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Trudeau’s Singapore pitch: Canada ‘just getting started’ on trade





Prime Minister Justin Trudeau arrived in Singapore on Tuesday afternoon primed to make his pitch to a Singapore business audience: Amid new barriers to trading with the U.S., why not consider Canada?

Trudeau has a busy three days planned at the margins of the Association of Southeast Asian Nations (ASEAN) and East Asia summits. 

Canada isn’t a member of either group, but is lobbying for a seat at the latter to try to be more of a regional player on security issues. And it’s exploring a potential comprehensive trade agreement with the 10-country ASEAN bloc.

“We have an openness towards investment and to immigration that is extremely positive,” Trudeau said before meeting with the Canada–​ASEAN Business Council. “One of the things that is a big differentiator between us and our neighbour to the south right now is the fact that top companies can get visas for their top talent in certain sectors in less than two weeks, to be able to come and set up shop in Canada, and start doing great things with us.”

Trudeau said his visit comes as Canada is “particularly engaged in a positive way on the world stage.”

Last month, his government wrapped up consultations with Canada’s business community gauging the appetite for comprehensive trade talks with ASEAN. Trudeau expects to have more to say “in due course.”

However, an ASEAN deal could be a long-term slog. Instead, groups like the Chamber of Commerce want Canada to push ASEAN members like the Philippines to sign on to the deal already in place for the Pacific Rim: the CPTPP.

Canada and Singapore were among the first six countries to ratify the Comprehensive and Progressive Trans-Pacific Partnership, the 11-country deal reworked after the departure of the U.S. in 2017. It takes effect at the end of this year.

U.S. Vice-President Mike Pence and his wife Karen arrive at Paya Lebar Air base in Singapore on Tuesday. Pence is in Singapore to attend events around the 33rd ASEAN summit. (Bernat Armangue/Associated Press)

“We go through Singapore to the entire world because this is such an important trading hub,” Trudeau said. Singapore is the world’s largest transshipment hub, with goods passing through to somewhere else.

“The incomes in this part of the world have been rising dramatically,” said Wayne Farmer, volunteer president of the business council. “This is where the action is.”

“In some ways the NAFTA agreement has been almost too good for Canada because it really has shaped our trade and commerce flows,” Farmer said. “Now that things are a little bit different, I think it is a wake-up call that Canada needs to diversify.”

‘People appreciate the face time’

Trudeau said that with its existing agreements, Canada now has preferential market access to two-thirds of the world’s GDP, “and we are just getting started.” 

But simply having trade deals isn’t enough.

“The real work, actually, gets started after you have signed the papers, and that is building the relationships … and also changing mindsets, getting Canadian companies to see the opportunities we have,” he said. Canada is “perhaps not top of mind” for potential investors.

This “real work” of relationship building may not have an immediate payoff this week — no major breakthrough announcements are expected — but Trudeau’s itinerary is packed.

Russian President Vladimir Putin inspects the troops during a welcoming ceremony at the Istana presidential palace in Singapore on Tuesday. Putin’s visit coincides with the ASEAN and East Asia Summit talks this week. (Roslan Rahman/Pool Photo via Associated Press)

“These are relationship-driven markets. People appreciate the face time,” said Rohan Belliappa, president of the Canadian Chamber of Commerce in Singapore and a regional representative of the Canadian National Railway. “It goes a very long way because we have a prime minister that has a very strong brand equity globally.

“When he comes to Asia people want to hear from him. And that only boosts Canada’s reputation in the eyes of these very important business people.”

As a “dialogue partner” in ASEAN, Trudeau will rub shoulders with other leaders at least twice: at a working luncheon and a gala dinner on Wednesday. 

But not all 10 of the ASEAN countries are a comfortable fit with the Trudeau government’s “progressive” agenda on human rights, freedom of the press and things like labour and environmental standards.

Trade vs. rights

Canada has a long-running consular dispute over the apparently unwarranted imprisonment of a Canadian teacher in Indonesia. 

Filipino President Rodrigo Duterte’s treatment of the media is precisely the opposite of the press freedom Trudeau was championing in Paris on Sunday afternoon

And Canada recently stripped Myanmar’s Aung San Suu Kyi’s honorary citizenship in protest of her role in gross human rights violations against the Rohingya minority in that country.

In cases like these, Canada’s quest for a share of the economic growth in the region runs up against the values it’s been championing in other forums.

ASEAN Leaders pose for a group photo during the opening ceremony for their 33rd summit Tuesday in Singapore. (Bullit Marquez/Associated Press)

While ASEAN countries might be interested in a trade deal that cuts tariffs, it’s unclear they’re prepared to take other steps Canada may want to see before deepening trade relations.

Nevertheless, “it’s an advantage to stand up for your values,” said former foreign service officer Emilie Potvin, who now works for the Uber ride-sharing service in Southeast and North Asia. “Canada is seen clearly right now as a leader.” When it comes to rights, Trudeau is “willing to have that conversation” with everyone, she said.

The ASEAN summit is not known for airing its dirty laundry in public — with criticizing partners too harshly seen as a cultural affront.

But that may be changing: Malaysia’s prime minister recently suggested his country would no longer support Suu Kyi over her handling of the Rohingya crisis.

Ancestors part of pitch

In a region where personal relationships count, Trudeau has a chapter in his family’s history that may help break the ice.

On Tuesday the prime minister said it was “touching” for him to return to Singapore, a place he had first visited as a young man with his father Pierre Trudeau. His mother Margaret’s side of the family has ancestral roots here: his fifth great-grandfather was Maj.-Gen. William Farquhar, the first British commandant of colonial Singapore early in the 19th century.

Farquhar’s daughter Esther, Trudeau’s direct ancestor, is buried in Singapore’s Fort Canning Park. A scheduled photo opportunity there was postponed due to a late flight Tuesday, but Trudeau hopes to reschedule.

Trudeau’s father’s relationship with China has helped open doors for Canada there since the Liberal government took office three years ago.

On Wednesday, Trudeau has his third leaders’ dialogue with Chinese Premier Li Keqiang, as Canada keeps trying to expand its presence in Asia’s largest market.

Trudeau met Cypriot President Nicos Anastasiades during a refuelling stop in Larnaca, Cyprus, late Monday. (Adrian Wyld/Canadian Press)

Trudeau’s trade diversification push even played a role in a short stopover his plane made on its way to Singapore.

When the president of Cyprus, Nicos Anastasiades, came to the airport for a short courtesy call, Trudeau reminded the European Union member that it would like to see a ratification vote in Cyprus soon on the Canada–EU trade deal.

That’s now expected sometime in 2019, an official said.


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Real Estate

5 ways to reduce your mortgage amortization





Since the pandemic hit, a lot of Canadians have been affected financially and if you’re on a mortgage, reducing your amortization period can be of great help.

A mortgage amortization period is the amount of time it would take a homeowner to completely pay off their mortgage. The amortization is typically an estimate based on what the interest rate for your current term is. Calculating your amortization is done easily using a loan amortization calculator which shows you the different payment schedules within your amortization period.

 In Canada, if you made a down payment that is less than the recommended 20 per cent of the total cost of your home, then the longest amortization period you’re allowed to have is 25 years. The mortgage amortization period not only affects the length of time it would take to completely repay the loan, but also the amount of interest paid over the lifecycle of the mortgage.

Typically, longer amortization periods involve making smaller monthly payments and having a much higher total interest cost over the duration of the mortgage. While on the other hand, shorter amortization periods entails making larger monthly payments and having lower total interest costs.

It’s the dream of every homeowner to become mortgage-free. A general rule of thumb would be to try and keep your monthly mortgage costs as low as possible—preferably below 30 per cent of your monthly income. Over time, you may become more financially stable by either getting a tax return, a bonus or an additional source of income and want to channel that towards your principal.

There are several ways to keep your monthly mortgage payments low and reduce your amortization. Here are a few ways to achieve that goal:

1. Make a larger down payment

Once you’ve decided to buy a home, always consider putting asides some significant amount of money that would act as a down payment to reduce your monthly mortgage. While the recommended amount to put aside as a down payment is 20 per cent,  if you aren’t in a hurry to purchase the property or are more financial buoyant, you can even pay more.

Essentially, the larger your down payment, the lower your mortgage would be as it means you’re borrowing less money from your lender. However, if you pay at least 20 per cent upfront, there would be no need for you to cover the additional cost of private mortgage insurance which would save you some money.

2. Make bi-weekly payments

Most homeowners make monthly payments which amount to 12 payments every year. But if your bank or lender offers the option of accelerated bi-weekly payment, you will be making an equivalent of one more payment annually. Doing this will further reduce your amortization period by allowing you to pay off your mortgage much faster.

3. Have a fixed renewal payment

It is normal for lenders to offer discounts on interest rate during your amortization period. However, as you continuously renew your mortgage at a lower rate, always keep a fixed repayment sum.

Rather than just making lower payments, you can keep your payments static, since the more money applied to your principal, the faster you can clear your mortgage.

4. Increase your payment amount

Many mortgages give homeowners the option to increase their payment amount at least once a year. Now, this is very ideal for those who have the financial capacity to do so because the extra money would be added to your principal.

Irrespective of how small the increase might be, in the long run, it would make a huge difference. For example, if your monthly mortgage payment is about $2,752 per month. It would be in your best interest to round it up to $2,800 every month. That way, you are much closer to reducing your mortgage amortization period.

5. Leverage on prepayment privileges

The ability for homeowners to make any form of prepayment solely depends on what mortgage features are provided by their lender.

With an open mortgage, you can easily make additional payments at any given time. However, if you have a closed mortgage—which makes up the larger percentage of existing mortgages—you will need to check if you have the option of prepayments which would allow you to make extra lump sum payments.

Additionally, there may also be the option to make extra lump sum payments at the end of your existing mortgage term before its time for renewal.

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Real Estate

Mortgage insurance vs. life insurance: What you need to know





Your home is likely the biggest asset you’ll ever own. So how can you protect it in case something were to happen to you? To start, homeowners have a few options to choose from. You can either:

  • ensure you have mortgage protection with a life insurance policy from an insurance company or
  • get mortgage insurance from a bank or mortgage lender.

Mortgage insurance vs. life insurance: How do they each work?  

The first thing to know is that life insurance can be a great way to make sure you and your family have mortgage protection.

The money from a life insurance policy usually goes right into the hands of your beneficiaries – not the bank or mortgage lender. Your beneficiaries are whoever you choose to receive the benefit or money from your policy after you die.

Life insurance policies, like term life insurance, come with a death benefit. A death benefit is the amount of money given to your beneficiaries after you die. The exact amount they’ll receive depends on the policy you buy.

With term life insurance, you’re covered for a set period, such as 10, 15, 20 or 30 years. The premium – that’s the monthly or annual fee you pay for insurance – is usually low for the first term.

If you die while you’re coved by your life insurance policy, your beneficiaries will receive a tax-free death benefit. They can then use this money to help pay off the mortgage or for any other reason. So not only is your mortgage protected, but your family will also have funds to cover other expenses that they relied on you to pay.

Mortgage insurance works by paying off the outstanding principal balance of your mortgage, up to a certain amount, if you die.

With mortgage insurance, the money goes directly to the bank or lender to pay off the mortgage – and that’s it. There’s no extra money to cover other expenses, and you don’t get to leave any cash behind to your beneficiaries.

What’s the difference between mortgage insurance and life insurance?

The main difference is that mortgage insurance covers only your outstanding mortgage balance. And, that money goes directly to the bank or mortgage lender, not your beneficiary. This means that there’s no cash, payout or benefit given to your beneficiary. 

With life insurance, however, you get mortgage protection and more. Here’s how it works: every life insurance policy provides a tax-free amount of money (the death benefit) to the beneficiary. The payment can cover more than just the mortgage. The beneficiary may then use the money for any purpose. For example, apart from paying off the mortgage, they can also use the funds from the death benefit to cover:

  • any of your remaining debts,
  • the cost of child care,
  • funeral costs,
  • the cost of child care, and
  • any other living expenses. 

But before you decide between life insurance and mortgage insurance, here are some other important differences to keep in mind:

Who gets the money?

With life insurance, the money goes to whomever you name as your beneficiary.

With mortgage insurance, the money goes entirely to the bank.

Can you move your policy?

With life insurance, your policy stays with you even if you transfer your mortgage to another company. There’s no need to re-apply or prove your health is good enough to be insured.

With mortgage insurance, however, your policy doesn’t automatically move with you if you change mortgage providers. If you move your mortgage to another bank, you’ll have to prove that your health is still good.

Which offers more flexibility, life insurance or mortgage insurance?

With life insurance, your beneficiaries have the flexibility to cover the mortgage balance and more after you die. As the policy owner, you can choose how much insurance coverage you want and how long you need it. And, the coverage doesn’t decline unless you want it to.

With mortgage insurance through a bank, you don’t have the flexibility to change your coverage. In this case, you’re only protecting the outstanding balance on your mortgage.

Do you need a medical exam to qualify? 

With a term life insurance policy from Sun Life, you may have to answer some medical questions or take a medical exam before you’re approved for coverage. Once you’re approved, Sun Life won’t ask for any additional medical information later on.

With mortgage insurance, a bank or mortgage lender may ask some medical questions when you apply. However, if you make a claim after you’re approved, your bank may ask for additional medical information.* At that point, they may discover some conditions that disqualify you from receiving payment on a claim.

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Real Estate

5 common mistakes Canadians make with their mortgages





This article was created by MoneyWise. Postmedia and MoneyWise may earn an affiliate commission through links on this page.

Since COVID-19 dragged interest rates to historic lows last year, Canadians have been diving into the real estate market with unprecedented verve.

During a time of extraordinary financial disruption, more than 551,000 properties sold last year — a new annual record, according to the Canadian Real Estate Association. Those sales provided a desperately needed dose of oxygen for the country’s gasping economy.

Given the slew of new mortgages taken out in 2020, there were bound to be slip-ups. So, MoneyWise asked four of the country’s sharpest mortgage minds to share what they feel are the mistakes Canadians most frequently make when securing a home loan.

Mistake 1: Not having your documents ready

One of your mortgage broker’s primary functions is to provide lenders with paperwork confirming your income, assets, source of down payment and overall reliability as a borrower. Without complete and accurate documentation, no reputable lender will be able to process your loan.

But “borrowers often don’t have these documents on hand,” says John Vo of Spicer Vo Mortgages in Halifax, Nova Scotia. “And even when they do provide these documents, they may not be the correct documentation required.”

Some of the most frequent mistakes Vo sees when borrowers send in their paperwork include:

  • Not including a name or other relevant details on key pieces of information.
  • Providing old bank or pay statements instead of those dated within the last 30 days.
  • Sending only a partial document package. If a lender asks for six pages to support your loan, don’t send two. If you’re asked for four months’ worth of bank statements, don’t provide only one.
  • Thinking low-quality or blurry files sent by email or text will be good enough. Lenders need to be able to read what you send them.

If you send your broker an incomplete documents package, the result is inevitable: Your mortgage application will be delayed as long as it takes for you to find the required materials, and your house shopping could be sidetracked for months.

Mistake 2: Blinded by the rate

Ask any mortgage broker and they’ll tell you that the question they’re asked most frequently is: “What’s your lowest rate?”

The interest rate you’ll pay on your mortgage is a massive consideration, so comparing the rates lenders are offering is a good habit once you’ve slipped on your house-hunter hat.

Rates have been on the rise lately given government actions to stimulate the Canadian economy. You may want to lock a low rate now, so you can hold onto it for up to 120 days.

But Chris Kolinski, broker at Saskatoon, Saskatchewan-based iSask Mortgages, says too many borrowers get obsessed with finding the lowest rate and ignore the other aspects of a mortgage that can greatly impact its overall cost.

“I always ask my clients ‘Do you want to get the best rate, or do you want to save the most money?’ because those two things are not always synonymous,” Kolinski says. “That opens a conversation about needs and wants.”

Many of the rock-bottom interest rates on offer from Canadian lenders can be hard to qualify for, come with limited features, or cost borrowers “a ton” of money if they break their terms, Kolinski points out.

Mistake 3: Not reading the fine print

Dalia Barsoum of Streetwise Mortgages in Woodbridge, Ontario, shares a universal message: “Read the fine print. Understand what you’re signing up for.”

Most borrowers don’t expect they’ll ever break their mortgages, but data collected by TD Bank shows that 7 in 10 homeowners move on from their properties earlier than they expect.

It’s critical to understand your loan’s prepayment privileges and the rules around an early departure. “If you exit the mortgage, how much are you going to pay? It’s really, really important,” Barsoum says.

She has seen too borrowers come to her hoping to refinance a mortgage they received from a private or specialty lender, only to find that what they were attempting was impossible.

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