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This Week’s Top Stories: Canadian Bank Regulator Delays Improved Risk Scrutiny, & Insolvencies Surge – Better Dwelling
Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
A Quarter of Employed Canadians Now Work For The Government
Canada’s surging population is outpacing job growth, and it may get a lot worse. Statistics Canada (Stat Can) data shows that 1 in 4 employed people now work for the government, which created most jobs since 2020. Entrepreneurship is declining, creating a huge problem and not just because the segment drives productivity. If significant state-stimulus is needed when the global economy is good, how much will be needed during a downturn? Will Canada have any dry powder in the event of an emergency?
Canada’s Bank Regulator Delays Standard Risk For Capital Minimums
Canada is pressing pause on bank regulations to better quantify risk and make them more resilient. Seriously. OSFI recently delayed Basel III guidelines to standardize risk reporting and set minimum reserve capital. Originally scheduled to be adopted within months, the delay will now see a phase-in begin next year. The decision comes as the banks scramble to back questionable investor mortgages and face increased scrutiny from US regulators. The latter has been hitting institutions with significant fines in response to anti-money laundering failures.
Canadian Youth Unemployment Close To Financial Crisis-Style Surge: NBF
One of Canada’s largest banks is warning the kids are not alight. NBF crunched the numbers and found youth unemployment (15 to 24 years old) is surging at a rate so fast that only the 2008 financial crisis eroded more rapidly. About 1 in 7 workers who are ready, willing, and able (not in school full-time) are currently unemployed. The problem is amplified for recent immigrants in this demographic, arriving with the promise of a labor shortage only to find 1 in 5 aren’t able to find a job. Instead, they face the same eroding labor market that Canadian-born young adults are struggling to get into.
Canada Is Seeing 359 Consumers File For Insolvency Per Day BEFORE Recession
Despite policymakers boasting of a strong economy, more households are seeking formal debt relief. Consumer insolvency filings climbed significantly in June, a trend that’s been happening over the past year. An average of 359 consumers have filed for insolvency per day over the past 12 months. It’s the highest volume outside of recession, once again begging the question: If this is what the economy looks like when things are good, how bad will it get in a recession?
Toronto Real Estate
Toronto Real Estate Prices Fall Further, Most Inventory Since 2008
Toronto real estate prices slipped as the market softened just a little further. TRREB data shows sales increased slightly in July, but the month was still one of the worst on record. At the same time, inventory continued to climb, leaving the worst demand balance recorded by the board. Combined with rising rental vacancies, the investor-dominated market isn’t looking pretty.
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