Dear valued client,
Markets rose yet again this week on news that inflation in Canada was a steady 3.1% in November (compared to 3.1% in October and 3.8% in September). The good news is inflation did not increase. The less optimistic news is that housing prices continue to rise. In a speech at Toronto’s Royal York Hotel last Friday, BofC Governor Tiff Macklem insinuated sky-high immigration rates were a main factor in increasing rent and housing costs. He stated, “Canada’s housing supply has not kept up with growth in our population, and higher rates of immigration are widening the gap.” On Tuesday, Statistics Canada confirmed that the Canadian population has swelled by 430,635 in just three months. Population growth hasn’t been this high since 1956 when Canada took in several thousand refugees fleeing the Hungarian Revolution. The solution to growing housing costs? Mitigate immigration and increase the supply by cutting the bureaucratic red tape to get more houses built.
Another factor that may affect inflation in the coming months is the supply-chain disruption in the Red Sea. Shipping companies such as British Petroleum and Maersk, have recently said they will have to temporarily reroute their ships due to attacks from Houthi militants. The Houthis are an Islamic political and military organization based in Yemen and financially supported by Iran. The group has been attacking commercial vessels ever since the Israel-Hamas war erupted at the beginning of October. The attacks are creating a global issue; the Red Sea flows into the Suez Canal which is the fastest maritime link between Europe and Asia and accounts for approximately 12% of world trade.
A high-ranking member of the Catholic Church is facing jail time. Cardinal Giovanni Angelo Becciu, who was considered a candidate to be the next pope, was found guilty of embezzlement and fraud in the church’s criminal court this week and sentenced to 5.5 years in prison. Prosecutors discovered misappropriated money transfers as part of a London real estate deal in 2013-14. Over $200 million in restitution was ordered as part of the ruling. This is yet another hit to the Vatican’s moral reputation.
“When our economy is truly healthy, and everyone rises with the tide of prosperity, then issues such as lack of affordable housing, homelessness, and hunger are greatly diminished.” – David Ige
Merry Christmas to you and yours,
PW
