Last week I was in Whistler attending the Dominion Lending Centres' biannual conference. I had a wonderful time, learned a lot, and got inspired.
Dr. Sherry Cooper and David Chilton were 2 of the key note speakers at the conference and I will share with you a few highlights of their speeches.
The slow-down in the Canadian economy has been uneven. BC showed the healthiest growth, while Alberta, NewFoundland and Saskatchewan performed the poorest. The Canadian economy has rebounded somewhat.
The falling oil prices from about $100 per barrel are largely due to fracking in the US which has resulted in more oil available on the market. Coupled with this is the slow-down in the Chinese economy. Dr. Cooper said it will be a long time before oil prices rise again to the $100 level. She emphasized that the Canadian economy is strongly tied to the price of oil.
The US economy is chugging along faster than the Canadian economy. Despite the strengthening economy, the Federal Reserve did not raise interest rates last week due to uncertainty in the global economy. However, at some point soon the Federal Reserve will raise rates. This will mean a further weakened Canadian dollar. Let’s hope that the dollar won’t fall too much lower!
Dr. Cooper went on to say that while Canadians have high levels of debt, they also have high levels of net worth. She believes that the net effect is healthy. I am not so sure that I agree with her but I am willing to accept good news.
She mentioned that amongst the G7, Canada has the highest rate of home ownership. We are truly a nation that believes in owning the roof over our heads. The rate of home ownership is at about 70%.
In discussions with the current government, Dr. Cooper has word that while the government wants to study the issue of foreign investors, they are not prepared to limit foreign ownership as has been stated in the news. Of course, we are in an election time, so predictions for policy are not certain.
The best news is that Dr. Cooper predicts a strong real estate market in 2016. And she predicts continued long term low interest rates.
You may recognize David Chilton from the Dragon's Den and as the author or the popular books "The Wealthy Barber" and "The Wealthy Barber Returns". One very interesting prediction that he made is that interest rates will remain depressed because of 3D printing. The reason is that it will cost many jobs in manufacturing. He cited the example of our ability to down load a new toilet bowl. The ability to down load a toilet bowl eliminates the manufacturers of toilet bowls. If you multiply the effect of cutting out manufacturing many times, you can see where he is going with the idea. He said we should expect a seismic shift in our economy over the next 5 years. Believe it or not!
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