One year later: A look at the Fort McMurray wildfire and rebuild by the numbers

FORT MCMURRAY, Alta. _ It’s been one year since a wildfire devastated parts of the northern Alberta city of Fort McMurray. Here is a look at the rebuild by the numbers:

1,595: Number of buildings and structures destroyed in the fire. Includes 2,579 dwelling units.

650: Approximate number of development permits issued by Fort McMurray since the fire, representing about 900 dwelling units.

222: Number of single-family homes started in the first three months of the year. Most starts in a three-month stretch since early 2008.

179: Number of homebuilders that have registered under new disclosure laws to do work in the Regional Municipality of Wood Buffalo.

33: Approximate number of families living in rebuilt homes as of the start of April.

48,000: Roughly the total number of insurance claims expected to be processed. Includes 12,000 auto claims and 25,000 home claims.

$80,000: Average insurance payout per claim.

$3.8 billion: Estimated total payout in insurance claims.

9.8: Unemployment rate for the Wood Buffalo-Cold Lake area as of March 2016.

9.1: Unemployment rate for the Wood Buffalo-Cold Lake area as of March 2017.

600: Approximate decline in student numbers in public and Catholic schools for 2016-2017 year. Total enrolment slightly more than 11,000 between the two school systems.

1.5 million: Average barrels of oil per day produced from the oilsands before the fire.

3 million: Record high number of barrels per day produced from the oilsands in November, six months after the fire.

12,000: Estimated number of fridges and freezers that had to be replaced, according to Insurance Bureau of Canada.

$660,000: Median home price in March 2016 on 21 homes sold.

$560,000: Median sale price of the 45 single detached homes sold in March.

11: Number of single family vacant lots sold in March, at a median sale price of $156,000, compared with none sold in March 2016.

17.8: Total vacancy rate for Wood Buffalo as of October 2016. A year earlier it stood at 29.3 per cent.

29,068: Number of mental-health-related client contacts between May 10, 2016, and March 18, 2017, at Alberta Health Services Addiction and Mental Health in Fort McMurray and Wood Buffalo.

$189 million: Total amount of money donated to the Red Cross.

$134 million: Total value of donations that were matched by the federal and provincial governments.

$231 million: Total amount the Red Cross says it has allocated to support individuals and families.

$30 million: Total amount the Red Cross says it has allocated to support small businesses.

$50 million: Total amount the Red Cross says it has allocated to support community groups.

10,900: The number of plane and bus tickets the Red Cross booked to help people return home.

37,000: The number of cleanup kits handed out to returning evacuees.

6,000 per cent: The surge in social media traffic the Red Cross saw in the aftermath of the fire.

40: The number of volunteers required to manage the Red Cross social media accounts.

Leaving money to a secret beneficiary is very, very tricky, experts warn

Leaving money to a secret beneficiary is very, very tricky, experts warn

By David Hodges

THE CANADIAN PRESS

TORONTO _ When it comes to requests to have inheritance money left discreetly, Toronto estate lawyer Ed Olkovich says it’s typically not the racy stuff most people might expect, such as funds for a secret lover or a child out of wedlock.

Rather, he says, it’s often done to avoid having something that could appear unseemly included in a will _ which becomes a public document once it’s probated.

“I’ve had a strange case where somebody said to me, ‘Don’t put that person’s name in the will because my partner will go crazy if I left this person money,”’ Olkovich says, citing the example of a client wanting to leave a sizable gift to a loyal employee without raising any suspicions from his wife.

“The next thing you know, somebody is accusing them of having an affair.”

But regardless of why you may want to leave money for a secret beneficiary, there are lawful ways to do it, says Ottawa-based estate lawyer Norman Bowley.

One option is to make arrangements with a trust company legal entities often used when dealing with estate planning matters that administer the money either during your lifetime or after your death.

“They’re discreet and professional and you would literally put in the trust, ‘When I die you are to give this $100,000 to such-and-such-a-person,”’ says Bowley. “That is not going to get out in the public, provided that you take the care to use an instrument for which you don’t need probate.”

Another option for leaving money confidentially is a secret trust in which you leave assets to a person named in your will with prearranged instructions that they privately give the funds to someone else who has not been named in the will.

For instance, Bowley says, you could leave money to a sibling, with the understanding that they would give the funds to your secret beneficiary “a mistress, for instance.” That means the gift is secret even after the will becomes public.

However, enforceability of a secret trust may be a concern because there is little you could do to ensure your wishes are actually carried out. Bowley says that “if your brother turns out to be a scalawag after your death, he may just keep the money for himself.”

An altogether different option is a permanent insurance policy that guarantees a payment, says Lorne Marr of LSM Insurance in Markham, Ont.

“The owner of the policy can choose whoever they want as the beneficiary, so long as they’re is an insurable interest” says Marr.

“But the nice thing about an insurance policy also is that it supersedes the will,” he adds, meaning that whatever you designate in your insurance policy is not part of your estate and therefore subject to probate.

But in terms of the actual pay out, the insurance company needs two things from the beneficiary: a claimant’s form explaining their relationship to the insurer, as well as a copy of the death certificate the latter of which could be tricky, Marr says.

Olkovich points out, however, that while an insurance company won’t tell you who a designated beneficiary is, that doesn’t mean the policy becomes confidential.

“If it’s for a large sum of money a court can order that information to be disclosed,” he says.

Generally, Olkovich says, the difficulty with trying to leave money in secret is that after you’re gone it’s no longer a secret once the beneficiary actually starts receiving the funds.

“If all of a sudden a large sum of money is missing out of your account, someone is going to follow that paper trail and they’re going to say, ‘Well, whatever happened to this money?”’

 

$45M insurance claims from March windstorm in eastern Newfoundland

Excerpted article was By Marilyn Boone, CBC News

Insurance companies have tallied the cost of a March blizzard that whipped through eastern Newfoundland and says damage claims covered by insurance add up to $45 million.

Hurricane-force winds on March 11 gusted more than 140 km/hr damaging residential and commercial buildings, vehicles and power lines.

Siding and roofs were stripped from houses, traffic lights were torn from their posts and windows were blown out of vehicles.

More than 70,000 people were without power, some for more than a day.

Winds were so strong in St. John’s that windows were blown out of vehicles in the Stavanger Drive area.

What happened is known in the insurance world as a catastrophic event, according to Amanda Dean, Atlantic vice president of the Insurance Bureau of Canada

“In the insurance industry, anything over 25 million is considered a catastrophic event,” Dean said.

The March 11 storm, on a Saturday, had residential and commercial clients calling their insurance companies the next day.

The storm came just months after remnants of Hurricane Matthew — in October 2016 — which resulted in $100 million worth of insurance claims by customers in Newfoundland and Nova Scotia.

In 2010, Hurricane Igor resulted in $75 million in insurance claims. Those figures from the insurance industry do not include damage to public infrastructure such as roads and bridges.

“One event doesn’t necessarily affect insurance rates,” Dean said, but noted that catastrophic events are happening more frequently.

Premiums charged are meant to fill up the pool of money that’s available to pay out claims and “once the pools are depleted, they have to be filled back up.”

Bay Roberts wharf

The wind ripped off the roof of this building on the Bay Roberts wharf, just one of the structures damaged in the March 11 storm. (Phil Smith/Twitter)

How Great-West Life became an insurance titan

Excerpted article was written By Darren Bernhardt, CBC News

Great-West Life’s roots date back to 1891, when the company was founded in Winnipeg and a man named Jeffrey Hall Brock had a dream that many called impossible.

At the time, there were 40 insurance companies in Canada and 31 of those were foreign-owned. None of the nine Canadian ones were based in Western Canada, according to George Siamandas, a Winnipeg historian who runs The Winnipeg Time Machine blogsite.

Brock was a local insurance agent who promoted the idea of a Winnipeg-based insurance company, thinking a local company would be more sensitive to the needs of westerners, Siamandas wrote.

Brock was scoffed at and told that his dream would not fly, that it was impossible. But he persevered and the company was incorporated on Aug. 28, 1891, and had leading citizens like hardware magnate James Ashdown on its board. Brock’s goal was to take in $1 million worth of premiums in the first year, Siamandas wrote.

At the board’s first annual meeting, he reported they sold $2.7 million.

The company’s first death claim was in 1893 for $1,000, and in 1912 two policyholders who died on the Titanic were covered.

By 1896, the company served clients across Canada and in 1906 it opened its first office in the U.S. in Fargo, N.D. The next year, it was the largest insurance company in Canada and had 100 employees in Winnipeg and 600 agents across the country.

In 1911, the company built its head office in Winnipeg’s Exchange District, on the corner of Rorie Street and Lombard Avenue.

In 1942, GWL became the first Canadian company to enter the accident and health insurance business.

In 1960, the company moved to a new building on Osborne Street — constructed on the site of the old Osborne Stadium — across from the legislative building, and in 1983 it expanded into another new building at Broadway and Osborne.

Still headquartered on Osborne and a publicly-traded company, Great-West Lifeco (GWL) is now one of North America’s largest financial holding companies.

Indirectly controlled by Montreal billionaire Paul Desmarais, through his stake in the Power Corporation of Canada — a Canadian holding company — GWL now serves more than 13 million people across Canada, offering insurance as well as investment, savings and retirement income plans and annuities.

In 1997, it took over the then-123-year-old London Life and in 2003, GWL acquired another one of the country’s oldest insurance companies, paying $7.3 billion CDN for the then-156-year-old Canada Life Financial.

The company’s network includes The Great-West Life Assurance Company, London Life Insurance Company, Canada Life Financial, Great-West Life & Annuity Insurance Co., Irish Life, and Putnam Investments.

Canada: Life Insurance – Uses, Tips And Traps

Article by Crista C. Osualdini

Life insurance is a familiar product to many of us and can be an element of estate planning that should not be overlooked. It is typically used to either create or preserve wealth and can be used in a variety of ways in structuring an estate plan. For example:

Creating Liquidity to Pay Debts –

When completing your estate plan, an analysis should be done of the nature and extent of anticipated debt and expenses upon death. In Canada, upon death we are notionally deemed to have disposed of all our assets for tax purposes. This means that any unrealized capital gains at the time of death will be taxed. This can often result in a significant tax bill – family cottages often being a prime example. Life insurance can create the necessary liquidity so that assets do not need to be sold in order to pay associated tax debt or any other forms of debt.

Creating Wealth Outside the Estate –

When developing an estate plan, the law requires you to ensure that certain persons are properly provided for. These people include, but are not limited to, spouses, minor children and dependent adult children. This can become problematic, especially in blended family situations, where there is a need to provide for a second spouse, but also a desire to provide for non-dependent adult children of the first marriage. Life insurance can be used to create wealth and increase the “size the pie” that is available for persons you would like to provide for.

Funding Buy/Sell Agreements in Privately Held Corporations – It is typical that in a small business upon the death of a shareholder, either the remaining shareholders or the corporation will purchase the deceased shareholder’s shares. This can be a substantial cost. The expense could interfere with the company’s ability to carry on business with the added cost of new financing or reduced capital availability. Life insurance can be a tool used to fund the share purchase so that the impact of the shareholder’s death on the operation of the corporation is minimized.

When working with life insurance, the following are 10 Tips and Traps from my experience in working with individuals to develop their estate plan:

  1. In light of the aging baby boomer generation, it is anticipated that over the course of the next thirty years there will be an unprecedented inter-generational wealth transfer. It will likely follow that estate litigation will be on the rise. Consider naming beneficiary on your life insurance other than your Estate, this will assist in protecting it from claims of disappointed beneficiaries and creditors.
  2. Consider the need for life insurance earlier rather than later. Life insurance is often prohibitively expensive later in life and thus renders it an uneconomical solution.
  3. If you name your Estate as the beneficiary of your life insurance, it will be subject to probate fees. While Alberta currently has low flat rate probate fees, this may not always be the case. In certain Provinces, probate fees are calculated as a percentage of estate value.
  4. In addition, if you name your Estate as the beneficiary of your life insurance, your executors will likely need to wait for a Grant of Probate to be issued prior to the insurance provider releasing funds. At the time of writing, a Grant of Probate takes approximately three to four months to issue at the Court of Queen’s Bench.
  5. Make sure your beneficiaries are aware that you have life insurance in place. Or alternatively, provide this information in your Will. If your executor or beneficiaries do not know that you have life insurance in place, it is possible that it may go unclaimed upon your death.
  6. When life insurance is used to fund a corporate buy out of share upon death, make sure your shareholders’ agreement sets out whether those funds will be paid through the Capital Dividend Account and thus on a “tax free” basis to the estate of the deceased shareholder. If this is unclear in the agreement, it can lead to litigation as to who receives the tax benefit generated by the payment of life insurance to the corporation.
  7. Ensure that your beneficiary designations are not in violation of any existing separation or divorce agreements. If they are, this will likely lead to litigation. The result of such litigation could be that a remedial trust is imposed by the Court over the insurance proceeds for the benefit of whomever the insurance was supposed to be paid pursuant to the agreement.
  8. Make sure initial and any subsequent amendments to beneficiary designations are done correctly. The Insurance Act sets out the requirements for making a beneficiary designation  amendment and must be complied with. Far too often these designations are completed incorrectly which can lead to expensive and time consuming litigation. Make sure the designation is signed by you and specifically names the insurance policy that you are referring to and who you are naming as the beneficiary.
  9. Insurance can be a great tool to use when you are desirous of making a charitable donation upon death. There are different ways to structure such a gift, so ensure you receive tax advice on what method is best for your circumstances.
  10. For couples with young children, an important consideration in estate planning is appointing guardians for the children in the event of the death of both parents. Part of this discussion usually pertains to where the children would live. Quite often parents will want to maintain continuity for the children and for them to continue living in the family home. Do not forget about mortgage insurance and considerations as to how the Estate will be able to afford to continue to maintain the family home.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Home Capital shares plunge after signing deal for $2 billion credit line

TORONTO _ Home Capital Group Inc. (TSX:HCG) shares lost more than half their value in early trading on Wednesday after the mortgage lender warned it would be unable to meet its financial targets under the terms of a new credit line it is working to secure.

Home Capital sought the credit line as savers stepped up withdrawals from the high-interest savings accounts of its Home Trust subsidiary, used by the company to fund its lending.

The lender’s stock price had already taken a hit last week after staff at Ontario’s securities regulator alleged that the company, two former CEOs and the current CFO broke the law in their handling of a scandal involving falsified loan applications. The company has said the allegations are without merit and vowed to defend itself.

The company said Wednesday that Home Trust has reached a non-binding agreement in principle with a unidentified major institutional investor for a $2-billion credit line. But it warned that the terms of the proposed agreement “would have a material impact on earnings, and would leave the company unable to meet previously announced financial targets.”

A firm commitment for the credit line was expected to be agreed to later today.

Shares in Home Capital fell $10.26 to $6.83 in late-morning trading on the Toronto Stock Exchange.

Home Capital said Wednesday that high-interest savings account balances have fallen by $591 million in the period from March 28 to April 24. The total high-interest savings account balance stood at roughly $1.4 billion at April 24.

“The company anticipates that further declines will occur, and that the credit line would also mitigate the impact of those,” Home Capital said in a statement.

Home Trust’s guaranteed investment certificate deposits remained essentially unchanged over that time at roughly $13.01 billion as of April 24 compared with $13.06 billion at March 28.

Home Trust and Home Bank deposits of up to $100,000 are protected by the Canadian government’s Canada Deposit Insurance Corp.

Combined with Home Trust’s current available liquidity, the credit line will provide access to more than $3.5 billion in total funding, the company said.

The $2-billion loan facility will be secured against a portfolio of mortgages originated by Home Trust and mature in 364 days.

Under terms of the proposed deal, Home Trust will be required to pay a non-refundable commitment fee of $100 million and make an initial draw of $1 billion. The interest rate on outstanding balances will be 10 per cent, and the standby fee on undrawn funds will be 2.5 per cent.

On Monday, Home Capital announced that chief financial officer Robert Morton, who is one of the three men named in the OSC allegations, will be assigned new responsibilities after first-quarter results are filed next month.

It also said Home Capital founder Gerald Soloway, who was formerly the company’s chief executive and also named in the allegations, will step down from the board of directors once a replacement is found.

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