Canadians spending more on home improvement and travel

Canadian consumer spending increased by a small margin following two consecutive quarters of stagnant growth, according to the Quarterly Spending Report released by Moneris Solutions Corporation (“Moneris”), Canada’s largest credit and debit card processor.

Moneris’ Quarterly Spending Report revealed that consumer spending rose 0.40 per cent relative to the same period last year. Spending climbed during the summer months, with a 0.5 per cent increase in July and 0.62 per cent in August before tapering off to 0.01 per cent in September. Canadians spent more on improving their homes and on vacations, and less on restaurants and entertainment, according to Moneris.

“While this is the first time that Moneris has recorded three consecutive quarters of flat consumer spending, key areas of growth emerged,” said Angela Brown, President and CEO of Moneris. “Summer 2014 demonstrated Canadians’ keen interest in home improvement and travel. It will be interesting to see if that trend continues into the remainder of the year or if the holiday season will see spending spikes revert back to entertainment and retail.”

Spending rose in six out of nine categories highlighted in Moneris’ Quarterly Spending Report including household (3.75 per cent), airlines (4.32 per cent) and drug stores (1.81 per cent), but fell in the restaurant category, where dine-in restaurants witnessed a decrease (-6.4 per cent) in spending. Accompanying the rise in vacation spending, consumers spent more on luggage and leather goods (3.62 per cent).

Spending at home and away

Purchases at home improvement stores rose by 8.49 per cent over the same period last year, and spending on plumbing and heating equipment, and on electrical contractors climbed by 5.14 per cent and 5.08 per cent respectively.

“Home is obviously very important for many Canadians,” said Brown. “Their spending patterns demonstrate enthusiasm for do-it-yourself projects, but they are willing to call in the professionals to perform specialized work, such as electrical and plumbing. Those who choose to leave the comfort of their houses are choosing to spend more on vacations as opposed to one-off experiences such as dinner and a movie.”

While spending on apparel decreased modestly (-2.07 per cent) overall, consumers spent 8.05 per cent more on family clothing in September as children headed back to school. In the same vein, spending in bars rose in August (1.34 per cent), but Canadians buttoned down as the kids went back to school, and spending at watering holes decreased slightly (0.62 per cent) in September over the previous year.

Growth in contactless payments

The number of contactless transactions1 grew by over 200 per cent over the same period in 2013. Some 9.6 per cent of credit transactions were contactless; 3.7 per cent of debit transactions were contactless. The number of contactless purchases exceeding $50 increased nearly fivefold.

“Contactless transactions continue to represent an area of growth in the Canadian payments market as more consumers become comfortable with the technology,” said Brown. “We anticipate this trend will continue, particularly with the growth of mobile payments technology.”

Modest gains, some losses

Most Canadian provinces posted gains under 1 per cent (0.46 per cent-0.81 per cent). However, sales in Prince Edward Island and British Columbia increased by 2.31 per cent and 1.15 per cent respectively. Quebec and New Brunswick were the only provinces to post losses (-1.32 per cent, -1.51 per cent).

About The Moneris Spending Report

The Moneris Spending Report provides a snapshot of consumer spending activity in Canada by analyzing credit and debit card transaction data. As the market leader with the largest merchant base, Moneris presents detailed analysis and insight on a quarterly basis. The percentages cited are derived from actual sales volumes—the dollar values of credit and debit card transactions being processed by Moneris merchants — compared to the sales volumes from the prior year.

List of Canada’s Top 100 Neighbourhoods to Invest for 2015 Officially Released

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Alberta is now vying with Ontario for the best and, indeed, the largest number of real estate investment opportunities this country has to offer, according to the annual Top 100 Neighbourhoods report from Canadian Real Estate Wealth Magazine.

“The sea-change in Canadian real estate is coming, if it’s not, in fact, already here,” says Canadian Real Estate Wealth Senior Editor Vernon Jones, who headed three months of research to formulate the list. “Investors in real estate may be wise to follow the economic development patterns of this country in deciding where to park their real estate investment dollars for maximum growth.”

Canada’s leading magazine for real estate investors leveraged data from The Teranet – National Bank House Price Index™ and industry analysis to form definitive rankings on price appreciation, yield and rental values. The results, hitting newsstands today in the magazine’s October/November issue – pinpoint the exact locations and property types investors should consider for both short- and long-term growth.

While Ontario continued to claim the largest number of neighbourhoods on the list, Alberta has grown in importance to claim second spot.

Geographic Distribution:

34% Ontario

23% Alberta

18% BC

13% Quebec

5% Manitoba

4% Nova Scotia

3% Newfoundland

Canadian employees could see average salary increases of 2.6%

The 2.6% projected increase is the same as that in 2014, and lower than the 2.9% projection for 2013. Canadian projections have now fallen further behind the U.S. where American workers can expect an average increase of 3.0% in 2015, up from 2.8% projected for 2014.

Projected base salary increases for Canadian workers continue to be much lower than those of 3.7% before the 2008/09 economic downturn.  U.S. projections were also considerably higher at that time.

According to the survey, 83% of Canadian employers will provide their employees with base salary increases in 2015.

Resource-based provinces continue to lead the rest of Canada

The highest increases continue to be seen in the oil and gas sector at 3.8% where demand for key skills continues to outweigh the strategic supply challenges that persist in the industry. Chemicals (3.3%), credit unions (3.2%), and financial services (3.0%) are all sectors with forecasts considerably higher than the national average of 2.6%. These high forecasts are also a continued reflection of the demand for key skills and experience.

Alberta (3.1%) and Saskatchewan (2.9%) will lead the country with projected overall base salary increases higher than the national average, these are again buoyed by the demand for key skills in the resource industries despite the economic challenges in other sectors in these provinces. All other provinces are predicting increases of 2.1 – 2.6%, which are at or below the national average.

Looking at the 2015 projections for major Canadian cities, workers in Calgary (3.2%), St. John’s (3.1%) and Saskatoon (3.0%) will see the highest salary increases.

  • For all organizations, actual base salary changes realized in 2014 were exactly as forecasted at 2.6%.

  • Projections by job level show that most positions will be at or just above the national average of 2.6%. Only unionized clerical positions will see average increases (2.3%) which are below the national average.

  • Alberta (3.1%) and Saskatchewan (2.9%) have the highest 2015 base salary projections in Canada.

  • BC’s projections will increase to the national average of 2.6%.

  • No change to the Ontario and the GTA projections of 2.5%.

  • No change to the Quebec (2.6%) and Maritimes (2.1%) from last year’s projections.

  • Projections for countries such as U.K. (2.5%), Canada (2.6%), U.S. and Australia (3.0%) continue to lag behind those for India (10.7%) and China (8.2%) although the 2015 forecasts for China are lower than the 9.0% made a year ago.