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International trade in 2018: making sense of a ‘tarrifying’ year





CBC News surveyed a dozen Canadian and American researchers, lecturers, lawyers and business advocates to sum up this complicated and often frustrating year in international trade.

Here are a few highlights from what they shared with us.

What was the biggest surprise?

“The fact that Donald Trump carried through with steel and aluminum tariffs,” said Mark Agnew, director of international policy for the Canadian Chamber of Commerce.  “People thought, ‘Surely he’s not going to do this against Canada.'”

They thought wrong.

“That really shocked me,” agreed Debra Steger, a former Canadian trade official now on the University of Ottawa’s law faculty, adding that Trump’s escalating tariff strategy over the last year caused a “ripple effect” of consequences — including retaliatory tariffs from other countries, Canada among them.

“Everything has been driven by the initial tarrifying actions that were deliberately taken by the United States as a cudgel over everyone’s heads to negotiate,” she said.

(Her use of the word ‘tarrifying’ serves double-duty as a pun. Trump’s indiscriminate use of tarrifs is terrifying for those who believe in international trade law.)

The new level of bullying was a surprise, she said. “We had never seen U.S. administrations behave that way before.”

“I thought this government was too pro-business to allow (the tariffs) to stay in place,” said Todd Tucker, a fellow at Washington D.C.’s Roosevelt Institute. “I underestimated the way Republicans rallied around Trump.”

Inu Manak, a Canadian trade researcher who now works at the Cato Institute, said she was caught off-guard by the level of Trump’s hostility toward Canada.

“At first I thought maybe he’s just joking around, and it’s a negotiating tactic,” she said.

But the tariffs persist, even after the revised North American trade agreement was signed.

“It was genuinely shocking, and genuinely negative for the bilateral relationship,” said Meredith Lilly, the Simon Reisman chair at Carleton University’s Norman Paterson School of International Affairs.

What don’t people get?

“I don’t think the average person understood how completely integrated we are with the U.S. economy, and how foolish the idea that we would tell the Americans to bugger off would be,” said Flavio Volpe, president of the Automotive Parts Manufacturer’s Association.

Trump’s presidential powers became a topic of fierce legal debate in 2018. Can he just terminate NAFTA if Congress won’t ratify the revisions he wants?

The U.S. presidency has been given a lot of authority over trade matters over the years, Manak said, but “the fact that this Congress has not pushed back a lot on a lot of stuff he’s done, doesn’t mean they can’t.”

U.S. House Speaker designate Nancy Pelosi and Senate Minority Leader Chuck Schumer met President Trump at the White House earlier this month. The Democratic leaders didn’t shy away from confrontation, and it’s not clear they’ll be willing to work with the administration to ratify the revised NAFTA. (Jonathan Ernst/Reuters)

That’s why the election of a Democratic majority in the House of Representatives in November could be “a little destabilizing,” but good for the democratic process, she said.

“There’s the strong impression that he can just just unilaterally go back to pre-NAFTA tariffs on Canada and Mexico,” Tucker said. “I don’t know any constitutional law professor that thinks that.”

The public and partisan debate over Trump’s powers has generated more “heat than light,” he said, by not properly acknowledging that Congressional authority over tariffs.

Brian Kingston, vice-president for international and fiscal policy with the Business Council of Canada, said he thinks the Canadian public hasn’t properly grasped the role of Congress in trade deals, either.

But the Canadian government gets it, he said, “hence their very comprehensive lobbying and advocacy campaign” — especially important as long as Congressional ratification remains uncertain.

Trade lawyer Mark Warner doesn’t buy the argument that Trump can’t unilaterally terminate a trade treaty and throw everything into chaos.

The Canadian negotiators, Warner said, should have agreed to a deal earlier in the year, before the tariffs landed — even if that meant conceding more.

He said he thinks Ottawa misjudged the dynamics of the NAFTA negotiations from the start.

“The idea that Mexico was joined at the hip with Canada and wouldn’t go out on its own … it just didn’t make a lot of sense,” he said. “Our interests are not completely aligned and it’s something that we have now learned.”

What stories were overblown?

Lilly said she found the NAFTA negotiations were generally overhyped, with a lot of “false drama” coming from the Canadian side before the talks ended with a deal that turned out to be quite predictable.

“Much ado about very little change,” agreed Monica de Bolle, senior fellow at the Peterson Institute for International Economics. “Very anticlimactic.”

Her office did a lot of work trying to anticipate the disruption Trump’s threatened auto tariffs might trigger. But despite the hype, those tariffs haven’t materialized.

At least, not yet. (The U.S. Commerce Department report on whether automotive imports are a “national security” threat is due by February.)

“We were all concerned about ‘carmageddon,'” Volpe said, “but I wonder if the Americans would have pulled that trigger, because the bullet would have gone through both of us.”

The room was a bit tense as the revised North American trade agreement was signed Nov. 30. Outgoing Mexican president Enrique Pena Nieto’s decision to announce a deal with the U.S. before Canada had concluded its negotiations made the final weeks difficult for Prime Minister Justin Trudeau’s government. (Kevin Lamarque/Reuters)

Agnew said the debate over Canada insisting on a cultural exemption also offered more drama than substance.

“In the end it was the dog that didn’t bark, with the retention of the exemption.”

Another new feature in NAFTA 2.0 — article 32.10 on negotiating a trade deal with a “non-market economy” (read: China) — will have “very little impact,” said Carlo Dade, director of the trade and investment centre at the Canada West Foundation.

“I don’t think it’s a total nothing, but it’s certainly not going to take away Canadian sovereignty and Canada’s ability to negotiate with China in the future,” Steger said.

What warranted more discussion?

“If there is a Russian strategy to undermine multilateralism and U.S. leadership of the global economy, it’s really more about economics than it is about defence,” said George Washington University’s Susan Aaronson.

The most competitive Canadian and American exports in the future will be agricultural commodities and services. But for both export sectors to succeed, they need trusted partners in world markets and a strong global consensus on what constitutes appropriate behaviour, Aaronson said.

Trump undermined all this, she said, which hurt Canada’s integrated economy — and left the Trudeau government little choice but to diversify its trade through other deals.

“It’s a good thing Canada’s doing that,” Aaronson said, “but in the long run, it’s a bad thing.” North America, she said, is more competitive when it works together. Plus, the world will miss U.S. leadership on trade — and it might not like what replaces it.

“We haven’t talked enough about what happens to Latin American relations in the middle of the confusion over the China-U.S. relationship,” said de Bolle, an expert on the region. “The region is very complicated right now.”

The new left-leaning, nationalist Mexican administration, for example, has closer ties to China, de Bolle said. The foreign policy of Brazil’s new government, a major economic player, is “crazy to me,” she added. And the Chinese are also securing key oil resources in Venezuela, as that country’s economy continues to implode.

Trade lawyer Cyndee Todgham Cherniak said she thinks businesses are only just beginning to wake up to the consequences of politicians escalating economic sanctions against countries like Iran and Saudi Arabia. The arrest of a Huawei executive in Vancouver, she said, may be only the beginning.

Canada’s new Magnitsky Act — a law allowing Canada to go after the assets of foreign officials implicated in human rights violations — should get more attention, she added, particularly if it’s applied to Saudi Arabia. “It will have a significant effect on companies carrying on business worldwide.”

Long-term consequences?

The effects of what unfolded over the last year may be felt for years to come.

“The hardening American consensus around Chinese trade practices is something that is here to stay,” Warner said, “even if Trump is defeated in 2020.”

“You would have seen Hillary Clinton do some of the same things” on China, said Tucker.

But what the history books will emphasize is Trump’s use of “national security” as an excuse for protecting domestic steel and aluminum industries, Tucker argues. Other countries already have started to follow suit, bringing unprecedented instability to the global trade system Americans once fought to establish.

Chinese President Xi Jinping and U.S. President Donald Trump had a “working dinner” after the G20 leaders summit in Buenos Aires, Argentina earlier this month. They announced a 90-day “truce” in their tariff war while officials attempt to work out a deal to de-escalate the conflict. (Kevin Lamarque/Reuters)

Dade calls Trump’s ongoing tariff war “the nuclear option.”

“The unthinkable has become normalized,” he said.

That puts a lot of pressure on countries like Canada, which are now being forced to pick a side.

“It’s going to affect every trade discussion that we have from now on,” Volpe said. “You’re going to have to know what the American position is before you even attempt a discussion with us.”

The American insistence on a sunset clause for NAFTA (even if it was watered down in the final text) reflects an increasing climate of protectionism in the U.S. that “isn’t a cyclical trend. That’s here to stay,” said Kingston.

“The very negative rhetoric and some of the missteps along the way have created the conditions that we may look back in 20 years and say this fundamentally changed the Canada–U.S. relationship,” Lilly said.

“Down the road we’re going to look back and say, ‘I wish this never happened,'” Manak said. “I’m a little nervous.”


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Real Estate

7 Tips For First-Time Home Buyers In Calgary





Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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Real Estate

‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market





The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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Real Estate

10 Tips For First-Time Home Buyers





Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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