Month: April 2019

TORONTO — A lawyer for Loblaw Companies Ltd. told a Toronto court today there is no evidence to back the Canada Revenue Agency’s allegations that its Barbadian banking subsidiary was misused for tax avoidance.

Loblaw’s lawyer Al Meghji said in his closing arguments at the Tax Court of Canada that Barbados-based Glenhuron Bank is viewed as a bank under Barbadian law, and should qualify for a tax exemption under Canadian law.

Department of Justice lawyers had argued during the trial, which began in April, that Loblaw Financial Holdings took steps to make Glenhuron Bank appear to be a foreign bank in order to avoid paying tax.

Earlier on HuffPost: Loblaw offers $25 gift cards over bread price-fixing scandal

Government lawyers had argued that the Barbados-based entity did not qualify because, among other things, it mainly invested the grocery giants’ own funds and did not conduct business with arms-length entities.

Meghji today told Justice Campbell Miller that the majority of Glenhuron’s activities involved arms-length entities, such as swap contracts with large banks, and its banking licence from Barbadian authorities is further evidence that it fits the profile of a bank.

The dispute centres on the federal government’s reassessments of Loblaw’s subsidiary for several tax years dating as far back as 2001, and could cost the company as much as $437 million according to its latest quarterly report.

While Huawei executive Meng Wanzhou’s extradition case may take months, even years, to settle, it took less than a month for China to strike a multibillion-dollar blow to Canadian canola exports. On Wednesday, China suspended the licence of yet another major Canadian canola exporting company — Regina, Ont.-based Viterra — approximately one month after revoking that of a first.

China surely made a calculated move by banning Canadian canola products. The sanction will affect around $2.7 billion worth of canola export from Canada, and China is one of the product’s main importers.

China’s Ministry of Foreign Affairs said Canada should “correct the mistakes it made earlier” in the brewing trade spat and justified its stance by claiming that Canadian canola products pose a safety risk. It remains uncertain what “mistake” the Chinese officials were referring to — the alleged biological hazards found in Canadian canola or the arrest of Wanzhou, who was indicted by the United States Department of Justice on more than 20 criminal charges.

‘Willing to utilize all of its resources to coerce Canada’

Prime Minister Justin Trudeau acknowledged that the relationship between Canada and China has its “challenges,” but his proposed solution to the ongoing diplomatic crisis seems to be heading in the wrong direction. Earlier in Winnipeg, Trudeau told media that he is considering sending a delegation to Beijing to resolve the issue.

It is not the first time that China utilized trade to pressure foreign countries on various conflicts. In 2010, China called off a proposed bilateral trade deal with Norway and started to restrict imports of Norwegian salmon after the Nobel Prize committee issued the 2010 Nobel Peace Prize to prominent Chinese political prisoner, Liu Xiaobo, who later died of cancer while detained in 2017.

Britain and other countries faced China’s retaliatory measures for meeting with the Dalai Lama, Tibet’s spiritual leader-in-exile. University of Calgary was similarly targeted after the Dalai Lama spoke at the university on 2010, when the Chinese Ministry of Education to remove U of C as an accredited Canadian university in China. In the ongoing trade war with the United States, China put on tariffs on American agricultural products, including soybeans, to pressure voters to dismiss Donald Trump.

It seems China is clearly willing to utilize all of its resources to coerce Canada into making decisions in favour of the regime’s benefit. Chinese authorities took two Canadian citizens as hostages over the Huawei dispute. Michael Kovrig and Michael Spavor are still detained by China. They were not allowed legal counsel, and were only granted consular services once a month.

To this day, Ralph Goodale and the Ministry of Public Safety have yet to make a final decision on banning Huawei’s involvement in Canada’s 5G network. We can expect Xi Jinping and the Chinese communist regime to continue to increase pressure on Canadian officials.

‘Canadians need to realize the danger’

The emerging crisis on canola may just be the start of an aggressive trade penalty scheme. In addition, Canada also exports wood, paper and mineral products to China. If the Chinese were determined to put more restrictions on Canadian exports, more industrial workers and businesses will suffer.

Canadians need to realize the danger that emerges from an aggressive China: this is no longer a country facing mass poverty and poor infrastructure. Through international trade, favourable economic terms and comprehensive government interference, China has become a global power with massive resources over the past 40 years of economic reform.

There are many options that Canada has yet to utilize to defend against China’s ongoing aggression. Trudeau seems to prefer a softer approach to the Chinese government, ostensibly to avoid further retaliatory measures. But while Trudeau wants to engage in dialogue and communication, the Chinese have shown little interest in talking — they want to see Meng Wanzhou released and Huawei to be included in Canada’s 5G network. Trudeau is not able to offer either of these things.

Canada should start considering a defensive strategy. We have a dollar-to-dollar tariff on American steel; we should consider a similar dollar-to-dollar tariff on Chinese goods in Canada.

It is time for Canadians to realize the scope and the severity of the diplomatic disputes between Canada and China. It is more serious than canola products and two detained Canadians. It is the time for Canada to re-evaluate its China policy to handle future crises from the increasingly aggressive regime. We need to consider proactive plans, and we should be prepared for facing larger conflicts.

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People in Manitoba, Ontario, Saskatchewan and New Brunswick will be paying more for gasoline and heating fuel Monday when the federal government’s carbon tax begins in provinces that refused to impose their own emissions pricing.

The federal tax is $20 a tonne for this year and is set to increase by $10 annually until it reaches $50 a tonne in April 2022.

Earlier: Trudeau outlines what provinces without their own emissions pricing plans face.

The starting rate adds 4.4 cents to the price of a litre of gas, about four cents to a cubic metre of natural gas, and also drives up the cost of propane, butane and aviation fuel.

‘There’s no way for us to pass these costs along’

There is uncertainty about how widespread the impact will be, how businesses will receive rebates, and whether the tax will survive court challenges underway in two of the rebel provinces.

Todd Lewis, president of the Agricultural Producers Association of Saskatchewan, said while farm fuel is exempt from the carbon tax, the levy does apply to that used in commercial trucks and trains moving grain off farms and bringing in seed and equipment.

“As we move our commodities, we’re going to have increased costs. Simple as that,” Lewis said in an interview.

“There’s no way for us to pass these costs along. If you’re a grocery store or a dry cleaner, if you’re costs go up, you can pass them along to the consumers, but we participate in a world market.”

The business community also has unanswered questions. The federal government has yet to reveal details about a program to rebate some of the increased costs faced by small- and medium-sized businesses.

Residents of the four provinces will be getting rebates as well on their income tax returns. The rebates start at $128 annually, vary between provinces and increase for people with spouses or dependents at home.

The federal government says the carbon tax is a sensible way to protect the environment — put a price on activities that pollute to discourage emissions, and give back most or all of the money through income taxes.

The holdout premiers have been vocal in their criticism.

Ontario Premier Doug Ford has described the carbon levy as a “job-killing” tax that will increase prices on everything. He has warned that it could cause a recession — a claim economists dispute.

Ford has tweeted nearly daily about the tax over the last two weeks — his caucus members have contributed dozens more — and has held news conferences to rail about it.

An Ontario court is set to hear the government’s constitutional challenge of the carbon tax in April. A Saskatchewan court has already heard similar arguments and is expected to deliver its verdict shortly.

New Brunswick Premier Blaine Higgs’s government argues the tax will punish the province’s large rural population because there’s no option to ditch vehicles for public transit.

Rebates may not be enough to offset higher costs: Pallister

In Manitoba, Progressive Conservative Premier Brian Pallister initially intended to implement a lower carbon tax, and demanded the province be recognized for spending billions to build clean hydroelectric infrastructure. He dropped the idea and joined the protesting provinces when Ottawa refused to accept the lower rate.

Pallister said the tax comes at a time of economic uncertainty for Manitobans.

“Uncertainties for people who are concerned about trade … or people who are concerned about higher interest rates for mortgages when they come up for renewal.”

Pallister suggests the federal rebates may not be enough to offset increased costs businesses will face, which could be passed on to consumers.

“The proposed plan does not consider … the multiplier effects of these taxes on the people we buy things from.”

Beverly Gilbert, a Calgary tax adviser, says the carbon tax will affect Canada’s competitiveness.

“The U.S. does not have any kind of carbon levy or carbon charge so it makes it more difficult to compete internationally,” she said.

Speaking Sunday in Brampton, Ont., federal Conservative Leader Andrew Scheer denounced the tax as just another way to take money from Canadians.

“The Liberal carbon tax is not an environmental plan,” Scheer said. “This is nothing but a tax grab.”

With files from Stephanie Taylor in Regina, Allison Jones in Toronto, Holly McKenzie-Sutter in St. John’s, Nfld., and Dan Healing in Calgary

If you grow pot in your rented apartment and it damages the property, whose insurance will cover the damage?

That’s a question that both tenants and landlords alike don’t know how to answer, according to a new survey from rate comparison site Ratehub.ca.

Matt Hands, Ratehub’s senior business unit manager for insurance, told HuffPost Canada that insurance providers don’t have a lot of historical data about pot growing and smoking-related damages to accurately calculate the risk factors involved.

“But where I think they’re failing is … to be open with the public about that and even give their initial feelings on how it is,” he said.

Most homeowners (78.76 per cent) and renters (59.44 per cent) don’t believe their homeowner’s or renter’s insurance would cover cannabis growing-related damages.

Canadians are also split on whether legalization will cause home and insurance premiums to rise. A third believe it will, another 27 per cent say they don’t think so, and 40 per cent say they don’t know.

Hands said that while everyone in the industry may have their opinions on where policies will go after legalization, insurance providers aren’t taking the onus to educate Canadians.

“That’s where that uneasiness and that unknowingness is coming from the survey respondents we’re talking to, so that’s the general consensus we’re getting — they just wish their insurance providers would be a bit more forthcoming with them with what’s going on.”

Renters, landlords split on right to consume

Just over a quarter of renters (28 per cent) believe Canadians should have the right to smoke and grow cannabis within their rental units, even if their landlord or building manager forbids it in their lease. But the survey showed opinions were split across generations, with exactly half of baby boomers (ages 55 and older) saying they shouldn’t be allowed, whereas only 30 per cent of Gen Xers (ages 35-54) and 32.13 per cent of millennials (ages 18-24) saying the same.

However, 38 per cent of renters said they don’t know whether they will have the right to after recreational pot is legalized. More than half (58 per cent) said they don’t know whether they automatically have the right to grow cannabis in their apartments.

More than three in five (62 per cent) landlords don’t think tenants should be allowed to smoke inside, and about the same number (59 per cent) plan to put restrictions on smoking pot inside. Another 51 per cent of landlords plan to restrict pot-growing entirely.

Still, most renters and homeowners aren’t planning on growing cannabis at home when recreational marijuana becomes legal. Four in five homeowners (80.24 per cent) and 71.93 per cent of renters say it’s not on their radar.

The survey also showed a lack of clarity around pot rules for drivers and auto insurance. Almost three-quarters of Canadians (74.36 per cent) believe driving high should be penalized in the same way as driving drunk, but almost as many (69.58 per cent) don’t know if driving while high on cannabis will affect their premiums.

Hands said it’s important for insurance providers to provide more transparency to Canadians to help them to make smarter financial decisions.

“This is a big change in the market right now, it’s something that everyone’s kind of really interested in, and like we said, there’s a lot of unknowingness, so just having insurance providers take a step forward and just being transparent on what they feel is going to happen, will go a long way.”

The survey of more than 1,200 Canadians was conducted online by Ratehub.ca during July and August 2018. The survey has a margin of error of +/- 3 per cent at 95 per cent confidence.

Not long ago, it would have been hard to imagine a time when Vancouver’s real estate market was so quiet you could hear the crickets chirp. Yet here we are.

There’s no papering over the latest bad news from the region’s real estate board: Sales in August were down 36.6 per cent from the same month a year earlier, the region’s real estate board reported Wednesday, and prices are now falling in all housing categories.

“Buyers today have more listings to choose from and face less competition than we’ve seen in our market in recent years,” said Phil Moore, president of the Real Estate Board of Greater Vancouver, in a statement.

“With fewer buyers active in the market, benchmark prices across all three housing categories have declined for two consecutive months across the region,” he added.

But so far, the real estate board’s numbers show price declines have been mild. The benchmark cost of a detached home in Greater Vancouver sat at $1.561 million in August, down 3.1 per cent from a year earlier.

Thanks to strength earlier this year, condo prices are still higher than a year ago, up 10.3 per cent in a year to $695,500 in August. But prices have now turned negative, and are down 1.6 per cent since May.

A serious price crash?

But some real estate insiders in B.C. say there are segments of the market where things are considerably worse than the real estate board’s data suggest.

Realtor Ian Watt used independent figures from data-mining company SnapStats to determine that detached homes on Vancouver’s pricey west side have fallen by 26 per cent in the past year, to a median of $2.8 million, from $3.8 million a year ago.

In West Vancouver, detached house prices are down 30 per cent over the past year, to $2.5 million from a median of $3.6 million.

The seeming collapse in house prices at the top end of the market could be the “canary in the coal mine” warning of a broader correction, realtor Stuart Bonner told the Vancouver Sun earlier this month.

“Vancouver will never be affordable, but it will drop 25 per cent or more,” the Sun quoted Watt as saying.

Things are likely to get worse before they get any better. A key measure of the health of a housing market — the sales-to-active-listings ratio — indicates that Vancouver’s detached home market is now a “buyer’s market,” with fewer than 10 sales for every 100 active listings.

The townhouse and condo segments are headed there as well. There were fewer than 27 condo sales for every 100 condos listed in August, down from around 57 sales per 100 active listings at the start of the year. That represents a rapid slowdown in the condo market.

Affordability unchanged

Despite the declines in house prices, Vancouver’s market is not getting any more affordable, data from National Bank of Canada shows.

The bank’s latest affordability report found no change to the relative cost of homeownership in Vancouver in the second quarter of this year. Lower house prices were offset by higher mortgages rates. The city’s dubious distinction as the least affordable housing market in North America is likely secure for the moment.

For Canada as a whole, the cost of homeownership rose by 0.2 per cent in the second quarter, relative to earnings, led by a 1.8-per-cent jump in costs in Victoria and a 0.8-per-cent jump in Quebec City.

DETROIT — Nissan recalled nearly 240,000 cars and SUVs worldwide due to a fire risk and is advising people to park the vehicles outdoors in rare cases.

An anti-lock brake pump can leak brake fluid onto a circuit board, causing an electrical short and increasing the fire risk, according to the company. If drivers see the anti-lock brake warning lamp for more than 10 seconds after starting the engine, Nissan urges them not to drive the vehicles and park them outdoors and away from structures or other vehicles.

The recall covers certain 2015 to 2017 Nissan Murano, 2016 and 2017 Nissan Maxima, 2017 through 2018 Nissan Pathfinder and 2017 Infiniti QX60 vehicles.

Nissan estimates 56 per cent of the vehicles have the problem, which has been traced to faulty seals in the pump.

Some Muranos were recalled for the same problem in 2016.

No crashes or injuries reported

Documents posted Thursday by the U.S. National Highway Traffic Safety Administration don’t say if there have been any fires. Nissan spokesman Steve Yaeger would not comment when asked about fires but said there have been no related crashes or injuries.

The company is asking owners to park the vehicles outside if the anti-lock brake light stays on “out of an abundance of caution” Yaeger said. If the light stays on, owners should immediately contact Nissan or Infiniti to have the vehicle towed to a dealer, he said.

Dealers will inspect the pump serial numbers and replace them if necessary starting Oct. 15.

Most of the recalled vehicles are in the U.S., Canada and Mexico.