Canada’s Mortgage and Housing Corporation forecasts that home construction could plunge 32% due to high inflation, rising interest rates and a shortage of construction workers.Jeff McIntosh/Canadian Press
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CMHC warns of plummeting housing construction
Soaring building material prices, shortages of construction workers and rising borrowing costs are having a worrying impact on Canada’s housing industry. As Rachelle Younglai reports, Canada Mortgage and Housing Corp. predicts that housing construction could plummet 32% this year to 176,890 units. CMHC chief economist Bob Dugan said the climate was “unfavorable” for new construction and warned that affordability would continue to deteriorate unless the domestic housing stock increased. Even after the Bank of Canada raised interest rates to keep inflation in check, strong demand did not allow home prices to fall further. CMHC expects average prices this year to be about 9% lower than he expects in 2022, but the agency predicts that home prices in the country will bottom out in the next two months.
Striking Federal Workers Get Normal Pay – For Now
The government said that striking federal workers will continue to receive their regular salaries until at least May 10, although they may be reimbursed for days spent on the picket line at a later date. More than 100,000 federal public sector workers have been on strike since April 19, and the government and the Canadian Public Service Alliance (a union representing workers) are trying to work out a new collective bargaining deal, according to the report. Vanmala Subramaniam and Bill Curry report. About 47,000 people who are considered essential workers are not obliged to go on strike and are paid normally. The PSPC said that if the strike lasted more than five consecutive days, payroll processing would require manual intervention by a compensation advisor, and some employees would be asked to “check only the impact of the strike on pay for future pay periods.” ‘ said.
Union wage hikes still lag inflation
Unions have recorded their highest wage gains in more than a decade, but it’s not enough to keep up with rapid inflation. Government data showed he averaged 3.1 percent annual salary increases for the 10 major public and private sector union settlements signed between December and February. This is still well below inflation, meaning workers have experienced substantial wage cuts. However, the Bank of Canada expects inflation to ease to 3% by midyear, below the level of the recently agreed wage pact. Jason Kirby examines union wage settlement lagging inflation in his Decoder this week.
Canada Pension Plan death benefit is tough
Over the past 25 years, the maximum Canadian Pension Plan death benefit payment was just $2,500 in a single lump sum, writes Rob Carrick. Until his CPP reform in 1997, the death benefit was set in a way that paid out a maximum of $3,580. Benefits were then calculated as the deceased contributor’s six months of her CPP retirement pension at age 65, up to a maximum of $2,500. A small improvement made in 2018 was to generate a flat profit of $2,500. Adjusted for inflation, his $2,500 in 1998 would be his $4,262 today. CPP retirement benefits he increased by 6.5% in 2023, offsetting rising costs of living, but the value of death benefits fell again due to inflation. Indexing death benefits to inflation or raising it outright would be a big help for middle- and low-income families when a loved one dies, but that’s unlikely to happen. Although small, the death benefit is worth claiming and must be made within 60 days of the CPP contributor’s death.
Four-figure rents for living with roommates are becoming increasingly common
Living with roommates used to be one of the best ways to save on housing costs, but that’s no longer the case in Canada. In more and more cities, renters face advertising fees of about $1,000 a month for a shared-house bedroom, she reports Erica Alini. The average rent for a spare bedroom in Vancouver was $1,410 for her in March. Rentals.ca, was $1,309 in Toronto. Rental demand surged in 2022 as rising immigration, students returning to college and university campuses, and soaring mortgage rates forced many potential homebuyers to stay on rent. is. That brings private apartment vacancy to his 22-year low of 1.9% last year, leading to significant rent increases across most of the country.
how to get tax refund
I hope you filed your taxes. If you’re in a hurry, check out The Globe’s comprehensive tax guide before the May 1 deadline. About 63% of returns filed have been returned, with an average return of $1,741 this year, according to the Canada Revenue Agency. If you’re waiting for a direct debit or check in the mail, Tim Cestnick shares some ideas for using your refund wisely, whether it’s paying off debt or investing.
Sign up for MoneySmart Bootcamp. If you want to improve your financial health, The Globe’s MoneySmart Bootcamp newsletter course is for you. Authored by Personal Finance Reporter Erica Alini, her new five-part course will improve your personal finance skills, including budgeting, borrowing and investing. If you sign up for the MoneySmart Bootcamp, you’ll get her once-a-week emails to work with another financial source. Lessons will arrive in your inbox Wednesday afternoon.
You’re all set, so prepare for the coming week with The Globe’s investment calendar.
