It’s that time again to take a look back at the top stories that shaped the Canadian economy and financial balance sheets of the average Canadian this past year.

Housing

This year saw an increase in interest rates, as well as legislation to prevent foreign ownership in markets like Vancouver… all contributing to slowing down the housing market slightly. And I do mean slightly. Yes, the market is still a warm one and real estate agents are still consistently busy, but we’re ending the year at a much more reasonable state of home ownership. In Niagara we’re seeing housing prices up 14% over 2016 to the average sale price of $385,000 – some saying that’s closer to the level that they belong at, and it remains a buyer’s market. With new mortgage rules in effect for 2018, and an inevitable interest rate increase again, the housing market will surely level out even further. More than ever before, 2017 saw many of my own clients moving homes, or purchasing their first homes.

Stock Markets & Economic Growth

It was fairly level trading until September when the markets decided to take off in a positive direction in both Canada’s TSX and the USA’s DOW and NASDAQ Markets. Canada can thank the Bank stocks for their strong earnings reports for boosting the fall markets. The economy of Canada saw overall 3% growth in 2017 making it the fastest increase of any of the G7 nations (according to Conference Board of Canada). This growth is partly because of the adjustment now to the commodity (oil) shock in the western provinces, as well as the creation of 329,000 new jobs across the nation. The increase in interest rates from the Bank of Canada also indicates strength in Canada’s economy, despite the record debt loads being carried by Canadians.

Changes to the Retail Landscape

With mammoth competitors like Amazon in the retail sector, 2017 saw giants like Sears closing their doors, and Toys R Us filing for bankruptcy protection while they restructure. Other department stores in Canada are also feeling the effects, but are still holding on, increasing focus on improving their online shopping experience. Malls across the nation will see changes with the loss of Sears as an anchor tenant, and not many other options to take over in that size of space. We saw similarly in 2013/14 when HBC closed their discount department store chain Zellers, and many of the leases were taken over by Target – which then ended up closing all their Canadian locations in 2015. The greatest loss to the nation with the closing of Sears (and others) is the loss of thousands of jobs.

Small Business Tax Changes in 2018

Canada’s Finance Minister Bill Morneau came under scrutiny when he announced major tax changes in the dead of summer in 2017. Proposed changes to small business taxation had the business community up in arms, stating that the incentives the changes were proposing on taking away allow the business owner to create more jobs and reinvest in their businesses. Despite the outcry, and desire for more time to debate and research these new changes, the tax changes for small business are in effect January 1, 2018. This is the most significant tax change in decades, and with only 10 weeks of public input before being passed into law.

Cannabis Capitalism

This new industry has been making baby steps with the creation of medical marijuana need. Now with the Canadian government legalizing recreational marijuana use, to come into effect in summer of 2018, the industry is ramping up to be able to supply the expected demand. The provinces are against the gun trying to figure out the regulatory and distribution end of it all by the July 2, 2018 availability date. It’s expected that the months of July and August will see distribution and sales outlets available in most provinces and territories. This marijuana industry may just be as lucrative as the liquor industry is in Canada… or not.

Want to know more about something specific? Let me know – I’d be happy to share my research and opinions.