Stinky Jobs Report for February | Dr. Sherry Cooper

Matt Chan • March 11, 2016

This article was written by DLC Chief Economist Dr. Sherry Cooper.

There was no good news in the data released this morning for Canadian employment in February. While economists were expecting a 5,000 jobs gain, employment edged downward (-2,300) as gains in part-time work were offset by losses in full-time–the opposite of what we would like to see. In addition, the unemployment rate notched up another tenth of a percentage point to 7.3%, its highest level in three years.

The only demographic group to enjoy an uptick in employment was men aged 55 and older. For everyone else, job growth was stagnant. On a regional basis, employment declines were posted in Saskatchewan, New Brunswick and Prince Edward Island. British Columbia, the strongest province in the country, recorded an increase and there was little change in the remaining provinces. Employment growth in BC has outpaced the national performance since mid-2015 (see chart below).

The jobless rate in Alberta continued to climb as layoffs in the energy sector have dragged on. The unemployment rate in that beleaguered province is now 7.9%, compared to 6.6% in BC and 6.8% in Ontario where housing markets continue to boom. In vivid contrast, housing markets in Alberta, Saskatchewan and Newfoundland have slowed with the cutback in the oil industry.

The construction industry has been one of the bright spots in the economy. There were 34,000 more people working in that sector in February, although year-over-year, the number of construction jobs was virtually unchanged. Manufacturing jobs were little changed last month, but employment in manufacturing increased by 2.4% over the past year, mostly in Ontario, Quebec and BC. The weaker Canadian dollar has made Canadian manufactured products more competitive, improving exports, primarily to the U.S.

In other news released this morning by Stats Canada, household net worth continued to rise in the fourth quarter of last year as the value of financial assets outpaced the rise in household debt. The ratio of household debt to disposable income rose to 165.4% in the fourth quarter–up from 164.5% in Q3. The Bank of Canada has long been concerned about the rise in debt levels (chart below), the largest gains having occurred in BC, Alberta and Ontario as mortgage debt has risen sharply.

With interest rates likely to remain low for an extended period, more than 90% of households are in decent financial shape. The Bank of Canada estimates that roughly 8% of households have debt-to-income levels at or above 350 percent. These are generally younger households concentrated in Alberta, BC and Ontario. Highly indebted Albertans could be in trouble as unemployment has spiked in the wake of the oil shock. To date, however, mortgage delinquency rates remain very low in Alberta.

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Mortgage Advice to Help You Through a Separation

By Matthew Chan • February 19, 2025

With the latest stats claiming that about half of marriages end in divorce and with around three-quarters of Canadians being homeowners, it’s important to know how to handle your mortgage if you decide to separate. Here’s a quick list of things to consider. Keep making your payments. A mortgage is a legally binding contract between you and the lender. It doesn’t take marriage into account. If your name appears on the mortgage, you're responsible for making sure the regular payments are made. A marital breakdown does not give you an excuse not to make your mortgage payments. If, during your marriage, you've relied on your spouse to make the mortgage payments and you aren’t certain payments are being made after separating, it's in your best interest to contact the lender directly to verify your mortgage is being paid. If payments aren't being made, it could affect your credit score or worse; the lender could start foreclosure proceedings. There is always a financial cost to break your mortgage. When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs. If you’re in the middle of a term, the penalty for breaking your mortgage might be significant, especially if you have a fixed-rate mortgage. It’s certainly worth contacting your mortgage lender directly to verify the cost of breaking your mortgage. Having that information accessible when writing out your separation agreement will provide increased clarity. Listing your marital status as separated or divorced. When completing a mortgage application for securing new mortgage financing, when you list your marital status as separated or divorced, you can expect that a lender will want to see your legal separation agreement or your divorce papers. The lender wants to make sure you aren’t responsible for support payments. So if you haven’t finalized the paperwork, expect delays in securing mortgage financing. It could be harder to qualify for a new mortgage. With the separation of assets also comes the separation of incomes. If you qualified for your existing mortgage on a double income, you might find it hard to maintain the same quality of lifestyle post-separation. This is where careful planning comes in. Working closely with your independent mortgage professional will ensure you understand exactly where you stand. You’ll want to put together a plan for how to handle the mortgage on the matrimonial home. Purchasing the matrimonial home from your ex. There are special considerations given to people going through a separation to buy out the matrimonial home. Instead of looking at the transaction like a refinance where you can only borrow up to 80% of the property’s value, lenders will consider one spouse buying out the other up to a 95% loan to value ratio. This comes in handy when dividing assets and liabilities. Navigating the ins and outs of mortgage financing isn’t something you have to do alone. If you're going through a separation and you’d like to discuss all your mortgage options, please connect anytime. It would be a pleasure to walk you through the process.

What is a Second Mortgage?

By Matthew Chan • February 12, 2025

If you're not all that familiar with the ins and outs of mortgage financing, the term "second mortgage" might cause a bit of confusion. Many people incorrectly assume that a second mortgage is arranged when your first term is up for renewal or when you sell your first home. They think that the next mortgage you get is your "second mortgage." This is not the case. A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime. When you borrow money to buy a house, your lawyer or notary will register your mortgage on the property title in what is called first position. This means that your mortgage lender has the first claim against the sale proceeds if you sell your property. If you happen to default on your mortgage, this is the security the lender has in repossessing your property. A second mortgage falls in behind the first mortgage on your property title. When you sell your property, the lawyers will use the sale proceeds to pay off your mortgages in sequence, the first position mortgage is paid out first, and the second mortgage is paid out second. After both mortgages are paid off completely, you get the remaining equity. When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage. So why would you want a second mortgage? Well, a second mortgage comes in handy when you're looking to access some of your home equity, but you either have excellent terms on your first mortgage that you don't want to break, or you’d incur a huge penalty to break your first mortgage. Instead of refinancing the first mortgage, a second mortgage can be a better option. A second mortgage is often used as a short-term debt consolidation tool to help provide you with better cash flow. If you’ve accumulated a considerable amount of high-interest unsecured debt, and you have equity in your home, you can secure a second mortgage to lower your overall cost of borrowing. If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Unsure About the Housing Market? Let's Talk.

By Matthew Chan • February 5, 2025

If you’ve been thinking about buying a property, whether that be your first home, next home, forever home, or a home to retire into, the current state of the Canadian economy might have you wondering: Is this really the right time to make a move? There is certainly no shortage of doom and gloom in the news out there. The truth is, that’s a tough question to answer in the best of times. It’s nearly impossible to know for sure what’s going to happen next with the housing market in Canada. It could heat up or it could cool down. So here’s some advice. Instead of basing your buying decision entirely on external market factors, like the economy or housing market, consider looking for the answers internally. When you stop looking at the market to determine your timing to buy a home, and instead examine the personal reasons you have for wanting to buy a home, the picture can become much clearer. Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself: Does buying a property now put me in a better financial position? Do I make enough money now to afford a new home and maintain my lifestyle? Do I feel confident with my current employment status? Have I saved enough money for a down payment? How long do I plan on living in this new home? Is there any scenario where I might have to sell quickly and potentially lose money? Does buying a property now move me closer to my life goals? Do I really want to buy now or am I just feeling a lot of pressure to just buy something? Am I holding back because I'm scared property prices might drop soon? There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress. If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together. The best place to start is to work through a mortgage pre-approval. There is no cost for this service, you’ll learn exactly what you can qualify for, and it will provide a lot of clarity about your situation. You might decide that it’s best to wait before buying, and that’s just fine. You might find that now’s a perfect time for you to buy! If you'd like to talk, please connect anytime. You’re not in this alone. We can work through everything together.