Archive for June, 2018

Infamous slum finally shut down

Monday, June 25th, 2018

Regent Hotel appropriated by city

Amy Smart
REP

The City of Vancouver is shutting down a decrepit residence on the Downtown Eastside, where some of the city’s most vulnerable have been living in what the CEO of a non-profit housing society said are mould- and feces-ridden conditions.

Janice Abbott, the CEO of Atira Women’s Resource Society, which took over management of the Regent Hotel about three months ago, said the building is in horrific condition.

An order was issued Wednesday giving the occupants eight days notice to leave the building and the province is offering tenancy at one of two nearby buildings it recently purchased.

Atira Women’s Resource Society was in negotiations with the building’s owners, the Sahota family, for about 18 months before reaching an agreement to take over management of it, Abbott said.

While the building appeared relatively clean each time she visited it during the negotiation period, Abbott said it was a different story once she was able to visit without giving advance notice and had the opportunity to meet people in their rooms.

It’s still difficult to estimate how many actual tenants there are, because there were about 100 extra people sleeping in hallways, stairwells and elevators, she said.

“There was mould in the rooms, ceilings had collapsed under the weight of water ingress, people were living without health care or attention from the health-care system,” Abbott said. “So unrelated to the shape of their rooms, they would be living in their own feces, urine-soaked mattresses.”

This, in addition to rampant violence against women, assaults and cases of tenants being forced out of their rooms by others who wanted to rent them out, Abbott said.

Vancouver Mayor Gregor Robertson said the Regent Hotel has been the subject of more than 1,000 outstanding bylaw violations, including 445 that were referred for prosecution.

“After many years of deplorable negligence by the owners of the Regent Hotel, the city and province must intervene for the safety and well-being of tenants,” Robertson said in a statement.

The city’s chief building official determined that, due to decades of underinvestment and mismanagement by the building’s owners, structural and life-safety deficiencies constitute unsafe living conditions.

About 80 residents will have the option to move into one of two buildings called the Jubilee Rooms on nearby Main Street, which the province recently purchased for $12.5 million.

With the support of Atira and other service providers, including RainCity Housing, approximately 50 Regent tenants already have moved to other locations in the past several weeks.

The Sahotas could not immediately be reached for comment.

Copyright © 2018 Key Media Pty Ltd

B.C. government back on offensive

Monday, June 25th, 2018

Hidden property owners and tax cheats targeted

Neil Sharma
REP

The British Columbia government is continuing its shakeup of the province’s real estate, this time targeting hidden property owners and tax cheats.

The registry will make real estate ownership a matter of public record and empower law enforcement agencies and tax auditors to pursue tax evasion, fraud and money laundering with competency. Finance Minister Carole James emphasized the urgency with which the province is purging its real estate of grafters.

“Right now in B.C., real estate investors can hide behind numbered companies, offshore and domestic trusts, and corporations,” James said in a statement. “Ending this type of hidden ownership in real estate will help us fight tax evasion, tax fraud and money laundering.”

The registry, said to be the first of its kind in Canada, should not come as much of a surprise. Last month, the Canada Revenue Agency revealed that the Vancouver and Toronto real estate markets are replete with tax cheats who have collectively shirked paying almost $600mln in taxes.

The Real Estate Board of Greater Vancouver has endorsed the registry.

“Any time that the government places in measures that  make people accountable to pay the taxes that are due, when 99% of the citizens are paying their taxes, we certainly endorse those changes,” Phil Moore, the board’s president, told News 1130.

While the real estate board did spend a couple of years consulting the government on this registry, Moore blames the 15% foreign buyer tax for the growing ranks of investors who hide behind numbered companies. However, he also believes the registry will equip the government with depth of information. 

“Better measures to know who really owns the house when the house transfers to another party’s name. There’s going to be more of an accountability of a paper trail.”

However, there is not much of any indication about how the registry will help people struggling with the cost of housing—without a doubt the most immediate issue pertaining to the city’s real estate.

“It’s really going to be difficult to understand if it’s going to really create more affordable housing. It really depends on how the government’s going to structure this. We really support the government collecting the tax that they’re owed.”

Copyright © 2018 Key Media Pty Ltd

BIGHORN MEADOWS Resort on the Springs golf course in Radium BC 44 duplexes by Luxury Resorts West

Saturday, June 23rd, 2018

Bighorn Meadows a rec property ‘that you use like a cabin on the lake without the headaches’

Barb Livingstone
The Vancouver Sun

PROJECT: The Residences at Bighorn Meadows

AREA: The overall 10-acre Bighorn Meadows Resort development sits on The Springs golf course in Radium, British Columbia.

WHAT’S AVAILABLE: The is the third phase of the 44 duplex mountain-contemporary cabins with two bedrooms/two baths and 1,100 square feet of living space. There are full basement options in this phase, providing the possibility of two additional bedrooms and a bathroom. Prices start in the low $300,000s.

BUILDER: Luxury Resorts West

INFORMATION: bighornmeadows.ca

When Janet Colvin saw her cat’s focused glare out the patio window of her Radium vacation home, she investigated, discovering a young deer peacefully sleeping on the other side.

“How more perfect could it be,” says the 60-year-old Colvin who, with her husband Doug, took possession of their place in the Bighorn Meadows Resort a year ago.

The couple purchased a duplex in the Residences at Bighorn Meadows, part of the overall 10-acre development sitting on Radium’s The Springs golf course.

“The golf course is out our door — my husband golfs and I am trying — and this winter we went out on our cross-country skis,” says the retired Colvin, whose own childhood and that of her children was spent visiting British Columbia’s mountain playground.

But it wasn’t until their son and his family decided to purchase a second home in Fairmont that Janet and her husband started looking for one of their own.

The couple has a house in Calgary (moving into the city from an acreage) and didn’t want an apartment condo or a single-family home for their recreation property, but they did want full ownership. They found Bighorn Meadows, which has launched a new phase of the community started in 2003, offering duplex-style cottages at full or partial ownership.

Randy Trapp, president of Luxury Resorts West, builder of Bighorn Meadows, is bullish on this year’s sales season for the residences.

Currently, 88 per cent of owners in the overall project come from Alberta, the majority of those, like the Colvins, from the southern half of the province.

He has seen a change in the last several years in buyer demographics with continued interest from empty nesters being bolstered by those in their 30s to late 40s, with older kids, looking at that lifestyle purchase.

“It is a recreation property that you use like a cabin on the lake without the headaches.”

He says the lack of headaches comes from Bighorn Meadows Resort amenities including outdoor maintenance, concierge and front desk services to buy all your groceries before you arrive, book your golf games or hang-gliding experience, plus a meeting/flex room.

He predicts this year will see continued purchases by that younger group, as well as the return of empty nesters shifting focus from the United States to properties back home.

Trapp says downsizers can buy in Bighorn and still enjoy winter months down south, by exchanging weeks in the resort-share program. And the homes in the East Kootenays are not part of the B.C. government’s recent speculation tax, placed on out-of-province owners of vacation homes.

The 44 new units offer low maintenance, energy efficiency and more privacy with the duplex-style configuration.

The mountain-contemporary cabins have two bedrooms/two baths with 1,100 square-feet of living space. There are basement options in this new phase, allowing for addition of two bedrooms and a bathroom. The duplexes have added low-maintenance features including Hardie board siding, on-ground concrete aggregate decks, energy efficient heating/cooling, B.C. Home Owner Protection Warranty, 30-year shingles and all-weather windows.

Strata fees are less than in other Bighorn Meadows Resort phases because of the minimal upkeep needed on the buildings.

Bighorn Meadows owners can also choose to put their unit into a rental pool, managed on site. The average two-bedroom owner can offset ownership costs by as much as $17,000/year in rental revenue.

Colvin says her home is perfect for the couple’s weekend or vacation trips or when she comes on her own, with her husband still working.

“It’s my own little sanctuary. It’s way better than living in the city,” she says. “I can walk everywhere and feel safe. It is the perfect place for the two of us (plus cat), with room for our grandchildren when they stay over.”

© 2018 Postmedia Network Inc.

Fern Grove 24012 127B Avenue Maple Ridge 34 single-family homes by Epic Homes

Saturday, June 23rd, 2018

Both downsizers and first-time buyers taking note of Epic Homes? Fern Grove in Maple Ridge

Michael Bernard
The Vancouver Sun

Project:  Fern Grove

Project address: 24012 127B Ave. (128th and Fern Crescent), Maple Ridge

Project scope: Thirty-four single-family Craftsman-style homes on lots ranging from 3,800 to 6,000 square feet. Available in three- to six-bedroom models, some with legal basement suites. Easy access to Golden Ears Parkway, Alouette River and lake, elementary schools, golf courses, lakes, local parks and hiking trails.

Price: From $909,000 for a 2,954-square-foot home with an unfinished basement.  The show home, at 3,820 square feet, includes a finished two-bedroom basement suite and all furnishings, and sells for $1.3 million. 

Developer:  Epic Homes

Architect: Freddy Sale and Associates Ltd.

Interior designer: Leanne Leon, E2 Homes Ltd.

Sales centre: Fern Crescent and 128th Ave., Maple Ridge

Centre hours:  noon to 6 p.m., daily

Sales phone: 604-477-2959

Website:  www.ferngrove.ca

Occupancy date: From late summer

Getting some financial help from the bank of mom and pop is not uncommon today for young people struggling to buy a home in Metro Vancouver. But Mike and Kayla Fenton have gone one step further, with Mike’s parents in an arrangement that is a win-win for both the parents and them.

After the young couple determined that their 900-square-foot Maple Ridge condo was worth almost double what they paid for it four years ago, they started thinking it was time to upsize.

“So my husband’s parents have retired now, and they have decided to move back from Nanaimo to the mainland,” Kayla said. “We have made a decision together that we want to buy a place where they can live in the basement suite, but also still drive around the country in their RV.

“Mike and I can live on the top floor, and they can pay us rent (for downstairs) and we’re all in it together. It’s a good deal for all of us.”

What they bought is a single-family home in Fern Grove, one of 34 houses Epic Homes is building on six acres in a neighbourhood called Silver Valley in the Fraser Valley community. The main floor living space measures about 900 square feet, while the top floor is about 1,200. The basement suite will be reserved for the parents.

“The builders have been very accommodating,” said Kayla, a human resources worker who serves a large downtown Vancouver law firm. “The home that we bought was supposed to originally have two bedrooms in the basement, but they (the parents) have negotiated with the builders to have one larger bedroom.”

Kayla said most of the single-family homes in Maple Ridge seem to sell for prices comparable to what they paid for a Fern Grove home.

“It doesn’t make sense to buy a house built in the 1990s or the 1970s when we can get a brand-new one with a warranty. Yeah, we have to pay GST, but if anything goes wrong, we have someone we can contact. We’ve got a lot more safety in buying the new unit.”

Fern Grove Homes are covered by a new home warranty with two years for materials and labour, five years for the building envelope, and 10 years for structural defects.

Sales manager Norm Jones says Epic’s newest development — it has been building in Maple Ridge for more than 20 years — is attracting a lot of local attention from both first-time buyers and older couples looking to downsize.

 “Fern Grove is a very special and unique location,” he said. “We have been able to locate this development in an area that is pretty well untouched by normal development. It is right next to the rainforest and a few minutes from Golden Ears Provincial Park right alongside the Alouette River.”

“It is beautiful to drive up there. You take a winding road full of tall cedars and you can’t believe you are coming up on a development. It’s not too big at 34 homes.”

Maple Ridge has grown more popular over the last 10 years because of the projects that have increased access, including the Golden Ears Bridge, the widening of the Pitt River Bridge and the new Port Mann Bridge.

“We’re getting a lot of people cashing in on their homes in Burnaby, Coquitlam, Tri-Cities, Vancouver and Richmond and coming out here because the commute isn’t as bad as it once was. Condos and townhouses are attractive, but to find single-family homes under a million dollars is very hard,” he said.

Epic offers several models ranging from three to six bedrooms and up to more than 3,800 square feet.

The Craftsman-style homes have welcoming front porches and pitched roofs with exposed rafter tails, natural stone accents and decorative brackets.

The builder has kept time-conscious modern families in mind with low-maintenance premium vinyl siding and aluminum fascia mount gutters. The roofs are made of durable fibreglass shingles. Homes come with double or triple garages, landscaped front and rear yards and exposed aggregate rock concrete driveways.

The kitchens feature custom Shaker wood cabinetry in painted white or maple stain. There is a stainless-steel appliance package, undermount stainless steel double sink with chrome faucet. Countertops are quartz and there is a generously sized island.

The living area is an open-concept design with 10-foot-high ceilings on the main level and features wide-plank European-made flooring throughout and stain-resistant polyester carpet elsewhere. There is a natural gas fireplace with a floor-to-ceiling tile surround, which has been HDMI wired for tech and cable.

Oversize dual-pane windows provide optimal insulation, block UV rays and fill the homes with natural light.

There is a powder room on the main floor and two full bathrooms on the upper floor. The master ensuite comes with Italian ceramic tile, frameless glass shower enclosure and a stand-alone soaker tub.

Motion-activated ensuite lighting makes visiting the bathroom much easier in the middle of the night.

Besides offering options for completing the basement either as a family room or a rentable suite, Epic also offers “a tankless on-demand hot water heater.”

Homes are also roughed in for security and central vacuum and have a tech hub in the basement for internet, phone and cable systems.

© 2018 Postmedia Network Inc.

Planned residential towers in Toronto to reach as high as 92 storeys

Friday, June 22nd, 2018

Toronto to get Canada?s tallest tower

Ephraim Vecina
Canadian Real Estate Wealth

Development giant Great Gulf Group has announced plans to construct Canada’s tallest condo towers, which are slated to reach as high as 92 storeys, in Toronto’s entertainment district.

The buildings, which are projected to cost over $1 billion in total, were announced despite several indicators that the market appears to be entering a period of relatively subdued activity.

Figures from the Toronto Real Estate Board showed that condo sales in the region declined by 30% year-over-year in Q1 2018. Average prices rose by 9% in the same time frame.

However, Great Gulf CEO Jerry Patava is optimistic that demand for condos will remain robust in Toronto, which he said is characterized by healthy immigration.

“That’s a lot of square footage, 1.7 million or 1.5 million square feet of residence is a lot to sell but you know obviously, the building itself is spectacularly designed and the location is great,” Patava told Bloomberg. “But if we don’t get our presales, we’re not building our condo.”

Even a potential 10% drop in prices triggered by unemployment, a decline in immigration, or a considerable interest rate hike does not faze Patava.

“We can withstand that kind of downturn, we’ll just cut back on production and look in the U.S.”

The announcement is just the latest in Great Gulf’s multiple developments in Toronto, such as a 34-storey condo tower at Yonge and St. Clair and a 46-storey building at King and Spadina. Pre-sales for both projects are expected to start next year.

“We are very selective in what we acquire in the downtown core,” Patava said. “We spent a year and a half before we bought the site working with Frank Gehry just to make sure we can build it right.”

Copyright © 2018 Key Media Pty Ltd

Can this developer be trusted?

Friday, June 22nd, 2018

Liberty Development cancels project

Neil Sharma
Canadian Real Estate Wealth

Months after cancelling Cosmos, a sold-out condominium development at the Vaughan Metropolitan Centre, and  effectively blindsiding over a thousand buyers, Liberty Development Corp. has applied to build another project nearby.

However, cancelling a sold-out project is a reputational hazard, and the question is: How will the new project be received?

Tosin Bello, Turn Key Realty Point’s broker of record, believes—as many do—that Liberty didn’t anticipate how much Cosmos’ units would appreciate and wanted to maximize profits.

“I think they sold below the market and they didn’t anticipate that the prices would be where they are, so I’m pretty confident that when they do relaunch they will follow through because they’ll be priced right,” said Bello. “But it sounds terrible; it was a decision they made at the expense of hundreds of clients.”

Liberty Developments claimed the dissolution of the project was caused by a disagreement of terms between the landowner and Liberty, however, media reports subsequently revealed that they were both under the same corporate umbrella.

Bello added that Liberty didn’t just stake its own reputation, it compromised real estate sales agents associated with Cosmos.

“When you’re a representative for a development, nobody says ‘Liberty pulled units.’ They look at the agents who sold it and say, ‘I can’t trust this person because they gave me bad advice.’ It impacts more than the developer, it impacts agents. I was fortunate I didn’t sell units in that building, but my colleagues did.

“It impacts commissions too because agents sold dozens of units anticipating tens of thousands of dollars, and they have nothing. If you bought a car anticipating a commission in the next few months and now it’s cancelled, what do you do?”

Rosie Gimeno, a sales representative with REMAX Specialists Estate Group, is shocked to find out Liberty is coming back so soon with another project in virtually the same location. While she wouldn’t personally buy something from an unreliable developer, she says clients are a different story.

“If people are going to invest in them, they should add a clause where the builder has to pay a penalty if the same thing happens again,” she said. “Why would anybody feel secure investing in that project? I sure wouldn’t, but sometimes you have to get the client what they want, however, I would advise them about what happened the last time. It’s like if somebody buys during winter time: they have to be more scrupulous.”

Cancelled developments also shake consumer confidence in the market—which, in Toronto, is already reeling.

“There are people who are informed, because they have access to trained professionals, but a lot of people speculate and they’re driving the market,” said Bello. “They anticipate things, so when a development cancels like that, it impacts us all because we want to sell our properties to speculators. And when those people see something like [a cancelled development] they’re less likely to invest. Not only that but there’s also less money is in circulation. Something like this impacts the market because people become skeptical about other developments.”

Copyright © 2018 Key Media Pty Ltd

Vancouver CRE sales activity slips from 2017 high

Friday, June 22nd, 2018

Commercial real estate sales slows

Steve Randall
Mortgage Broker News

There were 523 commercial real estate sales in the Lower Mainland in the first three months of 2018.

That’s 10.8% below the 586 sales of the same period in 2017 according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

The multifamily sector saw the largest decline, dropping 44.8% year-over-year to 16 sales in Q1 2018. The total dollar volume for this sector was down 81.5% to $0.081 billion.

Office and retail sales totalled 173, down 15.6% from Q1 2017 with a total dollar volume of $1,076 billion, down 51.8%.

For industrial land, there were 113 sales in the Lower Mainland in Q1 2018, down 7.4% year-over-year. The dollar value of $0.280 billion was 12.2% more than the Q1 2017 total.

There were 221 commercial land sales in Q1 2018, 3.9% lower than Q1 2017. The dollar value of land sales was $1.594 billion in Q1 2018, a 20.5% decrease year-over-year.

The total dollar value of commercial real estate sales in the Lower Mainland was $3.031 billion in Q1 2018, a 38.5% decrease from the $4.927 billion in Q1 2017.

“Our commercial market returned to more historically normal levels in the first quarter of the year compared to the heightened activity we experienced in 2017,” Phil Moore, REBGV president said. “This shift to more typical activity is mirroring the overall economic trends we’re seeing in our province today.”

Toronto’s Redpin Brokerage -WOW (Virtual Office Website) goes bankrupt with $6.5M of debt

Friday, June 22nd, 2018

Brokerage’s demise highlights value proposition to agents

Neil Sharma
REP

News of TheRedPin’s demise last week may have sent shockwaves throughout the Toronto real estate industry, particularly for virtual office websites, but it also raises questions about the brokerage’s value proposition.

TheRedPin was one of the major VOW disruptors that was featured prominently in the Commissioner of Competition’s lawsuit against the Toronto Real Estate Board, but it was also the first real estate venture for start-up entrepreneur extraordinaire Keith McSpurren.

However, TheRedPin eventually buckled under the weight of its investors’ demands and folded owing about $6.4mln.

William McMullin, CEO of Viewpoint Realty, a Nova Scotia-based VOW, notes that many business models currently work for brokerages, but they’re all underpinned by the value they offer their agents: leads.

“The VOW business model is all predicated on generating leads for agents and charging agents for those leads,” said McMullin. “My guess is the product wasn’t strong enough to retain users to (TheRedPin’s) website. If you’re going to have a web-based value proposition and the website is your calling card, it needs to, in my opinion, generate enough leads to sustain the brokerage.”

During the Competition Tribunal, in which TREB was sued, TheRedPin’s co-founder claimed that, in three years, the brokerage had grown to conduct over $325mln in business.

However, McMullin furthermore states that leads devoid of quality will deplete a brokerage of its agents.

“Not all leads are quality, but there has to be enough of a quality percentage—where they turn into transactions—that, if you can do this, you will attract agents and retain them.”

Realosophy is another VOW, and according to its president and founder, the margins of running a brokerage are extremely narrow.

“The brokerage business is a tough one to disrupt and monetize,” said John Pasalis. “It’s a tough business to just change and make profitable because the margins are very tight.”

While Pasalis doesn’t have the inside track on TheRedPin’s demise, he surmises that its venture capital roots could have played a role.

“We didn’t go out and raise money, which takes some pressure off of us,” he said. “We get to focus more on quality and getting the right people and training them, rather than growing as fast as possible, because there’s always tension between being excellent at what you do and growing as fast as possible.”

Copyright © 2018 Key Media Pty Ltd

GTA new condo sales “very encouraging” says Altus Group

Friday, June 22nd, 2018

Condo sales in the Toronto area are on the rise

Steve Randall
REP

Sales of newly-built condos in the Greater Toronto Area totalled 2,003 in May, accounting for the bulk of the 2,345 total new home sales.

While condo sales were 47% below May 2017’s record high, they were just 1% behind the 10-year average for May.

“May new condominium apartment sales were very encouraging,” noted Patricia Arsenault, Altus Group’s Executive Vice-President, Research Consulting Services. “Not only was it the strongest month since last November, but the sales of 2,003 units are impressive in historical terms: there have only been five other years where May new condominium apartment sales topped this year’s performance.”

The figures are part of a report from the Building Industry and Land Development Association (BILD), which also reveals a 25.4% year-over-year rise in the benchmark price for new condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units ($758,370).

Inventory is down to 9,345 as only five developments, totalling 710 units, opened in May.

Single-family home sales, prices down The benchmark price for single-family homes was down 6.4% year-over-year to $1,144,191; and sales of just 342 homes meant sales dropped 33% from last May and down 78% from the 10-year average.

But the fall in prices may be about to change; and not in a way that will benefit sellers.

“It is doubtful prices will continue to moderate, considering embedded government fees, taxes and charges, and high land costs due to regulatory constraints,” said David Wilkes, BILD President & CEO.

BILD is asking residents to send letters calling for action on the GTA’s housing issues to candidates for municipal office ahead of the October 22 elections.

Copyright © 2018 Key Media Pty Ltd

Bank of Canada decision could go either way

Friday, June 22nd, 2018

Economic unknowns lead some analysts to wonder if Poloz will stand pat on July 11

Andy Blatchford
REP

OTTAWA _ A pair of unexpectedly soft economic reports are creating fresh doubts about the timing of the Bank of Canada’s next interest rate hike.

For months, experts have been predicting Bank of Canada governor Stephen Poloz to raise his benchmark rate at next month’s meeting. But broadening economic unknowns _ mostly linked to trade concerns around U.S. President Donald Trump’s protectionist agenda _ have begun to lead some analysts to wonder if Poloz will stand pat on July 11.

And on Friday two reports from Statistics Canada added more uncertainty to the interest rate outlook.

One release by the agency found Canada’s annual inflation rose at a pace of 2.2 per cent in May for the second straight month. The number, however, was cooler than market expectations of 2.6 per cent.

In the second report, Statistics Canada found that retail sales contracted in April by 1.2 per cent for the reading’s first month-to-month decline since December.

“These reports kind of highlight an economy that has slowed pretty significantly from the last year or two,” Robert Kavcic, senior economist for BMO Capital Markets, said in an interview.

“Given a lot of the uncertainty out there, and a little bit of a softer tone to this data, I think expectations for a July rate hike have probably come down a little bit.”

Royce Mendes of CIBC Capital Markets wrote in a report that Friday’s “bad data” make it even more difficult for the Bank of Canada to hike rates in July. Mendes noted, however, that things could improve before Poloz’s July 11 meeting because more important numbers on gross domestic product and employment are still on the way.

Nathan Janzen, RBC senior economist, said the combination of Friday’s figures, somewhat slower economic growth and a deteriorating tone in trade discussions with the U.S. “aren’t all that encouraging” and will make the Bank of Canada’s rate decision closer than previously thought.

Ranko Berich, head analyst at Monex Canada and Monex Europe, said the central bank’s July rate decision is “now an unknown factor.”

The hunt for clues into Poloz’s thinking will continue next Wednesday when he gives a speech to the chamber of commerce in Victoria, B.C.

The May annual inflation number in Friday’s report followed the 2.2 per cent reading for April and 2.3 per cent for March.

The main contributors to inflation last month were led by gasoline prices. Compared to a year earlier, they climbed 22.9 per cent in May and helped drive overall energy prices for the month 11.6 per cent higher.

Inflation also received a lift because Canadians paid more last month for restaurants, airline tickets and mortgage interest costs.

Consumers, however, paid less in May for telephone services, natural gas and digital devices and computers.

The report also found the average of the Bank of Canada’s three measures of core inflation, which leave out more-volatile numbers like pump prices, slowed to 1.9 per cent last month.

The core readings, which are closely monitored by the central bank, averaged 2.03 per cent in April, which was the strongest pace in six years.

On retail trade, the April contraction of 1.2 per cent pulled total sales down to $49.5 billion.

The April decrease was mostly due to a 4.3 per cent decline in sales by motor vehicle and parts dealers _ with new car dealerships reporting a 5.1 per cent drop and used car lots seeing a contraction of 4.1 per cent.

Statistics Canada said April’s unusually cool temperatures and bad weather in many parts of the country may have been to blame for the overall decline.

The decrease was concentrated in the largest provinces. Sales fell 2.3 per cent in Ontario, while Quebec saw a 2.7 per cent drop.

Statistics Canada, however, did release an upward revision to its retail sales data for March. The updated reading shows a 0.8 per cent increase, compared to its preliminary 0.6 per cent estimate.

Friday’s reports will help feed the Bank of Canada’s deliberations as its governing council considers its next interest rate decision.

For inflation, the bank can use interest rate hikes as a tool to help prevent it from climbing too high. The Bank of Canada tries to keep inflation from moving outside a range of between one and three per cent.

Recent inflation readings _ including Friday’s _ have been hovering just above the two per cent mid-point of the bank’s target range.

It’s unlikely, however, to have a significant impact on upcoming rate decisions because governor Poloz has predicted inflation to stay above two per cent for all of 2018. He’s predicted inflation to average 2.3 per cent this year before settling back down to 2.1 per cent in 2019 _ in large part due to the temporary effects of higher gas prices and the introduction of minimum wage increases in some provinces.

He’s raised the trend-setting interest rate three times since last July, but he hasn’t touched the rate since January. It’s been at 1.25 per cent ever since. 

The Canadian Press

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