Briefly:

(March 26, 2004) The Canadian Association of Income Funds (CAIF) is commending the Alberta government for its pledge to introduce limited liability for income trusts.

In the provincial budget released earlier this week, Alberta said it would introduce the trust legislation this fiscal year.

“This is an important decision by the Alberta government,” said CAIF chair Stephen Probyn. “The income fund industry is delighted to have this support and investors will be appreciative of the enhanced protection. We hope that other provinces will follow the lead of Alberta and Ontario in tackling this important issue.”.

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OAS benefits rise

(March 26, 2004) Social Development Canada has announced increases to the OAS benefits, effective April 1, based on increases in the consumer price index.

The basic OAS pension will increase by 0.2% to $463.39 per month. The maximum Guaranteed Income Supplement (GIS) and allowance payments will also increase by 0.2%, to $550.73 for a single or the spouse of a non-pensioner.

Last year the OAS program distributed more than $26 billion to four million seniors.

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Standard Life appoints group VP

(March 26, 2004) Standard Life has appointed Jacques Latour vice-president of sales for group insurance, effective March 22, 2004, where he will be in charge of distribution strategy. Latour has over 20 years of experience in business development, sales management and strategic planning in group insurance.

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National net worth rising, says StatsCan

(March 25, 2004) Canada’s net worth reached $4 trillion last year, nearly $125,000 per person, Statistics Canada reported today. That’s up 1.6% from the previous quarter, the agency said, when net worth — the sum of the net worth of the country’s people, corporations and governments — averaged $123,000.

Although net worth increased in the fourth quarter of 2003, so did debt loads. Households had nearly $103 in debt, such as credit cards and mortgages, for every $100 of disposable income, StatsCan said.

“However, low interest rates over the fourth quarter would have moderated the increase in the debt burden.”

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RBC: Economy set to accelerate

(March 24, 2004) The Canadian economy is poised to benefit from improving conditions in the U.S., according to RBC Economics.

“Last year we saw the resilience of the Canadian economy as it grew by 1.7% despite several negative shocks,” said Craig Wright, vice-president and chief economist for RBC Financial Group. “This year we expect the Canadian economy to improve by capitalizing on some of the opportunities presented by a strong currency, low interest rates and an improving global economy.”

The report says the U.S. economy is set to snap out of its stupor and lead the world in growth once again. Given the impact the U.S. has on Canada, our growth rate is predicted to hit 3.2% in 2004 and 3.6% in 2005. RBC also predicts one more rate cut from the Bank of Canada in 2004.

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S&P names new lead in Canada

(March 24, 2004) Standard & Poor’s has named Stephen Rive as vice-president of Standard & Poor’s Index Services Canada and global practice leader for exchange-listed products.

“Steve brings the best combination of skills and experience to effectively lead our Canadian index endeavours as well as our global practice for listed products,” said Robert Shakotko, managing director of Standard & Poor’s Index Services.

Rive joins S&P from his post as general manager at Barclays Global Investors. He holds a Masters in Economics from the University of Toronto.

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S&P launches bank loan ratings

(March 24, 2004) Standard & Poor’s has launched a new ratings service for secured bank loans in the Canadian market, indicating the range of expected loss or recovery should a rated borrower default on the loan. The service was launched in the U.S. last December.

“The Canadian launch of S&P’s recovery ratings is a natural extension of the product for Canadian issuers, given the integration of the Canadian and U.S. bank markets,” said Thomas Connell, managing director and office head of S&P’s Toronto office. “Many secured loans of Canadian issuers are placed in the U.S. market, or have a U.S. dollar tranche syndicated to U.S. investors.”

Loans are rated from “1+” indicating the highest expectation of full recovery of principal, to “5” indicating negligible recovery, or not exceeding 25% of the loan principal.

“We believe that the launch of recovery ratings will help to stimulate an active secondary market in Canada, which has been almost nonexistent to date,” said Connell.

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Canada’s net foreign liabilities drop

(March 24, 2004) Canada’s net liability to foreigners fell in the fourth quarter of 2003, due to an increase in direct foreign investment by Canadians, according to StatsCan.

Net external liabilities declined from the third quarter by $12.6 billion, to $205.9 billion at the end of December, representing 16.8% of GDP. Canadians made new investments abroad worth $11 billion, an increase of 2.8%. Total foreign liabilities totalled $1,121.8 billion.

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U.S. investor confidence slips

(March 23, 2004) American investor confidence slipped in March by1.7 points to 93.9, according to the State Street Investor Confidence Index.

The index, which measures institutional confidence, reached as high 109.0 in December 2003.

“Sentiment shifted strongly to the negative beginning in January 2004 and has continued this pattern in each of the last two months,” said Ken Froot, the Harvard professor who co-developed the study.

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Ontario raises registration fees for mortgage brokers

(March 22, 2004) Ontario’s insurance regulator is raising annual registration fees for mortgage brokers to a flat rate of $250 per person, beginning May 1, 2004.

Fees for mortgage brokers have not changed for 15 years, the Financial Services Commission of Ontario (FCSO) said in a recent notice announcing the change, “while at the same time costs have increased, including the cost of regulation.”

FSCO says the new fee — a 3% rise over a 15-year period — is in line with fees charged by other professions such as real estate brokers and mutual fund salespersons.

“This increase will allow FSCO to generate sufficient revenues to cover the cost currently associated with the sector,” the regulator says.

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MD Funds closing Global Equity RSP fund

(March 22, 2004) MD Funds Management has decided to terminate its MD Global Equity RSP Fund as of June 10, 2004, saying the fund was made redundant by clone funds.

The fund is closed to new purchases as of today and current unitholders will be allowed to switch to other MD funds at no cost. MD Funds Management serves the financial needs of physicians and their family members.

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(03/22/04)