Currently, there are great challenges surrounding the province of Ontario and Toronto as there is wide speculation of an economic crisis from the United States boiling over into Canada. However, Finance Minister Dwight Duncan is banking on growth in the financial services industry to help Ontario weather any looming economic storm. The center of this is in Toronto where it helped generate more than 50,000 new jobs since 2003. The Greater Toronto Area is home to 28 per cent of Canada’s financial services sector. The Greater Toronto Area is home to 28 per cent of Canada’s financial services sector and ranks 15th in the world as  a financial center.

The Toronto Financial Cluster will be the driving force of this ever growing econoic development as it will help off-set the possible North American recession that is currently looming.

Related links:

http://www.thestar.com/Business/article/356902

 

More oil & gas companies are listed on Toronto Stock Exchange (TSX) and TSX Venture Exchange than any other exchange in the world. At the end of September 2007, there were 423 oil & gas companies with a total market capitalization of $525.2 billion listed on Toronto Stock Exchange and TSX Venture Exchange. Oil and Gas companies are continuing to raise equity for the exchange un an unprecedented level. Oil and Gas are the world’s most lucrative commodities as their scarce supply are needed on a now exponential basis. The Toronto financial clusters as well as clusters all over the world (New York, Dubai…) have been focusing their attention on this market because of the realization that the scarce supply can not meet the demands of the future, resulting in imminent  price increases (per barrel). Institutions and investors have been profiting from oil since the crisis in the 1970’s, and will continue to profit a its demand continues to grow in developing countries (China and India).

 

Related links:  http://www.topix.com/ca/toronto-on/2008/03/stock-markets-negative-on-us-economy-worries-tsx-hit-by-falling-oil-metals

 

Gold stock has recently surged above the $1000.00 mark for the first time in its history and although it was short lived, it is predicted that over time it will reach record breaking levels somewhere in the region of $1500 an ounce. Toronto securities clusters have been promoting gold stock and bullion now for some time as a hede against the current economic status of North America (stagnating growth) as well as the poor performance of the American dollar. The popularity of gold has resulted in its incredible growth rate in the past 9 months. Financial clusters all over the world are now profiting from gold investments being made on a very large scale.

Investors are seeking a haven and refuge from the climbing inflation in the North American economy as economic growth has been stagnating while the inflation rate has been steadily growing. The result of these two factors results in a situation called “stagflation”. Gold can be utilized as a tool that will inversely grow from this situation.

Related links:

http://articles.moneycentral.msn.com/Investing/CompanyFocus/5ReasonsGoldIsHeadedTo1500Dollars.aspx

http://articles.moneycentral.msn.com/Investing/CompanyFocus/WhyGoldsGoingStraightTo1000Dollars.aspx

Standard and Poors rating services has realised the postive performace of the three main financial pillars found in the  Toronto financial cluster, them being banking, insurance and securities. Standard & Poor’s Ratings Services raised its outlook on the City of Toronto to positive from stable to reflect its robust economic performance, improved financial flexibility, and modest debt burden, and affirmed its ‘AA’ long-term issuer credit and senior unsecured debt ratings on the city.

 The positive outlook reflects Standard & Poor’s expectation that the city will implement two new taxes and that the new tax revenues, coupled with increasing grants from senior governments, will significantly improve operating and after-capital results.

 Toronto’s financial cluster ranks among the world’s elite in terms of performanec and and growth expectations. It is still not quite on a comaparable level to New York and Chicago (the two largets financial clusters in the United States) but is predicted to grow at much higher rate than these two due to the fact that it is much more affordable for new financial institututions to start-up and establish themselves in Toronto than anywhere else in the world, including New York and Chicago.

According to Standard and Poor analysts, Debt issuance should not exceed what the current capital plan forecasts, the rating agency cautioned. “We also expect that the local economy will continue to produce solid results and positive taxable assessment base growth. The future for the Toronto financial  cluster infrastructure looks very positive as it will grow and become a larger player in the world of both banking and securities, while also providing the young adults of the country with a multitude of job opportunities.

Links: http://www.cnbc.com/id/23605649/

http://www.theglobeandmail.com/servlet/story/RTGAM.20070413.wmarkets0413/BNStory/Business/home

Toronto ranks as number one among all other international cities in terms of lowest average operating costs. This provides great incentives for financial clusters to further develop and expand their concentration. The chart below indicates just how much cheaper it is for financial service compnaies to start up in Toronto in comparison to other top international cities.

 Financial Services – Total Annual Operating Costs Compared:Toronto vs. Select International Cities

City	Total Operating Costs
Toronto	9,273
Sydney	9,376
Chicago	9,559
New York	10,312
London	13,791
Frankfurt	14,361
Tokyo (Yokohama)	14,903

Banks in particular are key contibutors to this statistic as they bring in an abundance of revenue to the city. Here is a list of the top banks in Toronto:

Top 5 Toronto-based Banks

Company	2004 Revenues ($000s)
RBC Financial Group	25,204,000
CIBC	16,705,000
Scotiabank	16,497,000
TD Bank Financial Group	16,015,000
BMO Financial Group	13,208,000

Other interested statistics that further explains the important significance of the financial cluster in Toronto is :

Home-base for the TSX Group – the third-largest stock exchange in North American and seventh largest in the world based on market capitalization – is the world leader in mining sector listings.

The centre for over 10 per cent of all Canadian economic activity with a population of 2.6 million and $123 billion.

Links:

http://www.toronto.ca/invest-in-toronto/finance.htm

 

The concept of a common North American currency has been speculated for several years now, but analysts say that the probability of the Amero being introduced is much higher now than ever before. Since the inception of the Euro, a european currency, it has experienced much success and has exceeded performance expectations. It is one of the leading currencies in the world now in terms of value. Canada, the United States and Mexico are said to soon follow suite as they look to further enhance and facilitate trading transactions with their current NAFTA policy agreement.

The clusters that will be most effected by this Amero currency would be the financial centers in these three countries; that would include Toronto and New York specifically. The Amero is vastly promoted among pro-capitalist economist’s as it will consolidate North America’s economic position in the world.

The study says Canada’s cultural sovereignty and political independence would not be affected by monetary union, arguing that monetary union would not inhibit Canada’s ability to pursue its own tax, spending, social, regulatory and foreign policies.

Related Links: http://www.cbc.ca/money/story/1999/10/05/commoncurrency991005.html

http://www.canadafreepress.com/2006/cover121406.htm

The Toronto Service Alliance is extremely motivated and satisfied upon the news that the Ontario government will invest $4 million to create a Centre of Excellence for Education in Financial Services. More than 210,000 people are directly employed by financial services
companies in the Toronto region, and many more business professionals – in
accounting, law and information & communications technology – are employed to
support the sector. Toronto is the third largest financial services centre in
North America, and continues to attract international financial institutions
to establish operations here. The investment will further enhance the Toronto financial cluster as it will be used to generate and promote the quality of its financial services workforce; in international rankings Toronto is highly regarded has being part of the world’s elite financial cities.

The Centre of Excellence will focus on attracting and developing the best young talent available .

Links: http://www.newswire.ca/en/releases/archive/March2008/26/c7398.html

Canadian credit card holders are now limited to purchasing any merchandise while vacationing in Cuba. And it’s all because Regina-based CUETS Financial Ltd., the largest provider of MasterCards to Canadian credit unions, was sold to the Bank of America last October. The North Carolina–based bank processes client purchases south of the 49th parallel, so it is governed by U.S. law prohibiting transactions from Cuba and other sanctioned countries, such as Iran, North Korea and Sudan. This is a significant problem for Canadians and specifically for mastercard holders because they must find other means of completing their desired transaction.

Visa ranks as number one in the world as well as in Canada as the credit card most used, while Mastcard is a distant second in terms of market share. Mastercard’s share will be further decreased in Canada because of the fact that Cuba is Canada’s second most likely vacation destination spot, just behind Cuba. Betty Riess, a spokesperson for the Bank of America, won’t speculate on how Fidel Castro’s mid-February resignation might impact the use of CUETS-issued MasterCards in Cuba in the future. And she says that CUETS doesn’t release how many credit card holders it has in Canada. (In fact, more than five million Canadians belong to a credit union.

As a result Visa directly benefits from this as it is issued in Canada through a intermediary Canadian credit union.

Related Links: http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20080312_198707_198707

According to Caterpillar Chairman and CEO Jim Owens, the U.S. economy is probably in a recession and is unlikely to start recovering until late this year. The American Economyis currently  dogged by mortgage foreclosures, a steep drop-off in residential construction and financial market turmoil triggered by the subprime loan crisis. As a direct result of this, Caterpillar and other construction equipment comapanies are looking to further estblish themselves in Asian and South American markets, where there is significantly more development undertakings in progress and planned for the future. Caterpillar is eager to expand in Asia, where it trails local competitors such as Komatsu, and as a slowdown in the U.S. economy dampens the outlook for construction equipment demand in its home market.

The North American market will adversely suffer from this de-emphasis as capital generated from such large construction projects will stagnate and negatively affect the economy. The housing crisis has been largely blamed for the recent downturn in the North American financial markets, in particular The Dow Jones and The Toronto Stock Exchange. Although the TSX has not felt the full impact of the housing crisis in the United States, analysts predict that the recession will spread throughout North America, due to the fact that the United States is Canada’s largest trading partner. The United States has a reduced capacity to now purchase material from Canada and must now also increase its prices due to infaltion in the American economy.

Related links: http://www.cnbc.com/id/23790891

http://www.cnbc.com/id/23806219

http://www.cnbc.com/id/23728596