The Bank of Canada hit the pause button last week. This was an anti-climactic reveal as the market had priced this in for over a month. Canadian GDP dipped in Quarter 2 by -0.2%. The forecast was for 1.50% in positive gains, which helped in the “pause” decision. We even had three provincial MP’s speaking out against another hike (including Doug Ford). Ultimately MP lobbying won’t change the bank of Canada’s decision, as data sets trump politics.

The unique thing about the next Bank of Canada decision (October 25th) is we will have two CPI data sets to look at (September 19th and October 17th).

Inflation is excepted to rise at the next meeting. Heads will roll again next week…

International Student Debacle

Making headlines over the last week is a potential cap on international students. Last year, 807,000 international students studied in at Canadian colleges and universities. In 2011, this number was a mere 329,000 students.

The new housing minister has suggested putting a cap on the number of admissions on an annual basis. They have also proposed a limit on how many hours of work the are eligible while studying (currently it is 20 hours per week).

The institutions may have something to say about all of this. International students account for more operating income then government funding and domestic student COMBINED. Will this mean a cost increase to tuitions for those studying domestically?

Rent

Another month, another record set in rent prices. Average rents has grown 9.6% year over year.

Calgary

More people continue to move to Calgary which is evident in the chart below.

Current Interest Rates

CONVENTIONAL

• 5 year fixed, 30 yr amortization – 6.09%

• 3 year fixed, 30 yr amortization – 6.56%

• 5 year variable, 30 yr amortization – Prime – 0.40% = 6.80%

• 5 year fixed, 25 yr amortization – 6.09%

• 3 year fixed, 25 yr amortization – 6.46%

• 5 year variable, 25 yr amortization – Prime – 0.50% = 6.70%

INSURED

• 5 year fixed, 25 yr amortization – 5.64%

• 4 year fixed, 25 yr amortization – 5.74%

• 3 year fixed, 25 yr amortization – 6.19%

• 5 year variable, 25 yr amortization – Prime – .90% = 6.30%

Fast Facts

• 2.5% – An estimate of how much Canada’s per capita GDP has been overstated, given that the federal government undercounted roughly 1 million non-permanent residents.

• $52 billion USD – The valuation that British chip designer “Arm” is targeting for its initial public offering this year. Apple, Intel, and Nvidia are among the companies that plan to buy shares.

• 20 – The number of years it could take Ottawa to break even on its $28.2 billion in funding for electric vehicle and battery plants, per the Parliamentary Budget Officer—significantly longer than initial forecasts.