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Canada collects $839M in steel and aluminum tariffs, but aid for sector mostly unspent

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Foreign Affairs Minister Chrystia Freeland told an interviewer in Davos this week that once the U.S. drops its steel and aluminum tariffs, Canada will too, “30 seconds later.”

Until that day comes, the extra taxation is pretty lucrative for the federal government. Finance Canada says $839 million was collected in the six months leading up to Dec. 31 from retaliatory tariffs on imported American steel, aluminum and other products.

Canada didn’t start this tariff spat, and from the prime minister on down every Canadian official says he or she wishes it would end. The tariffs on both sides of the border have disrupted supply chains and added extra costs for consumers and businesses across a wide range of industries.

All the same, the new revenue is on track to hit the $1-billion mark by the time Finance Minister Bill Morneau tables his final pre-election budget this spring.

And this figure doesn’t include the 25 per cent surtax now collected on seven categories of steel imports from countries beyond the U.S. (Countries with whom Canada has a free trade agreement in place are mostly exempted, although some categories of Mexican steel were included.)

This “emergency safeguards” surtax is intended to prevent cheap foreign steel displaced from the U.S. market from disrupting supply chains in Canada.

Finance Canada told CBC News Friday that it’s too early to report how much revenue the safeguards are bringing in.

Finance Minister Bill Morneau, seen here starting an emergency safeguards process to protect Canada’s steel industry at a news conference in Hamilton last summer, has to decide later this spring whether to continue extra surtaxes on foreign steel imports. (Peter Power/Canadian Press)

Hearings on the merits of extending these safeguards beyond the 200-day period announced by Morneau in October wrapped up at the Canadian International Trade Tribunal on Thursday afternoon, with domestic steel producers arguing the safeguards were necessary to prevent a surge of foreign steel, while customers and foreign suppliers questioned whether there’s solid evidence that these imports represent a genuine threat.

Support takes many forms

Before the retaliatory tariffs started last June, the Liberal government announced a $2-billion assistance package for the steel and aluminum sector — to acknowledge the impact of the tariffs on businesses and to offset any impression of federal coffers profiting from cross-border trade misery.

Six months later, only a small amount of that aid package has been allocated. And because much of it takes the form of repayable financing, over the long term the cost to the government may not be anywhere near the value of the tariff revenue it’s raking in.

The government’s aid package for the steel and aluminum sector included:

  • $250 million from the Strategic Innovation Fund administered by Innovation, Science and Economic Development (ISED) Canada, set aside for steel or aluminum companies that need funding for new capital expenditures or other “innovation investments.”
  • $800 million in financing from the Business Development Bank of Canada, available to help companies expand into new markets, improve their efficiency or upgrade their technology and equipment.
  • $900 million in financing from Export Development Canada, available to provide extra support for companies’ working capital and help mitigate higher-risk investments.

The Strategic Innovation Fund has made only two announcements so far about help for steel or aluminum companies.

In October, nearly $50 million in repayable funding was allocated to ArcelorMittal Canada Inc., which is modernizing its plants in Hamilton and Contrecoeur, Que. And earlier this month, ISED announced that Algoma Steel Inc. in Sault Ste. Marie, Ont., would receive $30 million in repayable financing from this fund, as well as another $60 million from FedDev Ontario, as it emerges from bankruptcy protection and restructures its operations.

Taken together, these add up to less than one third of the money available from ISED. While this fund has criteria for allocating both repayable and non-repayable contributions, both of these steel companies got repayable financing.

As of Dec. 31, BDC had authorized 397 loans, worth just over $255 million of the $800 million that was announced.

For its part, EDC told CBC News that it has supported 26 companies in the steel and aluminum sectors, providing $169.1 million in financing, bonding and insurance support.

While that falls far short of the $900 million that was announced, spokesperson Jessica Draker wrote that “we expect continued uptake in the short term in light of the trade climate.”

Because the services provided by these Crown corporations can be loans or insurance products provided on commercial terms, they aren’t announced by press release or disclosed publicly in detail, making it difficult to track exactly who is benefiting from the federal aid package or to what extent.

Sault Ste. Marie MP Terry Sheehan and federal Minister of Innovation, Science and Economic Development Navdeep Bains met steelworkers in Sault Ste. Marie earlier this month, as new financing was announced for Algoma Steel Inc. (Supplied/Terry Sheehan)

The remainder of the $2-billion package wasn’t directed at domestic producers. Global Affairs Canada’s trade commissioner service is getting $50 million in new funding.

In addition, $50 million was made available to provinces for training programs for displaced employees. Another $25 million could fund temporary extensions to work-sharing agreements to mitigate job losses.

U.S. more open to exemptions

Some exemptions are possible for these tariffs; these are also hard to track.

Up to $285 million could be refunded to affected companies, but applications for exemptions are approved by a federal interdepartmental committee, according to the following criteria:

  • a lack of domestic market supply, either nationally or regionally — leaving no choice but to import.
  • contracts dated before May 31, 2018 that required the use of U.S. steel or aluminum (such as requirements defence contractors face).
  • other exceptional circumstances that risk “severe adverse impacts” on Canada’s economy.

CBC News asked how much of this $285 million has been refunded so far, but Finance Canada said Friday the data are not yet available. Previously, the government would not disclose which companies received exemptions, for what reasons, or in what amounts.

A smaller amount — $18.5 million — is available to be waived under the Canada Border Services Agency’s duty deferral program.

“Assessments are ongoing in regard to applications for surtax relief,” a spokesman for Finance Canada wrote CBC News this week.

Affected companies can also apply for exemptions from the American tariffs. In its first few months, the U.S. exemption process was called “arbitrary” and “screwed-up” as American steel companies lobbied the U.S. Commerce Department to reject certain exemption requests.

Prior to the U.S. government shutdown in December, reports in Washington media said the Commerce Department had received nearly 57,000 requests for exemptions from steel tariffs and over 7,000 requests for aluminum exemptions. Nearly 14,000 exemptions had been processed and granted for the 25 per cent U.S. steel tariff, and just over 900 exemptions had been approved for the 10 per cent U.S. aluminum tariff. 

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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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