Variable rate may no longer win

Garry Marr, Financial Post · Tuesday, Jul. 27, 2010

Not that there are a lot of people buying houses these days, but the answer to the age-old question of whether to go long or short on your mortgage is unclear yet again.

The Bank of Canada’s second quarter-of-a-point rate increase in the past two months is likely not going to do much to boost a real estate market that saw sales drop almost 20% across the country in June from a year ago.

The popular variable-rate product tied to prime that helped people buy a lot more house with more debt is going up too. The prime rate at the major banks, which tracks the Bank of Canada’s rate, is now at 2.75%.

But a funny thing happened as the Bank of Canada was raising rates. With much of the credit crisis seemingly behind us, the discounts on short-term borrowing are increasing as the cost of funds for banks also fall. Instead of borrowing at 100 basis points above prime, it’s now 70 basis points off prime.

At 2.05%, a variable-rate product today may look as attractive as ever, but the five-year fixed-rate closed mortgage is falling fast. It can now be had for a shade under 4%, says Rob McLister, editor of Canadian Mortgage Trends.

“Bond yields have fallen out of bed and nobody expected that,” said Mr. McLister, adding the spread between the five-year Government of Canada bonds and five-year mortgages is still large enough that the banks may reduce long-term rates even more. However, at about 4%, the five-year closed fixed-rate mortgage isn’t far off its record low.

Bank of Montreal senior economist Sal Guatieri does agree that variable-rate products have worked out better than fixed-rate mortgages throughout history, but says the tide may be turning.

“Given that the central bank has already raised rates a couple of times now and will likely continue to raise rates, it probably is a correct assumption to make,” says Mr. Guatieri, noting variable usually works in a declining interest-rate environment. “The next five years might not quite follow the past. You could probably argue it’s wiser to lock in now. It’s a close call.”

Bank of Montreal is forecasting another 25 basis point move in September and says rates will climb another 1.5 percentage points by the end of 2011. If Mr. Guatieri and others are right, by 2012, the variable-rate products out today would clock in at just above 3.75%, if the discounting remains the same.

“If you are still in that variable-rate product then, you’d have to sweat out the next three years because there would still be possibly more increases,” says Mr. Guatieri, who adds his bank sees the overnight rate eventually going to 4% in the following three years. Based on the present gap between the Bank of Canada and prime, that would place the variable-rate product you get today at 6% by around 2015.

Fears of such a scenario are driving people into fixed-rate products again. That, plus new mortgage rules that make it easier to qualify for a mortgage if you go for a fixed-rate product with a term of five years or longer.

“The Bank of Canada is doing what it said — it’s going ahead with rate increases. If I was counselling someone, the prediction is rates are going up, so now is a good time to consider locking in for a term,” says Don Lawby, president of Century 21 Canada.

It makes sense, but with variable rate still at around 2%, it’s easy to see why people wouldn’t want to lock in. Even Mr. Guatieri says if you are secure in your financial situation and don’t need to fix your mortgage payments, “you might just want to let it ride.”

There just never seems to be a clear answer on whether to lock in or stay variable.

gmarr@nationalpost.com

Read more: http://www.financialpost.com/news/Variable+rate+longer/3329442/story.html#ixzz0uwQpMuYU

A suite built above the garage of a South Surrey home.

Photograph by: PNG, PNG

METRO VANCOUVER – After decades of debate, Surrey has decided to permit homeowners to have one secondary suite in all single-family homes in the city, following an Ipsos Reid telephone poll in which 63 per cent of those surveyed supported the idea.

The move, which received unanimous approval at city council Monday night, brings Surrey’s secondary suite policy into line with that of most municipalities in Metro Vancouver. Delta is expected to go ahead with a similar policy.

Up until now, Surrey has allowed secondary suites only in predetermined zones in the city, mostly in Newton. Yet the city has its share of illegal suites, which are estimated to number as high as 19,000.

Surrey Coun. Judy Villeneuve, who chairs the city’s social planning committee, said the illegal suites have provided affordable housing in the city, as well as mortgage help for new homeowners.

Legalizing the suites, she said, will allow homeowners to offer accommodation to extended families or renters, while ensuring they provide parking spaces and pay their fair share for utilities and taxes.

Homes with secondary suites result in added costs to the city’s water, sewer, and garbage services.

“Hardly any rental housing has been built in Surrey in the past 15 years,” Villeneuve said. “Our goal is to is to provide lots of [different] housing so everyone can live … and have a roof over their heads.”

According to the Ipsos Reid poll, 63 per cent of 1,200 people polled in a random telephone survey said they would support the move, mainly because it would provide more rental housing, make home ownership more affordable and increase density in neighbourhoods without changing the area’s character.

But support varied according to location, with 65 per cent in favour in the Newton/Fleetwood area compared with just 57 per cent in south Surrey.

The main reasons for opposing the move are related to parking issues, general congestion/crowding, traffic congestion and concerns about equitable payment of property taxes and utility charges.

City staff recommended that council endorse the policy subject to conditions, which included prohibiting multiple suites in a house, requiring the registered owner of a home with a secondary suite to live on the premises and requiring homes to provide parking and pay appropriate utility fees to offset the added costs of city services.

The random telephone survey, conducted between June 28 and July 6, has a margin of error of 2.8 percentage points. A web-based survey, which polled more than 1,500 people on the city’s website from June 28 to July 1, found levels of support were lower, with 55 per cent in favour.

ksinoski@vancouversun.com

Read more: http://www.vancouversun.com/Surrey+votes+allow+secondary+suites+city+wide/3325280/story.html#ixzz0ut38F3da

1. What is the home buyers’ tax credit (HBTC)?

For 2009 and subsequent years, the HBTC is a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., generally means that the closing is after this date).

2. How is the new HBTC calculated?

The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.

3. Am I eligible for the HBTC?

You will qualify for the HBTC if:

• you or your spouse or common-law partner acquired a qualifying home; and
• you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first-time home buyer. However, the home must be acquired to enable the person with the disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.

4. What is a qualifying home?

A qualifying home is a housing unit located in Canada acquired after January 27, 2009. This includes existing homes and those being constructed. Single-family homes, semi‑detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co‑operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.

5. Who is considered a person with a disability for purposes of the HBTC?

For the purposes of the HBTC, a person with a disability is an individual who is eligible to claim a disability amount for the year in which the home is acquired, or would be eligible to claim a disability amount, if we ignore that costs for attendant care or care in a nursing home were claimed for the Medical Expense Tax Credit.

6. If I buy a house, can my spouse or common-law partner claim the HBTC?

Either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750.

7. My friend and I intend to jointly purchase a home, and we both meet the conditions for the HBTC. Can we both claim the credit?

Either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750.

8. Do I have to register the acquisition of the home under the applicable land registration system?

Yes. Your interest in the home must be registered in accordance with the land registration system applicable to where it is located.

9. How will I claim the HBTC?

Beginning with the 2009 personal income tax return, line 369 is incorporated into the Schedule 1, Federal Tax to allow you to claim the credit in the year in which you acquired the qualifying home.

10. Do I have to submit any supporting documents with my income tax return?

No. However, you must ensure that this information is available, should it be requested by the Canada Revenue Agency (CRA).

11. Is the HBTC connected to the existing Home Buyers’ Plan?

No. Although some of the eligibility conditions for the HBTC and the Home Buyers’ Plan are similar, the two are not connected. Your eligibility for the HBTC will not change whether or not you also participate in the Home Buyers’ Plan.

12. Where can I get more information about the new HBTC?

The CRA encourages taxpayers to check its Web site often—all new forms, policies, and guidelines are posted there as soon as they become available.

13. In which taxation year can I claim the HBTC?

You can claim the HBTC in the taxation year in which the qualifying home is acquired.

14. If I purchase a condominium as my qualifying home in which occupancy takes place in one taxation year but the legal transfer of ownership only takes place in the subsequent taxation year, in which taxation year can I claim the HBTC?

You can claim the HBTC in the subsequent year in which your interest in the condominium (or a right in Quebec) will be registered in accordance with the land registration system or other similar system applicable where it is located.

Canadians back away from borrowing

Owe Canada. It’s not our anthem any more.

Crazy borrowings on lines of credit? History. The gotta-buy-now housing market? Toast. Credit card debt? Slowing down, too.

Many months ago, it was fashionable to question how Canada’s profligate borrowers would hold up when interest rates began to rise. Today, after the Bank of Canada raised its trendsetting overnight rate for the second time in the past two months, we’re starting to see the answer.

In virtually all forms of borrowing, the rate of increase has slowed drastically. “I’ve been saying for a while that this is the most logical display of behaviour on the part of the consumer that I’ve seen in a long time,” said Benjamin Tal, senior economist at CIBC World Markets and an expert on household finances.

Mr. Tal’s take is that consumers ramped up their borrowing to take advantage of the historically low rates that were used by central banks around the world to fight the recession and global financial crisis. The likelihood of a rate rebound was widely discussed, and people took notice. When he looked at borrowing data for the first quarter of 2010, the rate of growth was down across the board.

“What we need to see now is a continuation of the softening in credit in order for people not to get into trouble,” Mr. Tal said.

This appears to be happening. The latest mortgage data has prompted him to forecast growth in outstanding mortgage debt of 3 to 4 per cent in 2011, down from 10 to 12 per cent in the first half of this year. He said growth in line-of-credit balances has fallen to about 7 per cent on an annual basis from 30 per cent two years ago. As for credit cards, growth in balances has fallen to 3 to 4 per cent from 12 to 14 per cent two years ago.

“All credit vehicles are slowing significantly,” Mr. Tal said.

This responsible attitude toward debt came through as well in the results of a survey by Genworth Financial Canada, which competes with Canada Mortgage and Housing Corp. to provide mortgage default insurance. It indicates that one-quarter of homeowners with mortgages have either made a lump-sum payment against principal or accelerated their payments in the past year.

There’s no better way to prepare yourself for the impact of rising interest rates on your mortgage than to make a lump-sum payment or speed up your pace of repayment.

In a way, the Bank of Canada’s latest move to raise rates is a gift to people with debts. They’ll have to pay a bit more in interest on their lines of credit, variable-rate mortgages and floating rate loans, but the increase is mild and the pace of further increases will be muted. It could be a lot worse.

In fact, lots of market watchers thought it would be worse last year when they looked ahead to 2010. They saw all the government stimulus pumped into the economy during the recession producing a significant uptick in inflation, which in turn would send interest rates marching higher.

Now, there’s talk of deflation, or falling prices. The Bank of Canada’s not outwardly concerned about this, but it did throw a mention into its latest statement on rates about how it expects economic growth to slow next year and in 2012 from the 3.5-per-cent growth of 2010. Back in April, the bank expected 3.7-per-cent growth this year.

Borrowers would undoubtedly argue in favour of keeping rates steady at current levels, but that promotes an unhelpful complacency. Rates are still close to the unsustainable emergency lows they hit in the financial crisis and recession. By increasing them by a quarter-point in June and then another quarter-point on Tuesday, the Bank has signalled to people that it’s time to take control of their debts.

Lots of people have obviously got the message already, and good for them. But let’s remember that less borrowing means less of the consumer spending that’s essential to economic growth.

Mr. Tal said lower levels of consumer spending are one of the reasons why his firm sees growth slowing, just as the Bank of Canada does. But he still thinks both the economy and borrowers are benefiting from the central bank’s early action on rates.

“By October, I think we’ll have reached a point where interest rates have gone up enough to slow down economic momentum without the risk of punishing the consumer too much.”

That seems fair, given how much less Owe Canada’s being sung these days.  http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/canadians-back-away-from-borrowing/article1646613/   

Have a great day!

OTTAWA, July 20 /CNW Telbec/ – The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

The global economic recovery is proceeding but is not yet self-sustaining. Greater emphasis on balance sheet repair by households, banks, and governments in a number of advanced economies is expected to temper the pace of global growth relative to the Bank’s outlook in its April Monetary Policy Report (MPR). While the policy response to the European sovereign debt crisis has reduced the risk of an adverse outcome and increased the prospect of sustainable long term growth, it is expected to slow the global recovery over the projection horizon. In the United States, private demand is picking up but remains uneven.

Economic activity in Canada is unfolding largely as expected, led by government and consumer spending. Housing activity is declining markedly from high levels, consistent with the Bank’s view that policy stimulus resulted in household expenditures being brought forward into late 2009 and early 2010. While employment growth has resumed, business investment appears to be held back by global uncertainties and has yet to recover from its sharp contraction during the recession.

The Bank expects the economic recovery in Canada to be more gradual than it had projected in its April MPR, with growth of 3.5 per cent in 2010, 2.9 per cent in 2011, and 2.2 per cent in 2012. This revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.

Inflation in Canada has been broadly in line with the Bank’s April projection. While the Bank now expects the economy to return to full capacity at the end of 2011, two quarters later than had been anticipated in April, the underlying dynamics for inflation are little changed. Both total CPI and core inflation are expected to remain near 2 per cent throughout the projection period. The Bank will look through the transitory effects on inflation of changes to provincial indirect taxes.

Reflecting all of these factors, the Bank has decided to raise the target for the overnight rate to 3/4 per cent. This decision leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending, and the uneven global recovery.

Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.

Information note:

A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 22 July 2010. The next scheduled date for announcing the overnight rate target is 8 September 2010.

-30-

Housing sales fall sharply in June

Steve Ladurantaye Real Estate Reporter

Globe and Mail

 The spring housing market  ended with a gasp in June, as residential housing sales fell sharply across the country and the average resale price moved lower after months of record setting gains.  

The Canadian Real Estate Association said the number of sales fell 8.2 per cent in June compared to May, led by lower activity in Toronto and Calgary. Sales slipped in 70 per cent of the markets surveyed.

The national average resale price, meanwhile, was $342,662, down 1.2 per cent from May’s record setting $346,881. Prices are still 4.9 per cent higher than they were last June.

Canada Mortgage and Housing Corp. is reporting its seasonally adjusted annual rate of housing starts was 189,300 units in June, down 3.1 per cent from May.

The agency also revised up its figures for April and May – to a 3.7-per-cent gain in April (205,900 units) and a 5.1-per-cent decline in May (195,300 units).

The agency says June’s decline was largely due to a slide in Ontario multiple starts.

Urban starts fell 2.6 per cent to 167,000 units in June.

Urban multiples decreased 5.8 per cent to 89,200 units, while singles edged up 1.4 per cent to 77,800 units.

The annual rate of urban starts decreased 19.8 per cent in Atlantic Canada and 17.4 per cent in Ontario, and increased 11.6 per cent in Quebec, 8.6 per cent in the Prairie region and 6.3 per cent in British Columbia

Rural starts were estimated at 22,300 units in June.

“Canadian residential construction activity has likely peaked for the time being, and should soften further given the weakening demand backdrop and lower rate of household formation,” Robert Kavcic of BMO Nesbitt Burns said in a note.

 Recession-battered Canadians growing more conservative with savings

By Sunny Freeman, The Canadian Press

TORONTO – Recession-battered Canadians are growing more conservative with their money and turning away from high risk investments to the safety of savings accounts — a trend that banks are cashing in on, industry insiders say.

Canadians this year have opened about 20 per cent more chequing and savings accounts than last — a giant leap from the average three to five per cent annual increase, said financial services consultant David McVay.

“Canadians are more conservative than they were in 2007,” McVay said, adding that more consumers are paying off debt, opening RRSPs and tax-free savings accounts than they were a year ago.

“We’re seeing a shift from stock investing into keeping more money in savings accounts because of the financial crisis,” he said.

The shift to safer investments is being driven by a nervous baby boom generation who “have lost their mojo” after the plunging stock market wreaked havoc on their retirement investments, McVay said.

They no longer want to take on the risk of a crash that could force them to work another five or 10 years.

“The banks are marketing to the uncertainty that Canadians have about their savings and retirement plans caused by the financial crisis,” McVay said.

Banks are looking to capitalize on the conservative shift in consumer sentiment because they can make more money from savings accounts than they can when stocks and bonds are in vogue, he added.

The 20 per cent increase in retail accounts amounts to about $100 billion in business — and Canadian banks are fighting aggressively for customers with cash-back and points incentives, McVay said.

TD Bank  economist Grant Bishop agrees that the trend away from risky equity markets has increased competition for deposits.

“You did see banks increasing the attractiveness in order to get the largest bulk of that cash flowing in,” Bishop said.

But the rush into precautionary savings during the initial phases of the recession, has since dropped off, he added.

As the early stages of recovery took hold, consumers began to take advantage of historically low interest rates and favourable borrowing conditions.

“We did see households, spurred by ultra-low interest rates, accumulating debt, largely for the purpose of home ownership,” he said.

“But going forward that does need to slow and households do need to save more in order to rebalance their finances and bring down the potential vulnerabilities that households would face as interest rates rise.”

As interest rates on loans begin a cycle of gradual hikes, borrowing will become more expensive. As the same time, that should eventually translate into higher interest on savings accounts.

Scotiabank released results of a survey of Canadians’ savings habits Tuesday that found nearly one-third of Canadians do not have a savings plan in place even though almost everybody —94 per cent— said they feel better when they have a safety net of savings.

That means there is still a large untapped market of Canadians who are looking for help with their savings.

“We did have a tough period in the last few years and I think now is a great time to really focus on this and get people thinking about how they can save,” said Gillian Riley, Scotiabank senior vice-president of retail deposits, payment and lending.

“Over the last year we certainly have seen some movement towards savings as a flight to safety,” Riley added.

About 55 per cent of the 1,000 Canadians surveyed by Harris/Decima for Scotiabank in March told pollsters they save on a regular basis. Still, nearly one-in-five Canadians said they don’t have any rainy day savings at all.

Household consumption had been growing at a faster rate than income growth, indicating that Canadians were taking on more debt to fuel domestic spending, Bishop said, adding that TD predicts that the pace of credit growth will slow in the near future.

The personal debt to income ratio has climbed dramatically in the past year, Bishop said. It sits at around 147 per cent, meaning for every dollar of income households earn, they hold about $1.47 in debt.

“That reflects that households still do need to save a larger portion than they were during the pre-recession period … in order to pay down debt.”

Upbeat survey may pave way for interest rate hike

By Julian Beltrame

OTTAWA — Canadian firms are giving the recovery a vote of confidence in a key quarterly survey, paving the way for the Bank of Canada’s expected interest rate hike next week.

The central bank’s quarterly survey, released Monday, showed firms were concerned about the fallout from the European sovereign debt mess, but still generally upbeat about the coming year.

“Overall, (business executives) are positive about the outlook for business activity over the next 12 months,” the bank wrote.

“For the first time in two years, firms, on balance, reported an improvement in their past sales activity.”

The bank’s governing council next interest rate announcement is next Tuesday.

Following a strong jobs report last week, the survey likely represents the last piece of evidence governor Mark Carney was looking for to confirm a predisposition to continue raising rates.

“I’d say there’s a 75 or 80 per cent probability they will hike next week by 25 basis points,” said Derek Holt, vice-president of economics with Scotia Capital.

“I think they’d want to avoid the perception that they just came out with a whole new round of bullish forecasts and then got wobbly knees after just one quarter-point hike (in June).”

What could stay Carney’s hand, economists say is the unknown factor of what will happen to the global economy as governments move from spending to restraint later this year and next.

Canada’s domestic economy appears well grounded. Statistics Canada reported on Friday that an additional 93,000 jobs were added in June, bringing total re-hiring since the recession’s end to over 400,000.

And the business outlook survey showed that 50 per cent of firms surveyed said they planned to add workers over the next 12 months, as opposed to only 10 per cent that planned to cut their workforce.

TD Bank economist Diana Petramala viewed that finding as the strongest in the report, although she said it might indicate some hiring that’s already taken place.

While an increase in the bank’s policy rate to 0.75 per cent will raise short-term interest rates for consumers, most economists say it is unlikely to have much of an impact on longer-term, fixed mortgage rates. Many see a hike at this time as not applying the brakes to growth, since the rate would remain near the historic low, but as a judgment by the bank that the recovery is taking hold.

Not all agree, however. A bearish minority argue that Canada still faces considerable headwinds from the European situation and ongoing U.S. weakness, and that Carney should refrain from adding a further impediment to growth.

But failing a climb down from its forecast of 3.7 per cent growth this year, and 3.1 per cent next year, the bank appears on track to take interest rates a little higher next week, analysts say.

“With price pressures expected to rise in the production line, excess economic slack continuing to melt away, and credit and lending conditions continuing to ease, the survey results weigh on the tightening side,” noted economist Michael Gregory of BMO Capital Markets.

The summer poll, and a separate survey of loan officers also released Monday, found sentiments positive, if not deliriously so, across a range of topics.

The bank said credit conditions appear to be easing, especially for larger corporations, a critical prerequisite for expansion.

The balance of opinion was also positive on questions of sales volume prospects for the coming year, and future investment intentions.

Not all doubts have vanished, however.

Business executives expressed concerns about “recent global economic and financial uncertainties and possible spillover effects in Canada.”

And although on the plus side of the ledger, expectations on future sales and investment intentions were softer than three months ago. That’s partly because of the way the Bank of Canada couches its questions, contrasting expectations to what they were in the earlier survey.

The bank noted the responses suggest that firms that have already experienced strong sales growth from recession lows now believe that the growth rate will slow to more sustainable levels, but remain positive.

And many firms that do not expect to increase spending on new machinery have already made those investments, particularly firms in the services sector.

On other elements of business activity, executives said they expect the cost of their inputs to increase at a greater rate during the next 12 months, and plan to pass on these cost increases to their customers.

But the inflationary expectations over the next two years were modest, within the central bank’s one-to-three per cent range.

The Canadian Press http://news.therecord.com/Business/article/744317   

Canadian economy adds 93,200 jobs in June; loonie jumps after employment report

By Julian Beltrame, The Canadian Press

OTTAWA – Canada enjoyed another big month for employment in June, churning out a whopping 93,200 new jobs — almost all in Ontario and Quebec and all in the services sector.

The strong performance brings the jobless rate to 7.9 per cent, the first time it has been under eight per cent since the depths of the recession in January 2009.

The Canadian dollar rose sharply after the Statistics Canada report. A few minutes before the release, the loonie was trading overseas just below 96 cents US and jumped more than half a cent after the jobs report came out.

Canada’s dollar was at 96.71 cents US shortly before the official open of trading Friday, up about a cent from the previous close of 95.79 cents

With the employment gains in June, the Canadian economy has recouped almost all the jobs that were lost during the economic contraction that began in the fall of 2008.

But Statistics Canada noted that the unemployment rate remains well elevated above the 6.2 per cent that existed in October 2008 because many more Canadians have since joined the labour force.

Still, the quickly improving labour market likely gives the Bank of Canada all the evidence it needs to raise its key interest rates by another quarter-point to 0.75 per cent on July 20 in order to keep inflation in line.

There were a number of surprises in the Statistics Canada report.

Economists had expected a modest pick-up in the range of 15,000 new jobs because several economic indicators, including retail sales, exports and building permits, have been weak since March.

Also, the 109,000 additional jobs created in April suggested a pay-back was in order.

The other surprise was that the jobs were all concentrated in Ontario and Quebec, despite the fact that manufacturing actually shed workers during the month.

Ontario gained 60,300 workers, slicing the province’s unemployment rate 0.6 points to 8.3 per cent.

Meanwhile, Quebec gained 30,400 new jobs, bringing its unemployment rate to 7.8 per cent.

This was accomplished without any help from the manufacturing sector, a mainstay in both provinces, as factories actually shed 14,300 jobs overall in June.

All of the new jobs were in the services, including retail and wholesale trade, business building and other support services, health care, social assistance and other services, such as auto repair and personal care.

The agency said the new jobs were split between full-time and part-time, with more than half private sector.

There was also a big increase in student employment — 63,000 more last month than was the case in June last year.

However, there were setbacks. There were 10,200 fewer working in the goods producing industries last month, with losses in the factories sector leading the way.

Regionally, other provinces didn’t fare a well as Canada’s two most populous, with most recording slight gains and Newfoundland and New Brunswick outright job losses.

Have a great weekend!