $10,000 per household. They were saving up for a rainy day in 2016," Mr. Miron said. "A lot of the unusual behaviour can be explained by people being concerned by their economic prospects. Will the price of oil come back?"
While assets grew nationally, so did debt. Household debt in 2016 increased to $139,387 despite income only growing 1 per cent last year, but Mr. Miron suggests this figure is also tied to real estate. Consumer debt grew 2.6 per cent while mortgage debt grew 5.6 per cent.
"A lot of this is explainable by the generations. Millennials are moving into their first homes and taking on mortgages," Mr. Miron explained.
The 69.2 per cent of Canadian households that own their homes are seeing their net worth grow at a much faster rate than the 30.8 per cent of those who don't own a home. In the wealthiest 20 per cent of neighbourhoods nationwide, household net worth grew by 14.1 per cent, while the bottom 20 per cent only had growth of 7.5 per cent. Mr. Miron suggests that this is leading to a wider wealth gap.
"When you see a boom in the real estate market or the stock market, it's more beneficial to people who are wealthier in the first place," Mr. Miron said.
Otherwise, the report and continuing developments suggest the country as whole will continue to prosper. While the nature of the economy is cyclical and real estate growth in some parts of the country is hitting unsustainable levels, Mr. Miron says there's nothing in the data pointing to a downturn any time soon.
"You usually need two or three negative impacts to see a recession but at the moment we don't even see one. I see a growing number of millionaires in the future," Mr. Miron said.
StatCan. The Globe and Mail. 13/09/2017. Census 2016: More Canadians than ever are living alone, and other takeaways.
GLORIA GALLOWAY, who explains the highlights
Statscan's latest release of census data paints a clearer picture of a Canada where single-person households, same-sex marriage, language diversity and bilingualism are on the rise.
More Canadians are opting to live alone as the country's population ages and as women become better able to foot the household bills by themselves.
Those are the findings of the latest data from the 2016 census, which looks at the number of people who live under the same roof, the types of families Canadians are forming and the range of languages they can speak.
For the first time in the country's history, the number of one-person households has surpassed all other types of living situations. They accounted for 28.2 per cent of all households last year, more than the percentage of couples with children, couples without children, single-parent families, multiple family households and all other combinations of people living together.
Percentage of people who live alone by census district, 2016
42 of the top 50 places where people live alone are in Quebec
National
average
28.2%
Sparsely
populated
25.8%
29.0
32.2
THE GLOBE AND MAIL, SOURCE: STATSCAN
That mirrors trends in the United States and Britain, but is still significantly lower than that in other developed countries. In Germany, for instance, 41.4 per cent of people lived alone in 2015.
But while single living is becoming more common, there are some demographic groups in Canada that are bucking that trend. The proportion of women over the age of 65 who are living alone fell to 33 per cent last year from 38.3 per cent in 2001, while the ranks of those who were married or living common-law increased.
And the number of young adults between the ages of 20 and 34 who are living with at least one parent is also on the rise.
In terms of language, the census finds that Canadians are becoming increasingly diverse. The influx of immigrants has created a country in which increasing numbers of us speak a language other than English or French at home, but the number of Canadians who can speak both of Canada's official languages is also rising after a decade of levelling off.
Why are so many living alone?
Although it is easy to assume that more people living alone means Canadians are lonely and unhappy, experts say that is not necessarily the case. They key difference between a happy and an unhappy single-person household, they say, is whether the independence is a choice.
Barbara Mitchell, a professor of sociology and gerontology at Simon Fraser University in British Columbia, said much of the trend toward living alone can be attributed to greater individualism and changing gender roles.
"A lot of women now have the economic means to afford to live on their own," said Dr. Mitchell, and many senior women want to have a home to themselves after a lifetime of taking care of other people, she said.
"A lot of the research seems to suggest that living alone confers a lot of negatives in terms of health outcomes," Dr. Mitchell said. "But I think it is really dependent upon whether it is a choice or whether it is forced upon you."
Roderic Beaujot, a professor emeritus of sociology at the University of Western Ontario in London, said innovations such as microwave ovens and the convenience of fast foods have made it easier to maintain a household as a single person. And social media, he said, means single dwellers can stay connected with friends and family.
"So the technology, both to make it possible to live alone and the technology to continue to be an interacting human living alone, is making it less of a negative," Dr. Beaujot said.
Families, households and marital status
The percentage of one-person households has quadrupled since the middle of the 20th century as the country became increasingly urbanized and large rural families were no longer the norm. In 2016, nearly 14 per cent of all Canadians over the age of 15 lived alone, compared with 1.8 per cent in 1951.
Statistics Canada attributes the trend to an increase of women in the work force, higher separation and divorce rates, and longer life expectancies – seniors are more often single than people in younger age groups.
Meanwhile, the family dynamics of Canadians are changing. While married couples still account for the majority of unions, more than a fifth of Canadian couples lived in a common-law situation in 2016 – up from just 6.3 per cent in 1981.
The number of couples without children increased faster between 2011 and 2016 than those with children – a function of an aging population with parents becoming empty-nesters.
And the arrival of large numbers of immigrants from countries where grandparents, parents and children traditionally live in the same home made multigenerational households the fastest growing type of household between 2001 and 2016.
Céline Le Bourdais, the Canada research chair in social statistics and family change at McGill University in Montreal, cautions that the statistics on one-person households can be misleading.
In cases where couples have separated or divorced and share custody of children, Dr. Le Bourdais said, the father or mother who did not have the children on the night before the census was completed would be registered as living alone even though they have their kids with them much of the time. And it is important to remember that the census, in this case, is counting households, not people, she said. Multiperson households, by their nature, account for more individual Canadians.
Like the others, Dr. Le Bourdais said it would be wrong to assume to most people who live alone are poor and lonely. Often, she said, it is just a matter of what a person wants and can be managed financially.
The family life of children
Single-parent families are becoming more frequent and children in those situations are increasingly living with their dads.
In 2016, more than a million Canadian children – about two in every 10 – lived in a single-parent family.
While the percentage of kids living with a mom or a dad has been increasing for decades, and single-parent moms are still the majority, the proportion of children who were living with their father climbed by 34.5 per cent between 2001 and 2016, while the proportion who were living with their mother increase by just 4.8 per cent.
Young adults living with their parents
The number of people who get their own place when they reach their 20s is decreasing and, in 2016, more than a third of Canadians between the ages of 20 and 34 lived with at least one parent.
For years, women have been more eager than men to obtain their independence. In 2016, there were five young men for every four young women who were living under a parental roof. But the gender differences are becoming less pronounced. Between 2001 and 2016, the proportion of young women living with one or both parents rose twice as quickly as the proportion of young men choosing the same. This also means that proportionately fewer young adults have their own families than was the case in previous years. The percentage of young adults living with their own children declined to 25.5 per cent in 2016 from 32.9 per cent in 2001.
Same-sex couples
The number of gay and lesbian couples is still just a small fraction of unions in Canada, but their proportion is growing. A decade after same-sex marriage became legal in this country, a third have chosen to tie the knot.
There were 72,880 same-sex couples in Canada in 2016, which accounted for less than 1 per cent of all couples. But, between 2006 and 2016, that increased by 60.7 per cent, compared with an increase of just 9.6 per cent for heterosexual unions.
Although there were more male than female same-sex couples last year, a slightly higher proportion of the female couples were married.
Language diversity on the rise
It is still necessary to speak English or French to integrate into Canadian society, but other languages are on the rise – especially those from the Philippines, the Middle East and India.
Meanwhile, the proportion of Canadians who say English or French is their mother tongue dropped to 78.9 per cent in 2016 from 82.4 per cent in 2001.
The overall number of English speakers was up from 2011, while the number of people who said they spoke French at home declined across Canada and in Quebec.
Mandarin and Cantonese remained the most common non-official languages spoken in Canadian homes last year. But, for the second consecutive census period, Tagalog (the language of the Philippines) was the fastest growing with the number of people who speak it rising by 35 per cent between 2011 and 2016. The number of Arabic speakers climbed by 30 per cent during the same period, while Farsi speakers rose by 26.7 per cent, Hindi speakers were up by 26.1 per cent and Urdu speakers were up 25 per cent.
European languages, with the exception of Spanish, were down.
Among Indigenous people in Canada, Cree was the most common language – 83,985 people reported that they spoke Cree in their homes in 2016. That was followed by Inuktitut, Ojibway, Oji-Cree, Dene and Montagnais (Innu).
The number of people who reported that they spoke an Indigenous language at home was higher than the number who said it was their mother tongue, which reflects the growing interest in learning the languages spoken by Indigenous forebears.
Bilingualism grows
More Canadians say they are bilingual than at any point in Canadian history.
Between 2011 and 2016, the English-French bilingualism rate rose to 18 per cent from 17.5 per cent. That climb occurred after a decade of levelling off.
But bilingual Canadians remain concentrated in Quebec, where 42.6 per cent reported being able to speak both official languages in 2016, and the growth in bilingualism over the past five years largely took place in that province. The majority of bilingual people say French is their mother tongue.
CANADA BY NUMBERS: MORE FROM THE GLOBE AND MAIL
StatCan. REUTERS. SEPTEMBER 13, 2017. Resource boom led Canadian wage growth to accelerate: census
OTTAWA (Reuters) - A booming resource sector led Canadian wage growth to accelerate between 2005 and 2015, government data showed on Wednesday, although while some provinces benefited from higher commodity prices others lost manufacturing jobs.
The median income of Canadians rose 10.8 percent between 2005 and 2015 to C$70,336 ($57,780), Statistics Canada said in a census report. That was up from 9.2 percent growth in the previous decade and a 1.8 percent decline in the decade before that.
Adjusted for inflation, wages rose 12.7 percent between 2005 and 2015. The census did not capture the full effect on wages from the recent drop in oil prices that put Canada in a brief recession in early 2015.
Wage growth in Canada has been muted more recently, as it has been in many other developed countries. That has puzzled economists and policymakers who had anticipated stronger earnings growth this far along in the recovery from the 2008 global financial crisis.
But there are signs wages could be heating up in Canada, with last week’s jobs report showing annual earnings growth picked up in August at its fastest pace in 10 months.
The census data showed the western prairie provinces, where Canada’s oil sands and other natural resources are located, had the highest growth in income over the course of the decade as more workers moved to the region.
Saskatchewan saw a 36.5 percent spike in income, while wages in Alberta climbed 24.0 percent.
Ontario, Canada’s most populous province, had the slowest growth in income at 3.8 percent as manufacturers shed jobs amid shifts in technology and a drive toward globalization.
Ontario’s manufacturing sector lost 318,000 jobs over the decade, a decline of 30 percent, the statistics agency said.
Nationally, there was little change in the number of low income households - those that make less than half of the median income. They edged up to 14.2 percent from 14.0 percent in 2005.
Low income households contained fewer children aged five and younger, but a higher proportion of seniors.
Reporting by Leah Schnurr, Editing by Rosalba O'Brien
SMALL BUSINESS
REUTERS. SEPTEMBER 13, 2017. Canadian small business lending rises in July as economy grows
OTTAWA (Reuters) - Lending to Canadian small businesses climbed to the highest level in a year-and-a-half in July, data showed on Wednesday, pointing to a pickup in corporate spending that could help underpin recent economic strength.
The PayNet Small Business Lending Index rose to 126.2 in July, its highest level since January 2016 and up from 121.2 in June. On an annual basis, the index was up 6 percent.
The index of lending to medium-sized businesses fared even better, jumping to 238.9 from 223.2 in June and up 14 percent from a year ago.
The increase in lending was broad-based across sectors and regions, PayNet President Bill Phelan said.
“We’re starting to gain some steam and some momentum,” he said.
Lending to the transportation industry was up 17 percent compared to a year ago, while the construction and retail sectors were each up 9 percent.
An unexpectedly robust pace of growth in Canada in the first half of 2017 has prompted the Bank of Canada to raise interest rates twice this year so far. The central bank has been looking for an increase in business investment to help drive growth.
The increase in rates should not dampen corporate investment, as borrowing costs are still relatively low, Phelan said.
Indeed, the financial health of companies remained strong, with 30-day delinquencies declining to 0.97 percent in July from 1.09 percent in June, while the number of those that were 90 days or more behind on payments fell to 0.31 percent from 0.32 percent.
Reporting by Leah Schnurr; Editing by Paul Simao
COMPANIES
AMAZON. REUTERS. SEPTEMBER 13, 2017. Exclusive: Amazon plans mega-warehouse for Mexico growth spurt
Daina Beth Solomon
MEXICO CITY (Reuters) - Amazon.com Inc is preparing to open a 1 million square-foot warehouse near Mexico City, sources familiar with the project said, part of an effort to boost its presence in Mexico’s nascent e-commerce industry.
The new warehouse is slated to be built in the Tepotzotlan municipality about 25 miles (40 km) north of the Mexican capital, according to four Mexico City real estate professionals familiar with the plans. Expected to be completed next year, the facility would triple Amazon’s distribution space in Mexico, home to around 120 million potential customers.
Amazon’s Mexico push comes amid talks to revamp the North American Free Trade Agreement, which could benefit the Seattle-based retailer if the United States persuades Mexico to raise a $50 limit on the value of online purchases that can be imported duty-free.
Amazon is a relative newcomer to Mexico; it opened its Kindle e-books site to Mexican customers in 2013 and expanded into sales of physical goods just two years ago. But it is growing much faster than rivals such as Wal-Mart Stores Inc, and is already the nation’s third-largest online retailer. Amazon posted $253 million in sales in Mexico last year, more than double the year before, according to market research firm Euromonitor International.
Sharing a nearly 2,000-mile long border with the United States, Mexico would seem a logical place for Amazon to expand. But duplicating the company’s U.S.-style success could prove tougher.
Online shopping comprises nearly 3 percent of all retail sales in Mexico compared with over 10 percent in the United States. Some Mexican shoppers are wary of online fraud and many do not have credit cards.
Some analysts believe Amazon is willing to take the risk as it races to bulk up in foreign markets to compete with fast-moving global competitors such as China’s Alibaba Group Holding Ltd.
“Amazon is not afraid to plow into a new market in a very big way, take a big hit, but say, 10 years down the line, this is going to be big and profitable,” said Neil Saunders, managing director at the GlobalData Retail research firm.
Amazon spokesman Julio Gil declined to comment on plans for a new warehouse in Mexico. He said the company’s Mexican unit is aiming to expand its product offerings, offer faster deliveries and make the purchasing process as smooth and secure as possible to inspire consumer confidence.
“We’re trying to eliminate any friction,” Gil said.
Amazon’s stock climbed more than 1 percent on Wednesday, reaching $994.10 a share by early afternoon.
FLUID LOGISTICS
Amazon currently operates two distribution centers in Mexico totaling more than 500,000 square feet (46,452 sq m), Gil said. Both are in Cuautitlan Izcalli in the state of Mexico, adjacent to the autonomous district of Mexico City, whose metro area is home to more than 20 million people.
The new warehouse will be constructed about 7 miles (11 km) from the existing facilities. All are located along the so-called “NAFTA” highway, an industrial belt that runs through Mexico’s factory regions to the U.S. border.
The new facility is being built by industrial developer Fibra Prologis, according to sources familiar with the plans. The Mexico-based real estate investment trust owns 34.2 million square feet (3.2 million sq m) of manufacturing and logistics space across Mexico. Prologis declined interview requests.
At 1 million square feet, the new facility would be able to distribute bulky products such as furniture, as well as small items like books and microwaves, a set-up Amazon uses in other foreign countries, said Marc Wulfraat, president of the logistics consultancy firm MWPVL International.
If about 85 percent of the space is used for small products – typical of a U.S. warehouse set-up – Amazon would be able to store 15 million products and make up to 1 million deliveries a day nationwide. It would likely employ 2,000 to 3,000 people to handle the shipments, Wulfraat said.
The location could also serve as a distribution point for products going north to the United States, added Saunders from GlobalData.
“Amazon is very fluid with its logistics,” he said. “As long as that border is reasonably open, Amazon is very agnostic.”
MEXICAN RETICENCE ONLINE
Amazon’s global operations stretch across 14 countries including Latin America’s most populous nations, Brazil and Mexico. That footprint fueled $11.5 billion in net international sales in the second quarter, just over half the size of Amazon’s North American sales.
Amazon’s 2016 Mexico sales fell well behind the market leader, Argentina’s MercadoLibre Inc, with $435 million in sales, according to Euromonitor. Still Amazon edged out No. 4 Wal-Mart and was neck-and-neck with third-place Linio, a division of Berlin-based Rocket Internet .
All are fighting for loyalty from consumers largely unaccustomed to clickable shopping and wary of credit card and mail fraud.
“Much of the reticence of Mexican shoppers to make purchases online is uncertainty,” said Carlos Hermosillo Bernal, an analyst at Actinver. “Will I get the product? Is it what was being offered? What guarantee do I have?”
That reluctance may fade as Mexico’s middle- and upper-class millennials gain purchasing power.
Mexico City-based college student Daniel Arturo Munoz Castro, 20, said he has purchased board games, smartphone accessories and t-shirts on Amazon’s app. He appreciates the variety of products and ease of use, even though his father first thought it might be a scam.
“It’s not like other web pages when you order things, and perhaps they don’t arrive. It’s very safe,” he said.
Still, Mexico’s vast wealth disparity and cultural differences lead some analysts to doubt whether Amazon can replicate a U.S. shopping concept. Amazon backed off from its investments in China, for example, after struggling to understand the local markets, said Gene Munster, managing partner at Loup Ventures.
“If they largely failed in China, why try in Mexico, Brazil or India? The answer is they haven’t failed yet in those areas, and they may be able to right the ship,” he said.
TWEAKING TRADE RULES
If the United States, Mexico and Canada raise the value of online purchases that can be imported duty-free as part of a modernized North American Free Trade Agreement, Amazon may be poised to reap rewards in Mexico.
The proposal, which is backed by U.S. trade representatives, would push the duty-free limit on imports to about $800 from thresholds of $50 in Mexico and C$20 ($16.5) in Canada. That would give consumers in those countries an incentive to buy big-ticket products online from the United States, an idea that President Donald Trump has championed in his “Buy American” agenda.
Mexican negotiators, however, are treading cautiously amid push-back from Mexican industries such as textiles and footwear.
“We have to find a middle point that does not damage our economies with extreme liberalization,” Mexico Economy Minister Ildefonso Guajardo said at the conclusion of NAFTA talks in Mexico City early this month. The next round is scheduled for Ottawa in late September.
International trade analyst Claude Barfield of the American Enterprise Institute anticipates that even a compromise is unlikely to dash Amazon’s plans for Mexico.
“I can’t imagine this would be a deal-breaker,” he said.
(For a graphic, click here)
Reporting by Daina Beth Solomon; Editing by Frank Jack Daniel and Marla Dickerson
________________
LGCJ.:
