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5 reasons why the oilpatch could be in for another turbulent year in 2019

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Canada’s oilpatch will be glad to see the back of 2018 — a year that saw domestic crude prices plunge, pipeline construction stall and tensions grow with Ottawa.

But the coming year doesn’t promise much relief. Big questions loom over the future of the Trans Mountain pipeline, Ottawa’s overhaul of the project approval process and Alberta’s decision to impose oil production cuts.

Here are the major challenges for the energy sector that will make headlines in 2019.

The Trans Mountain saga

The plot twists continue for Canada’s most contentious energy project, the Trans Mountain pipeline expansion, which would send oilsands crude to the West Coast for export.

Weeks after Ottawa rescued the project by buying it from Kinder Morgan for $4.5 billion, the Federal Court of Appeal overturned the pipeline’s approval, partly on grounds the federal government failed to properly consult First Nations.

The government is redoing that work, but there are no guarantees the project will move forward.

Hereditary Chief Phil Lane Jr., centre, joins other Indigenous chiefs and elders in leading thousands of people in a march against the Trans Mountain pipeline expansion in Burnaby, B.C., last March. (Darryl Dyck/Canadian Press)

Warren Mabee, director of the Institute for Energy and Environmental Policy at Queen’s University, says pipelines could be an issue that splits voters in next fall’s federal election.

“[Justin] Trudeau has a fine line to walk into the election,” he said. “Is he going to be the prime minister who battles climate change or is he going to be the prime minister who builds pipelines? Can he be both?

“It’s a big question.”

Oil production cuts 

With a growing oil glut triggering a steep fall in the price of Canadian oil, Alberta did something it hadn’t done in decades — imposed mandatory production cuts.

The policy takes effect Jan. 1, and Albertans will soon see how well it works.

Alberta Premier Rachel Notley will soon find out whether her government’s mandatory production cuts will have any unintended consequences. (David Bajer/CBC)

Prices improved significantly following the announcement on Dec. 2, but some experts are uncertain that will continue.

People will also be watching for “unintended consequences,” including harm to investment and trade. 

There are also questions about whether the curtailment will actually save jobs — an important matter for Premier Rachel Notley with an election call potentially coming as early as February.

The battle over a carbon tax

A cornerstone of the federal government’s environmental plans is its national carbon tax strategy, but it’s facing mounting political pushback as implementation nears.

Ontario is taking the federal government to court on the constitutionality of the carbon tax and Saskatchewan is also mounting a legal challenge.

Ontario Premier Doug Ford, right, and Saskatchewan Premier Scott Moe took turns blasting the federal government’s carbon tax plan at Queen’s Park in Toronto back in October. (CBC)

New Brunswick and Manitoba haven’t signed on either. And if Alberta changes governments this spring, there’s little chance its carbon tax survives in its current form.

This could spell trouble for a strategy that supporters see as a critical step in Canada’s efforts to help address climate change. Critics argue the policy will damage the economy and achieve little.

“You have a federal government that is really trying to find a way to get this in place,” Mabee said. 

If carbon taxes “start to change behaviour,” then the government can invest in infrastructure such as pipelines “with a clear conscience,” he said. “But without the carbon tax, it’s a problem.”

Oil’s rough ride

The benchmark prices for oil in North American and international markets strengthened in 2018. West Texas Intermediate (WTI) peaked at over $76 US a barrel in October, while Brent crude nearly reached $87.

But fear there’s too much oil being produced for a slowing global economy sent oil tumbling in December to lows not seen in more than a year, with WTI dropping below $50 a barrel.

Fear of another oil glut and a slowing world economy has been weighing heavily on international oil prices in recent weeks. (Troy Fleece/Canadian Press)

The geopolitical factors affecting oil prices can change quickly, and OPEC policy, trade disputes and U.S. shale production are all wild cards to some degree.

With so much volatility, opinions vary on where prices are headed. For one, Judith Dwarkin, chief economist at RS Energy Group, expects global crude stocks to build through next year and prices to continue to be “soft-ish.”

That could be good news for consumers, as lower oil prices typically mean relief at the pumps.

The future of Bill C-69 

There’s much at stake for Canadians in how the federal government proceeds with Bill C-69, which includes an overhaul of the assessment process for major energy projects across the country.

The bill sets in place new timelines and parameters for reviews, lifts limits on who can participate in the process and creates an early-phase consultation with Indigenous communities and anyone else who could be impacted by a project.

There are fears in the oilpatch that a new process will scare off investment, though executives who met Trudeau in Calgary in November said they were confident he heard their concerns.

A base plant with upgraders near Fort McMurray, Alta. (Jason Franson/The Canadian Press)

The government argues reform is needed to restore trust in the system.

Indigenous leaders want to ensure they have a bigger role in the decision-making process, while environmental groups have long wanted to see a more transparent approval process that relies on solid science. 

Crafting the final legislation will require hard work and careful politics.

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Window repair or replacement is the responsibility of the condo corporation

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If the windows in your condo are hazy, drafty, or have rotting frames, it’s an indicator that they need repairs or outright replacement.

However, under the Condominium Act, it is the responsibility of the condo’s board to carry out such changes as a replaced window is a common element.

“Under the Condominium Act, a declaration may alter the maintenance or repair obligations of unit owners and the corporation but cannot make unit owners responsible for repairs to the common elements,” said Gerry Hyman is a former president of the Canadian Condominium Institute and contributor for the Star.

“A declaration for a high-rise condominium invariably provides that the unit boundary is the interior surface of windows. That means that the entire window — whether it is a single pane or a double pane — is a common element. Necessary repairs or replacement of a broken pane is the obligation of the corporation.”

According to Consumer Reports, selecting an installing windows replacement can be very overwhelming for homeowners. Therefore, if you aren’t covered by your condo’s corporation, it would be necessary to hire professional hands.

Wood, vinyl and composite windows need to be tested on how they can withstand various natural elements. For wind resistance, a window can be very tight when it’s warm but get quite cold too—especially when it begins to leak a lot.

Whatever the case may be, the bottom line remains that replacement windows can save you heating and cooling costs, but it’s best not to expect drastic savings.

Additionally, while getting a new window might help you save on your electric and gas bills, due to their expensive cost, it may take a long time to offset their cost.

Mid-last-year, the government withdraw a $377 million Green Ontario program that provided subsidy on windows to installers and repairers. Window companies had to install energy-efficient windows in order to qualify for the government subsidy that pays for up to $500 of a $1,000 to $1,500 window.

Due to the largely generous subsidies from the government under the Green Ontario program, a lot of window dealers were fully booked for months—even after the program had ended.

“We’re fine with the program ending, we just need more time to satisfy consumers,” said Jason Neal, the executive director of the Siding and Window Dealer Association of Canada, the industry group representing window dealers in a report.

According to Neal, the Progressive Conservatives acted hastily, making massive changes with no prior notice.

“No notification was given to us by anyone,” he said, noting he learned about the change through one of his dealers.

“It’s created a ripple effect.If they had just given us notice we would have pushed that down the line from the manufacturer right into the dealer right down to the consumer.”

Neal noted that he wasn’t particularly sad to see the Green Ontario program end, as it was “the worst rebate program in the history of the window industry.”

“It’s been horrible,” he said. “$500 a window has created such hysteria.”

However, despite the program ending about a year ago, numerous homeowners have been contacting window dealers consistently with concerns that they might not be able to afford replacement windows without the government’s subsidy.

“I understand their concern,” said window dealer Chris George. “I would suggest they reach out to their local representative of the government in their riding and let them know about their concerns.”

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7 Vancouver Real Estate Buying Tips

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The real estate market in Vancouver is turning around for good for everyone looking to purchase a home.

Previously soaring prices are now beginning to ease up, making it a perfect time for buyers—with real estate agents already getting ready for a very busy spring and summer season.

However, before splashing cash on a new property, there are some very important tips you need to know to ensure you make the most of the buyer’s market.

Here are some few expert tips that would guide you when purchasing a home in the sometimes frustration Vancouver seller’s market.

  1. Get adequate financing

It is very important that before you make the move to purchase a property, you put into careful consideration your credit score.

Normally, home buyers with lower scores use the secondary mortgage market to finance their purchase, as they’re more likely to pay a higher interest rate.However, it is advisable to get loan approval long before purchasing the house. This way, you are fully aware of how much you are able to spend—but never be tempted to borrow the maximum amount of money available.

“What’s your mortgage payment that you’re comfortable with? And take into the fact the taxes you’re going to have to pay, if it’s a strata – what the maintenance fees are, if it’s a home what type of maintenance are you going to have to pay in the future?” said Phil Moore, president of the Real Estate Board of Greater Vancouver in a report.

Always be careful of the type of loan you secure and ensure that you can comfortably afford it over a long period of time.

  1. Get a real estate agent

Buying a property without professional help is a very risky move and can be likened to choosing to represent yourself in court without a lawyer. While you might trust your negotiation skills, only realtors are permitted to present offers directly.

Therefore, it is necessary to get a professional real estate agent in the area to represent you. So, screen a few agents and select the best one who has in-depth knowledge of the markets and has a great reputation.

“They’re there to protect you. They’re there to walk you through each step of the process,” Moore said.

  1. Sign up for automated alerts

Most—if not all—realtors have access to the Vancouver real estate board’s database which is updated approximately two days before the public MLS website.

Therefore, you can request from your realtor to sign you up for automatic real-time alerts of all new listings. Doing this gives you an edge as you’re among the very first to know about new properties.

  1. Do a thorough inspection

After receiving an alert for a new listing, it is necessary to push almost immediately for an inspection from your realtor. In this current market, buyers now have time to make an inspection.

Making a quick inspection eliminates any surprises—as there could be major maintenance or repair issues that could spring up. Therefore, you can now table your offer based on the outcome of the inspection, with clauses about claiming your damage deposit back if everything isn’t as was advertised.

Additionally, if you notice that renovations were done, you need to be sure that it was permitted work and carried out appropriately. Failing to do this would ultimately lead to further cost down the line and simultaneously affect the resale value.

  1. Have a back-up plan

There’s always the possibility that everything may not go as smoothly as you’d want. From the inspection being a failureto the property not living up to your expectations—or not being able to agree on the closing date that matches with your needs.

However, a professional real estate agent will definitely help you get past all of these things. If you plan on selling the property as you buy, you can table that and make it part of the deal.

“You’ve got an option, especially in a buyer’s market: you can put in an offer subject to selling your place. So maybe you want to have a place lined up,” Moore added.

Additionally, building contingencies into your buying plan is necessary. Things such as unexpected delays in closing the deal, closing cost and moving costs that could result in added living expenses if that’s your permanent home.

  1. Don’t fall for the buyer frenzy

The Vancouver market buying frenzy that caused a serious climb in the prices a couple of years ago has ended. Thus, it is important not to get caught up in bidding wars with properties that have been deliberately under-priced—with the hope of initiating multiple offers.

“Some of the sellers have been on the market for over a year and they’re eager to sell. So what I’m saying to consumers is: you have a lot of choices, you’re in the driver’s seat, let’s go out and take a look at what’s available,” said Moore.

  1. Never be wary of multiple offers

When purchasing a property, don’t be afraid of multiple offers as you have the same opportunity as anybody else.

Typically, there are just a few offers below the asking price: a couple priced fully, and two or three above the asking price—depending on how close the fair market value is from the asking price.

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Do you know what kind of condo you’re buying?

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(NC) Condominiums can come in all shapes and sizes. But it’s important to know that not all condos are created equal when it comes to warranty coverage.

Whether you’re buying a condominium townhouse, loft-style two-bedroom or a high-rise studio, they are all classified as condominiums if you own your unit while at the same time share access (and the associated fees) for facilities ranging from pools and parking garages to elevators and driveways, otherwise known as common elements.

The most common types of condos are standard condominiums and common elements condominiums. The determination of how a condominium project is designated happens during the planning stage when the builder proposes the project and the municipality approves it.

When you’re in the market to buy, you need to know how your chosen condo is classified because it affects the warranty coverage under the Ontario New Home Warranties Plan Act. Standard condominiums have warranty coverage for units and common elements, but common elements condominiums only have unit coverage.

How could this affect you as the owner? If your condo complex has underground parking and, for example, there are problems with leaks or a faulty door, the condo designation will determine whether there’s warranty coverage.

If your unit is a standard condominium development, then the common elements warranty may cover the repairs. If it’s a common element condominium development, then repairs might have to be covered by the condo corporation’s insurance, which could impact your condo fees or require a special assessment on all the owners.

To avoid surprises, you should have a real estate lawyer review the Declaration and Description attached to your purchase agreement to be sure that you know the designation and boundaries of the unit you’re looking to purchase. Find more information on the types of condos and their coverage at tarion.com.

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