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(April 10, 2007) Western Canadian cities will continue to have the highest levels of economic growth but the Conference Board of Canada says they are not expected to grow as fast in 2007 as they have in the past.

Mario Lefebvre, director of the Conference Board’s metropolitan outlook service, says Calgary and Edmonton will lead all Canadian cities in growth in the coming year.

Calgary’s GDP is forecast to grow by 4.2% this year, while Edmonton’s economy is expected to grow by 3.7%. The energy sector continues to drive the economy in both cities, but the Conference Board says the non-residential construction and retail sales sectors are also performing very well.

In the east, Lefebvre expects Halifax to have a banner year, thanks to sustained growth in services and a recovery in manufacturing output. “The outlook for central Canada and for cities in the Atlantic provinces remains muted, with the exception of Halifax,” he says.

Halifax’s economy will expand by 2.9% in 2007, tying Saskatoon and Vancouver as the third-fastest growing cities.

Toronto, meanwhile, is expected to grow at 2.5%, which puts it in third place for central Canada, slightly behind Oshawa, Ont., and Montreal, expected to grow at a rate of 2.7% and 2.6% respectively.

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RBC changes expense ratio on funds

(April 10, 2007) RBC Asset Management is proposing to change the way it calculates operating expenses for 21 RBC funds.

“We always aim to be a leader in delivering excellent value for money to our unitholders,” says Brenda Vince, president of RBC Asset Management. “Investors will benefit, as more than 80% of the RBC funds will see lower management expense ratios this year, as a direct result of this change.”

Frank Lippa, chief operating officer of RBC Asset Management, says the changes will make MERs for each series of units more predictable and transparent.

“Currently, MERs are variable and investors may not know what they paid to invest until after a fund’s financial statements are issued each year. This change will make it much easier for investors to compare the cost of investing in an RBC fund with other investment options,” Lippa says.

If approved, the change will take effect on July 1, 2007.

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TD releases prosperity plan for Quebec

(April 10, 2007) A new report from TD Economics recommends Quebec invest more of its resources in capital equipment and education, reduce personal and corporate taxes, and better facilitate the integration of immigrants into the workforce in order to close the province’s prosperity gap with the rest of Canada.

“An economy that invests more of its resources in capital equipment, education or infrastructure tends to have an easier time translating each hour worked into production of goods and services,” says Don Drummond, senior vice-president and chief economist at TD Bank Financial Group.

The report points to a number of positive developments, including successive government initiatives that have led to lower deficits, lower unemployment rates, more funding for priority programs and modest tax reductions.

TD says the province possesses an “enviable list of assets” including a diverse economy and high quality of life. “Quebec can parlay its comparative strengths into prosperity.” In turn, Drummond says, “rising incomes will generate revenues for government to strengthen social services and enable companies to increase salaries and benefits for its workers.”

Still, he warns that Quebec has a significantly higher share of elderly and a lower share of youths compared to the rest of Canada, and the province’s aging population represents a threat. Projections suggest Quebec’s labour pool will steadily decline unless the province is able to keep its youth and bring in skilled labour from abroad.

(04/10/07)