6 reasons to buy Canada

By Eric St-Cyr

Time to invest in AAA America: Canada.

The select membership of the AAA rating club is shrinking rapidly. You will soon have enough fingers to count all the AAA rated countries around the world. Since the recent Standard & Poor's downgrade only 12 countries remain in this exclusive block: Australia, Canada, Denmark, Finland, Germany, Luxembourg, Netherlands, Norway, Singapore, Sweden, Switzerland and the United Kingdom.

When we consider that Germany and the Netherlands will have to recapitalize their banks sooner rather than later, and that the economic situation in the UK doesn't seem to be getting better, I expect this élite group to shrink even further in the coming months. We will soon be left with a group of Scandinavian socialist countries, where individual taxation exceed 70%, Switzerland and Luxembourg, physical refuges of the wealthy, Singapore which is really a transit port for Chinese goods and the commodity producers that are Canada and Australia.

If I had to choose between which country presents the best risk/reward as an investment going forward, my vote would definitively go towards Canada. I am biased, being Canadian myself, however I should also state that I haven't lived there for years, avoiding the cold weather and prohibitive taxation levels. This doesn't stop me from seeing the appeal of Canada as an investment.

When Dr. Doom, Nouriel Roubini, described Canada as "a country with a relatively sound financial system, solid government balance sheet and a commodity sector that can withstand possible global economic risks" (Source:Huffington Post ) he was onto something. Canada will soon emerge as a safe haven for foreign investors and should play an important role in everyone's portfolio, on both the Fixed Income and on the Equity side.

6 reasons to invest in Canada:

Commodities: As you may be aware, for every death two people are born on earth today. Demand for commodities will continue to rise for the next 20 to 30 years. Of course, we will see set backs - caused by either a rise of the US dollar or a slow down in China's demand. As commodity demand increases Canada is positioned to profit from it.

Canada has the second largest landmass in the world behind Russia. In recent years Canada has been the world's largest producer of zinc and potash; the second-largest producer of nickel, asbestos and cadmium; the third-largest producer of platinum and titanium; the fourth-largest producer of aluminum and the fifth-largest producer of gold, copper, lead and cobalt (Source:Canadian Trade Commissioner ).

Canada is also one of the world's largest suppliers of agricultural products, being one important producer of wheat, canola, and other grains. With nearly half of Canada's entire land surface covered by trees, Canada is the third largest exporter of forest products. And I can go on and on...

Energy: Canada is one of the only developed nations that are net exporters of energy. According to the Canadian government website, Canada has the second largest proven reserve of oil in the world. Canada is also the seventh largest producer of electricity and the world's largest producer of Uranium. Remember that Canada has a population of less then 35 million; therefore most of the energy is destined to be exported, continuing to improve the trade balance going forward.

Composition of the Index: Be aware that an investment in a Canadian fund or a Canadian ETF may bring more volatility to your portfolio. The Canadian economy presents less diversification then the US economy. When we compare the MSCI Canada Index to the S&P 500, Canada has twice the weighting in financials, twice the weighting in energy and six times the weight in materials. However also remember that the Canadian banks, the largest component of the index, are in much better shape then their US counterparts. If you are of the view that the North American economy is muddling through then the sector mix of the Canadian index should outperform the US market.

Total debt to GDP: In 1992 Canada lost its AAA rating based on debt denominated in foreign currencies, this followed years of uncontrolled spending by the Liberal party. During that period we watched the Canadian dollar collapsing. I remember when the Bank of Canada had to increase interest rates by 2% overnight to defend its currency, sending money market fund net asset value into negative territory.

Ottawa recovered the AAA rating 10 years later, after reducing government spending, by a massive 8% of Gross Domestic Product, through a series of stringent spending cuts. Nothing was spared, not even education or healthcare. Today Canada is gradually reducing debt and now presents the lowest total debt to GDP ratio of the 10 largest developed economies. (Source:McKinsey&Company )

Currency : As we reach (or have passed) peak oil , and demand for other commodities continues to rise, the trade balance of Canada will continue to strengthen sending its currency higher. This is already happening. To the surprise of all, Canada generated a trade surplus in November last year. It is just a question of time before the Loonie trades 10 or 15% higher then the Greenback.

Political Stability : The biggest risk to the Canadian economy was, for a long time, the threat of separation from the Province of Quebec. The relative prosperity experienced by the country, change in mentality and important influx of immigrants into the province are all reasons to be positive. The cessation talk is fading away and the annihilation of the sovereign party, Le Bloc Québécois, during the last Federal election clearly illustrates this. In a recent poll, 63% of Quebecers said that they see no contradiction in being both proud Québécois and proud Canadians at the same time.

The Trade : Many trades are possible here, the simple ones available on a US exchange are: buy the index through the iShares MSCI Canada Index Fund EWC +0.04%, the currency through CurrencyShares Canadian Dollar Trust FXC +0.07% and for the more adventurous investors, I recommend the Guggenheim Canadian Energy Income ETF ENY -0.29% an interesting play on the oil sands, especially with the situation developing in Iran.

I have strong convictions that, long-term, the Canadian economy will continue to outperform other developed market economies without providing as much volatility as emerging markets. If you have been reading my column from the start, you know that I am optimistic , however in the case of a collapse of Europe ( 30% probability ), the Canadian dollar will drop like a stone, as will the price of oil, other commodities and financial sector stocks.

Disclaimer: Clover is currently long EWC and long ENY in some of its client's accounts. Clover has no positions in FXC. Clover has not made any transactions in any security mentioned in the past 72 hours and will not make any purchases or sales in the 72 hours following publication of this article.  

INFLATION IN CANADA IN 2011

Inflation figures were released today by Statistics Canada. Figures are available for the country, by province and territory, by main expense group and some other classifications. The inflation presented is base on the Consumer Price Index. Here are some of the numbers.

NATIONAL INFLATION

Consumer prices increased 2.3% from January to December 2012. This inflation in the country can be compared to that in previous years:

·        2011: 2.38%

·        2010: 1.16%

·        2009: 1.32%

·        2008: 2.35%

·        2007: 2.30%

Also, compared with the inflation in the other NAFTA countries for 2011 (2.96% in the US and 3.82% in Mexico) we can see the price increase in Canada has been lower than in these countries.

INFLATION BY PROVINCE AND TERRITORY

·        National 2.3%

·        Northwest Territories 3.5%,

·        New Brunswick 3.3%,

·        Newfoundland and Labrador 3.2%

·        Alberta 2.9%

·        Prince Edward Island 2.9%

·        Nova Scotia 2.8%

·        Yukon 2.8%

·        Manitoba 2.6%

·        Saskatchewan 2.5%

·        Quebec 2.5%

·        Ontario 2.0%

·        Nunavut 1.9%

·        British Columbia 1.7%

INFLATION BY MAIN EXPENSE GROUP

·        All ítems 2.3%

·        Food 4.4%

·        Transportation 3.3%

·        Household operations, furnishings and equipment 2.3%

·        Health and personal care 2.0%

·        Shelter 1.8%

·        Alcoholic beverages and tobacco 0.9%

·        Clothing and footwear 0.3%

·        Recreation, education and reading 0.2%

DEFINITION OF CONSUMER PRICE INDEX (CPI)

The definition presented by Statistics Canada for the Consumers' Price Index (CPI) is the following:

"The Consumer Price Index (CPI) is an indicator of changes in consumer prices experienced by Canadians. It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers. Since the basket contains goods and services of unchanging or equivalent quantity and quality, the index reflects only pure price change.

The CPI is widely used as an indicator of the change in the general level of consumer prices or the rate of inflation. Since the purchasing power of money is affected by changes in prices, the CPI is useful to virtually all Canadians. Consumers can compare movements in the CPI to changes in their personal income to monitor and evaluate changes in their financial situation."

About Acus Consulting. This firm supports companies, organizations and government agencies in financial and strategic analysis, investment project evaluations, financial planning and decision making. It is based in Toronto.

Immigrant entrepreneurs can transform small, even dying, communities.

 An article by sarah     No Comments

Not very long ago, the former mill town of Lewiston, Maine was a dying community, unable to reinvent itself after the mills closed. Yet an influx of entrepreneurial Somalis followed by other Africans with good trading connections has revived and reshaped its economy.  As quoted in areport for the Ford Foundation (p. 15), the head of the local growth council said, “It’s been an absolute blessing in many ways…just to have an infusion of diversity, an infusion of culture and of youth.”  The transformation of Lewiston appears to have been triggered by the arrival of a single family that in turn recruited other friends and families to settle in the town. The result has been an infusion of people and new businesses.

Most of Canada’s immigrants settle in large urban centres, but studies of immigrants in rural Canada show that many do prefer to live in smaller communities.  Immigrants may enjoy various benefits of living in small communities. Indeed, a 2008 Statistics Canada study found that immigrants fared better in smaller communities in various ways:

• immigrants in smaller areas quickly learn an official language because official language communication is more important in smaller areas than larger cities
• immigrants with less education in smaller areas fare better economically than immigrants with less education in larger cities
• refugees integrate quicker in smaller areas than in larger cities

At the same time, smaller communities are increasingly interested in attracting more immigrants: immigration is viewed as a means of countering population decline and revitalizing local economies.  To attract and retain immigrants, smaller communities need to offer economic opportunities, services and supports that newcomers need, and amenities such as transit.  Moreover, the communities must be welcoming of new cultures and new ideas.

In Nova Scotia, for example, the unemployment rate among immigrants was 7.4% in 2009, lower than for native Nova Scotians and immigrants to the rest of Canada.  This is partially due to the larger incidence of immigrants creating their own businesses.  As cited in an online article, Howard Ramos of Dalhousie University noted: “This is what I find interesting — a lot of the successful migrants are people who have come as entrepreneurial immigrants…. They open a hotel, kayaking outfitter or some value-added tourist element — they provide jobs for themselves, their families and a few people in the community.”

Click here to open a report on Immigrants in Rural Canada based on the 2006 Census.

Canada a safe haven for bond investors

Zara McAlister  Jan 17, 2012 – 12:26 PM ET | Last Updated: Jan 17, 2012 3:27 PM ET

Andy Clark/Reuters

• Comments 
• Email 
• Twitter
• inShare 
•  

Canada has long been considered a safe haven for immigrants and it is now one for bond investors with the European financial crisis worsening. The month of November revealed a massive increase of foreign inflows in Canadian securities, jumping to $15-billion from just $3.9-billion in October.

Most of the inflows came via bonds – both corporate and government of Canada – primarily from U.S. investors who bought $5.3-billion worth, according to Statistics Canada. Money-market instruments and equities also attracted more foreign investment in November. Japanese investors, on the other hand, reduced their holdings for a third consecutive month.

Nomura economist Charles-St Arnaud says strong inflows into Canadian markets over the past few months coincides with heightened global uncertainty, while inflows into Canada tend to be weak when risk sentiment is more positive. He thinks November confirms this trend.

Since many eurozone countries were downgraded last week, the economist believes Canada, which has an AAA rating, will continue to attract strong foreign inflows.

“This continues to point to some safe-haven flows going to Canada,” he says.

But National Bank strategist Krishen Rangasamy warns foreign investors that there is a limit to net inflows into federal government bonds. She says Ottawa plans to cap supply as part of the plan to balance the budget by 2015-16.

“With the limited supply of Canada’s being an issue, foreigners wishing to increase their Canadian exposure may increasingly turn to bonds from other Canadian issuers,” she says, suggesting provincial or corporate bonds as alternatives.

Source: The Financial Post.

Canadian website for foreign credentials launched

by RAY CLANCY on JANUARY 17, 2012

IQN website to help immigrants with better intergration into Canadian labour market

It is now easier to work out if your foreign qualifications can be accepted in Canada with the launch of a new website to help people applying for work.

Citizenship and Immigration Canada has launched the International Qualification Network (IQN) for the assessment and recognition of foreign worker qualifications.

It serves as a virtual space for employers, regulatory bodies, governments and organizations to capitalize on promising qualification assessment and recognition practices.

‘The Government of Canada is committed to improving the process of recognizing foreign worker qualifications, and the IQN website will help find solutions that will allow immigrants to integrate better into the Canadian labour market,’ said Citizenship and Immigration Minister Jason Kenney.

Through the IQN website, stakeholders can share effective evaluation tools and practices, studies, pilot projects, reports and videos and post information on events, such as workshops and conferences.

The website was created with the guidance of the IQN Advisory Council, a group of 20 partners and stakeholders who represent various provinces, employers and post secondary education institutions from across Canada. The information posted on the IQN will benefit everyone in all jurisdictions.

For example, The Registered Nurses Professional Development Centre in Nova Scotia has posted a profile of its programme to assist internationally educated health care professionals in getting their credentials recognized and integrating into the province’s labour market. The profile serves as a model for other nursing associations in other provinces to design their own programme.

The Multi jurisdictional Midwifery Bridging Project (MMBP) posted an outline of its eight month bridging programme for internationally educated midwives who want to practice in British Columbia, Alberta, the Northwest Territories, Saskatchewan, Manitoba and Nova Scotia. The outline provides valuable information to foreign midwives and organisations assisting immigrants.

With the creation of the IQN website, the Government of Canada is delivering on a two year commitment to support provincial, territorial and stakeholder efforts to improve international credential recognition through the Pan-Canadian Framework for the Assessment and Recognition of Foreign Qualifications.

The IQN website is administered by the Foreign Credentials Referral Office, a branch of Citizenship and Immigration Canada that offers referral services in Canada and overseas to immigrants, and develops tools for employers and regulatory bodies so they can help immigrants integrate into the Canadian workforce.

Calgary’s Employment Forums Go Face-To-Face

Bringing the city's hiring managers face-to-face with immigrant job-seekers

Many immigrants who come to Canada want to work for municipalities because government jobs are held in high regard in their countries of origin, says Cheryl Goldsmith, Human Resources Advisor at the City of Calgary.

The challenge is to ensure those who are enthusiastically applying to work at the City are a good match for the jobs, she says.

To that end, Goldsmith and her colleagues partnered with the Immigrant Sector Council of Calgary to establish the Immigrant Employment Partnership Project. The project’s mandate is to “promote employment for newcomers and other immigrant stakeholders in Calgary, and to educate these groups about the careers available with The City of Calgary,” says Goldsmith.

One-stop shop for skilled immigrants

The project has been an outstanding success. This is partly due to the emphasis on employment forums — a “one-stop shop” for new Canadian professionals interested in a career with the City.

Typically, each forum features direct interaction with City of Calgary hiring managers. The forum begins with a general presentation on the recruitment process, followed by individual hiring managers presenting information on how their profession is practiced within the municipality. During these programs, the managers discuss what types of jobs are available, as well as what qualifications and qualities they’re looking for.

Finally, the managers sit down one-on-one with the immigrants, who will get a chance to ask questions. “This is valued as one of the best parts of the forum,” says Goldsmith.

She cites the work of the Immigrant Sector Council of Calgary in helping to co-ordinate the agencies to work with the City at these forums. “We always make sure to keep a balanced focus on our partners in the immigrant employment and settlement sector,” she says.

Employer forums on the horizon

In the past, the forums have focused on the immigrant professionals and immigrant employment counselors. Looking ahead, the partnership hopes to also focus on employers.

An “employer forum,” says Goldsmith, would share the model of the Immigrant Employment Partnership and highlight the importance of:

• Working as a partner: sharing the leadership and training responsibilities between the employer and the immigrant-serving agencies.
• Sharing expertise: gaining essential knowledge from immigrant-serving agencies about interviewing immigrants and analyzing their résumés.
• Being creative: participating in career fairs targeting immigrants and reducing barriers in electronic recruitment.

“Partnership is such a viable model because of the learning opportunities,” says Goldsmith. “Peer-to-peer and cross-sector learning has opened so many doors for the City as an employer. Our hiring processes have been greatly improved because of our partnerships.”

The upside to this multifaceted approach to immigrant recruitment has been an overall improvement in human resources services at the City of Calgary. The City now has International Qualifications Assessment Services guides available online, which allows both HR and hiring managers to quickly check international credentials.

“At present, there is a much higher internal awareness of how international credentials factor into the hiring process,” says Goldsmith. “Before this information was provided on our intranet, résumés with such credentials might have been screened out.”

The City of Calgary has more than 14,000 employees.

Source: Hire Immigrants