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Assessing whether 2020 will bring a Canadian property tumble: Don Pittis – CBC.ca

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According to fresh data, the Canadian real estate market is booming again.

In a world where interest on your savings account is in the two-per-cent range and secure investments such as locked-in guaranteed investment certificates aren’t paying a whole lot more, houses are once again feeling like the best place for ordinary Canadians to keep their money.

The question being asked by many young Canadians, who are considering buying their first home and many boomers at the other end wondering when to sell, is whether those house price increases will continue in 2020, or will it all come crashing down.

Most commentators from the real estate industry have been upbeat in their outlooks for the coming year.

While not the 30 per cent increments Vancouver saw at the peak of the boom, new figures from the Canadian Real Estate Association (CREA) out on Monday suggest that if you bought a house in November a year ago, that house was worth 8.4 per cent more in November this year.

As a return on a safe investment in the current market, that’s astounding. And the tax advantage makes it even better.

Covering your assets

For most Canadians who only own one home, Canadian tax law means that the entire eight-odd per cent increase — about $40,000 on CREA’s average priced home and $80,000 on the average million-dollar homes of Toronto and Vancouver — is entirely income-tax free.

Not only that, but the CREA prediction for next year shows prices will rise another, tax free, 6.2 per cent. What is not to like about such staggering returns?

Well, as usual, if making-money were easy, we’d all be multimillionaires. Details matter. And for another thing, if you want to cover your assets, you can’t just look at the bright side.

Is now the time to rent or buy? One expert Hilliard MacBeth is still advising young people to avoid the condo market where he thinks prices have become detached from the land value they represent (Don Pittis/CBC)

Over the longer term, Canadian property prices are in all likelihood a safe bet. While prices dip periodically, they almost always recover again. But that can take a decade or more.

In fact, a closer look at that 8.4 per cent rise in prices, according to CREA economist Gregory Klump, tells us that until just the last few months prices have not been doing so well. Effectively, the big percentage increase is based on comparing a high point in November this year with a low point in November a year ago.

Overall, comparing all of 2018 to all of 2019 shows prices are only expected to rise 2.3 per cent by the time this year is over. So that is a detail to remind you that it depends on exactly when you buy and when you sell. And not only when,  but where.

“There was an almost even split between the number of local markets where activity rose and those where it declined,” said the CREA report. “Higher sales across much of British Columbia and in the Greater Toronto Area offset a decline in activity in Calgary.”

Too much euphoria? 

If you are ever worried that you are feeling a bit too euphoric about the state of the property market and your enthusiasm needs damping down, one useful option is to talk to Hilliard MacBeth, or better yet read his book When the Bubble Bursts.

There aren’t a lot of people who say the Canadian housing market remains overvalued and is heading for an inevitable fall, but MacBeth is not the only one. Swiss bankers at UBS recently put out their latest Global Real Estate Bubble Index, and Toronto had the honour of second place between Munich and Hong Kong. Vancouver came in at No. 6.

“The people who are really suffering in the residential side are the new home builders who have built too much product on the outskirts of Edmonton and Calgary,” said MacBeth, on the phone from Edmonton at the end of last week. “I think the term is ‘immediate availability’ — code for ‘we’re desperate.'”

Canadian Real Estate Association figures are based on resale homes, but in Calgary and Edmonton new home builders who have too much product in the pipeline are really suffering, MacBeth said. (CBC)

He says there are bargains to be had, so long as you don’t think prices are going to go down further yet.

As MacBeth points out, under priced new-builds are not included in the CREA numbers, nor are mortgage defaults, which are often sold quietly by the foreclosing banks. He said that houses withdrawn from the market because the seller is dissatisfied by offer prices also don’t make it into the data.

In some ways, MacBeth says the property market in Alberta and Saskatchewan — currently suffering from a continued downturn in the oil and gas sector — represents a foretaste of what could happen if the wider Canadian economy were to go into recession.

It is something Stephen Poloz in his Bank of Canada year-end speech and news conference last week said he had taken into account. While the central bank sees the large pile of mortgage debt accumulated by Canadians as sustainable, it remains the principal vulnerability for Canada and its financial system.

‘A nasty shock’

“If a nasty shock came along and unemployment in Canada rose significantly … the effect of that shock would be magnified,” Poloz told business reporters. “So we would have a bigger and more prolonged recession than if that debt was not there.”

Poloz was in no way predicting a global or Canadian economy shock this coming year, but he said Bank of Canada modelling shows that even in the worst case, the country’s banking system would remain sound.

Having studied the central bank’s predictive scenarios, MacBeth is not so sure. But of course gloom, especially in the property market, is one of his specialities.

He is still advising young people to avoid the condo market where he thinks prices have become detached from the land value they represent. He is advising people to rent, and notes that construction companies working on purpose-built rental properties will continue to do well, selling them to pension funds for the reliable stream of future income they represent.

“So will 2020 be the year of recession in Canada? I suspect it will, and if that’s the case, then it will be a particularly challenging time for Canadians because we’ve never gone into recession with private-sector debt levels — both corporate and household — at such high levels,” said MacBeth.

That may be the minority view, but now you’ve been inoculated. It’s safe to go back and read some real estate optimism about how property has nowhere to go but up in 2020.

Follow Don on Twitter @don_pittis

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Senegalese diplomat arrested by Quebec police owed former landlord more than $45,000

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MONTREAL — The detention and alleged beating of a Senegalese diplomat by Quebec police last week occurred while a bailiff was attempting to seize property at her residence in connection with a court judgment against her.

Quebec’s rental board in June ordered Oumou Kalsoum Sall to pay a former landlord more than $45,000 for damage to a furnished home she occupied from Nov. 1, 2018, to Oct. 31, 2020. The tribunal found that she caused flooding that led to structural damage and that her use of the property forced its owner, Michel Lemay, to replace most of his furniture.

“The pictures speak for themselves,” Anne A. Laverdure, an administrative judge, wrote in her ruling. “The furniture is full of cockroaches. Pieces of furniture are scratched and scuffed. Some are missing. Everything is dirty.”

Laverdure awarded Lemay almost $13,500 for structural damage to the home and $23,000 to replace furniture. The administrative judge awarded Lemay another several thousand dollars for other damages.

Court records show that the debt was not paid and that a bailiff went to Kalsoum Sall’s residence in Gatineau, Que., across the river from Ottawa, on Aug. 2 to seize property in connection with the debt.

Kalsoum Sall is a first counsellor at the embassy of the Republic of Senegal in Ottawa, according to a federal government database of foreign delegations. The Senegalese Ministry of Foreign Affairs has claimed that the diplomat had to be hospitalized after being handcuffed and beaten by police.

Quebec’s independent police watchdog said Monday it opened an investigation into the incident. Gatineau police have said that they were called to the residence to assist a bailiff and that they arrested a woman with diplomatic status after she allegedly hit a police officer in the face, adding that she was tackled to the ground after allegedly biting another officer.

Global Affairs Canada has described the incident as “unacceptable,” adding that the 1961 Vienna Convention on Diplomatic Relations — which Canada has signed — gives diplomats immunity from any form of detention or arrest.

Gilles Rivard, a former Canadian ambassador to the United Nations and to Haiti, said that while he doesn’t know exactly what happened during the Aug. 2 incident, some diplomats can be aggressive because they believe there will be no consequences for their actions.

“They can be aggressive because they know that they have immunity, so they believe that they can do whatever they want,” he said in an interview Tuesday.

While police are not officially supposed to arrest a diplomat, Rivard said, it’s possible a police officer might handcuff an individual while they wait to confirm the person’s diplomatic status.

“But if after that, that person shows that she is a diplomat, or he is a diplomat, normally they have to be released,” he said.

In 2001, a Russian diplomat struck and killed a woman while driving in Ottawa. The Canadian government asked Russia to waive the diplomat’s immunity so he could be charged in Canada, but Russia refused, Rivard said, adding that Canada’s only option in that case was to expel the diplomat.

Rivard said he doesn’t think the Aug. 2 incident is serious enough to damage Canada’s very good relationship with Senegal.

The Senegalese Embassy in Ottawa did not immediately respond to an emailed request for comment Tuesday afternoon. A call to the embassy was not answered.

This report by The Canadian Press was first published Aug. 9, 2022.

 

Jacob Serebrin, The Canadian Press

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Alberta awards prize to essay that argues women should pick babies over careers

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EDMONTON — Alberta has awarded a prize to an essayist who argues the sexes are not equal and that women should pick babies over careers to avoid the province having to import more foreigners and risk “cultural suicide.”

The United Conservative government removed the essay from its legislature website Tuesday following an outcry of condemnation.

Jackie Armstrong-Homeniuk — Alberta’s associate minister for the Status of Women and also the contest organizer and one of the judges — also distanced herself from the entire affair.

“The essay contest was intended to reflect a broad range of opinions from young Alberta women on what democracy means for them,” Armstrong-Homeniuk said in a statement.

“While the essay in question certainly does not represent the views of all women, myself included, the essay in question should not have been chosen.”

Armstrong-Homeniuk was not made available for an interview.

Her office declined to say who else sat on the judging committee and how and why the essay was chosen.

The contest advertised that essays would be judged by Armstrong-Homeniuk and other legislature members but did not specify names.

Armstrong-Homeniuk was appointed to the cabinet post in June but has been the face of the contest since it was introduced in February.

The “Her Vision Inspires” contest challenged women ages 17 to 25 to describe their ideas for a better Alberta.

The top two essays suggest ways to get more women, and the public in general, involved in public life.

The third-place winner — identified only as S. Silver — won a $200 prize to be spent at the legislature gift shop.

Silver’s essay posits that the governing mission of humanity is to reproduce itself, but that Alberta has lost its way to instead pursue “selfish and hedonistic goals.”

The solution, she argues, is to acknowledge that “women are not exactly equal to men.”

Society, she writes, should celebrate and embrace the birthing role of women and stop pushing them to put off prime procreation years while they “break into careers that men traditionally dominate.”

She says the idea that Alberta can put off procreation and instead “import foreigners to replace ourselves … is a sickly mentality that amounts to a drive for cultural suicide.”

Opposition NDP critic Rakhi Pancholi said Armstrong-Homeniuk owes the public a full explanation of how this view was not condemned but honoured and rewarded.

“Sexism, racism, hate — this is not what any government should be celebrating, yet increasingly these views are becoming acceptable in this UCP government, and even now applauded,” Pancholi told reporters.

Pancholi zeroed in on the “cultural suicide” reference, likening it to 1930s Nazi Germany urging women to be baby vessels to propagate the Aryan race.

“This is an absolutely reprehensible claim. It is a nod to the racist replacement theory that drives white nationalist hate,” she said.

The contest was run through the legislative assembly office, which is headed up by Speaker Nathan Cooper.

Cooper’s office, in a statement, said the contest was conceived and administered by Armstrong-Homeniuk in her role as regional chair of the Commonwealth Women’s Parliamentarians group.

“Neither the Speaker’s office nor the legislative assembly office were involved with the selection of the essays in any capacity, including who was on the MLA panel judging the contest,” said the statement.

“As soon as the content of the third-place winner was brought to the Speaker’s attention, he immediately made the decision for the content to be removed.

“The content is abhorrent and does not reflect the views of the Speaker or the legislative assembly office.”

Three candidates in the race to replace Premier Jason Kenney as party leader and premier also took to Twitter to criticize the award.

“It’s a disgrace that an essay saying women are not equal to men won an award sponsored by government. Women, and their contributions, are equally valuable and amazing whether we are moms or not. Can’t believe this needs to be said,” wrote Rebecca Schulz.

Rajan Sawhney followed up, writing, “Agree, Rebecca. Same goes for the comments about ‘foreigners.’ Alberta is the proud home of people from all over the world — from Ukraine, to the Philippines, and everywhere in between.”

Leela Aheer said, “Well, I read 1st and 2nd place (essays). Those were great! I’m not sure how the 3rd essay elevates women.”

Lise Gotell, a women’s and gender studies professor at the University of Alberta, said the essay perpetuates an essentialist, sexist and racist point of view stemming from the long discredited and outdated concept that a women’s role is to reproduce as a bulwark against immigration.

“The fact that it was chosen says a great deal about the views on appropriate gender roles being advanced by this government,” said Gotell in an interview.

“This essay reads like something that quite frankly could’ve been written in the 19th century.”

—  With files from Angela Amato in Edmonton

This report by The Canadian Press was first published Aug. 9, 2022.

 

Dean Bennett, The Canadian Press

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Two miners trapped in Dominican Republic rescued with help from Canada

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OTTAWA — Defence Minister Anita Anand says two miners who were trapped in an underground mine for 10 days in the Dominican Republic have been rescued with the help of Canada.

In a tweet on Tuesday, Anand said the Royal Canadian Air Force transported mining equipment to Santo Domingo following a request for assistance from the Dominican government.

Two miners with the Dominican Mining Corporation, known as Cormidom, had been trapped since July 31 in an underground mine.

According to a news release from the Dominican Republic Embassy on Saturday, Canada was expected to send over a mining excavation system made up of machines, tools and various rescue technologies.

The statement says the equipment was provided by Machines Roger International, a mining company based in Val-d’Or, Que.

Anand thanked the Royal Canadian Air Force personnel involved in the mission who arrived in the Dominican Republic on Sunday.

This report by The Canadian Press was first published Aug. 9, 2022.

 

The Canadian Press

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