Latest news with #DesjardinsEconomicStudies
Yahoo
16-06-2025
- Business
- Yahoo
'Elbows up' doesn't extend to Canada's major pension fund, survey finds
A large majority of Canadians don't want the 'elbows up' movement to affect the returns of Canada's largest pension fund, a new survey from the Angus Reid Institute says. The survey of adults across Canada, published Monday, suggests that support for Buy Canadian policies and retaliatory measures against U.S. tariffs and 51st-state rhetoric decidedly does not extend to the Canada Pension Plan Investment Board (CPPIB), with 72 per cent of respondents saying the CPP fund 'should invest wherever it earns the most returns for Canadians." 'These views are relatively consistent across age and income levels, as well as retirement status,' the survey noted. Nonetheless, a significant minority — 28 per cent — say the CPPIB 'should invest more in Canada.' The CPPIB's 'singular objective' is to 'maximize long-term investment returns without undue risk,' in order to assist the CPP in paying benefits. It had assets of $714.4 billion as at the end of March and a 9.3 per cent net return rate for the last fiscal year. A recent report from Desjardins Economic Studies found even a minor refocusing of pension funds' investment strategies towards Canada could have a significant impact. The report, which looked at other major funds as well as the CPPIB, says that a one per cent shift from international to Canadian would result in tens of billions to invest, and that a more Canadian focus would also affect the performance of the loonie. The Angus Reid Institute survey found that 76 per cent of respondents expect the CPP to play a 'very important' or 'important' role in their retirement — up slightly from 73 per cent who said so in 2015. Support for the fund investing more in Canada is highest among people aged 18 to 24, the survey says, with 39 per cent in favour. Support is lowest, at 25 per cent, among those aged 55 to 64 — a cohort that includes the earliest age of CPP eligibility, which is 60. The standard age to start CPP is 65. The survey also notes some significant changes in how retirees perceive their financial situation compared with 10 years ago. In the 2025 survey, 25 per cent of retirees say 'I have enough money to do everything I want,' down from 38 per cent in 2015. A greater proportion of retirees now see themselves somewhere in the middle, with 60 per cent saying 'I live comfortably but don't have money for luxuries' — up from 44 per cent in 2015. At 15 per cent, the proportion of those who say 'making ends meet is a struggle' was down in 2025 from 18 per cent in 2015. Among those who have not retired, a greater proportion think retirement will be a struggle today (38 per cent in 2025 versus 28 per cent in 2015), while a smaller proportion expect to have enough to do everything they want (17 per cent, down from 24 per cent in 2015). The proportion of those who expect to live comfortably but without luxuries dropped slightly to 45 per cent from 48 per cent in 2015. The Angus Reid Institute conducted the online survey of 3,228 Canadian adults in early June. The survey notes that "for comparison purposes only, a probability sample of this size would carry a margin of error of +/- 1.5 percentage points, 19 times out of 20." John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf. Download the Yahoo Finance app, available for Apple and Android. Sign in to access your portfolio
Calgary Herald
05-06-2025
- Business
- Calgary Herald
Average home price growth in Canada outpaces affordability
Article content Home prices have more than doubled wage growth in Canada over the last 25 years, highlighting how housing has become unaffordable across much of the country, a new report has concluded. Article content Desjardins Economic Studies published a study in May finding average home prices since 2000 have 'ballooned' by more than four times whereas household disposable income has only increased a little more than two times. Article content Article content Article content Desjardins further noted that first-time buyers face a steep hill to ownership, especially given they are also paying historically high rent across many Canadian markets. Article content Article content The report pointed to the Desjardins Affordability Index being at historical lows for affordability even as mortgage rates have eased and home prices have fallen in Canada's most expensive markets like the Greater Toronto Area. Article content Affordability hit bottomed out coming out of the pandemic as interest rates soared from near historical lows to about seven per cent for five-year fixed mortgages by fall 2023, but the report noted Canadian households remain under pressure — made worse by Canada-United States trade anxieties. Article content Desjardins added that home price pain is not merely an outcome of lower interest rates during the pandemic and recently high migration to Canada. Prices have accelerated gradually over the last 25 years — though more so as a result of the pandemic. Article content Assuming a household could save 20 per cent of disposable income, earning three per cent per year on money saved, it would take six years to have a down payment for the average home in Canada, about $700,000. Article content Given the economic uncertainty, stirred largely by U.S. policy, affordability is unlikely to improve soon, it added. Article content
Yahoo
22-05-2025
- Business
- Yahoo
'Big gains to be had' if Canada's pension fund giants invested more at home: Desjardins
Even a small shift in Canada's enormous pension funds' investment focus towards domestic assets could lead to 'big gains' in the domestic market, a new report from Desjardins Economic Studies says. Most of the funds' roughly $3.6 trillion in investments are currently in foreign assets, Desjardins foreign exchange strategist Mirza Shaheryar Baig writes, but there is an appetite for change both within government and the institutions. 'Due to their large size relative to the domestic market, any shift in their asset allocation or currency hedge ratios can have a significant impact on financial markets, and current market dynamics suggest that there is some scope for change.' Of that $3.6 trillion — an amount that easily exceeds the total value of Canadian mutual funds and ETFs combined — around $1 trillion is managed by the Canada Public Pension Investment Board (CPPIB) and the Caisse de dépôt et placement du Québec (CDPQ), Baig says, while the rest is with 'various employer‑based or trusteed pension plans' such as the Ontario Teachers' Pension Plan. The funds take in money from their investments and worker contributions, but also pay out benefits. Whatever remains needs to be invested, Baig says. That amount is typically very large and typically invested outside the country. In 2024 it was around $105 billion, the Desjardins report says, with $31 billion from excess contributions, and $74 billion from investment income . The funds will likely need to spend a similar amount this year. An emerging movement to encourage the funds to invest more in Canada may be gathering force. Desjardins notes that several small measures in the federal government's Fall Economic Statement were designed to encourage more domestic pension investment, and since then the 'buy Canadian' movement spurred by trade tensions with the U.S. has brought the funds' investing might into even sharper focus. This week, the head of the CPPIB said in an interview with The Canadian Press the fund was 'excited' about investing in potential large-scale infrastructure projects championed by the newly-elected prime minister, Mark Carney. Overall, good macroeconomic policies and an investment-friendly environment could achieve the best of both Shaheryar Baig, Desjardins Economic Studies The government would need to build on the 'tweaks' in the Fall Economic Statement to improve the investment landscape for the funds, Baig writes, but doing so could result in a 'win-win' situation. 'Canada will need to expand investment in infrastructure in the coming years, and these projects could be well suited to the funds' long‑term investment objectives,' Baig says. 'Moreover, deepening capital markets and encouraging more corporate listings in Canada would help too. Overall, good macroeconomic policies and an investment-friendly environment could achieve the best of both worlds.' The report notes that even a one per cent shift by the social security funds out of international assets would leave them with around $10 billion to invest in Canada. A similar move by the trusteed pension funds would yield $24 billion. Another area where the funds' clout could have impact is foreign exchange and the loonie, the report says. Most of the funds' U.S. dollar-valued investments are unhedged given the long-held reputation of that currency as a safe haven, with an expectation that the U.S. dollar would appreciate against the loonie during volatile markets. 'However, this belief is now being openly questioned,' Baig writes. 'The loonie has become very undervalued on a range of metrics.' If the funds were to adjust their currency hedge ratios, Baig says, 'even a modest hedging program would lead to the Canadian dollar outperforming its usual relationship with fundamental drivers' such as interest rate differentials. Although the report declares that 'there are big gains to be had,' it also cautions that creating the conditions where these gains are possible could be challenging. ' Foreign assets have returned more than local assets for several years,' Baig notes. 'And it could take time for any changes in government policies to translate to a shift in strategic asset allocation targets.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-05-2025
- Business
- Yahoo
Ontario's Bill 17 could help housing supply, but affordability will remain an issue
Developers have welcomed Bill 17, the Ontario government's newly proposed legislation that seeks to make building new homes easier — but affordability, a dominant concern in the province, is likely to remain an issue in the years ahead, experts say. Bill 17, or the Protect Ontario by Building Faster and Smarter Act, was announced earlier this week, with measures aiming to accelerate permits and approvals, simplify development charges and fast-track infrastructure projects, especially around transit corridors. The head of real estate development at rental developer Hazelview, Michael Williams, says the bill 'tackles key friction points that have been highlighted that delay purpose-built rental for us,' but adds that nothing will solve Ontario's housing issues all at once. Michael Waters, CEO of developer Minto Group, offers a similar take. 'It's not the silver bullet, it's not going to solve everything, but I think it's a step in the right direction,' he said. Housing affordability has been a hot-button issue in Canada. A major factor driving the problem has been a shortage of supply, with new housing stock failing to keep up with recent population growth. Affordability has been especially bad in Ontario, and the Greater Toronto Area in particular. A report this week from Desjardins Economic Studies found that despite a slight improvement in 2024, 'the benchmark price for all types of housing is highly unaffordable for residents of Ontario.' Bill 17 might help accelerate the addition of housing supply, says Carolyn Whitzman, a senior housing researcher at the University of Toronto School of Cities, but it will do little to help lower-income residents who have been priced out of virtually every market. 'Absolutely there's a need for something, anything to be built, but it needs to be a supply that has some relationship to who needs what housing where, and at what cost,' Whitzman said. 'And I simply haven't seen much evidence that the provincial government understands that in its legislation.' There's actually a lot of uncertainty in those processes, and uncertainty is a killer, from the perspective of allocating or investing Waters, CEO of Minto Group Both Williams and Waters hail Bill 17's measures to standardize processes across municipalities. Williams notes that at present, requirements for planning studies 'change dramatically from municipality to municipality,' requiring adjustments to new frameworks on potentially every submission. Waters calls the current situation around approval processes 'one of the biggest roadblocks or inhibitors for housing supply coming online more quickly. … There's actually a lot of uncertainty in those processes, and uncertainty is a killer, from the perspective of allocating or investing capital.' Additionally, Williams highlights the bill's provisions to fast-track development around transit hubs. 'I think everyone's hyper motivated to build around transit, as municipalities have been somewhat restrictive around existing and future transit nodes and having densified areas,' he said. 'I think that's really good that they address it, but it stands out that they've acknowledged that it's a problem.' The simplifying of development charges would also make a huge difference, Waters says. 'You pay the development charges when you pull the permit, but of course, the project begins months and years and years before, when you acquired the land,' he said. 'And so, accurately forecasting the level of development charges is a challenge, and they won't be levied for years.' Waters and Williams both note other issues not addressed by the bill which could still affect the efficiency and affordability of housing in Ontario, including the ongoing shortage of skilled labour. Waters says approval timelines should also be standardized. "I could give you examples in the city of Toronto where it has taken us over a decade to get an urban redevelopment site rezoned and site plan approved,' he said. 'That does not make sense. It is inconsistent with the state of crisis we have in housing supply." For Whitzman, the chief problem is that the new measures would likely facilitate the supply of housing only 'for the upper middle class and the wealthy.' On the affordability front, she says the Ontario government is ignoring past studies and task forces that offer proven solutions. 'What does work is the Ontario government getting back into financing and supporting and setting targets for non-market housing,' Whitzman said. 'And by non-market housing, I mean public housing, cooperative housing, supportive housing and other forms of housing that are provided by nonprofit organizations.' John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jmacf. Download the Yahoo Finance app, available for Apple and Android. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
