Evaluating Canada's Economy

RBC Branch HWY 404 & HWY 7 260 East Beaver Cre...Image via Wikipedia
 
C
 
anada is America’s largest trading partner. The reasons Canada has come out of the 2008-2009 recession virtually unscathed is murky to most Canadians and all Americans. Some of it was dumb luck and/or the holding back on innovations.

Space limitation allows for a thumbnail sketch only of the differences in style of business in Canada vis-a-vis the United States.


Banking Industry

Canada’s five major banks, with thousands of branches, pleaded with the government to be allowed to merge, evolve into 2 or 3 multibillion dollar banks able to underwrite big deals, big enough to match Wall Street’s behemoths. The government said, "No, you’re likely to close unproductive branches in rural areas." The banks tried to con the finance minister, claimed they would keep all branches open. The federals wouldn’t budge. The banks got lucky.

Royal Bank of Canada, Toronto Dominion, and CIBC went into the U.S. market anyway. CIBC got badly burned in the Enron fiasco where it settled with the SEC for $1 billion dollars. RBC and TD have had better luck, with TD expanding with commercial branches in the northeast and southern United States.

The Housing Market

There doesn't seem to have been a single foreclosure in Canada. Prices are still rising in some locations, dipping in others. In the United States, folks don’t care to build up equity since mortgage interest is tax deductable. Furthermore, availability of a 30-year mortgage allows one to get by with minuscule amounts of principle being paid. When home prices rose, the tendency was to apply for a second mortgage treating one’s home like an ATM machine. In Canada, to buy a home, a substantial down payment is required, and credit worthiness is a prerequisite. One is offered a fixed rate (amortized over 20 years) mortgage for up to five years only. Interest is not deductable. The mortgage is insured for a small fee by the Canadian Housing Authority and is held by the issuing bank to maturity. All in all, it was an old fashioned way of doing business.

Living Standard

A little known fact is that, in Canada, a good three-quarters of the population is middle class. While per capita income is lower than the United States, the social safety net, including the National Health Plan, offsets the difference. The fabricated stories of mistreatment, waiting periods, death panels, and more, are just that: malicious rumours spread by those interested in maintaining the U.S. status quo. What puzzles many visitors to Canada is an absence of slums.

Climate

A good many Americans from above the Mason Dixon line retire, and establish permanent residence in the sunbelt. Naturally, Medicare services in such locales are strained, increasing costs. Canadians who wish to avail themselves of the Health Plan stay at home. There is no sunbelt to retire to, and no trailer parks. The benefit of this lower mobility is more stable home prices and adequate medical staffing.

Immigration and Government

Major cities in Canada, (about six), are a polyglot of nationalities. There are no racially segregated areas in Canadian cities, just segregation by housing costs. There is little friction, perhaps because, with the exception of some parts of the Maritimes, Canada is a country of immigrants. Canada does not have a land border with an underdeveloped country. Illegal immigrants that get in, usually by air, can apply for asylum. While they wait for an immigration panel to adjudicate their case, they are free to find work and obtain some subsidy, if needed. A costly affair, but it does provide for peaceful society.

In the recent era, governments of all political stripes, to stave off defeat in a vote of confidence, which brings on an election, managed Canada's affairs from the center. The current right-wing, minority government is no different. Partisanship is mostly rhetoric. A law passed by the House of Commons (component of Canadian government of elected officials) gets an easy pass from the unelected Senate. There is little drama, and few surprises.

By: Manny Drukier
Source: The Epoch Times


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Major Canadian Immigration Changes: Summer 2010 Alert

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Souce: www.bakermckenzie.com
The Department of Citizenship and Immigration Canada ("CIC") has introduced
some substantial changes through July 26, 2010 Ministerial Instructions that
affect (i) the Federal Skilled Worker Class ("FSW"), the Canadian Experience
Class ("CEC") and (ii) the Investor Immigration Program ("IIP"). The main
changes are
1. a new list of 29 occupations in demand, down from a list of 38
occupations;
2. language testing for every CEC and FSW applicant, with no exceptions;
3. Elimination of the simplified process such that now all applications must
be submitted in full. All incomplete FSW and CEC applications will be
returned to the client;
4. Removal of FSW Stream 3 (previously working or studying in Canada for
one year); and
5. Doubling of financial thresholds for the IIP.

All of these changes are discussed in detail below.
(I) Federal Skilled Worker applications
CIC is now receiving more FSW applications than it can process and accept each
year and the backlog has been growing after an initial slowdown after the "C-50"
Ministerial Instruction of November 2008.
Background: C-50 Changes
In November 2008, the government introduced major changes to the processing
and eligibility of FSW applicants. Unless the applicant met the requirements of Bill
C-50 , the applicant would need to apply for a category other than the FSW (point
system). More specifically, prior to these changes, a foreign national could apply
under any National Occupation Classification ("NOC") O, A or B occupation
(managerial, professional, or skilled trades areas).
The 2008 Ministerial Instructions created three eligible skilled worker streams,
namely for individuals:
with at least a year of work experience in one of 38 "high demand"
occupations, which cut across numerous industry sectors and skill levels,
but all within NOC codes A, B, and O – ("Stream 1");
with "arranged employment", requiring either an existing work permit with
an established company or business, or an arranged employment opinion
("AEO") – ("Stream 2"); and
working or studying in Canada for at least a year – ("Stream 3").
Applicants meeting one of the three streams had to be pre-approved as a first
step, through the Centralized Intake Office ("CIO"). The applicant only had to
submit the full application package at Stage 2. Passing the first step at the CIO
allowed the visa office abroad to process the application. During the second step
at the visa office abroad, the candidate would still have been required to meet the
67 point threshold, along with all other regulatory requirements.
June 26, 2010 Changes:
CIC has set a maximum of 20,000 FSW applications annually (without an offer of
arranged employment), with a maximum of 1,000 in any of the 29 occupations
(see the list below). CIC argues that a cap is the only guaranteed way to limit the
number of applications it receives, and that without the cap on applications, the
backlog and processing times will only get longer.
FSW applications will continue to be processed through the CIO in Sydney, Nova
Scotia. The submission must include all documents relating to the application, as
the simplified application has been eliminated. All fully completed applications
received by the CIO must meet either of the following two criteria:
a) Stream 1 – Applications from skilled workers with evidence of one year of
continuous full-time (or equivalent) paid work experience in the last ten
years under one or more of the 29 NOC codes (up to a maximum of
20,000 new, complete applications per year with no more than 1,000
applications in any one NOC category); or
b) Stream 2 – Applications submitted with arranged employment (where
there will be no cap on applications).
Stream 3 (temporary foreign workers and international students living in Canada
for one year) no longer exists. Students and temporary foreign workers applying
under the FSW class must now meet the criteria of the two other streams above,
in order to be eligible for processing, or apply through other categories such as
CEC, or a provincial nominee program.
Eligible NOC codes as of June 26, 2010
1. Restaurant and Food Service Managers;
2. 0811 Primary Production Managers (Except Agriculture);
3. 1122 Professional Occupations in Business Services to Management;
4. 1233 Insurance Adjusters and Claims Examiners;
5. 2121 Biologists and Related Scientists;
6. 2151 Architects;
7. 3111 Specialist Physicians;
8. 3112 General Practitioners and Family Physicians;
9. 3113 Dentists;
10. 3131 Pharmacists;
11. 3142 Physiotherapists;
12. 3152 Registered Nurses;
13. 3215 Medical Radiation Technologists;
14. 3222 Dental Hygienists & Dental Therapists;
15. 3233 Licensed Practical Nurses;
16. 4151 Psychologists;
17. 4152 Social Workers;
18. 6241 Chefs;
19. 6242 Cooks;
20. 7215 Contractors and Supervisors, Carpentry Trades;
21. 7216 Contractors and Supervisors, Mechanic Trades;
22. 7241 Electricians (Except Industrial & Power System);
23. 7242 Industrial Electricians;
24. 7251 Plumbers;
25. 7265 Welders & Related Machine Operators;
26. 7312 Heavy-Duty Equipment Mechanics;
27. 7371 Crane Operators;
28. 7372 Drillers & Blasters — Surface Mining, Quarrying & Construction; and
29. 8222 Supervisors, Oil and Gas Drilling and Service.

See http://www5.hrsdc.gc.ca/NOC/English/NOC/2006/Welcome.aspx for the NOC
job descriptions and educational requirements applicable to these occupations.
Due to CIC's limit or the number of applications, Stream 1 applications should be
submitted as soon as possible. The process is now based on a "first come, first
serve" principle: as soon as the cap in that occupation has been reached, no
further applications will be processed, and all new application packages and the
processing fees will be returned. For the unique purpose of calculating the caps,
the first year will begin on June 26, 2010, and end on June 30, 2011. Subsequent
years will be calculated from July 1st to June 30th, unless otherwise indicated in a
future Ministerial Instruction.
Language requirements
Every new FSW and CEC applicant is required to include the results of an English
or French language test as part of their application. There are no exceptions to
this rule, regardless of nationality, current residency or educational background.
English language tests can be taken under IELTS (www.ielts.org) or CELPIP
(www.ares.ubc.ca/CELPIP/index.html). The CELPIP option only applies to the
FSW, not the CEC class. French tests can be taken through JEF
(www.fda.ccip.fr).
(II) Investor Class applications
The Ministerial Instructions of June 2010 propose a doubling of the investment
and net worth levels, without any charge in the process.
Background:
Currently, an applicant under the IIP must meet the definition of an "Investor", and
the minimum points required (points are rarely an issue under the IIP). An
"Investor" is currently defined as a foreign national who:
has had business experience (a test which can be met/through certain
managerial or entrepreneurial experience);
had a legally obtained net worth of at least CAD$800,000; and,
indicated in writing to an officer that s/he intended to make or had made
an investment of at least CAD$400,000 with an approved facilitator
(financial institution). The applicant's investment was returned after a
five-year period, without interest. There were alternatives to paying the
entire CAD$400,000, through facilitators financing plans . Such plans
cost approximately CAD$125,000, without any funds being returned to
the Investor after 5 years..

June 26, 2010 Changes:
The proposed regulatory amendments, anticipated to come into force in the Fall
of 2010, will double the investment and personal net worth thresholds of the IIP to
$800,000 and $1.6M respectively. CIC has placed a moratorium on all IIP
applications as of June 26, 2010. All applications and fees received by CIC after
June 26, will be returned to the applicant until the proposed charges come into
effect, (or the Minister announces otherwise).

Conclusion
The past two years have seen monumental changes to Canada's immigration
system. First, in November 2008, we moved from an open occupation list to a
closed list of 38 occupations. Now, per the June 2010 changes, we have reduced
the list to 29, but more importantly, moved towards U.S.-style limits on
applications, in a system that resembles a combination of the Green Card lottery
system, and the H-1B cap. Additionally, language testing requirements have
been introduced for permanent resident applicants -- even for Americans and UK
citizens -- whether here working in Canada, or applying abroad. Finally, Investor
applicants will have to double their money. These changes all pose both
challenges and opportunities.
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