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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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Couple from Toronto buys dream home in Mushaboom

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MUSHABOOM – A couple who lived and raised a family in downtown Toronto developed a five-year plan in 2015 to purchase their dream home.

In September they moved into the home – located on Malagash Island in Mushaboom on Nova Scotia’s stunning Eastern Shore – that met and exceeded their best dreams for their retirement.

The Camerons, Bruce and Tanya, decided in 2019 they would explore the Maritimes to see what real estate was available to become their potential retirement home. In the spring of 2020, during a global pandemic, the real estate boom hit their city, and they were hearing the same for Nova Scotia. Our province was their first-choice for attaining their desire for an entirely different lifestyle – away from the busyness of the city.

“We had $300,000 to $350,000 as a home value in mind to buy. Our semi-detached located off Danforth in Toronto was priced at $850,000. We wanted to come out ahead, so we would be secure in retirement,” Tanya said.

Their century-old home had prime location near the subway and GO Transit Line for a great 13-minute commute downtown.

“We enjoyed our community,” explains Bruce “… we had great neighbours, young children around and street parties – lots of social activity.”

Bruce says, “Our agent suggested a starting quote of $899,000. We did not do any renovations and only some staging. Fifty couples went through and we received four significant offers. Six days later we sold – with zero conditions – and a price of over a million dollars. We just requested a closing of September 2020 to get the kids off to school – which we got.”

The couple got more than they had anticipated.

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Rabobank Announces Leadership Changes in U.S., Canadian Offices

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NEW YORK, Dec. 16, 2020 /PRNewswire/ — Rabobank, the leading global food and agribusiness bank, has appointed two of its top executives, Tamira Treffers-Herrera and Robert Sinescu, to become Co-Heads of North American Client Coverage, positioning the Bank for future growth in the region.

Treffers-Herrera has also assumed the role of Vice Chairperson and Head of the Atlanta office, where she additionally oversees Rabobank Mexico, which is led by Eduardo Palacios. Sinescu is the Head of the Chicago office, and also oversees Rabobank Canada, led by Marc Drouin, who was recently appointed as Canada’s General Manager.

Treffers-Herrera and Sinescu report to David Bassett, Head of Wholesale Banking North America, the Bank’s corporate and investment banking business for the region based in New York.

“Both Tamira and Robert have a demonstrated history of strong leadership, operational excellence and passion for our clients,” Bassett said. “Their broad experience and deep sector expertise will be invaluable in delivering dynamic results for clients while accelerating our growth trajectory in North America.”

Each office will have an even greater focus on key Food & Agribusiness sectors and clients: The Chicago office will drive growth in sectors including Dairy, Farm Inputs and Grains & Oilseeds, which are also key areas of focus for the Canada office. The Atlanta office will focus heavily on sectors such as Animal Protein, Beverages, Sugar, and Supply Chains, which are important sectors in Mexico as well.

“Rabobank is fully committed to our clients throughout North America, and we believe our new sector-focused coverage will improve our ability to provide knowledge-based, value-added solutions that benefit our clients,” Bassett said.

Treffers-Herrera was most recently based in London as CEO of Rabobank’s European Region from 2016-2020, where she took the organization through Brexit. Prior to that, she worked in the Atlanta office from 2002-2016. During her tenure in Atlanta, Treffers-Herrera served as Global Sector Head – Consumer Food & Beverages, and prior to that she was a senior banker for a portfolio of large beverage and consumer foods clients. She holds a Bachelor of Arts degree from the University of Kentucky, a Master of Arts from the Patterson School of Diplomacy and International Commerce and has studied at The University of Chicago Booth School of Business and Harvard Business School.

Sinescu has been with Rabobank for over 21 years and was previously General Manager of Rabobank Canada, where he oversaw all operations, business development, commercial strategy and relationships with regulators. In addition, he continues to serve as CEO of Rabo Securities Canada Inc. Prior to Canada, he was a senior banker, Head of Corporate Banking, European Sector Head for Sugar, and a member of the Management Team for Rabobank France. He holds a Bachelor of Science in Business from the Bucharest School of Business, a Master of Business Administration & Management and a Master of Science in Banking and Corporate Finance from Sorbonne University in Paris, and has studied at Brown University.

Drouin has worked with Rabobank’s Canadian team for more than nine years and most recently served as a senior banker, Head of Rabobank Canada’s AgVendor Program and a member of Rabobank Canada’s Management Team. He brings extensive wholesale banking experience within the Dairy, G&O, CPG and Supply Chain sectors. Drouin holds a Bachelor of Arts degree from McGill University and a Master of Business Administration in International Finance, Marketing and Management from the Schulich School of Business at York University.

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Greybrook Realty Partners & Marlin Spring Brand Jointly Owned Asset Manager – Greyspring Apartments

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TORONTO, Dec. 14, 2020 (GLOBE NEWSWIRE) — Greybrook Realty Partners and Marlin Spring are pleased to announce the new branding of their jointly owned investment and asset management firm, Greyspring Apartments. With a portfolio of more than 2,000 units and CAD$375 million in assets under management, Greyspring Apartments is focused on the acquisition and repositioning of multi-family assets throughout Canada.

The new name and branding is an important step in Greyspring’s evolution as an independent operating business. Formed in 2018 by long standing-partners Marlin Spring and Greybrook Realty Partners, Greyspring Apartments was established with the goal of building a leading asset management firm with a robust portfolio of residential rental real estate assets in primary and secondary markets across Canada.

Greyspring’s talented team of real estate, asset management and finance professionals is overseen and guided by the Management Board, whose members include Benjamin Bakst, CEO, Marlin Spring; Elliot Kazarnovksy, CFO, Marlin Spring; Sasha Cucuz, CEO, Greybrook Securities Inc.; Peter Politis, CEO, Greybrook Realty Partners; Chris Salapoutis, President & COO, Greybrook Realty Partners; Ashi Mathur, President, Marlin Spring; and Karl Brady. In addition to his role on the Management Board, Karl Brady leads Greyspring Apartments as its President. 

“We are pleased to announce the official name and branding of a business we formed with our partners at Marlin Spring a few years ago,” said Peter Politis, CEO, Greybrook Realty Partners. “Greyspring has been diligently focused on the execution of strategic value-add programs across its portfolio that are improving the quality of housing for tenants and overall asset values. For Greybrook investors, expanding from our core business in real estate development to the value-add space through Greyspring, has allowed us to provide our clients with investment opportunities that diversify their real estate investment portfolios.”

“Marlin Spring and Greybrook have partnered on many residential real estate projects in recent years,” said Benjamin Bakst, CEO and Cofounder, Marlin Spring. “To a great extent, Greyspring illustrates our approach to partnerships. We believe in, and strive for, responsible growth through deepening our relationships with our trusted partners. With Greyspring, we’ve formalized our focus on providing better and more affordable living experiences for Canadians. This vision aligns with our mission to deliver exceptional real estate value to all our stakeholders with an uncompromising adherence to our core values.”

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