Archive for the ‘Other News Articles’ Category

Multi-family sales soar 900 per cent across Lower Mainland

Wednesday, June 10th, 2020

Commercial real estate transactions in the Lower Mainland soared to $2.15 billion in Q1

Western Investor

Led by land sales and the multi-family rental sector, the total dollar value of commercial real estate transactions in the Lower Mainland soared to $2.15 billion in the first three months of 2020, a 37.2 per cent increase from the $1.57 billion recorded in the first quarter (Q1) of 2019.

Sales and dollar values increased across most property types, but land and multi-family rental buildings combined accounted for more than half of the dollar volume.

There were 375 commercial real estate sales in Q1 2020, a 10.9 per cent increase from the 338 sales in Q1 2019, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

“The first quarter of 2020 came to a close just a few weeks into the COVID-19 pandemic,” said Colette Gerber, REBGV chair. “While sales and values increased in the first three months of the year, it’s too early to assess how the commercial market has been affected by physical distancing rules and other changes that have been implemented due to COVID-19. We’ll monitor this through the second quarter of the year.”

Q1 2020 activity by category:

Land: There were 105 commercial land sales in Q1 2020, which is an 11.7 per cent increase from the 94 land sales in Q1 2019. The dollar value of land sales was $853 million in Q1 2020, a 15.8 per cent increase from $737 million in Q1 2019.

Multi-Family: There were 15 multi-family land sales in Q1 2020, which is up 87.5 per cent from eight sales in Q1 2019. The dollar value of multi-family sales was $626 million in Q1 2020, a startling 903.8 per cent increase from $62 million in the same period a year earlier.

Office and retail: There were 135 office and retail sales in Q1 2020, which is down 3.6 per cent from the 140 sales in Q1 2019. The dollar value of office and retail sales was $318 million in Q1 2020, a 14.9 per cent decrease from $373 million in Q1 2019.

Industrial: There were 120 industrial land sales in the Lower Mainland in Q1 2020, which is a 25 per cent increase from the 96 sales in Q1 2019. The dollar value of industrial sales was $359 million in Q1 2020, a 10.1 per cent decrease from $399 million in Q1 2019.

REBGV Commercial Edge real estate sales data is drawn from transactions in the Lower Mainland region of BC that have been registered with the Land Title and Survey Authority of British Columbia.

Copyright © Western Investor

Selling Sunset does not shortchange on drama

Tuesday, June 2nd, 2020

Ranking the new season?s kerfuffles from worst to first

SONIA RAO
The Province

Selling Sunset is the reality series centred on West Hollywood’s Oppenheim Group, a real estate brokerage employing the sort of agents who might accidentally wear stilettos to a construction site.

None of this is to suggest these agents aren’t good at their jobs, making room for luxury property sales and friendship meltdowns.

But not all drama is created equal. So, in the spirit of pettiness, here’s a ranking of this season’s kerfuffles, from worst to best.

  1. CHRISTINE’S SUDDEN ENGAGEMENT

Resident villain Christine Quinn returns from abroad with her beau, Christian.

Christine’s co-workers are surprised to learn she’s engaged. Estranged bestie Mary Fitzgerald wonders aloud to Chrishell Stause and Heather Rae Young whether there’s any “overlap” between Christian’s relationship with his previous girlfriend and his new one with Christine.

The rift between the two women worsens.

Unlike Mary’s fiancé, Romain Bonnet, Christian does nothing to spice up the plot.

  1. MARY AND ROMAIN’S WEDDING PLANNING

Mary and Romain’s wedding planning is fraught.

Romain, a model, bans Mary’s co-worker Davina Potratz from the wedding because she insulted him, assuming Mary pays for his entire life.

Davina feels left out and directs her anger toward Mary, who is dealing with Romain’s stubbornness and Christine’s hurt feelings.

In the Selling Sunset universe, Mary is a superhero.

  1. HEATHER DEFENDS HER NEW RELATIONSHIP

Fans of HGTV might recognize Tarek El Moussa from Flip or Flop. He and Heather have been dating for a while now. The second season picks up a month into their relationship.

When a few agents express surprise at how early into the relationship Heather met Tarek’s kids, the newest, Amanza Smith, a hardworking single mother, warns Heather to be careful. It can be hard for children to bounce back in the event of a breakup, she says.

Heather interprets Amanza’s concern as an assumption the relationship is doomed.

  1. CHRISTINE AND CHRISHELL’S FIGHT

Chrishell begins the show married to This Is Us actor Justin Hartley. Chrishell occasionally refers to him, but her vagueness only makes their marriage seem more mysterious.

The season takes place before Hartley suddenly filed for divorce, meaning viewers watch these episodes with the knowledge that Chrishell, unaware, is on the verge of life-altering change.

Chrishell is still a central figure, but her main role this season is to defend Mary by reminding everyone how difficult it can be to face Christine’s wrath.

Ironically, their drama was sparked last season by Christine defending Mary after Chrishell seemed to question Mary’s relationship with Romain.

  1. MARY AND CHRISTINE’S FRACTURED FRIENDSHIP

Their friendship falters over a difference in how they approach conflict.

Mary is more straightforward, preferring to speak directly. Christine discusses her feelings with other parties first, a method that comes off as gossiping.

The conflict is dramatized, but the fracturing of a friendship is the most realistic part of this show.

© 2020 Postmedia Network Inc

Why it’s time for companies to change or be changed

Saturday, May 23rd, 2020

Shifting landscape won’t necessarily be devastating, Kevin Carmichael writes

Kevin Carmichael
The Vancouver Sun

It’s a bad time to be a maker of expensive clothes – just ask a maker of expensive clothes.

“Tailored clothing is probably going to be near the bottom of people’s priorities,,, said Stephen Granovsky, chief executive of Toronto-based Luxury Men’s Apparel Group Ltd.

(LMAG), owner of Samuelsohn Ltd., which makes $1,000 sports jackets and $1,500 suits in the north end of Montreal.

It’s not that LMAG’S core customers don’t have money to spend. Despite the COVID-19 cri­sis, the number of men and women working in finance and real estate was little changed from April 2019, while the number of workers in Statistics Canada, s “professional, scien­tific, and technical services,, category was only 2.7 per cent lower. Meanwhile, the year­over-year overall decline was more than 17 per cent.

The company’s consumers are the type that will power the recovery’s early stages. Gra – novsky, however, doubts he’ll benefit much from any pent-up demand. His customers kept their jobs, but they won’t be in the market for office clothes if the office is now the kitchen table.

“Retailers who are opening now that sell casual clothing and sportswear, and even on their online businesses, are seeing lots of initial demand,,, said Granovsky, whose company also owns Rochester, N.y.-based Hickey Freeman Tailored Clothing and Toronto-based Lipson Shirtmakers.

“If you1 re in the sweatpants business, we1re all buying more sweatpants,,, he continued.

“We1 re all buying stretch jeans and things of that nature. But the stuff you wear to work, the stuff you wear to weddings, the stuff

you wear to go to parties, the stuff that we make … we1re going to be somewhere in the bot­tom half of people1 s consumer spending priorities for some period of time, and we have to be prepared for that.,,

Economic downturns destroy companies with weak business plans. The Great Recession punished companies that had grown complacent with exporting to the United States. Canada ended 2009 with about 550 fewer firms than existed at the start of that year, ac­cording to Statistics Canada data, a quick snapshot of what a recession can do to an export­dependent country overly reliant on a single market. The coronavirus crisis is different in that it will also test executives such as Granovsky, whose strategy was entirely reasonable up until a few months ago. The recession is reshaping consumer and corporate behaviour, which will cause reliable streams of demand to run dry.

“We1 re already well over two months,,, Stephen Poloz, the Bank of Canada governor, told reporters on Thursday. “1t1 s going to be long enough for certain habits to change.,,

Poloz made the comments during an hour-long video conference, taking advantage of technology that existed prior to the crisis, but was little used because professional work was wedded to face-to-face meetings.

That notion has now been erased. Waterloo, Ont.-based Open Text Corp. has already de­cided to get rid of half its office space because it discovered that ordering its 15,000 work­ers in 30 countries to stay at home had no effect on productivity. Facebook Inc., Ottawa­based Shopify Inc. and Twitter Inc. all have set similar plans in motion, heralding a struc­tural change in service-based economies that revolves around commuting.

“Office centricity is over,,, Tobi Liltke, Shopify1 s chief executive, tweeted this week.

As a result, demand for commercial real estate, air travel, business suits and overpriced sandwiches won1t recover with the rest of the economy when the lockdowns are lifted. That won 1 t necessarily be devastating for the broader economy because the money that was once devoted to those things will be free to go elsewhere. Entrepreneurs will emerge offering goods and services that we didn1t know we needed at the start of 2020, and exist­ing companies will pivot towards the sources of new demand, provided their managers are talented enough to seize the opportunities.

“There are constraints out there now,,, Poloz said. “What are companies doing in the midst of those constraints? They are developing all -new ways of doing business. People are adapting. Those are the folks that will do more than just survive. They are going to explode in positivity afterwards.,,

Granovsky and his leadership team at LMAG have spent “thousands of hours,, overhauling their Rochester factory to produce face masks and the Montreal facility to make hospital gowns.

Lots of other companies have answered the call for protective equipment by supplying rea -sonable facsimiles with whatever they had on hand. Granovsky decided to do it right and learn how to make hospital-grade gear. That meant tracking down fabric that resists fluid and bacteria, and resetting factories for an entirely different kind of production.

The former was the most difficult, since hospital-grade material is suddenly hard to find. Granovsky made about 40 calls before he found a supplier, a source he is so protective of that he refused to name the company. “We made huge commitments up front for this fab­ric, in excess of $1 million worth of fabric right at the get-go to secure it,,, he said. “We sort of jumped into the deep end of the pool, both in terms of work as well as a financial com -mitment. We’re a company, like many others, where the pandemic threatens our core busi­ness.»

LMAG was rewarded for its efforts last month by an order for 200,000 hospital gowns from the Quebec government, which allowed Granovsky to reopen the Samuelsohn factory and recall 150 employees. Rather than death, the COVID-19 crisis could represent a new phase for Thomas Hickey and Samuelsohn, which share a combined history of more than 200 years.

“We took the position that for some period of time, this was our new business,,, Granovsky said. “We’re even prepared to make some sacrifices in our core business going into the fall season in order to continue manufacturing (personal protective equipment) at whatever pace is required by governments and the broader medical community.,,

© 2020 Vancouver Sun

Why flying is about to get a lot more expensive – for good

Friday, May 8th, 2020

Discount airlines maybe gone forever

Joseph Hall
other

There once was a time when the skies were glamorous, reserved for jet setters tracing vapour trails to Rio and the Riviera. The rest of us loaded up the station wagon — Griswold vacation style — and drove to a campground or a rental on Georgian Bay.

Cheap flights changed that dynamic.

But with COVID-19 annihilating the airline-industry model that made flying affordable, those long-ago times may well be back.

The airline industry is now in tatters, posting hundreds of billions of dollars in losses. And experts are predicting that costly new safety measures will lead to the demise of discount airlines and a significant jump in ticket prices.

From fewer seats on flights, to longer boarding times, to reconfiguring airports for social distancing even before passengers leave the ground, this pandemic has clipped the wings of both business and pleasure travellers and may have lasting effects.

“The elite will always fly … the rich and famous are doing that as we speak,” says Ambarish Chandra, an airline industry expert at the University of Toronto’s Rotman School of Management.

“But if I had to make a prediction I would say that flying will become a lot more expensive, there will be a lot fewer options and so you would have to be quite affluent and have a very good reason to fly to be able to justify it,” Chandra says.

The strategy that made flight affordable to the masses was simple — cramming as many people as possible into a plane and turning that aircraft around within an hour of touchdown with another jammed load, says Chandra.

Social distancing will put an end to that, he says.

And that means far fewer passengers on planes that will need to be sanitized for hours before reloading.

“So the cost of travelling is going to go up, that’s a fact,” says Frederic Dimanche, director of the Ted Rogers School of Hospitality and Tourism at Ryerson University.

The number of seats on commercial planes could fall to 50 or 60 per cent of current configurations, says Dimanche, and airlines will have to raise prices to make flights viable.

Another factor that may drive airplane travel to the realms of the rich is the almost certain demise of the posh business class seating that helped make many airlines profitable.

Dimanche says the risk of infection and longer security and boarding times — possibly double the pre-pandemic cattle lines — will discourage most business travel.

“The quick business trip of a day or the round trip from one place to another is dead,” he says.

“People are not likely to be willing to spend so much time in the airport and on the plane … just for a meeting that they’ve found out in the last two months they can do by Skype or Zoom or Microsoft Teams.”

But, he adds, in our globalized society, where relatives and friends are spread across the country and continents, people will still be lured to fly.

It’s the extended weekend getaway to the Caribbean or the week at the beach in Mexico that are no longer viable, he says.

“People are going to be reallocating their priorities in terms of type of trip, destinations, and budget for sure.”

And that could mean more people will be hitting the road, returning to family camping trips or drives to the lake for their leisure travel.

“We’ll go to something out of the past,” Dimanche says.

The first sector of the airline industry to suffer from COVID-19 will almost certainly be the discount carriers, whose thread-thin margins depend entirely on the quick turnaround, sardine-can flights that the virus will almost certainly eradicate, Chandra says.

“I wouldn’t be shocked to see many, many airlines just finding it unsustainable to keep operating,” he says.

“I would expect big, national carriers (like Air Canada) to continue in some form, struggle on through the crisis and emerge at the other side. But it’s hard to imagine how the smaller airlines are going to compete.”

And any move to quell passenger fears by eliminating seating would also eliminate any potential profits the discount carriers could hope for, Chandra says.

“It completely undermines the economics of flying for these … airlines,” he says.

Governments will almost certainly help some airlines through the crisis and beyond, especially given the vital role they are currently playing as cargo and emergency personnel carriers, Chandra says.

“But it’s hard to believe governments would bail all of them out because that would be a massive amount of money,” he adds.

“So my guess is we see sharply lower competition, which would mean that airfares would have to rise which would (also) mean the days of leisure travel, people just jetting off for the weekend to some holiday destination seem like they are over.”

Jim Scott, president and CEO of Edmonton-based Flair airlines, the country’s third largest, certainly hopes that is not the case.

The discount airline has been flying successfully under the load-’em-up strategy since 2005.

He is counting on equitable government aid to help his airline survive.

Ottawa should not pick favourites when dealing with an airline crisis that has seen passenger loads drop by 90 per cent during the pandemic, says Scott.

He is looking for the federal government to underwrite loans that, he says, Flair would repay within two years.

This is a critical time for a cash infusion and if the government doesn’t step in now “we’re going to see ourselves back to that (Air Canada WestJet) duopoly where our airfares are probably the most expensive of any G-7 country,” he says.

As air travel gets ready to open back up under the new conditions, Scott says Flair is looking at options that include passengers paying a premium to have the seat beside them empty.

“This is going to be a reality, I think because people are going to want to have some empty space next to them and they’re going to be prepared to pay for it.”

But it’s not just the in-flight experience that is going to change, says Dimanche. The airport experience will change, too.

Many of the international airports built over the past two decades, including Toronto’s Pearson, were created as cathedrals of commerce and opulence — elements that will largely disappear with the demands of the current disease.

In one sense it was fortunate the terminals were built on a monumental scale, Dimanche says. “We’re going to need that space because we’re going to have to spread out.”

But he expects the high-end retail, art and entertainment installments the space was meant to accommodate to largely disappear.

“We don’t want people to stay in the airport anymore, but when they are at the airport they are going to have to be following very, very precise procedures with distancing, so we will need the space,” Dimanche says.

But even with all those measures in place, the pandemic has likely spread a fear of flying though the population that could hobble the airline industry for decades.

“Every cabin is sort of the perfect environment for germs to spread (whether) your neighbour is three feet away as opposed to six inches away,” Chandra says.

Adds Dimanche: “It’s a total change of behaviour that we need to be ready for.”

© Copyright Toronto Star Newspapers Ltd. 1996 – 2020

Bitcoin is staging a comeback reminiscent of the 2017 bubble frenzy

Wednesday, May 6th, 2020

A technical event coming for Bitcoin

Vildana Hajric and Olga Kharif
The Vancouver Sun

It’s been left for dead more than once, written off as nothing but a bubble and denounced as rat poison by one of the world’s most famous investors. Yet Bitcoin is once again staging a comeback reminiscent of the token’s glory days, with evangelists pegging their hopes on a technical event as the new catalyst.

True believers say the gains are driven by Bitcoin’s upcoming halving, when the rewards miners receive for processing transactions will be cut in half as soon as May 12. The internet is glutted with second-by-second countdown clocks and the mania is even spurring a hike in hiring by crypto firms worldwide. Bitcoin has rallied to more than US$9,000 in anticipation from around US$6,000 just a month ago.

“Narratives in the world of blockchain act like the Force in Star Wars — they mysteriously move and shape the market,” said George McDonaugh, co-founder of crypto and blockchain investment firm KR1. “You couldn’t be blamed for getting a little excited about what’s to come.”

Bitcoin halvings, which slow down the rate at which new tokens are created, happen once every four years or so. Its third such event is set to occur next week. Skeptics argue crypto prices are notoriously volatile and often difficult to pin explanations to, positing that any appreciation should be priced in ahead of time. But crypto fans cite historical precedent.

Bitcoin’s undergone two prior halvings — or halvenings, as they’re sometimes called — which saw its price appreciate in the aftermath. The world’s largest token rose from around US$12 to over US$1,000 in the year following its 2012 cut in rewards, and advanced about 1,000 per cent in the wake of the 2016 halving, though that reduction happened at a time when the coin was gaining greater mainstream recognition.

The frenzy around digital currencies took it to near US$20,000 the following year before it crashed, with the coin still trading about 50 per cent below 2017’s all-time highs.

But Bitcoin has historically bottomed 459 days prior to the halving, risen leading into the event and exploded to the upside afterward, according to research from Pantera Capital. Post-halving rallies have averaged 446 days — should history repeat itself, Bitcoin could peak around August 2021.

Wallet growth has also spiked, rising 2 per cent in April, the largest monthly increase since at least November. To Nicholas Colas at DataTrek Research, there’s two possible explanations: bored, locked-down gamblers and sports betters are finding their way into cryptocurrencies amid the coronavirus shutdown, while many are also getting excited about Bitcoin’s halving, he wrote in a recent note.

Price Predictions

To be sure, many crypto fans also point to unprecedented monetary and fiscal stimulus unleashed by central banks around the world as a catalyst for prices to advance. Whatever the reason, the recent bull-run hype has ushered in the return of sky-high price targets.

Global Macro Investor’s Raoul Pal projects Bitcoin could reach US$1 million in the next three- to five years. Though the halving isn’t the key driver behind his prediction, it could be a potential accelerant.

“It is already the best performing asset in all recorded history,” Pal wrote in a recent presentation. “It was born out of the financial crisis for exactly what is about to come in this crisis. This is literally what Bitcoin was invented for.”

Jefferies LLC analyst Christopher Wood in his weekly “Greed & Fear” newsletter recommended investors — including institutions — buy Bitcoin ahead of the halving, citing the token’s prior price surges around the event.

“To invest in Bitcoin it is necessary to believe the system has integrity in the sense that the supply is truly limited,” he wrote. The digital token should be a source of diversification “precisely because of its truly decentralized nature,” he said.

Venture capitalist Tim Draper predicts Bitcoin could hit US$250,000 by 2022 or the first quarter of 2023. “Bitcoin adoption will spread because Bitcoin is simply a better currency than any of the political currencies that are tied to governments and political whims,” he said, citing fiscal and monetary stimulus as possible accelerators for adoption.

To Antoni Trenchev, co-founder and managing director of crypto-lender Nexo, Bitcoin could reach US$50,000 by the end of the year, implying a 470 per cent surge from current levels. Though the halving may already be priced in, it will lead to huge appreciation over time, he said.

“Critics can disparage Bitcoin as much as they like, but it’s by far the best performing asset of the past decade,” he said. “We’re bullish about its future.”

Trenchev is seeing “huge” demand for his firm’s products ahead of the coin’s halving. “We’re not hiring because of the halving per se. We’re hiring because the halving has been lifting Bitcoin and will continue to do so,” he said.

Hiring Hike

A number of crypto exchanges have also embarked on hiring sprees. Kraken LLC and Binance Holdings Ltd. are expanding their workforces, as are OkEx and Coinbase Inc.

David Janczewski, the chief executive officer and founder of Cardiff, Wales-based Coincover, said any market event that impacts adoption is a positive for his business.

“That’s part of what we see — when the last spike happened, we know that an awful lot of people moved into the market because they felt they ought to get in on the action,” said Janczewski, whose firm offers insurance against crypto thefts and scams. “Ultimately, anything that causes the market to be aware, or wider investment markets to be aware of crypto, tends to be a good thing from our perspective.”

© 2020 Financial Post

Manufacturers swivel to arm front-line workers

Thursday, April 30th, 2020

At least a dozen Surrey firms now making masks, shields and sanitizer for virus battle

Frank O’Brien
Western Investor

At least a dozen Surrey manufacturers, including a brewery, have retooled to produce essential medical and personal protective equipment (PPE) during the pandemic.

The companies have the capacity of producing up to 32,000 face shields, 40,000 reusable fabric face masks and upwards of 200,000 litres of hand sanitizer each month, according to a city statement. 

As of April 30, 11 companies had signed on but another 11 were in the process of retooling, said Amber Stowe of Surrey’s communication department.

The companies have all signed up for a new program Surrey Makes PPE, a City of Surrey initiative to assist senior levels of government and health authorities access large quantities of PPE supplies.

“Surrey is home to one of the largest manufacturing bases in the province and I want to commend our businesses for pivoting so quickly to produce critical medical and protective supplies needed to fight COVID-19,” said Mayor Doug McCallum. 

Surrey Makes PPE was launched to assist senior levels of government and health authorities access large quantities of PPE supplies. An additional nine facilities are in the process of retooling their assembly lines in response. 

The program also provides an online marketplace that allows buyers to source in bulk from manufacturers, such as Central City Brewer, which is now turning out hand sanitizers. 

Surrey’s Firetech Manufacturing repurposed their production lines to produce face shields. 

“Firetech Manufacturing’s core business is building custom bags and backpacks for first-responders,” said Dan London, president of Firetech. “When the federal government sounded the call for PPE, we naturally decided to pivot part of our production to build disposable face shields, for most of which is being purchased by the local health authorities.”

Copyright © Western Investor

COVID-19: Frequently Asked Questions About Government Programs

Monday, April 27th, 2020

As the spread of COVID-19 keeps Canadians at home for another week, the federal government is unveiling more initiatives

other

Please note: the federal government is constantly updating their website as new information is announced. Remember to check Canada’s official coronavirus webpage and CREA’s COVID-19 online hub to stay up to date.

As the spread of COVID-19 keeps Canadians at home for another week, the federal government is unveiling more initiatives that provide financial aid to both individuals and businesses affected by physical distancing requirements. Many of these programs have been calibrated over the past weeks, with eligibility criteria being broadened to capture a larger segment of Canadians in need. 

Here are some of the questions we have been asked by members this week.

When can I apply for the Canada Emergency Wage Subsidy (CEWS)?

The Canada Revenue Agency (CRA) will open the application process on Monday, April 27, and funds will begin to be released on Tuesday, May 5. Claims will be subject to verification by the CRA.

To help businesses plan ahead, a calculator for potential applicants is available. You can enter amounts such as number of eligible employees and gross payroll to preview your subsidy claim. Today, the government also published a detailed FAQ to help businesses better understand how to apply for the subsidy.

The CEWS is a 75% wage subsidy for businesses, retroactive to March 15. It’s available to businesses that suffered a 30% drop in gross revenue in April or May (15% for March) when compared to the same month in 2019, or the average of January and February 2020. 

The Canadian Real Estate Association (CREA) has consulted with an external accounting firm and CRA representatives on the application of the CEWS within the real estate industry.

Amended eligibility criteria for the CEWS provides that employers should determine its qualifying revenue in accordance with its normal accounting practices, with an option to use the cash basis, for the purpose of determining their CEWS eligibility. The basis must be applied consistently in all periods.  Normal accounting practice would typically be the method used to record revenue on the employer’s external financial statements or filed tax returns, which is normally on an accrual accounting basis.   

The normal conditions for revenue recognition under accrual accounting on a sale of real estate that must be met are:

  • the sales agreement is signed by both parties and there are no conditions outstanding;
  • the amount of the sales commission is measurable; and
  • the amount is expected to be collected.

The two most common “normal accounting practices” for revenue recognition used in the real estate sector are:

  1. Deal Closed Basis—when the transaction closes; and
  2. Business Written Basis—when the sales agreement is signed and all conditions are met.

Both of these practices are consistent with accrual accounting. To determine CEWS eligibility, brokerages have the option of using their normal accounting practice or the cash basis.

Brokerages do not have the option of switching between the Deal Closed Basis and the Business Written Basis. 

Brokerages are encouraged to seek the advice of their own tax specialist so their individual situation can be assessed.  

CREA continues to work with officials to ensure the CEWS and other programs provide the needed support to the real estate industry. How can I access the Canada Emergency Commercial Rent Assistance (CECRA)? While the program launch has yet to be announced, Prime Minister Justin Trudeau said he expects the CECRA will be operational by mid-May, with commercial property owners lowering the rents of their small business tenants payable for the months of April and May, retroactively, and for June.

CECRA will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.

The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75% for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25% of the rent.

Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues.

Do I need to issue T4 slips to qualify for the Canada Emergency Business Account (CEBA)?

There are concerns about the way subcontractors figure into payroll requirements for the CEBA. This issue has been raised and the government is aware of it. CREA has discussed solutions with brokerages and recommended two options to key decision makers:

  • Expand eligible payment structures to include wages (T4), commission payments (T4A) and dividend payments (T5), reflective of the diversity of business models impacted by COVID-19.
  • Allow businesses to qualify by demonstrating expenses intended to be covered by the CEBA other than payroll, such as rent, utilities, insurance, property tax, or debt service.

In other developments related to the CEBA, last week Prime Minister Trudeau announced expanded eligibility criteria to include employers with $20,000 to $1.5 million in total payroll for 2019.

The CEBA provides eligible small businesses, operating as of March 1, with interest-free loans of up to $40,000—25% of which will be forgiven (up to $10,000) if the loan is repaid by December 31, 2022.

As an employer, can I apply for the CEWS for an employee who is receiving the Canada Emergency Response Benefit (CERB)?

Depending on the specific situation, rehired individuals who may have received, or continue to receive, the CERB could be required to repay some or all of the amounts. The government will provide additional information on this shortly. CERB recipients who already know they will need to repay the financial relief received can do so through the mail. An individual cannot receive both a subsidized salary through the CEWS and the CERB.

The CERB is a taxable benefit of $2,000 every four weeks for up to 16 weeks to eligible workers who have lost their income due to COVID-19. 

The measures covered in this FAQ are part of the Government of Canada’s COVID-19 Economic Response Plan. The government is constantly assessing the evolving situation and is likely to introduce additional measures as it deems necessary. We are monitoring the implementation of existing measures and continue to advocate on behalf of REALTORS® as new initiatives are developed.

Canadian Inflation (Mar) – April 22, 2020

Wednesday, April 22nd, 2020

Consumer Price Index (CPI) rose by 0.9 per cent in March

BCREA

Canadian inflation, as measured by the Consumer Price Index (CPI) rose by 0.9 per cent in March year-over-year, down from a 2.2 per cent increase in February. This marked the largest decline in the CPI since the measure began in 1992. Energy prices were the main drag on inflation, excluding this category, national CPI rose by 1.7 per cent year-over-year. The downward pressure on gas prices began before the spread of COVID-19, but were exacerbated as global demand dropped (e.g., limitation on international travel), while supply continued to increase. The Bank of Canada’s three measures of trend inflation fell 0.2 percentage points, averaging 1.8 per cent in March. Prices rose in six of the eight major components, led by shelter (+1.9%). In contrast, prices fell for transportation (-1.2%) and recreation, education and reading (-0.5%). 

In B.C., CPI grew to 1.2 per cent year-over-year, following a 2.4 per cent increase in the previous month. The drag on price growth was primarily due to a fall in gas prices (-14.5%) and to a lesser extent, transportation (-3.2%). Meanwhile, price growth was reported in clothing (2.2%) and household furnishings (1.1%). 

Statistics Canada notes that the March CPI was largely unaffected by COVID-19, as the majority of prices were collected prior to the implementation of domestic physical distancing measures. As such, we can expect to see steep drops in prices in next month’s CPI report. 

Canadian Retail Sales (Feb) – April 21, 2020

Tuesday, April 21st, 2020

BCREA

Seasonally-adjusted Canadian retail sales were up by 0.3% in February at $52 billion

The rise in February was driven by auto dealers and general merchandise stores. Sales were up in 6 of 11 sub-sectors, representing 63% of retail sales. Some retailers reported that both the rail blockades and COVID-19 negatively impacted their sales in February. In contrast, sales were positive at stores selling sporting goods, hobby, book and music, building material and garden equipment, and health and personal care. 

In BC, seasonally-adjusted retail sales were up by 1.2% at $7.4 billion in February. Looking at the non-seasonally adjusted change shows a different picture. Retail sales in February were down by 0.1% from the previous month in half of the sub-sectors, notably at general merchandise stores (-11%), clothing (-5%) and electronics/appliances (-5%). Meanwhile, Vancouver reported a monthly increase of 1.2% in retail sales. Compared to the same time last year, BC retail sales were up by 6.4% in February.

Given that the majority of physical distancing measures and store closures were not implemented until mid-March, the impact of COVID-19 on retail sales will be more apparent in next month’s data release. We can expect a steep drop in dining and entertainment, accommodations and at gas stations, while increases will likely be reported at grocery stores and in e-commerce. Compared to the same time last year, e-commerce reported an increase of 18% in February, accounting for about 3.6% of total retail sales in Canada (excludes Canadians purchasing from foreign e-commerce retailers). In March, many Canadian retailers reported opening or expanded their e-commerce platforms.

Communicating During Stressful Times

Monday, April 20th, 2020

The current pandemic has created a lot of anxiety within the real estate community

Marianne Brimmell
BCREA

The current pandemic has created a lot of anxiety within the real estate community – it’s a stressful time for everyone. Buyers are uneasy about the future of their investment as well as their ability to qualify and make mortgage payments and sellers are concerned about how the market uncertainty will impact the sale of their property. REALTORS® are justifiably concerned about how this pandemic and associated economic fallout will impact their livelihood.

In times of stress, how we communicate with one another becomes extremely important. Our words and actions will serve to either de-escalate stress by alleviating fears and calming emotions or escalate it, causing irreparable harm to client relationships.

During the next few months, you will engage in difficult conversations with your clients and colleagues. Here are some communication tips to support you in handling these situations with poise and grace.

When addressing a difficult topic

Keep in mind that when you communicate you do so through three channels of expression: verbal, vocal and visual. Each channel will impact how your message is received at a conscious and unconscious level.

Verbal tips

Be aware of the words you use when addressing a difficult topic with your colleagues or clients.  Eliminate phrases such as ‘you always’ or ‘you should have’ or ‘if I were you’. The first is blaming, the second is judging and the third is preaching, and none are effective at neutralizing an emotionally charged environment.

Vocal tips

Vocal refers to the pace, tone and volume of your voice. You can lower the defensiveness of the person you are engaging with by using a steady pace, a softer tone and a lower volume.

Visual tips

Visual communication includes hand gestures, facial expressions and body posture. Since body language accounts for the majority of how your message is perceived, be particularly aware of what yours is expressing. Open palms, calm facial features and relaxed body posture will help prevent your client from reacting to your message defensively.

When responding to an emotionally charged client

When you are on the receiving end of an emotionally charged client, it’s helpful to practice the art of ‘non-defensive listening’.

When you find yourself in this situation, your instincts may compel you to defend yourself. A traditional way of handling emotionally charged language is to respond with the JAWS of defense by Justifying, Accusing, Withdrawing or becoming Sarcastic.

Rest assured that while these response options might feel gratifying as they leave your lips, they can cause irreparable harm to your professional relationships. As a wise sage once said, ‘A moment of patience in a moment of anger will prevent a thousand moments of regret.’

A far more productive response option, when confronted by a stressed client, is to remain calm and respond with an appropriate alignment phrase. An alignment phrase can be either an agreement, acknowledgment or empathy response:

  • Agreement: I agree you should have been told sooner.
  • Acknowledge: Clearly, you feel very strongly about this.
  • Empathize: I understand how frustrating this must be for you.

An alignment response that’s sincere places you next to the emotionally charged individual instead of pitting you against them.

When dealing with situations in a calm manner you are better positioned to ask the clarifying questions necessary to isolate the source of concern or frustration and respond with the appropriate information or steps to resolve it. While we ultimately can’t control stressful situations, we can control how we respond to them, and this will be particularly important to remember while you deal with potentially stressful situations over the coming months.

Copyright © 2020 British Columbia Real Estate Association