This week’s biggest stories in finance and business
The National Bank says that new rules established by the Liberal government meant to keep the housing market from overheating are doing the exact opposite. The rules—which include a required increased down payment on mortgages above $500,000—are to blame for the current housing activity in places like Vancouver and Toronto. Analysts expect to gradually see prices rise higher in the coming months. Currently, Vancouver, which is already known to have a difficult housing market thanks to high pricing, is experiencing the tightest home resale market in 12 years. House sales in Vancouver far outstrip new listings in the market. Economists predicted last year that the rules would temporarily drive the market up, as homebuyers raced to land a mortgage before the deadline. Now, some say that the effects will continue into this year, as the rules do not apply to anyone who locked in a mortgage before Feb. 15, 2016, leaving the window open till July 1, 2016.
Regardless of even the most viral of Facebook posts, there was nothing that could be done to keep French’s ketchup on the shelves of one of Canada’s most prominent grocery retailers. On March, 14, 2016, it was reported that Loblaws would no longer carry French’s ketchup, despite the fact that the product uses tomatoes that are grown locally, in Leamington, Ontario. The product, which recently has become the topic of a viral Facebook post, has been on the rise thanks to the use of the local produce and the jobs it has provided to the Leamington community. The production plant, which was formerly owned by Heinz, was taken over by Highbury Canco two-years-ago. Even more surprisingly, the decision comes in the wake of a successful campaign which saw the release of two new flavours. With the loss of sales in stores that account for more than a third of the market, French’s is concerned for its future.
Anyone who is travelling by air this year should see further dips in fares after the sizable drop in fuel prices. The International Air Transport Association says that the average fare worldwide fell approximately 12 per cent last year, or around 4.5 per cent after distortions caused by the U.S. dollar’s appreciation. With competitive pressures rising within the industry, it is likely that this will result in further declines in the first half of the year. In Canada, the average domestic round-trip actually rose. However, in comparison to fees from the previous year, they were still down around 11 per cent in U.S. dollars. Fares will fluctuate as demand picks up heading toward the busy summer season, but prices will remain low, because the downward pressure from oil prices is so strong. Canadian prices could dip more than those in the United States, because American carriers have already been pushed by competition to pass along savings more quickly than in Canada.