Chief Economist Speaks to Mortgage Industry

On Friday, September 11, 2009, I was a delegate at the Alberta Mortgage Broker's Association's (AMBA) Annual Conference, held in Calgary.  A much more subdued affair than years past, there was a general time of reflection going on, as many lenders have pulled out of Canada, gone bankrupt or have decided to not do mortgages anymore.  Many mortgage professionals have not been able to continue to work in this industry and have had to return to former professions or new work to make ends meet.

Keeping this in mind, there was an air of skepticism when Mr. Benjamin Tal, Chief Economist for CIBC, stated that "Canada can expect to see a modest two per cent economic growth in 2010 with Alberta’s economy growing by 2.5 per cent followed by four per cent growth in 2011."  He was adamant that the worst is behind us, and that we are slowly but surely going to ooze out of this recession.  He stated further along, "This recession is over.  No question about it.  We will see real GDP growth in the third quarter of this year.

I had the good fortune of listening to Mr. Tal at a different venue in November last year, and that time he was quite adamant that we had between 6-9 months of serious downturn, with a slow, up and down recovery.  Well, so far he is correct.  At that time he was very certain that thousands of jobs would be lost, that the drastic measures the US had taken would need time to take hold, and that as the world is inexorably linked together now, the impact that China, India, Russian and Brazil had on our own tiny economy would be an unknown entity in the entire affair.

The bottom line?  Mr. Tal tells us to expect slow but steady growth, and as Asia's appetite for commodities increases, so will Canada's (and especially Alberta's) fortunes will increase.