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Sunshine Coast Credit Union Coastlines VOLUME 16 NOVEMBER / DECEMBER 2004 OFFICIAL PUBLICATION OF S U N S H I N E C O A S T NUMBER 2 C R E D I T U N I O N Global and local economies impacted by recent economic events. Recent economic events make for interesting times, far too interesting for those who want stability and predictability. Crude oil over US $50 per barrel and the Loonie over .80 US cents are significant developments that Helmut Pastrick Chief Economist, Credit Union have negative impacts Central of British Columbia on the Canadian and BC economies. The global economy has to absorb those higher oil prices and it is showing definite signs of slowing from its robust pace in the first half of the year. What does all this mean for the local housing market and its three year long housing market expansion and for interest rates, which are being raised by the Bank of Canada? The jump in energy prices acts like a tax on the economy and shifts income away from spending on other goods and services. In short, it cuts into economic growth, unless you are a net oil exporter like Alberta. Estimates by the International Energy Agency put economic growth lower by 0.5 percentage points per year for every sustained US $10 increase in oil. When you consider that oil is up over US $20 in the past year, the negative impact will be noticeable. The Loonie’s sharp run-up since mid-year to over .80 US cents has a similar impact on the Canadian economy though it takes more time for its effects to be fully absorbed than higher oil prices. The net effect is slower export growth, with a possible outright decline if volumes do not rise enough, and slower overall economic growth. The Bank of Canada will respond to slower growth ahead by not raising interest rates in the first half of 2005. In its last Monetary Policy Report, it acknowledged these risks to growth and lowered its growth forecast for 2005. Nonetheless, the bank will very likely raise its key policy rate once again at its December 7 meeting. Why? Unless there is some significant negative economic news before then, the Bank estimates that the economy is at or near full capacity and needs to raise rates from abnormally low levels. Also, the Bank has a history of erring on the side of caution since it can always lower rates later if needed. I reckon the onequarter percentage point increase on December 7th will be the last for several months as slower economic growth materializes. Since long-term rates matter more for capital financing and investment than short-term rates like prime, their movements are equally important. Longterm rates are not moving much higher, and in fact, have come down recently in anticipation of slower growth ahead. Low long-term rates are good for mortgage borrowers and for the continuation of this housing expansion. Continued on page 2 IN THIS ISSUE: Helmut Pastrick’s ECONOMIC REPORT, p.1 - 2 Meet our newest Commercial Lender, p.3 Bursary Recipients, p.2 SunCu RRSP Conversion Notice, p.2 SHARING OUR SUCCESS, p.4 what you could do with a PERSONAL LOAN @ PRIME OFFER EXPIRES DECEMBER 24, 2004. CONDITIONS APPLY. from Sunshine Coast Credit Union ® Coastlines Global and local economies.... Continued from page 1 Housing market sales slowed in recent months when mortgage rates went up by one percentage point in the spring. Rates are down from those levels, and not likely to rise anytime soon, so housing sales should begin to firm. In fact, September sales firmed over August sales and this appears to be a trend in the coming months. Housing prices, determined by market demand and supply, will continue to rise but at a lesser rate than in the past year. NOVEMBER/DECEMBER 2004 More supply from the existing housing stock continues to arrive on the market and new construction is also adding to available supply. That, in combination with a price squeeze on demand will result in less intense market conditions and lesser price increases going forward. The housing market is not in a price bubble even with prices up over 30% in the past three years. Evidence reveals that speculation is not rampant or a significant part of this market. As a result, the market is driven by the sound fundamentals of low rates, pent- These fundamentals will continue to play out in the coming months, and barring a major geo-political shock sending confidence plunging or oil prices soaring even higher, housing will remain one of the strengths of this economy. Helmut Pastrick Chief Economist, Credit Union Central of British Columbia 2004 Bursary Recipients If you’re 69 this year, it’s time to act on your RRSPs. Amanda Civitareale -Pender Harbour Grad An important message from Barbara Wells, CFP, Investment Advisor SunCu Financial Services Inc., in Gibsons Tel. 604-886-8533 Amanda Civitareale moved to Burnaby in early October. She’s currently working full time in a restaurant while she completes an English course at Vancouver Community College. “In the New Year I will begin my studies in the Pathology Attendant Program at VCC for 2 to 3 years,” writes Amanda. Karin Mjanes - Chatelech Grad (no photo) Karin Mjanes has entered the Faculty of Social Sciences at the University of Victoria. Karin writes, “As the recipient of your generous bursary, I would like to thank Sunshine Coast Credit Union for its generosity and commitment to the community.” Colin Nebocat - Elphinstone Grad Colin Nebocat moved to Vancouver in late September to study Graphic Design at the Art Institute of Vancouver. After graduating, Colin plans to attend Langara College for further studies toward his goal of becoming a professional photographer. “I am very pleased to have been chosen for this award and am appreciative of your support,” writes Colin. If you turn 69 this year and have Registered Retirement Savings Plans (RRSPs), there is action that must be taken prior to the year end. There are three options available to you and depending on an individual‘s financial situation, a combination of the three options could be selected. 1) Cash in the RRSP – usually not recommended as the total dollar value of the RRSP will be added to the individual’s taxable income for the year 2004 and will most likely create a large tax liability. 2) Convert the RRSP to an annuity – with the current low interest rate environment many people are discounting this option. 3) Convert the RRSP to a Registered Retirement Income Fund (RRIF) – this option allows a person to bring all of their RRSPs into one RRIF. There are 2 main types of RRIFs: an individual plan where only one company‘s products are purchased and a self-directed plan that can hold products of many companies including bonds & securities. In selecting the right asset mix for a RRIF, consideration is given to whether the RRIF is an individual plan or a self directed plan, and to each person‘s current asset mix of other financial assets (i.e. term deposits, mutual funds, bonds, stocks, etc.). Once the RRSP is converted you are required to withdraw an annual minimum payment from the RRIF in the year after the conversion and each subsequent year. This payment is added to your total income for the tax year in which it is taken. A person can elect to take a dollar amount higher than the annual minimum payment; however caution is recommended on taking too much money out of the RRIF as you may outlive the RRIF. This article was prepared by Barbara Wells, CFP, who is a registered Investment Advisor with Dundee Securities Corporation, a Dundee Wealth Management company. This is not an official publication of Dundee Securities and the views (including any recommendations) expressed in this article are those of the author alone, and have not been approved by, and are not necessarily those of Dundee Securities Corporation. Insurance products provided as a life agent via multiple insurance carriers. Securities sold through: Our three grads were awarded $750 each toward their post secondary educations. WE WISH THEM EVERY SUCCESS! 2 up demand, and consumer confidence. CONSULTATION BY APPOINTMENT SunCu LIFE INSURANCE ANNUITIES Financial Services Inc. INVESTMENTS A wholly-owned subsidiary of Sunshine Coast Credit Union Coastlines NOVEMBER/DECEMBER 2004 STAFF NEWS WELCOME the power to realize your dreams Mary-Ann Thiessen ACUIC Direct: 604-886-4397 Sunshine Coast Credit Union's newest Commercial / Small Business Lender joined the Gibsons Branch staff in July 2004. Mary-Ann Thiessen grew up in Winnipeg‘s Fort Garry area and obtained her Business Administration diploma from Red River Community College. Her last 6 years in Manitoba were spent working at South Interlake Credit Union in Pine Falls. While there, she completed many courses including financial management, marketing management and commercial lending, resulting in her obtaining her Associates Designation through the Credit Union Institute of Canada. She also completed the Canadian Securities course in 2000. “My move to the Sunshine Coast has been a dream come true,” says MaryAnn. ...renovate your kitchen...get a new car...buy a vacation home ...go travelling... pay for your child’s tuition... consolidate your bill payments... invest...live your dreams One mortgage, so many options ! a mortgage that takes you there... $ “I have always enjoyed the financial analysis of statements, looking at business plans and talking with people about their entrepreneurial endeavours. I look forward to helping our commercial members with their financial and borrowing needs." Mary-Ann, her husband and their three children, currently reside in Gibsons. – options that adapt to your family’s changing needs. To learn how the CreditMaster® mortgage can work for you, come in and talk to one of our mortgage specialists. Sunshine Coast Credit Union Gibsons 604-886-8121 Pender Harbour 604-883-9531 Sechelt 604-885-3255 www.sunshineccu.com Special Fall Term Campaign a Success! Gibsons Branch Staff celebrated the spirit of our SPECIAL FALL TERM DEPOSIT campaign, by decorating the branch with baskets of freshly picked fruits and vegetables that complimented our colourful autumn leaves theme so well. During the campaign, which ran from October 1st through November 15th, our 3 branches recorded a total of over $28.5 million invested into the specially featured one and three year term products. 3 Coastlines The Credit Union Deposit Insurance Corporation, a government corporation, guarantees deposits up to $100,000 per “separate deposit.*” NOVEMBER/DECEMBER 2004 SHARING OUR SUCCESS with Members and Community Sunshine Coast Credit Union marks another year of commitment to both its members and the community. * As defined by regulation Sunshine Coast Credit Union Gibsons Branch Dale Eichar, C.E.O. P.O. Box 715, 985 Gibsons Way Gibsons, B.C. V0N 1V0 Telephone: 604-886-8121 Fax: 604-886-4831 Toll free 1-800-734-6204 Branch Manager: Diane Wright [email protected] He reports that this year Sunshine Coast Credit Union’s assets grew by $26 million in the first three quarters alone. Loans grew by $20 million during the same period, and deposits grew by $25 million. “A large portion of our loan growth can be attributed to the housing market on the Sunshine Coast, which has been extremely active during the year,” says Eichar. Continued growth saw the credit union’s assets at $228 million as of September 30th. Pender Harbour Branch P.O. Box 28, 12887 Madeira Park Road Madeira Park, B.C. V0N 2H0 Telephone: 604-883-9531 Fax: 604-883-9475 Toll free 1-866-883-9531 Branch Manager: Bonnie Rivers [email protected] Rick Cooney, Manager Operations and Development Sechelt Branch P.O. Box 375, 5710 Teredo Street Sechelt, B.C. V0N 3A0 Telephone: 604-885-3255 Fax: 604-885-3278 Toll free 1-800-320-4588 Branch Manager: Mark Hussey [email protected] BRANCH HOURS Tuesday to Thursday: 10 am - 5 pm Friday: 10 am - 6 pm Saturday: 10 am - 2 pm Diane Wright, Manager Gibsons Branch ABM available at all branches 24 hours a day. MemberLink TELEBANKING (604) 740-0999 WEBSITE / INTERNET BANKING www.sunshineccu.com Administration Office P.O. Box 799, 985 Gibsons Way Gibsons, B.C. V0N 1V0 Telephone: 604-886-2122 Fax: 604-886-0797 Toll free 1-866-886-2132 [email protected] Bonnie Rivers, Manager Pender Harbour Branch OFFICE HOURS Monday to Friday: 8:30 am - 5:00 pm C.E.O. Dale Eichar Manager, Operations and Development Rick Cooney 2004 BOARD OF DIRECTORS Tim Anderson, Chairperson Brian Beecham, 1st Vice Chairperson Karen Archer, 2nd Vice Chairperson Stan Anderson Bernard Bennett Harris Cole Rick Gamache Elfie Hofmann Margaret Penney Mark Hussey, Manager Sechelt Branch Barbara Wells, C.F.P. SunCu Financial Services Inc. Sunshine Coast Credit Union ® ® Registered trademarks, used under license. MemberDirect® is owned by Credit Union Central of Canada 4 Serving the Coast for over 60 years, Sunshine Coast Credit has proven to be the financial institution of choice for individuals and businesses – committed to leadership, development, and social initiatives, as well as giving back to both credit union members and the community. “This is directly related to the credit union’s success,” says Dale Eichar, Chief Executive Officer. Successful growth has meant giving some of our profits back to members. The credit union gave back $417,000 in patronage dividends and interest bonuses last year. The Board of Directors also authorized the issue of another $1 million in Class D Voluntary Equity Shares early in 2004 with over $500,000 having been purchased to date by members. Sunshine Coast Credit Union’s Class D Equity Share dividends, in recent years, have paid well above prevailing interest rates. “This product has allowed members to share even further in the credit union’s success,” says Eichar. Also sharing in our success are the Coast’s organizations and charities. The credit union is a sponsor of Success by Six, a partnership between the Savings and Credit Unions of British Columbia, the United Way and the Ministry of Children and Family Development, which identifies the gaps in early childhood development; the Community Foundation Endowment which aids groups, individuals, or businesses; a main sponsor of the Pender Harbour Jazz Festival; and a major supporter of the Sunshine Coast Salmonid Enhancement Society as well as many other non-profit and charitable causes. We were also one of the main sponsors of the recent Sunshine Coast Opportunity Summit Conference where over 250 people turned out to hear Premier Gordon Campbell and John Furlong, CEO of the Olympic Committee, speak. Eichar says “The credit union has donated over $63,000 in charitable donations so far this year, ranging from arts and culture, to sports and community events.” Sunshine Coast Credit Union is a major employer on the Coast with approximately 100 employees. “Management, staff and directors are involved in numerous economic development activities and organizations locally,” says Eichar. Our membership now stands at over 13,700. Province wide, Credit Union Central of British Columbia has reported that credit unions employ more than 7,000 British Columbians in 342 branches in 135 communities. B.C.’s credit unions have more than $30 billion in assets overall and nearly 1.5 million members. Looking to the future, Sunshine Coast Credit Union will continue its integral financial role in the community, and will continue to enhance its financial services. ”We are working on plans to update our facilities, expand our commercial lending services and we are upgrading our technology to give members a more robust on-line banking service and expanded ATM functionality, as well as improved merchant card services and point of sale,“ says Eichar. ”There‘s a bright future ahead for residents on the Coast, and we will continue to do everything we can to help it grow while standing behind the credit union umbrella of People Before Profits®.”