Briefly:

(August 2, 2006) TD Bank Financial Group economists are calling for an imminent economic slowdown south of the border that may have an impact on the Canadian economy. However, Canada’s strong economic diversification may prevent the nation from feeling the full effects.

Economist Sebastién Lavoie says industries that are highly exposed to the U.S. market will still expand, though slowly, in the coming year. Automotive and parts, plastics and rubber and forestry products manufacturers in particular will be hardest hit because of their higher dependence on U.S. demand, he says. As well, it’s predicted that the cooling U.S. housing market will not only put a sizable dent in Canada’s logging activities, but the softening economy will also result in a commodity price correction, lead by crude oil and base metals. Non-residential construction, on the other hand, along with other metals, computers and machinery products, will likely buck the trend and benefit from healthy domestic conditions.

“We do not expect much improvement in manufacturing activities to take place before mid-2007 because of the weakening U.S. economy,” says Lavoie. “For each dollar of manufacturing output produced in Canada, 50 cents is exported abroad, mostly to the United States. The good news is that the U.S. mid-cycle slowdown is likely to be short-lived, lasting about a year.”

Service-oriented sectors, meanwhile, are expected to perform better than goods manufacturers in 2006 and 2007, with wholesalers, retailers, financial services, professional services and telecoms leading as the top performers. Tourism, accommodation and food services, though, are expected to suffer, as a result of the dampening effect of the strong Canadian dollar and high gasoline prices. Overall, Lavoie says the economic slowdown in Canada will likely be moderate at most.

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Ontario organizations develop youth fiscal responsibility programs

(August 2, 2006) The Ontario Trillium Foundation is funding new projects to teach at-risk Ontario youth about financial responsibility. The three organizations joining forces to deliver the training program are the Ontario Association of Credit Counselling Services (OACCS), the primary grant recipient, Social and Enterprise Development Innovations, and the Ontario Association of Youth Employment Centres.

The group has been granted $398,300 over three years to deliver the Financial Capability for Youth Project, a training and resources program for 110 Ontario organizations to address growing concerns about youth debt and poverty, and build the capacity to teach financial capability to at-risk youth.

OACCS has also been granted $57,800 over six months to increase the youths’ awareness of the impact of debt and money management on their future prospects. In the past 10 years, the groups say their clients’ family incomes have increased only 11%, while the average family debt load increased 57%.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.