Thursday, October 02, 2008

NCC buys three more acres in Gatineau Park

The National Capital Commission has agreed to buy an additional three acres of private property within Gatineau Park as part of its plan to buy up to $385 million worth of land to prevent further development inside the federal park.

On Monday, the NCC announced its board of directors had approved the purchase of a two-acre lot on Lac-la-Peche Road and a one acre lot on Kingsmere Road.

Terms of the purchase were not released.

"The acquisition of these vacant lands supports our objective to acquire privately owned properties in Gatineau Park that, based on the Gatineau Park Master Plan and the NCC's budget envelope, are priorities for acquisition," said NCC chief executive Marie Lemay in a statement.

The NCC is currently developing an updated inventory of the 1,400 acres of privately owned land within the park boundaries.

U.S. Headed for Deep Recession

The U.S. is likely headed for a deep recession, the International Monetary Fund warned Thursday in a report in which it notes that the current banking crisis is the type that's most likely to lead to such a downturn, and suggesting the government's proposed bailout of the banking system is the right course of action.

Episodes of financial turmoil characterized by banking sector distress are more likely to be associated with severe and protracted downturns.

Financial stress is more likely to be followed by an economic downturn when it is preceded by a rapid expansion of credit, a run-up in house prices and heavy borrowing by households and non-financial firms. The current situation of the United States bears some resemblance to previous episodes of banking-related financial stress episodes that were followed by recessions.

Based on a comparison of the current episode of financial stress to previous episodes, there remains a substantial likelihood of a sharp downturn in the United States.

Not all episodes of financial stress lead to economic slowdowns or recessions.

However, when a slowdown or recession is preceded by financial stress, and especially when the stress is concentrated in the banking sector, typically it is substantially more severe than slowdowns or recessions not preceded by financial stress. In particular, slowdowns or recessions preceded by bank-related stress tend to involve two to three times greater cumulative output losses and tend to endure two to four times as long.

The odds that a banking-related crisis is followed by a slowdown or recession is associated with the extent to which house prices and outstanding credit have risen prior to the eruption of the crisis. Further, while greater reliance on borrowing by non-financial corporations is associated with a sharper downturn in the aftermath of financial stress, the indebtedness of households is crucial in determining whether the downturn will turn into a recession.

However, the relatively strong positions of corporate balance sheets at the onset of the crisis and the aggressive monetary easing by the U.S. Federal Reserve may provide some cushion in the U.S., while the relatively strong balance sheets of European households offer some protection against a sharp downturn there.

In the current circumstances, strong actions by policy-makers to deal with the stress and support the restoration of financial system capital seem particularly important.

Canada Likely Bound for Rate Cuts

Canada is safe from recession, even if the U.S. Congress rejects a bailout package and global credit dries up further, but the economy may take enough of a beating to force the Bank of Canada to cut interest rates.

Credit is harder to come by for Canadian businesses, curtailing their investments. U.S. consumer purchases of made-in-Canada goods is wilting and commodity prices are slamming into reverse from record highs.

That toxic mix has sent economists back to their models to churn out lower growth forecasts for both 2008 and 2009, raising the likelihood that the central bank will have to consider easing borrowing conditions.

If the U.S. government can't put something through, that clearly increases the risk to Canada through the end of the year and into next year.

The export sector, heavy reliant on the U.S. market, is getting clobbered and 70,000 factory jobs have been lost in the past year. But commodity prices are still higher than a year ago, padding household and corporate income.

At this point we don't really see negative growth for Canada, even in the worst-case scenario. We still look at them as being able to eke out a little bit of growth because they've been so resilient thus far.

Last month after holding rates steady at 3%, the Bank of Canada flagged a worsening U.S. outlook as one key risk that could prompt it to change its mind on rates. In a Sept. 25 speech Governor Mark Carney said this risk had become "more probable."
Markets on Thursday had priced in a 96% probability of a rate cut on Oct. 21 due to the financial market meltdown, up from 51% on Sept. 23.
Some economists are gradually coming around to that view as well.

Even if the rescue package is passed, I'm still assuming that there is about a 60 % chance the bank will cut in October.

Strong Showing for Ottawa Housing Prices

Ottawa's hot housing market is bucking the national trend as homes in the region averaged a near six-per-cent increase year-over-year in August.

Its report on Canada's major markets cataloged a 5.1% decrease in prices compared with last year, with an average listing price at $316,052.

The rosy numbers in Ottawa were a stark contrast to the situation in most other regional housing markets. Calgary's average price of $390,091 was eight per cent less than last year. Vancouver fell by 5.2%, and Edmonton also dropped by 4.8%.

However, Regina's area saw a strong 36% gain, with markets in Saskatoon and Winnipeg also posting gains of at least 10% each.

With the fall in prices also came a drop in listings and mortgage rates.

Ottawa Home Construction Slows

A 14% drop in Ottawa's housing starts in August was the first significant decline in recent months.

Housing starts fell to 639 last month compared to 743 units in August 2007
However, year-to-date figures show growth in starts has moderated to a "still solid" 14.3% above 2007.

Townhomes continue to drive Ottawa's new home market, up 22.5% over August 2007 and up 28.2% for the year. Single-detached properties - which fell slightly in August by 2.4 % compared to August 2007 - still represented 45% of total starts in Ottawa.

Housing starts in the Gatineau area were up by 21%, to 363 from 299, from the same month a year ago.

Friday, July 04, 2008

Canadian Economic Slowdown Will Be Brief

Canada's economy will manage growth of just 1.4% in 2008 but stage a quick recovery next year when it is expected to expand by 2.5%.

Weakness in the U.S. economy has had an impact on Canada's economic growth, but domestic demand has helped mitigate the drag.

The surprise economic contraction will be short-lived as growth prospects for the remainder of the year should brighten, with financial market pressures starting to ease, the U.S. economy getting a boost from the issuance of tax rebate checks, and commodity prices remaining historically high.

Canada's core inflation rate will trend higher this year but remain below the Bank of Canada's 2% target and stay there through 2009.

Canada's housing market is also poised to cool
as soaring prices have driven the cost of home ownership beyond the reach of many families. Housing affordability in most major markets across the country has deteriorated to its worst levels in almost 20 years.

However, the extent of any weakening is expected to be much less pronounced than what is occurring currently in the U.S. as the Canadian market did not experience many of the excesses evident south of the border.

U.S. economic growth to be modest this year, rising 1.5%. Growth is projected to strengthen to 2% in 2009. We believe that the U.S. economy will avoid a contraction this year and should start to see sustained upward growth momentum in 2009.

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Wednesday, July 02, 2008

Canada's Cautious on Economy

Canadian Finance Minister said he was concerned that economic weakness in the United States, his country's top trading partner, could hold back the domestic economy in the coming months.

He welcomed Monday's stronger-than-expected report on April gross domestic product, which showed Canada's economy had expanded for the first time in three months.

Even so, "one month does not make a trend.

He was concerned about the impact of the U.S. housing crisis on the economy south of the border and believed the property market would not sort itself out until next year.

Despite the headwinds, he believed Canada's economy could continue to grow, though at a slower pace, due to the country's solid fundamentals and a strong labor market.

A rebound in manufacturing helped Canada's economy grow by 0.4 % in April after two months of contraction. The April performance was slightly more robust that market expectations of a 0.3 % increase, and it followed contractions in March and February of 0.2 % and 0.3 %, respectively.

The Canadian economy shrank by an annualized 0.3 %in the first three months of the year, the first quarterly contraction since since April-June 2003.

He was still confident that the government would show a budget surplus this year.

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Canadians Should Expect to See Considerably Slower Gains in Wealth in the NextvTwo Years

Canadians should expect to see considerably slower gains in wealth in the next two years, limiting their ability to spend.

Consumer spending will slow from a more than 5% annualized rate of increase in early 2008 to about 2.6% in 2009.

Canadians have been able to spend "almost like drunken sailors" over the past 2 years because high commodity prices have brought great wealth into the country.

But most factors point to lower household wealth gains in the next couple of years, including stabilizing commodity prices, lower house price increases and higher unemployment.

Nominal gross domestic product, which includes inflation, will fall from 5.9% in 2007 to 4.1% this year and 3.5% in 2009.

Real GDP, which adjusts for the impact of inflation, is also slowing from 2.7% in 2007 to 1% this year, before recovering somewhat to 1.8% in 2009.

Two-thirds Disapprove of Ottawa Mayor Larry O'Brien

Ottawa City council itself took a beating in the survey, which ran from May 2 to May 30, after garnering at 80.7 disapproval rating. Ottawa Mayor Larry O'Brien generating a 68.7 per cent disapproval rating after nearly 2 years in office.

Though most councilors polled at under 50 % individually, there were some bright spots. Osgoode Councilor Doug Thompson ranked the highest, with an overall approval rating of 71.4%. Gloucester-Southgate Councilor Diane Deans, meanwhile, finished with the highest disapproval rating of 75%.

Though experts have often disputed the accuracy and reliability of online polling, their popularity has skyrocketed in recent years. Over 700 individuals rated city council in their survey, which asked respondents to answer 47 questions on councilors' performance.

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Ottawa Approves Plasco Tax Break

Ottawa city committee endorsed a property tax exemption for Plasco Energy.

The company is running a test waste-to-energy plant on city property at the municipally owned Trail Rd landfill, and the municipality is a partner of the company's. The city has an agreement with the company stating its garbage disposal technology, which eliminates the need for new landfills, will be used to handle all city garbage if the company wins approval from the province's environment ministry.

Plasco officials requested to be exempted from paying property taxes of about $72,000 per year. The exemption will be before city council next week for final approval.

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Monday, June 30, 2008

Canadian Economy on the Rebound

Canadians should have an extra reason to celebrate Canada Day Tuesday, which will follow expected news Monday that, after two months of shrinkage and a first-quarter decline, the economy rebounded in April.

We are expecting a decent gain in real GDP in April after two months of negative economic growth, in part due to adverse winter weather which kept consumers shoveling snow rather than shopping and resulted in the first quarterly decline in five years. Wholesale and retail sales rebounded during the month, along with manufacturing shipments, supported by strong wage growth and continued employment gains.

However, any celebration, and the rebound itself, will likely be tempered by what analysts also expect will be further evidence of weak housing activity and shrinking auto production.

The spirits of Canadian auto workers won't be lifted by the news out of the U.S. on Tuesday.

It anticipates the June vehicle sales report for the U.S. -- the destination for 80 per cent of Canadian auto production -- will fall below the 14-million mark for the first time in 10 years, in part reflecting the impact of soaring gasoline prices on sales of light trucks and SUVs.

Meanwhile, other reports coming this week out of the U.S., Canada's main export market, aren't expected to give Canadians reason to cheer and will likely give Americans even less reason to celebrate their July 4 holiday on Friday.

The news includes the June employment report, coming Thursday, which we expect will show further job shedding as U.S. firms try to deal with rising fuel and borrowing costs. On the bright side, it expects, despite further job losses, the unemployment rate will ease slightly after jumping to a three-year high of 5.5% in May.

An index of manufacturing activity in the U.S. on Tuesday, meanwhile, is also expected to reveal further weakness, though that should be offset a bit by a report Thursday that is expected to show a slight rebound in non-manufacturing activity there, reflecting in part the impact of the tax-rebate economic stimulus package.

The U.S. manufacturing sector continues to struggle under the weight of sluggish domestic demand and high input costs. Despite the important offset that the export sector continues to provide to these factors, we expect the deterioration in the U.S. manufacturing sector to (have continued) in June.

With the U.S. economy continuing to struggle, we are unlikely to see any sustained upswing in Canadian economic activity in the near term.

On Friday, Statistics Canada will release a report on the state of pension plans at the end of last year, which in light of the losses on stock markets last summer and fall, will not likely do much to improve the mood of Canadian worker.

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Measure and Mismeasure of the Canadian Economy

GDP — or Gross Domestic Product — is the most widely used indicator of the overall size and health of a country 's economy.

The "Gross" in GDP means that it includes the costs associated with the depreciation of things like buildings machinery and equipment.

The "Domestic" refers to the requirement that the economic activity must take place within the boundaries of Canada, so goods produced by Canadian companies overseas are not factored in, and goods produced for foreign companies in Canada are.

As for "Product," GDP measures the result of production — the value of all good and services produced in one year.

When you see GDP growth figures cited, they're usually "real" GDP figures. Real GDP excludes the effects of inflation, so it's easy to see if the economy "really" grew, or if inflation alone was responsible for the increase in a country's total output.

The growth in real GDP is widely used as a standard to indicate the economy's health. It is this growth figure that economists look for in the GDP reports that Statistics Canada churns out and releases at the end of every month.
How is GDP calculated?

Statistics Canada gathers much of the raw data it uses to calculate GDP from its own surveys, like the monthly survey of manufacturing or the survey of employment, payrolls and hours. It also gathers data from other federal departments and agencies, other levels of government and from private industry.

There are many ways to express a country's GDP. Statistics Canada calculates the country's GDP by industry. It divides the economy into goods-producing industries (like manufacturing, construction, and energy) and service-producing industries (like retail trade, health care, and finance).

GDP is calculated on a "value-added" basis. In other words, only the value of production added at each state of the manufacture of a product is counted. If this didn't happen, production would be double-counted and GDP would be inflated.
Problems with GDP

GDP, to put it bluntly, is a blunt instrument. It was designed in the wake of the Great Depression as a way of measuring the size of a country's productive output. But in the decades since, it has been wielded as a sign of economic well-being, even the happiness of the citizenry. If a country's real GDP rises by four per cent in a year, it doesn't seem to take long before you see politicians taking credit for building a "strong" economy. Times are good, and all that.

Even as a measure of economic output, however, GDP has its limitations. Take a look at the first quarter of 2008, when the Canadian economy contracted at an annualized 0.3 per cent that quarter and the U.S. economy grew by 0.9 per cent.

That leaves the impression that the Canadian economy was doing worse than the U.S. economy, which was struggling with rising unemployment, slumping auto sales, and one of the worst housing downturns in decades.

"Without resorting to hyperbole, this understates the relative performance of the Canadian economy by a country mile," said BMO Capital Markets economist Doug Porter in a report he titled "Does GDP Matter?" (He says yes, but not as much as usual.)

More fundamental criticisms of GDP arise when one takes a look at what it measures, and especially what it doesn't. GDP, for instance, does not measure unpaid housework and caregiving. When a maid or professional caregiver is hired, however, that does add to a country's GDP. GDP figures also do not take into account the economic value of the many hours of volunteer work.

GDP includes the costs of rebuilding after a devastating hurricane or earthquake, even though it merely restores the status quo. It also counts the cleanup of an oil spill as "production," just as it counts the billions spent fighting crime and preventing terrorism or dealing with a health epidemic.

And finally, GDP fails to take into account how a country's wealth is divided. A huge gap between rich and poor is irrelevant in the GDP scheme of things, while it clearly matters if one is talking about a healthy society. GDP is a measure of quantity, not quality.
What are some alternative measures?

The increasing use of GDP figures as a proxy for progress and well-being has led to the development of some creative alternatives that attempt to capture the intangibles that make people happy and a society healthy.

Measure of Economic Welfare (MEW) — The MEW is the work of Yale University economists William Nordhaus and James Tobin. They developed their Measure of Economic Welfare back in1972 as one of the first attempts to address the shortcoming and mismeasures of GDP. It proposed accounting for such variables as household work, pollution, and spending on crime. This measure was to form the basis of several later attempts to measure well-being.

Index of Economic Well-being (IDEW) — This index is the work of the Ottawa-based Centre for the Study of Living Standards.It's a weighted average of what the Centre considers to be the four main components of economic well-being: consumption flows, stocks of wealth, inequality, and indicators of economic insecurity like unemployment and poverty in old age.

The Centre found that the economic well-being of Canadians, as measured by the IDEW, has increased at a much slower rate over the last 25 years than real GDP per capita. Its last look at 14 industrialized OECD countries found Norway was at the top of its Index of Economic Well-being, while Canada was in 10th spot, the U.S. was 11th, and Spain was 14th.

Genuine Progress Indicator (GPI) — The GPI was developed in 1995 by Redefining Progress, a private research institute based in California. It arrives at its Genuine Progress Indicator by taking GDP figures and then adjusts them to take into account income distribution. It adds points for household and volunteer work, and subtracts points for the costs of things like crime, pollution, car accidents and the loss of leisure time. Under its per capita GPI formula, the U.S. has been basically treading water for the last 30 years — making no real progress in that time, even though real per capita GDP had jumped significantly.

Nova-Scotia-based GPIAtlantic has developed its own Genuine Progress Index to reflect the standard of living in Nova Scotia. Its GPI is constructed along similar lines to the GPI from Redefining Progress. But GPIAtlantic doesn't turn its index into a single number. One of its research studies found that volunteerism adds $1.9 billion a year to Nova Scotia's economy — a figure that doesn't find its way into traditional GDP reports.

Index of Sustainable Economic Welfare (ISEW) — Developed in 1989 by Herman Daly and John Cobb, the ISEW takes into account private spending on defence (a negative), domestic housework (a positive), the costs of environmental harm (a negative), and it corrects for income inequality.

Human Development Index (HDI) — This index is the work of the United Nations Human Development Report. It calculates an annual HDI that ranks the world's countries on their achievements in three main aspects of human development: health (life expectancy at birth), knowledge (as measured by literacy rates and school and college enrollments) and standard of living (as measured by GDP per capita based on purchasing power parity.) For 2007-08, Iceland was in first place, Canada was fourth, the U.S. 12th, and Sierra Leone was last, in 177th place.

Happy Planet Index (HPI) — The Happy Planet Index was developed by the British-based New Economics Foundation to, in their words, "show the relative efficiency with which nations convert the planet's natural resources into long and happy lives for their citizens." In other words, it doesn't really measure whether people are "happy". Its most recent HPI ranking puts Vanuatu, Colombia and Costa Rica first, second, and third. Canada is in 111th place (just below Benin), and the U.S. is 150th.

Finally, in 1972, the King of Bhutan came up with the Gross National Happiness (GNH) indicator that he felt would be more in tune with his country's Buddhist values (i.e. sharing prosperity, protecting the environment, and preserving culture).

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Ottawa Mattress Fire

A mattress fire late last night forced the evacuation of an Ottawa Housing building and sent at least one man to hospital to be treated for smoke inhalation.
The Ottawa Fire Department was called to a five-storey apartment building at 1390 LePage Ave. at around 10:15 p.m.
A tenant on the third floor reported that a mattress in their apartment was on fire, but by the time firefighters arrived, the burning mattress had been dragged into the stairwell, causing the building's upper three floors to fill with smoke.
"They did what they thought was right, but it didn't make our jobs any easier," said District Chief Lyle Fraser.
The charred remains of the mattress were piled on the lawn near an entrance on the building's east end.
One man who looked to be in his 40s was treated with oxygen at the scene and taken to hospital for smoke inhalation. At least two other people were treated for smoke inhalation at the scene.
A fire fighter cut his hand on a broken window and was taken to hospital for stitches.
The parking lot in front of the two-tone brown brick building was packed with residents from the building, as well as a neighbouring building at 1400 LePage Ave.
That building was not evacuated, but Mr. Fraser reported that smoke had wafted into the upper floors.
Many were senior citizens who depend on wheelchairs or walkers to get around and needed assistance getting out of the building.
Alexandra Travella was spending the night with her 86-year-old mother, Evelyn Goshko, a resident on the second floor.
When the fire alarm went off, Ms. Travella went down to the parking lot to speak with firefighters before going back upstairs to evacuate her mother, who refused to leave her apartment without her walker and her cat, Belle. Ms. Goshko has lived in the building for 27 years.
Kirkwood Avenue between Merivale Road and Chatelain Avenue was temporarily closed while a total of 36 firefighters and 11 vehicles responded to the call.
A fire investigator was on the scene. Damage is estimated at $5,000 to the building.

Sunday, June 29, 2008

24-inch Pool ByLaw Situation

When Kanata resident Richard Lapointe bought a $75 inflatable pool for his two young daughters, it was a huge hit on those hot summer days.

On the box, the pool dimensions are 12 feet by 30 inches -- with an air ring holding up the pool.

According to the instructions, it's supposed to be designed for the water to go up to the ring, the actual water level is supposed to be less than 23-inches deep.

But recently, he and his neighbours received a visit from a building code inspector who was checking for property damage as a result of a new house being built at the end of the street.

"Surprise, the next day we had a Pool Enclosure Bylaw 2001-259 violation report in our mail box. According to the ticket, 'Your pool is designed to hold more than 24 inches of water and must adhere to conditions of By-law 2001-259 being a by-law to regulate privately owned outdoor swimming pool enclosures. This enclosure requires a

permit,' " Lapointe relayed in an e-mail to the Sun.

According to him, the pool is only designed to hold 23 inches of water, but the bylaw says if it's capable of holding 24 inches you need a permit.

And hence, the requirement for a $150 permit for a $75 pool.

The permit is designed to pay for the cost of an inspector to ensure the pool is properly enclosed.

Lapointe said he wouldn't pay the "ridiculous" permit fee, and would instead tell his girls the pool has to come down.

"Is our city so desperate for money they are coming after kids and their pools? Should stores have warnings on them with the bylaw restrictions for Ottawa? How many people are buying these pools for less than $100, not knowing they have to pay the city $150 just to set it up?"

Lapointe wasn't impressed.

"The city seems pretty concerned with my pool, but where were they this winter when I had to shovel five feet of roadway just to get to my driveway? They should be more concerned with maintaining our parks and city lands which are deteriorating at a considerable rate, than kids' pools, but I guess they need the $150," he wrote.

"I am incredibly embarrassed to be a resident of this city. Could we vote on de-amalgamation?"

Arlene Gregoire, the director of Building Code Services, said complaints like this often occur because people simply aren't aware that kiddie pools that can hold 24 inches of water need a permit, regardless of what they cost.

"This is for toddlers, they are the ones that disappear in the blink of an eye," she said.

"It's really all aimed at safeguarding children.

"Every summer we get people who are frustrated. They buy inflatable pools, and may not have a fence, or it's three sided, and then they discover after they've bought the pool, there are these regulations to enclosures -- all for a $59 pool. So, yes, we've received complaints."

But while she understands the frustration, she said the city has a role to protect the safety of young children. And if you have a pool which can hold 24 inches of water, your yard must be properly fenced and inspected, and the $150 permit is charged on a cost-recovery basis.

The 24-inch rule applies to any kind of pool, whether it's a cheap kiddie pool, hot tub or even a garden pond.

Turns out this story has a happy ending for Lapointe. He says after contacting the Sun, he had phoned the city to have an actual bylaw officer visit his home Friday morning to see if the pool complied with the bylaw.

Seems saner heads prevailed.

Indeed, the officer agreed the inflatable kiddie pool wasn't really capable of holding 24 inches of water and, in fact, would likely burst if it did.

"That's just what I was saying. And that was my frustration, I kept telling them that.

"I'm satisfied with the outcome, but I think the bylaw itself is ridiculous."

Landlords get the dope on tenants

A crime prevention group wants to teach landlords how to spot and deal with problem tenants.

Landlords aren't familiar with spotting addicts or don't know how to handle them, said Nancy Worsfold, executive director of Crime Prevention Ottawa, which released a six-month report Friday.

The group has focused some of its work in Vanier, identifying the problems with drugs and prostitution. They say Vanier offers cheap rent, which in turn lures tenants with addictions and mental health disease.

Safety and Security in Rental Buildings: An information guide for Ottawa's residential landlords acts as a step-by-step manual for landlords in dealing with problem tenants.

"A lot of residents in Vanier deal with problem addresses, which are often drug related," said Worsfold.

She said the manual is for landlords "who are willing to do the right thing or are scared or don't know what to do and need a little bit of help in how to act in situations."

The manual tells landlords how to avoid renting to tenants they suspect might cause problems for neighbours, other tenants or destruction to property. They can get tips on renting to students, immigrants and other first-time renters.


They are encouraged to screen potential tenants, welcoming them when they first move in which sends the signal that "you are keeping an eye on the property early on," said Worsfold.

The manual provides help on resolving situations.

"The people who are victims most of the times in these situations are the other tenants in the building," she said.

There are numbers to call to try to resolve mental health issues.

If all else fails, the manual instructs landlords how to evict tenants.

Crime Prevention Ottawa plans to distribute the manual to landlord associations and at the community and protective services committee on Thursday.

Canada's Housing Boom Over

A year or so ago, selling a house in most of Canada's major markets was not a significant challenge. If you lived in a city with a strong economy, the selling price was heading in one direction only - straight up, usually in double-digit leaps every year.

But the most recent reports suggest the boom times are over.

Prices have already begun falling in Calgary and Edmonton after a couple of years of breakneck growth, and prices for the country as a whole were up just 1.8% year-over-year in May. Between the beginning of January and the end of May, 202,899 homes had been sold nationwide through the multiple listing service (MLS) compared with 233,213 in the same period last year - a drop of 13%.

It as a move towards a more balanced market, but with new listings coming in at a pace more than double the number of houses sold, analysts say it is clear that a slowdown has begun.

The combination of significantly higher listings, reflecting the desire of homeowners to take advantage of the past increase in prices, and weaker demand, due to the past erosion in affordability, are leading to declining sales and softer price performance across the country, but particularly in the west.

It all comes down to a simple matter of supply and demand. On the supply side, past price performance has strongly encouraged additional supply in both the new and existing home markets. Housing starts averaged a strong 234,000 units in the first quarter. While we expect new home construction activity to remain robust, starts should gradually edge down to a lower level of around 200,000 units over the course of the next 18 months.

We had anticipated an increase in new listings as a result of solid price gains in the last couple of years, but the recent surge in new listings has been far greater than anticipated. The jump in supply of homes for sale is assuredly an attempt to take advantage of the past home price appreciation on the part of homeowners and real estate investors.

The Canadian situation is far different than that in the U.S., where the housing market is in full retreat and prices are plummeting in a number of major markets.

It should be stressed that the rise in listings does not reflect homeowners of principal dwellings desperate to sell, and this is the dominant difference between the Canadian and U.S. experience.

In Canada, speculators may be quickly dumping properties on the market to get out while the times are good, but individuals that have a principal dwelling are not under financial duress. This distinction is crucial to evaluating the impact of weaker home price performance on personal wealth and consumption. Canadian consumers are also nowhere nearly as leveraged through their home equity as American consumers are.

There can be no doubt that housing prices are due for a correction in Canada, with the country's economy growing wobbly and prices in several markets peaking after six years of rapid growth.

Nationally the average house price increased less than 2% year-over-year in May. We are getting close to slipping under water. I expect to see negative growth figures at least for the next few months. Housing markets have a lot of inertia. Once they start to move they can go in that direction for several years. The market was flat on its back for most of the 1990s.

Looking ahead, flat sales and prices "may be the best-case scenario, at least for the next year or so. The Canadian economy is anemic and it will probably be like that for the rest of the year.

Canada's housing boom is getting long in the tooth. "It has been with us for six years running. We have already seen prices start to fall in Edmonton and Calgary - cities where the prices rose too rapidly. And they are down in Windsor because of that city's economic slump.

Given that Canada's economy is weakening there is room for prices to decline further. But, there is little chance of a U.S.-style bust in Canada. Our housing market is on a firmer foundation.

Nor does it mean that Canadians should rush to sell their homes. Owning a home generally makes more sense than renting. But as for investment properties, we probably wouldn't recommend it.

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Canada's housing market shows shades of U.S.

After months of holding fast to the view that Canada will not follow the U.S. into a housing decline, one economist is now raising the specter of an overall drop in prices north of the border.

Canadian home sales are down 13% year over year so far in 2008 and price appreciation has slowed markedly to a year-to-date gain of 1.8%.

When charted out, these data suggest Canada is tracking the U.S. housing market fairly closely, at a two-year lag.

It's a bit unnerving to see how Canadian performance is beginning to look like that of the U.S. two years down the line.

In the past 10 years, the average price of a detached, two-storey home in Canada has risen 129%.

However, this year, sales are down, listings are up, and while prices have mostly stayed in positive territory, a few markets have showed signs of cracking.

Last month, three markets posted slight year-over-year declines in house prices - Calgary, Edmonton and Windsor-Essex.

In the West, the declines look like modest corrections to markets that got ahead of themselves.

More concerning is weakness in cities where economic fundamentals are much less stable, such as Windsor and Thunder Bay.

The most interesting question is what will happen to the middle ground. Will cities like Toronto, Montreal and Ottawa, which have fairly robust markets but have not been blessed by a booming underlying economy, end up seeing home price declines, too?

Economic fundamentals, including strong job growth and low interest rates, suggest that Canada is still in pretty good shape, and that declines in this "mass of cities" have an outside chance instead of a probability.

Thus far, Canada is not even close to experiencing the 8% price drop and 20% decline in existing home sales that has taken place in the U.S. this year, but that doesn't mean there is no cause for concern.

There are a litany of reasons why the Canadian market is different. But even a very pale version of what we saw in the U.S. would not be good news.

Are we on the road to ruin?

BASF had to increase its prices in North America last week on everything from its kaolin products, an ingredient in paper, to the resins used to make paint, garment hangers and toys, citing "unprecedented" and "dramatic" increases in raw materials, energy and transportation costs.

The former cassette tape company certainly isn't the only one stuck in this inflationary boat. BASF's competitor Dow Chemical announced last week its second price hike in less than a month to offset record costs for energy and raw goods. The Midland, Michigan-based firm makes propylene glycols for antifreeze and pharmaceuticals along with acrylic acid-based products for detergents and diapers.

"It's happening across the industry as a result of rising oil prices," says Rotenberg. In fact, staggering oil prices are winding their way throughout the economy and trickling down to consumers in just about every area imaginable.

Thanks to soaring prices at the pump, airlines have all jacked up their fuel surcharges, and last week Toronto's taxi industry followed suit, announcing a fare increase this summer.

And if you're still mailing it in, Canada Post also wants to squeeze more pennies from your change purse. The federal agency announced Friday that it will ask Ottawa for a six-cent increase in the price of domestic stamps over the next three years as their transportation costs climb, while the price of crude oil and gasoline is expected to cut the post office's profits in half. That request comes on the heels of recent announcements by global shipping giants FedEx Corp. and United Parcel Service Inc. that high fuel costs and a slumping U.S. economy are destroying profits.

"Everything from taxi fares to your morning bowl of cereal has been affected by the rising cost of fuel," says CIBC World Markets economist Avery Shenfeld, who pointed out that most other countries have been experiencing higher inflation for some time. But it didn't kick in for Canada until recently, due primarily to the strength of the loonie and low interest rates along with the GST cut and grocery store price wars, which kept inflation at bay.

"Other than Japan, all the G-7 economies had higher inflation than Canada," notes Shenfeld.

"It's been creeping in over the last year, but the pace of the increase is now noticeable" to consumers at the same time that the Canadian dollar slides back from par, he says.

Relief isn't expected anytime soon either. Oil leapt to a record high above $142 a barrel on Friday (27), extending gains after surging nearly 4 per cent in the previous session, as tumbling global stock markets helped to trigger a wider commodities rally.

China's largest steel maker Baosteel felt the sting of escalating oil prices last week, agreeing to the biggest price hike in more than a decade in iron-ore term contracts with Rio Tinto. Baosteel is set to pay the Australian miner up to 96.5 per cent more for its iron ore.

Meanwhile, global markets endured a sell-off last week amid increasing worries over the rising threat of inflation.

World stocks fell to a three-month low on Friday, hurt in part by the soaring oil price and feeding into inflationary fears.

"There is so much to worry about now (in the Canadian economy). There are risks on the inflation side, on the growth side as well as incredibly volatile currency and equity markets," says RBC Financial Group's chief economist Craig Wright.

"Most central banks are gauging the growth of inflation. It's a delicate balancing act how it's all going to pan out," he says.

"The big sticker price is on food and energy. Those are very visible. And it does raise the risk of spilling over into wages."

Wright does not foresee energy prices soaring ever higher though next year. He is forecasting oil to slide back to $90 by the end of next year, though he adds it likely won't translate into a significant dip in fuel prices.

"Our view (overall) is one of nervous optimism," he adds.

Confidence is also crumbling across Europe as oil-powered inflation, public worry number one, accelerated further in June, compounding the double-trouble central bankers must deal with as economic growth slows in the industrialized world.

Ahead of a meeting next week where the European Central Bank is expected to raise interest rates, Germany's statistics office said the annual inflation rate in Europe's largest economy rose to a near 15-year high of 3.3 per cent in June, from 3 per cent in May.

And in Spain, a one-time boomer hit by a housing bust, inflation in June was announced at 5.1 per cent, the highest since records began in January 1997, while Belgian inflation sat at a near 24-year high of 5.8 per cent. Politicians in Germany, France and Spain have all signalled that the second quarter of the year could look ugly in terms of gross domestic product.

Meanwhile, BASF's Rotenberg is concerned that escalating costs for her company's chemicals will result in customers turning to cheaper substitute materials.

"If you can cover your costs and make a profit you also have to make sure your customers don't look for other products."

Thursday, June 26, 2008

Ottawa Transit Cuts Proposal

The City of Ottawa has ordered firefighters to stop using fire trucks to go grocery shopping. The order is part of a proposal to reduce the amount of fuel used by city vehicles.

Firefighters will now have to buy groceries on their own time before their shift or arrange for delivery if they want to prepare meals at the fire station.

The order is included in an "eco-driving" policy presented to council Wednesday by Coun. Marianne Wilkinson. It will be modified and returned to councillors in the fall.

Considering that it has not yet been passed, the directive is premature, said Peter Kennedy, the president of the Ottawa Professional Firefights Association.

"It's had a real negative impact on the morale of the members and I think what we would have preferred is a consultation process," he said Wednesday.

Ottawa Fire Services has said it receives many calls from the public questioning why firefighters drive to grocery stores in fire trucks.

Kennedy said the practice is part of long tradition that arose because crews have to stay together at all times, in case they're called to an emergency. He added that firefighters are redistributed to stations across the city throughout the day, which means it's hard to predict how much food they will need to prepare meals for all the firefighters at a given station during a 10-hour day, a 14-hour night or a 24-hour shift.

Now, he said, it's unclear what vehicle firefighters will use to go grocery shopping and who will pay for the expense.
Transit cuts, telecommuting proposed

According to Wilkinson's motion, the city must spend an extra $400,000 a year on its vehicles for each one-cent increase in the price of a litre of diesel fuel.

By improving fuel efficiency, she said, the city can reduce costs without reducing services.

"I think that there's a lot of things we can do and some people are loath to even ask or even talk about them," she added.

Her proposal was modified Wednesday to allow for consultation. Fuel-saving suggestions from departments and managers themselves will be brought before council this fall.

Wilkinson's original proposal included a number of other ideas such as:

* Cancelling or changing transit routes with low ridership.
* Speeding up analysis of potential rail links outlined by the Mayor's Task Force on Transportation a year ago.
* Developing a protocol to allow employees to work from home part of the time.
* Revising police patrol routes to reduce fuel usage.
* Review the use of snow removal vehicles and other city vehicles to reduce fuel consumption.
* Ban city vehicles, including emergency vehicles, from idling even when it is very hot. The city bylaw that bans idling for more than three minutes applies only when temperatures are between 4 C and 27 C.

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City of Ottawa moves forward with 400 tonne-per-day PlascoEnergy facility

Plasco Energy Group Inc. of Ottawa announced that the Ottawa City Council unanimously agreed to issue a letter of intent to PlascoEnergy to build, own and operate a 400 tonne-per-day waste conversion facility that will process residual household waste that would otherwise be sent to landfill.

The City will continue to operate source separation blue box (plastic, metal and glass), black box (paper and paperboard) and yard waste composting programs introduced many years ago, and is currently introducing source separation of organics for anaerobic digestion. The Plasco Conversion Facility will convert substantially all residual household waste to valuable products including synthetic fuel gas for operation of internal combustion engines. Generators driven by the engines and by waste heat from the conversion process and the engines will produce approximately 21 MW of net saleable base-load power for delivery to Hydro Ottawa.

Upon approval, the facility will be funded, built, owned and operated by PlascoEnergy and will be capable of processing 400 tonnes per day (150,000 tonnes per year) of garbage. Garbage will be delivered from local collection trucks to the facility. PlascoEnergy will separate large metal objects prior to feeding the garbage into the conversion system and will send them back to the City for recycling. The City will pay a tipping fee of $60 per tonne of waste processed, escalated to reflect CPI over a 20-year contract. All risks of operation and efficiency of power generation are assumed by PlascoEnergy. The City will receive 25% of annual revenues that exceed an amount mutually agreed to by PlascoEnergy and the City.

The facility will occupy a six-acre site near an existing city owned and operated landfill. The City's leftover garbage will be converted into synthetic engine fuel, agricultural sulphur, industrial salt and construction aggregate with no emissions to the air, land or water. In addition, the excess moisture in the waste will be recovered through the process as clean water.

The engines will drive electrical generators to produce reliable base-load power. Emissions from the engines will be monitored by continuous emissions monitoring and by periodic source testing. The results of both continuous and source testing will be reported on the website and will be reviewed by independent experts approved by the Ministry of the Environment ("MOE"). An independent Public Advisory Committee will review and make public comments as it sees fit on the environmental performance of the facility and MOE will assure that the facility continuously meets its environmental requirements under the Ministry's Certificate of Approval.

The move by City Council comes three years after the Council approved development by PlascoEnergy of a plant to demonstrate the Plasco Conversion System on a City owned site on the capped Nepean Landfill on Trail Road. The demonstration facility received funding support by Sustainable Development Technology Canada, and from the Ontario Ministry of Research and Innovation. Ottawa provided the demonstration site and has provided garbage for processing at the demonstration plant. The Plasco Trail Road demonstration plant began commissioning in July last year. "

;Provided this system meets all the environmental requirements, the City of Ottawa will be supportive," said Ottawa Mayor Larry O'Brien. "I have always said cities have too much waste and not enough energy and exploring technologies like PlascoEnergy is a positive step forward for our City."

All necessary permits including Certificates of Approval by the Ontario MOE must be received before commencement of operations. Certificates of Approval will be based on exhaustive operating data from the existing Trail Road Demonstration Facility. The entire process of approvals and construction is expected to take approximately two years.

Plasco Energy Group Inc. (PlascoEnergy) is an Ottawa-based private Canadian company. PlascoEnergy and its predecessor RCL Plasma, Inc. have operated plasma based R&D and test facilities in Ottawa and Spain for more than a decade. The Plasco Trail Road facility is a full scale semi-commercial demonstration plant using PlascoEnergy proprietary technologies. This project has been supported by a contribution from Sustainable Development Technology Canada, a not-for-profit corporation created by the Government of Canada It has also been supported by a loan from the Ontario Ministry of Research and Innovation under its Innovation Demonstration Fund, and the provision at nominal cost of the site and supply of waste during the demonstration period by the City of Ottawa.

InterRent Buys Ottawa Centretown Condo Building for $6.1M

InterRent Real Estate Investment Trust has completed its $6.1-million purchase of a 42-suite Ottawa Centretown apartment building.

The Toronto-based trust said it has closed the acquisition of the recently renovated class-A property of condominium quality, which was announced March 20. The building was one of four local properties InterRent had agreed to buy at the time.

"Ottawa currently represents 16% of our portfolio, and is its best-performing region, with an approximately 1.5-per-cent vacancy rate, and a 65-per-cent net operating income," said InterRent CEO Michael Newman in a statement. "The addition of a fully renovated, condominium-quality building in Ottawa's downtown, without the addition of any incremental costs, will serve to strengthen our overall operating performance."

Mr. Newman added that the company was looking to buy more properties in the nation's capital.

InterRent also announced the closing of the sale of a 68-suite, class-B apartment building in the GTA's Scarborough area for $4.65 million, the purchase of which was also announced at the same time as the Ottawa deals.

The company said it had flipped the property to an arm's-length purchaser because it "did not meet management's initial financial operating expectations, and was negatively impacting (the trust's) operating performance."

The Ottawa acquisition is being financed through the assumption of two existing first and second mortgages in the amount of $1.7 million, a vendor take-back mortgage of $1.9 million and the issuance of $360,000-worth of InterRent REIT units at $3.50 each, with the balance being paid in cash.

Ottawa Balcony Case Shows Need for Proactive Inspection of Rental Properties

While it is encouraging to see the City of Ottawa is following through on balcony complaints, tenants will continue to live in unsafe housing conditions.

The collapsed balcony on Beausoleil Dr was reported to be covered with a material which led to the wood rotting underneath, therefore, by all outward appearances, the balcony appeared safe, otherwise six people would not have ventured out onto it at the time it collapsed.

What is flawed in a complaint-driven system is that there are often cases such as this one where the tenant may not even be aware that a complaint should or needs to be made.

Although Susan Jones, the director of bylaw services, indicated she had never seen a balcony collapse in many years, I do recall the brick façade of a rental building on Metcalfe Street came crumbling down onto the sidewalk below just last fall. No injuries occurred thankfully, but the bricks did fall on a sidewalk.

As the rental stock gets older in the central core, I believe these rare occurrences may become less and less rare if not balconies, then other major deficiencies such as a roof collapsing or health threatening issues such as mold.

The Somerset Ward was plagued with residential fires several years ago, yet it wasn't until a family of five lost their lives in a tragic fire due to a lack of smoke detectors that the city became more proactive in doing frequent ongoing inspections to ensure smoke detectors are working in rental units.

We are now repeating history with serious maintenance deficiencies, leading to serious injury or death.

The other problem with the complaint-driven system is that tenants often fear reprisal from their landlords after a complaint is made. For example, it is not uncommon for tenants to receive an eviction notice shortly after a complaint has been made to the city.

Now is the time to reflect on ways to ensure that every tenant has a safe home and address ways to implement more proactive measures to inspect these buildings and prevent further tragedies from occurring. A good place to start is to bring in more stringent regulations of maintenance and inspections of rental properties.

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Canadian Housing Market Not in a Bubble

Canada's housing market does not appear to be in a bubble and is supported by sound fundamentals.

Canada appears not to be in danger of following the U.S. into a housing market meltdown.

The Canadian housing market does not appear to be characterized by excess supply at this time. The proportion of unoccupied, newly built dwellings in most cities remains below historical averages, suggesting that a major widespread reversal in house prices is unlikely in the near term.

The recent downward trend in building permits suggests supply is adjusting to softening demand and, importantly, the Canadian mortgage market is in reasonably good shape.

The Canadian 'subprime' mortgage market accounts for less than 5% of the residential mortgage market, and might be better characterized as a 'near-prime' market, with quite different lending standards than appear to have been applied in the United States.

However, Canadians cannot afford to be complacent and that they need to remember house prices can go down as well as up.

It wasn't that long ago - in the late 1980s and early 1990s, to be exact - that Canada experienced its own real estate boom and bust. It took a decade after that before we saw activity pick up and real prices increase. More recently, of course, we have seen in this part of the country a strong housing market cycle.

Residential investment has averaged about 6% of GDP over the last decade, with about one third devoted to renovations. Some 68% of Canadians are homeowners and real estate accounts for more than $2.2 trillion, or 37% of total household assets in Canada.

A number of factors can influence housing prices in addition to supply and demand such as innovations in financing and policy. Policy-makers and financial market players must be wary of new financial products and ensure that they do not distort the market and really do make markets more efficient.

While Canada has escaped many of the problems of the U.S. mortgage crisis in part because of a more conservative mortgage environment, increasing use of extended amortization periods could have a dramatic impact on the personal wealth and savings of Canadians and new no-money down or low deposit mortgages can also encourage speculative behavior, which can also distort real estate markets.

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U.S. Interest Rate Held for First Time Since Start of Credit Crunch

The U.S. Federal Reserve ended its rate-cutting streak by freezing the federal funds rate target at 2%, a move that was widely anticipated by analysts.

The Federal Open Market Committee voted in favour of maintaining the benchmark rate as growth in household spending balanced out the overall weakness in the financial and labor markets.

The committee also warned that the continuing credit crunch, weakness in the housing market and soaring energy prices would likely push down U.S. economic growth over the next few quarters, although it said that downside risks appear to have diminished somewhat.

The committee expects inflation to moderate later this year and next year. However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflations expectations, uncertainty about the inflation outlook remains high.

The rate freeze was the Fed's first halt in cuts since September 2007, shortly after the credit crunch hit the markets. The federal funds rate target has been slashed by 3.25% in the past nine months.

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Friday, June 20, 2008

Orleans Residents Fight Housing Development

With both the city and province pushing for increased urban intensification, east-end residents are fighting a new housing addition being proposed for the Rothwell Heights community, calling the development too dense and unsuitable for the neighbourhood.
“It’s the whole issue of how much is enough intensification,” says Jane Brammer of the Rothwell Heights Property Owners’ Association. “Residents believe zoning is there to protect neighbourhoods.”

Located at 741 Blair Rd., the almost 3,000-square-foot property is currently home to a single uninhabited house, though zoned to accommodate up to four single dwellings. A rezoning amendment for the site – to put in five semi-detached homes, or 10 units – went before the city’s planning and environment committee on Tuesday, June 10, resulting in a motion that limited the number of units to a maximum of eight and requested that a concrete site plan be approved before council adopts any zoning changes.

The property owners’ association, meanwhile, has been protesting the proposed development due to concerns about exceptions to city planning policy being made for the project, as well as issues with the proposed density and other impacts, Brammer explains.

With the developer requesting site-specific exceptions to zoning regulations for the property and only a conceptual design currently available, she says a site plan should be in place before any firm decisions are made by the city.

The property is also largely greenspace and home to many mature trees, Brammer continues, questioning why the area isn’t being preserved and how current stormwater standards will be maintained with a dense development.

“The city isn’t living up to its own planning,” she adds. “(The plan) obliterates everything on the site.”

Though a measure of intensification is needed in the area – especially with Montreal Road as a major transit corridor – and even with the modified development plan passed at committee “arguably reasonable,” Brammer says her group still feels skeptical eight units will eventually appear on the property.

“It’s a reasonable compromise, if it can hold,” she explains.

Applicant Lloyd Phillips, meanwhile, questions the rationale behind the committee decision to curb the number of units on the site.

“We don’t really see there’s going to be much difference at the end of the day,” he says, adding that the land can easily accommodate five semi-detached dwellings instead of four.

The proposed development is “very low-scale, low-profile infill,” Phillips continues. The site itself sits 10 feet lower than the backyards of the homes nearest the back of the property, he explains, with mature vegetation acting as a natural barrier. In addition, both provincial policy and Ottawa’s Official Plan have dictated the need for more infill development and intensification, Phillips adds.

As for the next step, with the motion scheduled to go before council on Wednesday, June 25, he says the property’s owners will likely wait to see what decision is made. In the event council upholds the committee’s recommendation, the owners would also have time after such a ruling go to the Ontario Municipal Board, Phillips continues.

Beacon Hill-Cyrville Coun. Michel Bellemare presented two unsuccessful motions during the committee meeting last week, first to reject the zoning application as a whole, and then curb the number of units on the property to six. He calls the limit of eight units passed by committee members a “compromise”.

“Eight is certainly better than 10,” he continues, suggesting the reduction in dwellings would offer a better fit for the project within the limits of the property, and would maintain current standards for issues like road width and setback.

With the site currently zoned for residential purposes, Bellemare says the expectation always existed that the property would be redeveloped.

“It’s one example of an area where intensification is anticipated, and called for,” he explains. “It is really a question of degrees. At the end of the day, intensification is a good thing, because it does curb urban sprawl, helps to rejuvenate neighbourhoods … but there are tradeoffs (that should be made).”
Residential goes commercial on Innes
In other east-end development news, the planning and environment committee also gave a thumbs up to a proposed rezoning request at 3591 Innes Rd., to modify the property from residential to “a limited number” of commercial uses. Currently, a single detached dwelling – where part of the ground floor was previously used as an insurance office – resides on the lot.

Four letters of objection related to the development and the zoning amendment were received by the city, with concerns ranging from questions about the “vague” future commercial uses of the property to the impact of stormwater run-off on residential properties to the location of parking and subsequent noise, litter and pollution issues.

City staff responded to concerns, explaining that uses of the development will be limited to a commercial, medical or dental office, or personal service business – none of which are expected to generate “large amounts of continuous vehicular traffic.” They also noted that plans are underway to ensure stormwater management and landscaping buffers – including a sight-obscuring fence – and that the placement of the property, located within the general urban area designation, calls for a “wide range of uses.”

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Minto EcoHome Opens in Ottawa Celebrating the greenest in home building

The Minto Group opened a new attraction for those interested in Green Building. More like an educational exhibition than a show home, it is one of the greenest houses ever built in Canada. The home, situated in the South Ottawa community of Manotick, demonstrates the future of home building and will help motivate and educate consumers toward greener home choices. The project goal is to not only influence home building in Ottawa, but all across the country.

The Minto Ecohome, it brings together a vision of net-zero energy design with healthy living features that can be afforded by any home buyer. Net-zero means that at the end of the year the home will have produced as much energy as it consumes. The initiative is part of Canada Mortgage and Housing Corporation's (CMHC) EQuilibrium Sustainable Housing Demonstration Initiative. Minto was the only Ontario production builder selected to push the limits of green home building. Twelve projects in all were asked to be part of the program nationwide.

We wanted to give something back to the community by having this home uniquely showcase sustainable building, in a way that inspires consumers to become part of the solution," said Robert Greenberg, Executive Vice President of the Minto Group's home building division.

With an open and informative style, Inspiration has interactive displays and signage to explain the features and benefits of green building. Starting in June 2008, the home will be on display to the public to experience for at least a year. For those who cannot visit the home in person, Minto has set up as an interactive green experience.

Global warming and climate change have been strong influences on the green building community. Inspiration strives to limit greenhouse gas emissions. It is designed to generate enough green power on its roof to completely offset the small amount of gas and electricity still used by the home. Thanks to the Ontario Power Authority's Standard Offer Program, Inspiration's homeowners could actually receive payments from their local electricity supplier for the electricity generated by their home.

"We started this project to see what was possible, so we gathered all the experts to build a demonstration home. In the end, we were so inspired by the results that we decided to offer versions of Inspiration in our communities, starting later this year," added Greenberg.

Inspiration is designed to reduce the cost of home ownership, conserve natural resources, improve the indoor air quality for better occupant health, and was constructed mostly with recycled and renewable materials. "In every practical way, we designed this home with conservation, health, and consumer empowerment in mind," explains Andrew Pride, Vice President of Minto's dedicated Green division. "Inspiration has a significantly lower environmental footprint. It uses rain water to flush toilets and water the lawn. It is designed with plenty of windows for natural ventilation to eliminate air conditioning. And, it is architecturally optimized to enjoy the benefit of the sun's heat and light."

The house was developed using an integrated design process and a design charrette - where the key members of the building team start from a blank page to discuss how to practically build a home with minimal impact on the environment.

Minto chose the future community of Mahogany in Manotick as the site for Inspiration. While still in the planning stages, Mahogany will be one of the largest energy efficient communities in Canada, blending the latest in environmentally responsible building technology with the character of the Village of Manotick. Minto has become a leader in LEED(R) - Canada certified green living options with other successful developments, and the company is committed to producing new communities that promote health, material conservation, energy efficiency, and a high quality of life.

"This initiative with CMHC has inspired us to believe that we can slow, and one day even reverse, the effects of global climate change by challenging each of us to do more and to continually strive for better solutions," Pride said.

Inspiration's Green Features:
  • Rainwater harvesting for irrigation and toilets
  • Low flow faucets and fixtures
  • Dual flush water saving toilets
  • Solar thermal air collectors
  • Solar hot water collectors
  • Photovoltaic solar electricity panels
  • Extended roof-line to block heat from the summer sun
  • Natural ventilation design to eliminate the need for air conditioning
  • Passive solar design with slate floors to retain solar heat
  • Double insulated walls for added warmth, quiet, draft proofing, anddurability
  • Triple pane windows
  • Flexible open design to adapt easily to life's changes
  • Rapidly renewing bamboo flooring and stairs
  • Built-in recycling centre
  • Low VOC paints and finishes
  • Compact fluorescent lights throughout
  • A convenient All-Off switch connected to green plugs to make conserving energy easy

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Sprinklers to be Mandatory in New Apartment Buildings in Ontario

A move to mandate sprinkler systems in all new Ontario condos and apartments four storeys tall or higher was welcomed by firefighters Wednesday, although they said the new rules fell short of what they were hoping for.

While the Ontario Association of Fire Chiefs applauded the announcement made by Municipal Affairs and Housing Minister Jim Watson, the group suggested sprinklers should be mandatory for all new residential construction projects.

The building code changes follow public consultations and will take effect April 1, 2010.

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Thursday, June 19, 2008

More Than 400 Defendants Charged for Roles in Mortgage Fraud Schemes as Part of Operation “Malicious Mortgage” in US

The Department of Justice and Federal Bureau of Investigation (FBI) announced today a national takedown of mortgage fraud schemes, the culmination of substantial coordinated efforts during the last three and a half months to identify, arrest and prosecute mortgage fraud violators through the United States. Operation Malicious Mortgage highlights the strong enforcement response undertaken by the Department of Justice and its law enforcement partners to combat the threat mortgage fraud poses to the U.S. housing industry and worldwide credit markets.

From March 1 to June 18, 2008, Operation Malicious Mortgage resulted in 144 mortgage fraud cases in which 406 defendants were charged. Yesterday, 60 arrests were made in mortgage fraud-related cases in 15 districts. Charges in Operation Malicious Mortgage cases were brought in every region of the United States and in more than 50 judicial districts by U.S. Attorneys’ Offices based upon the law enforcement and investigative efforts of participating law enforcement agencies. The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

In addition to fraud directly related to individual mortgages, the Department is committed to investigating and prosecuting cases of mortgage-related securities fraud. Today, the U.S. Attorney’s Office for the Eastern District of New York announced an indictment against two senior managers of failed Bear Stearns hedge funds, charging Ralph Cioffi and Mathew Tannin with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading. The indictment alleges that the managers marketed the two funds as a low risk strategy, backed by a pool of debt securities such as mortgages. The indictment alleges that by March 2007, the managers believed the funds were in grave condition and at risk of collapse, but made misrepresentations to stave off investor withdrawal. The funds subsequently collapsed in the summer of 2007 resulting in approximately $1.4 billion in losses to investors.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation’s housing market and to the peace of mind of millions of American homeowners," said Deputy Attorney General Mark R. Filip. "Operation Malicious Mortgage and our other mortgage-related enforcement actions demonstrate the Justice Department’s commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets."

"Operation Malicious Mortgage is a concerted, joint law enforcement and prosecutorial effort aimed at disrupting individuals and groups engaged in mortgage fraud," said FBI Director Robert S. Mueller, III. "This operation is an example of our unified commitment to address this significant crime problem. The FBI will continue to direct investigative and analytic resources towards mortgage fraud and corporate securities fraud that threaten our nation’s economy."

Operation Malicious Mortgage represents the joint collaborative efforts of the FBI, U.S. Postal Inspection Service, Internal Revenue Service-Criminal Investigation Division, U.S. Immigration and Customs Enforcement, U.S. Secret Service, U.S. Trustee Program, Department of Housing and Urban Development Office of the Inspector General, Department of Veterans Affairs Office of the Inspector General, and Federal Deposit Insurance Corporation Office of the Inspector General. Operation Malicious Mortgage is the most recent coordinated sweep in an ongoing law enforcement effort to combat mortgage fraud, which also included Operation Continued Action in 2004 and Operation Quick Flip in 2005.

Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.

The President’s Corporate Fraud Task Force, chaired by Deputy Attorney General Filip, is also responding to issues raised by mortgage fraud in the corporate sector. Created in 2002 to investigate and prosecute significant financial crimes, the Task Force includes representatives from ten federal departments, commissions and agencies, in addition to seven U.S. Attorney’s Offices and two Divisions within the Department of Justice, combining the experience of thousands of investigators, attorneys, accountants and regulatory experts. Since July 2002, the Department of Justice has obtained nearly 1,300 corporate fraud convictions, including the convictions of more than 200 chief executive officers and corporate presidents, more than 120 corporate vice presidents and more than 50 chief financial officers.

An indictment is not evidence of guilt. All persons charged with a crime are presumed innocent until proven guilty beyond a reasonable doubt.


Wednesday, June 18, 2008

More Pink Slips at Ottawa City Hall

Ottawa city committee has green-lighted Mayor Larry O'Brien's motion to have city managers work on a plan to slash 500 full-time municipal jobs and cap staff count.

The corporate and economic services committee yesterday voted 10-1 in favor of the motion, which the mayor put forward as a way to look at cutting costs in the face of another property tax increase in the 2009 budget and an economic slowdown.

The city is looking to save about $100 million over three years, or $19 million to $57 million for the upcoming year, in order to keep the promised 4.9-per-cent tax hike target. City manager Kent Kirkpatrick is already planning to hand out 450 to 600 pink slips and cut programs as part of the cost-cutting measures, according to media reports.

However, the mayor's motion includes a plan to cap full-time equivalent staff at the current level of 13,590, with the 500 cuts to 13,090 to occur by the end of 2009.

The motion goes before full council next week, and if approved, city staff will work on a plan that will be included in the 2009 budget deliberations later this year.

Ottawa Mayor Larry O'Brien gestures as he leaves the Ontario Provincial Police detachment in Ottawa January 7, 2008. O'Brien was booked, photographed and fingerprinted on charges of trying to bribe an opponent to drop out of the 2006 mayoral race and of pretending to have influence with a minister in Canada's Conservative government.

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Hands OFF Ottawa Greenbelt

Environment Minister John Baird warned yesterday that the federal government has no interest in developing the Greenbelt, dismissing suggestions that its development would enhance environmental sustainability.

His warning, a day after a City of Ottawa white paper laid out three development options for more than 13,700 acres of the Greenbelt, casts serious doubts on any future plans to develop the city landmark.

The Greenbelt was first conceived by William Lyon Mackenzie King and finished by John Diefenbaker ... and I just don't think that from the position of elected representatives -- Liberal, Conservative, NDP -- there is any appetite to develop this treasure.

People should know that there is no appetite from the government for this type of idea.

The Citizen reported yesterday that the city has identified about a quarter of the Greenbelt, worth about $1.6 billion, that could be developed without damaging its integrity.

While the city's white paper is only laying out proposals for a discussion on the future of the belt, it said the land could provide more than 20 years of urban land for housing and employment and help stop, or at least slow down, urban sprawl.

Greenbelt land could be used for showpiece sustainable development that would set out a new vision for the city.

Ottawa residents have to ask themselves whether it makes sense to pave vital farmland on the fringes of the city, while protecting agricultural land inside the Greenbelt.

His report echoes the opinions of several environmental groups and experts, who have said that the Greenbelt has failed as an urban containment belt for which it was created. Some say it has actually fuelled sprawl.

It certainly hasn't had much impact at all in terms of density of suburban development. It did cause leapfrogging and more commuting.

Mr. Baird said the failure of the Greenbelt as an urban containment belt is no longer the issue. He said the belt is now as much a part of the city's history and heritage as the Rideau Canal, and every effort should be made to protect it.

"If we wanted to limit development inside the Greenbelt, we are 30 to 40 years too late," he said.

"There is no doubt that intensification would have environmental benefits, but paving the Greenbelt would be a huge negative. It is good to intensify, but the Greenbelt is a great natural resource and it should be off-limits."

Mr. Baird said the problem is that once development starts, there would be no end to it. He said people may argue that only small portions would be developed, but soon, 13,000 acres would turn into 50,000 acres and before anyone realizes, not much would be left.

If we just start to slice and dice it, next thing you know its integrity has been compromised.

The minister said the National Capital Commission and the city are within their rights to conduct their reviews, but that is no license for development. He said what's often forgotten is that the Greenbelt was expropriated from people who didn't want to sell, and the justification for forcibly removing them from their land was that it was all for the public good. It is now a public trust, and selling it off to the highest bidder would be a betrayal.

He worries that once a decision is made to siphon off parts for development, the original owners could come back and demand the return of their property.

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Tuesday, June 17, 2008

Air Canada Cuts 2,000 Jobs Plus Cutting Flights

Air Canada has joined a global trend by announcing plans to cut as many as 2,000 jobs at the end of this year as it sharply reduces capacity to deal with the rising cost of fuel, and is warning there are likely more cutbacks to come.

Canada's biggest airline said Tuesday it needs to fly fewer trips as oil prices keep rising to record levels, and it will cut capacity by seven per cent from its fall and winter schedule.

Fewer flights mean the airline will require less staff across all levels of the organization.

The big Montreal air carrier had nearly 24,000 employees at the end of 2007, which means the latest cuts amount to just over 8% of its workforce.

Air Canada, like other global airlines, must adapt the business and reduce our flying, more specifically flying that has become unprofitable in this current environment.

They will be meeting with union representatives to discuss options and these options could help minimize involuntary layoffs.

Arthur declined to outline the possible alternatives.

With the cost of jet fuel more than doubling in the past year and quadrupling since 2004, further capacity reductions are likely if prices remain at current levels.

Air Canada says every time oil increases by $1 per barrel, it costs the airline an additional $26 million a year. The company spend more on fuel than any other expense, representing more than 30% of its total operational spending.

With oil over US$133 a barrel, the airline estimates it will shell out almost C$1 billion more in 2008 than in it did in 2007. It says the average cost of taking one passenger on a round trip has increased to $230, from $146 in 2007 and $110 in 2004.

It also blames federal and provincial fuel excise taxes, security fees and airport charges that are amongst the most expensive in the world as roadblocks to profitability.

The loss of jobs is painful in view of our employees' hard work in bringing the airline back to profitability over the past four years.

They regret having to take these actions but they are necessary to remain competitive going forward.

Rival airline WestJet said it has no plans to cut capacity or lay off employees to combat rising fuel costs.

It is business as usual for us.

"Our low-cost business model continues to work. We are feeling the effects of record fuel prices and excessive airport fees and taxes but we will continue with the execution of our strategic plan."

The Calgary-based non-unionized airline plans to add two aircraft this year, bringing its fleet total to 77, with orders for 121 aircraft through 2013.

Air Canada's various unions learned of the cuts Tuesday morning.

Employees at its offices at Trudeau International Airport declined to comment.

Air Canada plans to cut domestic capacity in the fourth quarter of this year and first quarter of 2009 by two per cent, while slashing U.S. transborder capacity by 13 % and international capacity by seven per cent, for a total of seven per cent across its system.

Among routes being jettisoned are the previously announced suspension of Toronto to Rome non-stop service - although that will remain for the high-traffic summer season - and the elimination of non-stop service from Vancouver to Osaka, Japan.

Airlines around the world have announced similar moves and most have substantially raised fuel surcharges and added a series of new passenger costs.

U.S. carriers including American, United and Delta have announced plans to reduce capacity and eliminate jobs.

Delta Air Lines Inc. said it plans to cut twice as many jobs as the original goal outlined in March, when it offered voluntary severance payouts to more than half its workforce.

Air New Zealand said it will raise air fares and eliminate some routes.

With the reductions, Air Canada expects to see full-year capacity growth between one per cent and minus one per cent. It had originally forecast growth between one and 2.5% over 2007 levels.

On the Toronto Stock Exchange, Air Canada's voting B shares rose 6 cents to $9, down from $17 late last year.

The Ottawa Macdonald-Cartier International Airport says they're unsure if recent cuts to Air Canada service – equating to up to 2,000 jobs and seven per cent of domestic and international routes.

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Ottawa Greenbelt Development Under Review

For the first time, the City of Ottawa has identified more than 13,700 acres of the Greenbelt, worth about $1.6 billion, that could be developed without damaging the integrity of the capital's most treasured natural landmark.

The land, about a quarter of the 49,400-acre (20,800-hectare) belt, is enough to provide more than 20 years of urban land for housing and employment if the National Capital Commission decides to open it up for development.

It is the first time since the Greenbelt was created in the 1950s that a government body has put out a serious proposal on developing property that has been kept immune to development. It is also the first time that anyone has put a figure on its value. Assembled for $40 million (in 1966 dollars), about 85% of the belt, made of up of farms, woodland, wetland, trails and scrubland, is undeveloped. Today, shorn of the environmentally sensitive lands that are virtually untouchable, the Greenbelt has about 21,500 acres (8,746 hectares) of theoretically developable land.

Those 21,500 acres are worth $2.5 billion, a city estimate based on the going market price of $120,000 an acre for urban land. The city believes that, realistically, only 13,700 acres (5,560 hectares) can be developed without doing lethal harm to the Greenbelt as a whole.

Ian Cross, author of the white paper and the city's manager of research and forecasting, says in the end, the fate of the Greenbelt will be decided by the NCC, which owns and manages the land. However, it is useful for the coming debate on the future of the city's most prized natural asset to ask whether the Greenbelt envisaged by French planner Jacques Gréber almost 50 years ago is still relevant.

Right now we are building on farmland outside the urban area and the question is, does it make sense to protect agricultural land in the Greenbelt when we continue to build farther out? "The primary purpose of the Greenbelt was to contain urban development, but that is gone. It didn't work. Building sustainable communities in the Greenbelt may be the appropriate evolutionary development.

In its white paper, the city laid out three development options for discussion as the federal government considers the future of the once sacrosanct belt.

The options are:

- Corridor development along major roads in the Greenbelt such as Highway 417 in the west, Highway 416 to Barrhaven and Highway 174 to Orléans.

- High-density mixed-use development along existing or planned rapid-transit lines such as the east and west sides of the Woodroffe transitway, south of Hunt Club Road, to encourage high transit use.

- Extension of urban land into the Greenbelt in existing neighbourhoods in areas such as north and south of Hunt Club west and the west side of Orléans along Innes Road.

The Greenbelt has long been treated with such reverence that it was considered taboo to contemplate any development on it beyond the public institutions such as the Ottawa Airport and research centers that call it home. A series of experts' reports, including one recently from the Canadian Institute for Environmental Law and Policy, have all said the Greenbelt has fuelled sprawl, instead of containing it. Last year, NCC chairman Russell Mills became the most influential voice in the city to advocate some strip development along the Greenbelt to reduce urban sprawl. And when she announced the NCC's review this spring, chief executive Marie Lemay said "everything is on the table. You've got to ask the basic question: Is the use we have now what we want for the next 10 to 15 years or are there parts where we want something different?"

But others, prominent among them Larry Beasley, a noted urban planner and former chief planner of Vancouver, and Environment Minister John Baird, oppose development in what they consider an important part of the city's heritage. Mr. Baird vowed to fight any such move.

The white paper notes that with 141 kilometres of city roads, 43 kilometres of water pipes and 39 kilometres of sewer pipes running through the Greenbelt, the cost to the city and to commuters of continued expansion beyond the belt is running high. The extra travel through the Greenbelt during the peak period costs drivers $60 million annually. It also costs the city an extra $10 million a year to run buses through the Greenbelt to outlying areas. The cost of vehicle emissions is incalculable, Mr. Cross says. For all those reasons and more, he says, it makes sense to put the Greenbelt into the equation so that whatever the final decision is, all the issues will have been thrashed out.

By the Numbers:

49,400 - Total number of acres in the Greenbelt.

21,500 - Number of acres of theoretically developable land in the Greenbelt.

13,700 - Number of acres that could be developed without affecting the integrity of the natural landmark.

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