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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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Canada adds 2,300 new COVID-19 cases as provinces split on next steps against pandemic – Global News

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Canada’s COVID-19 hotspots showed diverging approaches to handling the crisis on Sunday, as Ontario and Prince Edward Island prepared for new lockdowns while Quebec entered a week of spring break complete with some activities meant to ease the monotony of life during a global pandemic.

The developments came amid another 2,302 new cases of COVID-19 across the country, which pushed the national total to 866,434. Another 34 deaths were reported on Sunday as well, with the national death toll standing at 21,994.

To date over 813,520 patients infected with the virus have recovered however, while over 24.8 million tests and 1.87 million vaccine doses have been administered. Sunday’s data paints a limited snapshot of the virus’ spread across Canada however as B.C. and both the Northwest Territories and Yukon do not report new cases on the weekend.

Prince Edward Island announced it was entering a 72-hour lockdown starting at midnight as the province struggled to contain an outbreak of COVID-19.

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The short-term public health order was announced as officials reported five new infections of the disease in a province that has seen few cases for most of the pandemic. The Island has now recorded 17 new infections over the past five days.

Health officials identified two clusters of COVID-19 in the cities of Summerside and Charlottetown, and said it’s possible the island has community spread of the virus. The province has a total of just 132 cases of COVID-19 since the pandemic began.

The three-day lockdown requires residents to stay home as much as possible and will close all kindergarten to Grade 12 schools, with post-secondary education moving online only.

“We would rather go harder and stronger now than wait for an outbreak like we have seen in other provinces that could put us in an extended period of lockdown for weeks or even months,” Premier Dennis King said late Sunday during a briefing with reporters.

Ontario, meanwhile, passed the 300,000 case mark on Sunday as the government prepared to hit a so-called ’emergency brake’ in two northern public health units grappling with surging case numbers.

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The Thunder Bay and Simcoe-Muskoka District health units will enter the lockdown phase of the province’s pandemic response plan on Monday in order interrupt transmission of COVID-19 at a time when new variants are gaining steam.

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The province has also pushed back its spring break until April in an effort to limit community spread.


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Navigating a tax season complicated by COVID-19


Navigating a tax season complicated by COVID-19

Quebec, in contrast, has allowed movie theatres, pools and arenas to open with restrictions in place to give families something to do as the traditional winter break kicks off, even as most other health rules remain in place.

The province opted to allow students and teachers the traditional March break, even though Premier Francois Legault has said he’s worried about the week off and the threat posed by more contagious virus variants.

Quebec’s health minister said the situation in the province was stable on Sunday, with 737 new cases and nine additional deaths _ even as confirmed cases linked to variants of concern jumped by more than 100 to 137.

Most of the variant cases have been identified as the B.1.1.7 mutation first identified in the United Kingdom, including 84 in Montreal.

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Ontario, meanwhile, reported 1,062 new infections linked to the pandemic on Sunday as it became the first province to record more than 300,000 total cases of COVID-19 since the onset of the pandemic.

The country’s chief public health officer urged Canadians on Sunday to continue following public health measures as a way of buying critical time as vaccine programs ramp up.

“Aiming to have the fewest interactions with the fewest number of people, for the shortest time, at the greatest distance possible is a simple rule that we can all apply to help limit the spread of COVID-19,” Dr. Theresa Tam said in a statement.

Canada’s immunization program received a boost last week with the approval of a third COVID-19 vaccine, raising hopes that provinces will be able to inoculate their most vulnerable populations before the more contagious variants can fully take hold.


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Trudeau says COVID-19 case counts, presence of variants being looked at with Canada-U.S. border restrictions


Trudeau says COVID-19 case counts, presence of variants being looked at with Canada-U.S. border restrictions

Toronto announced Sunday that it was expanding the first phase of its COVID-19 vaccination drive to include residents experiencing homelessness, noting that they have a higher risk of serious health impacts due to COVID-19 and are vulnerable to transmission in congregate settings.

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Quebec, meanwhile, is set to begin vaccination of the general population on Monday, beginning with seniors 80 and over in the Montreal area, or 85 and over in the rest of the province.

While some regions with extra doses began administering shots late last week, the pace of inoculation will ramp up on Monday when mass vaccination clinics in Montreal throw open their doors.

Case counts were more stable elsewhere in the country.

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Manitoba reported just 50 new COVID-19 infections on Sunday and two new virus-related deaths, while Saskatchewan saw its overall tally climb by 181 but did not log any new deaths.

Alberta reported three new virus-related deaths and 301 new infections, including 29 identified as variants of concern.

In Atlantic Canada, Nova Scotia logged three new cases while officials in Newfoundland and Labrador reported seven.

— With files from Global News

© 2021 The Canadian Press

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Canada pension fund boss Machin quits after overseas trip for COVID shot

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By Noor Zainab Hussain and Maiya Keidan

(Reuters) – The head of Canada Pension Plan Investment Board (CPPIB), Mark Machin, has resigned after his trip to the United Arab Emirates for vaccination against COVID-19 flouted Canadian government’s travel advice and drew criticism.

CPPIB on Friday named John Graham, currently senior managing director and global head of credit investments, as the new chief executive officer of the country’s largest pension fund.

Machin, 54, becomes the second senior Canadian corporate executive to resign after attempting to jump vaccine queue, underscoring the frustration among some about the country’s slow vaccine roll out.

“It was a complete lapse of moral judgment which risked undermining people’s trust both in government policy and the stewardship of their public pension provision,” said David Wheeler, a former business professor at York University, adding that “clearly he had to go immediately”.

Machin received Pfizer’s <PFE.N> vaccine shot after arriving in the UAE with his partner this month, the Wall Street Journal reported on Thursday, adding he had stayed on in the UAE and was due to receive his second dose in coming weeks.

“We are very disappointed by this troubling situation and we support the swift action taken by the Board of Directors,” Kat Cuplinskas, press secretary for Canada‘s ministry of finance.

CPPIB, which manages C$475.7 billion ($377 billion), is governed independently from the federal government but it reports to a board of directors selected by Canada‘s minister of finance. It manages Canada‘s national pension fund and invests on behalf of about 20 million Canadians.

Machin did not respond to a Reuters request for comment.

Machin, after discussions with the Board, agreed the most appropriate step was to tender his resignation, Michel Leduc, senior managing director and head of public affairs and communications said in a statement to Reuters.

NO TRAVEL BAN

Machin sent an internal memo to CPPIB staff acknowledging that he took a personal trip and was in Dubai for a number of reasons, some of which were “deeply personal”, the source said.

Machin also said in the memo that the trip was supposed to be “very private” and that he was disappointed it had become the focus of “expected criticism”, according to the source.

Although there is no specific ban on Canadians traveling abroad, the federal and provincial governments have advised against overseas trips to prevent the spread of the novel coronavirus.

Canada trails behind many developed nations in its vaccination drive, with under 3% of the population inoculated so far.

The UAE says it provides COVID-19 vaccinations to residents and citizens only, free of charge, and requires a valid residency identification card to receive the shots. It was not immediately clear how Machin, a British national, secured the vaccine by traveling to Dubai.

Machin worked with Goldman Sachs for 20 years before joining CPPIB in March 2012. He was appointed as president and CEO in 2016.

Under Machin, CPPIB reported net return of 3.1% for the year ended March 31, 2020, down from 8.9% a year earlier. Machin was paid C$5.4 million ($4.25 million) in 2020, according to CCPIB’s annual report.

Incoming CEO Graham has been with CPPIB for 10 years. Prior to that he was with Xerox Innovation Group for over nine years.

Some Canadian federal and provincial leaders have resigned in the past month after their overseas leisure trips sparked public outrage. https://reut.rs/3qZvDLh

Last Month, Great Canadian Gaming Corp CEO Rod Baker resigned after he and his wife were charged with traveling to northern Canada and misleading authorities in order to receive the vaccine.

($1 = 1.2699 Canadian dollars)

 

(Reporting by Noor Zainab Hussain in Bengaluru and Maiya Keidan in Toronto; Writing by Denny Thomas; Editing by Anil D’Silva and Marguerita Choy)

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International permanent residency holders running out of time to come to Canada – CTV News

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TORONTO —
Immigrants waiting to come to Canada have been speaking out about the COVID-19 travel restrictions denying them the chance to start their new lives.

Last March, the federal government updated their exemptions to the international travel restrictions, which included “permanent resident applicants who had been approved for permanent residence before the travel restrictions were announced on March 18, 2020, but who had not yet travelled to Canada.”

Almost overnight, families and individuals around the world who had been approved for permanent residency (PR) in Canada after March 18, some of whom had been waiting years for their approvals, were no longer allowed to begin their new lives.

Applicants with a valid confirmation of permanent residency (COPR), but without immediate or extended family members in Canada are not included in the list of essential or exempted traveller lists, and for those holding COPRs issued from October 2020 onwards, authorization letters are needed to fly in internationally.

Now, almost a year later, those who hold COPRs approved after March 18, 2020 are facing their visas expiring – COPRs cannot be extended – leaving families desperate.

Many have quit their jobs in anticipation of immigrating after receiving their COPR, sold their properties, taken their children out of school and incurred expenses in preparation for travel – booking hotels, flights and other accommodations.

Some have taken their fight online, using the hashtag #free_copr_after_march18 to raise awareness of their plight.

Others have been lobbying the government; Immigration, Refugees and Citizenship Canada (IRCC); and the media to allow an exemption for those who received their COPR after the cut-off date.

These are some of their stories, in their own words.

(Disclaimer: replies have been edited for length, clarity and brevity)

CHIRAG RATHOD – INDIA

Chirag Rathod“My wife and I are in great mental depression as we were all set to start our new life after getting the COPR. We had all our bags packed. It did not happen. Now, my wife has started feeling suicidal. I shut down my company thinking that I would be travelling soon and now we have no source of income. We are in such a limbo about restarting our life in India, as we do not know when the Canadian government let us in; it may happen in a month or in a year we have no idea. We are clueless about what will happen to our COPRs after they expire, will it be honoured or will we have to go through the entire PR process again?”

ISAAC BELLO – NIGERIA

Isaac Bello“It has not been easy time emotionally and psychologically for me. The security situation around where I reside is deteriorating by the day. A lot of kidnapping for ransom takes place regularly. This tension is exacerbated by the fact that my family (spouse and children) are not accompanying me. I will have to land first, settle in and then apply for family sponsorship for them.

It would be nice and helpful if the government of Canada takes into consideration COPR holders irrespective of whether they have family in Canada or not, since they will have adequate quarantine measures in place. We should be able to land and confirm their permanent residency status since students and temporary workers are allowed in. We should also be exempted from travel restrictions as well since we are coming to stay permanently, unlike students and temporary workers. Many of us are stranded not knowing what our fate will be. Should we keep waiting, hoping that our peculiar situation will be addressed or should we try to pick up our lives where we left off?”

MAMTA SHARMA – INDIA

Mamta Sharma“I have two teenage daughters and I am a single parent taking care of all their emotional & financial needs.

I had informed their school about the withdrawal of their admissions. Now, in a limbo, I have to plead to the school to admit them back. I worked hard to provide them a better life and good future but currently it seems like a distant dream with lots of uncertainty. I am having sleepless nights and going through tremendous stress and trauma. It is affecting mine and my daughters’ mental health.

I am a valid COPR holder and should be given the right to enter Canada, my new homeland.

Being a single parent is itself a challenge in my community, I had worked hard for the Canadian dream for me and my daughters. We saved each and every penny wherever we could, I am emotionally strained but I have to appear strong in front of my daughters. It’s not only me, there are many people across the world who are facing the same issues. I know COPR visa is a privilege not a right, but understand how hard we have worked to reach for this position. “

FAUZIA KARIM – BANGLADESH

Fauzia Karim“We are family of three, I am originally from Bangladesh but living in India with my husband and 3-year-old son. We researched day and night about how things work in Canada; starting from transportation, housing, weather, daily life, job search, grocery and day care. Being a Bangladeshi citizen married to Indian man, I am already staying in India on a dependent visa and couldn’t work for the past four years. We invested a good portion of our savings in securing an invitation to apply for PR. My husband served his three months notice period to his employer, sold our car, home appliances and moved to his hometown.

We planned to travel to Calgary on Feb. 21 2021, travelled 800 km from our hometown to Delhi Airport, took a pre-departure COVID test, arranged a proof of funds letter from the bank, booked accommodations etc. We were denied boarding by Air Canada staff stating that our COPR was issued post- March 18 2020, and we aren’t travel exempt, we need to have an authorization letter from IRCC – which is only possible if we have an immediate or extended family member in Canada.

Apart from the financial and emotional stress, there is a lot we are going through. Every now and then are being questioned by family, relatives and several other people “When are you moving to Canada,” and now with no job in hand we are breaking down financially and on the edge of spending money from proof of funds, which was supposed to be for initial months for survival in Canada.”

GURPREET SINGH – INDIA

Gurpreet Singh“When my COPR was approved I was so happy that my dream is going to be true, and I started preparing for the travelling with the hope that soon they will allow us to enter Canada. I resigned from my job, as I needed to serve a three month notice period and booked the tickets and accommodation to complete a 14 day quarantine.

I was not aware that a nightmare was on the way. I am scared because I have resigned from my job, I have my three-year old son who is ready to start school and I am the sole bread earner for my family. I really don’t know how I will fulfill my families basic necessities without a job. As of Feb. 2021, no exemption has been granted to us and our COPR will expire in upcoming months. Now getting into these situations all doors are locked for me, and every night I cry from my heart which has also raised our stress and anxiety. As an immigrant I always wanted to settle in Canada permanently so that my spouse and son would get a good future. Being a skilled worker I feel that hard work pays off in Canada and eventually I will contribute to the Canadian economy.”

KESHAV SHARMA – INDIA

Keshav Sharma“After getting my COPR, I was very happy and started to prepare to move permanently to Canada. I resigned from my job, as I was speculating that approved COPR holders will be able to land in the country without much hassle. Then we found out about the 14 days quarantine rule, which was sensible to me and I am happy to arrange that as I can understand completely how critical it is to be safe. We later found out about the three day hotel quarantine rule which again I understand the point of view from the Canadian government. I thought because they had issued COPR to us eventually they will allow us to enter Canada. In short, the situation has become so frustrating and heartbreaking that I am kind of starting to feel emotional trauma. I don’t know what is in the future, as there is not a single clarification provided about the agenda of travel restrictions and files processing by IRCC. Life has become miserable for me. I have been postponing my future plans about my family and my career in hope of migrating. Canada is our country now and we must be given a chance to enter our own country.”

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