Wednesday 31 October 2012

Focus on Canada


Credit-rating agency, Moody's, slams Canada's banks‎

Moody's has threatened to downgrade six of Canada's major banks. The credit rating agency has expressed concern with ballooning consumer debt in Canada as well as the spike in house prices in recent years.


Joshua Blakeney, Press TV, Calgary



Economic outlook not so rosy, Flaherty told


30 October, 2012

Finance Minister Jim Flaherty is being told the Canadian economy will perform significantly lower next year than was forecast in his federal budget in March.

Private-sector analysts informed Flaherty at a meeting Monday that they see economic growth of 2 per cent in 2013, well below the 2.4 per cent prediction indicated in the 2012 budget.

For 2014, however, the economists see the economy bouncing back to 2.5 per cent growth, slightly higher than the 2.4 per cent forecast in the budget.



Recession’s legacy has food-bank usage soaring in Canada
30 October, 2012

A record number of Canadians visited a food bank this year, an indication the recession’s legacy continues to bite.


More than 882,000 people used a food bank this March, a 2.4-per-cent increase from last year. Demand is now 31-per-cent higher than before the recession, a study to be released Tuesday says.


Food banks were never supposed to be a permanent part of Canada’s landscape. They sprang up during tough economic times in the early 1980s as a temporary way to alleviate hunger. Thirty years later, more than three quarters of a million Canadians are using food banks each month.


This year’s elevated numbers show “the recession is still affecting us, while low-paying jobs and inadequate social programs continue to challenge a lot of Canadians,” said Katharine Schmidt, executive director of Food Banks Canada, which is releasing its 16th annual tally.


Need has broadened in the past four years to “those who we might least expect visit a food bank,” from employed people to homeowners and two-parent families, the report said.


Nearly a fifth of employed Canadians are working poor, earning less than $17,000 a year, reflecting a shift in the economy towards lower-paying services jobs, Ms. Schmidt noted.


The statistics show nearly 93,000 people are first-time clients of a food bank.


Cashama Charlery is one of them. She arrived in Canada last December from St. Lucia with her now seven-month-old son, hoping he would have a brighter future here. She holds a college degree in hospitality from her home country and has two years’ experience as a customer services rep for the cellphone company, Digicel.


The only work she’s found since, however, is erratic shifts at a frozen food manufacturer that pay $8-an-hour (below minimum wage) with no benefits. After paying for a babysitter and medical bills, she has no money left.


People don’t see this struggle, they don’t know how hard people are trying to make it here,” said Ms. Charlery, 22, who gets diapers, baby food and basic staples from a food bank in north Toronto. “I’m very ambitious and I know I can make it. ... I just want to have a chance to show how I can work and give back to this country.”


Demand varies by province. Newfoundland and Labrador is the only place to see lower rates of food-bank usage in both the past year, and the last four years – a reflection of that province’s vastly improved labour market.


Elsewhere, Manitoba saw the biggest jump in food-bank clients in the past year. Usage also rose in Ontario, British Columbia and the other three Atlantic provinces.


Food inflation is putting particular pressure on people in the North. One Iqaluit food bank saw an 18-per-cent jump in the past year, with reports of $12 milk and $29 cheese spread. Soaring food prices prompted protests in the region earlier this year.


The paper recommends boosting access to affordable housing, creating a new model for food security in the North (where it says food insecurity has become a “dire” public-health emergency) and revamping social assistance programs to support self-sufficiency.


The increased demand may seem at odds with Canada’s modest economic growth in recent years. But it’s typical to see food bank and welfare rates rise two to three years after a recession, says John Stapleton, an independent consultant in Toronto.


It’s counter-intuitive, because people think, ‘Oh, well, if the recession’s over, everybody’s fine.’ It just doesn’t work that way.”


Rather, it takes time for the recession to hit home, which might begin with a job loss, and spiral as severance runs out, support ebbs from family and friends and savings dry up. “You don’t immediately go into poverty after a recession starts.”


Social researchers tend to scrutinize food bank numbers as a proxy for how low-income people in Canada are faring. Unlike the United States, Canada doesn’t produce statistics on national welfare rates or the number of people whose jobless benefits end without landing work, while information on incomes is published with a two-year lag.


The annual release is based on counting the number of people who get groceries and meals over the month of March. It is not independently verified, though its numbers typically tend to move in tandem with the unemployment rate.


Poll: Canadians overspending, rely on luck


UPI,
30 October, 2012

The majority of Canadian consumers are overspending each month and some are counting on luck with a lottery or inheritance, a survey Tuesday indicated.

The survey for Credit Canada Debt Solutions and Capital One Canada of 822 consumers in September found one-third of respondents pinned their hopes on future financial security on winning a lottery jackpot or inheriting a large sum.

Canada has dozens of government-operated lotteries that pay lump sums, tax-free and the weekly news of winners has apparently skewed financial planning for some, Credit Canada Debt Solutions Chief Executive Officer Laurie Campbell said

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