Briefing highlights
- Odds of living American Dream higher in Canada
- Global markets at a glance
- Toronto home sales slump
- Sears Canada to suspend some payments
- Trade data shows strength
Canadian Dream
Actually
living the American Dream appears to be far easier in Canada than in America.
On this week of annual celebrations in both countries, I dug out a study from a few months ago that looks at income mobility across the United States and, among other things, compares it to Canada.
What the study published by the Federal Reserve Bank of St. Louis found is that our next-door neighbours (and, in many cases, relatives) have a much harder time striving for that well-known goal than we do.
In fact, author Raj Chetty of Stanford University said in the report: "Your chances of achieving the 'American Dream' are almost two times higher if you're growing up in Canada relative to the United States."
Defining that Dream is, of course, difficult. It's a "complicated concept" that the economics professor measures this way: "The probability that a child born to parents in the bottom fifth of the income distribution makes the leap all the way to the top fifth."
While American kids born to parents in the bottom fifth have a 7.5-per-cent chance of reaching the top, the probability in Canada is 13.5 per cent, he wrote in the Fed article.
It's 9 per cent in Britain and 11.7 per cent in Denmark, added Mr. Chetty, who, with his colleagues, has studied upward mobility across the United States.
Make no mistake: Income inequality is a big issue in Canada as well. And the Stanford professor has an interesting way of looking at that:
"When some people initially see these numbers, they sometimes react by saying, 'Even in Canada, which has the highest rates of upward mobility, the rate of success doesn't look all that high. You only have a 13.5-per-cent chance of reaching the top if you start out at the bottom.'"
Yes, but "it is important to remember that, unfortunately, no matter what you do, you can't have more than 20 per cent of people in the top 20 per cent," Mr. Chetty noted.
"As such, these differences are actually quite large."
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Markets at a glance
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Toronto housing markets slumps
The Toronto area's over-the-top housing market is cooling fast, hosed down by government measures meant to stop a bubble from bursting.
Both sales and prices slumped in June for the second straight month in the wake of Ontario's tax and rent-control measures, numbers released Thursday by the Toronto Real Estate Board show.
The market is expected to cool even more, though economists wonder if the easing will be short-lived, as was the policy-induced slump in Vancouver.
Home sales in the Greater Toronto Area plunged 37.3 per cent in June from a year earlier, to 7,974.
Average prices were still well up from a year earlier, by 6.3 per cent to $793,915, though that marks a far slower pace of increase than the region has seen.
And it doesn't tell the monthly story: The average home price slipped 8.1 per cent in June from May, following May's 6-per-cent drop from April.
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More news
- Sears Canada seeks court approval for restructuring; to suspend some payments
- Canada trade data show economic strength ahead of rate decisio