Economy

Thursday, 07 January 2016 12:42

How Tax Changes Affect Newcomers

Written by

by Sukaina Jaffer in Toronto

A tax cut introduced by the new federal government looks to strengthen the middle class, but some Canadian immigrants disagree about how it will help newcomers.  

The new change will provide about $3.4 billion in tax relief to nine million individuals, according to Stéphanie Rubec, a communications officer from the Department of Finance in Ottawa. 

Canadians earning between $45,282 and $90,563 will see taxes drop from 22 per cent to 20.5 per cent. 

Single individuals who benefit will see an average tax reduction of $330 every year. Couples that benefit will see an average tax reduction of $540 annually.

A mixed bag for newcomers

Rida Zeeshan and her husband, who works as a senior analyst at CIBC Mellon, emigrated from Pakistan six months ago. They see both advantages and disadvantages to the changes.

[quote align="center" color="#999999"]“The government here gives more benefits to people.”[/quote]

“[It’s] a good move for middle-class families who are earning above $45,000; however, it won't help lower-class families because tax rates for [the] first taxable income threshold ($45,282 or below) haven't changed at all,” Zeeshan wrote in an email interview with New Canadian Media.

According to Canada Revenue Agency’s most recent tax-filing data and income statistics for the 2012 tax year, around 66 per cent of people had income below $45,000. This group would not benefit from the tax cut.

Although she says the benefits of living in Canada are much better compared to Pakistan, Zeehan says there is no clear information available specifically for new immigrants.

“There should be a website or printed brochures that describe benefits available to new immigrants.”

Zeeshan mentions that they do not utilize any government benefits. They took advantage of just one when her husband bought professional attire through an employment centre.

As for Basim Al-Ali, who relocated from Dubai to Canada in 2011, he says he feels the taxing system in the country is fair. “The government here gives more benefits to people.” Al-Ali mentions that in Dubai, non-nationals do not pay tax.

Syed Furqan Zaidi, an inventory controller in a manufacturing company, says that by paying his taxes regularly here, he is able to take advantage of the government’s benefits, such as the child tax benefit, GST/HST premium benefit, universal childcare benefit and the Trillium benefit. He moved from Pakistan to Canada three years ago.

[quote align="center" color="#999999"]Volunteer tax clinics, like the one at Northwood Neighborhood Services in Toronto, are available help people complete their tax forms.[/quote]

The government also intends to introduce the Canada Child Benefit – a tax-free and more generous benefit to help families raise their kids.  

Faheem Mazher, a senior tax analyst with Deloitte LLP in Toronto, says that this benefit will help families for a longer time than the previous Universal Child Care Benefit (UCCB).

In addition, the government plans to repeal income splitting for families with children. Zeeshan says this is “not a good move because this was the only tax relief available to lower-class families, which has now been relinquished.”

Tax benefits

For newcomers to Canada to be able to access benefits, income tax forms must be filed. Volunteer tax clinics, like the one at Northwood Neighborhood Services (NNS) in Toronto, are available to help people complete their tax forms.

“In a year we serve an average of 400 people whom we help to file income tax returns,” says Francois Yabit, executive director of NNS, a non-profit organization running for more than 10 years.  

This service is provided for low-income community members who qualify and assists a diverse clientele of Chinese, Spanish, South Asian and African newcomer Canadians.

The organization offers income tax clinics from March to April by appointment. However, during the year, they offer services to those who face problems such as forgetting to file their tax forms on time.

“If you do not file tax forms, then you cannot get benefits from the government,” says Yabit.

Some taxpayer benefits include the child tax benefit, GST/HST premium benefit, disability support, universal childcare benefit, medical credits, children’s fitness and art credits, tuition credits and the Trillium benefit.

[quote align="center" color="#999999"]While the new tax cut is set to benefit the middle-class population, it still may not help many immigrants who are struggling to make ends meet in low-income jobs.[/quote]

But to ensure that one is eligible for such benefits, Mazher says newcomers need to be “transparent” and to “not cheat the system in any way, shape or form” because the Canada Revenue Agency (CRA) can enforce heavy penalties.

In addition, Mazher points out, “Many newcomers don’t realize that they have to pay taxes on overseas income.” This may include property overseas or accounts, stocks, investments and bonds that are generating interest.

Tax-filing for newcomers 

Mazher advises newcomers to retain their receipts, transit passes and donation receipts and to file their taxes even if they have no income so they can get tax credits to carry over.

He also recommends people to retain their receipts for six years in case of an audit by the CRA.  

“It is essential that tax forms be filed by the end of April or one can accrue penalties and interest from the CRA,” states Mazher.

But while the new tax cut is set to benefit the middle-class population, it still may not help many immigrants who are struggling to make ends meet in low-income jobs.

Zeeshan has a couple of suggestions for ways the government could help those who may need a little more support.

“We think the government should also introduce a tax relief or discounted tax rates for new immigrants living in Canada for two years or less,” she says.  

“This will help them to decrease their expenses and to get settled here quickly.” 


Journalist Samantha Lui mentored the writer of this article, through the New Canadian Media mentorship program.

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by Tazeen Inam in Mississauga, Ontario

For most of the Syrian refugees arriving in Canada this month, their first challenge will be to find affordable housing as they transition into a new life in the country. 

Dominic Amann, an IT project manager, plans to offer two bedrooms in his home along with free food to a family of four or five members with the assistance of Wesley United Churches in Hamilton, Ontario.

Amman was born in England and came to Canada 25 years ago. As a child, he saw his father receive refugees from Uganda and Kenya during the 1970’s expulsion. He is Roman Catholic and wife is Jewish.  

The offer was made possible with extended resources from his network of friends, such as food, clothing and even employment for the refugee family. Amman is also willing to let them stay for longer than the standard 12 months if necessary.

“I am flexible,” Amann says. “We have to see what the need is, as well as my ability to continue as it cannot be unlimited.” 

Impact on low-income rental housing

Building developers are not worried that offering free or discounted rental units to Syrian refugees might impact the affordable housing market. 

“Twenty-five thousand refugees translates into seven to eight thousand households from Barrie all the way to Victoria,” says Bob Dhillon, president and CEO of Mainstreet Equity Corp, a rental apartment provider in Calgary. “It’s a drop in the ocean. I don’t think it’s going to impact in any sense.” 

Dhillon has offered 200 rental units in different cities for three months, either free or prorated (where three months’ rent is proportionally distributed over 12 months).  

Many Canadians are struggling to find affordable housing. This is particularly true in Ontario, where a 2014 report from the Ontario Non-Profit Housing Association suggests that the average family waits for rent-geared-to-income housing for 2.3 years. 

The province suffers from chronic homelessness, something the Ontario government has committed to eradicating in the next 10 years.

[quote align="center" color="#999999"]“It’s a drop in the ocean, I don’t think it’s going to impact in any sense.”[/quote]

Despite these large numbers, Daljit Thind, owner of THIND Properties Ltd., a new home builders company in Vancouver, agrees with Dhillon. He says offers made to refugees are on a humanitarian basis.

“Free or subsidized rentals offered to refugees is totally separate from low-income rental market,” he says.

Thind is offering a number of fully furnished townhouses to Syrian refugees in Vancouver without charging rent for few months.

For Amann, he says it would be harder for him to offer free or sponsored housing to homeless people in Canada because of the risks associated with it.

“[People who are] homeless in that situation are due to things like mental illness or addiction and can pose some level of risk to my family,” he says. “I know people coming as refugees have more external support from government and agencies.” 

The government’s role in housing

Debbie Douglas, executive director at Ontario Council for Agencies Serving Immigrants, says the government has not made any special arrangements for Syrian refugees in terms of housing. 

Like any other refugee group, only government-sponsored refugees get a housing supplement for a year; privately sponsored refugee are supported by their sponsors. 

“Even the social housing stock in Ontario is not being used for refugees,” she says.

However, with corporate donations, the government is looking to create a housing fund — separate from social housing — to help refugees transition to permanent housing. 

“I know that CN [Canadian National Railway Company] has given a $5 million donation that the government is looking to create a sort of housing fund [with],” Douglas explains.

[quote align="center" color="#999999"]The government has not made any special arrangements for Syrian refugees in terms of housing.[/quote]

In a news report, Heng Chau, the housing co-ordinator for Maison Sophia, a reception house for refugees in Ottawa’s ByWard Market area, says that most refugees manage to pay their rent by scrimping on other expenses.

The report adds that government-sponsored refugees – families of four with two adults and two children – receive approximately $2,600 assistance a month from the federal government during their first year in Canada, to cover food, housing, transportation and child-tax benefits.  

According to Canadian Mortgage and Housing Corporation report, the vacancy rate amongst rental units in 35 of the country’s largest cities has increased to 3.3 per cent from 2.8 per cent in 2014, which means the arriving refugees should be easily accommodated in Canada’s housing market.

The report further adds that in October 2015, the average rent for a two-bedroom unit in new and existing buildings in those 35 cities was $960 a month.

Settlement process needs time

Some critics suggest that the hunt for affordable housing will get harder as more refugees arrive, while others believe that refugees who have lived in camps and tents often are comfortable in smaller living spaces or shared housing. 

As Thind suggests for the town houses he is offering, “They have four bedrooms and can accommodate two families easily.”

With a language barrier, finding cheap affordable housing in the long-run for these refugees could be a challenge. However, Douglas says that while they get help from settlement counsellors, they are expected to move out on their own too, just like the other 100,000 or so immigrants who settle in Ontario every year.

“With access to language training and employment support, they will able to find entry level jobs in the beginning to support themselves,” she concludes.


Journalist Priya Ramanujam mentored the writer of this article through the NCM Mentoring Program. 

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by Eddie Ameh in Toronto 

As Rakan Almasri waited for his childhood friends to arrive in Canada last week, it seemed to him to mark yet another leg in a journey that has been years in the making.

After leaving his successful small business in the Syrian city of Homs behind to seek safety in Iskenderun, Turkey, he’s now found himself in Toronto, hoping to find a job to feed his family of six.

Successful businessman back home

On December 10, Almasri, 44, welcomed Ziad Khabbaz and Mazen Khaabaz when they arrived at the Toronto Pearson International Airport as refugees. Feeling somewhat nostalgic as he waited, Almasri reflected on his life back home in Syria. 

An electrical engineer by training, Almasri was a contractor who provided spare parts for industrial power plants and other facilities in the energy sector. “I was very comfortable. I had my own office, my own car and my own house,” he says.

Almasri’s wife, a trained teacher, taught primary school in a government school in Homs. The couple has five children. 

He says when the war broke out, he had to move his family out of Homs to a safe place. While there, he heard his house had been burnt down and looted. “I lost everything. During the war, you can’t do business, you can’t do anything,” Almasri says.

[quote align="center" color="#999999"]“I was very comfortable. I had my own office, my own car and my own house."[/quote]

Since leaving in 2012, Almasri has not set eyes on his house or office. He says it might be difficult locating it since the area has always been at the centre of intense fighting.

Life in Iskenderun 

When Almasri noticed things were becoming more difficult and his family’s security was no longer guaranteed, he packed up their bags and left Syria. “We decided to leave because there was no security for us and we have to find a future for our children,” he says.

The family got in touch with some friends in Iskenderun, Turkey who agreed to host them for two weeks. They rented a place afterwards. 

[quote align="center" color="#999999"]Almasri that he could not work as an engineer like he use to back in Homs.[/quote]

It was difficult staying in Turkey, according to the family. “We found a small house, not like ours back home,” he says.

In this new country, the reality dawned on Almasri that he could not work as an engineer like he use to back in Homs. He had to work as a clerk at a company that imported automobile parts in Iskenderun. While he was away at work, his wife had to take care of their children, so she worked at a daycare to supplement the family’s income.

Canada and the hope for a better future

Almasri and his family were eventually brought to Canada by the Ahmadiyya Muslim Jama’at, an organization that has sponsored a number of families and hopes to bring more.

“It was only a few decades ago that our community (Ahmadiyya Muslim Jama’at), also came to Canada as refugees seeking refuge because of the persecution in Pakistan,” says Safwan Choudhry, spokesperson for the Ahmadiyya Muslim Jama’at. “Doing this to Syrian refugees is not only our responsibility as successful Canadians, but [it is important] to give to these Syrian refugees who desperately need our help.”

[quote align="center" color="#999999"]“Whatever job, I will do [it] to support my family."[/quote]

Almasri says he is happy to be in Canada because it’s peaceful and will provide a better future for his children. Even though he’s sad for his family, especially his children who had to leave their home and their friends behind, “at least, we are secured here.”

Almasri may have succeeded in coming to Canada but he has other family back home. Two of his sisters live in Homs while another two are living in Turkey. He hopes they’ll join him soon, but as long as they are safe he’s happy. “I’ll bring my mother and sisters from Turkey, inshallah [God willing],” he says.

Finding employment in Canada

On the evening the Khabbaz family arrived at the airport, Almasri translated for those in attendance. He says it’s a job he’s obligated to do because he was the only person who speaks the same language as the Khabbaz family.

While it wasn’t a challenge for Almasri to help the reporters get their quotes, what is challenging is finding a job that will allow him to take care of his family in the long-term. 

“Whatever job, I will do [it] to support my family,” he says.

All he wants is for the war to be over so that those who might not be lucky like him can live happy lives back in Syria. “I hope there is justice,” he says. “The world is very big, we can all fit in [it], why are we fighting?”

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by Maria Ikonen in Gatineau, Quebec

Growing up in a small village in Iran near the Caspian Sea, Maria Rasouli felt the rush of freedom as she explored her surroundings riding her bicycle.

Despite being able to provide her with great joy, the activity was seen as inappropriate for an 11-year-old girl.

Things changed when she moved to Canada at age 24. Here, she was finally able to make her dreams of exploring the world on two wheels a reality.

Today, she is the founder and operator of Escape Bicycle Tours, a company that gives tourists and adventure seekers bike tours around Ottawa.

Her company was one of three winners of an Immigrant Entrepreneur Award this year from the City of Ottawa.

[quote align="center" color="#999999"]“A true source of inspiration [for my business] was my life in Iran as a woman where I was not allowed to bicycle.”[/quote]

“A true source of inspiration [for my business] was my life in Iran as a woman where I was not allowed to bicycle,” she says.

She adds that Escape Bicycle Tours was the result of two years of self-reflection that finally gave her the courage to pursue her dreams of riding a bicycle. Her passion for the sport is what she aims to provide for her clients.

“I have had guests who said they did not remember the last time they were on a bicycle or they had not bicycled for over 30 years,” she shares. “They were so happy that they took a bicycle tour with Escape.” 

Challenges of an immigrant entrepreneur 

Despite the motivation to take an entrepreneurial path, new Canadians may find obstacles in things like time-consuming bureaucracy and a lack of local networks.

According to David Crick, an international entrepreneurship and marketing professor from the University of Ottawa, a newcomer’s existing skill set or business model from overseas is not guaranteed to work well in Canada – there may be more competition already here. 

“They may have to look towards something that offers value [to Canadians like] lower costs,” he says.  

[quote align="center" color="#999999"]“[There] are still many people who put immigrants into a box, and this is not something that will be changed quickly.”[/quote]

Another issue may rise from having no local banking history. 

“Even getting lines of credit from banks may be hard,” Crick explains. “[It is] a high risk to banks. This makes starting a business problematic.” 

Moe Abbas, founder of Ottawa General Contractors and another winner of the Immigrant Entrepreneur Award this year, points out other difficulties such as prejudice. 

“[There] are still many people who put immigrants into a box, and this is not something that will be changed quickly,” he says. 

“We must all understand how we are viewed in the eyes of the clients we serve. That judgement may not be a bad thing if we know what it is, and can work with it.” 

Rasouli also mentions the challenge of being in unfamiliar territory when new to Canada. She had to take some time to establish herself and gain a better understanding of how business is conducted in Canada. 

“I actually think it is a good idea for immigrants to work in Canada for a few years before starting their own business. There are lots of things that an immigrant can learn from co-workers and how organizations are run in Canada by being in a workplace,” she says. 

“That knowledge could later on be used for starting a business, building partnerships, marketing, sales and customer service.” 

She adds that the absence of family members in Canada can result in the lack of a support net, but may create a platform to improve as an entrepreneur. 

“I do not have the emotional, psychological, and sometimes financial support that family members could provide. This has led me to build strong professional and support networks and work harder to succeed.”   

Tips for immigrant entrepreneurs

Despite the challenges many newcomer entrepreneurs face, networking with similar ethnic groups could be something beneficial to try, Crick says.

“They may have networks overseas that can help in self-employment practices,” he explains. “For example, depending on the nature of the business model employed, some may have access to import or export linkages that domestic Canadian firms may not have.”

[quote align="center" color="#999999"]"[S]ome may have access to import or export linkages that domestic Canadian firms may not have.”[/quote]

Abbas, who is in the process of working on a social media start-up, Bumpn Inc., highlights the importance in understanding the consumer’s mindset. 

“If you are an entrepreneur selling to a demographic, you must look and behave, or at least understand deeply, the demographic you are serving,” he says. 

“People buy from people they trust. They usually trust people like them.” 

Rasouli emphasizes the value of making connections. 

“Network, network and network: people are often very kind and try to help if you ask them,” she says. “So, make sure that you have a diverse, solid network of professionals and friends who could help you with various aspects of your business and life.” 

Success is mostly in an entrepreneur’s hands, Rasouli adds. 

“Your success is … dependent on the amount of work you put into your business. You don’t have to wait for a performance appraisal or a manager to acknowledge or approve your work. The harder and smarter you work, the more success you bring to your business.”


Journalist Samantha Lui mentored the author of this article through the New Canadian Media Mentorship Program.

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Yaldaz Sadakova | December 11, 2015

 

What’s the safest place to have a heart attack?

The back of a Canadian cab — because the driver is likely a foreign-born doctor.

Benefits Canada

Read Full Article

Wednesday, 09 December 2015 05:41

Syrian Finds New Life, Success in Canada

Written by

by Tazeen Inam in Mississauga

Over the next six years, the cost of bringing Syrian refugees to Canada will reach $1.2 billion. The federal government has earmarked $275 million in support for the immediate processing of the refugees as well as financial support and health care for one year. 

While some Canadians have expressed concerns over this, others see it as a long-term investment.

A report issued by financial co-operative Vancity suggests that Syrian refugees are expected to boost British Columbia’s economy by more than half a billion dollars over the next 20 years.

According to Naveed Chaudhry, executive director of Peel Multicultural Council, this could be because Syrians coming to Canada are not from an under-developed country; they are educated and entrepreneurial in nature.

“Yes there is an upfront cost of bringing them into Canada, but I think the benefits far outweigh these costs,” says Chaudhry.

Oppression and entrepreneurship 

One immigrant who is currently living the Canadian dream is Nabil Orfali, an IT project manager from Syria, who now owns a consulting firm in Canada. 

Orfali graduated in 1998 from a university in Damascus. Shortly after, he developed and launched the first online payment portal in Syria. At 20, he was one of the first people in the country to specialize in web development and worked for a newly established IT company, Syriancom.

While working full-time, he started an internet cafe as a side business with a group of friends but like many other shops, it fell prey to the corruption and oppression of local security forces and the government.

[quote align="center" color="#999999"]"I think the benefits far outweigh these costs.”[/quote]

“There was no security in Damascus as they just wanted money and kept the shops closed for hours in the name of security. Incomes were very low,” remembers Orfali.

Things for Orfali and his peers deteriorated when they were conscripted into the army by the ruling government.

“I [would’ve had] to stay three years minimum in military service, which [meant being] out of touch with technology, so I just ran away to Saudi Arabia,” he shares.

He applied for immigration to Canada in 2001 and finally arrived in a the country six years later with his wife and two-year-old daughter. 

Adaptation in a new country 

Orfali’s story is not much different from those of other newcomers to Canada. Like many immigrants, he experienced difficulties initially landing a job.

But after he experimented with his resume, he got a job as a project manager in one of the larger IT companies, Navantis, in Toronto. 

The recession of 2008 hit him hard though, and he was laid off after three months. 

[quote align="center" color="#999999"]He applied for immigration to Canada in 2001 and finally arrived in a the country six years later.[/quote]

“I was shocked and took it personally that I was probably not qualified,” Orfali remembers. “I did not [think] that it was the recession. This was tough and difficult to deal with, but again I didn’t give up and [I] kept my spirits high."

A few months later he managed to get another job with the Ontario government services, but was soon laid off again. 

“[The] manager said I [was] not a ‘good fit’ for the team. I don’t know why, I was doing a great job, but they laid me off, and it was another shock and shattered my confidence.”

Entrepreneurial success in Canada

After working for several years at a company called Cyberplex, Orfali decided to tap into some of the entrepreneurial spirit in his blood.

Orfali, who always dreamt of establishing his own company growing up in Syria, started working on an online startup: reviewsgurus.com. It was eventually recognized by the Canadian Trade Commission and Orfali was sponsored to go to the Silicon Valley. 

“That was a great experience. [I] got in touch with mentors, investors, entrepreneurs,” he shares. “Although I wasn’t able to raise money [from an] investor [. . .] those were the best three months of my life.

“[I] got to the bottom of how to build a successful business.”

After returning to Canada, Orfali started a project with Canadian Tire. He worked there for another two years until he started his own consultancy firm by the name of TechGuilds in December, 2014.

“In 10 months the firm is hitting a revenue of $1.2 million per year. I hired mostly newcomers, interns and fresh graduates, including three Syrians,” explains Orfali. “So that’s my contribution to Canada, and it’s still growing.” 

Based on the experience Chaudry has had with Syrian immigrants over the last 25 years, Orfali's entrepreneurial spirit doesn't seem uncommon.

“Syrians are from a very diverse and open-minded society. I have seen them settling fast and becoming contributing members of the society.” 


 Journalist Priya Ramanujam mentored the writer of this article through the NCM Mentoring Program

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by BJ Siekierski in Ottawa

John Manley — the president and CEO of Canadian Council of Chief Executives — criticized the Harper government Tuesday for mismanaging bilateral relationships with China and Mexico, and reiterated a call for the incoming Liberal government to pursue a free trade agreement with China.

There are reasons to think that isn’t out of the question.

“We have very important trading relationships with both Mexico and China. And quite frankly, the Harper government didn’t manage those relationships particularly well,” Manley, whose organization represents 150 CEOs of Canada’s biggest companies, said in an interview on BNN.

[quote align="center" color="#999999"]"Smart, principled engagement of China must be at the centre of Canadian foreign policy.”[/quote]

This comes after an open letter Manley sent to Prime Minister-designate Justin Trudeau last week, which called for a “comprehensive bilateral economic agreement” with China, the reversal of the visa requirement for Mexican visitors and the ratification of the Canada-EU agreement and the TPP (Trans-Pacific Partnership).

“We urge your government to reverse the 2009 decision that requires most travellers from Mexico to obtain a visa before visiting Canada. With regards to China — our country’s second-largest trading partner, and soon to be the world’s largest economy – we believe the time has come to seek a comprehensive bilateral economic agreement. Smart, principled engagement of China must be at the centre of Canadian foreign policy,” Manley wrote.

China requires immediate attention

He elaborated on those points Tuesday, days after the CEO of Ford Canada, Dianne Craig — a member of the Canadian Council of CEOs — spoke out against the TPP.

“Ford is one of our members, likewise is Linamar, one of our largest auto part companies, which supports TPP. So I don’t think there’s a unanimous view. I think overall, though, what I’d say…is this: if TPP doesn’t happen, well then life goes on. If TPP does happen, and the United States and Mexico are part of it, then Canada really needs to be there. We can’t afford, for our national interests, to be excluded from an an agreement in which two of our three largest trading partners are there,” Manley said.

Since TPP ratification on the U.S. side could be held up by Congress, Manley didn’t think there was any reason for Trudeau to “lose sleep” over it yet.

[quote align="center" color="#999999"]"We don’t have to agree with China on everything, but we do need to engage China.”[/quote]

He said China, however, required immediate attention, adding that, like Australia and New Zealand, Canada should pursue a free trade agreement.

“Australia, while being a strong proponent of human rights — a strong supporter of rule of law — all of the things that Canada stands for, has managed to negotiate a free trade agreement with China. As has New Zealand. And they are benefiting — their economy is benefiting significantly in both cases,” Manley said.

“We seem to have a hard time deciding whether we want to do business with China or not, and we blow warm and cold. I think a consistent, lasting approach to China — multiple visits by our prime minister, by our minister of foreign affairs, by our minister of trade, and by our minister of industry, would yield benefits in the years to come. We don’t have to agree with China on everything, but we do need to engage China.”

Deepening relationship with China

While the Harper government signed and ratified, not without controversy, a foreign investment protection agreement with China, and released an economic complementarities study in August 2012, Ottawa preferred an incremental approach with regard to trade liberalization, reaching individual market access agreements for products such as beef, cherries, and blueberries.

“There are many mechanisms other than free trade agreements to allow us to deepen our trade relationship with China,” Trade Minister Ed Fast said last November.

[quote align="center" color="#999999"][T]he Harper government wanted to see the “more balance” in the trading relationship before moving forward with negotiations. The Liberals have seemed more eager.[/quote]

In May, he clarified that the Harper government wanted to see the “more balance” in the trading relationship before moving forward with negotiations.

The Liberals have seemed more eager.

As Australia moved to implement their concluded free trade agreement with China, Liberal MPs — including Ralph Goodale, Chrystia Freeland, and Scott Brison — accused the Conservatives of bungling the relationship.

More recently, the Liberals named Peter Harder, who serves as president of the Canada-China Business Council, to head their transition team.

That could be a sign of things to come.


Published in partnership with iPolitics.ca

by Deanna Cheng in Vancouver

During the 2015 election campaign, one issue remained imminent for many Canadians: how will the newly elected government improve the economy? But, a question less pondered, of interest to many immigrant communities is how will the government improve economic inequalities.

One economics professor from British Columbia’s Simon Fraser University recently pointed out which promises made by the major political parties in Canada made would lower inequality.

“Inequality is more about wealth than income,” professor Krishna Pendakur said during a public lecture in Burnaby earlier this month.

Wealth, he said, is money generated from stocks, bonds, etc., and income is based on labour.

Economic platforms

Pendakur said the Conservatives’ plan is vague when it comes to economic inequality  – more commonly referred to as the gap between the rich and the poor.

“They promise to grow the economy, to have a bigger pie, then a trickle-down effect,” he explained. “Whatever crumbles from this pie and falls down to the rest of the 99 per cent, that’s it.”

[quote align="center" color="#999999"]Pendakur said the Conservatives’ plan is vague when it comes to economic inequality.[/quote]

Pendakur noted though that some trickle-down effect did happen with previous policies of low tax rates, low revenue and low public spending. “There was high skilled blue-collared incomes in Alberta while the party lasted.”

Looking to the Liberals and New Democrats, Pendakur said both parties promise to increase guaranteed income supplement, which is a good thing. The income supplement provides a monthly non-taxable benefit to Old Age Security recipients who have a low income and are living in Canada.

To get the supplement, the recipients must be legal residents in Canada and receiving the old age pension.

Addressing national inequality

Pendakur pointed out which policies each party promised would likely be most effective in addressing national inequality.

For the New Democratic Party (NDP), he said the two major ones are national subsidized childcare and national universal drug coverage. “Both are long term commitments and [Tom] Mulcair will need more than one election to see it through,” he commented.

[quote align="center" color="#999999"]"[F]or some, even if they’ve seen a doctor and the doctor has written the prescription, sometimes people can’t afford the treatment at the pharmacy. It’s the biggest cost to someone’s health.”[/quote]

Pendakur said political parties are careful about what they can claim because there are certain jurisdictions which federal governments don’t have a lot of control over.

Health care is decided at the provincial level, so that is why the NDP chose pharmaceuticals, he said.

“It’s good because, for some, even if they’ve seen a doctor and the doctor has written the prescription, sometimes people can’t afford the treatment at the pharmacy. It’s the biggest cost to someone’s health.”

Minimal wage is also a provincial jurisdiction, Pendakur explained, which is why the NDP promised a minimum wage of $15 per hour for federal workers. “100,000 workers will be affected.”

Turning to the Liberals, he drew attention to the party’s promise to increase child benefits with lower implicit tax rates on them.

The party also said it would raise tax rates on personal income over $200,000 by four per cent and lower income tax rates for the middle class from 22 per cent to 20.5 per cent.

Privileging particular demographics

During the Q-and-A session, an audience member asked Pendakur what he thought about the Conservative party’s income-splitting tax plan.

“Income splitting is awful,” Pendakur replied.

[quote align="center" color="#999999"][Pendakur] said [income splitting] values two-parent, two-income families and ignores every other demographic in the country.[/quote]

He said the plan values two-parent, two-income families and ignores every other demographic in the country. “Why is this particular demographic worth more than others?”

University of Fraser Valley student Anoop Tatlay agreed with him.

“I couldn’t pinpoint what it was about the [income-splitting tax] proposal that bothered me, but once he said it, it clicked,” stated Tatlay, who is a single mother. “I’d thought the same thing.”

Pendakur presented complex information in an engaging manner, said Tatlay. The newfound knowledge she gained motivated her to look more closely at the federal budget and public spending and try to understand it better.

As a Canadian citizen, the 37-year-old resident of Mission, B.C. said she plans to vote on Oct. 19.

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by Tazeen Inam in Mississauga, Ontario

Shahzad Shamim recently settled in Canada with his family – three school-aged children, a wife and a mother – after emigrating from the United Arab Emirates. Instead of renting an apartment or a condo, though, he bought a house in the Greater Toronto Area (GTA). 

With interest rates at an all time low, this is the best time to buy a property in Canada, explains Shamim. 

“Why should I pay for someone else’s mortgage by renting a property, instead of paying my own?” asks Shamim, adding that he believes once his family is settled he will be better able to search for work. 

It’s widely believed that low interest rates make Canada’s housing market attractive for immigrants who bring with them a significant amount of capital when they arrive.

This in turn translates into an optimistic trend when it comes to prices, explains Adnan Bashir, vice president of Cityscape Real Estate agency. “Demand is escalating; it’s not taking a roller coaster ride, but it is there,” he says.

Demand is created by the growing influx of immigrants, but Shamim insists that low-interest rates don’t mean unlimited purchasing power for new Canadians. “If the interest rates are low, that doesn’t mean I am saving a lot [or buying] a luxury house. It only compels me to afford a reasonable house within my budget.”  

The perceived threat of foreign investors

As stated in a CIBC World Market Report released in June 2015, under the heading “The Many Faces of the Canadian Housing Market”, Canada’s housing market is multi-dimensional and cannot be characterized with a blanket statement.  

CIBC’s report estimated that roughly 70 per cent of pre-sales and 50 per cent of final sales go to investors. However, the share of foreign investors in this total activity is much smaller than perceived.

[quote align="center" color="#999999"]This segment of the market is relatively safe from foreign investors.[/quote]

“The more significant portion is coming from a situation in which the money is coming from abroad, but the family lives in Canada,” indicates the report. “Now the question arises if this is foreign or domestic investment?” 

Whatever it is classified as, this kind of activity requires a much larger down payment and the family often lives in the house after purchasing, suggesting a much higher level of commitment than a typical foreign investor does. 

Therefore, in terms of risk, this segment of the market is relatively safe from foreign investors driving up housing prices, the report adds.

Today’s average immigrant buyer

Gurinder Sandhu, the Executive Vice President and Regional Director of Remax, says today’s immigrant buyer is quite different from that of years past.

“People are not buying houses for investment or renting them out and are [not living in Canada],” he says. “Now immigrants are buying to live in those [houses] and they buy for their families.” 

Sandhu says this is a result of the world recession. In other parts of the world, buyers are unable to grow their equity and their investments are deemed unsafe because of factors including corruption, poor economy, oil prices and war.

For over two and a half years, the global economy has been on the verge of uncertainty, whereas “Canada’s stable financial institutions and prudent fiscal policy have kept the housing market well intact,” Sandhu adds.

[quote align="center" color="#999999"]“Now immigrants are buying to live in those [houses] and they buy for their families.”[/quote]

Canada is also viewed as one of the best places to raise families, making it a preferred destination for immigrants.

Sandhu predicts the urban market across Canada will show a healthy single-digit annual ascent, with prices growing less than 10 per cent from the previous year.

Bashir added that this growth will be most significant in areas outside of the GTA. “We will see an increased growth in suburban markets like Hamilton, Pickering and others due to new development and affordability.”

Shamim is one such new immigrant who preferred the Hamilton area, as his eldest child will most likely opt to attend McMaster University after completing high school.

“It’s a nice neighbourhood with plazas, clinics and community centres within a close vicinity,” he says.

Rising prices and interest rates

Bashir says he believes that the biggest challenge faced by today’s immigrants is “money management”, which results in constant demand for smaller down payments. 

This is reflective of a market in which housing prices in provinces like Alberta, British Columbia and Ontario – where many immigrants have traditionally settled – are increasing to the point where homes are unaffordable to the working class.

The Bank of Canada indicates that rising home prices have increased household debt levels, but steps taken by regulators to tighten mortgage-lending rules have helped manage the associated risks.

The risk of becoming “house poor” – a situation that describes a person who spends a large proportion of his or her total income on home ownership including mortgage, property taxes, maintenance and utilities – is relatively high, Bashir says. 

[quote align="center" color="#999999"]“The real test will come when interest rates start to rise."[/quote]

However, Sandhu indicates that the demand for luxury houses among immigrants is not diminishing either. 

“A detached or semi-detached house might not be the first house of an immigrant, but it could be the real dream house. The investors are using their first buy (condo or town house) as a source of equity built up,” he comments.  

For the wider market, the CIBC report warns that “the real test will come when interest rates start to rise, whenever that may be.” 

Sandhu predicts this will happen, but not in the short term. “Rates may move up slowly, but not in [the] near future,” he says. 

He cautions, though, “Constant political and financial upheaval outside Canada reduces the interest rate stability.” However, like Sandhu he says there are no foreseen changes in the interest rates anytime soon.


Journalist Priya Ramanujam mentored the writer of this article, through the New Canadian Media mentorship program.

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Every city has its own urban legend. Vancouver’s fantasy over the last few years is that it has the world’s second most unaffordable housing.

On the back of this piece of unchallenged, unverified claim, Canadian opinion makers and media have been portraying a city pushed to a breaking point by a runaway housing crisis caused mostly by wealthy immigrants and corrupt Chinese officials fleeing to Vancouver with stolen money. A more twisted version paints Canadians of Chinese descent as Beijing’s pawns in a long-term chess game to take over Vancouver and its housing market.

Either way, the city’s rising housing cost has become an issue in this year’s federal election with Chinese buyers firmly cast as the villain in profiteering at the expense of the city and its regular working people. The political pressure has led Prime Minister Stephen Harper to announce his government is investing $500,000 to gather “comprehensive data” and study the impact of foreign investment in Canada’s real estate market. This special five-part series deconstructs the narrative to present the issue in a broader framework. 

Publisher's Note: NCM has revised this commentary to clarify several citations as recommended by the South China Morning Post, and reflects the revised references made by the SCMP to Demographia’s rankings which now describe the study’s scope. 


by Ng Weng Hoong in Vancouver

In fanning public anger against foreigners for Vancouver’s declining affordability, the Canadian media rarely mentions that the worrying trend of housing costs rising faster than incomes is also occurring in many major cities around the world.

Around the world, housing costs in major cities are being pressured higher by the same combination of scarce land supply, income inequality, increasing urbanization, local taxes and more recently, the world’s major governments unleashing trillions of dollars into the global economy to stave off recession.

The money-printing operations, also known as quantitative easing, undertaken by the US Federal Reserve Board and other central banks since 2008 have ended up inflating prices of coveted real estate in many international cities.

[quote align="center" color="#999999"]research paper published by the US Council of Foreign Relations in August 2014 described how “housing markets around the world, from Tel Aviv to Toronto, have overheated.”[/quote]

A research paper published by the US Council of Foreign Relations in August 2014 described how “housing markets around the world, from Tel Aviv to Toronto, have overheated” as central banks have been lowering interest rates and “pumping trillions of dollars’ worth of new money into the financial system.”

But these major factors along with the role of investment funds and domestic buyers are seldom mentioned in the Canadian media given its overwhelming focus on Chinese buying in Vancouver’s rising real estate market.

The Demographia factor

Perhaps the biggest flaw in Vancouver’s blame-the-Chinese narrative is that commentators often start off with a reference to Demographia and its limited survey on housing affordability in nine countries.

The Illinois, U.S.-based consultancy is owned and operated by conservative public policy consultant Wendell Cox who opposes urban densification and public transit in favour of sprawl and the use of private cars.

[quote align="center" color="#999999"]Despite the political importance and implications of Demographia’s rating, none of Canada’s mainstream commentators, real estate experts and politicians have subjected its data, research methods and survey sample to any serious analysis or questioning.[/quote]

For the fourth consecutive year, Demographia’s 2015 annual survey of 378 cities has dubiously rated Vancouver’s housing as the second least affordable after Hong Kong.

Vancouver’s 10.6 unaffordability ratio is derived from dividing its median housing price of C$704,000 by the annual household income of C$66,400 [in other words, the unaffordability ratio is a price-to-wage ratio that reflects affordability rather than absolute property value]. 

According to the survey, Hong Kong has the least affordable housing ratio of 17 (HK$4,892,000 / $287,000) while Ireland’s Limerick and four U.S. cities have the most affordable ratio of 2.

Despite the political importance and implications of Demographia’s rating, none of Canada’s mainstream commentators, real estate experts and politicians have subjected its data, research methods and survey sample to any serious analysis or questioning.

This act of blind faith serves a useful purpose: the catchy conclusion that Vancouver is just behind Hong Kong in housing unaffordability provides the perfect launchpad for alarmist reporting and commentaries.

The leading voices who treat the Demographia survey as gospel have turned their interrogation efforts on British Columbia’s real estate industry, the provincial government and anyone who challenges their narrative that Chinese money is largely responsible for Vancouver’s rising housing cost and problems.

Ian Young, the award-winning Vancouver-based investigative journalist with Hong Kong’s South China Morning Post (SCMP), recently tore into the British Columbia Real Estate Association’s analysis that said foreigners accounted for less than five per cent of Greater Vancouver’s home ownership and sales.

[quote align="center" color="#999999"][S]ome cities in parts of Asia, the Middle East, Europe and possibly even Africa not covered by Demographia have arguably higher housing unaffordability than Vancouver.[/quote]

While calling the BCREA finding “bogus”, Young, an influential voice in emphasizing the Chinese impact on Vancouver’s housing market, reported the Demographia survey as covering “the world” in his comment on February 28 for B.C. Business and amended in his June 3 and September 10 Hongcouver blogs for the SCMP. 

This is wrong as Demographia clearly states it covers only the U.S., Canada, UK, Australia, New Zealand, Japan, Hong Kong, Singapore and Ireland, leaving out the other 184 countries on the United Nations’ list.

[toggle_box]
[toggle_item title="Comparison with U.S., British Cities"]A recent Gallup survey found that U.S. home ownership has fallen to its lowest level in 15 years with the young less willing or able to take on a mortgage.

“For a younger generation that is struggling with student debt, renting a home may be an increasingly safe option. Non-homeowners’ expectations for buying a home in the near future appear to be waning, and the percentage who say they own their own home is the lowest in nearly 15 years,” said Gallup.

Citing an Urban Institute study, a CityLab report found that “every single county in America is facing an affordable housing crisis. From Portland, Oregon, to Portland, Maine. From Jacksonville to Juneau. No matter where you look, there isn’t enough affordable housing.”

According to the Daily Mail, a generation of young Britons have given up hope of buying their own homes “amid high house prices and poor pay rises”. Only 20 per cent of those now under the age of 35 are expected to become property owners by 2020 while “first time buyers are struggling to find a house as the gap between the supply and demand for two-bedroom properties widens.”

“Less than 20 per cent of young adults will own homes in 2020 if housing crisis goes unchecked,” says a Huffington Post story, which predicts that the number of people in U.K.’s 25-to-34-year-old cohort owning property will plunge by half.

Asia’s housing affordability crisis is looking a lot like the U.S. bubble in the run-up to the 2008 crash, said The Washington Post.

“That's because money poured into those countries in search of better returns right after the crisis and … found its way into the property market,” it said referring to China, India, South Korea, Taiwan, Singapore and Malaysia where housing prices have outpaced wage growth.

Despite operating one of the world’s most successful public housing programs the last few decades, Singapore is increasingly confronting a housing affordability challenge caused by rising home prices and slow wage growth. 

“For millennials, the homeownership dream is dying,” said financial news site Zerohedge. “New graduates are having a difficult time finding jobs that are commensurate with their education.”

[/toggle_item]

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This huge omission is crucial as some cities in parts of Asia, the Middle East, Europe and possibly even Africa not covered by Demographia have arguably higher housing unaffordability than Vancouver.

Inexplicably, Canada’s mainstream media – Vancouver Sun, Globe and Mail, The Province, Business In Vancouver, CTV, GlobalNews, Huffington Post, Ottawa Citizen – have all misrepresented Demographia’s nine countries as “the world”. None of the media told of their mistake has published corrections.


Read Vancouver and Unaffordable Housing Part 2: A Tale of Many Cities

Read Vancouver and Unaffordable Housing Part 3: Solutions or Scapegoats?

Read Vancouver and Unaffordable Housing Part 4: Lots of Statistics, and a Few Lies

Read Vancouver and Unaffordable Housing Part 5: The China Factor

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New Canadian Media provides nonpartisan news and views representing all Canadian immigrant communities. As part of this endeavour, we re-publish aggregated content from various ethnic media publishers in Canada in an effort to raise the profile of news and commentary from an immigrant perspective. New Canadian Media, however, does not guarantee the accuracy of or endorse the views and opinions contained in content from such other sites. The views expressed on this site are those of the individual writers and commentators, and not necessarily those of New Canadian Media. Copyright © 2019 All rights reserved