OTTAWA, Jan 26 (Reuters) - Consumer confidence in Canada rebounded slightly in January from a 27-year low in December as more people expected their financial situation to improve despite the recession, the Conference Board of Canada said on Monday.

The index in January rose to 70.2 from 67.7 in December, which was the lowest mark since the 1981-82 recession.

“As gasoline prices across the country continued to fall, respondents indicated that they were slightly more optimistic about their current financial situation,” the organization said in a statement.

The number of people who said their families were better off today than six months ago rose by 0.8 percentage points to 13.3 percent. When asked if their family’s financial situation would improve in the next six months, 22.2 percent said that it would, also an increase of 0.8 percentage points.

There was also a 1.7-point drop in the proportion who said their financial situation had worsened, to 24.8 percent.

An increasing number of Canadians believe now is a good time to make a major purchase such as a home or a car. That number rose to 28.5 percent from 26.7 percent.

Canada slipped into a recession in the fourth quarter of last year and the Bank of Canada forecast last week that the economy would contract 4.8 percent in the first quarter of this year, on an annualized basis. It expects the economy to decline 1.2 percent in 2009. (Reporting by Louise Egan; editing by Peter Galloway)

5 hours ago

TORONTO — Canadian Imperial Bank of Commerce (TSX:CM) has joined the parade of Canadian banks issuing preferred shares to bulk up capital buffers.

CIBC said Monday it is issuing $200 million of preferred stock, with an option to sell an additional $75 million.

The preferred shares - which pay fixed yields like bonds but qualify as Tier 1 equity capital - will provide an initial yield of 6.5 per cent, resetting in April 2014 and every five years thereafter at the prevailing five-year Government of Canada bond yield plus 4.47 percentage points.

Last Thursday, Toronto-Dominion Bank (TSX:TD) announced a $200-million issue of preferred shares and National Bank of Canada (TSX:NA) announced a $100-million issue.

The day before that, Royal Bank of Canada (TSX:RY) and Bank of Nova Scotia (TSX:BNS) each announced $250-million preferred issues.

Initial yields on the banks’ issues, which all have the five-year reset feature, range from 6.25 per cent for Royal, Scotiabank and TD to 6.6 per cent for National.

The three big TFSA issues
Posted: January 26, 2009, 8:00 AM by Jonathan_Chevreau
Taxes, Wills & Estates, Advisors, tax shelters, TFSAs
The following is an email I received from certified general accountant Dean Paley, who is in the tax and estate planning division of Edward Jones. The entire text that follows is his words:

I am writing in response to your January 5th post entitled “Are Some Financial institutions Blowing The TFSA Launch?”

In this post you published some feedback you had received from your readers about the new TFSA. I would like to address three of the major issues, specifically the frustration over naming beneficiaries and confusion over in-kind transfers.

Naming Beneficiaries

Provincial law governs beneficiary designations on accounts such as RRSPs, RRIFs and now the TFSA. For example, in Ontario, the Succession Reform Law Act specifically allows direct beneficiary designations on RRSPs and RRIFs but has not yet been amended to include TFSAs. As a result, we must wait for the provincial governments to amend their legislation to allow beneficiary designations to be made directly on TFSAs.

At the time of writing, only BC, AB, PEI, and NS have introduced legislation to change the beneficiary designation laws allowing direct beneficiary designations for TFSAs. Until the remaining provinces change their legislation, investments in TFSAs will be governed by the deceased’s will and may be subject to probate fees in those provinces that charge probate fees.

Investors who have TFSAs in those provinces that do not yet permit beneficiary designations should consider amending their wills to ensure their wishes are carried out. In particular, married couples should consider amending their wills to designate the surviving spouse as sole beneficiary of the TFSA. When the surviving spouse is named in the will as the beneficiary of the TFSA, then the investments of the TFSA may be transferred to the surviving spouse’s TFSA without affecting their contribution room. While designating the spouse as the beneficiary in the will may cause the TFSA to be included in the calculation of probate fees, the tax-free transfer is still achieved.

In-Kind Transfers

The “in-kind” transfer of investments to a TFSA will result in a “deemed” sale at the current market value and any capital gains would become taxable. However, any losses would be considered nil and could not be used in the future. Similarly, if an investment held outside of the TFSA is sold and the same investment is re-purchased inside the TFSA within 30 days, any loss that may have been available is lost and can cannot be used in the future.

Married couples who contribute investments from joint accounts to a TFSA should be aware that only the individual who is named on the TFSA can contribute to the TFSA. Investments held in joint account or joint ownership do not match the registration on the TFSA and cannot be directly transferred. The investments could be transferred first to a regular investment account registered in the name of one of the spouses and then transferred to the TFSA.

Delays In Opening

I can certainly appreciate the frustrations some have experienced with opening a TFSA at other financial institutions. However, at Edward Jones we have been ready to open TFSA accounts since December. An Edward Jones advisor would be more than happy to sit down with you face-to-face and discuss how you can meet your financial goals.

DEAN PALEY, CGA | Tax, Estate & Financial Planning
Edward Jones (Canada)
T: 905-306-8732

—–

P.S. I’m getting lots of email on Saturday’s TFSA column — TFSAs not just kid’s play. I’ll post comments below as approvals happen and of course readers are welcome to post comments directly.

How to win a free copy of Findependence Day

Click here for a new review of my financial novel by financial advisor and blogger Preet Banerjee. He’s giving away four copies for those who give him ideas for new financial topics to cover on his blog, Wheredoesallmymoneygo.com. And radio listeners in British Columbia may want to tune in to a half-hour interview with me about the book this afternoon at 4pm PST on 1150 on the AM dial. Or, in the rest of the country, online via www.am1150.ca.

Last Updated: Monday, January 26, 2009 | 11:34 AM ET
The company that urges Canadians to “save your money” in repeated advertisements is having trouble holding on to its own cash.

ING Canada reported a fourth-quarter net loss Monday of $64.1 million.ING’s stock price
Full-year net income for 2008 was $128.2 million, down 74.8 per cent from the previous year.

“Given the deep and prolonged decline of the Canadian stock market and the level of uncertainty about its recovery, we took a significant impairment on our common equity portfolio,” ING President and CEO Charles Brindamour said in a statement.

There are indications that customers of ING insurance arm are soon likely to face higher premiums.

“The increased cost of claims in automobile insurance and the changing weather patterns are likely to drive up the price of home and auto insurance products in 2009, ” he said.

ING Canada released its financial results early because of dramatic developments at its parent company, ING Group of the Netherlands.

The Global bank and insurer will book a large fourth-quarter loss, cut 7,000 jobs and change its CEO. The company predicts a $52 billion loss when it posts its earnings on Feb. 18.

ING said in the fourth-quarter “market conditions deteriorated sharply, making it the worst quarter for equity and credit markets in over half a century.”

The company said CEO Michel Tilmant’s abrupt departure should be seen “in light of the extraordinary developments over the past few months.”

The job cuts represent five per cent of the company’s total workforce.

In a deal reached with the Dutch government, the state will assume the risk for most of the $44.32 billion in troubled U.S. mortgage-backed securities ING owns.

The securities are based on “Alt-A” mortgages that are a step below prime mortgages. They were often made with limited or no documentation of assets or income, leading to the nickname “liar loans,” and many borrowers are defaulting.

Analysts say the current market value of these securities is roughly two-thirds of face value. ING’s deal with the state assumes they are worth 90 per cent.

Under the complex deal, the government will assume 80 per cent of both risk and payments from the portfolio.

For ING, the benefits of the deal include further deleveraging of its balance sheet. It said its Tier 1 ratio — the measure commonly used to rate a bank’s strength — will improve to 9.5 per cent from 9.1 per cent.

ING said Monday’s deal frees up resources so that it can lend 25 billion euros in the Netherlands, of which 10 billion euros will be eligible for state guarantees under a program introduced by the government last year.

STEVEN CHASE , DANIEL LEBLANC and BRIAN LAGHI

Globe and Mail Update

January 26, 2009 at 1:59 PM EST

OTTAWA — The Harper government is creating a new $4-billion Infrastructure Stimulus Fund in tomorrow’s budget to help provinces, territories and municipalities get more job-rich public works projects started, Transport Minister John Baird announced today.

It’s part of $7-billion in infrastructure spending to be doled out by the Jan. 27 stimulus package, he said.

“We did not start this economic crisis – but we will take steps to protect Canada and Canadians from it,” Mr. Baird said, noting that the new $4-billion infrastructure fund’s money would be for projects that take place over the next two years.

The Transport Minister added an important caveat though, saying that other levels of government would have to pitch in their share in order to tap this new money.

“We’d like our partners to match the support that we would present,” Mr. Baird said.

The $7-billion in new infrastructure funding also includes a $2-billion fund to support repairs and maintenance and accelerated construction at colleges and universities across Canada, and a $1-billion Green Infrastructure Fund.

Today’s news is the latest advance leak by the Tories in advance of their Jan. 27 fiscal plan. To date, they’ve now released $13-billion in spending announcements before the budget is even tabled.

The moves are an attempt to cement public support for Prime Minister Stephen Harper’s minority government and remove any reason the Opposition Liberals might have for defeating them in a vote on the budget.

Liberal MP Gerard Kennedy cautioned Canadians to be skeptical of the Tories’ ability to deliver on what they promise. “Can Mr. Harper be believed when he says he gets it?”

Mr. Kennedy noted the government has unveiled tens of billions of dollars of infrastructure spending commitments since 2006 but has only doled out cash for a fraction.

“This is an area of high skepticism,” he said.

A day earlier, the Harper government pledged to set aside the partisan gamesmanship that turned its last economic foray into a near-fatal political crisis.

“We have grown-ups running the budget process,” a senior government official told The Globe and Mail Sunday on condition of remaining unidentified by name. “There will be no juvenile political games.”

The source said the Prime Minister’s chief of staff, Guy Giorno, has seen his influence over the budget superseded by two veterans with more than 70 years of combined experience: the Clerk of the Privy Council, Kevin Lynch, and a senior adviser to the Prime Minister, Bruce Carson.

The comments and gradual early unveiling of the budget are part of a comprehensive strategy to win opposition support and survive the confidence votes that will follow today’s Speech from the Throne and tomorrow’s budget.

The plan includes an extraordinary series of budget previews, beginning last week when Mr. Harper’s office indicated the country will run deficits totalling $64-billion over two years.

Another departure from traditional pre-budget secrecy came from Human Resources Minister Diane Finley, who announced yesterday on CTV’s Question Period that the budget will include $1.5-billion in training funds for laid-off workers.

Over the past three days, half a dozen Tory ministers have publicly revealed nearly $6-billion of its contents.

The Conservatives say they’re trying to make sure their entire budget gets publicity rather than risk measures being overlooked in the torrent of budget-day spending news. Also, they argue, leaking budget measures was standard practice under the Liberal governments that preceded theirs. “The budget hasn’t been all kept [secret] for budget day in more than a decade,” one senior official said.

Still, leaks in the Jean Chrétien and Paul Martin era tended to be imprecise hints transmitted through anonymous sources — not public statements by cabinet ministers as the Tories have done.

“I’ve been looking at these things for 30 years and can never remember the specifics of any measure being announced in a fairly formal way like this,” Toronto Dominion chief economist Don Drummond, a former federal Finance official, said.

The unusual strategy is to cement public support for the budget and, thus, for the minority Harper government, leaving no reason for the Liberals to vote against it and defeat them. “The goal seems to be to delay the executioner,” Liberal finance critic John McCallum said.

The NDP has already said it will oppose the budget and the Bloc Québécois has set the conditions of its support extremely high.

Last fall’s economic statement led to the creation of the Liberal-NDP coalition and the near-death of the government. Government officials have pointed fingers at Mr. Giorno, Finance Minister Jim Flaherty and at Mr. Harper himself for the statement and its inclusion of such initiatives as suspending the public service’s right to strike and the effort to eliminate voter subsidies to political parties.

While nobody has been reprimanded for the November difficulties, it now appears clear the government wants to send a message that it has learned its lesson.

Shifting responsibility for the budget may serve to demonstrate to Liberal Leader Michael Ignatieff, who must decide whether to keep the government alive, that the Conservatives are serious about changing their approach.

The government official’s statements are in stark contrast to Mr. Harper’s refusal in his year-end interviews to take any responsibility for last fall’s political crisis, or to acknowledge that the fiscal update — which he had personally approved — was a mistake. A number of Conservatives now feel that Mr. Harper has to either eat crow and take responsibility for the fiscal update, or assign blame to one of his top operatives for the ensuing political crisis.

One Tory insider also said that the PMO has sent out messages that individual ministers are not to draw attention to themselves during the budget process by pushing forward controversial ideas.

“There’s a sense now that now’s not the time for gimmicks,” said the Tory. “We just have to appear serious at this stage. We can’t appear to be poking our fingers in people’s eyes.”

The new co-operative attitude on behalf of the PMO has also been on display with respect to the premiers, business leaders and the civil service. Observers also say Mr. Harper’s authority has been curbed, his agenda circumscribed and his instincts to attack Mr. Ignatieff curtailed.

“He has put himself in a pickle,” said Peter Woolstencroft, a political scientist at the University of Waterloo, and an expert on Canada’s Conservative movement. “By not being adroit in November, he has created a circumstance that, unless he wants to be defeated, forces him to present a richer budget than he might have wanted.”

Within days of last month’s parliamentary prorogation, the call went out from three separate government departments to begin gathering information from provinces on what they need to cope with the economic turmoil. Those ministers included Mr. Baird, who is also Transport Minister, Ms. Finley and Mr. Flaherty. Aboriginal Affairs Minister Chuck Strahl was called on to do the same with Canada’s native leaders.

The provinces have put forward hundreds of ideas for how to spend the multibillions the government plans to make available for roads, bridges, water-treatment plants, broadband initiatives and the like. The premiers also met with the Prime Minister for a full day-and-a-half (a first), and trotted out suggestions for how to reform Employment Insurance and spend money on retraining and other things.

It was a far cry, said one provincial bureaucrat, from last year when Mr. Flaherty advised international investors that Ontario was one of the worst places in the world to invest.

But whether the Prime Minister can rebuild trust quickly is still a question.

When asked whether Mr. Harper would have done so much consulting without the sword of the coalition hanging over his head, the bureaucrat said “no way, no way. This isn’t in their DNA. They’re playing against type here.”

Similar efforts at openness have taken place within the federal civil service. While a number of cabinet ministers and employees believe the bureaucracy is filled with Liberal sympathizers, the government has nonetheless drawn on its ranks for ideas. Civil servants have responded by spitting out 400 infrastructure projects that can be moved ahead quickly. A good number will see the light of day tomorrow.

Experts say that whether the provinces, bureaucrats and interest groups get exactly what they want from the budget is almost beside the point. What Mr. Harper has tried to do is listen hard enough so that, even if people don’t like everything they see, they won’t complain about not being consulted.

To stash away the big bucks, first chop expenses in housing, transportation and food. Here are lots of ideas to make that possible.

By Liz Pulliam Weston
January 15, 2009
If you were hoping for a list of small tweaks you could make in your spending to save $10,000 a year, sorry.

The reality is that $10,000 is a lot of money. And saving big money usually means making big changes in the areas where we spend the most, such as:

* Housing.
* Transportation.
* Food.

Many people balk at chopping these basic expenses, notes Vicki Robin, a founder of the simple-living movement and co-author of the landmark book “Your Money or Your Life,” first published in 1992 and recently reissued in a new edition.

But those willing to entertain alternatives often find they can cut their expenses dramatically. Surveys of those who tried the nine-step “Your Money or Your Life” program — which teaches people how to achieve financial independence by reordering their spending priorities — found that participants trimmed their spending, on average, by 25%, Robin said.

The following are ways people have found to substantially reduce their costs to live, move and eat. Perhaps some will inspire you.

Saving on shelter
On average, one-third of the money North Americans spend goes to housing costs. Trimming that bill can reap significant savings. Some ideas:

Rent for less. Blogger Donna Freedman gets reduced rent in exchange for managing a small apartment complex. Others alternate stays in short-term or inexpensive rentals with housesitting or caretaking gigs.

Patricia Walker, 64, typically gets paid $5 to $12 a day to housesit in the Mexican retiree mecca of Ajijic. That’s more than enough to pay the $160 monthly rent on a tiny casita she uses between housesitting gigs.

“This is an area where there are a lot of wealthy Americans and Canadians, and when they travel they don’t want to leave their homes alone,” said Walker, a former Californian who blogs about her life in Mexico. “Right now I’m getting paid to live in a mansion, with a maid three days a week and a gardener, and they pay for everything.”

Walker said she finds her housesitting jobs through word of mouth. People looking for longer-term stints can subscribe to The Caretaker Gazette for $29.95 a year.

Move. Downsizing to a smaller house or a less-expensive area can dramatically improve your financial prospects. Anne Crawford, 49, sold her home in Northern California after two decades there and paid $93,000 cash for a small house in her hometown of Omaha, Neb. The move not only freed her of a mortgage but allowed her to pay off her other debts and supplement her savings.

* Tell us: How are you cutting your spending?

Share. Having roommates may feel like something you should outgrow, but plenty of people decide the savings more than make up for the loss of privacy. For years, Robin and a crew of roommates shared a large Seattle home that also served as headquarters for her New Road Map Foundation.

More recently, a family that Robin knows decided to offer a room to someone who provided both part-time child care and lawn care. That arrangement essentially turned unused space into a big savings for the family’s budget.

Rethink your car
The U.S. government’s latest Consumer Expenditure Survey indicated that the average American household spent $8,758 a year supporting an average of two cars. But you can easily spend more than that on a single car in an area where insurance costs are high. Research firm Runzheimer International estimated a 2009 midsize sedan would set its owners back $8,764 to $13,200 a year, depending on where the family lived.

Clearly, not owning a car, or owning one car fewer, can save you a bundle if you can pull it off. Some alternatives:

Car sharing. If you live in an area served by the car-sharing service Zipcar, you can pay an annual fee and hourly charges to have access to a number of vehicles parked around your town. If you live in other areas, renting a car occasionally and using public transportation the rest of the time can make sense.

* Tell us: Do you have spending resolutions for 2009?

Carpooling. If you must own a car, try to make it a “site of production” rather than just a “site of consumption,” as Robin puts it. That means using it to make money, or at least be reimbursed for some of your costs, such as by carpooling.

“What people chip in for gas often exceeds what you had to pay to fill up the car,” Robin said.

Car maximizing. You can save more than a quarter-million dollars over your adult life simply by owning cars for 10 years instead of five. You can save even more if you buy those cars used. Read “Make your car last 400,000 kilometres” for tips on how to keep your vehicle running smoothly longer.

Eat for less
You can trim an out-of-control food bill substantially by eating out less and making more meals from scratch. Combining coupons with weekly sales can chop an additional 25% or more from your bill.

Being vegetarians, as Oregon residents Sandy Aldridge and Dale Lugenbehl are, can save you a bundle as well, since meat is relatively expensive.

But Aldridge and Lugenbehl take it a step further by growing most of the food they eat. Instead of spending more than $500 a month on food, which is average for two-person households, the couple spend “less than $30 a month, sometimes considerably less,” Aldridge said. (See “Five foods it’s cheaper to grow.” )

Aldridge acknowledges that tending a garden and processing the produce can be a lot of work, but she finds it preferable to running back and forth to a grocery store. Also, the couple don’t grow their own just for financial reasons, but as a way of lessening their environmental impact.

“Because we grow things organically, we don’t use any chemical pesticides or fertilizers. It also eliminates transportation of the produce,” Aldridge said. “You really can’t get anymore bio-regional than picking things from your backyard.”

What they don’t grow, they “purchase in serious bulk — 25- and 50-pound sacks of grains and beans, 5-pound sacks of nuts,” Aldridge said. “That packaging, for the most part, is compostable, so we just return it to the soil.”

OK, now for the tweaks
Not inspired yet? Then consider these 10 ways to save at least $1,000 a year:

Put $4,000 more into your retirement plan. You’ll reduce your tax bill by at least $1,000.

Stop smoking. Quitting a pack-a-day habit will save thousands if you pay $8 per pack.

Join the 21st century. Plenty of 20-somethings know the truth: You don’t need a cable TV subscription or a land phone line, as long as you’ve got a broadband Internet connection. Many TV shows are available for free, either on network sites or elsewhere. And there are plenty of ways to make phone calls for less, including via Skype or Vonage. If you’re spending more than $84 a month on your TV and phone, dropping both could save you $1,000 a year.

Do your own nail care. Even at the cheap places, a weekly manicure/pedicure will set you back more than $20, plus tip.

Drink (tap) water. The alternatives cost you. If you drink one bottle of soda (at $1.25 each), and your weekly consumption includes a latte ($4), an alcoholic beverage ($6) and a case of bottled water ($5), you can save more than $1,200 by drinking plain tap water, even considering the $30 you blow on a purifying pitcher.

Stop driving like a maniac. Driving the speed limit and avoiding aggressive moves, such as fast accelerations and slamming on the brakes, can improve your fuel economy by a combined average of 42%, according to Edmunds.com. That means savings of more than $1,000 for someone who drives 30,000 kilometres a year.

Pay off your credit cards. If you carry a $10,000 balance, you’re probably paying at least $1,000 in unnecessary interest (assuming an 11% interest rate).

Rethink date night. Dinner ($40, easy) and a movie ($14 for two tickets) once a week sets you back $2,800 a year. If you’re paying a baby sitter, add $2,000 more or so to the tab. You can chop the bill in half just by going out every other week. Another way to save: alternating baby-sitting with another family. (See “10 hot dates in a bad economy.”)

Cut your clothing bill in half. The average U.S. household spent $1,881 on clothing in 2007; the tab for a family of four was $2,859. Some of that was doubtless necessary spending to replace outgrown shoes and worn-out jeans. But if your closet is already chock-full and you’re still adding to it, you might want to call a timeout on clothing purchases.

David Berman, today at 9:30 AM EST

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Thinking about scooping up Canadian bank stocks on the cheap, now that the concerns over the credit crisis have begun to fade? John Aiken, an analyst at Dundee Securities, recommends against. He downgraded both Royal Bank of Canada and Toronto-Dominion Bank to “sell” recommendations, from “neutral.” He also lowered his 12-month target prices on the stocks, to $35 from $38 in the case of RBC; and to $44 from $51 in the case of TD.

His rationale on RBC? “Royal’s earnings have held up reasonably well on the back of its domestic retail banking platform. However, with Canada unlikely to escape the economic carnage occurring south of the border, we believe that it is only a matter of time before domestic credit quality begins to weaken materially, as we have started to see with credit card exposures.”

On TD? “While we believe that TD’s operations remain strong and that its longer-term prospects are solid based on its U.S. growth platform, we believe that its outlook will remain challenged relating to additional deterioration in credit quality over the coming quarters.”

Yes, TD isn’t alone with these challenges, which is why Mr. Aiken now has “sell” recommendations on all of Canada’s Big Five banks, despite the fact that the shares have already tumbled between 40 and 50 per cent from their highs in 2007.

Curiously, though, Mr. Aiken is warming up to Laurentian Bank of Canada, which isn’t one of the Big Five. He upgraded his recommendation on the bank to “neutral” from “sell” – but lowered his target price to $33 from $36. He sees limited downside to the stock, given its recent fall and reasonable valuation.

December listings soar 9.6% as credit crisis, economic downturn `choked off demand’

Jan 16, 2009 04:30 AM
Comments on this story (6)
TONY WONG
BUSINESS REPORTER

Canadian existing home sales ended 2008 in the deep freeze, falling 1.8 per cent in December compared with the prior month.

Sales fell nationally to 27,357 units, the lowest number since 2000, and were down 17 per cent compared with a year ago, according to figures released by the Canadian Real Estate Board yesterday.

“Canada’s housing boom fizzled in 2008 as the credit squeeze and economic downturn choked off demand,” BMO Capital Markets economist Robert Kavcic wrote in an economic note. “With job losses accelerating late last year, sales activity will likely remain under pressure. All told, 2009 is shaping up to be another difficult year in the Canadian housing market.”

House prices have fallen 11.1 per cent to an average $314,552 from December of 2007, while new listings were up by 9.6 per cent.

“This report serves as yet another reminder that the Canadian housing market is squarely on the path of correction,” TD Securities economics strategist Millan Mulraine stated in a note. “With new listings continuing to outstrip the volume of sales, the inventory of unsold homes is likely to build, thereby placing further downward pressure on prices.”

Not all provinces suffered falling sales in 2008, however. Newfoundland and Labrador bucked the national trend with record sales. But activity for the year was down in every other province, including Ontario at 15 per cent. The largest declines were in British Columbia at 33 per cent and Alberta at 21 per cent.

“Buyers want to know if they should make an offer now or wait for prices to drop even further,” CREA president Calvin Lindberg said.

Lindberg says despite the drop in sales, 2008 still represents the sixth-highest annual sales for residential properties on the Multiple Listing Service. However, weak market conditions mean there is no short-term fix, CREA economist Gregory Klump said.

“The consensus economic forecast calls for an economic rebound in the second half of 2009, so an improvement in housing market trends is likely to wait till next year,” Klump said.

Meanwhile, realtors have asked federal government officials to increase the amount first-time buyers can withdraw from their RRSPs to pay for a residential property under the Home Buyers Plan.

The current limit is $20,000.

The plan, introduced in 1992, has not kept pace with inflation, argues the association, which wants the limit increased to $25,000 and made more widely available.

With housing sales stalling, Canadian contractors are also much more pessimistic in their outlook for 2009, according to a survey released by Wells Fargo yesterday.

The company’s “optimism quotient” fell by a hefty 50 points to 32 in the survey of 300 Canadian construction executives taken last fall. A figure of 100 represents high optimism, while anything below 50 would be considered to be low optimism – “a decidedly pessimistic view,” says the report.

“Canadian contractors are preparing for a challenging year ahead,” says the report, with three quarters of contractors expecting a recovery starting in the next one to two years.

This is a reaction to the market that’s slowing,’ says Onni’s Evans

Brian Morton, Vancouver Sun
Published: Thursday, January 15, 2009

In what’s being marketed as a real estate liquidation sale, the Onni Group of Companies is offering 375 Metro Vancouver condos valued at $150 million at prices it says are discounted by up to 40 per cent from those originally advertised.

Onni executive vice-president Chris Evans said Thursday that Onni was facing high costs in carrying the units under current financing terms. “It made sense to sell our remaining inventory.”

As well, Evans said in an interview, the sale makes sense because of the slowing real estate market.

“No one could ever have imagined the real estate market would drop as much as this. This is a reaction to the market that’s slowing.”

The sale represents all the company’s remaining inventory in projects completed over the past 12 months, Evans said. “And this is not a pre-sale. Every home is completed, brand-new and ready to move into.”

The one-day sale will take place on March 7 and the units will be sold on a first-come, first-served basis, he said.

The sale includes condominiums in Richmond (Flo); Port Moody (Suter Brook - Aria 1 &2, Room Loft Living and Libra); New Westminster (Victoria Hill and The Point); Port Coquitlam (South Verde); and Surrey (Escada).

Examples of the prices include:

• Richmond: A 900-square-foot two-bedroom unit originally priced at $472,900, or $525 per square foot, is now approximately $360,000, or $400 a square foot.

• Port Moody: A 1,106-square-foot two-bedroom-and-den originally priced at $453,900 is now approximately $340,000.

A 655-square-foot studio originally priced at $319,900 is now $240,000, and a 990-square-foot wood frame two-bedroom originally priced at $419,900 is now approximately $315,000.

• Surrey: An 1,100-square-foot two-bedroom and den originally priced at $360,900 is now $260,000.

• New Westminster: A one-bedroom originally priced at $270,000 is now approximately $215,000.

• Port Coquitlam: A 1,000-square-foot two-bedroom originally priced at $389,900, or $390 a square foot, is now approximately $280,000, or $280 a square foot.

However, Evans said some of the units were selling at the original prices. “There’s some demand for homes. The catch is that people are looking for a great deal.

“This is a rare opportunity to afford a home you thought you never could. This is an extraordinary time in the marketplace,” he said, citing the combination of dropping prices and lower interest rates.

University of B.C. urban economist Tsur Somerville said the Onni sale is essentially a marketing tool.

“Technically, this isn’t a liquidation sale,” said Somerville. “That implies that they’re going out of business. It’s a marketing tool. When sales are low and there’s existing product, you want to get people to your site.

“It also signals they don’t think the market is turning around anytime soon.”

Somerville said he hadn’t heard of anything else like the Onni sale yet.

“I know of developers who are quietly marking down,” he said. “But if people perceive that this as a success, you’ll see more.”

bmorton@vancouversun.com

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Globe and Mail Update

January 16, 2009 at 2:01 PM EST

Monday, Jan. 19

Statistics Canada reports on international securities transactions in November. Economists are forecasting a net outflow of $1-billion.

Tuesday, Jan. 20

The Bank of Canada makes its interest rate announcement. Economists expect the target for the key overnight rate to be set at 1 per cent, down from 1.5 per cent.

Statistics Canada reports on manufacturing shipments for November. Economists forecast a drop of 0.5 per cent.

The European Union’s economic and monetary affairs committee begins a two-meeting in Brussels.

Suncor Energy Inc. releases fourth-quarter results. Analysts expect share profit of 46 cents, down from 63 cents last year.

Bank of America Corp. releases fourth-quarter results. Share profit of 8 cents (U.S.) is forecast, up from 5 cents the previous year.

International Business Machines Corp. releases fourth-quarter results. Share profit of $3.03 (U.S.) is expected, up from $2.80 last year.

Johnson & Johnson releases fourth-quarter results. Share profit of 92 cents (U.S.) is forecast, up from 88 cents last year.

Wednesday, Jan. 21

Statistics Canada reports on wholesale transaction in November.

U.S. Bancorp releases fourth-quarter results. Analysts expect share profit of 22 cents (U.S., down from a 53-cent profit last year.

The Bank of Japan starts a two-day monetary policy meeting.

Thursday, Jan. 22

Canadian National Railway Co. releases fourth-quarter results. Analysts expect share profit of $1.02, up from 90 cents last year.

Potash Corp. of Saskatchewan Inc. releases fourth-quarter results. Share profit of $2.25 (U.S.) is expected, up from $1.11 last year.

Richelieu Hardware Ltd. releases fourth-quarter results. Share profit of 44 cents is expected, unchanged from the previous year.

Microsoft Corp. releases second-quarter results. Share profit of 50 cents (U.S.) is forecast, unchanged from last year.

Capital One Financial Corp. releases fourth-quarter results. A share profit of 45 cents (U.S.) is expected, down from a 60 cents last year.

Lockheed Martin Corp. releases fourth-quarter results. Analysts expect share profit of $1.91 (U.S.), up from $1.89 last year.

Southwest Airlines Co. releases fourth-quarter results. Share profit of 5 cents (U.S.) is forecast, down from 12 cents last year.

Fiat SpA releases fourth-quarter results. Share profit of 18 euro cents (30 cents) is expected, down from 45 euro cents the previous year.

Nokia Corp. releases fourth-quarter results. Share profit of 30 euro cents (50 cents) is expected, down from 47 euro cents last year.

Statistics Canada releases retail sales figures for November.

The U.S. Commerce Department reports on housing starts and building permits figures for December. Economists forecast 608,000 starts and 600,000 permits, both annualized. .

The Bank of Canada issues its monetary policy report update.

Friday, Jan. 23

Statistics Canada reports on the consumer price index in December. Economists expect the measure of inflation to drop to 1.2 per cent, year-over-year, from 2 per cent the previous month.

General Electric Co. releases fourth-quarter results. Analysts expect share profit of 37 cents (U.S.), down from 68 cents last year.

Harley-Davidson Inc. releases fourth-quarter results. Share profit of 58 cents (U.S.) is expected, down from 78 cents last year.

Xerox Corp. releases fourth-quarter results. Share profit of 34 cents (U.S.) is forecast, down from 41 cents last year.

All earnings forecasts are mean estimates of analysts polled by Thomson Reuters. Go to globeinvestor.com for a full searchable calendar of companies reporting earnings, dividends and stock splits.