Canadas economy takes a breather after hot start to year but still

Canada’s economy unexpectedly stalled in February as manufacturing and production in other goods producing sectors shrank during the month. The real estate sector, which expanded 0.5 per cent, had its best one-month gain since 2015 as housing in Toronto soared. Economists surveyed by Bloomberg predicted a 0.1 per cent gain in February, after a 0.6 per cent jump in January.Key PointsThe recovery in goods production seen in recent months came to a halt in February, with those sectors recording a 0.3 per cent decline in February after three straight months of gains. Manufacturers recorded a 0.6 per cent decline in production, with the mining sector down 0.2 per cent. On the upside, it’s all about real estate. The runaway housing market in Toronto was a major contributor to economic activity in February, fuelling a 5.3 per cent gain in output of real estate agents and brokers.Suddenly, Canada has one of the world’s fastest growing economies — but is it real?Here are six ways the Ontario Budget will help (or hurt) your wallet Other sectors benefiting from the hot housing market was the finance and insurance sector as a whole, which posted a 0.7 per cent gain. Construction was up 0.5 per cent during the month.  Gains in real estate and finance meanwhile are fuelling demand for professional services like legal services. The professional, scientific and technical services component recorded a 0.5 per cent increase, led by a 2.9 per cent gain in legal services. From a year earlier, GDP is up 2.5 per cent in February, the biggest gain since January 2015.Big PictureCanada’s housing sector, particularly in Toronto, has become both the main driver of growth and one of the biggest sources of uncertainty amid concern the gains aren’t sustainable.Even with the stalled growth in February, Canada is still on pace to have a strong first quarter, with annualized growth estimated to be just below 4 per cent. That would likely be the fastest in the Group of Seven.At the same time, caution prevails. At a rate decision two weeks ago in Ottawa, Canada’s central bank revised up growth projections for 2017, but cut them for 2018 and raised questions about the sustainability of the rebound and the country’s long-term growth outlook.Bloomberg.com read more

Sask government defends decision to sign 1B deal on handshake agreement

The Saskatchewan government is defending its decision to sign an infrastructure funding agreement worth almost $1 billion on a handshake that the terms of the deal would later be made more favourable to the province.That handshake is now at the centre of the latest dust-up between Regina and Ottawa, which began last month when the province took its funding negotiations public and accused the federal government of delaying a host of projects.While the two sides subsequently agreed to fund some projects, the spat has nevertheless continued, leading to accusations of political manoeuvring by Premier Scott Moe and Regina-Wascana member of Parliament Ralph Goodale ahead of the Oct. 21 federal election.“We were moving forward with an understanding that there would be more flexibility added to it,” Deputy Premier Gord Wyant said of the decision to sign the deal in October, a month after Prime Minister Justin Trudeau blasted Saskatchewan for its tardiness.“If we would have waited to sign an amending agreement or have something formal without taking them at their word, we wouldn’t have any projects approved this year,” Wyant continued, adding that he was “assured” the flexibility would be there.Story continues belowThis advertisement has not loaded yet,but your article continues below.Infrastructure Canada spokeswoman Ann-Clara Vaillancourt said the original agreement was executed because the federal government wanted to capitalize on construction season and get infrastructure projects moving this year.However, she said, “we would not have made a promise that is not reflected in the agreement, just for the sake of getting it signed.”Wyant’s use of “flexibility” refers to Saskatchewan’s stated desire to use some funds from a $307-million pool earmarked for transit projects in major cities — one of four streams in the deal — to pay for cultural and recreation projects in Saskatoon and Regina.According to the province, an immediate transfer would preserve the $56-million culture and recreation stream for use in other communities. Wyant said proposed projects in Saskatoon and Regina would devour roughly 40 per cent of that total.Saskatoon and Regina collectively represented 41 per cent of the province’s population at the time of the 2016 census.The agreement Saskatchewan and Canada inked in October states Ottawa will review requests for transfers between streams “including, but without being limited to,” three and five years after the deal was executed “to reflect Saskatchewan’s needs.”At the time, following a series of bitter exchanges between Moe and Trudeau, Wyant traded compliments with federal infrastructure minister François-Philippe Champagne, who referred to his provincial counterparts as his “new best friends.”This spring, Infrastructure Canada’s Deputy Minister Kelly Gillis wrote to her provincial counterpart stating that the Investing in Canada Infrastructure Program had been changed “to respond to the concerns and challenges (Saskatchewan) raised.”In the letter, Gillis said new “flexibilities” include the ability for the province to immediately transfer money out of the transit stream and into streams for green infrastructure and projects in rural and northern communities, but not culture and recreation projects.Wyant, meanwhile, said Ottawa was aware of the province’s expectations, and that while Saskatchewan didn’t have a signed agreement, it had “conversations” and a draft amending agreement to that effect with its federal counterpart.Vaillancourt, however, said the changes reflected in Gillis’s letter — the ability to transfer some funds between streams ahead of the original three-year window — were a response to an “official request” from the province.“While there were parameters to the funding there was significant latitude within them and we allowed for more still.”amacpherson@postmedia.comtwitter.com/macphersonaRelated ‘Not Ralph Goodale’s re-election fund’: Moe agrees to fund three projects but not Regina pools Feds approve Sask. infrastructure projects using formula province rejects Province could withhold funding for big city infrastructure projects if feds don’t cave on dispute Feds and province trade blame over infrastructure projects delays read more