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(May 25, 2006) The head of the TSX Group says the exchange will likely make a decision on the derivatives market by the end of this year. And Richard Nesbitt has not ruled out taking over the Montreal Exchange as the TSX attempts to keep up with global consolidation.

As part of the consolidation of Canadian exchanges in 1999, TSX carved out derivatives for the Bourse de Montreal and gave it a 10-year run, free of TSX competition, to develop what has become the fastest growing area of securities trading.

In a speech on Thursday in Montreal, Richard Nesbitt said the TSX will be involved in derivatives after its agreement with the Montreal Exchange expires in 2009, adding his “preference is that Montreal…remain the centre of excellence for derivative expertise in Canada.”

However, one of the weaknesses of the Canadian market is that derivatives and equities are in different places, he added. This wasn’t an issue back in 1999 when the Canadian exchanges agreed to restructure, but with the recent round of consolidation, global exchanges are moving towards the combination of cash and derivative markets.

Before the 1999 agreement, Nesbitt said Canada had “one of the unhealthiest capital markets structures in the world.” The decisions the TSX faces now in terms of how to add derivatives to its mix are “every bit as profound” as those it faced in 1999.

Having this capability would help the exchange cope with the increased costs of handling higher trading volumes from hedge funds. “An exchange that trades both equities and derivatives benefits from the rising volume on both sides of the hedge,” Nesbitt said.

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Census data shows family incomes rising

(May 25, 2006) A Statistics Canada report shows that couple families in Oshawa, Ontario have the highest median total family incomes among all census metropolitan areas.

The median for couple families in Oshawa reached $83,100 in 2004, up 1.6% from the previous year, after adjusting for inflation. Oshawa remained slightly ahead of Ottawa-Gatineau, where couple families had a median total income of $82,100, up 1.2% from 2003.

Nationally, the median total income for couple families rose 1.6% in 2004 to $64,800. In metropolitan areas the largest increases were observed in the Greater Sudbury area, Abbotsford, Edmonton and Calgary.

The median total income for couple families remained highest in the Wood Buffalo area of northern Alberta. The median income of $120,100 rose 2.6% during the year. The area is dominated by those living in Fort McMurray, an area recognized for its involvement in oil sands development.

Data in the release was obtained primarily from income tax returns filed in the spring of 2005.

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Renters still planning to buy

(May 25, 2006) Despite rising home prices and higher interest rates, a new survey from Scotiabank suggests that 30% of Canadian renters plan to purchase a home within the next three years.

“Steady job and wage gains continue to support Canadians who want to make the move from renting to owning,” says Scotiabank senior economist, Adrienne Warren. “Many potential new homeowners, however, will look to less expensive housing options such as town homes and condominiums.”

Those surveyed say deterrents to purchasing a home include the commitment of ownership, the high cost of real estate, living paycheck to paycheck, poor credit and student loans. Interestingly, roughly 31% of those surveyed say they did not know why they should plan for a home purchase.

“These individuals should work with their financial institutions to devise a plan,” says David Bach, author and special advisor to Scotiabank. His argument for advisors serving lower income Canadians: “Don’t throw away money building equity in a home to make your landlord rich when you can build wealth for yourself.”

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Berkshire adds to insurance team

(May 25, 2006) Berkshire Insurance Services has appointed Jackie Lively-McKee to the newly created position of Insurance Inside Sales Associate in the firm’s Calgary business development office.</p<>

Lively-McKee will work closely with Berkshire’s insurance advisors across the country to help them grow their insurance practices and will provide direction and support for their insurance-related needs, the company said in a statement.

“Having worked at both the TWC Group of Companies and Berkshire Insurance services over the last five years, Jackie brings a wealth of knowledge and experience that will be a tremendous asset to Berkshire advisors looking to build and strengthen their insurance practices.”

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Britain to raise retirement age

(May 25, 2006) Britain is revamping its public pension system, linking benefits to earnings and gradually raising the retirement age to 68, starting in 2024.

The changes come in the wake of a government-appointed panel, which warned that nearly 10-million British workers are not saving enough for retirement.

“Today’s White Paper seeks to entrench a new pensions savings culture where future generations can take increasing personal responsibility for building their retirement savings,” said Britain’s work and pensions secretary.

British workers will also be automatically enrolled in a national pensions saving plan, starting in 2012, with each employee contributing 4% of their annual salary, matched by a 3% contribution from employers and 1% tax relief from the government.

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