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CEOs say Trump policies hurt business, investment

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From center stage in Davos last year, U.S. President Donald Trump told the world’s corporate bosses that America is a great place to invest. It hasn’t quite turned out that way.

Foreign direct investment to the United States fell in 2018, and companies gathered at the World Economic Forum in the Swiss Alps this year say they are worried Trump’s trade war with China will dampen the global economy and business investments even further.

One key complaint here this week: Companies increasingly reliant on consumers in China have had to lower their earnings outlooks as the world’s second-largest economy cools.

And while the U.S. administration has cut taxes and regulations to attract new investment, a wave of caution is rippling through many industries in the United States.

The trade war has been very damaging for the U.S. agricultural economy.– David MacLennan, Cargill CEO

“The trade war has been very damaging for the U.S. agricultural economy,” said David MacLennan, chief executive of U.S. food and agricultural giant Cargill Inc, which announced worse-than-expected results out of China earlier in January.

“The longer this goes on, the worse it is,” he told Reuters.

Foreign investment in the United States, which includes cross-border mergers and acquisitions as well as intra-company loans, fell about 18 per cent in 2018 from the prior year, according to the United Nations Conference on Trade and Development (UNCTAD).

That is close to the 19 per cent year-on-year drop in foreign investment globally. But it is notable given the deregulation and tax cuts that might have otherwise fed into inward investment. In January of last year, at Davos, many executives said they planned to spend money in the U.S. in 2018.

A view of the congress center, which hosts the WEF event, is illuminated by street lights on the eve of the annual meeting Sunday. (Markus Schreiber/Associated Press)

While the UN trade agency attributed the global and U.S. declines to the tariffs that the United States and China have imposed on each other’s imports since mid-2018, foreign investment in China actually rose three per cent last year over the previous year. Foreign investment to India rose seven per cent.

Alan Jope, chief executive of consumer goods company Unilever, said the United States remains a good market for its products, which include Dove deodorant, Magnum ice cream and Lipton tea.

But it is China, where Unilever last year joined forces with e-commerce giant JD.com to move its products around the country, that has become the more resilient market.

Jope said China was “one of our most reliable sources of growth. China provides the new stability in consumer consumption.”

Ripple effects

The U.S.-China trade war has hit industries around the world over the past few months.

Big Chinese companies such as Alibaba have shrunk their plans to invest in the United States. Taiwan-based Foxconn has scaled back its plans for a Wisconsin factory, and Chinese automaker GAC Motor has also delayed a move into the U.S. market.

In September, Austria’s fiber producer Lenzing halted a planned U.S. expansion, blaming rising tariffs between the United States and China.

Chinese textile exports to the U.S. are among the goods facing tariffs. Lenzing mothballed a $322 million US project in Alabama to focus on setting up a new production facility in Thailand.

To be sure, foreign companies are still investing, particularly in the auto industry.

Volkswagen said earlier this month that it would invest $800 million to build a new electric car at its plant in Chattanooga, Tennessee. Toyota and Mazda are working on a new assembly plant, and Daimler and BMW are investing in existing operations.

But the economic malaise driven by the upending of trade flows is hitting tech companies hard due to both supply-chain disruption and the economic slowdown in China.

Apple this month warned of disappointing quarterly revenues, citing slowing iPhone demand in China. Samsung Electronics Co Ltd. — the world’s biggest maker of smartphones and the manufacturer of chips for other smartphone makers, including Apple and Huawei — said its fourth-quarter profit likely dropped 29 per cent.

“For the long run … I worry that the trend will expand to many other countries and industries, and at that time … we all will be negatively affected,” Ken Hu, deputy chairman of China’s Huawei Technologies, said in Davos.

Huawei, the world’s biggest producer of telecommunications equipment, is “probably suffering the most right now” because it relies on heavily integrated and globalized supply chains, Hu said.

Trump looms large

As a result of the disruption, Trump’s trade war with Chinese President Xi Jinping is looming large over Davos this year, even if neither man is here.

The International Monetary Fund trimmed its global growth forecasts on Monday and a survey by auditing and accounting giant PwC of nearly 1,400 chief executives showed increasing pessimism among business chiefs.

The PwC research showed 27 per cent of executives from outside the United States see the United States as the number one place with the most potential for growth, down from 46 per cent in 2018.

It’s not only economics that is clouding the skies. Foreign companies, mainly Chinese, also face tighter scrutiny when they bring deals to the United States, after the Trump administration last year strengthened the powers of the Committee on Foreign Investment (CFIUS), said Stuart Eizenstat, former U.S. ambassador to the European Union and now head of law firm Covington & Burlington LLP’s international practice.

CFIUS is an intra-agency panel that reviews acquisitions on national security grounds.

Chinese state-owned Sinochem Group, which has been in merger talks with ChemChina to create the world’s biggest industrial chemicals firm, said that it did not think it could clinch a U.S. acquisition in the current environment.

“You know what’s happening today, so I think you will see there will be less investment going abroad,” Sinochem Chairman Ning Gaoning said.

“The Chinese are getting quite confused. They thought they were welcome to invest in other countries. Now they realize they are not being welcomed all the time.”

Takeshi Niinami, chief executive of Japanese brewer Suntory Holdings Ltd., told Reuters in an interview that the world has “very big emotional leaders” including one in the Washington.

“Davos is a body to work on one voice, to give [a message that says]: ‘Come on, we have to be rational,'” he said. “Business should be the one to let them cool down.”

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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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