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Economic Impact

In order to help keep you informed and stimulate your thinking with regards to the current financial context, Stéfane Marion and Denis Girouard take a look at economic news and share their perspectives via our monthly informative videos.

November 9, 2026

Hello and welcome to Economic Impact. It is November 9th, 2026. Stefane, again, a pleasure to see you. We talk once a month, but every time it feels like it's been a year.

Action-packed.

There you go. So again, last week something happened here in Canada that we need to talk about.

Action-packed central banks. We mentioned last time around that the Bank of Canada was one of a few central banks that had not hiked. Nancy, peer pressure. Peer pressure took place at the BoC and they hiked rates for the first time since 2023, which I have to say surprised me a little.

Yeah, it was a bit early based on your analysis so can you tell us why?

Well, I understand that they're concerned about inflation, but at the same time, although it's not the primary mandate, the primary mandate is inflation. You can't ignore what's happening in labor markets. Few days after they raised interest rates while the labour market showed the third consecutive monthly contraction in jobs, the unemployment rate drifting higher at 6.7%. It's not the same emergency that we're seeing in the US in terms of, you know, labor market tightness.

And you have another slide where we see another foundational difference between us and the United States.

Yeah so OK, I understand, you know, it's not your primary mandate to look at jobs, but it's not like you're going to create a lot of inflation with the job market like this and at the same time, if you want to tackle the primary objective, which is inflation, well, I'd like to point out there's only 35% of components in Canada that are showing 3% inflation or more in terms of the CPI basket. You're in line with your historical average, Nancy, whereas in US you're at 50, about 50%. So I understand why you need that.

It's the pressure.

Yeah, but from a BoC bank account perspective so listen, let's give them the benefit of doubt on that but what that implies, Nancy, is there's no need to be for rapid rate hikes in Canada. So they'll probably take a pause at the next meeting.

And again, inflation is going upward and you've told us many times that inflation is not our politicians' best friend.

No, the worst enemy of all incumbents and we see this in the US so if you have more than 50% of your CPI components that are rising at more than 3%, you can't be surprised that your headline inflation is now close to 4% at 3.6%.

And we mentioned last time around that, you know, this is the most difficult part, this is the worst enemy of every politician and it that actually had some important ramification.

And then we saw what happened last week exactly reflating one of those, which is the insatisfaction towards inflation and other stuff.

Yeah you know, so US consumers continue to spend, Nancy. But, you know, you can see the new composition of Congress. You know, they, you know, the big surprise is that the Democrats took control of the Senate. The House was expected, but not the Senate. So full majority in Congress, you have to go back to 2008 for that. So it's not that US consumers are not spending. GDP was strong, but they're spending on stuff they don't want to spend on, right? So higher energy prices, higher electricity prices. So gasoline, electricity, food is going up. Interest rates are higher and toy prices are up by 7%, which is the biggest increase in 40 years so just before Christmas.

Yeah, just before Thanksgiving and Christmas.

You're right so it was a big challenge for in the midterm elections. so big change in Washington.

And it is reflected in in the market.

So when there's a big change, you have to wait and say, OK, how do I settle? What's my new equilibrium value with long term interest rates? You could say, well, where the majority of Democrats maybe, you know, the war and the Strait of Hormuz will appease and then maybe lower energy prices, brings inflation down, breaks interest rates down, which would be good for equity markets. But in the meantime, I have to say, Nancy, the market is in limbo. Like what's going to happen? The new Congress doesn't take effect until January, right? So in the meantime, you can see that the IT sector, which has been the primary driver of the S&P 500, is down, you know, almost 16% as of last Friday. Communication services hit by higher interest rates so there's not one sector that's doing well. So the market's in limbo. You're still up year to date, don't get me wrong.

It's compared to the highest.

Compared to their peaks, respective peaks and you can see that the market is, you know, we'll see what happens, will the new policies in Washington under the new Congress be more restrictive to deploy in artificial intelligence, which accounts for 1/3 of US GDP growth right now. So we have to wait and see, but, and there could be some profit taking as you wait.

Of course, and you don't have a slide for it specifically, but we know that in Canada it's holding up a bit better.

Yeah, down roughly 3%, not 6% and year to date, it's still one of the best performing markets on the hope that you know, in Canada we have a decent story for 2027 when it comes to economic growth and business investment and profitability.

So again, last week, another announcement we had the budget from Carney and his team.

So it's not because you get a change in Congress, and you mentioned that before. I mean, the Congress even under the Democrats was very protectionist. Joe Biden was using subsidies to suck all the capital into the US, right? So the change in Congress, we'll see what happens, but clearly from a Canadian standpoint, it's not time to let down your guard and that's why we need a budget.We have this uncertainty about US market access in the meantime, we need to reindustrialize and the government presented a budget with $142 billion of new spending initiatives, about more than a third is for investment, which is, which is good news. And the most important part, Nancy, is we're keeping the deficit below 2% to GDP, which means that, you know, foreign buyers of Canadian bonds are not panicked where the deficit this size just for comparison, in the US it's close to 8%.

And this, if well executed will create jobs in the years to come, reindustrialize our economy so it should be good.

Well, you just mentioned the magic word execution. It's all about execution for 2027. So we could do it be in limbo here in Canada too, because you might have a budget like this, which is very telling in terms of, you know, bringing investment back to the country but I need US market to access more visibility. So the president has recently mentioned that he might be looking into making a deal with Canada we'll see on that front what happens. But clearly execution is the name of the game for 2027 for the Canadian, for the S&P TSX.

Yeah. Well, Stefane, thank you very much. Very enlightening. And as you see, it is volatile. But as you know, end of year like this, we do have strategies that you can put in place with your advisors on some tax strategies so please take the time to review your own situation with your advisor. And Stefane, I'm going to, I'm sure that in December we're going to be again, very busy looking at what's happened in the last couple of weeks.

We'll find something to speak to, I promise.

Absolutely. Thank you. Thank you all.

Hello everyone, we are Wednesday, July 15th, 2026. Stéfane, a pleasure to be here with you again today. So, tell me, are the markets running out of speed?

Ah, they seem to be. Last time we saw a new record high on global equities, Nancy, it was the beginning of June. Notice that, you know, at the beginning of the Strait of Hormuz intervention, we had a correction, a big rebound stalling. And I think there's some geopolitics undermining the markets at this point in time.

I think so. So, you know, probably has an impact on the oil price for sure.

So, it coincides with renewed upward pressure on oil. Notice, Nancy, that we're still very far from the levels that exceeded $100, but it's.

Going up.

It's quite the rebound in recent weeks with renewed tensions.

And of course, that's mostly related to the Strait of Hormuz.

So, doesn't matter what politicians say. Politicians say, open or not open, traffic says it's not open. So, if you look at the underlying data, you can explain what's happening on the oil prices via traffic in the Strait of Hormuz, which is not reopened. So even though we put it, is it open? That is the question or not, it's not reopened at this point in time, hence the pressure on oil prices.

And it also has an impact because there is limited availability of various products, therefore.

So, there's something important to note. So, there's the Strait of Hormuz, but there's also a war elsewhere in the world. And what's happening in Europe where you're seeing destruction of refineries, particularly in Russia, which accounts for 11% of diesel sales around the world. You're seeing that refining, the cost of refining oil is surging because there's less refined capacity at refinery levels. So, crack spreads, which is one way to look at the price of refined products if you want, actually exceeds what you saw in 2022 that started the beginning of the war in Ukraine when crude oil was much higher. So what that means, Nancy, at the end of the day is like the economy works on refined products and they're up significantly, whether it's gasoline, diesel, diesel, and it shows up in a global supply chain. So yes, crude prices have rebounded. They're still below where they were before, but gasoline and diesel might hit new all-time highs in the coming week.

Yeah. And that's what consumers feel when they go to the pump, right?

Yeah. And remember, Russia actually said that they were restricting exports of diesel for the next month. And if there's more refinery capacity that's destroyed, probably that will last longer. So, hence the impact on global transportation costs.

And it will take time before everything goes back to normal, right?

So, politicians say something, betting markets say something else. So according to betting markets, you're not gonna reopen by the end of July, 2% probability, end of August 13%, end of September 27%. We're below 50% until the end of the year. Nancy, what that means is that you're going to continue to impact the global supply chain. So, I know U.S. inflation was weaker than expected this month but be prepared for potential upside surprise.

And obviously, let's say it opens December 31st. The next day, everything will not be back to normal. We felt that during the pandemic, it took months before things.

You have to replenish inventories, yes, you're right. So, probably the key story here is to say global supply chains, you know, the pressures on global supply chains are the most acute we've seen since the COVID recession. Historically, that's accompanied with positive or if you want negative surprise in the sense that inflation is higher than expected. So, this is why we're still not out of the woods. So, coming back to your first question, are the markets running out of steam? Well, the markets are looking at this– How do we assess the impact on the global economy and earnings in this situation?

And even so, since the beginning of this conversation, we've had, you know, geopolitical not so good news, not dramatic, but not so good. But then again, markets expectations are surprisingly high.

So, this does not necessarily show up in terms of earnings expectation because right now, as we speak, the expectation is that virtually every large region of the world will deliver more than 20% earnings per share growth so profitability will increase by 20%. It's you know, listen, it's possible. I just want to say these expectations are quite ambitious if you have more pressure on the supply chain in the coming weeks.

And what's surprising is your graph is that there's no negative, there's no one single digit.

No, no double digit, minimum double digit. So, as we said last month, the expectations are still the best earnings per share growth globally ever seen outside a recession recovery. So, market surprise for better news, not worse news, hence the need to watch what's happening on the geopolitical front in the coming weeks.

So, one good news we got this morning is Bank of Canada.

Well, if not moving interest rates is good news, yes, it is because we're keeping our.

But for our consumers it is.

Well, most of our, you're absolutely right, most of our clients would appreciate that and we remain in a jurisdiction where interest rates are lower than the rest of the world. So, that's good news. And the other good news, Nancy, is the Bank Canada, actually, they stayed on the sidelines, and they recognized that well we might see a better rebound in GDP than we expected in the second quarter, remember we had two negative quarters. Now we're set to rebound 2% in the second quarter. That's good news.

Yeah. And you have another one about employment.

Oh yeah, so GDP rebound is not very important for me if it's not accompanied by a jump in employment. And the good news is we seem to be confirming better news on GDP with the June employment data, particularly for people age 25 to 54 who are critical for the credit cycle, right? So, new all time high on employment for people 25 to 54. Now, Nancy, I know you're going to tell me "Yeah, but you told me population growth is negative this year", but permanent immigration is still up and it really has an impact on people 25 to 54. But yes, population will be down because many foreign students or temporary workers that tend to be younger will be negatively impacted. But that's good news for the credit cycle and for potential GDP rebound.

Good. So, you have another good for us about the production level that would be increasing in Canada.

So, people have been talking about trade diversification. It's hard to do in the short term if you don't tap into natural resources. And so oil production's on the rise in Canada and the expectation is they will continue to rise because there was a new pipeline announcement between Ottawa, Alberta, and British Columbia that seems to be inclined to provide more oil to the rest of the world. 90% currently goes to the U.S. and if you want diversification, you need a pipeline. So, from that standpoint, it's positive news in terms of diversification and note that from a trade balance perspective, it will help support the Canadian dollar. So again, there's upside potential here for oil production in Canada. And if you want to become an energy superpower, you know, it goes with that title. So again, I think that this is constructive from a trade diversification perspective, which the government actually is hoping for.

So, a lot of good news, Stéfane. So even though the microeconomic is very volatile, I mean, you've brought us a couple of very interesting news today. So, thank you for that.

Pleasure.

And for all of you, I hope that you will enjoy the summer and that you will take the time during your vacation to reflect on your situation and talk to your advisors. And we will see you again in August. So thank you. Thank you, Stéfane.

Property Perspective

Hello everyone and welcome to this November 28th edition of Property Perspective. Today I have the pleasure to be with Matthieu Arseneau, hello Matthieu. 

Hi Simon. 

And with Andrée Desrosiers. 

Hello Simon. 

Hello Andrée. Our topic of the day, what's best for my mortgage, a fixed or a variable rate. But before we enter that interesting discussion with Andrée, let's talk with Matthieu about recent economic news that influence the real estate market. So Matthieu, a number of events have occurred since we last spoke, all of which have an impact on the economic outlook, obviously. First, what are the implication of the Republican sweep in the US presidential election for economic growth and interest rates? 

Yes, this was a big event and there will be application for that for Canada over the next four years. Higher uncertainty, we saw that with the announcement of potential tariff on Canada. We'll see. But clearly, in my mind, the big event and this has implication for the housing market in Canada, particularly for interest rates. It's the fact that there could be much more fiscal stimulus South of the border given the promises of Trump during the campaign. As you can see on that chart, while the Congressional Budget Office was expecting roughly 6% of GDP deficit, which is already very high, it could be as high as 8% if all those promises are realized by Mr. Trump. So at the moment the Federal Reserve is trying to calm inflation in the US, calm the economy. There's government that could support growth over the next few years. So before the election, the Federal Reserve started to decline rates. They did already 75 basis points. But you can see that at the same time it didn't mean that longer term rates decline. In fact, it increased because of risk of tariffs and its implication for inflation because of stronger growth, though that's something we have to keep in mind. And the problem with that increase is given a global correlation in interest rates, when you have the largest economy in the world supporting the economy and having those rates it has an impact on rates in countries with economies not as strong as the US and has to cope with those increases. And that could be difficult for a couple of other economies in the world given the increase of those of those rates. So big implication and that has implications for Canada as well. 

Very interesting Matthieu, so the ability to lower the prime rate in the US now looks more limited. What about Canada?

In Canada, so we saw that in fact for investors expectation for the policy rate in the US, it was expected at 3%. Now it's much more closer to 4% by the end of next year. So clearly investors revised their optimism for rate cuts in the US. In Canada, the situation is clearly different in our view when you look at the labour market here, I'm showing the jobless wait for the prime age workers, the 25-54, it has continued to increase over the past few months. And that's diverging with the US and it's now its highest since 2017. And we don't see stabilization over the next few months given the hiring intention of corporations. So for us that's a sign that the economy has cooled significantly and this is reflected in inflation. When you look at services, core services excluding shelter in the US, it's running at 4.4% because they didn't have that weakness that we got in Canada, it's so it's running at 1.3%. So clearly inflation is under control here. So yes, we expect the Bank of Canada to continue to decline rates. Prior to recent announcements, we were expecting policy rate as low as 2% by the end of next year. But given the transfer that was also announced by the federal government, it could lead to upwardly revise a bit. We'll see if it will be implemented. But clearly as you can see on that chart, while Bank of Canada is declining rates, 10 year rate is increasing and is essentially in its last two years average at this point. So not that much relief for long term rates. So that's something to keep in mind. But for that reason, perhaps it's another reason for the Canada to try to push down those rates by having short term rates very low. So that's our expectation at this time, OK.

Matthieu, the government has announced recently an additional break on population growth for the next three years. What are the implications of this new announcement on the real estate market?

We talked about it very often over the past few months. Housing shortage is still very acute in Canada. We see that in the rental market with rent still increasing at a tepid pace. Same thing for first time home buyers. It's where affordability is still a problem. So I think it's the good decision to calm down population growth. In fact, with the recent announcement about the declining non permanent resident to 5% of population over a 2 year. Reducing permanent resident temporarily, that will lead for— when you look at the five year period, when we look in 2028, the pace for the next 5 years will be similar to what we had prior to the pandemic level, much more sustainable and much more in line with our capacity to welcome. So, I think it's a good decision at this point given housing shortage. And we have to keep in mind newcomers have problems to integrate the labour market in the current context. So let's fix that situation and get back to normal after this three-year period of slow growth and we will be able to get back to the model we had that was benefiting the Canadian economy prior to the pandemic. 

So finally good news. Thank you, Matthieu for your very interesting comments. Let's now discuss with Andrée, hello Andrée. In the context of the anticipated drop of the interest rate by the end of this year and obviously in 2025, should we go with a fixed rate or variable rate for our mortgage?

Very good questions Simon and indeed very relevant. The choice between a fixed rate and a variable rate for a mortgage depends on several factors, especially in the context of falling rates. Our risk tolerance, financial situation and short and mid economic outlook are key, you know, considerations to look at. We must first understand the bearish rate context, however, When the Bank of Canada lowers its prime rate, financial institutions typically adjust, you know, their mortgage rates in response to that downsize. Variable rates will generally follow primary fluctuations and become particularly advantageous in the short term. Fixed rates, although often higher than variable rates at the time of subscription, offer protection against potential future increases. We must however remember that they usually follow the interest rate on long term bonds and not the Bank of Canada prime rate. Therefore, a quarter point drop in the prime rate does not mean that fixed rate will fall by the same amount. 

OK. We must therefore understand this context carefully before making our decision. You're right, Andrée. Many people assume that when there's a drop in the prime rate, all rates fluctuate in the same way. However, as we have just seen, that isn't the case since different rates are influenced by different factors. With that in mind, Andrée, what are the advantages of one or the other? 

Yeah. If we look first, you know, at the variable rate, you should consider that rate if you believe that interest rates will continue to decline or stay low for an extended period of time. You can also choose the variable rate if you're comfortable with some level of risk and can handle or afford, you know, potential payment increases if rates rise. Also if you want to benefit from lower penalties, if you decide to pay off your mortgage early or switch lenders. Also, some variable rates loans offer the option to switch to a fixed rate if rates increase. On the other hand, you should consider, you know, a fixed rate if you prefer stability and want to avoid uncertainty, if you think rates might rise in the midterm and again, if your budget cannot accommodate sudden increases in monthly payments.

So once again, Andrée, the choice does not automatically go towards one or the other. Even if we are in the context of falling rates. As you mentioned, we must make sure to take other elements into account in our decision. You are very right Simon. And we must also not forget that some lenders offer mixed rate mortgages, you know, part fixed, part variables. So this approach allows you to balance the advantages of both options and reducing risk while still benefiting partially from falling rates. So in summary, you know in a falling rate environment, a variable rate may seem more advantageous in the short term, but it remains a bet on future rate trends. If you're comfortable with some uncertainty, a variable rate could maximize your savings. However, if peace of mind is your priority, a fixed rate is the safer choice. It all depends like usual on your financial profile and financial goals. To help you in your choice as usual, do not hesitate to consider or consult a mortgage specialist to assess your personal situation and provide you the right advice for that choice. 

Thank you Andrée for sharing your insights. As you suggested, having a discussion with a mortgage specialist will help make the right decision. There's no point about that. So thank you all for watching and join us again very soon for our next edition of Property Perspective.

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