Statistics Canada today released the 2009 Accounting Services Price Indexes for Canada as a whole. We have been tracking these indexes for Ontario, but these, along with other regional figures, are no longer available due to a redistribution of wealth within the Federal Government.
Here are the indexes for Canada graphed from their inception:
Here are five pointers picked up from discussions with firm leaders and advisers about the always-sensitive “dance” of how and how much to raise rates:
1. Do the math. Your costs may have risen this year, as the costs of a business often do: salaries, facilities, travel, equipment, software upgrades—all of those expenses involved in running a business have probably gone up. An overall assessment of higher costs can help your firm get a sense of how much firm revenue needs to increase to cover these costs.
[Eric's note: Although this note, like all of Stewart's, are archived elsewhere on this site, I had to give this one it's own post after reading the last sentence.]
May housing starts decline by -6.3% month-over-month.
Canadian housing starts come to a stop in May, with the rate of construction slowing to 189.1K units on an annualized basis. This is well back of April’s rate of construction at 201.7K. Market expectations had been looking for 202.0K, while our own pessimistic forecast was looking for 192K.
In producing the forecast we had leaned heavily upon the April building permits data from last week. Numbers that reflected some significant softening up in builder intentions with approved units for construction down -8.2%m/m in the multi family dwelling category. Equally soft was the -6.4%m/m decline in the number of approved units in the single family dwelling category. Overall, housing starts are down -6.3% from the previous month.
Underneath the headline softness, despite a decline of nearly 6K in the mutli family unit category, starts at 92.8K is still reflective of heightened levels of activity. By contrast, the bulk of the headline softness was borne by the single family category which fell by 12K to a rather depressed pace of activity of 72.4K units. On the upside, rural starts bounded back, rising from a depressed 19.2K to 23.9K units.
Overall, the picture on the housing market, whether we are talking about the new build or the existing home category, the expectations going forward into the second half of 2010 and 2011 are for reduced levels of activity coming down from the historical highs that have been reached. A moderation/slowing in the pace of activity that will be led by higher financing costs, changes to the funding and financing formulas for mortgages and changes in the tax structure in Ontario and BC which host two of Canada’s most active housing markets.
In keeping with this theme of slowing activity for the housing market, the Canada Housing Trust (CHT) indicated that they may sell 15% less debt this year as fewer mortgages are expected to be raised and funded.
One way of thinking about the less pronounced decline in the mutli family category is from a cyclical standpoint. Although early on into the business cycle, Canada has a housing market that is already deep into its cycle. Given that home prices are at historically high levels, along with changes in the funding models that will raise the barrier to entry into home ownership, builder interest may very well be favoring multi family unit construction as higher overall costs force consumer demand into the multi family category that tends to come in at lower pricing points than is the case for single family residences.
None the less, the Bank of Canada and fiscal agents together have drawn a deep breath which, when exhaled, will invariably blow some of that froth off the housing market mug.
Statistics Canada has released the 2008 edition of Service Bulletin: Accounting Services, which contains industry highlights along with financial data including revenues, expenses, and operating profit margins. The publication also includes product information, data by type of client and by geographic region.
Download a free copy: http://bit.ly/amv7XV
If you like pretty, coloured graphs, see our own, based on the same data.
The highlights of the StatsCan report are as follows:
• In 2008, the operating revenue of the Canadian accounting services industry totalled $12.5 billion, up 10.3% from 2007. This growth rate was in line with the double digit growths of 2005 (13.6%) and 2006 (11.6%), but higher than 2.5% growth in 2007.
By Mark Lee, as originally posted on his blog, www.bookmarklee.co.uk
[Thanks to Grant Rowson, CISA, CGA, of BDO Canada Technology Solutions, Inc., for bringing this article to my attention.]
A number of people have mentioned in conversation recently how much it costs to go to the dentist. In each case their dentists are getting close to retirement and their longstanding patients are stating to look for someone new. The patients are shocked at how much more they have to pay their new dentist.
By Dawn Jetten, John W. Teolis, and Jacqueline D. Shinfield of Blake, Cassels & Graydon LLP
On April 16, 2010, the federal government released the new “voluntary” Code of Conduct for the Credit and Debit Card Industry in Canada (the Code). The Code was created to address the concerns of merchants regarding some of the business practices of credit and debit card networks, issuers and acquirers. Although the Code resulted from extensive consultations with both merchant and consumer associations, it is evident from reviewing the Code that merchants are the primary beneficiaries.
The stated purpose of the new Code is to:
Market and forecaster sentiment alike was largely cemented earlier in the week with the release of the BoC’s post meeting statement on Tuesday. The collective catalyst – a ceremonious dropping of the BoC’s conditional pledge to hold rates at 0.25% through to the end of Q2/10 – pulled to the fore, a June rate hike scenario. While the Governor will emphasize that nothing is preordained, the impact of the act of removing of the conditional rates pledge was to focus the various elements of Canadian monetary opinion into a fairly narrow beam of expectations.
Stewart Hall of HSBC Securities Canada issued his comments on today’s Bank of Canada interest rate announcement. [See all of his comments on other economic matters in our Stewart Hall Archives.]
He concludes from the Bank of Canada announcement that, “A policy change is coming, but it is looking like evolutionary change rather than revolutionary… We continue to forecast a rate hike in September of 2010.”
Given the record levels of Canadian consumer and mortgage debt, as interest rates increase many debtors will find their own “tipping point”, where monthly minimum payments exceed monthly maximum earnings.
“Now” is always a good time to sell over-leveraged assets. Including houses…. Ancient wisdom: Greed blinds.
[See all of his comments on other economic matters in our Stewart Hall Archives.]
