Spotlight on Industry Headlines
NERVOUSNESS ABOUT CANADA’S HOUSING MARKET ON THE RISE Data suggests there is concern among business owners about their ability to repay the debt taken on to help cope with the pandemic and government-mandated interven- tions to control the spread of COVID-19. This follows a CFIB released report in January that said one in six small busi- nesses were contemplating permanent closure as Canada approached a full year of pandemic restrictions. A bout 70 percent of small business owners across Can- ada have taken on debt to cope with the pandemic, with collective indebtedness climbing to $135B as of February, up from the $117B reported in July of last year. According to data analyzed by the Canadian Federation of Independent Business, the average business now carries a debt load of nearly $170K. SMALL BUSINESS DEBT LEVELS ARE SURGING AMID PANDEMIC C anada’s housing market risks entering a speculative phase that could trigger new measures from regulators. For months, historically low mortgage rates have combined with increased demand for bigger living spaces and a lack of supply to lift prices to new highs. Recently, signs have begun to emerge of speculators driving some of the demand, along with other buyers worried they’ll miss out on the boom. This trend as policy makers concerned for the affordability of housing for young and poor families to concerns over a correc- tion in the market. However, officials are reluctant to hold back a crucial sector at a time when the economy is still struggling. A possible flipper’s tax, paid by people who sell houses quickly af - ter purchase, along with changes to mortgage qualification rules to try and bring things under control while the market naturally cools off.
MORE RESTAURANT JOBS & THE STIMULUS PACKAGE FORESHADOW THE INDUSTRY’S COMING RECOVERY R estaurants and bars gained 286,000 workers in February fol- lowing several months of losing jobs, the latest sign that the industry’s recovery is on the horizon after a resurgence of new Covid-19 cases, hurt eateries at the end of 2020 and into the new year. The National Restaurant Association recently surveyed 3,000 restaurant operators about a third of respondents were pessi- mistic saying it would take seven to twelve months for business conditions to return to normal with another 29% saying it would take at least a year. EXPORT BOOM DRIVES CANADA’S LARGEST TRADE SURPLUS SINCE 2014 Full-service restaurants have also been battered by indoor dining restrictions and fewer outdoor dining customers during the win- ter. Additionally, chains have outperformed independent eateries and grabbed market share as mom-and-pops close their doors permanently. C anada’s trade sector unexpectedly recorded its larg- est surplus in more than six years on across-the-board increases in exports. The nation ran a surplus of $1.4 billion CAD ($1.1 billion USD) in January from a revised defi - cit of $1.98 billion CAD in December, according to Statistics Canada. Economists were predicting a gap of $1.4 billion CAD. It marked the first time Canada has run a monthly trade sur - plus since May 2019 and represents the largest since 2014. Exports rose 8.1 percent in January, versus a 0.9 percent in- crease in imports. Shipments of energy products were up 5.9 percent on rising oil prices. Non-energy exports increased 8.5 percent which is positive economic news for North of the bor- der.
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MARCH 2021 • SPOTLIGHT ON BUSINESS MAGAZINE
SPOTLIGHT ON BUSINESS MAGAZINE • MARCH 2021
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