House prices, TSX set new records — but scotch keeps up the pace: Business Week Wrap
A busy week in business news was highlighted by some major government policy decisions, and a new record that Canada's investment community has been waiting a while to see.
On Tuesday, Ottawa formally rubber-stamped its approval for Enbridge's $5.5-billion, 1,200-kilometre Northern Gateway pipeline to take Canadian crude oil from Alberta, through the Rocky Mountains all the way to Kitimat, B.C. for exporting.
Officially, the project got the go-ahead only if it meets a lengthy list of 209 conditions, but even though the decision will be Ottawa's final say on the matter, the project is anything but a sure thing.
Native groups and environmentalists on the ground are vowing to stop the project, and opposition parties in Ottawa are quick to say it's a bad decision. Indeed, it's not even clear that the decision has the support of all members of the governing party.
Northern Gateway took a tentative step towards completion, but other major pipelines like Kinder Morgan's and TransCanada's Keystone XL still need final approval, so we'll be hearing a lot about pipelines for a long while yet.
Hot home prices
In another story that seems to never end, prepare yourself for a shock: Canadian home prices went up by a lot this month, and policymakers worry the housing market is overheated.
The latest real estate data from the Canadian Real Estate Association Monday showed the average price of a Canadian home increased by 7.1 per cent in May to $416,584.
That may be great news for anyone who already owns, but experts say over the long term, house prices that go up too far too fast is bad for every other part of the economy. There is, after all, a limit to how much people can borrow to buy a house before they start having no money for anyone else.
It's a message that some people are starting to receive. The CBC's reporter Peter Armstrong spoke this week with a couple who bought and sold a house in Vancouver to make a profit. But with prices where they are in Toronto, they've decided to stay on the sidelines and come out ahead in the long run.
New record high on TSX
House prices aren't the only things breaking records this week. On Wednesday, the TSX did something that investors have been waiting a long time for — six years, to be exact.
The TSX's benchmark index set a new all-time closing high of 15,109 on Wednesday. That's the highest the index has ever been since exactly six years earlier, on June 18, 2008, when the TSX set its old record at 15,073.
Nobody at the time though the 2008 level would be a high-water mark, but in the 10 months that followed that date, the global financial crisis happened and the TSX lost half its value. Time will tell if history repeats itself again.
High-end scotch market booming
If stock prices are feeling too rich for your tastes, CBC reporter Aaron Saltzman reported this week on another asset class that's aging well: high-end scotch.
The market for high-end whisky is booming, Saltzman found, but as any scotch drinker can tell you, not all single malts are created equal.
The right tipple can wet the whistles of investors to the tune of $30,000 or more a bottle, but you likely need to go to a scotch auction in Europe to see that type of appreciation — both as an asset, and as a libation.
Closer to home, others were salivating over the latest technical gadget as online retailing giant Amazon unveiled what it's calling the world's first "3D phone" — a smartphone armed with infrared cameras that can display images in what looks like three dimensions.
The phone's receiving mixed early reviews (critics can't help but note that every feature on the phone is tailor-made to make it easier for a consumer to point the device at any object and instantly buy it online — from Amazon of course) but in terms of service notice of their intent of becoming a major player in the smartphone space, the Amazon Fire has already achieved its main goal.