My ritual every morning is to load up on some high octane coffee and surf the web for economic news.  I’ve conditioned myself to expect some negative articles about the mortgage industry, and thanks to Canada’s major newspaper I’m rarely disappointed.  Our industry has taken so many body blows that we’re qualified to perform for the WWE.  Go ahead, suplex me off the top ropes.  It can’t be any worse than the predictions of doom and gloom and specifically that the housing industry is the greatest threat to Canada since confederation. Well, imagine my shock when I read the Globe and Mail’s Report on Business last Friday.  The headline bellowed, “Labour market shakes off winter blues.  Economy creates 82,300 jobs in March, its best month since recession, as unemployment rate falls to 7.2 per cent”.  I double checked, it really was The Globe.

To be clear there wasn’t a single sentence in the article about the importance of the housing and mortgage sector, and the millions of direct and indirect jobs the housing and mortgage sector creates.  Let’s not let facts get in the way of a good story.  At least we’re not being blamed for something.  Maybe I’m becoming cynical but one day I expect to read that global warming, Iran’s nuclear capabilities and the Leafs failure to make the play-off is a result of consumer debt levels in Canada, as well as over inflated home values.  So it’s big news when we can get through a day without being held accountable for… well…  just about anything that goes wrong with the economy.

There was plenty of good news of Friday.  On the employment front some 82,300 jobs were created last month.  The overall unemployment rate fell to 7.2 per cent.  The pace of hiring is clearly picking up and corporate Canada is far more optimistic about our recovery, as well for our neighbours South of the boarder and in Europe.  You know the news is good when the manufacturing sector in Ontario is showing signs of growth.  And you we’re skeptical about the Easter Bunny.   What’s really refreshing about our economic growth is who’s leading the way.  Not the usual suspects.  All hail the new king, Saskatchewan!  You want to live and experience an economic boom…move to Regina.  The unemployment rate there is 3.9 per cent.  Last year Regina’s GDP growth was 6.1 per cent.  The average price of a bungalow is $315,000.  For prosperity go west young man, just not all the way west.  This is a great success story.  Good people deserve good fortune.

 So we should all bask in the glow of this good news for as long as it lasts.  I see the markets have gone into the tank since Friday because of poor job growth numbers in the US.  It seems that economists were expecting much better job numbers in the U.S.; economists have been having a tough go of it recently.  Our actual job growth numbers came in eight times greater than what economists were calling for.  I wonder if this is the same group of economists who called on the Finance Department to change the mortgage rules because the sky was falling.  Here’s a suggestion for them; they should set aside their data and cognitive skills and use something a little more reliable, like tarot cards.

 Until next time.

 Cheers.

How many times have you heard, “it’s just an honour to be nominated“.  What rubbish! If you’re going to be nominated for an award you want the hardware.  A nomination gives you hope and the trophy is the validation.  We all need, and like, the validation.  Those who say it doesn’t matter are being disingenuous.  Even if the sentiment is sincere why wouldn’t you want people’s efforts to be acknowledged?  No one has ever won an award without the hard work of a lot of other people.  When you win an award there’s many finger prints on the trophy.

I take great pride in the fact that CAAMP won the award for Conference of The Year at the Canadian Event Industry Awards.  If you consider all the conferences that are held in Canada each year, the trophy is a significant accomplishment.  Mortgage Forum 2011 was a huge success, and that was confirmed by the survey results and from the numerous comments I received from attendees.   CAAMP took a gamble by changing up the conference, and the changes were well received.  The affiliation with the Art of Sales ensured that the line-up of speakers surpassed all previous conferences.  Tuesday turned into a full day of speaker sessions and it was impressive to see an audience of 2,220.  I remember standing at the back of the hall during one of the speaker sessions and saying to myself, “damn, it actually worked”.  When you make changes you never know how the changes will be received until you go live.  There’s a big divide between concept and execution.  The devil is in the detail, and the CAAMP staff didn’t miss a single detail.  I’ve got proof of that…it’s a nice shiny trophy.

So how does CAAMP top last year’s conference at Mortgage Forum 2012 in Vancouver? It’s not going to be easy but they’re up for the challenge.  They’ll do what they always do, and that means they’ll put on a hell of a show.  CAAMP announced this week that Amanda Lang, CBC’s senior business correspondent, is returning as host of the Mortgage Forum 2012. That’s a fabulous start.  What’s also returning is CAAMP Comedy Fest; we’re in the process right now of signing a contract with the headliner.  I can’t say who it is yet but he’s gut busting funny.  There’s a good chance that you’ve seen him on the TV talk-show circuit or one of his HBO comedy specials.  Many of the speakers for the Tuesday’s portion of the conference have committed, and the theme for Tuesday is the Art of Marketing.  CAAMP will announce the speaker line-up in short order.  Trust me, you’ll be impressed.

It’s disclosure time.  I’m the conference chair for Mortgage Forum 2012, and I have a vested interest in the success of this conference.  Anytime you attach your name or reputation to something you want to make its successful.  So I’ll use every tool at my disposal to ensure success, up to an including, bravado, hype, spin and hyperbole.  Shooting from the lip is easier to do when you know there’s a group of highly killed individuals doing all the heavy lifting behind the scenes to ensure Mortgage Forum 2012 is the best conference we’ve ever had.  Is that spin on my part?  There’s an easy way to find out….see you at Mortgage Forum 2012 in Vancouver.

Until next time

Cheers

Plenty has been written about federal budget which was handed down by the Conservative Government last week.  The reality is that’s only been four days, and yet the fallout, criticism and navel gazing has been rather muted.  The opposition played their role and provided reporters with negative sound bites but by all appearances their collective protests have had little impact.   Why is that?  Is it because they’re ineffective?  Do people not care?  I think the answer is that the Tories managed expectations extraordinarily well, and they provided everyone with a lesson in shaping the narrative. 

For over a year now the PM has stated, in no uncertain terms, that the government had to manage its affairs more efficiently.  Cuts were coming, and the only question was how much?  For over a year the press has been reporting that federal agencies would be required to cut 5% of their operating budget.  Your highest fixed overhead costs are salaries, therefore, job cuts were on the way.  The budget didn’t disappoint, just over 19,000 jobs will be made redundant.  That’s a fair bit of bloodletting but the reaction seems to be, “oh well, it had to be done”.  There’s no doubt that the government tapped into the mood of the electorate, pensions and salaries being too generous, but I am surprised at the lack of reaction.  You have to give the Tories credit for managing this message.  How do you criticize the Tories when they’ve been saying all along that they would do this?  How dare they keep their word?

That being said the Tories may step on a few land mines  over the budget.  Many of the 19,000 plus civil servant jobs to be cut are here in Ontario.  This won’t help an already beleaguered  Ontario economy.  Moreover, the Minister Finance has got into a war of words with his provincial Liberal counterpart, Dwight Duncan.  There’s no love lost between these two, and I guess all is fair in love and war.  But Ontario gave the Conservatives a majority, and Ontario’s vote will be critical to the Tories if they want another majority mandate.   If it wasn’t for the 905 and 416 area code voting for the Tories, we would have another minority government.  There’s little doubt that the Federal and Provincial Liberals will play this up.  It’s happening already.  The Federal Liberal talking points are that this was a Western Canadian based budget, and voters west of Ontario are the benefactors.  Political regional warfare?  You can count it.

Ontario aside, the most common theme in the press was that the budget wasn’t bold enough.  I guess there was an expectation that something draconian was on the way.  Once again, if you get in front of the message and position it effectively, people’s reaction is “it wasn’t really that bad”.  And if you push out certain things, like those under the age of 54 today will now have to wait until they’re 67 years old to receive Old Age Security, people will say I’ll worry about that later.  To deflect some of the criticism over contentious issues the government threw the voters a few bones in this budget.  Like cross boarder shopping.  This is especially helpful for those who lie through their teeth and do not declare everything.  You know who you are.  You’re the person who recites a silent prayer when you’re talking to the customs agent, asking the lord for help and begging your ever merciful god to ensure that you don’t get pulled into that special room and have your bags checked.  Good news!   Effective June 1st – if you’re out of the country between 24 to 48 hours, the exemption increases from $50 to $200.  Trips between two and seven days will see an increase in the tax exemption rise from $400 to $800.  That’s a lot of shoes! 

The highlight of this budget was saying farewell to the penny.  This annoying and useless coin is being taken out of circulation.  I had no idea that the removal of the penny will save the government $11 million annually.  The government is recommending that commercial transactions be rounded off to the nearest five cent interval.  This is a great start but there’s other currency we should take out of circulation, like the $50 and $100 bill.  If no one accepts them, why have them?  Just my two cents worth.

Until next time

Cheers.

There are signs that spring is really here.  No, it’s not the lack of snow on the ground or the unusually mild temperatures we’ve had here in Ontario.  It’s definitely not about the Leafs playing hockey beyond the regular season.  My understanding is that’s when the Stanley Cup play-downs or playoffs or whatever the hell they call it begins.  My memory fails me as I get older, and it’s hard to remember what hockey in the spring time is like in this city.  It’s not about a new baseball season which begins in one week.  No, it’s spring time because it’s budget time…isn’t that exciting boys and girls?   

Our “Daddy Premier” in Ontario gave everyone some bad news this week, especially if you’re one of the 1.2 million public servants in this province.  The Liberal government announced a wage freeze for all public servants, and they don’t mind biting the hand that voted for them.  According to the Ontario Finance Minister Dwight Duncan, the government will legislate a wage freeze if one cannot be negotiated.  There’s 4000 labour agreements in place today.  This has job action, strikes, rallies and public demonstrations written all over it.   The gauntlet may have been thrown down in the spring but this will carry forward and ensure a winter of discontent for us here in Ontario.  Never mind that all the austerity measures are necessary, and that the minority Liberal government had no choice but to address the fiscal disaster which is the Ontario budget, the opposition will skewer the Liberals over this budget.  That being said the Liberal government doesn’t believe the opposition has the stones to defeat the government over this budget, resulting in an election.  This is a high stakes political game of chicken, and I suspect the Liberals are counting on the support of the NDP.  I think a deal’s done already. The Liberals have changed their mind on reducing corporate income to tax to 10% by next year.  The new budget states that corporate taxes will be frozen at 11.5% through 2017-2018.  That’s reason to celebrate in NDP world, and it’s not as if the Liberal and NDP haven’t openly discussed being bed buddies in the past.  Sure, those discussions have been at the federal level but I suspect their provincial siblings have taken note.   The next part of the process is for the liberals to stand up and pat themselves on the back for being responsible and doing what’s necessary to fix the problems we have in Ontario.  Really?  That’s like an arsonist  taking credit for helping to put out a fire he started.

I was reviewing all the cuts, wage freezes and cancelled programs when I came upon one initiative in the budget to increase revenue that made laugh out loud.   The Liberal government plans on opening up 25 new and larger liquor stores in Ontario every year.   Here’s what that means, “as a government we’re financially and morally bankrupt, we’re fiscally incompetent, we couldn’t organize a one car funeral…so come on Ontario…let’s get hammered”.

There’s another budget that we’ll be hearing about today, tomorrow and the day after and so on.

The Federal Budget will be introduced today, and there’s been a fair bit of speculation  as to what it may contain.  I’ll refrain from adding anything more to the speculation, and wait for the actual details before commenting any further.  You may not be aware of this but Jim Murphy, CAAMP President, was invited to Ottawa by the Finance Department to participate in the budget lock-up process.  These invited guests are sequestered in a room, and they get to review budget, spending plans, back ground papers and the actual speech before it’s delivered.   It’s also an opportunity for Jim to speak to senior government officials who will also be present.  It really is an honour for CAAMP, and Jim, to be invited to the sneak preview.  For those of you who may have missed CAAMP’s most recent message about their government relations effort, I encourage you to watch the video below:

Until next time.

Cheers

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Straight talk from a politician is rare and yet when we hear it we still look for the underlying message.  We are conditioned to look for what wasn’t said.  I have a great deal of respect for Minister Flaherty, and his willingness to speak in clear terms.  That’s not easy for a politician to do because it opens them up to criticism and it gives them little wiggle room if they want to back track.  You may not agree with what Flaherty has to say but at least you know where he stands on issues.  Minister Flaherty gave a speech in Stittsville, Ontario last week, and it was another example of straight talk.

His speech was about the state of the Ontario economy, and his thoughts regarding the pressure being put on the federal government to further tighten mortgage rules.  There was no ambiguity in his speech, here’s what you may have missed in his speech:

“I find it a bit odd that some of the bank executives are taking the position that the minister of finance or the federal government somehow should tell them how to run their business.  We have bank executives in Canada going and saying ‘really, the rules on insured mortgages should be tightened up.’  They must forget that they are actually the ones that issue mortgages.  It’s their market.  It’s not my market.  They decide what they want to charge in interest rates.  They’re the ones that make the profits out of this business, so I find it a bit much when some of the bank executives turn to the government and say ‘you ought to change the rules and make it tighter.’  It’s very interesting commentary from them.”

Try as I might but I can’t find a hidden message in the statement above.  No Clinton like speak here.  The message is clear and what else is clear is that some bank executives got a verbal public spanking.  For months now the pressure has been relentless that the government must act and tighten mortgage rules.  The fact that some of those that are sounding alarm bells have introduced or decided to follow the irrational interest rate pricing game is “special”.  Let’s see, “we’re concerned about consumer debt so we’ve decided to lower rates so consumers can take on more debt, and add gasoline to an already hot housing market.”  Alex, I’ll take double speak for $200 please.

I understand and agree that the concern about consumer debt is real, and it needs to be addressed.  The Bank of Canada, and the Ministry of Finance, are walking a tightrope.  Cooling down the housing market, while not negatively impacting the overall economy, is not an easy task.  Recently CAAMP provided a report to the Ministry of Finance about the impact of the housing industry has on employment in Canada.  The report was written by Will Dunning, CAAMP’s Chief Economist.  I encourage you all to read the report, and to receive a copy please visit CAAMP’s website at CAAMP.org

Here’s a few highlights from the executive summary:

• The housing and mortgage industry has been particularly important to job creation these past 5 years.  From 2006 to 2011, it’s estimated that 18% of all job creation occurred as a direct and indirect result of growth in the housing and mortgage sector.
• The biggest threat to the health of the Canadian housing and mortgage industry is a recession that results in job losses.  The best way to support the housing and mortgage industry and to sustain its positive impact is to pursue policies that continue to create jobs.  At the same time it is important that qualified buyers have choice when seeking mortgages to finance or re-finance their home.

As an industry we have a responsibility to the government to provide facts, which ultimately can assist the government with a safety net.  Is our message getting through?  All I know is that the government decided to not change the mortgage rules at this time.  I would like to believe that our efforts to date have had a positive impact.  One thing I am certain of is that we have to stay the course, and not talk through both sides of our mouth.

Until next time,

Cheers.