The people’s plan

For those not yet born when this pathetic blog crawled out of the primordial ooze, time for some full disclosure. I am aroused by tax-free accounts. There. I said it. Don’t judge.

It was eleven years ago when it occurred to me how much better lives would be if Canadians could have something like the Roth IRA – an account Americans can stick after-tax money into, let it grow without being nicked by government, then withdraw it in retirement with no tax consequences. And why would this be better than the traditional RRSP, in place here for decades?

Simple. Lots of people retire with healthy incomes. So when you cash out RRSPs (or turn them into RRIFs) the money can push you into a higher tax bracket. Big negative. Second, taxes aren’t going down, so having all your retirement money in vehicles taxed at current levels when removed in a few decades could be heartbreaking. So why not encourage people to save by allowing free growth and in return for giving no tax break when they contribute, charge no tax when they withdraw?

In 2005 I lost my mind (again), got elected to Parliament and came up with the weird, populist idea of asking people what kind of budget changes they’d like. This was one of them. At the time I was the only blogging MP (that eventually murdered my career), and the results of my budget survey were thunderous. So I wrote a fat report for the finance minister, who made it clear he didn’t want any damn suggestions, and recommended we create a tax-free Roth-like retirement vehicle to complement the RRSP.

Well, three years later, after my sorry ass had been booted out of the Stephen Harper caucus (for blogging with people), the government introduced the TFSA. The only wrinkles from my original idea: it was no longer linked to retirement and promoted as a glorified savings account, not a long-term investment vehicle.

One other reason this thing is so cool: it’s democratic. Everybody gets the same shot at building wealth. You need only live here to get one. And the contribution limit isn’t tied to income (like an RRSP) so no big advantage to the wealthy. This one’s equal for all. The fairest, most honest, egalitarian, leveling break possible. The people’s plan.

So here we are in 2017, and the accumulated room has swelled to $52,000, or more than $100,000 per couple. In other words, serious money can be put into a TFSA. An entire balanced and diversified portfolio can live inside one family’s accounts. And while money isn’t locked in or tied to retirement, that remains the greatest use. Happily more and more beavers are starting to understand that. The tax-free account is a money machine. If you only do one thing for your future, make it this. Not an RRSP.

Here are some other things you should know:

While you can certainly flip stocks inside your TFSA, or trade ETFs and other securities, this is not intended to shelter income from an investment business. So if the CRA thinks you’ve created a job by day-trading inside your TFSA, or you’re a financial professional doing the same, the tax-free profits won’t be that way for long.

The main pay-off in retirement is having TFSA withdrawals, or any stream of cash generated by assets in your account, not considered as income. You don’t even report it on your tax return. It will not change your tax bracket. You can have a $2 million TFSA generating ten grand a month and still collect your full government pogey.

Whatever you can put into an RRSP can go into a TFSA. Remember (above all) that this is not for saving money, but investing it. The name therefore sucks. So do government promotions for the TFSA. Someday that needs to change, since 80% of the 11 million people with a TFSA have it stuffed with cash.

Never withdraw money from a TFSA, as tempting as it may be, because you’ll screw up the greatest benefit – long-term, tax-free growth leading to unreported income and eternal bliss. But if you did, wait until the following calendar year to put it back. If you re-contribute too soon, the penalty is stiff – 1% a month on the greatest excess amount in there.

Borrowing to fund a TFSA is not a sweet deal since the interest isn’t deductible from taxable income. Also be aware US dividend-paying stocks in your plan will be subject to a 15% IRS tax. In fact, because the evil Yanks don’t recognize the TFSA as a legitimate tax shelter (like the RRSP), Americans living here (or dual citizens) should avoid this unless they like making accountants rich.

If you can’t decide between putting money into an RRSP or dumping it into the TFSA, do both. A contribution to a retirement plan will net a tax refund that can be used for the tax-free account. You can always use non-registered assets you have now (like ETFs) to make a ‘contribution in kind’ to your RRSP, then the government will send you money in the form of a tax refund for selling yourself assets you already owned, which can be used to fund the TFSA.

Is this a great country, or what?

196 comments ↓

#1 Theo on 01.03.17 at 6:26 pm

Well fine whatever but you were part of that deplorable Wrecking Crew that was taking money that rightfully belonged to the government to pay out pensions. By making things shielded from taxes you are literally starving children and causing our roads to crumble into dust.

Shame on you.

Please feel free to pay more tax, if you wish, to make up for me. I only hand over 52% of what I earn. — Garth

#2 T.S. on 01.03.17 at 6:36 pm

“The main pay-off in retirement is having TFSA withdrawals, or any stream of cash generated by assets in your account, not considered as income. You don’t even report it on your tax return. It will not change your tax bracket. You can have a $2 million TFSA generating ten grand a month and still collect your full government pogey”

If you think you’re going to generate $10,000 a month in retirement and get full OAS by all means listen to Garth.

I e-mailed Joe Oliver (when he was in charge) on this issue and got an official response from his department saying that it’s something they’re looking at but they don’t feel pressed to do anything since nobody is close to that amount yet.

If the Cons admit there’s a big loophole that needs closing, you think a Liberal Government isn’t going to act in the future?

TFSAs are great, but rules can change and this is going to be one of them.

#3 None on 01.03.17 at 6:36 pm

I think the fairness justification is weak. Why not just make all investments tax free then? That would be also totally democratic and fair right? No one pays capital gains? Yeah, that’s paying peter to pay paul – just like the TFSA may end up being. Taxes need to come from somewhere.

#4 Theo on 01.03.17 at 6:40 pm

Evidently I was too convincing in my sarcastic post.

#5 Alice on 01.03.17 at 6:47 pm

The US has lower income taxes, but there’s way more loopholes that can bring a Canadian’s tax rate below the yanks.

#6 Overtaxed Masculinist on 01.03.17 at 6:48 pm

Why are fuel prices very high this week?

Why are the teacher unions bribing Kathleen Wynne to push social engineering agenda in our public schools starting from Junior elementary? Why are female teachers advocating to dress unprofessionally in front of those minor students in classroom?

Why is Toronto considered to be a militant suffragette city that just accidentally looking at a female in downtown Toronto is considered way worst than a convicted child predator fondling a baby in a hospital?

Why does Toronto pay exorbitant fuel prices when Canada is an oil producer country?

Why can’t Alberta separate from the rest of Canada to stop the theft of their income from Ottawa?

Why is it lousy to work in Toronto when I feel like I have to walk on eggshells when dealing with politically correct loonies who act like supremacists and bad people?

Why do I have a lawyer retained & extra 50 grand set aside for legal fees to sue any company (just in case) which discriminates against me in favor of a woman living in Toronto?

[My lawyer told me that a growing # of men are seeking his services for false accusations in the workplace relating to harassment and anti-women allegation. My lawyer confidently explained that suing a company is the best option because it proverbially “stirs up the feces” & companies lose out in the end.]

Answer: It’s because you pay WAY TOO EXTRA Carbon taxes to a Liberal government led by a man-hating Premier who hates everything male, family & normal….

#7 Stevyn on 01.03.17 at 6:51 pm

Hi, I have no debt, no mortgage, house paid for. I have $32000 room in Tfsa. My question, thank you, is whether I should borrow to fill up my tfsa. About 3 years to retirement.

#8 CJBob on 01.03.17 at 6:56 pm

This years contribution will be going to XEF as my International percentage is down due to the increases in North America. Simple, disciplined based on an existing strategy and very easy to execute. After this nothing to do until June when I’ll check the balances again.

#9 Brock on 01.03.17 at 6:56 pm

Most Canadians are broke, can barely pay their bills and you’re talking about TFSAs. What percentage of eligible Canadians have maxed out their $52,000? Oh yeah. Less than 5%. Why? Because they’re broke. Wages are garbage and cost of living is insane.

#10 will on 01.03.17 at 7:03 pm

yup, loaded up today.

#11 Emily One on 01.03.17 at 7:05 pm

OMG tax evasion is wrong, immoral and unethical. Taxes insure that we educate our girls in school, pay our police staff to protect our women from street harassment, pay for government services that you need.

Taxes foster equality…don’t be an American loser, and let our vulnerable group of women and children suffer in Canada because of deep-rooted misogyny from Reaganomics in 1980.

Pay your taxes to prevent the CRA from auditing your business. Pay your fair share.

As a woman working as a teacher in the Greater Toronto Area, I am paid only 60-70% of what a man earns in Ontario.

Men should pay more taxes to fill the gap.

Male and female teachers earn the same. Trolls pretending to be teachers? Priceless. — Garth

#12 Polls R Phake on 01.03.17 at 7:13 pm

That’s all well and fine for the 75% of the blog readers who are well paid public servants courtesy of the taxpayer with all the “I make 130K a year blah blah blah and poor doctors that make 300K. Until the govt cuts its workforce by 10 or 15% and brings taxes way down they can ABC program all they want. The average Canadian benefits nothing from all these sweet government ABC incentives.

#13 meslippery on 01.03.17 at 7:18 pm

Please feel free to pay more tax, if you wish, to make up for me. I only hand over 52% of what I earn. — Garth

That sounds like a lot and it is.
However if you gross $2.5 million @52% thats over
$100,000.00 per month take home, wont find a lot of
sympathy for that tax rate.

Nothing to do with sympathy, just killing the ‘pay your fair share’ lament of the deplorables. BTW, I don’t earn two million from this blog yet. — Garth

#14 moneydriven on 01.03.17 at 7:18 pm

Also be aware US dividend-paying stocks in your plan will be subject to a 15% IRS tax.

Hi Garth,

Thanks for informative blog. Is this tax on dividend or on capital gain?

Assuming you have enough to create a balance portfolio with register and non register account. Does the statement above mean TFSA equity portion should be mostly maple? and keep US equity portion in RRSP or non register account?

Thanks,

The tax is on dividends, so it’s inconsequential. — Garth

#15 Debtslavecreator on 01.03.17 at 7:19 pm

Theo- you have it ass backwards buddy
The TFSA for now is one of the very few ways to avoid the massive theft of private assets that has been occurring over the last few decades and on overdrive in the last 15. Everyone who works has income tax and EI deducted which right off the top means 20-30% reduction for the typical wage earner then Deduct HST and property taxes and user fees and then whatever you have left to invest is steadily destroyed by the deteriorating value of our currency combined with the real tax applied in illusory gains.
No amount of tax is going to help the children. Government corruption has led to out of control spending and borrowing with bloated public sector costs and steadily increasing interest costs that WILL consume more than 50% of tax revenues shortly
And you are angry those who make and save money are allowed to save a small amount each year tax free ? The largest expense by far for the average working family is govt taxes and fees
Get lost with the Marxist scan
Move to Europe – we are Marxist enough in this province thanks to these pathetic liberals

#16 conan on 01.03.17 at 7:22 pm

Just reading your blog( and a few other things) murdered my career.

“Bus, meet Conan.”
“Conan, meet Bus.”

“You can have a $2 million TFSA generating ten grand a month and still collect your full government pogey.”

Not sure how long that will last now that the Russian Cats have read it.

#17 rainclouds on 01.03.17 at 7:25 pm

More fodder

http://www.telegraph.co.uk/business/2017/01/02/fears-massive-global-property-price-crash-amid-dangerous-conditions/

#18 Smartalox on 01.03.17 at 7:28 pm

Glad to say that the value of my TFSA is already a few years ahead of where it should be.

Now if only the Canadian gov’t would come to an understanding with the IRS to allow my wife to do the same (though her non-registered portfolio of US stocks is slightly ahead of my TFSA at the moment).

Still, I tell people that the TFSA is similar to the principal property (real estate) tax exemption: you don’t pay taxes on gains in value made by your investment, and don’t have to declare income when you take it out of the account. The difference is that instead of leveraging the risk, TFSA users ‘pay as they go’, by making regular contributions to buy assets.

Of course with the TFSA, you never lose the contribution room that you have accumulated, and don’t have to worry about owing more than your account happens to be worth.

It would have been sweet if the TFSA limit had been extended to $10k, and not been bungled as a partisan ploy by the Liberals in the last election – but there’s still hope that they’ll get it right – for the reasons that Garth has already stated:

– That RRSPs disproportionately favour higher income earners at the expense of lower-earning taxpayers.
– The TFSA is more ‘democratic’ as everyone (rich or poor) gets the same opportunity, and contribution room is forwarded year after year, as long as you live in this great country.

With governments talking about Universal income, you’d think that that they’d favour ‘Universal Investment Opportunity’ too.

Meanwhile I’ll keep avoiding those higher tax brackets by increasing my contributions to my RRSPs.

#19 Irish Stew on 01.03.17 at 7:34 pm

Crazy question – is it possible to have too much money in RRSP’s at retirement?

#20 Keith in Calgary on 01.03.17 at 7:35 pm

While I will not argue against the usefulness of TFSA’s I will say that the only reason they exist at all in Canada is because of the 2008 financial crisis, and the need for the PC’s to protect the false veneer of “fake news” surrounding the supposed “health” of Canada’s banks.

In addition to the initial slight of hand bailout given to the banks thru CMHC in 2008, to date there have been some 118 billion dollars handed over to our banks thru TFSA contributions by the population.

Imagine if the government had to support them with this dollar amount via a bailout, instead of introducing your idea which is, quite frankly, another hidden bailout ?

What did I do to deserve this audience? — Garth

#21 BC_Doc on 01.03.17 at 7:36 pm

“In fact, because the evil Yanks don’t recognize the TFSA as a legitimate tax shelter (like the RRSP), Americans living here (or dual citizens) should avoid this unless they like making accountants rich.”
*********************************************

Garth–

When you have a chance, look up the “master nationality rule.” There is no such thing as a dual-citizen living in Canada. A Canadian citizen born in Iran is considered Canadian only by the Canadian government while living in Canada. Should he travel to Iran, he may find himself viewed differently by the Iranian government and forced to carry a rifle for the Iranian military. But again, in Canada, he is Canadian and Canadian only.

Those individual Canadians who refer to themselves as “duals” in Canada devalue their Canadian citizenship. Those governments (Conservatives and Liberals with FATCA) who refer to certain citizens living in Canada as duals devalue our great country’s sovereignty.

When it comes to so-called duals in Canada and the IRS, the US is overreaching. It needs to have its hand slapped when it tries to reach into Canada and tax Canadian citizens that it deems “US persons.”

A so-called “dual citizen” living in Canada should have the same advantages as other Canadian citizens and should be able to invest in a TFSA without being molested by Uncle Sam.

#22 Ronaldo on 01.03.17 at 7:37 pm

More great free advice.

#23 Joseph R on 01.03.17 at 7:39 pm

#1 Theo on 01.03.17 at 6:26 pm

[…] By making things shielded from taxes you are literally starving children and causing our roads to crumble into dust.

—————————————–

Theo,

TSFA contributions are made on POST-income tax (take-home) pay. RRSP are PRE-income tax, hence why many employers allow you to contribute monthly to a Group RRSP and give you a tax saving every pay day.

#24 Ronaldo on 01.03.17 at 7:42 pm

#9 Brock on 01.03.17 at 6:56 pm

Most Canadians are broke, can barely pay their bills and you’re talking about TFSAs. What percentage of eligible Canadians have maxed out their $52,000? Oh yeah. Less than 5%. Why? Because they’re broke. Wages are garbage and cost of living is insane.
—————————————————————-
My guess is that most people know nothing about them.

#25 mark on 01.03.17 at 7:45 pm

In Regards to the “in kind” contribution to a rrsp.
If your non-registered account has Preferred shares that are at break even investment dollar wise (no or little capital gain or loss) , IF you have RRSP room available is it prudent to move them to a RRSP and get the tax deduction? Margin tax rate about 25% i believe for me in B.C. ( $70,000 year gross wages).

Thanks, if anyone can chime in, ya i know see a tax pro.

#26 Ronaldo on 01.03.17 at 7:49 pm

#19 Irish Stew on 01.03.17 at 7:34 pm

Crazy question – is it possible to have too much money in RRSP’s at retirement?
————————————————————–
Not crazy at all. Google ‘rrsp tax trap’, sit down, have a nice cup of tea and check out the many links that come up for this topic. Also, check out this web site.

http://www.shillington.ca

#27 Nonplused on 01.03.17 at 7:52 pm

9 Brock

Your observations on the condition of the Canadian’s finances are pretty correct, but as survey after survey (ok there may have only been 1) has show, Garth’s readers tend to be wealthy enough to worry about such things. No billionaires perhaps, but I think his average reader has a family income over $100,000 a year, except the moisters but hopefully they aspire to at some point.

But anyway even if you don’t have such an income, if you are saving some amount for retirement the discussion is important, whatever the amount is.

Oh and Garth you forgot to mention if you have a company match RRSP plan from your employer max out the match first. I know you’ve said that before but it’s important. It’s free money.

#28 Victoria Millennial on 01.03.17 at 7:55 pm

Anyone else notice how many new listings there are in Van since Jan 1? I’m noticing a huge uptick, but perhaps this happens every January.

#29 Linda on 01.03.17 at 7:56 pm

Garth, just for clarification does that IRS 15% tax on US dividends apply to all, or just US citizens/US dual citizens?

#30 LH on 01.03.17 at 8:00 pm

Just a 30% tax bite?
Try 50-55%…

#31 Smoking Man on 01.03.17 at 8:04 pm

Man going to all the fringe websites.

Basically saying globalists aren’t going to let Trump into the white house. He either gets assassinated or Obama starts ww3.

Perhaps they might not be far off.
UCC giving me the same vibs. Just look at lonney Johnny Boys rant on Trump yesterday. He’s probably considered a moderate lefty.

#32 Paully on 01.03.17 at 8:05 pm

Re: #11 Emily One on 01.03.17 at 7:05 pm

If it is true, as Emily One asserts above, that women only make 60-70% of what men make, then what is stopping any business from hiring exclusively women and using the 30-40% aggregate labour-cost savings to absolutely crush the competition?

#33 Nonplused on 01.03.17 at 8:06 pm

11 Emily One

As a woman working as a teacher in the Greater Toronto Area, I am paid only 60-70% of what a man earns in Ontario.

Men should pay more taxes to fill the gap.

Male and female teachers earn the same. Trolls pretending to be teachers? Priceless. — Garth

Not going to get that obvious misstatement by Garth, are we Emily? As Milo Yiannopoulos has proved to a certain high level of certainty, the wage gap is a myth when time worked and type of work is included in the calculations. I’ve been inside the workings of the annual review process for a major company before and saw the pay levels of 75 employees as we allocated raises and such. I can assure you there were no noticeable discrepancies based on gender. And I can also assure you no public company or government agency in Canada would attempt to discriminate based on sex. The penalties are too harsh. Especially a school board.

My ex-wife was a teacher (she’s a prof now teaching teaching but actually doesn’t get paid anymore, not sure why she went that route) so I have taken time to review how the salary grid works for teachers, at least here in Alberta. There are only 2 criteria, level of education and years worked. If you have a Bachelor’s degree and 8 years of experience, vola! There is your salary right on the table and it’s public you can look it up on line. Gender has nothing to do with it.

Oh and men (and women) who make more money already pay more taxes, and not just more but also a higher percentage of income. We have a graduated tax system in Canada and gender is also not a factor in those rather complex mathematical calculations.

The whole source of “the wage gap” at this point is that men tend to do more “dirty jobs”, collecting the trash, building houses and bridges in -20 weather, and working on rigs 8 hours from civilization.

#34 Randy on 01.03.17 at 8:06 pm

Too bad our SOVEREIGN Government can’t find a way to allow 1.5 MILLION Canadian citizens born in the USA to have the same rights under the Charter of Rights and Freedoms as other Canadians have. No, not all CANADIAN citizens in Canada have the same rights. I bet all the readers here thought that “a Canadian is a Canadian”. American Canadians have to pay capital gains when they sell their home here.

#35 GB on 01.03.17 at 8:06 pm

While not officially tied to income….The TFSA is indeed tied to income in that no average Middle income family trying to raise a family can afford to top it up.

Sorry Garth….this is a vehicle for the wealthy only.

Trudeau has it right…shred the 10,000$ stock pile for the wealthy and re-build the middle class (you know…the ones who officially drive an economy…).

The TSFA is a wealthy man’s play toy plain and simple.

#36 Diversified in Oakville on 01.03.17 at 8:15 pm

#9 Brock.

This is NOT a blog for “Most Canadians” who may or may not be broke. This IS a blog for those of us who care about our financial futures.

Our household income is not in the 1% or even in the top 10%, but we still manage to max out our TFSA’s and RSP’s.

How? Living within our means and budget. It is so easy to come hear crying and moaning, but what are you doing about it?

#37 Pete on 01.03.17 at 8:20 pm

These guys steer people towards minimizing their tax burden.
http://www.detaxcanada.org

#38 Rexx Rock on 01.03.17 at 8:20 pm

Wow,listening to check news and Victoria house went up 20% and 40% in Oak Bay.Wages must be increasing huge to afford this insane real estate market.They said its because of low inventory,great job growth and everyone moving to Victoria for its great overall lifestyle.I guess that’s why you see people smiling everywhere of all the money they made just living in a dumpy house.Good times 2017.

#39 GB on 01.03.17 at 8:24 pm

#28: Diversified in Oakville,

I don’t believe you for a single second…without knowing the specifics behind you claim:

1) Are you married?

2) Do you have kids (if so how many?)

3) Did your parents gift you any cash?

4) Are you earning an “average family wage” (which is about 90,000K per year with two incomes).

5) Do you have a mortgage?

6) Do you afford your children (if you have them) the ability to partake in recreational activities (hockey, ballet etc?)

If you are maxing out both then we are missing something in you equation.

I know this because I keep a solid record of spending on an average family Canadian income and it…juts…ain’t…possible.

Do tell…

#40 ShawnG in TO on 01.03.17 at 8:29 pm

do you escape capital gains tax when you contribute to rrsp in kind?

suppose i bought $8000 worth of xiu last year. now it’s worth about $10000. if i move that to my rrsp, don’t i have to pay cap gain tax on the $2000 ?

thank you !

Yes, unless it was inside a TFSA. — Garth

#41 Nicely done in 2005 Garth on 01.03.17 at 8:29 pm

Thank you so much for the TFSA idea, report and recommendation YOU made back in 2005.

Anyone with a TFSA or that will ever get one, owes you a huge debt of gratitude.

A huge debt of gratitude to you Garth, from me.

You were ahead of your time then and you continue to be so.

bsant

#42 Andrew Woburn on 01.03.17 at 8:32 pm

Since monetary policy seems to have run its course in Europe, the French are apparently experimenting with alternative methods of fiscal stimulus.

“Almost 1,000 cars torched around France on New Year’s Eve but government insists it ‘went particularly well’ ”

http://www.telegraph.co.uk/news/2017/01/02/almost-1000-cars-torched-around-france-new-years-eve-government/

#43 Quebec is Great on 01.03.17 at 8:32 pm

Man, I really don’t understand the TFSA hating posts! I guess there really are a lot of people out there that don’t understand it, crying about no $ to put in it while they are buying $500k condos?

#44 hope & ruin on 01.03.17 at 8:32 pm

Politicians that represent the people and ask them what they want? We don’t elect politicians for that.

We elect them so they can tell us what’s best for us. How else will we know??

Being forced to vote along party lines, rather than listen to your constituents or your own good judgment, is all the proof we need that politics is a facade.

They want smart people to sit in chairs, look astute and repeat after me: “the leader is good”.

#45 Show me the Money on 01.03.17 at 8:37 pm

Garth, can you transfer etf’s or stocks inside your tfsa to your rrsp without any penalties? And if so do you recommend this?

Assets can be removed from a TFSA and contributed to an RRSP without triggering tax. No capital gain. The contribution in kind will net a tax refund. — Garth

#46 Andrew Woburn on 01.03.17 at 8:48 pm

#38 Rexx Rock on 01.03.17 at 8:20 pm
Wow,listening to check news and Victoria house went up 20% and 40% in Oak Bay.Wages must be increasing huge to afford this insane real estate market.
————————–

Our house assessment in Nanaimo is up 25% for this year. Wages have nothing to do with it.

In Nanaimo it’s retirees cashing out of Vancouver chasing a diminishing supply of SFH. In Victoria it’s probably the same plus some younger refugees from GTA prices as well. My guess is that you could take a 15% wage cut and still come out ahead by moving from the GTA to Victoria.

#47 Anthony on 01.03.17 at 8:49 pm

Couldn’t find this information anywhere regarding over-contribution. Hoping you can enlighten.

If I over contribute by $x in September, and immediately realize the mistake and take that money out. Do I still pay 1% per month on $x until the end of the calendar year?

No. Just the offending month(s). — Garth

#48 Theo on 01.03.17 at 8:57 pm

#15 Debtslavecreator on 01.03.17 at 7:19 pm

I urge you to calm down and read comment #4.

Back during the election a few of the commenters here were making comments that the TFSA needed to be reduced because, among some of the reasons:

– Only the super rich 1% can afford 450 a month for the TFSA
– Because the TFSA does not tax withdrawals you still get maximum OAS/CPP, and they claimed that was ‘stealing’
– Not paying double tax on investment was considered “tax evasion” and illegal (lol)
– Its our DUTY to DO THE RIGHT THING and pay out the ass for taxes.

I was making a light hearted jab at those comments. Unfortunately I was TOO convincing, as not only it brought out the ire of our host, but yourself as well.

Eyes on target.

#49 Smoking Man on 01.03.17 at 9:00 pm

Plot thickens

Where is Eric Braverman ?

#50 Polls R Phake on 01.03.17 at 9:02 pm

#17 rainclouds on 01.03.17 at 7:25 pm
More fodder

http://www.telegraph.co.uk/business/2017/01/02/fears-massive-global-property-price-crash-amid-dangerous-conditions/
___________________________________________

Can’t say as though I would feel sorry for anyone if the RCMP ever decides to get off their fat asses and start enforcing money laundering laws. Even lawyers publish articles about how NOTHING is being enforced. What a joke. Oh but keep everyone in fear of terrorist hiding behind every rock.

#51 Renter's Revenge! on 01.03.17 at 9:03 pm

There’s nothing like bringing up the topic of an egalitarian program to get people riled up and tearing at each other’s throats!

#52 InvestorsFriend on 01.03.17 at 9:05 pm

Alberta Separation

6 Overtaxed Masculinist on 01.03.17 at 6:48 pm asked:

Why can’t Alberta separate from the rest of Canada to stop the theft of their income from Ottawa?

************************************
Perhaps a majority of Albertans could vote that way some day. Don’t hold your breath.

Most Alberta may realize that they are only really citizens of Canada. They are merely residents of Alberta. As citizens of Canada talk of separation sounds a bit like treason to me, but perhaps I misundertand the concept.

Albertans as a matter of fact pay exactly the same rate of federal taxes as do all Canadians. On average they pay more because they earn more. (Oh the inhumanity)

The federal government is in no way obligated to spend the federal taxes collected in Alberta in that same province. No more than it is required to spend what it collects from your neighborhood in your neighborhood.

Most Albertan realise they have it better than most Canadians and separation from Canada is the furthest thing from their minds.

Why do so many Albertans and other Canadians feel so hard done by? Is it because there will always be whiners in this world?

#53 Balmuto on 01.03.17 at 9:07 pm

I agree the TSFA should not be used as a savings account. But let’s say you have a large unforeseen expense that you don’t have cash to cover – should you withdraw from the TSFA or put it on your line of credit? If the answer is you should have money set aside for emergencies, where do you stash it? Seems like the non-taxable TSFA is as good a place as any, provided you have unused contribution room.

#54 InvestorsFriend on 01.03.17 at 9:12 pm

Savings versus Investment

Whatever you can put into an RRSP can go into a TFSA. Remember (above all) that this is not for saving money, but investing it. The name therefore sucks.

**********************************
People seem to have been caught up by the word SAVINGS in the name of the TFSA.

Yet there never seemed to be much confusion that the Registered Retirement SAVINGS Plan was for investment. Or was there?

No comparison. RRSP withdrawals are taxed. — Garth

#55 Henry Morgan on 01.03.17 at 9:19 pm

House price crash coming, thanks to JrT’s unilateral sign on to Agenda 21 .

#56 Terry on 01.03.17 at 9:20 pm

“Also be aware US dividend-paying stocks in your plan will be subject to a 15% IRS tax. In fact, because the evil Yanks don’t recognize the TFSA as a legitimate tax shelter (like the RRSP), Americans living here (or dual citizens) should avoid this unless they like making accountants rich.”

Garth, did Jim Flaherty negotiate an inter-governmental agreement between Canada and the USA a few years ago which also exempted TFSA accounts, (like the RRSP), for Americans living here?

No. — Garth

#57 When Will They Raise Rates? on 01.03.17 at 9:21 pm

It`s just a matter of time before the jackals come for your TFSA $ too.

A better strategy is to pump all revenue back into your business and never show a profit, while continuing to expand your business.

This way, your business grows, revenues grow, the government gets this:

https://www.youtube.com/watch?v=M5QGkOGZubQ

#58 Andrew t on 01.03.17 at 9:24 pm

#9 Brock on 01.03.17 at 6:56 pm
Most Canadians are broke, can barely pay their bills and you’re talking about TFSAs. What percentage of eligible Canadians have maxed out their $52,000? Oh yeah. Less than 5%. Why? Because they’re broke. Wages are garbage and cost of living is insane.

While we’re generalizing, Canadians don’t seem too broke to be buying real estate at ridiculous prices. Just sayin’.

#59 Guillaume on 01.03.17 at 9:28 pm

Paraphrasing Garth, TFSA is an anti poverty remedy for all middle/working class people that will only be able to rely on CPP and OAS for retirement. Unfortunately a lot of the taxpayer’s money thirsty buttholes on fat DB pensions can’t handle that……too sad

#60 Greg on 01.03.17 at 9:35 pm

Might sound stupid, but then, I’m not an investment guru, but what are the implications of transferring investments within an RRSP into a TFSA?
I’d like to migrate funds already in other vehicles into my TFSA. What are the tax liabilities?

All RRSP withdrawals are taxable. — Garth

#61 cramar on 01.03.17 at 9:38 pm

“At the time I was the only blogging MP (that eventually murdered my career). . .”

—————

Things sure change in 12 years! Now the most powerful man in the world, the elected Chief of the United States of America, throws out tweet after tweet! And we also have a GQ poster-boy PM whose trademark is The Selfie!

Guess you were just ahead of your time using social media, and made to drink hemlock.

#62 joe campbell on 01.03.17 at 9:45 pm

I think TFSA suck, because income taxes suck. a TFSA is just another way to complicate taxes and force you to have more bank accounts and pay more banking fees, all while being watched by ottawa.

i hate both rrsp and tfsa for this reason. i understand that the may “encourage savings”, similar to how increasing inflation encourages my boss to give me a raise.

we are in need of a simpler and more equal tax system, tfsa’s, rrsp’s and tax deductions on buss passes are not how to achieve it.

sales and user taxes are better than income taxes.

you know what my bank said when i told them i wanted to buy self directed stocks in a tfsa? you cant do that. i took a few years for them to realize you can.

#63 InvestorsFriend on 01.03.17 at 9:51 pm

How to Avoid Taxes

#57 When Will They Raise Rates? on 01.03.17 at 9:21 pm
It`s just a matter of time before the jackals come for your TFSA $ too.

A better strategy is to pump all revenue back into your business and never show a profit, while continuing to expand your business.

***************************************
Well, let’s see the great majority of people don’t own a business.

And second a business does not eliminate profit by investing revenues back into the business. Successful profitable businesses make profits and invest some or all of that back into the business.

A business that does not generate a profit is called a hobby.

Avoiding taxes by avoiding income is a Pyrrhic victory indeed.

#64 devils advocate on 01.03.17 at 9:56 pm

Some people don’t like to pay taxes that pay for the following:

health services
public education
subsidies for universities
police and bylaw services
judiciary system
libraries
canada post
fire service
roads, highways, parks, public lightning
sidewalks
snow clearing
garbage collection
sewage and drainage
catch basins
fire hydrants
bridges
etc.

What’s the matter , do you want to be a freerider in this society?

#65 The Technical Analyst on 01.03.17 at 9:57 pm

“For most people, obviously less talented and omniscient than you, it doesn’t work. Lows and highs are known only once they’ve passed. — Garth”

Thank you very much for the great compliment Garth. My success in reading technical come from a good combination of schooling, desire, hard work and a little natural talent. I could talk your ear off on finance charts, technical data points, etc. Heck, I’m only a few km’s down the road!

In my off-time, I enjoy being a Financial Literacy and Economics mentor as well as volunteering at every Financial Literacy I can attend.

#66 Tony on 01.03.17 at 10:09 pm

TFSA’s are perfect for “tip money” at restaurants or casinos when you retire.

#67 AR on 01.03.17 at 10:11 pm

Our two children attending university make $20,000-$30,000 annually. They are completely self sufficient and pay all living expenses and tuition. And they make their TFSA contribution every year. It’s all about choices. They have had some RESP money that we saved for 20 years. Again all hard choices made all the way along. We’re lucky they have good summer incomes, but we’ve always said if you can’t pay as you go, don’t go. (till you can pay). Our family mantra- debt is bad. I hope in 20 years when they have hundreds of thousands the government won’t consider them wealthy and tax it all back…. It will have been because of good choices not a silver spoon.

#68 traderJim on 01.03.17 at 10:14 pm

#4 Theo

hahah you had me fooled.

You know things are insane when you really can’t tell ridiculous sarcasm from a normal lefty post.

There are lots of people who actually believe all earnings belong to the government, and keeping any of your hard earned loot is ‘stealing from the government’.

Of course, these people are usually takers not contributors.

#69 Leo Trollstoy on 01.03.17 at 10:16 pm

US GDP revised upwards. Again!

http://mobile.reuters.com/article/idUSKBN14N1I5

BOOOMING BABY!!

#70 Tony on 01.03.17 at 10:19 pm

Re: #52 InvestorsFriend on 01.03.17 at 9:05 pm

Albertans don’t pay provincial sales tax nor do they pay surtaxes or super-surtaxes. They also get a rebate for carbon taxes if their incomes are low enough.

#71 };-) aka Devil's Advocate on 01.03.17 at 10:20 pm

DELETED

#72 Capt. Serious on 01.03.17 at 10:31 pm

There is a minor argument for using the TFSA for some ‘savings’, and that is it is a better place to hold your income producing assets than in a non-sheltered account. The RRSP is obviously ideal for these, but difficult to rebalance out of an RRSP back into a non-registered account. Much easier from a TFSA.

#73 Capt. Serious on 01.03.17 at 10:34 pm

#64 devils advocate

I think most people around here will agree we already pay quite a bit of tax. There is nothing wrong with using a legitimate tax shelter.

#74 Smoking Man on 01.03.17 at 10:34 pm

Deep into the JD again. No songs , no brilance.

Nothing to share. No brain cells left. My demise is complete.

Nice place to be when you really look around and see what’s happening all around you.

Ok one more song. Ordered by the UCC

https://youtu.be/sSJrryzm2zU

#75 Frank on 01.03.17 at 10:36 pm

One other reason this thing is so cool: it’s democratic. Everybody gets the same shot at building wealth.

Kinda. It’s great for those that can afford to save $5500. The average income is $27K so how many people do you think can do that? So while everyone *can* in theory, only those well above average *can* in practice.

That said the $5.5K cap keeps it from being a boon for the wealthy so really it’s a middle class tax break and middle class is dwindling. Lets not pretend it helps the majority of folks. You said yourself, it’s for investing not savings. Investing is not a tool of the many.

But yeah, TFSAs are great. Mine is in a pretty conservative portfolio so I only made 8.76%. Still, that’s about $5K in free untaxed money. Sweet.

#76 from TFSA to RRSP inkind on 01.03.17 at 10:37 pm

Thanks for the idea.

If I transfer US stocks in kind from TFSA to RRSP, how will be the RRSP contribution amount calculated?

I assume, the price of the stocks at the date of transfer at CAD exchange rate.

Would the brokerage calculate and issue an RRSP contribution receipt in CAD, to be used for income tax?

Thanks.

Yes & yes. — Garth

#77 Context on 01.03.17 at 10:37 pm

#49 Smoking Man:- Eric Braverman is a newly wed who married Neil Brown so they are probably on an extended vacation together.

#78 Smoking Man on 01.03.17 at 10:41 pm

Poor millenials grew up to the depraved mind of George Soros and Al Gore.

This is what I grew up to.

https://youtu.be/qHFxncb1gRY

#79 april on 01.03.17 at 10:47 pm

#46 – As you may know house prices are based on last July assessments. Since then prices have been falling – in Vancouver 19.7% and further declines will be in the double digits this yr. RE industry will continue to outright lie about these changes hoping to dupe a few more uninformed fools.

#80 Smoking Man on 01.03.17 at 10:48 pm

#77 Context on 01.03.17 at 10:37 pm
#49 Smoking Man:- Eric Braverman is a newly wed who married Neil Brown so they are probably on an extended vacation together.
……

Why did I know you would be the first to Google it.
My PhD in Herdonomics.

#81 Junior Juice on 01.03.17 at 10:51 pm

“Borrowing to fund a TFSA is not a sweet deal since the interest isn’t deductible from taxable income. Also be aware US dividend-paying stocks in your plan will be subject to a 15% IRS tax.”

This is the 1st I’ve ever heard of this. I own a US Preferred Share Index ETF (PFF) inside my TFSA. Can anyone tell me whether I should be expecting a bill from the IRS? Is there anywhere I can read up on this?

Many thanks blog dawgs…

An ETF is not a stock. The IRS does not bill Canadians, but withholds at source. Relax, Junior. — Garth

#82 Smoking Man on 01.03.17 at 10:51 pm

To the 96% climate change consensus and one world govt experiment.

https://youtu.be/agwMwbmMNbk

#83 Rexx Rock on 01.03.17 at 11:04 pm

#48
I guess you’re right,couples in their 50’s and 60’s cashing in GTA and YVR with say $1,200,000 to 1,500,000 can live anywhere in the world and just rent short term.Just a 5% return is more than enough to live a great life and not deal with -10 degree cold weather for the winter.The USA and Mexico for 7 months and you save so much money from a thieving government of Canada.I get it.

#84 Ace Goodheart on 01.03.17 at 11:04 pm

RE: #1 Theo: “Well fine whatever but you were part of that deplorable Wrecking Crew that was taking money that rightfully belonged to the government to pay out pensions.”

If I’m not mistaken Mr. Turner donates his pension.

RE: #2 T.S.:

“If the Cons admit there’s a big loophole that needs closing, you think a Liberal Government isn’t going to act in the future?

TFSAs are great, but rules can change and this is going to be one of them.”

The Libs are unfortunately effing eff’d. It is unfortunate because I vote for them. However they are going to become victims. Not of themselves, but of the collapse of the Western political system. This has already happened in the USA and it is coming here (Americans are always ahead of us, because we run our social welfare state off of their economic progress).

The USA has just had its’ “WTF” moment and it is a hard one. Apparently the Trumpster just got a 1.4 billion dollar Ford factory cancelled in Mexico (that was going to take jobs away from Detroit, of all places). So he becomes what can best be described as a national hero (he just brought a 1.4 billion dollar Ford plant, that was going to benefit a bunch of Mexican workers, to Detroit – Ford autoworkers in the USA are all UAW so those are union jobs he just brought home – so basically he is the second coming).

People are massively totally and completely angry at politicians. Our Liberals, completely blind to this, just decided to tax us into the stone ages. All this situation needs now is a little spark, really anything at all. A single allegation (even if false) of any form of corruption, would do it. There is no way they can run that tight a ship. People in Canada are seething angry. And the Libs are blind to this, soldiering on as if they are everyone’s best friend. It is painful to watch.

I don’t know what beast is going to be born out of this, but I know we are in for a change. We have a bunch of broke middle class workers, watching their worlds slip away, while fat cat bureaucrats feed from a newly created “carbon tax” trough. This is not going to end well. People are watching this sh*t very closely.

TFSA’s are orphans. But whomever replaces Trudeau will keep them around, simply because they are the honest person’s way of staying honest.

#85 jane24 on 01.03.17 at 11:13 pm

The only thing that counts in old age is your health. I am in my 60’s and friends and relatives are dropping like flies. Another chunk have life changing health problems. While you are saving for that rainy day that may never come, do remember to keep your weight down, exercise and avoid speeding trucks.

#86 For those about to flop... on 01.03.17 at 11:13 pm

I have talked about this before,so I will try to keep my point brief.

A few years ago my wife and I stopped looking at overpriced condos and committed to our TFSA’s.

The way we feed our Tfsa is to brown bag our lunch and to go to and from work without stopping to buy frivolous stuff.

Our goal is not to save $11k a year ,we just try not to waist 20 bucks each a day on crap we don’t need and the money is there each January.

We had to find a way to use this investment vehicle and this is our story.

Not as glamorous as Firecracker and What’s -his-name but it gets the job done…

M42BC
M64WI

#87 For those about to flop... on 01.03.17 at 11:25 pm

‘Waist’ should be waste,but I guess my waist appreciates the brown bag as well…

M42BC

#88 Mela on 01.03.17 at 11:35 pm

#35 GB
I hate to break it to you, but we’re an average family living in Toronto with a small child and a mortgage, and have maxed out our TFSAs. Live below your means. We car share and eschew the ‘unnecessaries’. It is entirely possible. And we paid $20k in daycare costs last year. AND even managed to take a family vacation.

#89 Jungle on 01.03.17 at 11:50 pm

Already transferred stock from non-reg to TFSA, and will keep doing the same with RSP and using the tax refund to pay down mortgage.

Almost all non-reg will be gone by then, but at least investments will be in tax sheltered accounts.

#90 earlybird on 01.03.17 at 11:55 pm

#64 Devils Advocate….most of those services should be privatised….better service for waaaay less!!

#91 Victor V on 01.04.17 at 12:12 am

Thanks for giving Canadians the TFSA, Garth.

Including 2017 contributions, my wife and I have investments totalling $150K in our accounts, growing nicely with growth ETFs and select equity picks.

#92 IHCTD9 on 01.04.17 at 12:25 am

#106 Wrk.dover on 01.03.17 at 12:01 pm

When I was young and poorly paid I could save none of that, but where have you arrived now with this practice that you preach?

Beyond the $800,000 mark? You are pushing sixty right?

———

I’m 44. Wife and I started saving and investing at around 28. We both had our student loans nuked by then, made about iirc 80k combined, paid 600.00 for rent and lived for about 1000.00 month all in. We put in 200.00/ month ea into RRSP’s auto withdrawal, and dumped the return in as well. We gradually upped the contribution as we could and made the occasional lump sum and are doing about 1k a month today, our income is now about 115k/yr. The contributions will increase to about 3k a month by 2022 if we still both have jobs and nothing bad happens. We probably will have to save some outside of a tax shelter. I expect if all goes well, we will have no issues going over a mil before we’re 65.

As far as dual white collar income Gen Xers go on this blog, our household income is right at the bottom of our respective heap. But we also had cheap university, cheap houses with cheap rates, and we live rurally so our house was so cheap back then I can’t even say it out loud anymore. We could have done a lot better – wish I knew then what I know now.

Looking back before I got married, I paid off my 12k OSAP loan in two years living at home, no problemo. I could have easily done the 500.00 month. The trick is convincing a 23 year old to save and invest religiously, I blew 5 years, that would have made such a huge difference today if I had been on the ball.

If there are any 20 year olds reading this, take it to the bank – you’re not going to give a rip about 90% of what you currently think is important when you’re 44. But you will be dancing a jig at 44 if you got on the investment train at 23 and are sitting on a pile. You get one chance, and it’s impossible to make up for the lost time after a point. At that point, you’re just a saver. Play with that calculator a bit and you’ll see I’m right. It takes 20 years before the action starts.

$500.00 measly dollars, just do it now, auto withdrawal, and forget about it.

#93 Tanner on 01.04.17 at 12:30 am

Hi Garth,
Thanks for the info. Quick TFSA question: Young guy here, not close to maxing out my TFSA limit. Planning a trip in around 7 months – should I put the savings in a TFSA or stick with a non-registered account? Will likely be a conservatively balanced portfolio with Tangerine or something with Weatlthsimple. Thanks!

#94 westcdn on 01.04.17 at 12:37 am

You know what – I am generally slow to read this blog. Don’t count on me to respond quickly. I collect die cast models of aircraft and autos because I can’t afford the real thing – feeds my geek things. Franklin Mint mostly – I miss Tylenol !

Everybody seems to do better in the market than I. I budget on a 5.5% return. I have to say that 2016 treated me well – 17%.

#95 DON on 01.04.17 at 12:56 am

#38 Rexx Rock on 01.03.17 at 8:20 pm

Wow,listening to check news and Victoria house went up 20% and 40% in Oak Bay.Wages must be increasing huge to afford this insane real estate market.They said its because of low inventory,great job growth and everyone moving to Victoria for its great overall lifestyle.I guess that’s why you see people smiling everywhere of all the money they made just living in a dumpy house.Good times 2017.
*****************************

WOW just wow…assessed at peak price July 1, 2016. days before the Lower Mainland Foreign tax. How convenient for the incumbent government who have based our economy on real estate related activities. From the BC Gov – “You are richer than you think….now pay your taxes” Six months have passed and Vancouver sales tanked. If we switch to the once great Albertan economy… ”

‘Slowing economy’ blamed for decline in Edmonton property values – Most property owners will see a modest decrease in their property assessments this year’ http://www.cbc.ca/news/canada/edmonton/slowing-economy-blamed-for-decline-in-edmonton-property-values-1.3919460

As for the once infallible mecca of Calgary. This just in…Calgary rentals going unloved. A Province leading Canadian growth for years and now NOT…But we are special in BC and Ontario or just last in line for a movie that sold out hours ago without us even being aware.

#96 Polls R Phake on 01.04.17 at 1:03 am

#82 Smoking Man on 01.03.17 at 10:51 pm
To the 96% climate change consensus and one world govt experiment.

https://youtu.be/agwMwbmMNbk

___________________________________________

96% of scientists/global warming is about as credible as 95% chance of Hillary becoming president. How did that one work out? This is just taking longer. I have lived in Greater Vancouver 25 years. By the end of next week it will have been below zero for more than a month. Just like 60% of the planet earth.

For all your climate changers out there…..don’t forget that this little landmass called ANTARCTICA COUNTS as part of the planet earth. Its twice the size of Australia by the way.

#97 DON on 01.04.17 at 1:05 am

#85 jane24 on 01.03.17 at 11:13 pm

The only thing that counts in old age is your health. I am in my 60’s and friends and relatives are dropping like flies. Another chunk have life changing health problems. While you are saving for that rainy day that may never come, do remember to keep your weight down, exercise and avoid speeding trucks.

******************

I have been seeing this as well, the flu is a problem for older and less healthy folk in BC at the moment. It seems that everyone I meet lately has a story or loss to tell. Just today I heard a friend lost her husband (Malahat Fire Chief) to a heart attack (early 50’s).

Today alone 3 people told me of recent losses.

And then we are told that the flu shot doesn’t cover the strain that is going around. Perfect! Idiots.

#98 Polls R Phake on 01.04.17 at 1:06 am

Some people don’t like to pay taxes that pay for the following:

health services
public education
subsidies for universities
police and bylaw services
judiciary system
libraries
canada post
fire service
roads, highways, parks, public lightning
sidewalks
snow clearing
garbage collection
sewage and drainage
catch basins
fire hydrants
bridges
etc.

What’s the matter , do you want to be a freerider in this society?
____________________________________________

ALL OF THEM

Overbudget, overpaid, dont work (ferries and icebomb bridges) super super inefficient lazy workforce…..

Privatize it…..watch the taxes melt and the economy boom.

#99 Fortune500 on 01.04.17 at 1:27 am

#43 Quebec is Great the TFSA ‘could’ work out for some, whereas real estate in Canada works out every time for everyone. In a few years those will be million dollar condos!

Right?

#100 majik on 01.04.17 at 2:56 am

Thinking of changing rental digs. Should I wait till years end when the knock-on effect of rate increases reduces moister demand? I’m thinking this will lead to an over-supply of nice shiny new condos with developers and investers eager to get some kind of return on their overpriced white elephants. Or with the cost of money increasing, wages and salaries will be pushed higher, will rent also follow suit? Garth thoughts?

#101 When Will They Raise Rates? on 01.04.17 at 3:24 am

#63 InvestorsFriend on 01.03.17 at 9:51 pm

Well, let’s see the great majority of people don’t own a business.

Perhaps they should, as opposed to misallocating their capital by dumping it all into overvalued RE while taking on massive lifelong debt.

And second a business does not eliminate profit by investing revenues back into the business.

You need a new accountant: Profit = Revenue – expenses.

Successful profitable businesses make profits and invest some or all of that back into the business.

What How much profit did Amazon generate in their first 10 years?

A business that does not generate a profit is called a hobby.

Avoiding taxes by avoiding income is a Pyrrhic victory indeed.

Tell that to Jeff Bezos.

https://upload.wikimedia.org/wikipedia/commons/thumb/6/6b/Jeff_Bezos%27_iconic_laugh.jpg/520px-Jeff_Bezos%27_iconic_laugh.jpg

#102 I'm stupid on 01.04.17 at 5:13 am

#33 Nonpulse

Well said!

#103 When Will They Raise Rates? on 01.04.17 at 6:33 am

#84 Ace Goodheart on 01.03.17 at 11:04 pm

The Libs are unfortunately effing eff’d. It is unfortunate because I vote for them.

Yeah, I thought so.

#104 When Will They Raise Rates? on 01.04.17 at 6:44 am

#99 Fortune500 on 01.04.17 at 1:27 am

#43 Quebec is Great the TFSA ‘could’ work out for some, whereas real estate in Canada works out every time for everyone. In a few years those will be million dollar condos!

Right?
————–

Bet the other way:

https://www.youtube.com/watch?v=Gk-0fTNWEpw

#105 cropgrower on 01.04.17 at 6:51 am

#19….yes….yes you can have too much in rrsp’s, but it is not a bad thing.

#106 Ace Goodheart on 01.04.17 at 6:59 am

RE: #85 Jane24:

“The only thing that counts in old age is your health. I am in my 60’s and friends and relatives are dropping like flies. Another chunk have life changing health problems. While you are saving for that rainy day that may never come, do remember to keep your weight down, exercise and avoid speeding trucks.”

This is very interesting. I have done a lot of research on health and old age. What I have found is kind of scary.

It used to be that females lived much longer than males. Men would work until they were 65 or so, then “retire” and drop dead three to four years later. Their wives would go on to outlive them by 15 to 20 years. You had this glut of old ladies with deceased husbands.

This has now changed. We are seeing an evening out of the life expectancies. Women are now working full time, until age 65, and then dying shortly thereafter.

There is all of this research that you can find that basically stands for the proposition that if you don’t stop working full time by age 50, you are going to die shortly after you “retire” at age 65 or 70. Your retirement will be very short. 50 seems to be the magic number. People who get out of the workforce at 50 seem to live to be quite old and seem to have minimal health problems. Anything past that, your life expectancy drops considerably.

So ideally we should all be planning to exit the full time workforce before we hit the big 50, if we want to have any form of “retirement” that doesn’t involve hospitals, doctors and mortuaries.

#107 Mishuko on 01.04.17 at 7:24 am

People I talk to think the rrsp is better than the tfsa and how the tfsa favours the rich. Man that boils my blood.

You earn more you can contribute more into your rrsp. Tfsa is flat. Even. Fair. Aslong as you’re age of consent and live here. Bah.

#108 maxx on 01.04.17 at 8:25 am

“Is this a great country, or what?”

It was greater when the TFSA contribution limit was higher.

Stupidity won out.

#109 maxx on 01.04.17 at 8:46 am

#1 Theo on 01.03.17 at 6:26 pm

“Well fine whatever but you were part of that deplorable Wrecking Crew that was taking money that rightfully belonged to the government….”

That money does NOT belong to “the government”! It belongs to the PEOPLE of Canada.
Government has a duty of care to manage tax revenue effectively. Gross excesses of construction industry and vanity projects takes money from the PEOPLE of this country.
Selfie, limo, obscene office decorating budgets and other grotesque abuses of OUR tax revenue wastes money that rightfully belongs to taxpayers.

And, wait for it- once the 150th anniversary party is over, I for one want to see what the tab adds to the national debt.

We need an accounting pit bull with real teeth to oversee spending by government, because the PEOPLE of Canada are fed up with reading msm headlines exposing yet another tax grab or wasteful spending spree, whilst being told to wait for medical care or other “austerity” BS.

Tax revenue DOES NOT “belong” to government.

#110 2007 Article on 01.04.17 at 8:49 am

Read this and then think about Toronto / Vancouver ….not shocking how similar things are in 2017

http://drhousingbubble.blogspot.ca/2007/05/housing-tipping-point-3-factors-that.html

#111 maxx on 01.04.17 at 8:59 am

#2 T.S. on 01.03.17 at 6:36 pm

“TFSAs are great, but rules can change and this is going to be one of them.”

You can either spend your time and energy on building wealth, or spray vitriol at other people’s efforts to do so.

Most choose the former and will vote accordingly.

The selfie brigade, like anything else in life, is date stamped and its arrogance is far from invisible.

#112 The Unbelievable Idiot Wynne on 01.04.17 at 9:03 am

http://www.theglobeandmail.com//opinion/ontarios-plan-destroy-jobs-save-the-planet/article33478285/?cmpid=rss1&click=sf_globe

Jocelyn Williams Bamford is vice-president of Automatic Coating, a small, specialty manufacturer based in Scarborough, Ont., that employs 75 people.

“Our electricity costs are through the roof,” she told me. The reason is something called “global adjustments” – a fee to cover the cost of green energy and conservation programs that is unrelated to the actual cost of electricity itself. Companies like hers are facing staggering hydro bills of $30,000 or $40,000 a month – mostly because of government investments in green energy that Ontario doesn’t need and can’t use.

#113 IHCTD9 on 01.04.17 at 9:13 am

#35 GB on 01.03.17 at 8:06 pm
While not officially tied to income….The TFSA is indeed tied to income in that no average Middle income family trying to raise a family can afford to top it up.

Sorry Garth….this is a vehicle for the wealthy only.

Trudeau has it right…shred the 10,000$ stock pile for the wealthy and re-build the middle class (you know…the ones who officially drive an economy…).

The TSFA is a wealthy man’s play toy plain and simple.
_________________________

How rich do you need to be to chuck 500.00 month into an RRSP/TFSA?

We’ve got two kids and burn thru 25.5K in tuition per year and still chuck 12K+ a year into RRSP’s

We used our talents and resources to keep costs low. Old house, old cars, buying used everything, keeping pleasures simple. This is the regular guy’s playground, just about anyone can play.

#114 Cheese on 01.04.17 at 9:15 am

In response to the “most Canadians can’t afford to top up a TFSA” .

I work a crummy retail job and barely gross $30k. With the proper budgeting and food planning, you can indeed manage to accumulate $5500 over a year for a TFSA.

I’m not saying it doesn’t hurt, but it’s likely worth the suffering us low wage millennials put up with to fully utilize the TFSA.

#115 Andrew t on 01.04.17 at 9:19 am

#96 Polls R Phake on 01.04.17 at 1:03 am
#82 Smoking Man on 01.03.17 at 10:51 pm
To the 96% climate change consensus and one world govt experiment.

https://youtu.be/agwMwbmMNbk

___________________________________________

96% of scientists/global warming is about as credible as 95% chance of Hillary becoming president. How did that one work out? This is just taking longer. I have lived in Greater Vancouver 25 years. By the end of next week it will have been below zero for more than a month. Just like 60% of the planet earth.

For all your climate changers out there…..don’t forget that this little landmass called ANTARCTICA COUNTS as part of the planet earth. Its twice the size of Australia by the way.

Thanks for bringing that up. Antarctica is the flashpoint for rising sea levels (Greenland as well) as steadily climbing average temps there melt ice at an accelerating rate, as the greenhouse effect is more pronounced at the poles. Thanks to another wacky scientific fact, (the world’s oceans are connected) this affects sea levels in Miami, for instance. But hey, that’s allright, if you want to sound smart without doing the hard work of understanding science, go ahead and think winter means no greenhouse effect. It’s a free country.

#116 maxx on 01.04.17 at 9:29 am

#15 Debtslavecreator on 01.03.17 at 7:19 pm

Spot on.

#117 Stock picker on 01.04.17 at 9:41 am

Our panty waist PM just sent the US Congress a video explaining that US companies are afraid of Donald Trump. This is a majority Republican Congress as everyone except for Juniors brain trust (one Gerald Butts) well knows.

I guess it’s obvious what kind of relationship we’ll have with the new US administration

” I’m too scared to face whatever tough questions might come my way so I’ll send you YouTube links instead”….

The selfie dunce is protecting himself from the bad press he assumes may be lurking if Trump doesn’t feel around for his butt like Obama did and come away with no bromance for the liberal media sychophants to twist and spin into popularity lies.

This doesn’t look good for Canada folks…but fortunately our business community is far smarter than Gerald Butts…

For my TFSA (joint) I bought 5500 of BMO for its US exposure and projected revenue….plus it’s Canada’s longest serving dividend payer….and 5500 into Encana for the very bright prospects it has in Texas under Rick Perry as energy secretary.

That’s my Two Cents….. I would have made the same two picks this week if Trudummy hadn’t cut the TFSA in half. Stocks are harder to pick than ETFs….which is why Indo weeks of due diligence before making any purchase.

#118 IHCTD9 on 01.04.17 at 9:54 am

#106 Ace Goodheart on 01.04.17 at 6:59 am
___________________________________________

I’ve noticed the men that make it into their 80’s, 90’s and beyond tend to never really quit working. They either volunteer their time, work part time, or start a small part time business. My Dad is mid 70’s and has a small business doing lawn care which he has always loved, and has been running on the side since the 80’s. He’s in great shape, I just helped him move a bunch of furniture – he didn’t even think twice, just gave me a call and rented the U Haul.

That is going to be my plan as well – something to keep my mind and body occupied until circumstances prevent me from doing so. Something I enjoy, something that makes a little $. The stash will be moved out of tax shelters along the line as much as possible for future dispersal to the kids. I don’t plan on using any of it for day to day living expenses. With any luck, I’ll be wearing my entire net worth in my casket when my number’s up.

#119 Ex-Moister on 01.04.17 at 10:00 am

Love your blog, Garth! Building my balanced portfolio with ETF’s as we speak because of this blog and your books. New wrinkle introduced in Jan 2017 by US is IRS rule Section 871(m).

How does this affect US dividend ETFs held within a TFSA?

Any thoughts/suggestions would be greatly appreciated.

#120 dgb on 01.04.17 at 10:10 am

why do so many people still not get it??? the tfsa is not just for the rich!!! stop spending foolishly and put money into one…if you don’t put in all you’re allowed, you can carry it over to the next year or the next!! so you win some money or inherit some money or get a birthday or christmas gift of cash..then do yourself a greater gift and put it in a tfsa investment account..not at your bank..any financial guy can tell you where you can go to be self directed and let it make you some money for retirement..do not touch it..let it grow..put every cent you can into it instead of your local coffee shop or mall or cigarettes or booze or movies or shows or your fancy car or truck, whatever you do that is your cost of living..you have to eat but most things people buy nowadays are useless expenses..my gross income has inched it’s way to $42000 and I am topped up in tfsa and also have rrsp and unregistered…quit your whining and blaming the rich for your awful spending habits!!!!garth is here to help us all but if you won’t help yourself then keep your whine to yourself…thanks

#121 };-) aka Devil's Advocate on 01.04.17 at 10:11 am

#71 };-) aka Devil’s Advocate on 01.03.17 at 10:20 pm

DELETED

Ouch. I thought that was a very interesting, enlightening article I wanted to share and your readers would enjoy. As I mentioned, sorry I couldn’t find a link instead of posting it in length.

#122 Londoner on 01.04.17 at 10:21 am

“So I wrote a fat report for the finance minister, who made it clear he didn’t want any damn suggestions…”

That’s because individual efforts and achievements are not recognized in the workplace just as they are not recognized in schools. Working for the libs would have taught you that.

#123 };-) aka Devil's Advocate on 01.04.17 at 10:22 am

Our world is going to change VERY quickly over the next few years catching many of us by surprise. All good things really… if you are prepared for and embrace them. Personally I am very anxious to rid myself of the baggage of pretentious and costly automobiles and be one of the first to own a Google driverless electric car or equivalent and foresee it’s arrival so soon that I opted out of buying a new F150 this past December when the salesman, unbeknownst to him, scared me off by enlightening me they have been told Hybrid trucks will be mainstream in about 3 to 4 years devaluing gas powered. (I tend to buy and hold for 10 years)

The major economic engine auto industry is going to be facing some serious challenges. As the writer of that article mentioned; Volkswagen and others are very afraid of Tesla.

Interesting stuff that will most certainly have some bearing on peoples investment decisions in the future.

#124 Centre Wing on 01.04.17 at 10:23 am

Please don’t leave, EmilyOne. Your trolling here will end up being legendary. You get tired of your same old schtick at Macleans?

#125 Londoner on 01.04.17 at 10:26 am

“The name therefore sucks. So do government promotions for the TFSA.”

Also because all of the big discount brokerage firms were very late to offer TFSA accounts. When the TFSA was introduced only Questrade (I believe) offered a TFSA trading account.

#126 cuerves especial on 01.04.17 at 10:37 am

….time for some full disclosure. I am aroused by tax-free accounts.”

Garth hope not to arouse you further, but if you move to Mexico and become resident, US dividends are only taxed at 5% due to tax treaty! Of course you might like the cold and all these complicated mechanisms!

#127 maxx on 01.04.17 at 10:43 am

“What did I do to deserve this audience? — Garth”

You didn’t- however, lack of wealth-building capability results in the myopic view of unfair advantage.
Canadians are extremely challenged when it comes to lauding wealth acquisition, especially by others: lord help you if you do better at saving and investing.
Canadians really ought to keep energy focused on building rather than knocking down.
– and successful savers and investors need to keep it mum or risk the wrath of the green-headed monster.

#128 Adam on 01.04.17 at 10:49 am

Garth,
Not sure the information on dual citizens avoiding TFSA’s is accurate. I read Jamie Golombek column years ago where he said dual citizens should avoid the TFSA. My understanding is the IRS has made no ruling on the matter. The reality is the US invented the TFSA – as you said it is the same thing as a Roth IRA. Why would they not eventually recognize it? My wife is a dual citizen and we originally received the same advice that she should avoid the TFSA but I pushed back with our accountant who specializes in US/Canadian Tax and they changed their tune to say go ahead and open a TFSA. Her TFSA is fully funded and fully invested in Canadian ETF earning tax free gains. As she is living in Canada she will only end up paying US income tax if her income rises above $90,000 or thereabouts. She has to file a US tax return regardless of her earnings. I am the primary bread winner as she is mostly with our kids and I am not a dual citizen so we currently pay no US tax. Is it possible the IRS will one day come after her to collect all of the tax free gains she is currently allowed in Canada so her TFSA is worth less than if it were in an unregistered account? I doubt it. This information needs to be updated – even dual citizens should have TFSAs. Happy to give the name of our accountant if it effects anyone else out there.

Disagree. The added accounting fees negate gains for many people. — Garth

#129 James TFSA on 01.04.17 at 11:05 am

Thanks Garth
I sent a link to my niece and Nephew both in their 20s
They were not even aware of a TFSA!
Anyway as I said I promise in 30 years the stock market will be much higher. As they do not have much to invest $50 a month, I had to advise them with a Bank Mutual fund.
As for my TFSA I have $86,000 and my wife $82,000, Sadly I did not follow your advice on ETFs, I own all stocks. I Buy and Hold.
Thanks Again!
I do hope you stop the housing bust Blog, it is getting tiresome, More posts on Investing and enlightening our peers would be welcome.

#130 Willdaman on 01.04.17 at 11:07 am

I have to believe that most of you blogdogs are numbers people. Here is something to chew on:

From CRA 2013 report, over 28 million Canadians were eligible for TFSA accounts. Only 6.7% of those people maxed out contributions.

So while theoretically the TFSA is indeed egalitarian as the contribution limit applies across the board to all eligible Canadians, in practice it is not egalitarian at all only a sliver of the population is able to take advantage of it.

Objectively the numbers show that very few max out contributions so does it really make sense to increase the limits? Does the argument that “some day people will be able to take advantage of the accumulated contribution room” make it a smart policy move to increase the limits?

To be sure, not all those that max out their TFSA are the 1%ers, there is evidence that lower income people max out their contributions as well (I’m sure there are some average joes, but I have to believe there are a significant chunk who are seniors that have other assets, as well as low income spouses who have higher income spouses that stuff their TFSAs). But let’s get real, as a practical matter who do you really think will benefit if contribution limits were doubled?

As a policy matter, it’s probably a smart move on the gov’t to scale back the TFSA so that people are forced to stuff their extra money into RRSPs.

In the long run, the RRSP structure is a better tool for the gov’t coffers. RRSP money (including all growth) is eventually going to be taxed (and those that have high income who max out RRSPs will likely still be in a higher tax bracket come retirement when RRSPs are drawn down and taxed). The cost to the gov’t for the RRSP scheme is the one time income tax deduction at the end of the tax year, and in exchange they can tax all the years of growth when it comes time to withdraw. As a bonus, the gov’t can tax your capital gains as income at your then marginal rate as well!

For the TFSA, the gov’t collects its tax money only once up front, and then loses out on all the years of growth, forever (until and unless there are rule changes).

I would prefer increased TFSA limits, but I understand why the limits are what they are (and why they were reduced), and there is no use bitching about it because it makes little sense to increase those limits for the general population who can’t fully utilize it, and without evidence that they ever will.

#131 cramar on 01.04.17 at 11:27 am

This is how much debt Americans took on during the holidays

http://www.marketwatch.com/story/this-is-how-much-debt-americans-took-on-during-the-holidays-2017-01-03

I’d shudder to see the stats for Canadians.

#132 Global Golfer on 01.04.17 at 11:28 am

One of Garth’s main reason for this blog is to set the theme and watch us make fools of ourselves in the comments. It must be amusing to him at times.
#35 GB
So they premise is that the rich (I assume the 1%) are gaining a huge advantage? So 350,000 Canadians are getting an extra 2500 bucks of tax advantage! Wow, a real boon to them for shelling out over 50% already of their earned money. Yes, they will use it. The real advantage goes to the little guy if he can find a way to invest through a TFSA. Of course, there are large numbers of people that won’t find a way to invest to the maximum in this vehicle. The problem is that there are huge numbers that manage to find a way to spend $10 or $20 per week in a lottery or spend many hundreds of dollars on a phone plan that they really don’t need. Or, as Garth continually informs us, they find a way to invest in a new house. It’s a matter of discipline for many and they should be finding a way to look for 458 bucks a month to fill the TFSA. I know people that have phone plans that large for their family (so they can check Facebook in the grocery line?). Any amount of money into the plan is a good start.
Hey GB, houses are for the wealthy. Why do give them a free ride for tax upon sale?

#133 ShawnG in TO on 01.04.17 at 11:39 am

if the greedy government ever want to tax TFSA withdraws, then before the law enacts i would transfer everything in my TFSA to my regular investment account.

it is also very likely the market would drop on the last day before the law because people would panic sell everything instead of transferring in-kind.

of course the government could enact the law retroactively. i don’t know if people have any choice in that case since tax laws are administrative laws.

#134 Mnpr on 01.04.17 at 11:39 am

As to US withholding tax from investments in tfsa…. does this apply to interest Income? I hold etf XTR in my tfsa and this contains a US high yield bond fund. Is there tax wthheld on that component?

#135 For those about to flop... on 01.04.17 at 11:46 am

Two houses in my hood decided to celebrate the new year by losing some weight…

M42BC

943 E 24th Avenue, Vancouver
Dec 8:$1,680,000
Jan 3: $1,528,000
Change: -$ 152,000.00 -9%

4298 Knight Street, Vancouver
Nov 23:$1,468,000
Jan 3: $1,388,000
Change: – $80,000.00 -5%

#136 Gonkman on 01.04.17 at 11:51 am

#84 Ace Goodheart on 01.03.17 at 11:04 pm

People are massively totally and completely angry at politicians. Our Liberals, completely blind to this, just decided to tax us into the stone ages. All this situation needs now is a little spark, really anything at all. A single allegation (even if false) of any form of corruption, would do it. There is no way they can run that tight a ship. People in Canada are seething angry. And the Libs are blind to this, soldiering on as if they are everyone’s best friend. It is painful to watch.

——————————————————————

I really hope it is Kevin O’Leary…

I want Trump the CDN Edition up here. Give little Jr. a run for his money.

I asked several Lefties over the holidays if they would vote for O’Leary… They all said “In a Heartbeat”…. No one is impressed with what T2 has done.

16 International Trips in one year? Giving away Billions to other Countries and the UN?

Thrown in some BS Carbon taxes for the hell of it?
Wow…Thanks Junior.

I really hope O’Leary runs… too bad we don’t have the long Election period the US does. The media spin should will be fun.

#137 Gonkman on 01.04.17 at 11:56 am

#92 IHCTD9 on 01.04.17 at 12:25 am

If there are any 20 year olds reading this, take it to the bank – you’re not going to give a rip about 90% of what you currently think is important when you’re 44. But you will be dancing a jig at 44 if you got on the investment train at 23 and are sitting on a pile. You get one chance, and it’s impossible to make up for the lost time after a point. At that point, you’re just a saver. Play with that calculator a bit and you’ll see I’m right. It takes 20 years before the action starts.

—————————————————————

^^^^^^ This X 100 ^^^^^^^

I was a little late on Pumping up the investments but I did start at 18 with Small Amounts.

Never wanted all the flashy shite.. just a comfy home and necessities.

Now 43.. Paid off SFH… No Debt.. Good Chunk in RRSP’s.. Will max out the TFSA’s this year. Then on to Wife’s RRSP’s.

Shooting for 49.. Cash out the DB Pension… Wife retires 2 years later with full pension.

Then “I” will be poor and pension split with the wife till the cows come home. T2 going to get as little as possible. TFSA will supplement nicely.

#138 ShawnG in TO on 01.04.17 at 12:04 pm

if the government is so desperate for cash, it could look at the mother of all tax loopholes – tax free prime residence.

it is probably the most inequitable tax break for the rich. guess what? the rich buys bigger house than you, thus get a bigger tax break than you.

if there is a limit on how much tax break you get, per year, then it would be much fairer. let’s say there is a limit of $50,000 gain tax free per year, a home that is primary residence for 10 years gets you $500,000 gains tax break. it’s enough for most people, but the rich with $10million would have to pay.

#139 Gmullz on 01.04.17 at 12:09 pm

#54 InvestorsFriend on 01.03.17 at 9:12 pm

People seem to have been caught up by the word SAVINGS in the name of the TFSA.

Yet there never seemed to be much confusion that the Registered Retirement SAVINGS Plan was for investment. Or was there?

_____________________________________________

I think the key difference in wording is actually “Plan” vs “Account”. “Savings Account” is literally in the title of the TFSA. This implies, to the uninformed, that it is simply a savings account that allows you to shelter money from the tax man, as opposed to the RRSP, which uses “Plan” as the top-level descriptor. I think “Plan” implies something more significant and complex than the word “Account”.

But let there be no mistake, most people have no sweet clue how the Registered Retirement Savings Plan works either.

#140 Dogman01 on 01.04.17 at 12:11 pm

For Smoking Man

On Education system:
“the two pillars of the current system — conformity and compliance”

http://ww2.kqed.org/mindshift/2016/08/15/sir-ken-robinson-how-to-create-a-culture-for-valuable-learning/

#141 Drew on 01.04.17 at 12:13 pm

Would buying the etf VFV.to – the S&P 500 vanguard etf on the tsx be a US dividend paying stock that I am paying money to the IRS on? And if so is this automatically deducted before I am paid my dividends? Or am I supposed to pay? Thanks for any help!

#142 InvestorsFriend on 01.04.17 at 12:13 pm

Avoiding Tax by Avoiding Profits

#101 When Will They Raise Rates? on 01.04.17 at 3:24 am responded to me:

#63 InvestorsFriend on 01.03.17 at 9:51 pm

And second a business does not eliminate profit by investing revenues back into the business.

His Response: You need a new accountant: Profit = Revenue – expenses.

My response: Your equation is correct. And investments such as buying new equipment are capitalised and are not expenses. Increasing expenses to avoid profits and therefore taxes is a strange strategy.

Successful profitable businesses make profits and invest some or all of that back into the business.

His response: What How much profit did Amazon generate in their first 10 years?

My response: Little or none, probably a large cumulative loss.

A business that does not generate a profit is called a hobby.

Avoiding taxes by avoiding income is a Pyrrhic victory indeed.

His response Tell that to Jeff Bezos.

My Response: Amazon continues to make only a small profit (small ROE) and has a trailing price to earnings ratio of 173. To date, Amazon has been a system that where some investors including Bezos made a lot of money by buying shares low and selling to others (possibly greater fools). A mature business tends to make money from profits. It remains to be seen if and when Amazon will start to make an acceptable return on the billions of dollars that it raised from its share owners. It has owners equity of $18 billion ($14 billion of owner money plus $4 billion cumulative profits in 21 years) and that equity trades on the market at a value of $360 billion. So, $4 billion made from customers, $338 billion made from investors bidding up the shares on the anticipation that the profits will eventually justify this. Do you see a risk here?

#143 TurnerNation on 01.04.17 at 12:15 pm

Trump = the new New Deal. A WW then came next. 3?

– A Kanadian tradition: Dollarama just began stocking Valentines merchandise. Trust your T2 Dollar stores in all regards, it’s our future.

M41ON

#144 Gonkman on 01.04.17 at 12:20 pm

#130 Willdaman on 01.04.17 at 11:07 am

From CRA 2013 report, over 28 million Canadians were eligible for TFSA accounts. Only 6.7% of those people maxed out contributions.

——————————————————————

Because most Canadians…

1. Don’t Know WTH the TFSA is and don’t care enough about their own financial future to learn Personal Finance and Retirement Planning. YOLO you know!

2. The FED Govt. isn’t EDUCATING people on the TFSA because they don’t want people to be educated about it. It’s less taxes for them.

3. Saving is HARD you know. I needz my stuffz.

4. The Crabs in Bucket Mentality – Pull everyone else down because they can’t save… so no one else should. How Liberal…

5. They don’t realize RRSP’s Max out at $26.5K for the Rich. The TFSA is only $5.5K (For Everyone).

6. Talking about Finances is Taboo. I tried educating people but they just don’t want to talk/listen but would rather complain about not having enough money.

7. They know more about Hockey or sports than personal Finance.

8. On the above note… they will spend $300+ to tickets and a night out to a hockey game rather and Invest it in a TFSA.

9. Live WAY beyond their means because they “Deserve” it.

I could go on… but it boils down to Educating yourself and Self Discipline and choices.

Rolling back the TFSA was a political move.. plain and simple.

But hey… just got 16 International trips this year on your dime. He thanks you for your Tax Donations.

#145 InvestorsFriend on 01.04.17 at 12:21 pm

Trump Will Cut the Excessive Regulation of Businesses!

And see he already started by umm personally directing FORD as to where they can build their car plants and threatening GM to do the same.

He is winning by exploiting the myth that Americans are one big team against the world. The myth that jobs for autoworkers in Detroit will somehow offset the higher cost of cars for all Americans.

Protectionism and beggar thy neighbour has been tried and failed in the past. Will be entertaining to watch it play out this time.

#146 Context on 01.04.17 at 12:31 pm

#113 IHCTD9:- Why burn through 25.5K in tuition for two kids when you could establish an example for them. Tell them to find summer jobs and learn to fend for themselves by paying some of the bills for a change or you will end up with future down payments for condos. Now for the climate change debate in regards to the polar regions, as historically they at one time were both tropical rain forests.

#147 TFSA rules! on 01.04.17 at 12:32 pm

TFSA is the best thing garth has promoted. That and deleting smoking man.

#148 millenially on 01.04.17 at 12:37 pm

I’m a young millenial and find more than enough to max the TFSA’s, my partner and I currently save over $30k a year… It’s simple, rent, meal plan, own one car or none, don’t buy stupid crap etc. And we travel every year, last year was Peru (Which is cheap btw):) People just have weird priorities (Like buying 500k condos with 600$/mo maintenance fees…) or going out every week for dinner and drinks.

#149 InvestorsFriend on 01.04.17 at 12:39 pm

Correction to Amazon ROE

In my response above I mentioned Amazon’s ROE is too low. Actually it was decent at 14% in the past four quarters. It is a GREAT business. The problem is that the return on the market value is very low. It is profitable but the vast majority of its value reflects predicted future profit growth. Anyhow, Amazon is currently paying hundreds of millions per year in income taxes.

My point stands that a personal business that does not make a profit is a hobby, not a real business.

#150 Barb on 01.04.17 at 12:47 pm

#84 Ace Goodheart on 01.03.17 at 11:04 pm

People are massively totally and completely angry at politicians. Our Liberals, completely blind to this, just decided to tax us into the stone ages. All this situation needs now is a little spark, really anything at all. A single allegation (even if false) of any form of corruption, would do it. There is no way they can run that tight a ship. People in Canada are seething angry. And the Libs are blind to this, soldiering on as if they are everyone’s best friend. It is painful to watch.
———————–
Agreed.
Municipalities/small towns hiring more and more high-cost bureaucrats, all of whom need an office, computer, cellphone. Politicians can no longer spell austerity.

Going way off topic: Will Trump stick his dirty fingers into the Columbia River Treaty review?
http://blog.gov.bc.ca/columbiarivertreaty/

#151 Rifles on 01.04.17 at 12:50 pm

“So if the CRA thinks you’ve created a job by day-trading inside your TFSA, or you’re a financial professional doing the same, the tax-free profits won’t be that way for long.”

Anyone have any idea what the threshold level of trading activity inside a TFSA would trigger such a response from the CRA?

#152 Zeitgeist on 01.04.17 at 1:00 pm

[..] after my sorry ass had been booted out of the Stephen Harper caucus (for blogging with people) […]

Perhaps they deemed you had disregarded the protocol to follow when consulting the constituencies, or bypassed the authority structure to interfere with the popular mandate.

#153 Damifino on 01.04.17 at 1:05 pm

#106 Ace Goodheart

People who get out of the workforce at 50 seem to live to be quite old and seem to have minimal health problems. Anything past that, your life expectancy drops considerably.
—————————————-

Could it be that people who exit the workforce by 50 are a characteristically different breed?

Maybe they realized early that life follows a common trajectory nobody can escape. Thus, they make plans to accumulate wealth while they are young, resourceful and energetic, knowing senior years are inescapable.

Perhaps those who amass enough capital to retire early (and comfortably) are wise enough to not only diversify their investments but their interests as well.

They probably wouldn’t sit around the house irritating their spouses or visit former workmates on lunch break.

Instead, they’d be doing creative things they couldn’t find the time for while in the work force and have the resources to involve themselves in more rewarding things not part of the standardcorporate agenda.

Such people would be forward focused and unburdened by nostalgia. They’d live quite a while, I think.

#154 Johnny boy on 01.04.17 at 1:07 pm

#31 Smoking Man on 01.03.17 at 8:04 pm

Man going to all the fringe websites.

Basically saying globalists aren’t going to let Trump into the white house. He either gets assassinated or Obama starts ww3.

Perhaps they might not be far off.
UCC giving me the same vibs. Just look at lonney Johnny Boys rant on Trump yesterday. He’s probably considered a moderate lefty.
……………………………………………………………………..

Just talked to my sister in the United States and from where she lives has a much better idea
of what’s going on in America than you! You’re a waste of human life! Trump is an idiot, that’s a
fact. You’re a real piece of work Smoking Dude, if anyone has an opposing opinion then you
automatically label them as a leftie, communist or liberal blah, blah, blah. So I’m a lefty huh!
Sorry Asshole I’m a card carrying conservative whom just happens to not look at Trumps bullshit
and con artist act as the gospel truth. So if you follow him blindly then that’s great for you.
But for gods sakes get off the everyone is a leftie bullshit, and who the hell made you all knowing?
Oh another thing I had to have a look at you and your blog, tweeter account. Be original you dick
all you do is forward other bulshitters bullshit.
There I’m done!

#155 jon on 01.04.17 at 1:15 pm

No judgement here Garth. I get full on wood from TFSAs

Carpenter? — Garth

#156 mnpr on 01.04.17 at 1:15 pm

For those of you who might be interested… I found the answer to my question asked a couple hours ago…. as per:

https://www.blackrock.com/ca/individual/en/literature/brochure/withholding-tax-reference-guide-en-ca.pdf

“All Canadian-Listed ETFs seeking exposure to U.S. bonds are generally either exempt from the U.S. withholding tax, on qualified interest income, regardless of whether or not the ETF is held in a taxable or non-taxable investment account.”.

So that’s good news.

#157 Damifino on 01.04.17 at 1:21 pm

#136 Gonkman

I like O’Leary too.

Granted, he’s far from perfect but I don’t think he’s “Canada’s Trump” and he’d certainly be a huge improvement on the drama teacher.

But Kevin has a big problem in not being bilingual. He thinks it’s just a minor detail he can take care of later, but I doubt that. It’s hard for me to envision him uttering a single word of French even though he does hail from Montreal. Weird.

#158 d'Edmonton on 01.04.17 at 1:23 pm

#53 Balmuto on 01.03.17 at 9:07 pm
I agree the TSFA should not be used as a savings account. But let’s say you have a large unforeseen expense that you don’t have cash to cover – should you withdraw from the TSFA or put it on your line of credit? If the answer is you should have money set aside for emergencies, where do you stash it? Seems like the non-taxable TSFA is as good a place as any, provided you have unused contribution room.
—————————————–
Garth has covered the reasoning behind this before.

You do not let your ‘unforseen expenses’ fund lie for perhaps years in cash in a savings account forsaking serious growth.

You pay for the unforseen expense from your LOC and then immediately liquidate an appropriate amount of your investment which should take a few days. Then pay down the LOC. The interest expense you pay for a few days on the LOC amount used should be minimal.

#159 Doug in London on 01.04.17 at 1:24 pm

@Global Golfer, post #132:
While I doubt that the main reason for this blog is to set the theme and watch us make fools of ourselves in the comments section, it certainly is an interesting and sometimes amusing side show. I’m amazed at some of the rubbish I read in the comments (or steerage) section here.

This rubbish does however have a valuable fringe benefit. When I see a lot of whining and bellyaching about how some asset has dropped in value, it’s a signal to buy. Some examples are whining about how REITs had dropped in 2013 and how preferred share ETFs had dropped in the last 2 years. The REITs have appreciated nicely from those sale prices, and the preferred share ETFs are slowly going up also since the on sale period. Thank you commenters for these useful investment tips during all the time I’ve been reading this blog.

#160 Doug in London on 01.04.17 at 1:38 pm

@Damifino, post #153:
Interesting comments you make, I think you are on to something. I pretty much retired from paid employment at age 53 and what you said describes me quite well. I have a wide range of interests and always manage to find something to keep me busy in retirement. Yes, I had the presence of mind to start saving early. As for my health, at age 56 I am quite healthy. Whether I live a long life remains to be seen but am off to a good start. I’m far from alone, if you want to see a community of people who think this way, including of course the blog owner, have a look at http://www.mrmoneymustache.com. I actually found out about that blog here about 4 years ago.

#161 joblo on 01.04.17 at 1:51 pm

Plop it into XTR ishare and fuggeta bout it.

#162 Deplorable Dude on 01.04.17 at 2:00 pm

Why would one move funds from a TFSA to RRSP?

Sure you get the tax refund, but the math shows that when it comes to TFSA vs RRSP you only win in the RRSP if your contributing tax rate is greater than your withdrawal tax rate. The RRSP is just a tax shifting device if you use it properly. This is about the only reason I can see to move funds from TFSA to RRSP?

#163 IHCTD9 on 01.04.17 at 2:06 pm

#154 Johnny boy on 01.04.17 at 1:07 pm

Just talked to my sister in the United States and from where she lives has a much better idea
of what’s going on in America than you! You’re a waste of human life! Trump is an idiot, that’s a
fact. You’re a real piece of work Smoking Dude, if anyone has an opposing opinion then you
automatically label them as a leftie, communist or liberal blah, blah, blah. So I’m a lefty huh!
Sorry Asshole I’m a card carrying conservative whom just happens to not look at Trumps bullshit
and con artist act as the gospel truth. So if you follow him blindly then that’s great for you.
But for gods sakes get off the everyone is a leftie bullshit, and who the hell made you all knowing?
Oh another thing I had to have a look at you and your blog, tweeter account. Be original you dick
all you do is forward other bulshitters bullshit.
There I’m done!

__________________________________________

Holy cow it’s tranquilizer time!!

#164 Ponzius Pilatus on 01.04.17 at 2:09 pm

Sometimes, I wonder.
If you live 100 years, and everyday is the same.
Are you just living one day 36,400 times?
Also, the fable of the grasshopper and the ant told me everything about retirement planning.
There is a reason for why we don’t know when we will die.
Makes life more interesting. Choices is what we have to make.
Learn to live with the consequences

#165 Johny boy on 01.04.17 at 2:13 pm

#136 Gonkman on 01.04.17 at 11:51 am

#84 Ace Goodheart on 01.03.17 at 11:04 pm

People are massively totally and completely angry at politicians. Our Liberals, completely blind to this, just decided to tax us into the stone ages. All this situation needs now is a little spark, really anything at all. A single allegation (even if false) of any form of corruption, would do it. There is no way they can run that tight a ship. People in Canada are seething angry. And the Libs are blind to this, soldiering on as if they are everyone’s best friend. It is painful to watch.

——————————————————————

I really hope it is Kevin O’Leary…

I want Trump the CDN Edition up here. Give little Jr. a run for his money.

I asked several Lefties over the holidays if they would vote for O’Leary… They all said “In a Heartbeat”…. No one is impressed with what T2 has done.

16 International Trips in one year? Giving away Billions to other Countries and the UN?

Thrown in some BS Carbon taxes for the hell of it?
Wow…Thanks Junior.

I really hope O’Leary runs… too bad we don’t have the long Election period the US does. The media spin should will be fun.
………………………………………………………………….
Kevin O’Leary would lay waste to Jr and run him right off the ranch. Trudeau would never know what hit him he is so blind to reality. Another silver spoon fed rich kid.

#166 Johny boy on 01.04.17 at 2:19 pm

#112 The Unbelievable Idiot Wynne on 01.04.17 at 9:03 am

http://www.theglobeandmail.com//opinion/ontarios-plan-destroy-jobs-save-the-planet/article33478285/?cmpid=rss1&click=sf_globe

Jocelyn Williams Bamford is vice-president of Automatic Coating, a small, specialty manufacturer based in Scarborough, Ont., that employs 75 people.

“Our electricity costs are through the roof,” she told me. The reason is something called “global adjustments” – a fee to cover the cost of green energy and conservation programs that is unrelated to the actual cost of electricity itself. Companies like hers are facing staggering hydro bills of $30,000 or $40,000 a month – mostly because of government investments in green energy that Ontario doesn’t need and can’t use.
…………………………………………………………………
Jocelyn Williams Bamford vice-president of Automatic Coating should tell Wynne that she is packing up and leaving for Calgary, Chicago or Houston. There she has just cut the hydro rate by 50% and doesn’t have to look at Wynne’s sour face again. Ontario will eventually loose all of its manufacturing and then what? Would you like fries with that burger sir?

#167 Renter's Revenge! on 01.04.17 at 3:13 pm

#141 Drew on 01.04.17 at 12:13 pm
Would buying the etf VFV.to – the S&P 500 vanguard etf on the tsx be a US dividend paying stock that I am paying money to the IRS on? And if so is this automatically deducted before I am paid my dividends? Or am I supposed to pay? Thanks for any help!

====================================

As far as I understand, income tax systems around the world are based on residency. So the IRS is free to withhold taxes on dividends paid by US corporations to Canadians, but after that, the money has the left the country for good. As a resident of Canada, you file a return with, and pay taxes directly to the Government of Canada.

You only file with and pay taxes directly to the IRS if you have been deemed a resident of the US for tax purposes.

And to answer your question, withholding tax is automatically deducted before you get your dividends. You don’t have to pay it yourself. That’s why it’s called “withholding tax” :)

#168 Lillooet, BC on 01.04.17 at 3:22 pm

#142 InvestorsFriend on 01.04.17 at 12:13 pm
… Amazon … Do you see a risk here?

Your analysis is sound. WB would think so too.
However, the market does not behave this way. Some companies are in deep loss with a P/E equal to ∞ (infinity), but their stocks are still sky high.

Jeff Bezos is No 4 on the rich people list because AMZN performs a lot better than many stocks of many businesses, including BRK. Will it go even higher or crash?

#169 Victor V on 01.04.17 at 3:24 pm

Chinese scrutiny of money movers could slow Canadian property sales

https://beta.theglobeandmail.com/news/world/chinese-scrutiny-of-money-movers-could-slow-canadian-property-sales/article33485996/?ref=http://www.theglobeandmail.com&service=mobile

Under the new regime, the number of buyers will “drop sharply,” said Andy Xie, a China economist formerly with Morgan Stanley. Those selling homes to Chinese buyers should brace for their “business to shrink dramatically,” he warned.

#170 Victor V on 01.04.17 at 3:27 pm

Portrait of a cooling housing market: Vancouver home sales fall 5.6% in 2016

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/portrait-of-a-cooling-housing-market-vancouver-home-sales-fall-5-6-in-2016&pubdate=2017-01-04

#171 Smartalox on 01.04.17 at 3:40 pm

Re : Trump and Ford

Ford didn’t respond to Trump, they did the math: better to use existing facilities more effectively, than to break ground on a new factory. If you can get state and federal tax credits to do it, so much the better.

Also, Ford announced that they planned to build higher-value products (electrics and hybrids) in Michigan, versus low value (low margin) product in Mexico.

Those low-margin cars will still get built off shore, but Ford will lose a lot less money building the expensive, high tech models in the US.

The cost of poor quality is still much higher in Mexico than the US, particularly for high tech products. The avoided loss alone would make the economic case for the change, but this way FoMoCo gets a favour in the bank from the Trump administration.

#172 Context on 01.04.17 at 3:49 pm

#166 Johny boy:- I wonder why many commercial establishments that one can view using a satellite tool have the roof areas covered with solar panels in Toronto.

#173 conan on 01.04.17 at 4:08 pm

Re: jon on 01.04.17 at 1:15 pm

Carpenter? — Garth

My guess is maintenance tech at Porn Hub.

#174 For those about to flop... on 01.04.17 at 4:21 pm

This is another example of what I was talking about the other day about not all reductions coming up on Realty Check.

This place just came back on the market after the contract expired with a new Mls number and a price reduction of $150k

Mums the word…

M42BC

https://www.estateblock.com/vancouver-real-estate/4318-st-catherines-st-vancouver-bc-v5v-4m3-mls-r2128735-1

#175 Damifino on 01.04.17 at 4:30 pm

#160 Doug in London

Thanks for the link. I will definitely spend some time there.

I packed in day-to-day working life at 56 and am now 66. That 10 years went by extremely fast. I still have no shortage of pursuits to keep me busy, although some might think posting on pathetic blogs shouldn’t be classified as any type of ‘busy’.

I know a man who will retire very soon from a life long physical, blue collar, union job with a good pension, some savings and a paid for condo.

He seems terrified. (So does his wife). He spends most of his time worrying about what kind of part time job he can get to keep some semblance of his daily routine.

He say’s he’ll take anything. He’ll dig ditches and clean up construction waste for minimum wage. He doesn’t need the money. He needs the diversion. Says he’s not a ‘hobby’ kind of guy. Scary.

#176 maxx on 01.04.17 at 4:37 pm

#36 Diversified in Oakville on 01.03.17 at 8:15 pm

#9 Brock.

“This is NOT a blog for “Most Canadians” who may or may not be broke. This IS a blog for those of us who care about our financial futures.

Our household income is not in the 1% or even in the top 10%, but we still manage to max out our TFSA’s and RSP’s.

How? Living within our means and budget. It is so easy to come hear crying and moaning, but what are you doing about it?”

Pathetic and helpless, all of this crying and moaning. These wailers will be doing it at retirement as well. Furthermore, a conservative guesstimate of 3/4 of that sorry lot would now thank heaven were the previous limit restored, now that they’ve woken up to the TFSA’s potential.
Blows my brains out that simply maxing out the RSP and putting the resulting tax refund into a TFSA is beyond them.

“What happened to your retirement fund?”
“Oh, it got lattéd, smart-phoned, designered”….fill in your own blank.

Brock here, will be sipping lattés on the deck of a cruise ship at retirement, much of the selfie brigade, not so much.

#177 Rakiki on 01.04.17 at 4:40 pm

Thank you Garth. This year’s money went into XPF (North American Preferred Shares) and XHY (US high yield bonds). Altogether provides a nice 5%+ yield. Our TFSAs now spin out $6400 a year in untaxed income. Delicious.

#178 Blacksheep on 01.04.17 at 4:45 pm

Ace 106 #, Jane # 85,

“here is all of this research that you can find that basically stands for the proposition that if you don’t stop working full time by age 50, you are going to die shortly after you “retire” at age 65 or 70. Your retirement will be very short.”
——————————————–
Here is the statistical proof supporting your insights I found years ago based research from Boeing, Lockheed Martin, AT&T, Lucent Technologies tracking retirement ages and duration of pension collected.

http://faculty.kfupm.edu.sa/COE/gutub/English_Misc/Retire1.htm

Quote from link:

“On the other hand, if you are not able to get out of the pressure-cooker or the high-speed battleground at the age of 55 and “have” to keep on working very hard until the age of 65 or older before your retirement, then you probably will die within 18 months of retirement. By working very hard in the pressure cooker for 10 more years beyond the age of 55, you give up at least 20 years of your life span on average.”
———————————————–
This is why at 53 I work five days/wk, 6 hours a day or less doing no physical labour, running my small low pressure business. I’m slowly getting my ducks in a row to have my manager run it for me (with a little profit sharing incentive) hopefully in the not to distant future.

It doesn’t mater how much money you made/make, if your dead…..

#179 Self Directed on 01.04.17 at 5:02 pm

#162 Deplorable Dude on 01.04.17 at 2:00 pm

Why would one move funds from a TFSA to RRSP?

Sure you get the tax refund, but the math shows that when it comes to TFSA vs RRSP you only win in the RRSP if your contributing tax rate is greater than your withdrawal tax rate. The RRSP is just a tax shifting device if you use it properly. This is about the only reason I can see to move funds from TFSA to RRSP?
……………………………………………………………………………………..

The only reason to move TFSA money into RRSP is because you have a chunk of unused RRSP contribution room, and you want a tax refund. There are many reasons why someone might need the refund… take a trip… pay for a big expense (a furnace or reno?)… or just put it into the TFSA.

It’s just a simple tax deferral move. You can convert any type of cash or investment back to pre-tax dollars by putting it into an RRSP. If you think of RRSP’s as “taxed upon withdrawal”, it makes perfect sense.

#180 cramar on 01.04.17 at 5:26 pm

#85 jane24 on 01.03.17 at 11:13 pm
The only thing that counts in old age is your health. I am in my 60’s and friends and relatives are dropping like flies. Another chunk have life changing health problems. While you are saving for that rainy day that may never come, do remember to keep your weight down, exercise and avoid speeding trucks.

——————–

So true! Just saw this. Too bad he is one in a million (make that 1 in 7+ billion)!

http://www.theglobeandmail.com/sports/more-sports/105-year-old-robert-marchand-makes-cycling-history/article33488845/

#181 Alice on 01.04.17 at 5:41 pm

#175 Damifino

Just took a browse around there, it’s really not the same type of stuff you find here. I imagine younger people would find it helpful though.

#182 AfterTheHouseSold on 01.04.17 at 6:00 pm

Toronto based company opening new manufacturing facility in US because of high energy costs in Ontario.

https://www.thestar.com/business/2016/12/20/toronto-company-opening-us-plant-because-of-rising-ontario-electricity-rates.html

#183 Christopher Mewhort, EA on 01.04.17 at 6:14 pm

As far as I understand, income tax systems around the world are based on residency. So the IRS is free to withhold taxes on dividends paid by US corporations to Canadians, but after that, the money has the left the country for good. As a resident of Canada, you file a return with, and pay taxes directly to the Government of Canada.
—————
The United States income tax system is based upon citizenship and residency. Hence, a US citizen or “US person” living outside the US may owe US income tax on income earned outside of the US.

Christopher Mewhort, EA

#184 Context on 01.04.17 at 6:22 pm

My friend in Richmond Hill years ago needed his basement professionally tiled. He hired a retired Italian as they were the best, and came in for a few hours daily over a period of weeks. He was happy to work for next to nothing just to get away from his wife who was driving him nuts in his retirement.

#185 Ryan on 01.04.17 at 6:50 pm

I like the idea of contributing to an RRSP and using the refund to invest inside a TFSA. However, is there any sense contributing to the RRSP before the TFSA is maxed out? After all, even with the rebate, RRSP is still taxed one day, while the TFSA never is.

#186 Linda on 01.04.17 at 7:49 pm

Maxx, Maxx, Maxx – don’t you KNOW that your views are politically incorrect? If someone isn’t having the life of the rich & famous because of their poor financial choices now & later, it is YOUR fault, mon ami. And all the little people who are being so cruelly denied the lifestyle they ‘deserve’ will be screaming for ‘the government’ to DO something – preferably, at the expense of those of us who did save & pay some attention to finances. Obviously, the only way we got ours is by ‘stealing’ from ‘them’. Besides, it is so much easier to take from those who have than those who have not…..

#187 Stock picker on 01.04.17 at 9:04 pm

I still can’t believe that our chief spokesman …. JuniorWater Boy Trudeau is afraid to make an appt with our largest trading partners and speak to them face to face. What a wimp!

Anyone with any responsibility sense would have been on a plane and go for a meeting like every business person in the world would do……Trudette…..goes into hiding in the tropics for our “unforgettable 150th”

We are so screwed…..NDP is trying to have climate denying opposition fired….can you imagine what’s going to happen when Rick Perry shows up?

BTW….made out like a bandit on the ECA call

#188 maxx on 01.04.17 at 9:28 pm

#186 Linda on 01.04.17 at 7:49 pm

LOL! Very well put, très au fait! ;-)

#189 maxx on 01.04.17 at 9:38 pm

#102 I’m stupid on 01.04.17 at 5:13 am

“#33 Nonpulse”

Yikes……..did he die?

#190 Peppy sue on 01.04.17 at 9:44 pm

#106 Ace:

Can you provide a link to that research?

#191 maxx on 01.04.17 at 9:51 pm

#112 The Unbelievable Idiot Wynne on 01.04.17 at 9:03 am

“http://www.theglobeandmail.com//opinion/ontarios-plan-destroy-jobs-save-the-planet/article33478285/?cmpid=rss1&click=sf_globe

Jocelyn Williams Bamford is vice-president of Automatic Coating, a small, specialty manufacturer based in Scarborough, Ont., that employs 75 people.

“Our electricity costs are through the roof,” she told me. The reason is something called “global adjustments” – a fee to cover the cost of green energy and conservation programs that is unrelated to the actual cost of electricity itself. Companies like hers are facing staggering hydro bills of $30,000 or $40,000 a month – mostly because of government investments in green energy that Ontario doesn’t need and can’t use.”

I’d throw an eye towards the U.S.- there are many business-friendly states that would just love to add a great business to the complement of existing ones.

#192 Doug in London on 01.04.17 at 10:52 pm

@Damifino, post #175:
As you’ve mentioned, I’ve heard stories about these fools who dread retirement because they’ll have nothing to do.

A long time ago in a different era before the tragic events of 911, you could, on request get a tour of the cockpit of a plane in flight. I remember doing so twice. On one flight from Charlotte to Toronto I remember the panoramic view looking out the front window while flying over the Allegheny Mountains and seeing the outline of Lake Erie off in the distance. On another flight from Glasgow to Toronto I remember seeing the rocky coast and mainly flat, seemingly endless expanse of ice in the interior of Greenland. On both flights, despite being being 8 miles above the ground I couldn’t see the curvature of the Earth, so that should tell you how big the world is, and that there is a lot to see, do, and experience in the world. Don’t even get me started on how big the Solar System, the Galaxy, or the Universe is.

With all there is out there to see and do after being no longer being tied down to the burden of a job I simply can’t fathom how anyone could dread finally being free to do whatever they want.

#193 Dan Bartinelli on 01.05.17 at 11:00 am

Here heard all this talk about interest rates rising last year but I noticed that bond yields in Canada, U.S. are dropping for the last 2 weeks now.

The Canada 30 year is 2.28% but it was 2.43% not that long ago. U.S. 30 year bonds is 3.0% when they were 3.15% just a week ago or so.

All maturities from 2, 5, 10 years are down and going down everyday but a few basis points here and there.

Interest rates will fall as the trend suggests over the last year, years and decades.

#194 Craig Halloway on 01.05.17 at 3:34 pm

Actually, bond rates are dropping fast! U.S. 10 and 30 year are now 2.36% and 2.96% lower by more today than just hours ago.

Anyone who follows bond yields hourly has a serious personality disorder. — Garth

#195 Joy Simpson on 01.05.17 at 8:46 pm

You have to admit that those that called for higher interest rates for years were and are still way off. What a more disasterous call made by so many so called analysts and experts.

Low rates are a symptom of economic stagnation. Thankfully those days are over, at least in the U.S. — Garth

#196 Rick Smith on 01.05.17 at 9:00 pm

Interest rates will not rise much because the whole economy has changed to a lower wage, slower growth, highly taxed economy and technology just accelerates that.