Revenge

REVENGE modified

We’ll get to the budget in a moment, but you already read the news here yesterday. Yes, this blog is just that wonderful, besides pathetic.

First, some danger signals regarding a real estate market now going completely off the rails in YVR and the GTA, even as it staggers along in most other major centres. How much risk is there when the average detached home in a city soars past the $1 million mark when the people who live there see no wage gains and the cost of living is on the rise?

Heaps, says housing consultant and ex-realtor Ross Kay. In fact he seems to be the first guy to actually try to quantify and chart that risk. And it ain’t pretty:

HERI modified

What does this mean? Well, the “Home Equity Risk Index” chart measures the percentage of equity the average Canadian homeowner could reasonably expect to lose, “when the next correction takes hold.” As you can see, the needle is currently sitting around 39%, which is a devastating amount of wealth to lose. Direct comparisons with the US are impossible, but it’s useful to remember the American middle class was financially Hoovered when house prices (nationally) declined by 32%. Six years later those families are still struggling to rebuild their net worth, and housing prices are still sharply below their pre-crash highs.

Ross Kay is not a globally-recognized brand, but The Economist magazine is. This week it said pretty much the same thing, warning that our housing market is anywhere from 35% to 89% more expensive than it should be, based on what we poor locals earn and possess. (By comparison, the Bank of Canada has suggested an over-valuation of between 10% and 30%, and warned last week that 416 and 604 are dangerous places to own in.)

The Economist (and others) comes to this conclusion by looking at the ratio of silly real estate prices to rent – in other words, what income the asset can actually generate (a good measure of how tenants today are wildly subsidized), plus the ratio of prices to after-tax incomes.

Not everybody is buying it. National Bank Financial’s chief economist today pointed out that he has “serious issues” with this conclusion, and that we should feel better about real estate valuations when we compare Canadian cities to others around the world.

Here is his chart (right side) intended to counter the hysteria of The Economist chart (left):

HOUSE CHART 1 modified

And here is the explanation:
“Despite the massive increase in Canadian home prices in recent years, a comparison between large metropolitan areas of similar characteristics shows that things are really not that bad. The ratio of median home prices relative to household income may be the highest in Vancouver (10.6), but even that is not outsized when compared to San Francisco (9.2). Ditto for Toronto (6.5) which is in line with New-York (6.1). Other major Canadian cities are all still cheaper than Boston. Unfortunately, The Economist again fails to mention that population growth for people aged 20-44 in Canada is one of the fastest in the OECD due to an aggressive immigration policy that is spurring demand for housing in major cities.”

So there you go. Nothing to see here, folks. If you think Vancouver is equal to San Francisco (the tech capital of the planet) or that Toronto is equal to New York (financial capital of the planet), then you should feel only slightly unhappy that you pay more to live there. Besides, we have all these #HornyKids willing to take on eternal debt so they can bail the wrinklies out.

What could possibly go wrong? Other than a 39% equity loss, I mean.

OK, so now the boring stuff (because you already know it):

TFSA contribution limits have been doubled, almost. The new number is $10,000, not the eleven grand we figured would be handed to us. But the biggest (and most unexpected) gift comes with the timing – instead of taking effect next January, it became law now. So the 2015 limit is goosed from $5,500 to ten thousand, and to $20,000 for a couple. Yahoo.

Move that money from your taxable non-registered account into your TFSA tomorrow morning, kids, and then invest the heck out of it.

Meanwhile good news for people with RRSPs that they have to turn into RRIFs because they’ve finally moved out of puberty and turned 71. The minimum amount you must withdraw and add to taxable income in the first year has been dropped from 7.38% of a plan’s total value, to 5.28%. The minimum amount required for subsequent years is also similarly adjusted. This means you can shelter more money for longer, avoid paying tax on it, and irritate your grandchildren who, because of the TFSA and RRIF changes, will certainly pay more tax later.

Boomer revenge. Deal with it.

266 comments ↓

#1 Danforth on 04.21.15 at 6:03 pm

Regarding the TFSA – I’m catching reports that the indexation is gone. We might be stuck at 10K for a loooong time!

#2 Ray Skunk on 04.21.15 at 6:05 pm

Increasing TFSA allowances is a real solution to the retirement saving “problem”, Ms. Wynne – not your bullshit tax grab.

#3 Weenerman on 04.21.15 at 6:06 pm

well, my wife and I are moving the extra TFSA cash tomorrow then…

Still not voting for the Harper Conservatives.

#4 gut check on 04.21.15 at 6:11 pm

revenge for WHAT?

#5 Ronaldo on 04.21.15 at 6:14 pm

So, we get a $289 billion budget with a $1.4 billion surplus for contingencies. That would be like a family earning an income of $289,000 with $1400 set aside for emergencies. This would barely cover momma’s daily intake of lattes. Laughable.

#6 kommykim on 04.21.15 at 6:16 pm

Any truth to the rumour that they removed inflation indexing from future TFSA contribution limit increases?

#7 Mike S on 04.21.15 at 6:17 pm

“But the biggest (and most unexpected) gift comes with the timing – instead of taking effect next January, it became law now. So the 2015 limit is goosed from $5,500 to ten thousand, and to $20,000 for a couple. Yahoo.

Move that money from your taxable non-registered account into your TFSA tomorrow morning, kids, and then invest the heck out of it.”

I probably missed it?

You mean I can contribute an extra 4.5K this year (on top of 5.5K already contributed)?

#8 LH on 04.21.15 at 6:17 pm

Great news for the financially literate!

#9 Oceanside on 04.21.15 at 6:18 pm

Pretty lame budget, nothing for our collapsing infrastructure in all major centres, nothing for the working poor, good thing we created 28,000 new part time jobs,
…..Oh well, TSFA is good for this couple anyway.

#10 Hot Albertan Money on 04.21.15 at 6:19 pm

FIRST? (What do I win?)

#11 JSS on 04.21.15 at 6:22 pm

If Canadian banks were really worried about the run up on house prices, they themselves would have sounded the alarm bells. Looks like they’re not.

#12 james on 04.21.15 at 6:22 pm

“The Economist again fails to mention that population growth for people aged 20-44 in Canada is one of the fastest in the OECD due to an aggressive immigration policy that is spurring demand for housing in major cities.”

These would be the immigrants that are bringing 47k into the country, on average?

Oh yes, I can see how they could easily prop up a market of million dollar homes. I guess they all get jobs as neurosurgeons or traders on Bay street.

#13 timetofly on 04.21.15 at 6:23 pm

First. My first post but have been a boomer fan for many years. Finally a budget that has components that work for my retirement quality. Have no dB pension or any other pension. Just hard earned and disciplined life long saving.

#14 None on 04.21.15 at 6:24 pm

Can I really dump another $4500 into my TFSA tomorrow or do I need to wait for the budget to pass? (or something)?

Now. — Garth

#15 Loving TFSA even more! on 04.21.15 at 6:24 pm

Here comes 4500 each for wifey, 21-year old, and myself! For the kid who turns 18 in two weeks gets 10000. That’s 23,5000 out of non-Reg a/c. Thanks Harper but I’m not voting for you in Oct.

#16 Nick on 04.21.15 at 6:25 pm

I can tell over here in Alberta the fear has begun to slowly sink in… Almost every conversation with my friends is about how difficult is has been to sell their homes…

And this only beginning….

#17 Loving TFSA even more! on 04.21.15 at 6:26 pm

23,500 – getting rid of that extra 0.

#18 Yogi Bear on 04.21.15 at 6:31 pm

Sweet. Transferring another $4500 in tomorrow morning!

#19 Big English on 04.21.15 at 6:35 pm

Moving money in to my TFSA for more ETF’s.
My mother-in-law is going to be clicking her heels with joy.
Now if only Real Estate would correct 10-39%

#20 Paul on 04.21.15 at 6:37 pm

#15 Loving TFSA even more! on 04.21.15 at 6:24 pm

Here comes 4500 each for wifey, 21-year old, and myself! For the kid who turns 18 in two weeks gets 10000. That’s 23,5000 out of non-Reg a/c. Thanks Harper but I’m not voting for you in Oct. ———————————————————-
Sure vote for Trudeau or the N.D.P better yet lets have a coalition In Ottawa.
Like all things Careful what you wish for.

#21 Mark on 04.21.15 at 6:39 pm

“Any truth to the rumour that they removed inflation indexing from future TFSA contribution limit increases?”

That appears to be the case. I haven’t read the legislation specifically, but if Canada is in for a period of deflation in coming years (likely with falling house prices and a rising CAD$), the Tories have effectively protected the TFSA against reductions to the limits on account of falling CPI.

If Canadian banks were really worried about the run up on house prices, they themselves would have sounded the alarm bells.

Watch what the banks actually do, not what their mouthpieces speak. The Canadian banks, in practice, have pulled back dramatically from the market and basically only make uninsured loans to only the most creditworthy of prospects (ie: very low LTV loans).

Its the credit union sector that appears to be basically taking up uninsured subprime mortgage loan issuance in Canada. Which probably will lead to the demise of many of the most outrageous examples.

#22 Interstellar Old Yeller on 04.21.15 at 6:39 pm

Well, that’s a pleasant surprise for those of us with an extra $4500 per adult kicking around. Nice to be Gen X but cashing in on the Boomer-aimed perks.

#23 BG on 04.21.15 at 6:41 pm

#4 gut check on 04.21.15 at 6:11 pm
revenge for WHAT?
————————————————————-

For having to put up with entitled millennials who think they should have the same opportunities, of course!

Oh well, I guess you’re new to this blog.

#24 Hurtin' Albertan on 04.21.15 at 6:43 pm

Wildrose or NDP government (or balance of power) coming to Alberta?

http://www.threehundredeight.com/p/alberta.html

#25 TurnerNation on 04.21.15 at 6:44 pm

I’ll load up on CPD.TO after June Fed decision.

#26 By any other name... on 04.21.15 at 6:44 pm

Thanks for the 10K TFSA Steve.
And I will be voting for you in the next election.

#27 Retired Boomer - WI on 04.21.15 at 6:44 pm

BOOMER REVENGE?

For what? Having to grow up in the high inflation, low job growth years? For watching so called “conservative” politicians act as anything but- when out sourcing our jobs after drafting and passing such great legislation as the Graham, Leach, Bliely act (1998) which removed depression era safeguards to irresponsible banking, NAFTA, and now on deck is the Trans Pacific Partnership.

Revenge….. might not be a word strong enough to contain the outrage of Boomers (and others) towards our imbecillic politicians who rely too much on “experts” to draft self-serving legislations. -rant over-

#28 Nacho Cheese on 04.21.15 at 6:45 pm

#15 Loving TFSA even more! on 04.21.15 at 6:24 pm
Here comes 4500 each for wifey, 21-year old, and myself! For the kid who turns 18 in two weeks gets 10000. That’s 23,5000 out of non-Reg a/c. Thanks Harper but I’m not voting for you in Oct.

……….
Haha, I read that too quickly the first time through. I was trying to do the math, thinking your wife was 21, while your kid was 18.

#29 mitzerboy aka queencity kid on 04.21.15 at 6:45 pm

looks like boomerz rule
im lovin every minute of it

#30 young & foolish on 04.21.15 at 6:45 pm

Don’t worry Blog Dawgs, house values will decline … and this will do what for you exactly?

#31 Julie K. on 04.21.15 at 6:46 pm

The
Fun
Saving
Age

#boomersrule

#32 Ogopogo on 04.21.15 at 6:46 pm

Thanks for the speedy confirmation, Garth.

What a tremendous gift to the financially savvy.

I’ll be teleporting $9,000.00 combined for myself and the wife from our margin account to our respective TFSAs first thing tomorrow morning!

P.S. Still not voting for the Cons.

#33 DM in C on 04.21.15 at 6:48 pm

Is it worth it to take the funds from registered accounts, pay the tax and dump into TFSAs? Thinking of melting my non-work related RRSP acct.

#34 Pete on 04.21.15 at 6:48 pm

What’s the revenge for? Boomers have always “won”, and always will until they all croak!

I will definitely make use of the new TFSA room – still catching up, started reading up on investing only a year ago… If Harper thinks he gets my vote, he’s still dreaming.

#35 Victoria Real Estate Update on 04.21.15 at 6:49 pm

It always makes me laugh when more stimulus is added to Canada’s housing bubble, like the recent lowering of the BoC rate.

It has certainly stimulated housing markets in Vancouver and Toronto this spring, which should be no surprise.

Lower rates is resulting in even higher levels of already dangerously high household debt in Canada.

Rates could have been lowered without pushing household debt levels higher if counter measures had been brought in to neutralize the stimulative effect that lower rates have on housing markets.

Examples of counter actions could have included increasing the minimum down payment or lowering the maximum insurable mortgage limit down from $1 M (it’s about $400k in most parts of the US).

Is stimulating the housing market in Canada really the only card that is left to stimulate Canada’s weak economy? If so, the Canadian economy is in a lot worse shape than most think.

#36 and then invest the heck out of it on 04.21.15 at 6:56 pm

“… and then invest the heck out of it.”

Let’s talk about that. Let’s skip the real estate part for a while.

#37 AGrumpyHobbit on 04.21.15 at 7:00 pm

Great so now that I can put more money TFSA and avoid paying tax, let see how much I can save

What I can afford to invest in TFSA now ZERO
Under new rules, still ZERO

Like the vast majority of Canadians, this mean no Benifit to me, but you know, I can retire later, with less social plans, with less money for transit, with not addressing issue of Climate Change, with less protection of our fresh water, while muzzling scientist, and don’t even get me started on that pseudo fascist domestic spying law called C51

#38 Leo Trollstoy on 04.21.15 at 7:02 pm

The missus and I will be dumping $20k into TFSAs tomorrow and looking forward to voting for Harper Conservatives.

#39 Mel on 04.21.15 at 7:03 pm

Yahoo! Great news for people like me. Instead of sending my hard earned cash to keep the housing bubble going for a bit longer, I shall max out TFSA.

My only dilemma is; Hate Harper government on many other policies, however, don’t like the idea to have Opposition parties to fool around with my TFSA.

What I hate listening to is the old spin, middle class have no money left at the end of paycheck. I’d say, middle class have no money at the end of the day because they chase their housing “investments”.

Just wait, they will cry poor me Argentina when their housing portfolio adjust to real value. They will press new Government to scrap my TFSA, because people like me have too much money on hand.

Housing bubble has truly screw our priorities. Everyone, Government, Banks, and people will be to blame. Leave my TFSA ALONE.

#40 T.O. Bubble Boy on 04.21.15 at 7:04 pm

So, can I move $4,500 into my TFSA tonight???

#41 tundra pete on 04.21.15 at 7:09 pm

If the Cons only knew what I was thinking, they would not allow me to vote.

#42 Danforth on 04.21.15 at 7:09 pm

The rumour mill referenced “doubling” the TFSA limit, implying 11K for quite some time. Doubling the TFSA was also the original election promise.
I’m curious how much mathematical wrangling there was to arrive at the 10K rather than 11K, and lost indexing. That might have been a material difference in the final sums.

#43 Leo Trollstoy on 04.21.15 at 7:11 pm

Bunch of my friends WhatsApping me about the $10k TFSA. Told them its in effect tomorrow and they’re very happy. They and their partners will all vote PC in the fall.

Sorry NDP Libs.

#44 Vancouver, Toronto.... then nothing else on 04.21.15 at 7:14 pm

“If you think Vancouver is equal to San Francisco (the tech capital of the planet) or that Toronto is equal to New York (financial capital of the planet)…”

Of course not (even close).

What’s unique though about them is that Canada is a huge country, well known and attractive country, with fairly open immigration policy – yet it has no Boston, LA, Chicago, Miami, and the rest (not even close).

It has Vancouver, Toronto…. then nothing else to compare, before comes Calgary maybe Montreal.

Canada has a supply demand problem when it comes to choice of cities. You can count that into the price – whether you like it or not.

#45 Victor V on 04.21.15 at 7:16 pm

http://business.financialpost.com/personal-finance/tfsa/federal-budget-2015-ottawa-boosts-tfsa-account-limits-by-82-to-10000-a-year?__lsa=4967-c1c4

Rechtshaffen said there is little question more and more planning will start to revolve around TFSA. “You could have someone with a $2.5 million house and two $700,000 TFSAs and have zero income. That’s going to be a planning goal,” he said, noting TFSA withdrawals don’t count as income for determining old age benefits. “You could have zero income and net worth of $4 million, that’s pretty good.”

Jason Heath, a fee-only certified financial planner with Objective Financial Partners Inc. in Toronto, said he still thinks the TFSA is program for people on the high-end of the wealth spectrum and favours the RRSP for middle-class investors.

“It’s great for rich people with lots of money who have non-registered portfolios and need an extra tax shelter,” said Mr. Heath.

He added people who are low income, and may not benefit from reducing their taxable income through RRSP contributions, also benefit from the TFSA.

“I guess TFSAs are neat from the perspective you can put a bunch of money in and hit a couple of home runs and grow this big tax-free account,” said Heath, adding most TFSA accounts are invested in low risk and low return cash and guaranteed investment certificates. “If TFSAs are going to grow, people will need to change the way they invest in them.”

#46 Suede on 04.21.15 at 7:16 pm

My reliable housing speculation indicator in YVR is still in Bull mode

I call it the “has my wife sent me a house listing in the last two weeks” meter

Nothing to see here yet…. Caution is still warranted though.

#47 ANON on 04.21.15 at 7:18 pm

“What could possibly go wrong? Other than a 39% equity loss, I mean”

Oh, that one is easy. Pick me, pick me! I can think of a couple of things other than that … and bigger than that…and…and…oh, boy, did I just scare myself!

#48 dave on 04.21.15 at 7:19 pm

Kudos for being correct in predicting the TFSA and RRIF changes. You must still have some friends in the conservative camp…

#49 everythingisterrible on 04.21.15 at 7:21 pm

#27 Retired Boomer – WI
Don’t you always tell millennial s to stop whining on this thing? You’re the guys who elected those imbecilic politicians.

#50 Not Retarded on 04.21.15 at 7:23 pm

Thanks for the speedy confirmation, Garth.

What a tremendous gift to the financially savvy.

I’ll be teleporting $9,000.00 combined for myself and the wife from our margin account to our respective TFSAs first thing tomorrow morning!

P.S. Still not voting for the Cons.”

Turdeau has promised to roll back the TFSA increase together with income splitting, so who exaclty do you plan to vote for? The greens?

#51 Made in BC on 04.21.15 at 7:24 pm

“My name is Steven Harper and I approved this budget which helps rich wrinkles and does nothing for the struggling middle class. Please vote for me in the fall”

#52 Not Retarded on 04.21.15 at 7:27 pm

It’s amusing to see all the lefty whiners here complaining about the TFSA that they can’t use, characterizing it as some gift to the “rich”.

As if it makes any difference. Fact is you are incapable of taking care of yourselves, that’s why you want to government to be your mommy and daddy. But even then you won’t be happy because you’ll always feel like mommy and daddy love your siblings more.

Grow up.

#53 Mr. Pink on 04.21.15 at 7:27 pm

Yet another warning.

http://www.cbc.ca/news/business/canadian-house-prices-35-overvalued-economist-magazine-says-1.3040698

#54 not 1st on 04.21.15 at 7:28 pm

Why the slow build on the TFSA? I mean why can’t they leave it wide open to dump whatever I want in there. Like sell my house for a mil and dump it all in and ride it out tax free forever. Why do I have sit here wasting time “growing” it over 25 years? I could be dead by that time.

#55 Made in BC on 04.21.15 at 7:31 pm

I don’t understand why it is so hard to just cut taxes. Why is that so hard? Why is it always RSP or TFSA or Income Splitting some other fanciful acronym that usually only helps people with income left over after their paycheck. Is it that it’s too easy and will not employ enough of the civil service to perform such a task?

1. Cut income tax by 5%
2.
3.
4.

(there is no 2, 3 or 4)

#56 Smoking Man on 04.21.15 at 7:33 pm

#38 Leo Trollstoy on 04.21.15 at 7:02 pm
The missus and I will be dumping $20k into TFSAs tomorrow and looking forward to voting for Harper Conservatives.
….

Me too, as much as I despise and loath the cowardly Neocon ideology and the fear generated lost of privacy, and rights. I always vote with my wallet.

Can you Imagen the horror of having three levels of tree hugging, teacher loving communists running the show

The Horror…

The big one for me is the Fed Corp tax going from 11% to 9% HUGE. My fear is that the money hungry soul sucking Wyneebag will scoop it fast.

Covers the cost an entire year of Casino Adventures.

#57 Entrepreneur on 04.21.15 at 7:36 pm

Good for Ross Kay and others who speak up about real estate. Thank-you!

What about taxes when moving a taxable non-registered account to a TFSA? Will pass on the transaction info to others.

A lot of us oldies are spending our hard earned savings as life has an end, enjoy when can attitude. Time to save and time to spend, a balancing act.

#58 Marquis de Sale on 04.21.15 at 7:36 pm

A friend of mine is sending muffin morse code over Brazil…XBZ.TO. Is it a buy? Olympics there next year.

#59 crossbordershopper on 04.21.15 at 7:39 pm

poor people will stay poor. They dont have 100 bucks to save, let alone 10 grand a year. i know tones of people who work every day for 30 years and yes couldnt come up with 10 grand total, let alone an annual savings.
this is for the wealthy, who already have money moving it from one pocket to another to save a few dollars on taxes.
rich people helping rich people,
where is the money for people on disability, the first nation, the poor, the homeless, etc. yes 50 percent of everyone in hamilton. they will never vote conservative anyway so why pander to them, just make sure duffy and the boys eat, and yes it looks like they have eaten well over the years
food banks dont give out milk, because they dont have refrigerated products. yes, they give out cereal, but cereal without milk is useless. why do i mention this, well, its what poor people talk about not about increased tfsa levels.

#60 Jimbo on 04.21.15 at 7:40 pm

Here’s what’s really scary about high-ratio mortgages in Canada

http://business.financialpost.com/personal-finance/mortgages-real-estate/heres-whats-really-scary-about-high-ratio-mortgages-in-canada

Looks like 1.8 million households are doomed.

#61 Daisy Mae on 04.21.15 at 7:44 pm

GARTH: “(By comparison, the Bank of Canada has suggested an over-valuation of between 10% and 30%, and warned last week that 416 and 604 are dangerous places to own in.)”

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

And, according to CBC News this morning, Vancouverites are a very unhappy lot. Small wonder…

#62 New Wave on 04.21.15 at 7:48 pm

Saying housing in Canada is expensive is like saying Mike Duffy is fat – pretty obvious. Pretending that other asset classes are not inflated through central bank rate suppression and base money supply increases is delusional. Not saying it won’t last for quite a while, but still delusional.

#63 Roger on 04.21.15 at 7:50 pm

Readers should be aware that the increase to the TFSA is NOT effective tomorrow!

This is a budget proposal and requires changes to the Income Tax Act. This is defined in what is known as a Ways and Means Motion which was tabled by Minister Oliver in the House today. It must be passed before the changes take effect. This legislation will undoubtedly be passed because the Conservatives have a majority. However there is the off chance that Harper could call a snap election before the budget is passed.

I would wait before making a contribution. If the legislation does not pass you will get a penalty for over-contributing.

False. The budget will pass. Even if it failed, there would be no penalty for over-contribution. Not logistically possible. — Garth

#64 Shawn Allen on 04.21.15 at 7:52 pm

Great News

#8 LH on 04.21.15 at 6:17 pm

Great news for the financially literate!

******************************
or, Great news for the financially liberate

#65 Ray Vasquez on 04.21.15 at 7:53 pm

To Ray Skunk #2

This is why Toronto’s budget and now Ontario’s budget in a few days will take away more money with new taxes, fees.

Don’t forget about more 10%+ higher hydro, electricity, water rates etc., so it will be harder to put money in a TFSA, RRSP, RESP, non-registered investments etc.

#66 Shawn Allen on 04.21.15 at 7:56 pm

Tax Breaks are a Zero-sum game:

Made in BC on 04.21.15 at 7:31 pm
I don’t understand why it is so hard to just cut taxes. Why is that so hard? Why is it always RSP or TFSA or Income Splitting some other fanciful acronym that usually only helps people with income left over after their paycheck. Is it that it’s too easy and will not employ enough of the civil service to perform such a task?

1. Cut income tax by 5%
2.
3.
4.

(there is no 2, 3 or 4)

******************************************
Agreed, cut the tax rate…

One way to do it, is cut the selective tax breaks

The other way is to cut expenses.

Neither of which bring many votes…

#67 Realtor007 on 04.21.15 at 7:56 pm

A perfect example as to why housing is still the best investment, Trudeau and Mulclair can’t wait to get a chance at reversing and most likely scrapping the TFSA.

As much as like the TFSA it has a short lifespan if either of those 2 get in, they’ll allow you to keep what’s in there but future contributions will be scrapped using a an excessive amount of excuses as to why you should not be able to save and keep your own money.

Using the Trudau analogy we should scrap the RRSP as well since most people can’t come anywhere near full contribution, of course this is all about nanny state coddling and taxes they can’t extort multiple times from the same sum of money. Enjoy it while it last or forget the politics and buy investment properties because even the socialist won’t dare to fiddle around with that.

“Liberal Leader Justin Trudeau said his party would reverse the TFSA increase if it were in government.

“The TFSA itself, up to $5,000, is an encouragement to people to save and there’s a lot of Canadians who do that,” Trudeau said.

“But the reality is there’s not a lot of people who at the end of the year have $10,000 laying around that they can invest.”

http://www.cbc.ca/news/politics/federal-budget-2015-conservatives-dig-into-contingency-to-hit-surplus-1.3041628

#68 pete on 04.21.15 at 7:57 pm

Thanks for the 10g ( TFSA ). Still not going to vote for you CONs and will enjoy seeing you out of office.

#69 Shawn Allen on 04.21.15 at 7:58 pm

TFSA increase is a gift to the high income people. Who will pay for it? What will we do, raise the tax rate to pay for the tax break?

#70 woofermeister on 04.21.15 at 8:02 pm

In dog we trust!

#71 TurnerNation on 04.21.15 at 8:03 pm

Just now saw TFSA news.
Beep beep back up the truck here comes another $4500 of goodness.

#bikesbabesbalancedport.

#72 But any gardener on 04.21.15 at 8:03 pm

Garth, in yesterday’s post, ‘BoomerDole’, you mentioned that the proposed changes to the TFSA and RIF programs were poor social policy. If you were amiable, I would be interested in hearing of what you would suggest as good social policy. We personally will benefit from today’s TFSA contribution change, but I am worried that our current governments, federal & provincial, are making moves that are not sustainable in the future. I fall into the fiscally conservative, socially liberal camp. Of course, you do not have to post or reply, I was just interested in what your thoughts might be.

#73 Boingopo on 04.21.15 at 8:03 pm

How do we invest in the products you when banks deal with only mutual fund portfolios?

#74 Buddha on 04.21.15 at 8:04 pm

Maggie Thatcher famously quipped, ” We are all prostitutes…” So true.

Amazing how cheaply some of you can be bought.
and with your own money.

Buddha

#75 Macrath on 04.21.15 at 8:08 pm

#59 crossbordershopper

When I was young we had powdered milk and canned milk, Yum !
Then at 12 yrs old, I got a job with the milkman and switched to the good stuff

#76 Ogopogo on 04.21.15 at 8:08 pm

#50 Not Retarded on 04.21.15 at 7:23 pm
Turdeau has promised to roll back the TFSA increase together with income splitting, so who exaclty do you plan to vote for?

Do you have a link for the first claim on Trudeau promising to roll back the TFSA or are you just fear mongering?

#77 pete on 04.21.15 at 8:09 pm

Harper is a fool. With debt to income ratio sitting at 164% what 10g do Canadians have? Only the rich/1 % will benefit from this with the exception of blog dogs who has money. The indebted are numerous as majority can’t even pay back the money they took out of their RRSP’s and instead pay the tax. To those poorly spinning this isn’t for the rich are fooling no one.

#78 LLewelyn on 04.21.15 at 8:12 pm

Estimating revenues at $291 billion for 2015/16 is nothing but a pipe dream when you consider that 50% of total revenues come from personal income taxes. The budget is based on the interesting assumption that revenue from personal income taxes will increase by $7.0 billion in 2015/16. For the record the average annual increae between 2010/11 and 2014/15 was less than $6.0 billion per year and I am pretty sure the Canadian economy is not getting stronger.

Corporate tax revenues are projected to increase by $435 million in spite of a reduction in the rate for small businesses and the fact that the oil and gas and construction sectors of our economy will face serious contraction in 2015/16.

Canadians deserve some measure of honesty from their government not hopeful budget projections designed to convince us all is well. In closing I would not that disposable income pmythicala a

#79 Kris on 04.21.15 at 8:14 pm

I sometimes go in our company’s jet to customer sites (No, I’m not an executive, but they let us use it sometimes). We land at private airports (like Teterboro, New Jersey) where Wall St high-flyers park their personals jets.

Even the magazines in the lobby of those airports tell you that it’s an alternate universe.. Ads for $5800 purses and $50,000 watches. And of course, gated hilltop estates with helipads for “discerning UHNW (ultra high net worth) individuals”…

I tried to look natural as I leafed thru the magazines.. “Bah! How dare they advertize mere 4-seater jets! Doesn’t anyone make 10-seaters?!”, I exclaimed to the bored blonde 30-something Julia Roberts look-alike sitting a few feet away (Judging by her abrupt departure, I’m guessing I wasn’t too convincing)

Anyway, now to the serious part..
Interesting article in one of the magazines. A New York financial consultancy was recommending Cdn cities (mainly Toronto) to their UHNW clients as one of the best places on the planet to raise a family. They quoted a bunch of stats like crime, noise level, clean water & air etc. Toronto trumped (no pun intended) New York and London/England..

There may be some truth to The Economist’s assertion. Perhaps Toronto & Vancouver are experiencing the growing pains of being “found” by the world. I’ve asked that question in this blog a few times (in the past 3-4 years) – What’s to justify the insane real estate values in London/Eng? Why is Toronto not a similar hub for affluent from many countries? Well, looks like we are now..

#80 Sam604 on 04.21.15 at 8:16 pm

Joke of a budget. Raid the contingency fund and sell off a bunch of GM shares at a loss to barely come up with a surplus. Jack up the TFSA and bribe the wrinklies with RRSP fluffing. Shallow vote buying for the upper middle class. Dumb.
Of course, Ill be taking full advantage of the new TFSA limit. It’s awesome for me. I love it. But I vote not purely for my own benefit, but for society’s as a whole. I’m not a sociopath :)
Thanks Harper. Honestly, thanks. But you aint getting my vote.

#81 Butcher on 04.21.15 at 8:16 pm

Thanks for the goodies, Stephen.
The wife and I will vote for you on Oct 19!

#82 Financial Freedom at 40 on 04.21.15 at 8:17 pm

Around 1 pm today the price for gold was $1195, traded in some old style jewellery gathering dust in a drawer for a nice cheque, will deposit it into the TFSA tomorrow to hit the new number, and invest in ETFs that have pulled back. My day today is dedicated to Garth and the blog dogs, a year ago I wouldn’t have thought to do any of these things.

#83 Joblo on 04.21.15 at 8:18 pm

Averages, home prices, weather temperatures, body weight blah blah blah who cares. Means nothing, let’s get specific.

If idiots can’t afford it or take a 39% loss so be it, common sense is so lacking.

Let the thing blow up already, vultures are getting restless.

#84 Adam on 04.21.15 at 8:20 pm

For those of you who are voting Conservative because of the TFSA increase, you might want to look at this beforehand: https://twitter.com/preetbanerjee/status/590627612994707456

Removing indexing basically eliminates the benefit of the increase to anyone who is a long term investor. Nice smoke and mirrors trick though!

#85 Marco on 04.21.15 at 8:20 pm

Thanks Garth.

@gutcheck

“Revenge for WHAT?”

For having to wear the thirsty underwear?

Vancouver the San Francisco of the north said someone once and then never again.

Cheers.

#86 george on 04.21.15 at 8:21 pm

With debt to income ratio sitting at 164% where would indebted canadians find the money to invest 10 thousand? It’s sad that the middle class is broke and up to their eyeballs in debt all thanks to the RE bubble. The ten G’s TFSA gift should be for everyone but the fact is the majority can’t even put 5 g’s . Harper just showed everyone that the 1% is all that matters.

#87 HNIC on 04.21.15 at 8:23 pm

10 000.00 per year in TFSAs now? That should appease GIC buyers.

#88 sideline sitter on 04.21.15 at 8:24 pm

Love the TFSA increase, still not voting Harper

#89 Smoking Man on 04.21.15 at 8:25 pm

Been spending alot of time trying to finish the book of books, the holy grail of madness.

I have to admit, it’s bloody hard. Like when you try and force yourself to sleep. I wana publish this year, but when I try to hard, nothing.

So I’m just going to write when I feel like it. Screw the self emposed deadline. It’s killing me.

I have no idea how writers write multiple books. Obviously their standards are much lower than mine.

But if there are any writers out there, found an amazing tool. TEXT TALK.. You paste your work in a window, it reads it back to you.. You can clearly spot mistakes and things that don’t flow. I fixed most of it up.

Just for fun, I pasted, Hunter, Bowkoski, Hemingway.
Know I know why they are great.

I have to be greater. It takes time.

#90 Balmuto on 04.21.15 at 8:30 pm

There’s a HUGE difference between 6.5x income (Toronto) and 10.6x income (Vancouver). At these low rates 5-6 times income can be justified. So Toronto is somewhat overvalued. I can’t see how you could come up with the cash-flow to finance 10.6 income unless you had a large downpayment, which most people don’t have. You can barely support a $1million mortgage on a $100k salary, even at these low rates. Vancouver’s multiple is in the stratosphere.

#91 Alex G. on 04.21.15 at 8:33 pm

@ #76 Ogopogo on 04.21.15 at 8:08 pm

Here’s the link, it’s around the halfway point of the article:
http://www.cbc.ca/news/politics/federal-budget-2015-conservatives-dig-into-contingency-to-hit-surplus-1.3041628

#92 Smoking Man on 04.21.15 at 8:36 pm

#51 Made in BC on 04.21.15 at 7:24 pm
“My name is Steven Harper and I approved this budget which helps rich wrinkles and does nothing for the struggling middle class. Please vote for me in the fall”
…….

Screw the book back to fun…

The struggling middle class. Ha, if they are struggling it’s because they lack imagination, drive, ambition and are risk averse.

Tremendous opportunities everywhere so long as you can free your mind of programming, the part in your text book the says trade time for wages.

If your struggling, it’s your own fault, do something about.

Try going two days with positive thoughts, no negative and magicaly your life turns for the better, do it for a month.. You’ll move mountains..

I’m good at it so long as JD is not swaped for wine.

#93 Oslerscodes on 04.21.15 at 8:43 pm

TFSA increase all well and good.

More significant will be the small business tax reduction. That’s another $16k in this millenial couple’s coffers!

#94 Fuzzy Camel on 04.21.15 at 8:47 pm

Garth is right, this chart shows all the house-gasm going off all over. Everyone over 40 is moist and non-stop talking about real estate. Woooo granite countertops like they are getting turned on sexually. Emotion is strong.

Interest rates look ripe for rising in 3-4 months. The implications will be quite interesting.

The looks of shock, what, you mean interest rates go…go…up??! We will see some things happen near the end of the year.

#95 Leo Trollstoy on 04.21.15 at 8:48 pm

“Liberal Leader Justin Trudeau said his party would reverse the TFSA increase if it were in government.

“The TFSA itself, up to $5,000, is an encouragement to people to save and there’s a lot of Canadians who do that,” Trudeau said.

“But the reality is there’s not a lot of people who at the end of the year have $10,000 laying around that they can invest.”

Typical. Libs pandering to the irresponsible.

Trudeau is a clown.

#96 Leo Trollstoy on 04.21.15 at 8:51 pm

What fool is going to take the $10k contribution room and then vote for the party that says they will roll it back? Oh yeah, liberals.

#97 iwill on 04.21.15 at 8:51 pm

Thanks for the TFSA Steve. You have my vote.

#98 TurnerNation on 04.21.15 at 8:58 pm

Well we might be living in H’s open air camp watched over by drones, US guards and internet spys but we have our fat TFSAs!!

Watch what you say online, Party members are every where. Hey my dad grew up in this environment. Did I think we’re different? Human behavior never changes. That knock on your door in the night.

#99 Karen Baker on 04.21.15 at 9:02 pm

Great article. It is important that clients check with their advisor before doing switches on non-reg to reg. switch fees are early withdrawal fees may apply.

You must sell mutual funds. How’s the Porsche running? — Garth

#100 editor on 04.21.15 at 9:07 pm

#89 Smoking Man

Smoking man, you need a good editor, they are like trainers for the champions. They give you the independent good eye you lose with your work after chewing each word over and over again. It’s hard to find a real good one, who you not only trust, but even appreciate, because he/she makes you write better, edit your story you never thought you could.

Keep the deadline – even if it is self-imposed.
The most influential muse is deadline.
For you it’s especially hard to submit, you don’t pay the bills with writing the book and a good day with friendly RSI & Bollinger will make you more than your book in a year or ever.

Writing is hard. It’s just the white nothing and your mind. JD, smokes of any kind will bridge the gap only so much, even the massage par-lour angels can’t fly you over all the way.

It’s just you buddy… you and yourself pulling it out one word after the other…

On the other hand, nothing gets you closer to feel that you can live more than one life than writing a good shit.

#101 John Mc on 04.21.15 at 9:09 pm

#96

Wow good advice and she still gets whacked, even after she gave you a compliment…..

You must be a financial advisor. How’s the Hummer running?

Fine thanks. And nobody should ever pay ‘switch fees’ to change an asset. — Garth

#102 TurnerNation on 04.21.15 at 9:19 pm

This blog is an Adventure in Tirade and should according be taxed.

#103 sotiri on 04.21.15 at 9:20 pm

“…The Economist again fails to mention that population growth for people aged 20-44 in Canada is one of the fastest in the OECD due to an aggressive immigration policy that is spurring demand for housing in major cities.”

This idiot think that Canada started to accept immigrants only in the last 7-8 years? Why have housing price not been influenced by the immigrants of the 90’s?
99.9% of immigrants come to Canada broke and that is the main reason why they leave their countries so how are they able financially push the price of housing in the $1,000,000 range? How come the National Bank Financial’s chief economist doesn’t see any correlation between “massive increase in Canadian home prices” and massive increase in Canadian household debt? The reason that he doesn’t see it is that he makes $$$$ out of Canadians in debt. He is not concerned because of all the massive amounts of money that is insured from the taxpayers. If the home prices are as he says “normal”, why are banks not willing to give mortgages without CMHC insurance? This is simply because they consider it too risky to lend their money but the moment that the CMHC (taxpayers) insure the mortgages, they change their evaluation from too risky to normal. Why shouldn’t they do that? It is easy to be irresponsible with someone else’s money.

#104 lee on 04.21.15 at 9:21 pm

#60

If there are 1.9 million owners with mortgages with negative savings then at least 40 percent must be in Ontario, which means about 400,000 to 500,000 in GTA. My guess is we have 4,000,000 households in GTA so 1 in 10 are under water. This probably means 25 percent of mortgage holders are under water. Do you know what a 1 percent uptick in the mortgage default rate will do to house prices? Ask Floridians.

#105 cramar on 04.21.15 at 9:23 pm

So we get to add another $4500 to our TFSA tomorrow? Wonderful. Going to be making a call first thing. But I heard that Justin has said that if he gets elected, he will reverse the TFSA largesse. He just shot himself in the foot and is helping the Harper cause.

#106 AfterTheHouseSold on 04.21.15 at 9:25 pm

#31 Julie K.
Listed your house

Last time you posted you had listed your house. If you don’t mind, I was wondering how that is going for you.
Is the market, interest, what you expected? Sold?
Regards

#107 Smoking Man on 04.21.15 at 9:27 pm

#98 TurnerNation on 04.21.15 at 8:58 pm
Well we might be living in H’s open air camp watched over by drones, US guards and internet spys but we have our fat TFSAs!!

Watch what you say online, Party members are every where. Hey my dad grew up in this environment. Did I think we’re different? Human behavior never changes. That knock on your door in the night.
………

Do you not observe the hedging in my posts. :)

Let the young be the revolutionary, good luck with this lot.

I just want to write about aliens while getting smashed out of my mind in casinos, flirt with young hot chics, then go to bed with my wife. While she reads my nights typing and laughes herself to sleep. Not that it’s witty, more of, are you serious.. Bahahaha.

#108 Millmech on 04.21.15 at 9:30 pm

#77 Pete
I’m lower middle class and the $10,000/yr I’m socking away is the difference I save by renting and not owning and then some.Love that my landlord is basically filling up my TFSA for me every year.

#109 Cowtown Cowboy on 04.21.15 at 9:33 pm

#16 nick….

So all your friends are trying to sell their houses…..get a life

#110 Revenge | Realties.ca on 04.21.15 at 9:36 pm

[…] Source: http://www.greaterfool.ca/2015/04/21/revenge-3/ […]

#111 gold country on 04.21.15 at 9:41 pm

Looking forward to the boomer rodeo, when we round y’all up and stick you in palliative warehouses. Yeeha. Check out the menu:
soup…$200
sheet…$500
hose down…$800
caring smile…$1500
;)

#112 Smoking Man on 04.21.15 at 9:45 pm

#100 editor on 04.21.15 at 9:07 pm
#89 Smoking Man

Smoking man, you need a good editor, they are like trainers for the champions. They give you the independent good eye you lose with your work after chewing each word over and over again. It’s hard to find a real good one, who you not only trust, but even appreciate, because he/she makes you write better, edit your story you never thought you could.

Keep the deadline – even if it is self-imposed.
The most influential muse is deadline.
For you it’s especially hard to submit, you don’t pay the bills with writing the book and a good day with friendly RSI & Bollinger will make you more than your book in a year or ever.

Writing is hard. It’s just the white nothing and your mind. JD, smokes of any kind will bridge the gap only so much, even the massage par-lour angels can’t fly you over all the way.

It’s just you buddy… you and yourself pulling it out one word after the other…

On the other hand, nothing gets you closer to feel that you can live more than one life than writing a good shit.
……..

That was probably the best advice I’ve ever had on this delema.. And I’ve never even thought about it. I missed the obvious, no one’s perfect.

Thank You.

#113 Republic_of_Western_Canada on 04.21.15 at 9:45 pm

How’d they come up with the 0.28% part?

#114 Panhead on 04.21.15 at 9:50 pm

Man … I’ve seen a few dog’s with “that look” over the years …

#115 Shawn Allen on 04.21.15 at 10:02 pm

Lower Small Business Taxes

#93 Oslerscodes on 04.21.15 at 8:43 pm
TFSA increase all well and good.

More significant will be the small business tax reduction. That’s another $16k in this millenial couple’s coffers!

**************************************
That is a lot of savings implies you have $800,000 in income in small business (plural) as the limit is $500k for the small business rate, I believe.

An unneeded change. One can shelter income in a small business and just pay 11% federal tax now to be 9%. In Alberta it totals 14% now and will be 12%.

Already the business can lower its income by paying personal expenses as business expenses.

Then invest the profit in stocks within the corporation and never sell and you defer taxes for decades?

This seems a silly and unneeded tax break,

like our friend above with $800k in small business income taxed at a very low rate needed a break?

I pay 11% in Alberta and leave the profits in the company so its a low tax bill already.

#116 JacqueShellacque on 04.21.15 at 10:08 pm

Garth, I’m a longtime renter, no house-humper by any means, but I think the “equity risk” metric doesn’t sound particularly alarming as written and explained. If 39% of equity is at risk, then someone whose valuation is $100,000 over their mortgage balance is only potentially out 39 grand on paper in the worst case. This is chump change to most bricklickers, who are eminently inventive when it comes to rationalizing house purchases, even if the equity loss pushes the home”owner” into negative equity territory. I know they wouldn’t be accounting for its opportunity cost, but just trying to think like a mortgage slave. In the same paragraph, however, you cite the 32% decline in the entire value of their residential real estate in the US, but it seems to me that these are separate measurements and not comparable. A 39% equity drop, doesn’t sound too bad, even for those of us who eschew the crippling leverage. A 39% price drop, however, should be positively frightening.

#117 Julie K. on 04.21.15 at 10:09 pm

#106 AfterTheHouseSold

ATHS, not sure if I should be impressed w/your memory OR be a little freaked out you would recall my post from a few weeks back.

Which is it, ATHS?

Anyways, since you did ask:

– 20+ showings Mon a.m. -> Thurs noon
– 3 Pre-inspections (never heard of those before but was told it’s the “new normal” in YVR when multiple offers are anticipated so offers can be written subject free)
– 8 offers presented Thurs afternoon — all over asking
– Sold in ~ 72 hours to the 2nd highest bidder (they wrote a nice house-love letter that sealed the deal over the highest offer)

So, now it’s time to get to know GT a bit better (and learn to, uh, TRUST in someone lesser a fool than I will ever be).

#118 PM on 04.21.15 at 10:11 pm

The Canadian banks, in practice, have pulled back dramatically from the market and basically only make uninsured loans to only the most creditworthy of prospects (ie: very low LTV loans).

Can you back this up in any way?

#119 RayofLight on 04.21.15 at 10:13 pm

84Adam:
For those of you who are voting Conservative because of the TFSA increase, you might want to look at this beforehand:https://twitter.com/preetbanerjee/status/590627612994707456
Removing indexing basically eliminates the benefit of the increase to anyone who is a long term investor. Nice smoke and mirrors trick though!
————————————————————
Not even a nice try. If the funds are invested in a balanced portfolio and making Garth’s projected 9%, the lines will never meet unless inflation >9%. In this low growth world, that’s not going to happen. The argument becomes even more so if the funds are in a value growth oriented portfolio generating returns > 9%.

Actually I referenced 7%. — Garth

#120 cramar on 04.21.15 at 10:14 pm

#113 Republic_of_Western_Canada on 04.21.15 at 9:45 pm
How’d they come up with the 0.28% part?

——–

Answer: Bureaucrats!

Must be the same ‘num-nuts who wrote the Income Tax forms. Multiple X by 5.05% What is the .0005 for? Used to pay the maid to dust the china at 24 Sussex?

Maybe the same ‘num-nut at the BoC who publish the exchange rates. Currently the average 2015 U.S. rate is 1.26191364. Hey, you are not calculating the energy density of the universe! Dummy! The last 6 digits are totally meaningless.

Government. Bureaucrats. Bah humbug!

#121 bdy sktrn on 04.21.15 at 10:14 pm

#73 Boingopo on 04.21.15 at 8:03 pm
How do we invest in the products you when banks deal with only mutual fund portfolios?
———————————————-
but they do more…

ie RBC —> RBC action direct (same idea for others)

1. open action direct (trading) acct. hook it to your online banking click the $$ from any acct to trading acct

*2. buy one or two junior miners, or put it all on tesla.

3. profit

*lower risk choices available too.

#122 bdy sktrn on 04.21.15 at 10:16 pm

i’m thinking i forgot something about underwear gnomes.

good luck

ps: trading acct can be rrsp,tfsa or non reg (try all 3!)

#123 BG on 04.21.15 at 10:16 pm

Again, the NDP disappoints me.

We can all see the TFSA limit increase was a cheap move to gain votes. But it’s still good news for anyone more interested in saving and investing than getting buried in debt.

The fact that in reality, the majority of Canadian choose to not take advantage of it is not a valid argument against the TFSA.

By saying so, I think the NPD is trying to gain votes just as cheaply as the conservatives are.

Maybe they should just join Garth in telling people how a TFSA can be useful to them.

#124 Freedom First on 04.21.15 at 10:17 pm

It pays extremely well to look after #1. I have always avoided paying interest my whole life. It has paid me better than I could ever have imagined. RRSP’s properly managed, the TFSA, and a pension from work, have also proven over time to be very financially beneficial. As Garth often says, money=freedom.

On top of paying no interest, I think anyone who is a non-smoker-as smoking is an expensive health destroying addiction, non-gambler-as not even spending a dime on lottery tickets, which is what I do, and becoming financially literate at a young age, you can live a very satisfying lifestyle while enjoying many different adventures throughout your life.

As Garth recently said, he would change nothing, I feel the same way. I’m just not smart enough to ever think I could ever have done any better, as I have certainly been blessed. No one is ever sure of the future, but what is for sure, is that stupid is as stupid does. And, you can have anything you want in life, all you have to do is pay for it.

#125 Republic_of_Western_Canada on 04.21.15 at 10:21 pm

#86 george on 04.21.15 at 8:21 pm

With debt to income ratio sitting at 164% where would indebted canadians find the money to invest 10 thousand? It’s sad that the middle class is broke and up to their eyeballs in debt all thanks to the RE bubble. The ten G’s TFSA gift should be for everyone but the fact is the majority can’t even put 5 g’s . Harper just showed [..more tripe snipped..]

You’re a bit thick, aren’t you?

In order to entice people away from OD’ing on RE, a fair and feasible alternative to placement of funds for growth is needed. Ergo desto, an exponentially beneficial means has been provided through avoiding taxes – rather than being tempted to gamble on some RE idiot being dumber than thou or on lotteries which you will never win.

Endless social assistance and expansion of the nanny state only leads to substantial inefficiency in the administrative part of the system, and moral hazard of the individual.

And the 10,000 comes from hard savings scratched from the excesses and inefficiencies of daily life. The more one looks at how tough it is to scratch that together, the more you realize how valuable this provision is. But at least it is an assist out of the misery of debt servitude.

#126 Rex Strathford on 04.21.15 at 10:27 pm

Isn’t the TFSA just basically mimicking a ROTH IRA what the Americans have had for years? We are finally catching up in terms of investment and savings encouragement and Trudeau is against this, I wonder if he will be topping up his TFSA tomorrow AM?

#127 markymark on 04.21.15 at 10:29 pm

For those that are so happy about the tfsa room and say will not vote for harper you better listen to what preppy Justin wants to do with the program if and when he gets in………..can you say dismantle.
Budget has to be made law before you ad any money to top up tfsa?
I think I will wait a bit before I jump the gun.

#128 Mort the Mort on 04.21.15 at 10:32 pm

Garthster,

Just when you had me convinced that I should become a financial adviser ,like you, along comes this!

“Inheritance plans and why financial advisers have a lot to fear”

http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/a-finding-on-inheritance-plans-thats-sure-to-send-shivers-down-a-financial-advisers-spine/article24050092/

Looks like I will go back to my original plan of being a mortician to take advantage of the demographic boom in biz around the corner…

#129 John on 04.21.15 at 10:33 pm

#73 Boingopo
Any bank will let you open a self-directed brokerage account for investing in stocks and ETFs. you don’t have to buy the bank’s mutual funds. Or go to questrade.com and open up a TFSA with them. Cheaper commissions.

#130 Mort the Mort on 04.21.15 at 10:37 pm

“#79 Kris on 04.21.15 at 8:14 pm
I sometimes go in our company’s jet to customer sites (No, I’m not an executive, but they let us use it sometimes). We land at private airports (like Teterboro, New Jersey)…..”

Are you one of the dudes from “Criminal Minds” ???

#131 Bottoms_Up on 04.21.15 at 10:39 pm

Demographics of the 2011 election. Boomers really do vote in droves:

http://www.elections.ca/content.aspx?section=res&dir=rec/part/estim/41ge&document=report41&lang=e#p41

#132 Michael on 04.21.15 at 10:43 pm

Vancouver is no San Francisco, it’s more comparable to Seattle, with a ratio of 5.2 compared to Vancouver’s 10.6.

Toronto is no New York, it’s more comparable to Chicago, with a ratio 3.6 compared to 6.5 for Toronto.

#133 Andrew Woburn on 04.21.15 at 10:48 pm

Solutions to Vancouver prices. Instant laneway housing.

http://www.treehugger.com/modular-design/montainer-makes-shipping-container-architecture-easy.html

#134 saltpony on 04.21.15 at 10:49 pm

I just got off the phone to RBC about the new fee schedule.

So my free No Limit Banking will now cost me $83 per year It was free with the proviso of carrying mortgage, credit card and investments with them. And that’s not including the $48 per year overdraft.

I looked at switching to a Day-to-Day package as it’s still free.. and I nearly dropped off my chair. After monthly 12 transactions of any type: debit, credit, bill payment etc (weekly mortgage payments on my 2 properties = 8 transactions alone), RBC will charge $1.00 for EVERY transaction. Like paying the Visa bill or making an investment contribution (scheduled or not) or making an extra payment on the mortgage. A dollar for every debt payment made. This is on top of interest.

I am beyond steamed.

How can they take that kind of money from me without providing a parallel increase in service? Why are they increasing fees?

I have paid them $90k in the last 10 years in interest alone. I paid $100 per year to hold a mutual fund with them for 5 years. Yup, gave them $500 for managing my mutual fund. (It made 1.8% but it cost me 3.3% in MERs. This was all before I read this blog.)

Why do they nickel and dime me to death?

#135 Craig on 04.21.15 at 10:51 pm

Garth, Trudeau said if he is elected he will reverse the $10,000 TFSA change. If he does get elected or Mulcair for that matter, what are the chances that the 10k TFSA gets scrapped in 2016 ?

#136 Trading Naked on 04.21.15 at 10:52 pm

The TFSA dollar limit on this page better say $10,000 when I wake up tomorrow morning: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/menu-eng.html

#137 Mark on 04.21.15 at 11:00 pm

“It is important that clients check with their advisor before doing switches on non-reg to reg. switch fees are early withdrawal fees may apply.”

In-kind contributions of mutual funds shouldn’t incur a ‘switch’ fee. Of course, Garth’s advice is quite applicable here in any event — high cost/high fee mutual funds are definitely hazardous to wealth creation over the long run.

Already the business can lower its income by paying personal expenses as business expenses.

Any “personal expense” paid by a business, which was not incurred for a legitimate business purpose will be denied by the CRA.

#138 editor on 04.21.15 at 11:09 pm

#112 Smoking Man
#100 editor
#89 Smoking Man

Your welcome, Smoking Man…

Just sharing my own experience, I was lucky to have an editor Yoda master. Can’t share him, it happened on the other side of the world.

I am looking forward to read the completed work.

#139 juno on 04.21.15 at 11:10 pm

sweet! too bad most of my co-workers can’t benefit from TFSA or new RRSP, because they are so heavily in debt funding my government salary!

#140 Sally Tripper on 04.21.15 at 11:17 pm

Would you recommend filling the extra TFSA room with a $4500 cash injection or ‘transfer stocks in kind’ from investment acct to TFSA?

#141 AlbertaGuy on 04.21.15 at 11:25 pm

#134 saltpony. Made a note to myself last week when i received same…”BUY MORE ZEB”

#142 AfterTheHouseSold on 04.21.15 at 11:28 pm

#117 Julie K.

My memory isn’t the greatest, but when I saw your post tonight it reminded me, so thought I would ask. Congratulations on the sale Julie!

#143 mdm on 04.21.15 at 11:50 pm

#16…..I’m waiting till 1-2 to buy in Calgary. …people like me who are willing to wait are the reason why your friends can’t sell for they want

#144 gut check on 04.21.15 at 11:50 pm

#134 saltpony – Why do they nickel and dime me to death?
———————————————–

because you let them.

#145 Rabitt One on 04.21.15 at 11:52 pm

TFSA is not for the wealthy.
$41,000 principal + growth is barely tax savings for them.

Stop whining, just stuck up $4,500 tomorrow!

#146 Washed Up Lawyer on 04.22.15 at 12:03 am

Don’t you just hate it when you lose your speaking points on the way to the presser?

The hilarity of Alberta politics. The former Deputy Premier was not supposed to say this:

“Progressive Conservative candidate Thomas Lukaszuk announced Tuesday that he would support an increase in corporate taxes. The former deputy premier, who is running in Edmonton-Castle Downs, said he would follow the wishes of voters who have told him they believe corporations should contribute more to the province’s tax base.”

The prospect of unemployment and the pressure of a +50 % support for the NDP in Edmonton caused a brain cramp in this former teacher’s mind.

We have a horse race here in my beloved Alberta and “Here comes Heartache up the back stretch.”

#147 kommykim on 04.22.15 at 12:06 am

RE:#55 Made in BC on 04.21.15 at 7:31 pm
I don’t understand why it is so hard to just cut taxes.

It’s not hard. It’s just expensive. It is much cheaper to announce a large $ figure non refundable tax credit that only a minority can claim than provide real tax relief. Canadians can’t afford another tax cut. The National Debt would explode. The 2006 GST cuts are proof of that. (Each 1% GST cut= 7 BILLION added ANNUALLY to the debt)

#148 Snowboid on 04.22.15 at 12:08 am

#78 LLewelyn on 04.21.15 at 8:12 pm…

“…Canadians deserve some measure of honesty from their government…”

Having worked for and with many politicians for over 30 years before retiring, I can state the honest ones are few and far between.

And they don’t often last very long, just ask the esteemed professor!

#149 Shawn Allen on 04.22.15 at 12:14 am

Personal Expenses
Mark responded to me at 137:

Already the business can lower its income by paying personal expenses as business expenses.

Any “personal expense” paid by a business, which was not incurred for a legitimate business purpose will be denied by the CRA.

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

Yeah, I figured you would say that. But there is often a certain amount of expense that a business can claim that the individual would have incurred even without the business. There are expenses with both a personal and a business need and yet the business can claim the entire expense.

You own a restaurant, do you really think the family can’t eat there and not pay? that part of the food bill becomes a business expense.

You have a home office and claim a little share of household expenses that would have been incurred even without the business.

The company has a vehicle, do you really think the owner can’t grab some personal use without reporting?

Your business needs you to have a cell phone. Do you think you can’t use it for personal use?

Your business sends you on a conference and you combine it with a vacation but the flight is a business expense…

You would have to be very anal and a Saint to not get at least some personal benefits from a business which were not reported as taxable personal benefits.

Mothers claiming child care expenses get asked to send in receipts routinely. I have had rental property in the past for 13 years and nary a receipt was asked for. I have had a small corporation for 10 years and nary a receipt was asked for. I never took advantage of the system although it seemed like an open invitation was offered. But I do claim my internet connection.

Few of us are Saints and people will tend to interpret the rules in their favor and push the envelope at least a little bit.

Also if a wealthy person with a business is audited and gets hit with some taxes, they often just become more aggressive in future years.

#150 Ogopogo on 04.22.15 at 12:21 am

I will not be voting Liberal for the first time since I started voting. Trudeau’s shameless pandering to the mob of drooling financial illiterates in this country was simply vile. He even butchered his grammar to sound more “everyman.” I’m thinking of course of his “But the reality is there’s not a lot of people who at the end of the year have $10,000 laying around that they can invest.”

Mulcair I expected to act like an anti-TFSA tool, but Trudeau? I wouldn’t dream of voting for the Reformacons of course, so I’ll be voting for the only party left: Green.

#151 Lorne on 04.22.15 at 12:22 am

#20 Paul
Sure vote for Trudeau or the N.D.P better yet lets have a coalition In Ottawa.
Like all things Careful what you wish for.
………….
Either of those 3 possibilities would be a decided improvement over Dictator Steve.

#152 Bottoms_Up on 04.22.15 at 12:28 am

#134 saltpony on 04.21.15 at 10:49 pm
—————————————————
They are squeezing their customers to maintain profits to please shareholders. As simple as that.

Because BoC prime rate went down recently, and mortgage business is in the shitter, they’ve had to drum up extra money somewhere.

#153 Bottoms_Up on 04.22.15 at 12:32 am

#124 Freedom First on 04.21.15 at 10:17 pm
——————————————————-
Ah ha! I’ve got you. You will die about as young as a life-long smoker, if you remain unmarried:

http://www.ibtimes.com/single-people-likely-die-much-earlier-their-married-peers-302411

#154 kommykim on 04.22.15 at 12:37 am

RE: #134 saltpony on 04.21.15 at 10:49 pm
Why do they nickel and dime me to death?

So they can continue upping the dividend to stock holders. Open a discount brokerage account. Buy a TSX index ETF. Lots of banks in that. Mix it in with some Bond and international ETFs and enjoy the lower MER:
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf

#155 ozy - 905 shall drop before 416 on 04.22.15 at 12:43 am

In theory 905 shall drop before 416 – for obvious reasons, the space and number of houses….

But if 905 drops 50% it will cause ripple effects to 416 too … maybe 25%

Can’t wait to see how all of this would unfold…. WHEN and WHERE , hahahahaha

#156 macroman on 04.22.15 at 12:48 am

Garth, you really have the power of prose and your Dawg pics are hilarious.

You have latent Goldbug traits tho. Always calling the demise of Real Estate and the Cando.

Similar to us Goldbugs calling the end of the evil Uncle Buck Empire.

One day, we will both be right. Let’s hope the oxygen still fills the lungs…

#157 Last of the Boomers on 04.22.15 at 12:52 am

@#15

Just a quick note to pass on the information that you cannot contribute to a TFSA for an 18 year old until January the following year.

#158 macroman on 04.22.15 at 1:10 am

Smoking Man #89, you thought your writing is slow, wait until your editor gets a hold of it.

Back to page one and the second coming of Jesus.

#159 Freedom First on 04.22.15 at 1:16 am

#111 gold country

Nice try. I already have it worked out that all of my money will be untouchable. I will have monthly income streams that will meet all of my needs. This will give the business attending to my every need to treat me as I want to be treated, so as to keep me healthy and alive as long as they can. My needs also include a weekly hand massage by a pretty young woman;

gold country, have us Boomers taught you nothing?

#160 TRT on 04.22.15 at 1:53 am

Anyone under 40 that votes Con-s deserves what they get.

Let Boomers pay for their own healthcare–Bring on age based health premiums.

Wealth based taxes until the boomer cohort passes. Income should not be taxed.

#161 SWL1976 on 04.22.15 at 2:21 am

Funny how the most enlightend comment on here this evening comes from…

#74 Buddha

Maggie Thatcher famously quipped, ” We are all prostitutes…” So true.

Amazing how cheaply some of you can be bought.
and with your own money.

Buddha

———————-

Although it is much easier to understand how we have gotten into the mess we are in after reading the comments from many boomers here.

Your programming runs deep

Remember if you are not part of the 0.01% they want your money too, they are just a little more patient in getting it

There is mass distress coming to our financial system and a mass awakening going on…

What do you value most?

#162 drydock on 04.22.15 at 2:26 am

#10 Hot Albertan Money on 04.21.15 at 6:19 pm
FIRST? (What do I win?)
——————————————————————–
The shitboy award,don’t let it go to your head.

#163 equity risk on 04.22.15 at 2:30 am

someone suggests losing 40% of $100,000 equity in the house is not a big deal.. comment #116

Garth, please dig deeper into this. There clearly is a need for more information.

After a long bull run, the smart money walks and takes money off the table. Equity is completely irrelevant unless the bids are supporting the asks. When the buy side collapses due to exhaustion or a lack of fresh capital, the sell side is trapped and equity melts until it hits a floor. That’s where smart money will hopefully come back to the table.

#164 drydock on 04.22.15 at 2:34 am

#37 AGrumpyHobbit on 04.21.15 at 7:00 pm
Great so now that I can put more money TFSA and avoid paying tax, let see how much I can save

What I can afford to invest in TFSA now ZERO
Under new rules, still ZERO

Like the vast majority of Canadians, this mean no Benifit to me, but you know, I can retire later, with less social plans, with less money for transit, with not addressing issue of Climate Change, with less protection of our fresh water, while muzzling scientist, and don’t even get me started on that pseudo fascist domestic spying law called C51
——————————————————————
Put down the ring,step away from the ring.

#165 jane 24 on 04.22.15 at 3:27 am

Today’s comments are hilarious.

First the Economist is the financial bible of the world’s wealthy and they won’t even bother with what some unknown Canadian banker has to say in rebuttal. Those numbers on the Economist’s chart are frightening.

Second why are so many of you celebrating such a pathetic tax break as a TFSA. The limit on these are now a pathetic $10,000 Cdn or about £5500 sterling per year according to this article.

Sheltering previously taxed assets from further tax is offered in many countries at far more generous limits than Canada’s tiny $10,000 Cdn. It is not a Canadian invention.

For example in Britain a TFSA is called an ISA and the tax sheltering limit for this year is £15,240 or $27,432 Cdn per person or an incredible $54,864 Cdn per couple per year in any combo of cash and stocks.

Rather than celebrating you should be rioting in the streets at high Canadian taxes.

#166 avenirv on 04.22.15 at 6:35 am

#12 james

you’d be surprised to find many neurosurgeons/MDs and traders in Canada and USA have immigrant parents. When i say many I mean more than 20%.
then check silicon valley, if the top dog is not an immigrant then those (on executive positions) below him are immigrants. same on Wall Street.
surprise, surprise…

#167 earthboundmisfit on 04.22.15 at 6:37 am

Awful lot of folks on here willing to be bought with their own money. Small minded fools on whom Harper is counting …. to fail to see the havoc that he has wreaked on my country. Sad. Very, very sad.

#168 Kevin on 04.22.15 at 7:23 am

Move that money from your taxable non-registered account into your TFSA tomorrow morning, kids, and then invest the heck out of it.

Everybody who has so much extra money that they’ve already maxed out their TFSA and RRSP for 2015, and has accumulated thousands more in a non-registered account they don’t know what to do with, raise your hand!

Garth, be realistic. The reason there were already so few couples maxing out their TFSAs is because household budgets are stretched to the limit. Raising the limit of the TFSA is a hollow gesture. What married couple has that much extra money in their budget? The 2015 RRSP contribution limit is around $24,000. So a married couple (assuming they’ve maxed it out already every previous year and are not carrying-forward any unused contribution room) has $48,000 of RRSP room this year. Now another $20,000 in TFSA room? So they’re supposed to come up with $68,000 to invest? Every year? That’s $5,700/month! And if they don’t, then what? They’re irresponsible slackers failing to prepare for their futures?

Didn’t you get the memo? This is a blog for 1% dogs. — Garth

#169 Mike in Toronto on 04.22.15 at 7:29 am

#134 saltpony

http://www.rbcroyalbank.com/servicefeechanges/

I have my horrible RBC Rewards Visa and my $1k token GIC as an “investment” to qualify for the $4/mo rebate on my $4/mo fees.

$2 per transaction at a POS. Savage. $2 to *PAY* your visa *bill*?

How is this stuff legal?

#170 Mel 2 on 04.22.15 at 8:06 am

Can I move investments from a non registered account into my TFSA without first cashing them in?

Yes, but capital gains tax may be triggered. — Garth

#171 Victor V on 04.22.15 at 8:10 am

http://www.advisor.ca/tax/tax-news/tfsa-limit-is-10000-what-does-that-mean-for-clients-181374

Clients, especially those with high incomes, will benefit from the TFSA contribution limit rising to $10,000, announced in today’s federal budget.

The increase is proposed to be effective as of January 1, 2015.

Investors who put the full $10,000 a year in a TFSA will save $3,708 in tax over 10 years — a 12% increase in after-tax investment income, based on a 5.5% rate of return— compared to saving $5,500 in a TFSA and $4,500 in a non-registered account.

The government has decoupled TFSA limit increases from inflation, meaning any further increase to contribution limits will have to be legislated.

Clients over age 18 who have not contributed since the TFSA’s creation in 2009 now have $41,000 in contribution room. Carol Bezaire, vice-president of tax and estate planning at Mackenzie Investments, says CRA won’t penalize anyone who adds another $4,500 to their TFSA after April 21, 2015, even though the budget hasn’t technically passed yet. That’s because CRA considers the budget’s pronouncement law.

Exactly. Have at ‘er. — Garth

#172 TurnerNation on 04.22.15 at 8:18 am

Cost of buying one vote: $4500 x marginal tax rate?

#173 Nagraj on 04.22.15 at 8:31 am

#59 crossbordershopper

You haven’t posted for a while. Glad to see you back. If it weren’t for posts like yours I wouldn’t slog thru all the comments – so many of which amount to people with a little somethin’ congratulating themselves on havin’ a little somethin’. Oh brother.

Many many years ago I was at a town hall, the topic was rent control, and the hall was filled with poor renters. Lo and behold some bee-hived bitch gets up in the back and yaps – with an English accent no less – “What about my stocks?! What about my investments?!” Some guy in the back: “F- yerself!”

Looks to me like Trudeau just won the election. (And Oct is a ways off yet.)

#174 Ralph Cramdown on 04.22.15 at 8:41 am

I see Jim Prentice’s campaign is reduced to making its own metaphors:

http://calgaryherald.com/news/local-news/alberta-premiers-election-bus-collides-with-suv-one-minor-injury-reported

#175 Ralph Cramdown on 04.22.15 at 8:54 am

#168 Mike in Toronto — Re: RBC fees “$2 per transaction at a POS. Savage. $2 to *PAY* your visa *bill*? How is this stuff legal?”

It is legal because you have a choice. I’m sure some blog dogs have managed to get competitive pricing (and service?) out of RBC. But to my eyes, it is an institution that coasts on being the biggest. It never seems competitive (i.e. a leader) on interest paid, interest charged, or convenience. If I had to guess, I’d say the post popular answers to “I bank with RBC because ________” would be “because my parents did” (for native Canadians) and “because it is Canada’s biggest bank” or “because it has Royal in the name” (for immigrants).

It’s the bank for people who don’t shop around. It’s a joke. I remember seeing a poster outside a tony suburban Vancouver branch a few years ago that proudly announced “Now Open Mondays!” and thinking to myself “seriously?”

I think ‘Dumb, fat and happy’ probably describes the management, the shareholders and the customers equally. Where does the excess gravy go? To fund RBCs strategy of regularly buying US assets at high prices and disposing of them some years later at low prices.

#176 Ray Skunk on 04.22.15 at 8:56 am

Well, I wasn’t going to bother voting at all this election – I’m a traditional Conservative voter but as many in the peanut gallery have shown, Steve’s policies have alienated those he is trying to court.

However, if it’s true that Trudeau will reverse the TFSA, then I’ll be at the ballot box in October, voting strategically for whoever is most likely to prevent his candidate from winning my riding (NDP – I never thought I’d see the day!)

The Butts-advised Trudeau will be a federal Wynne; not allowing us to invest in ourselves, instead forcing us in to their nanny schemes where they skim off the top to their friends and family and offer us nothing in return. I’m decried as “rich”, yet I make what appears to be comparable to an average government salary, but without the iron-clad DB pension. Just because I haven’t enslaved myself to the RE cult I must be punished to pursuing a different path.

Harper’s not perfect, but the Liberal cancer that has infected Ontario will spread to the RoC under a Trudeau government.

#177 Daisy Mae on 04.22.15 at 8:58 am

#3 Weenerman: “Still not voting for the Harper Conservatives.”

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

Yeah…their election budget and sleight of hand shenanigans don’t impress me, either…..

#178 DJG on 04.22.15 at 9:03 am

I would love to believe that there is going to be a significant correction in central Toronto neighbourhoods, but I don’t really see how this will play out. [Disclosure: the main reason I want this to happen is so that I can renovate my house without it being a virtual bidding war to get the attention of any decent contractor…]

The median household income in so many of the neighbourhoods where prices are crazy is orders of magnitude greater than the overall Toronto number. In Rosedale, or even in Summerhill where I live, it’s much higher than it is in the Upper East Side of Manhattan. In Forest Hill, the Annex, even Leaside, incomes are well into the high $300s ($600s for Forest Hill). These people aren’t panic selling at a 30% discount any time soon; the only thing that might change is that the panic buying at a yearly 10% escalation will stop.

As with all these trends, I think the story is going to be that the people in the suburbs whose prices have drifted up along with the core will be the ones left seriously underwater.

#179 Daisy Mae on 04.22.15 at 9:10 am

#5 Ronaldo: “……….a $1.4 billion surplus for contingencies.”

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

FROM contingencies….

#180 CalgaryRocks on 04.22.15 at 9:20 am

#168 Mike in Toronto on 04.22.15 at 7:29 am
#134 saltpony

http://www.rbcroyalbank.com/servicefeechanges/

I have my horrible RBC Rewards Visa and my $1k token GIC as an “investment” to qualify for the $4/mo rebate on my $4/mo fees.

$2 per transaction at a POS. Savage. $2 to *PAY* your visa *bill*?

I haven’t done business with the nickle and dime thiefs at RBC in 15 years. But I take it that they’re all going the same way. I would try Scotiabank or PC Financial. I still use them to store Canadian $.

I have a Chase Premier account in the US. Everything is FREE, FREE, FREE! Oh, did I mention, it’s all FREE!

Dumped my old US bank ‘Bank Of America’ because they acted like they’d never seen me before when I moved back to the US after an 8 year absence.

Whereas Chase said, welcome back, gave me my Premier account and a credit card and had me on my way in less than 1 hour. Almost 1 year later my FICO score is at 780 which means we can rent pretty much any apartment we want, when we want it. All landlords welcome us.

God bless the USA

#181 Daisy Mae on 04.22.15 at 9:21 am

#17 Loving: “23,500 – getting rid of that extra 0.”

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

Oh, that’s good! The CRA will be all over you for over- contributing! LOL

#182 4 AM Sunrise on 04.22.15 at 9:25 am

#168 Mike in Toronto on 04.22.15 at 7:29 am

The $1 per transaction at a POS only applies if you don’t have a few extra seconds to insert your card and enter your PIN at the terminal. I agree that the fee to pay your own Visa bill is savage. The changes almost made me close my accounts with RBC.

#183 Katherine on 04.22.15 at 9:25 am

Thoughts?
http://business.financialpost.com/personal-finance/mortgages-real-estate/forget-gold-buy-a-vancouver-condo-if-you-want-to-hoard-your-wealth-says-worlds-biggest-money-manager

Offhand, meaningless comment from a guy you never heard of. But I agree, gold is kaput. — Garth

#184 Nathan Green on 04.22.15 at 9:27 am

As millennials are racked up with debt from school and the job market is looking pathetic, they are hit with another budget that does absolutely nothing to address the incredibly weak market they are facing… and this is somehow revenge? Revenge for what exactly? I’m curious why so many here, including Garth, buy into the “boomers vs millennials” mentality? Do you hate the new generation that much? How much more will you gleefully see them get punished until you realize without them our economy is headed toward depression. Good luck getting any sort of reasonable health care when the millennials are unable to pay off their debts, let alone contribute to the social system.

I’ll say this again, this false narrative of “boomers vs millennials” is only meant to divert from the real conflict which is between the working class and the owning class in this new rentier economy. Some of the reactions in the comments are extremely immature from people who are supposedly in the boomer generation. It’s such a shame that rather than being in solidarity with our fellow man, one segment of the population mocks those who are drowning in a pool of debt and this doesn’t only apply to those duped into getting a mortgage. If you think Canada can keep moving forward with such divisiveness, then I hope the inevitable depression doesn’t impact your investments too much, because it will ravish this country… maybe then some here will be able to sympathize with the struggles of the working class

#185 Daisy Mae on 04.22.15 at 9:42 am

#105 Cramer: “He just shot himself in the foot and is helping the Harper cause.”

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

Liberals just can’t seem to get it right when it comes time to chose a leader…..and so, they fail us.

#186 Shawn Allen on 04.22.15 at 9:48 am

Few will benefit from higher TFSA

Kevin said:

So a married couple (assuming they’ve maxed it out already every previous year and are not carrying-forward any unused contribution room) has $48,000 of RRSP room this year. Now another $20,000 in TFSA room? So they’re supposed to come up with $68,000 to invest? Every year? That’s $5,700/month! And if they don’t, then what? They’re irresponsible slackers failing to prepare for their futures?

Didn’t you get the memo? This is a blog for 1% dogs. — Garth

****************************************
I agree it’s maybe 1% of mid career married couples with kids that will benefit.

A bunch of others will favor TFSA over RSP and will ultimately be hurt by that because they will almost inevitably spend the money way before retirement. (Often on a house including renovation). With RRSP most people consider it untouchable due to the tax (repayment of the government’s 40% or so share).

Really a budget for the wealthy in a lot of ways.

As Garth says the 1%. The 1% are also powerful but in the end the 99% will outvote them easily.

#187 Bottoms_Up on 04.22.15 at 9:48 am

#5 Ronaldo on 04.21.15 at 6:14 pm
————————————————–
Actually, most families make no where close to $289,000.

Let’s say (gross) family income is $80,000.

The $1.4 billion surplus is not just from a ‘reduced’ contingency fund. So let’s say $500 million was ‘taken’.

0.5 billion on 290 billion revenue is 0.17%.

So a family earning $80,000, instead of ‘setting aside’ $136 for the year, they are using it to not take on extra debt.

Wow. A whole $136. What are they going to do? How are they going to recover from such a ‘loss’???

A country has many ways to raise funds to finance expenditures. Having a smaller contingency fund is not a big issue, unless of course we’re talking about Alberta robbing its for decades.

#188 Daisy Mae on 04.22.15 at 9:48 am

Wikipedia – A coalition government is a cabinet of a parliamentary government in which several political parties cooperate, reducing the dominance of any one party within that coalition….

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

Someone mentioned this possibility. Maybe it’s our only hope….

#189 estrella on 04.22.15 at 9:50 am

Comparing Canadian to US in terms of real estate is ridiculous. First of all, Canadian incomes cannot compare to those respective city and furthermore Americans use interest from their mortgages to deduct their income taxes. Whoever did that comparison is just trying to make things look better for their own benefit.

As to the elections, it will come down to “THE GREATER FOOL” or perhaps it will have to be “THE LESSER EVIL”…

I say blue tie will be my vote. At least I know what to expect from that crowd.

#190 Daisy Mae on 04.22.15 at 9:54 am

#154: “#124 Freedom First on 04.21.15 at 10:17 pm
——————————————————-
Ah ha! I’ve got you. You will die about as young as a life-long smoker, if you remain unmarried…”

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

Poor lifestyle habits and high stress levels would be more of a factor…being single brings freedom and independence. Don’t knock it! ;-)

#191 Smoking Man on 04.22.15 at 9:54 am

#183 Nathan Green on 04.22.15 at 9:27 am
As millennials are racked up with debt from school and the job market is looking pathetic, they are hit with another budget that does absolutely nothing to address the incredibly weak market they are facing… and this is somehow revenge? Revenge for what exactly? I’m curious why so many here, including Garth, buy into the “boomers vs millennials” mentality? Do you hate the new generation that much? How much more will you gleefully see them get punished until you realize without them our economy is headed toward depression. Good luck getting any sort of reasonable health care when the millennials are unable to pay off their debts, let alone contribute to the social system.

I’ll say this again, this false narrative of “boomers vs millennials” is only meant to divert from the real conflict which is between the working class and the owning class in this new rentier economy. Some of the reactions in the comments are extremely immature from people who are supposedly in the boomer generation. It’s such a shame that rather than being in solidarity with our fellow man, one segment of the population mocks those who are drowning in a pool of debt and this doesn’t only apply to those duped into getting a mortgage. If you think Canada can keep moving forward with such divisiveness, then I hope the inevitable depression doesn’t impact your investments too much, because it will ravish this country… maybe then some here will be able to sympathize with the struggles of the working class
………

People chose to be working class, it’s a Bonifide choice. Conrad Black, a convicted Felon, quite broke at the moment from court and problems..

Can you ever see him serving coffee, or washing dishes..

It’s a choice, stop feeling sorry for yourself, self excile from prospetity.

Shake off your programing…. And never look back, we’ll mabey, once or twice, just to gloat..

#192 saskatoon on 04.22.15 at 9:56 am

#75 Macrath

is this a metaphor?

#193 Yyc not retired on 04.22.15 at 10:00 am

Someone made a point that they banked with RBC because their parents did – did you see they are charging on KIDS accounts now too? Smart parents won’t be opening account for jr. at RBC anymore.. Kinda short sighted on the banks part because its true- we bank where are parents do!

#194 CalgaryRocks on 04.22.15 at 10:10 am

187 Daisy Mae on 04.22.15 at 9:48 am
Wikipedia – A coalition government is a cabinet of a parliamentary government in which several political parties cooperate, reducing the dominance of any one party within that coalition….

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

Someone mentioned this possibility. Maybe it’s our only hope….

I think the Liberals should merge with the NDP. It would certainly make for entertaining politics.

After 4 years in power I doubt that either brand will be re-electable for maybe 1 or 2 generations. And hey, cheaper RE after they burn what’s left of the Canadian economy to the ground.

As you say, you’re only hope.

#195 Lillooet, BC on 04.22.15 at 10:15 am

#7 Mike S on 04.21.15 at 6:17 pm
[…]

I probably missed it?

You mean I can contribute an extra 4.5K this year (on top of 5.5K already contributed)?
+++++++++++++++++++++++++

Another dude failed reading comprehension test!

#196 jess on 04.22.15 at 10:15 am

but cereal without milk is useless….

========
April 1, 2015
CFTC Charges Kraft Foods Group, Inc. and Mondelez Global LLC with Manipulation of Wheat Futures and Cash Wheat Prices
CFTC also charges violations of position limits and noncompetitive trading

According to the CFTC Complaint, in response to high cash wheat prices in late Summer 2011, Kraft and Mondelez developed, approved, and executed in early December 2011 a strategy to buy $90 million of December 2011 wheat futures, which amounted to a six-month supply of wheat. The CFTC Complaint alleges that Kraft and Mondelez never intended to take delivery of this wheat and instead executed this strategy expecting that the market would react to their enormous long position by lowering cash wheat prices and strengthening the spread between December 2011 wheat and March 2012 wheat futures. Those price shifts did occur and, according to the CFTC Complaint, Kraft and Mondelez earned over $5.4 million in profits.

The CFTC Complaint also alleges that on five dates in early December 2011, Kraft and Mondelez held long positions in December 2011 wheat that exceeded the CBOT’s 600-contract speculative spot month position limit by as much as 2,110 contracts without having a valid hedge exemption in place or a bona fide need for that quantity of wheat.

Finally, the CFTC Complaint alleges that beginning in or about 2003 and continuing through January 2014, prior to each of the five annual delivery periods for CBOT wheat, Kraft and Mondelez conducted off-exchange futures transactions between two separate corporate trading accounts that did not comply with exchange rules for noncompetitive, off-exchange futures trades.”…

#197 TurnerNation on 04.22.15 at 10:31 am

Dollarama stock went kaput as expected.

#198 Dup on 04.22.15 at 10:43 am

What did J.T. say? He will reverse the TFSA back if he gets elected? Why would you do that?

TFSA is not a hand out, it keeps the Gov hands out of our hard earned pot. I am not rich, but I do not expect hand outs either. Who wants hand outs should should look at a communist country. We are becoming a society of hand outs, and dying to get a job in the government.

They should not have taken the inflation indexing on the TFSA away. The conservatives got my vote for now…

#199 tkid on 04.22.15 at 10:45 am

I am thinking of putting the money in my non-registered account into the equivalent in a US bank. Now that the exchange rate has bounced up 5% it seems to be the time to do so.

I want at least some of my money the hell out of Canada if the Federal version of Wynne gets into power. Yeah, I’ll probably have to fill out extra forms come tax times. It is this or buy a townhouse in Florida.

#200 The American on 04.22.15 at 10:48 am

At #132: Michael, BINGO! You hit the nail right on the head with your comparison of these cities. Vancouver doesn’t even come close to San Francisco. Vancouver, on its very best day is a lame duck even compared to Seattle. Toronto is at its best a Chicago. That’s the heart of the matter, and anyone who has been to these cities would agree (barring many blind Canadians).

#201 Rabbitt One on 04.22.15 at 10:49 am

Just FYI

Those who turn age 19 this year in B.C..
You have $15,500 limit now.

As you know, legal age in B.C. is 19, and you only can open TFSA account in the year you turn 19, but TFSA limit accumulated since you are age 18.

#202 The American on 04.22.15 at 10:53 am

At #188: Estrella, correct, Americans do have the benefit of deducting mortgage interest expense each year as a tax deduction. What we do not have is the completely exempt capital gains tax that Canadians DO have when they sell their homes. Americans are subject to a capital gains tax over $250,000 as a single person and a gains tax over $500,000 as a couple. Also, Estrella, let’s not forget the fact that Americans pay 4 to 10 TIMES the amount that Canadians do for property taxes. That’s right, folks, Americans property taxes are insanely high compared to the prices paid for property taxes in cities across Canada.

#203 RainBird on 04.22.15 at 11:05 am

RE: #134
“Mix it in with some Bond and international ETFs and enjoy the lower MER:
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf

Can someone please explain why you would invest in this kind of portfolio? For example VXC ETFs has a yield of 1.5%. The GIC is better than that. Other yields are also pathetic. So what is the big deal?

#204 Paul on 04.22.15 at 11:07 am

Well I will vote for Harper not because of the T.f.s.a. Increase but because of Trudeau and The NDP.
As a matter of fact time to send in my contribution to there election war chest!

#205 gut check on 04.22.15 at 11:08 am

@ #183 Nathan Green on 04.22.15 at 9:27 am

——————————————-

I’m a Gen X parent of a Millennial and I agree with you. The commentary today is disheartening but not shocking as my Boomer parents are class A examples of “no one ever had it as difficult as we did and we deserve every penny from anywhere we can get it no matter if that means taking it straight out of the pocket of our children or grandchildren. No matter if that means poisoning our environment. No matter if it means we’re squeezing the pension system of TWO countries. No matter if it means we skive around taxes as long as we don’t get caught.”

Still, every individual is different, and I’m refusing to play the Generational Warfare game any more.

It is classic divide and conquer because the system is so rickety right now that if the working class would unite the game would be up. It’d be over for the 1%. They can’t have that so they make us fight about stupidity amongst ourselves. Sometimes I wonder if Garth wasn’t actually sent out of the government to stir the pot, still working away for them – set up as some kind of champion of common sense as a foil for Harper, all the while he’s just the ‘good cop’ holding the handcuffs behind his back.

Did I make you come here to get free advice? Don’t let the door hit you on the way out. — Garth

#206 Mike T. on 04.22.15 at 11:09 am

‘There is mass distress coming to our financial system and a mass awakening going on…’

indeed there is

unfortunately the ‘awakening’ is being lead by our handlers and they are just corralling the herd into the next phase

they are waking us up but the next round of traps are already set – the spiritual people are calling it a Golden Age (it’s a trap)

#207 Leo Trollstoy on 04.22.15 at 11:24 am

As Garth says the 1%. The 1% are also powerful but in the end the 99% will outvote them easily.

The financial standing and size of the Electorate is irrelevant compared to for whom the government caters to. Big unions? Big corporations? The rich?

#208 onpar on 04.22.15 at 11:35 am

After looking at the details of this budget, you would have to be a greedy sociopath to vote for Harper and his minions. What kind of society are they trying to build? I am all for smart financial planning, but at the end of the day we are trying to create a strong society for ourselves and for your children. The psychotic “got mine” attitude has turned to US into a completely polarized nation and I fear that Canada is following suit. Stop voting for the interest of your own wallet and start thinking about the legacy your generation will leave.
I am 38 and I’ve sat back and watched the Baby Boomers ruin not only the environment, but the economy too. The boomers are nothing but a savage group of selfish, narcissistic tit-heads who I can out-drive on a golf course with one arm. Go die quietly like a nice, old dog… and leave us to clean up this unbelievable mess.

#209 Herald of the Apoc on 04.22.15 at 11:35 am

“boomer revenge deal with it”

Millenial revenge: You have no grandchildren to visit you, your legacy, and genetic heritage, dies with the children you tell to “deal with it”

Enjoy your barren branches boomers, your lines are at an end.

Deal with it.

That was ugly. — Garth

#210 Craig on 04.22.15 at 11:58 am

Re : #170 Victor V

Carol Bezaire, vice-president of tax and estate planning at Mackenzie Investments, says CRA won’t penalize anyone who adds another $4,500 to their TFSA after April 21, 2015, even though the budget hasn’t technically passed yet. That’s because CRA considers the budget’s pronouncement law.

Exactly. Have at ‘er. — Garth

Before I make my extra $4500.00 TFSA contributon I decided to check with the CRA to make sure it is legal. They agent told me that in this instance ( TFSA increase to 10k ) they have yet to receive any direction and therefore their stance is that the TFSA rule change will have to wait for Royal Assent. After that I called the Ministry Of Finance but they referred me back to the CRA. I called back the CRA and got the same answer from another individual ( wait for Royal Assent). He said they are hoping for Royal Assent before July 1,2015. As a result I’ll be waiting a day or two for more clarification on this matter. Perhaps anyone else in the know can help us out with some further information. Thank you.

CRA has already indicated the budget is law as far as it is concerned. This is standard procedure with tax measures. — Garth

#211 Daisy Mae on 04.22.15 at 12:05 pm

#166 Earthbound: “Awful lot of folks on here willing to be bought with their own money. Small minded fools on whom Harper is counting …. to fail to see the havoc that he has wreaked on my country. Sad. Very, very sad.”

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

Yes, it is.

#212 editor's editor on 04.22.15 at 12:06 pm

#138 editor on 04.21.15 at 11:09 pm
#112 Smoking Man

Your welcome, Smoking Man…

You’re welcome…;)
————
it did seem like some pretty spot-on advise.

#213 Nuke on 04.22.15 at 12:09 pm

TheTFSA, RRIF change are good. Also the annual $10,000 home improvements to help with assisted improvements. Lots of stair elevators, bathroom and kitchen updates?

The $1million small business cg deduction is good as well the cg exemption on private business and real estate sales proceeds to a charity. Old and wealthy tax payers should be happy.

#214 TurnerNation on 04.22.15 at 12:11 pm

Despite looming dictates upon our freedumbs this election will become a one issue race. JustLefty prying our excess TFSA contributions out of our cold hands.

#215 BottomsUp on 04.22.15 at 12:14 pm

Check this one out: Budget offers break on RE investment gains by donating to charity

http://business.financialpost.com/personal-finance/taxes/federal-budget-2015-offers-a-break-on-real-estate-investment-gains-by-donating-to-charity

To qualify, you have to sell your real estate to an “arm’s length party” — someone not related to you — and then donate the proceeds within 30 days.

If a portion of the proceeds is donated, the exemption from capital gains tax is applied to that portion. The new measure, which would reduce federal revenue by about $265 million over the 2016–17 to 2019–20 period, applies to donations related to properties sold after 2016.

#216 fred flint on 04.22.15 at 12:27 pm

What exactly are you people rushing to move money into in a TFSAs? Everything is way overvalued right now. Very bad time to be putting money into ETF’s or stocks of any kind imho. I am waiting for at least a little bit of a pullback. Traditionally happens between Jun-Oct.

That is why the saying “Sell in May and go away”

If you are investing for a long period, it makes absolutely no difference. Stop trying to time the market. — Garth

#217 bdy sktrn on 04.22.15 at 12:28 pm

#133 Andrew Woburn on 04.21.15 at 10:48 pm
Solutions to Vancouver prices. Instant laneway housing.
—————————
not until they can stack ’em higher.

too much footprint/living area. laneways as currently built in van always have a loft/second level.

we have been looking at a few multiplexes in nanaimo, the prices are crazy low (0.25x to van) but the rents are only 0.5-0.6 of van. most places seem to carry the costs at current rates.

#218 BCD on 04.22.15 at 12:43 pm

My wife and I are by no means rich. But we make upwards of $150K a year combined and are able to put between 20-30K in our TFSA’s every year for the past couple of years. Next year’s goal is to save 40% of after tax income. Most people don’t realize that our lifestyles in Canada are bleeding money through the seams. . .hot water tanks, eating out, alcohol, heating huge homes, internet devices. Cutting down in some of these areas can have a profound effect on saving.

#219 chapter 9 on 04.22.15 at 12:48 pm

“Better the devil you know than the devil you don’t”.
Right now I am not happy or impressed with any political party, your voting for the best of the worst. Not exactly the best option for running this great country.
TFSA, of course Justin Trudeau would reverse it. Doesn’t EVERYONE have a trust fund???

#220 Peak RE Insanity? on 04.22.15 at 1:04 pm

re: #182

Thoughts?
http://business.financialpost.com/personal-finance/mortgages-real-estate/forget-gold-buy-a-vancouver-condo-if-you-want-to-hoard-your-wealth-says-worlds-biggest-money-manager

Offhand, meaningless comment from a guy you never heard of. But I agree, gold is kaput. — Garth

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

Desperately flogging condos in Vancouver…

Someone just rang the bell at the top.

Condos aren’t appreciating and the fees and insurance are worse than negative interest. Sure, rent out the condo and hire a property management company.

I’d rather see the dust collect on my stash and hold short term USTs until the rates go up this year.

Rates will go up and probably much faster than most people dare to contemplate.

#221 Snowboid on 04.22.15 at 1:08 pm

#179 CalgaryRocks on 04.22.15 at 9:20 am…

“…I have a Chase Premier account in the US. Everything is FREE, FREE, FREE! Oh, did I mention, it’s all FREE!…”

Same here, only with BMO Harris. Nice thing there is they offer US credit based on our Canadian scores!

In fact, we haven’t a Canadian or US account/credit card with fees for a few years now.

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

#201 The American on 04.22.15 at 10:53 am…

“…let’s not forget the fact that Americans pay 4 to 10 TIMES the amount that Canadians do for property taxes…”

That’s not the case in Arizona, taxes are on par with BC property taxes – but given that homes are about 1/2 the price the actual tax bill is much lower in AZ.

The assessed limited property value (which the taxes are based on) in the Phoenix area is always far less than the market value.

In the case of our Arizona home our tax bill is half what an equivalent home in Kelowna BC would be – and that’s even with the extra we pay in AZ as non-resident owners.

#222 Doug in London on 04.22.15 at 1:10 pm

@fred flint, post #215:
You could always buy stuff that’s on sale now like XPF, CPD, or AHY.UN. If you take the longer view, put a lowball offer in on XEG or USO-NY should another oil pullback occur.

#223 Bottoms_Up on 04.22.15 at 1:14 pm

#183 Nathan Green on 04.22.15 at 9:27 am
—————————————————–
Good post, we have been down this road on this blog many times before. Humans like to draw lines between each other….human nature?

Take any group of humans, have them born under the same circumstances, and they will have that general mentality of their generation/demographic. Boomers would have the outlook of millenials had they been born 30-40 years later. Millenials would be behaving as boomers had they been born 30-40 years earlier.

It’s all so predictable.

#224 Harper hates Canada on 04.22.15 at 1:30 pm

Harper only cares about the today’s rich while kicking the can of debt and problems down the road. We have always known harper and his policies are major future problems but to openly come out and admit it just proves Harper has to be kicked out.

TFSA changes a problem for ‘Stephen Harper’s granddaughter to solve,’ Joe Oliver says

That’s Harper for you to care about the 1% and screw over the next generation.

#225 Nagraj on 04.22.15 at 1:54 pm

Justin Tudeau on his way to 24 Sussex Dr.

https://www.youtube.com/watch?v=LXOCed3G5eg

#226 Nagraj on 04.22.15 at 1:57 pm

Re #224
Video unavailable! Okay, google Ranveer Singh Tattad Tattad, and there you are.

#227 Victor V on 04.22.15 at 1:58 pm

185 Shawn Allen on 04.22.15 at 9:48 am

A bunch of others will favor TFSA over RSP and will ultimately be hurt by that because they will almost inevitably spend the money way before retirement. (Often on a house including renovation). With RRSP most people consider it untouchable due to the tax (repayment of the government’s 40% or so share).

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

Surely you’re aware of the HBP Plan and the millions of Canadians who have raided their RRSPs to fund real estate purchases?

http://www.greaterfool.ca/2014/07/13/regrets/

#228 Jim B on 04.22.15 at 2:01 pm

Lovely chart by Ross Kay, but how does he (or, rather, the chart) come up with the 39% figure? What are the inputs? The X axis is year, and the Y axis is his made-up “Home Equity Risk Index.” Sorry, Garth, but this chart “quantifies” nothing, which you undoubtedly know very well. Overvaluation in YVR and YYZ is certainly a problem, and a quantifiable fact (via data on incomes, wage growth, interest rates, etc.), but this chart does not do that.

#229 Victor V on 04.22.15 at 2:05 pm

#217 BCD on 04.22.15 at 12:43 pm

My wife and I are by no means rich. But we make upwards of $150K a year combined and are able to put between 20-30K in our TFSA’s every year for the past couple of years.

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

In 2013 and 2014, the maximum allowable TFSA contribution per year per couple was $11K.

#230 Vermithrax on 04.22.15 at 2:08 pm

This is amazing news and my $4500 transfer is already underway. However, I won’t be voting for Harper next election. Saving money on my taxes isn’t the most important thing in this self-centered, narcissistic economy. Taking care of the 90% of indebted, no-savings sillies out there is necessary so they don’t rise up and smite us a la Marie Antoinette. They have no cake to eat because, umm.. they already ate it? And now want everyone else’s.

#231 Ogopogo on 04.22.15 at 2:18 pm

#202 RainBird on 04.22.15 at 11:05 am
RE: #134
“Mix it in with some Bond and international ETFs and enjoy the lower MER:
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf”

Can someone please explain why you would invest in this kind of portfolio? For example VXC ETFs has a yield of 1.5%. The GIC is better than that. Other yields are also pathetic. So what is the big deal?

Holy mother of ignorance! VXC holds 3,047 stocks. You can’t just look at the dividend yield, but at long-term appreciation of the ETF. Unless you’re banking on negative growth in the world, this is your best single bet outside Canada.

#232 -=jwk=- on 04.22.15 at 2:26 pm

@202
RE: #134
“Mix it in with some Bond and international ETFs and enjoy the lower MER:
http://canadiancouchpotato.com/wp-content/uploads/2015/01/CCP-Model-Portfolios-Vanguard.pdf”

Can someone please explain why you would invest in this kind of portfolio? For example VXC ETFs has a yield of 1.5%. The GIC is better than that. Other yields are also pathetic. So what is the big deal?
—————-

Because income investments like bonds and preferred dividends make up part of your portfolio. Capital gains, like VXC make up the rest. The 20yr annualized return is 7.74%. Right through the dot com bust, and the GFC. That not enough for you?

#233 CalgaryRocks on 04.22.15 at 2:34 pm

#223 Harper hates Canada on 04.22.15 at 1:30 pm
Harper only cares about the today’s rich while kicking the can of debt and problems down the road. We have always known harper and his policies are major future problems but to openly come out and admit it just proves Harper has to be kicked out.

TFSA changes a problem for ‘Stephen Harper’s granddaughter to solve,’ Joe Oliver says

What that means is, plan your life around the TFSA, spend your best years saving money into it. THEN, when you are old and need it the most, we will change the rules on you.

Maybe, we will give your share of the CPP to the guy that’s never held a job in his life and we’ll let you take care of yourself out of your TFSA.

Awesome no?

#234 gut check on 04.22.15 at 2:43 pm

“Did I make you come here to get free advice? Don’t let the door hit you on the way out. — Garth”

I can’t take your advice, Garth. I’m not a 1%er. :) And no, I’m not envious of those who are, since it’s a whole different mindset and a whole different way of so called living. I like the way I live.

I harsh on you because you’re the tone setter here, not because I think you’re a bad person. I sense the divide and conquer thing vis-a-vis Generational Warfare and also I want to try and coax people out of money-worshipping so I would like to stay involved in the conversation.

If that’s okay with you?

#235 Eaglebay on 04.22.15 at 2:43 pm

#207 onpar on 04.22.15 at 11:35 am

Have you hugged a tree today?

#236 Squirrel Meat on 04.22.15 at 2:51 pm

#224 Nagraj on 04.22.15 at 1:54 pm

Justin Tudeau on his way to 24 Sussex Dr.

https://www.youtube.com/watch?v=LXOCed3G5eg
#225 Nagraj on 04.22.15 at 1:57 pm

Re #224
Video unavailable! Okay, google Ranveer Singh Tattad Tattad, and there you are.

————————————————
Hilarious. Was that real!

This fellow is better……….. his fans/voters? castrate themselves for him!

http://www.independent.co.uk/news/world/asia/spiritual-leader-allegedly-manipulated-400-men-into-removing-testicles-to-be-closer-to-god-10078095.html

https://www.youtube.com/watch?v=Q48tagwurUw

#237 laforce on 04.22.15 at 3:12 pm

opened a pc financial bank account today to take advantage of the 3 mo 2.6% interest rate for new deposits. csr started probing me for mortgage info and told me income is assessed 3x the actual amount. someone making 20k could be potentially approved for same mortgage someone making 60k would be? anyone verified this?

#238 Smoking Man on 04.22.15 at 3:20 pm

#211 editor’s editor on 04.22.15 at 12:06 pm
#138 editor on 04.21.15 at 11:09 pm
#112 Smoking Man

Your welcome, Smoking Man…

You’re welcome…;)
————
it did seem like some pretty spot-on advise….
…….

Ha in all honesty, I don’t know for sure witch your or you’re is right.

Lol

#239 Squirrel Meat on 04.22.15 at 3:20 pm

#207 onpar on 04.22.15 at 11:35 am

I am 38 and I’ve sat back and watched the Baby Boomers ruin not only the environment, but the economy too. The boomers are nothing but a savage group of selfish, narcissistic tit-heads who I can out-drive on a golf course with one arm. Go die quietly like a nice, old dog… and leave us to clean up this unbelievable mess.
——————————————–

Funny – you must be the greens keeper. Carry my bag.

#240 tkid on 04.22.15 at 3:25 pm

#232, you are certainly an optimist! What on earth makes you believe there will be CPP for anyone in the next 20 years?

#241 Ralph Cramdown on 04.22.15 at 3:26 pm

#233 gut check — “I sense the divide and conquer thing vis-a-vis Generational Warfare and also I want to try and coax people out of money-worshipping […]”

Frankly, I think this country could use a bit more money worshipping. We’ve got a well educated population and a plethora of natural resources, and we’re selling off bits and pieces of our country wholesale because we can’t afford to keep it, having invested the fruits of our labour into overpriced housing stock. Latest example being the Wheat Board, sold to the Saudis for a song. Why on earth should our country, given its demographics and wealth viz a viz the rest of the world, need to be an importer of capital? Because we worship stick frame detached housing instead of money.

“Still, every individual is different, and I’m refusing to play the Generational Warfare game any more.”

Generational warfare isn’t like Wargames, where the only way to win is not to play. It’s more like thermodynamics, which has three laws: You can’t win, you can’t break even (especially if your fertility rate is below replacement levels), and you can’t quit the game.

#242 CPA investor on 04.22.15 at 3:36 pm

I am reading various articles that say we should not invest the additional $4,500 in the TFSA until the budget is confirmed by legislation.

Anyone else reading the same thing?

Stupidity. All budgetary tax measures have the force of law. — Garth

#243 The American on 04.22.15 at 3:37 pm

At #220: Snowboid, I’m not sure what to say here. First, Phoenix has some of the lowest property values in the nation, especially when compared to areas like Kelowna, B.C. However, according to these sites, I’d still say rates overall are about 2.4 times higher in Arizona (on average) than even in Kelowna. Again, Arizona isn’t a great way to look at this, because overall and in most similar metropolitan areas, the average U.S. resident will pay between 4-10 times more than Canadians in similar places.

In Kelowna on residential property, you pay about $559 for every $100,000 of property value.

In Arizona (on average), you pay about $1,300 for every $100,000 of a home’s market value. Arizona figures it VERY funky, no doubt, but these links provide some insight.

http://phoenix.about.com/od/govtoff/qt/proptax.htm

http://www.districtofwestkelowna.ca/472/Municipal-Taxes

Let’s take Seattle vs. Vancouver, B.C.:
Vancouver property valued at $1,000,000, one would pay about $3,680/year. Four friends of mine with values ranging from $650,000 to $$1.6MM in Vancouver have confirmed just how little they pay. It really surprises me.

Seattle property valued at $1,000,000, one would pay about $10,680/year ($10.6774 to pay for every $1,000)

Now, I recognize values in Seattle are about 25% lower than in Vancouver, B.C. for like properties, so make that Seattle property $750,000, and you’re still paying around $8,000/year. I can’t help it that people in Vancouver are paying way too much for similar properties in a city with significantly less people and an economy that is somewhat of a joke. There’s no justification for it.

http://vancouver.ca/home-property-development/residential.aspx

http://www.kingcounty.gov/depts/assessor.aspx

#244 Doug in London on 04.22.15 at 3:46 pm

@Vermithrax, post #229:
My thoughts also, even though I am a Boomer. I had the presence of mind to save some of my income and invest it years ago. I didn’t vote for Harper either, nor will I in the next election.

#245 HD on 04.22.15 at 3:50 pm

#202 RainBird on 04.22.15 at 11:05 am

Can someone please explain why you would invest in this kind of portfolio? For example VXC ETFs has a yield of 1.5%. The GIC is better than that. Other yields are also pathetic. So what is the big deal?

————————

Significant growth potential, broad diversification and capital gains.

Best,

HD

#246 gladiator on 04.22.15 at 4:00 pm

@234 Eaglebay:

I wanted to know what tree hugging is about and hugged one. It actually felt nice – I would recommend it as a stress relief.

#247 Mike S on 04.22.15 at 4:07 pm

” The 2015 RRSP contribution limit is around $24,000. So a married couple (assuming they’ve maxed it out already every previous year and are not carrying-forward any unused contribution room) has $48,000 of RRSP room this year. Now another $20,000 in TFSA room? So they’re supposed to come up with $68,000 to invest? Every year? That’s $5,700/month! And if they don’t, then what? They’re irresponsible slackers failing to prepare for their futures?

Didn’t you get the memo? This is a blog for 1% dogs. — Garth”

To be fair. it maximizing the RRSP contribution will only make sense to the person who has very high marginal tax bracket, which is also a requirement to actually have that 24K room per year. If you have that income you probably have the money to invest

… yet very few actually do

#248 ron on 04.22.15 at 4:07 pm

RE: investing in Vancouver #182

“Offhand, meaningless comment from a guy you never heard of. But I agree, gold is kaput. — Garth”

I wouldn’t call the CEO of the world’s largest asset manager a “guy you never heard of”..

Most people have not. He has no widespread influence. — Garth

#249 Mike S on 04.22.15 at 4:10 pm

“Can I move investments from a non registered account into my TFSA without first cashing them in?

Yes, but capital gains tax may be triggered. — Garth”

Having some allocation in cash is always beneficial for a moments like this

#250 Chris on 04.22.15 at 4:34 pm

Garth, I don’t really understand your opposition to the TFSA limit increase. You strongly advocate that real estate may be a bad investment and that young people should stay renters where it doesn’t make sense to buy. As long as people are following your advice and renting so they aren’t weighted down by massive mortgages, saving $10k a year is easily within reach of a good chunk of the population.

I see the TFSA increase as a benefit to young as well as old in that sense — it’s finally the government doing a little something for people who choose not to buy housing.

Where did I say I opposed this? Quite the contrary. — Garth

#251 editor on 04.22.15 at 4:48 pm

# 211 editor’s editor on 04.22.15 at 12:06 pm
#138 editor on 04.21.15 at 11:09 pm
#112 Smoking Man

Your welcome, Smoking Man…

You’re welcome…;)
————
it did seem like some pretty spot-on advise.

——

Thanks… :) There are more than one dyslexic here, now you know.

Working with an editor is own experience, before I traded chasing the end tail of the North American Dream for serving life time in the golden cage of ESL.

I have no clue how one finds an editor Yoda on this continent.

#252 Entrepreneur on 04.22.15 at 4:52 pm

Voting Conservatives by your wallet, Smoking Man. I thought you did not follow the herd mentality. I am a little disappointed.

Voted for the Green Party a couple of times, and by doing so, let in the worst party. Since we are voting for parties vote for the NDP who really “stand up” for Canadians (prairie people call NDP their “bread and butter”) and kick out the Conservatives and Liberals (they have been in power too long). Then in fours years vote for the Green Party. The only way to do it.

The four parties just divide our votes. My better half said “We should only have a two party system like the Americans” but we won’t because we like a lot of politicians (we don’t have Hollywood).

Money seems to control minds for a vote and ignore the other issues like environment. Have respect for the youth as the tide will turn and they will take control one day. Hopefully sooner than later.

#253 Vamanos Pest on 04.22.15 at 4:58 pm

#167 Kevin

Wrong.

To qualify for the 24K RRSP limit, the couple in your example would have to make at least~130k EACH (the RRSP limit is not fixed, it is 18% of earned income to a max of 24k). This would give them a tax savings of over 19k, so they would not really have to save anything extra to max out the TFSA.

Who could do this? Well, any real couple that your example actually applies to could do this easily.

Also, to many of those who commented above, the TFSA costs the government very little up front. This is tax exempt growth, but the tax on the contribution is paid in full. That’s why they talk about consequences in like the year 2525, or whatever. My point is, that by eliminating indexing, but doubling the max, it’s hard to say how this change has even effected the long term, and the long term is the only place the TFSA is even a loss to federal revenues.

#254 moloko on 04.22.15 at 5:16 pm

CPA investor,

I’ve heard that as well, and supposedly TD is saying the same thing right now.

Categorically untrue. — Garth

#255 Retired Boomer - WI on 04.22.15 at 6:16 pm

#49 Everything is terrible

I only get to vote for the idiots from MY State.

Although I vote, my picks do not always win.

Sort of like millenials don’t you think?

#256 JuliaS on 04.22.15 at 6:49 pm

#134 saltpony

Ever heard of cash? It’s like debit account with no fees or a TFSA with no contribution limits. Recommend you try it.

#257 Dave in Sylvan Lake on 04.22.15 at 6:57 pm

Ross Clark has been typically pretty spot on when it comes to so many things in the market. The guy knows what he’s talking about.

Finally after years and years of waiting, the TFSA contribution limit has been doubled! Now all we need is a massive market correction or crash and we can use it to it’s full potential.

#258 Dave in Sylvan Lake on 04.22.15 at 7:09 pm

“Voting Conservatives by your wallet, Smoking Man. I thought you did not follow the herd mentality. I am a little disappointed.

Voted for the Green Party a couple of times, and by doing so, let in the worst party. Since we are voting for parties vote for the NDP who really “stand up” for Canadians (prairie people call NDP their “bread and butter”) and kick out the Conservatives and Liberals (they have been in power too long). Then in fours years vote for the Green Party. The only way to do it.

The four parties just divide our votes. My better half said “We should only have a two party system like the Americans” but we won’t because we like a lot of politicians (we don’t have Hollywood).

Money seems to control minds for a vote and ignore the other issues like environment. Have respect for the youth as the tide will turn and they will take control one day. Hopefully sooner than later.”
-#251 Entrepreneur on 04.22.15 at 4:52 pm

I’m not for Conservative, Liberal, or Green Party, but to say that the “NDP have been the bread and butter” for people living on the prairies seems to be painting everyone on the prairies with the same brush. First of all, nobody had such a stranglehold on SK growth as the NDP did. Secondly, when has pro-taxation been an indication of “stand(ing) up” for the people as you suggest? It would appear to me that lower taxation increases one’s standard of living. The higher the standard of living, the more utility one can generate and the more resourceful they can be.

They’re all (Conservative/Liberal/NDP/Green) just a different management team of the same faction really.

#259 gut check on 04.22.15 at 7:29 pm

#240 Ralph Cramdown on 04.22.15 at 3:26 pm

Frankly, I think this country could use a bit more money worshipping. We’ve got a well educated population and a plethora of natural resources, and we’re selling off bits and pieces of our country wholesale because we can’t afford to keep it, having invested the fruits of our labour into overpriced housing stock. Latest example being the Wheat Board, sold to the Saudis for a song. Why on earth should our country, given its demographics and wealth viz a viz the rest of the world, need to be an importer of capital? Because we worship stick frame detached housing instead of money.

Generational warfare isn’t like Wargames, where the only way to win is not to play. It’s more like thermodynamics, which has three laws: You can’t win, you can’t break even (especially if your fertility rate is below replacement levels), and you can’t quit the game.”

To your first point – entreprenuership is NOT the same as money-worshipping. I’m with you on the meat of the point, but your actions and opinions don’t back up with you say on a daily basis here. Avoiding tax and investing into the banks that are ripping you off (your advice to the RBC fella) aren’t the answers. they are money-worshipping, though.

As to the generational warfare – one can opt out of the bashing. Surely you see that?

#260 gut check on 04.22.15 at 7:29 pm

damn, I forgot the ************* line between Ralph’s thoughts and mine. It’s going to be confusing, but I’m sure he’ll figure it out. :)

#261 Brunett43 on 04.22.15 at 8:03 pm

Great advice as always Garth.

I’ve only been in this blog for a couple of weeks now. I very much appreciate the hard stance you take on those you are as you put it “house horny” and are not saving and investing enough for retirement. I have had many heart to heart discussions with my 2 boys, 19 & 24 about debt/saving and investing. Both have maxed out their TFSA contributions over the past 2yrs and both have ZERO credit card debt. I will print this out for them to read and hopefully LEARN from.

T. London/ON

#262 Robert Britton on 04.22.15 at 9:53 pm

It is premature to contribute more to the TFSA based on the budget. The increase is not yet acknowledged by banks, brokerages, CRA, or Service Canada websites to be in effect. Common sense is to wait until it is in effect.

Wrong (for the tenth time). Budgetary tax measures are in force when announced. What a silly concern, with a majority government. — Garth

#263 Snowboid on 04.22.15 at 11:02 pm

#242 The American on 04.22.15 at 3:37 pm…

It’s fair to say that according to the sites you looked at the taxes are more in AZ, but the reality is far from it.

An example home in our NW Valley location is currently worth about $ 265K CAD on the market (based on comparable sales in the last couple of months) – yet it is assessed for taxes at $ 153K CAD, so non-resident taxes are about $ 1700 CAD a year.

A similar home in Kelowna would be about $ 500K with an estimated tax bill this year of $ 3400. A home worth $ 265K CAD in Kelowna would be $ 1800 a year in taxes.

Of course if we were fulltime residents in AZ our bill would be about 10% less, and if we owned in Kelowna there is also a homeowner grant to reduce taxes.

The example you use of Vancouver vs Seattle isn’t 4-10 times more, closer to 2 times more.

If you look at a $ 1 million dollar home in Kelowna, the taxes this year would be $ 6800 – this is much higher than Vancouvers’ rates.

#264 adam on 04.23.15 at 8:59 am

Anyone making $50,000.00 without $10,000 to invest for the year is making poor money choices. Having said that we have people making over $100k without $10k/yr to invest…

#265 gut check on 04.23.15 at 1:13 pm

#263 adam on 04.23.15 at 8:59 am
Anyone making $50,000.00 without $10,000 to invest for the year is making poor money choices. Having said that we have people making over $100k without $10k/yr to invest…
**************************

I hope that you may you never experience living through the many circumstances in which your statement can be proven false – however I’m afraid that the universe will teach you what you need to know in spite of my wish for you.

#266 Goofball on 04.23.15 at 6:19 pm

#263

If you make $50,000 and can save $10,000 it is time to move out of your parent’s basement!