A study by the Canadian Imperial Bank of Commerce (CIBC) suggests that Canadian job quality has fallen to its lowest level in 25 years, which may be indicative of a severe systemic problem that might be difficult to reverse anytime soon.
The report reveals that the bank’s employment quality index fell by 1.8% last year, amounting to a 15% overall decline since the 1990s.
The study also showed that there was a faster growth of part-time jobs in the country compared to high-quality full-time employment over the same time period. Even though last year saw full-time positions increasing at double the rate of part-time jobs, the overall negative impact on full-time employment during each recession was mostly permanent, the study noted.
In addition, the study also highlighted several “ongoing labor market challenges” like low participation of prime-aged Canadians.
Figures for 2014 show that the Canadian economy is about 270,000 jobs short of its full capacity, with more than one in four part-time workers looking for full-time work.
Experts have warned that these trends have far-reaching consequences for the Canadian economy. In particular, the increasing number of people in part-time positions and self-employment is going to lead to lower levels of savings and consumer spending. Debt, which is already growing consistently, is also likely to increase further.
“After every recession, job quality goes down, but it doesn’t fully catch up. So there is almost a permanent loss every time that there is a shock,” says Benjamin Tal of CIBC, who also believes that the long-term trends pointing to deterioration in job quality “is more of a structural issue than a cyclical one”.
The trends also point to a shift in the balance of bargaining power in the labor market. The fewer highly paid workers now enjoy higher bargaining power than the larger section of people holding low-paying jobs. “This is the main reason why the income gap is rising, which I believe is the number one economic, social issue facing the country in this decade,” says Tal.
However, some experts have cautioned that all part-time work must not be assumed to be of low quality.
The CIBC report’s findings come as talks are taking place between Ottawa and the provinces about training policies and employment insurance. The negotiations are focused on whether or not to renew Labor Market Development Agreements worth $2-billion a year to fund job training programs.
A new study suggest that Toronto ranks among cities of key importance to the world’s mega rich and will be among those that “dominate.” The study released today by Knight Frank, a global real estate consultancy whose annual Wealth Report is widely followed.
The study ranks Canada’s financial capital as No. 12 among the 40 “most important cities” for the wealthy this year.
The report says, “If we assess quality of life, a clutch of northern European, Canadian and Australian cities, led by the likes of Melbourne and Toronto, will dominate.”
High net worth individuals have been flocking to Canada, which is among the top countries where destination is concerned. Canada also ranks as No. 4 in the study’s “Big Spenders Index,” which looks at how the wealthy among us are likely to spend their money.
The report adds, “Positive gains are also anticipated for the Vancouver market, while Montreal is expected to maintain balance. Continued uncertainty in the Calgary economy is expected to temper sales throughout the spring, with the degree of long term impact to be determined. Toronto’s recent ranking as the best place to live in the Economist’s 2015 Safe Cities Index, along with a lower Canadian dollar, only strengthens its global appeal as a destination for foreign real estate investment.”
The Greater Toronto Area, which takes in several surrounding regions, will see “strong demand” for detached homes worth more than $1-million, in particular.
Shares of Canadian Natural Resources Ltd. rose this week after a pleasant surprise from an otherwise bleak oil patch. Pleasant for shareholders only since managers and directors are taking a pay cut. Canada’s second-biggest energy producer boosted its dividend and reported better-than-expected fourth-quarter results. However, it again trimmed its spending plans.
The company said annual average production rose to record levels towards the end of 2014.
Canadian Natural hiked its quarterly dividend to 23 cents a share as profit climbed to $1.2-billion, or $1.09 a share, diluted, from $413-million or 38 cents a year earlier.
ECB boosts outlook
Things are looking brighter this week for Europe with the European Central Bank having raised its forecasts for economic growth, though its new projections put the region dangerously close to a deflationary period.
The government held its benchmark rate steady and rolled out details of its bond-buying stimulus program, known as quantitative easing. the central bank of the euro zone raised its growth forecasts to 1.5 per cent this year and 1.9 per cent next year.
“The latest economic data and, particularly, survey evidence available up to February point to some further improvements in economic activity at the beginning of this year,” ECB chief Mario Draghi told reporters.
“Looking ahead, we expect the economic recovery to broaden and strengthen gradually.”
The Bank of England also held steady today.
China trims target
At this week’s annual meeting of Parliament in China, Premier Li Keqiang unveiled a slower 2015 growth target of about 7 per cent, down from last year’s 7.5 per cent, which it didn’t make. This is the slowest pace of economic growth in almost 25 years for China.
This comes amid action from the People’s Bank of China, which on the weekend cut interest rates.
According to economists at Bank of Nova Scotia, “His speech at the annual meeting of the legislature overnight reinforced other key 2015 Chinese themes that investors should be watching, including: (i) fiscal policy will remain proactive; (ii) monetary policy will continue to be prudent; (iii) the yuan exchange profile will be kept at a reasonable and balanced level; and (iv) the government will push ahead with the reform of state-owned enterprises and the liberalization of the banking system and financial markets.”
Job quality sinks
Job quality in Canada has sunk to its lowest level in more than two decades, a study released this week shows.
According to the report by Benjamin Tal, the bank’s deputy chief economist, an employment quality index, compiled by CIBC and which tracks part-time versus full-time work, paid versus self-employment and compensation trends, has fallen to its lowest level on record. The findings may confirm that Canada’s job market is not as robust as it once was.
In an announcement made by Chris Alexander, Canada’s Immigration Minister, it was revealed that the country had acquired 260,000 new citizens in the year 2014. The number sets a new record in Canada’s history and is more than double of the citizenship figures of 2013.
A news release by the Canadian government states that the high numbers are a result of changes to Canada’s Citizenship Act through which the application process has been improved. The new process that was launched on August 1, 2014, reduced the number of steps in the application process from three to one. More than 115,000 people have acquired Canadian citizenship ever since the new application process was put in place.
The federal government also claims that the citizenship application backlog has been reduced by 17%, which is the lowest level in the past three years. The government now aims to reduce the processing time for Canadian citizenship application to less than one year by next fiscal year.
Citizenship applications received after January 1, 2015 will have a processing fees of $530, which is a significant increase from the previous fee of $300.
Government statistics show that Canada has seen the highest numbers of sustained immigration since 2006. More than 1,550,000 people have got Canadian citizenship since 2006.
“With a record number of new Canadians this year, it is clear that our government’s changes to the Citizenship Act are having a real impact on the number of new citizens welcomed to the Canadian family. With more than 260,000 new citizens embracing Canadian values and traditions in 2014, we are fulfilling our commitment to reducing backlogs and, improving processing times,” said Alexander.
However, immigration experts have forecast that the record number of citizenship will not last long as changes to the eligibility requirements will result in fewer applications. “Even though there’s now a great number that’s been granted citizenship in this year, as the new law comes in to force and takes effect, fewer people will be eligible,” says immigration lawyer Warren Creates.
Some of the new eligibility requirements include showing evidence of intent to live in Canada after acquiring citizenship, residing in the country for a longer period of time, and filing regular income taxes during the period of residence.
“It’s going to take them longer to clock the number of years of physical presence in Canada that the new law will require,” said Creates.
Concerns have been raised by the Canadian Bar Association over the new eligibility requirements. The association has even said that the proposed bill was possibly unconstitutional.
Is Canada a tax haven? You could be forgiven for asking the question after hearing that Burger King, founded in Miami in 1954, plans to move its headquarters north of the border as part of its purchase of Tim Horton’s, the Ontario-based coffee and doughnut chain. Burger King insists its deal isn’t tax-motivated.
Valeant Pharmaceuticals, formerly of California, became Canadian in a 2010 deal; a second drug company, Auxilium, is in the middle of doing so now, a process known as an inversion. Tim Horton’s, a Canadian icon, did its own inversion in 2009: It repatriated to Canada after the end of its decade-long marriage with Wendy’s, which had left it with a U.S. corporate address.
Canada is hardly a low-tax nation. Its overall tax burden is about 30 percent of gross domestic product, higher than the U.S.’s 24 percent rate. But that figure includes personal income taxes and other levies that don’t apply to corporations.
Over the past two decades, many developed countries have either lowered corporate income taxes, stopped taxing foreign profits, or both. The U.S., whose 35 percent rate is now the highest in the developed world, is an increasingly lonely holdout. That’s why, from Miami, the whole world is starting to look like a tax haven.
Source: Business Week
Attorney Colin Singer Commentary:
Canada has experienced a reduction in corporate taxation rates and in theory this should attract foreign investment. However, the Tory government’s immigration policies towards business investors have become very restrictive.
Canadian companies expect to hire new employees in the fourth quarter at the weakest quarterly pace since 2010, a survey released on Tuesday showed.
The Manpower Group report, which measures the difference between employers that say they will hire employees and those that expect to cut jobs, said the net employment outlook for the fourth quarter, adjusted for seasonal variations, was eight per cent.
That is down two percentage points from the forecast for the third quarter, and down three percentage points from the fourth quarter of 2013. Western Canadian employers were the most upbeat about hiring, and expectations were progressively more modest heading eastward across the country.
The survey follows data last week that showed the Canadian economy unexpectedly lost 11,000 jobs in August compared with July, with the number of private-sector employees falling sharply, the latest sign that the economy is struggling.
The survey found that of more than 1,900 employers across Canada, 12 per cent planned to increase staffing levels during the final quarter of the year, while 7 per cent planned to make cuts, and the vast majority, 79 per cent, were not planning any changes. By sector, public administration, at 16 per cent, had the most favourable net employment outlook. Transportation and public utilities followed with 13 per cent, and the finance insurance and real estate sector, which also had the most favourable quarter-over-quarter change, was 12 per cent.
Non-durables manufacturing had the softest outlook at just one per cent, while the construction and wholesale and retail trade sectors both came in at 5 per cent.
Source: HR Reporter
Last week, Citizenship and Immigration Minister Chris Alexander issued a statement setting out the federal government’s opposition to Canadian municipalities becoming “sanctuary cities” for illegal immigrants.
The sanctuary city concept is one in which a city agrees not to take action against illegal immigrants. In Canada, at least two cities including Toronto and Hamilton, Ont. have declared themselves to be sanctuary cities. While some immigration enforcement laws are harsh and disproportionate, all immigration laws must be followed.
The Canadian government rightly points out that it is important for Canadians to have faith and integrity in the immigration system. Canadian cities have an obligation to respect Canadian laws and to enforce these laws when required. If communities are concerned about the way illegal immigrants are treated they should convince the federal government to change their laws so any punishment is suited to the actual immigration violation that has been committed.
When non-Canadians violate immigration laws, they are usually faced with deportation.
While this penalty may be appropriate for long-term repeat offenders, it is not appropriate for first-time offenders with minor violations. The problem facing Canadian immigration enforcement is there is usually no middle ground for penalties. While Canadian immigration law allows for the issuance of fines for immigration violations, this provision of the law has never been put to use.
What the federal government should do is introduce graduated penalties that can be assessed on non-Canadians for violation of immigration laws. For minor violations, a fine or an official warning may be more appropriate. These types of penalties could be recorded on the non-Canadian’s immigration file and, repeat offenders could be given harsher penalties.
The introduction of graduated penalties does not mean that ordering deportation should always be used as a last resort. Clearly, there are cases where deportation will be the appropriate penalty, even for a first offence. Immigration officers should be given the ability to exercise their discretion to assess what is an appropriate penalty under the circumstances.
Cities, first and foremost, have an obligation to their residents, if the situation calls for a city to enforce or assist in the enforcement of immigration laws, co-operation should be provided to the federal government.
Attorney Colin Singer Commentary:
The Harper Government has adopted harsh policies on immigration especially in the area of criminality. Canadians seem to support such a stand. Yet there is a disconnect by Canadians on the impact of such measures especially in the area of minor criminality which will affect Canadians who wish to sponsor members of the family class to immigration to Canada.
Source: CBC News
This week’s economic numbers are positive. American companies were busy restocking warehouses in May, increasing by 0.5% and following a hearty increase of 0.6% in April. Retail sales in the U.S. edged up by just 0.2% in June. Bombardier Aerospace sold $3.35 billion worth of aircraft in the month of July, which will have a visibly positive effect on national trade balance figures come the end of the quarter.
So how do small to medium Canadian exporters know where the world economy is headed when the numbers are so diverse? This is data overload, something that Export Development Canada’s chief economist, Peter Hall, calls the “tyranny of the urgent”. What numbers really matter? Which ones should the exporter care the most about? Here are four to watch:
Purchasing Managers Indices (PMIs): These indices track economic output, new orders, backlogs, stock levels, employment and input and output prices across the manufacturing, construction, retail and service sectors. They are compilations of data provided by purchasing managers: how much input are they ordering for production and what prices are they looking at? Theses indices are produced faster than data compiled by government agencies such as Statistics Canada and they usually appear monthly. One PMI to watch is MarkIt Economics’ PMI.
The Baltic Dry Index is a standard shipping index, updated daily, that measures the price of moving raw materials by sea. Named for a boat, not the European sea, it tracks the demand for shipping capacity, which is relatively inelastic. It reflects world demand for the raw materials needed for economic production. Its North American counterpart would be the Cass Freight Index, which measures continental freight volumes and expenditures, and the Nulogx Canadian General Freight Index.
Global GDP is the fundamental metric for how a country is performing. The figures for some countries, such as Argentina, may be extremely rough estimates or downright misleading. The World Bank uses it for the world’s countries and territories and shows year-over-year performance. The details can be surprising: Despite ongoing political unrest, Egypt economy grew by almost 50% between 2009 and 2013.
Trade Data Online is produced by Industry Canada, and while it’s not a true economic indicator of the economy as a whole, the data sets it provides show exactly what’s going on in any particular industry. The information helps determine where to export products, how much competition there is, provide overseas trade balances and where products are being imported. In addition, the World Bank produces Market Data and Information tools that provide export and import stats for 200 jurisdictions.
Source: Profit Guide
A new survey reveals that more than half of Canada’s adult workforce is unwilling to relocate for pursuing employment opportunities, which also throws light on why many Canadian companies have to hire temporary foreign workers because of the shortage of local skills.
The survey, conducted by Ipsos Reid for the Canadian Employee Relocation Council (CERC), checked with more than 2,000 Canadian workers whether they would be willing to move to a job that either operated from elsewhere within their current provinces or from other parts of the country. Experts consider the CERC survey to be accurate to within 2.5 percentage points.
Only 10 percent of the Canadians surveyed expressed their willingness to move, while a third expressed their reservations about the movement, even though they mentioned that with the right levels of persuasion and incentives, they would be willing to relocate for the job.
Reviewing the results of the survey, the head of the Canadian Employee Relocation Council, Stephen Cryne, said that the findings were disturbing. The Council said that the observations from the survey emphasised some of the challenges that businesses, which are looking to attract highly skilled labour, continue to face.
Respondents, who were willing to move to another part of the country for a job, wanted a top incentive of a 20 percent pay hike, in addition to the employer bearing all the expenses related to the relocation.
More than half of the respondents also mentioned that the government could play a vital role in making the relocation more attractive by permitting employers to provide a tax-free housing allowance for up to six months. This would not only help the relocating employees avoid unnecessary accommodation worries that come with a relocation for a new job, it would also enable the employees to settle themselves in the new location.
Half of the respondents also said that the government must permit employers to provide employees with non-taxable, interest-free loans of up to $100,000, so that the relocating employees could purchase a home in the new location.
A 2013 report from Statistics Canada and Haver Analytics shows that the percentage of Canadians moving between provinces has declined steadily over the years since 1977, from 1.5 percent in 1977 to under one percent in 2012.
While the Organization for Economic Co-operation and Development has recommended that Canada reduce barriers to geographical and occupational mobility, Council head Cryne felt that the government needed to promote the benefits of labour mobility in Canada more vocally.
Source: The Canadian Press
Canada must recognize the potential economic advantage that immigrants bring if it wishes to remain globally competitive, according to one of the country’s top economists.
In a recent piece for the Globe and Mail, Royal Bank of Canada chief executive officer Gordon Nixon, calls for more efforts to tap into under-utilized immigrant skills. He points to a recent RBC study which found that if newcomers earned equal wages to their Canadian-born counterparts, personal income in Canada would increase by $31 billion.
Nixon first calls out employers, saying that more needs to be done to promote diversity in the workplace and embrace international experience.
“A work force with global experience is a competitive advantage,” argues Nixon, who is also chair of the Toronto Region Immigrant Employment Council. “International experience is an asset to business. Too often, we hear that newcomers with no Canadian experience would be hard to fit into the Canadian work force. In truth, international experiences relate directly to the modern Canadian context.”
Secondly, states Nixon, governments need to continue the work that they are doing with other levels of government, as well as stakeholders in the community. More funding should go toward skills assessment and training, as well as community support services and cultural activities.
Immigration has helped make Canada the country it is today. We must not forget that part of our heritage if we wish to continue to contribute and compete in the interdependent global marketplace.
“The lesson of our history is clear and points the way to future economic prosperity and success: Canada has relied on diversity and immigration to build a prosperous economy and will continue to do so in the years ahead. We are good at it, but we need to get better to maintain that competitive edge.”
Source: Globe and Mail
Immigrants in Nova Scotia are concerned about problems with their citizenship language forms, according to a new report from CBC.
Mitra Naseh is one such immigrant from Iran who currently lives in Halifax and is in the process of applying for citizenship. She knows the language requirements, and obtained the necessary forms from Citizenship and Immigration Canada’s website.
The minimum language requirement is a 4, while Naseh says she submitted forms showing that she has reached level 8. Still, her application was rejected, citing lack of proof of language sufficiency.
“The worst thing is that everybody is confused,” Naseh said, pointing out that she is not the only one in her circle facing this obstacle.
In fact, local English as a Second Language teacher Anne Kelly has heard of several similar problems faced by her students, and has been writing letters of support in hopes of bolstering their citizenship applications.
“It’s also making the other students nervous or anxious about sending in their applications,” says Kelly.
Though many have tried to contact CIC to clarify the requirements, they say they have been told merely to re-submit, with no further explanation or clarification on these decisions.