Juggling Dynamite

As of January 2026, 3.1 million Canadian mortgages, or 52 percent of all outstanding, were due to renew by the end of 2027, according to the latest report from the Office of the Superintendent of Financial Institutions (OSFI).

“The near standstill in new condo activity and condo construction builds,” OSFI wrote, “is straining builders and has negative implications for the labour force they employ.”

President Donald Trump announced the United States would apply its own blockade of the Strait of Hormuz in retaliation for Iran’s de facto shutdown, which is now stretching into its seventh week. But, as Andrew Chang explains, responding this way to Iran’s control of 20 per cent of the world’s energy supply could pose several risks as the war in the Middle East escalates. Here is a direct video link.

We all hope for a speedy, lasting solution to the current Iranian conflict. An upside of the turmoil is that high fossil fuel prices intensify efforts to reduce dependence via greater fuel efficiency and substitution. In some countries, employees are being told to work from home more to reduce fuel demand. The transition to electric vehicles is also accelerating, see interest in EVs surges in Europe as fuel prices jump after Iran war:

Carwow, which links buyers with dealers in the UK, Spain and Germany, reported 20% to 30% increases in inquiries about electric cars in all three markets between February and March. In the UK, electric demand was up 23% over the month, while hybrid interest was up 19%.

“We’ve seen a shift away from internal combustion engines for quite a while now,” said Iain Read, Carwow’s content director. “But what we’ve seen with the war is it’s accelerating. Consumers are worrying about cost of living and wanting to keep their regular bills down.”

Figures last week from the Society of Motor Manufacturers and Traders (SMMT) showed that in March battery electric car registrations, based on sales several months before the break out of hostilities, totalled 86,120. This was a jump of 24.2% compared with the same month last year and a record high.

La Centrale, one of France’s largest car marketplaces, said that its searches for electric vehicles had increased by 160% between the start of March and the start of April.

No surprise then that the International Monetary Fund has downgraded its global economic outlook as the Mideast war drives an oil shock:

In its latest World Economic Outlook, published Tuesday, the IMF projects the global economy will grow 3.1 percent in 2026, 0.2 percentage points slower than its January forecast and below the 3.4 percent pace achieved in 2025. Global inflation is expected to average 4.4 percent in 2026, up from a projected 3.8 percent in the January forecast.

“Once again, the global economy is threatened with being thrown off course – this time by the outbreak of war in the Middle East at the end of February 2026,” the IMF said in the report, which was published as central bankers and finance officials from around the world gather in Washington for the biannual meeting of the IMF and World Bank.

Alongside its “reference forecast,” the IMF published two downside scenarios which see significantly worse outcomes for global GDP growth and inflation if the ceasefire between the United States, Israel and Iran breaks down and oil prices once again surge.

In the adverse scenario, where the benchmark price for a barrel of oil stays around US$100 through 2026 and US$75 in 2027, the IMF sees the global economy growing only 2.5 per cent this year, while global inflation would hit 5.4 per cent. In a severe scenario, where oil costs US$110 a barrel in 2026 and US$125 in 2027, global growth would slow to around 2 per cent. “This would mean a close call for a global recession,” the IMF said.

Although Canada is a major oil exporter, trade uncertainty and weakness in the domestic economy are ongoing headwinds that the IMF predicts will reduce Canada’s GDP growth to 1.5% in 2026 from 1.7% in 2025.

Imagine how much further ahead we would be if the resources being blown up in the Middle East were directed towards making us more resource-efficient. Nevertheless, high fuel costs are ultimately a cure for high costs, so the smarter energy evolution will proceed either way.

US Consumer sentiment sank about 11% this month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago.

Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall. One-year expected business conditions plunged about 20% and are now 6% below last April.

It seems gaslighting by stock market cheerleaders can’t fool all of the people all of the time. Assessments of personal finances declined about 11%, with consumers expressing a substantial increase in concerns over high prices and weaker asset values.

Buying conditions for durables and vehicles worsened again, driven by high prices. (source: U of M), Also see US Consumer Sentiment Drops to Record Low on Price Concerns.

The preliminary April sentiment index slumped to 47.6 from 53.3 in March (top left below), while inflation expectations rose, current economic conditions hit a record low, and the current financial situation index hit the lowest since March 2009.

Yesterday, the U.S. Bureau of Economic Analysis reduced its third estimate of real U.S. gross domestic product (GDP) for the final quarter of 2025 to an annualized rate of 0.5 percent, down from 1.4% in the advance report and 0.7% in the second estimate.

At the end of February, StatsCan said Canada’s economy contracted .60% annualized in the final quarter of 2025. We get the Q1 GDP growth estimate on May 29th.

Today, StatsCan announced that the economy added a modest 14,000 jobs in March, clawing back a fraction of the 109,000 job losses seen during the first two months of the year (shown below).In the World Happiness Report 2026 Canada ranked 25th out of 147 countries– its worst-ever showing in the 14 years the report has been published. A decade ago, Canada ranked 6th, in the same league as Scandinavian countries.

The situation is particularly dire among young Canadians — when only under-25s are counted, Canada falls to 71st place. Young people were once the happiest Canadian cohort; now they are the most miserable. Compared with 136 countries, Canada’s 10-year drop in youth life satisfaction ranks among the largest in the world. (Source: The Globe and Mail)

In the Ipsos Global Happiness Survey 2026, financial situation was cited as the number one cause of unhappiness, cited by 57% of respondents. (Ipsos)

The common thread across all surveys is a country that is holding together on the surface but facing real and deepening unhappiness, particularly among younger generations, driven by unaffordable housing, financial insecurity, and social factors, including social media use.

Stocks started the day on a positive note, but are falling off again in the early afternoon. Only high-frequency traders and those acting on inside information can trade with confidence. Everyone else has good reason to be cautious, at least until asset prices come down enough to restore some margin of safety.

Remember, when it’s time to buy, most won’t want to, and few will have meaningful cash to deploy.