It’s here

1SNOWMAN

So here’s what we now know about the T2 plans to gut TFSAs.

First, the contribution limit will drop from ten grand to $5,500, effective January 1st.  This comes despite a big, fierce lobbying campaign to change the Hot One’s mind. He didn’t.

Second, the limit will be indexed to inflation, starting in 2017. Given the current cost-of-living rate (about 2%), it would take seven long years for the limit to be increased from $5,500 to six thousand. Big deal.

Third, your accumulated TFSA room will not be reduced and can be carried forward indefinitely. That means to date you have $41,000 in possible contributions (if you were old enough to start in 2009). It also means all gains earned within a TFSA remain tax-free for eternity, or until the government changes it, whichever comes first.

Fourth, other rules remain intact. For example, if you take money out to buy a llama in any one year, you must wait until the next calendar year to replace it. There is no deduction from taxable income for your contributions. Nor can interest on money borrowed to put into a TFSA be tax-deductible. You can slide assets you already own into your tax-free plan, making a ‘contribution in kind.’ And you can fully fund plans for your spouse or adult kids without investment gains being attributable to you – so long as they make the actual deposits.

Of course, the basic TFSA credo remains: these ain’t savings accounts. They’re investment vehicles. Putting interest-bearing investments inside is like Beyoncé in a burka. Tragic. So by almost halving the limit, the Libs are seriously curtailing opportunity. Among those most impacted will be young people who may not be able to max out now, but will lose tens of thousands in contribution room they can employ later in life. Plus retired geezers aged 71 and above, who can no longer contribute to RRSPs, will be denied a reasonable tax shelter to help finance the remaining decade or two of life.

In short, ripping the tax-free account is a political move, not an economic one. It saves the current government no money. It’s not a punishment of the wealthy, to whom ten grand a year is car detailing money. It sure doesn’t help all the newly unemployed, looking for reasonable places to put their severance packages so they can better cope with the future. There’s zero discernible benefit to the country gutting a thing that currently just 7% of taxpayers take advantage of – but which millions can use as they age, accumulate assets and as the economy improves.

After all, if zapping something because it is underused was any justification, we wouldn’t have RRSPs any more – since over 80% of all contribution room remains empty. It seems a responsibility of government is to encourage its citizens to save, instead of just pigging out on debt and snorfling real estate. And tax-free accounts even up the playing field with public-sector workers, who enjoy indexed defined-benefit pensions. The very success of TFSAs – with over 11,000,000 accounts having been opened – demonstrates that most people get that. So taking back future growth is nothing but grinchy.

It’s also sexy. It appeals to those who are jealous of others’ success, wealth and income, or feel entitled but denied. Like the over-educated mouldy Millennials who apparently flocked to the Trudeau banner in October (over two million new voters were added).  It also plays to the us-against-them theme that was so evident during the election campaign – a form of class warfare at the very core of the tax reform now before Parliament. Seeing himself as the Selfie Robespierre, the prime minister has unwisely led people to believe they can be better off by pulling down others. Hence the special tax on the 264,000 people who make over two hundred grand, in order to throw a bone to six million others. Classic.

Ironically, as reported here last week (and admitted by the finance minister yesterday), the plan doesn’t work. Turns out we don’t have enough rich people to milk. The tax cut will come out of everyone’s pocket, just as this TFSA mistake will help create a society less affluent and more taxed.

That’s neither left nor right. Just obvious.

319 comments ↓

#1 CHEMTRAILS on 12.08.15 at 4:23 pm

Oh, never mind.

#2 Wild Roasted Gonads on 12.08.15 at 4:30 pm

Hacking the TFSA’s back is a real shame. They are fantastic for a mobile employment world. Sure the 1% can just transfer over existing investments in a heart beat. But who cares. These were a real gift to everyone else. Incredibly short sighted nanny-world thinking if replaced with increased CPP. Even if I was still 20 I would have been all over these.

RRSP benefit the so called “rich” far more.. just silly politicking.

#3 TRT on 12.08.15 at 4:30 pm

I think anger should be directed at Poloz. Looking at comment boards at the Globe and CBC, people are ticked.

Over the past year, he has openly robbed Canadians of TRILLIONS of real dollars in wealth.

More amazed at the populace than Poloz himself!

STRONG CURRENCY = STRONG COUNTRY

#4 Mark on 12.08.15 at 4:31 pm

Why can’t Canada be like much of the rest of the world where the tax and social benefit ‘system’ isn’t so broken to such an extent that all these “band-aids” such as TFSA’s, RRSPs, etc. are needed?

That’s my problem with it all.

Having said that, with the TFSA reduced back to $5500 for 2016, it just means that investors will be seeking out tax efficient strategies with their $4500 that they won’t be allowed to shelter. Many of these strategies inherently involve making long-term investments in equity or capital to take advantage of long-term tax deferral. Since the TFSA was so heavily (ab)used for making fixed income investments in practice, largely to feed the RE bubble, cracking down on it might be a small part of a larger plan.

Then again, Trudeau and the gang could just be vindictive towards upper-income Canadians. A plausible explanation in and of itself. Just like Poloz who is hinting that the BoC is going to declare war against cash “investors” in the not-so-distant future with negative policy rates.

#5 Bobs ur uncle on 12.08.15 at 4:31 pm

There’s zero discernible *downside*to the country gutting a thing that currently just 7% of taxpayers take advantage of.

Fixed that for you.

All I hear are a bunch of well-off folks whining about a loss of an entitlement that existed for less than a year. If that was room you could take advantage of, count yourself blessed to be prosperous. Many, 93+ percent apparently, are not in the same boat.

You miss the point. They could be and many will be. — Garth

#6 anonymous on 12.08.15 at 4:33 pm

Oh, I think 10.5K limit was introduced in election year (2015) by previous govt. and was same 5.5K before. So never mind.

#7 JG on 12.08.15 at 4:43 pm

great blog today.

My clients are all 200k + and they all have PC’s, are all paid dividends, employ family members, then they use flow throughs and limited partnerships to reduce taxes. I know many professionals and business owners who have reduced their tax burden over $100,000/yr using these strategies.

T2’s plan to tax the rich is doomed to failure. I saw it from the start.

What scares me now is the Bank of Canada saying today negative interest rates are ok if that is what is needed to get Canada going again. Not that they are going to do it, but that they at least have that option. This tells me the B of C has no idea what to do. We, as a country, are in a real mess. Slurping up too much maple syrup!!

Wasn’t it just a few years ago we were the pride of the world?? We were booming when the US and Europe were going down the drain. We didn’t have a care in the world. How quickly things change.

#8 TurnerNation on 12.08.15 at 4:44 pm

Requesting “Western bums and creeps” stay away from Ontario. Et tu, King Ralph? RIP.

#9 NegativeRates on 12.08.15 at 4:49 pm

Poloz sounds scared and a big dazed (as usual). He is now contemplating negative rates just as Yellen will start yellin’ for higher rates. LOL Poloz, LOL

He is not contemplating negative rates. Geez, people, Learn to read. — Garth

#10 Bobs ur uncle on 12.08.15 at 4:56 pm

I think we can agree to disagree – but the benefit is still there at 5500 and is indexed – so not the end of the world that many commenters make it out to be.

#11 RealtyUpUp on 12.08.15 at 4:57 pm

Poloz has tool to keep real estate going up, lower and lower interest rates. Even negative rates. Yeehaw!

http://www.cbc.ca/news/business/stephen-poloz-monetary-policy-1.3355704

#12 Kreditanstalt on 12.08.15 at 5:00 pm

That Mr.Poloz, our Keynesian twit in charge of counterfeiting, has decided that “negative interest rates” are a “policy option”…

1. Gold.
2. Cash-in-hand
3. Cheap and low-tax real estate

Surprising stupidity in this comment section today. — Garth

#13 Johnny d on 12.08.15 at 5:05 pm

Negative interest rates possible in Canada!!! The bank of ‘under my mattress’ will be the best place to hold cash apparently. USD of course… Our new polimer bills won’t even make good toilet paper when Poloz pulls that lever.

#14 IHCTD9 on 12.08.15 at 5:16 pm

#5 Bobs ur uncle on 12.08.15 at 4:31 pm
There’s zero discernible *downside*to the country gutting a thing that currently just 7% of taxpayers take advantage of.

Fixed that for you.

All I hear are a bunch of well-off folks whining about a loss of an entitlement that existed for less than a year. If that was room you could take advantage of, count yourself blessed to be prosperous. Many, 93+ percent apparently, are not in the same boat.
___________________________________________

You don’t need to be “well off” to utilize the TFSA. A little bit, on a regular basis, starting young, and persevering for decades. One day in your 40’s you’ll get your statement and have to admit that that’s a nice chunk of change sitting there.

#15 Jeff B on 12.08.15 at 5:27 pm

Re: #2 (Wild Roasted Gonads): “RRSP benefit the so called “rich” far more..”

RRSP’s disfavour the rich and also the generously-pensioned.

When the “rich” and generously-pensioned convert their RRSP’s to RRIF’s, they pay the highest tax rates Canada has to offer. RRIF payments are wholly tax-disadvantaged; the payments cannot be made less taxable in any way that I am aware of (someone please educate me if I am wrong). The RRSP idea was, and is, a brilliant piece of tax scheming by government: “Save your money” … “so we can tax it more thoroughly later”.

In many cases, this is wrong. RRSP benefits are massively weighted to those with higher incomes who can claim very large tax deductions for contributing. Also the wealthy are generally more entrepreneurial than most, and many have the ability to regulate incomes in retirement. For them the RRSP is a tax-shifting vehicle par excellence. — Garth

#16 Alberta Ed on 12.08.15 at 5:28 pm

Perhaps someone should explain to T2 — speaking slowly and clearly, so he could follow along — that not everyone is born with a silver spoon in his mouth, and that the TFSA helps those who were not born wealthy to save over time.

#17 Drill Baby Drill on 12.08.15 at 5:29 pm

“But the option to go into the negative with policy rates would imply that there’s already more room to cut rates than bankers had believed.”

They may not do it BUT the BOC is sure thinking about it as a possibility after 2016.

Negative. The bank made it clear this is not a policy alternative unless we face a crisis. We are not. — Garth

#18 onpar on 12.08.15 at 5:31 pm

Garth,
Do you consider today’s announcement by BOC to be a kick in the nards to those of us who have decided not to participate in real estate madness? It seems our entire monetary policy is built around those who mad the decision to take on massive amounts of debt. When will those of us with the ability to follow sound financial advice be rewarded? Don’t get me wrong, I’m not going to run to the newest bank to grab a mortgage – it’s just frustrating.

The bank made no consequential announcement. Nothing has changed. Your nards are intact. — Garth

#19 Smartalox on 12.08.15 at 5:34 pm

Cutting the TFSA back to $5500 isn’t just a shame, the optic is terrible: you can aspire to financial independence – just not that much.

A question on procedure: is this a clerical change, or will this be put to a vote?

Trudeau made a big show during the campaign that party members would be able to vote freely, and not be whipped to hew to the party line.

Would lobbying our MPS make a difference?

#20 Mark on 12.08.15 at 5:38 pm

“Poloz has tool to keep real estate going up, lower and lower interest rates. Even negative rates. Yeehaw!”

When rates get that low, you start running into problems of confidence. And lenders will just stop lending to the public if they can simply warehouse cash in their vaults (or the digital equivalent) and earn a positive return. Creditworthiness and simply oversupply into weakening demographics is what’s killing the contemporary RE market and promises to be a drag against it for many years to come.

It does seem that despite the shock and awe of lower rates over the years, and all the stimulus measures, that central bankers have fallen into the deflationary trap of monetary instability that they were so keen to avoid. Which is no surprise. Most major inflection points in long-term interest rates were characterized by the necessity of extraordinary application of monetary policy.

#21 neo on 12.08.15 at 5:39 pm

“We now believe that the effective lower bound for Canada’s policy rate is around minus 0.5 per cent, but it could be a little higher or lower,” Poloz said.

“The bank is now confident that Canadian financial markets could also function in a negative interest rate environment,” Poloz said.

“Today’s remarks should in no way be taken as a sign that we are planning to embark on these policies,” Poloz said. “We don’t need unconventional policies now, and we don’t expect to use them. However, it’s prudent to be prepared for every eventuality.”

Those are his words Garth. He isn’t saying it is imminent. He is saying that the BOC is open to this possibility. Even being open to the possibility is patently absurd regardless of whether he does it or not Garth.

Give it up. Negative rates will never happen unless 2008 returns. This is an utter waste of time and comments on this topic are finished. — Garth

#22 DJIM on 12.08.15 at 5:39 pm

Harper’s intention seemed to be (probably was) to bankrupt the federal government. The reason for all the projected deficits has as much to do with loss of gov’t income as intended spending increases. Some of these tax giveaways are going to have to be reversed.

#23 It’s here | Realties.ca on 12.08.15 at 5:41 pm

[…] Source: http://www.greaterfool.ca/2015/12/08/tuesday/ […]

#24 Sheane Wallace on 12.08.15 at 5:41 pm

He is not contemplating negative rates. Geez, people, Learn to read. — Garth
…………………………………..
I read him carefully and he is actually contemplating exactly that: that negative nominal interest rates (up to -0.5 % to be precise) are an option in ‘his toolkit’.

Now it is evident hat the guy ‘toolkit’ is tiny so he is looking for ways to expand it.

In Europe there are negative interest rates in Denmark and Switzerland, they both are strong economically and financially.

The problem is that our genius is contemplating negative interest rates in an environment of already sinking dollar 9lost 30 % so far against the USD). While Switzerland does it because the Swiss frank is very strong and that is the big difference.

I have always been suspicious in Poloz’s intellectual capabilities and he consistently has proven me right.

The guy has no place at the helm of BOC.

#25 He said it, not us. on 12.08.15 at 5:44 pm

Poloz said ‘Negative rates’. Not the comment posters here.

Why are the people posting on the blog being ridiculed for repeating what Stephen ‘The Treasonist’ Poloz said? If it wasn’t a possibility, he wouldn’t have mentioned those terms.

He gave a speech on expanded policy options, including QE. Talk about that. It’s more likely. — Garth

#26 Sheane Wallace on 12.08.15 at 5:45 pm

DELETED

#27 Oceanside on 12.08.15 at 5:45 pm

Negative. The bank made it clear this is not a policy alternative unless we face a crisis. We are not. — Garth

This does depend on one’s definition of a crisis…..The fact that he mentioned it at all is a little disturbing.

#28 bob on 12.08.15 at 5:45 pm

Here you go, Canada hinting at Negative rates. Let’s start putting this in people mind… getting them ready for it right. Of course the spin will be that this is to stimulate the economy (housing)

http://www.cbc.ca/news/business/stephen-poloz-monetary-policy-1.3355704

The odd of Canada having negative rates is probably greater than having them actually raise rates.

Insanity here. I’m done. — Garth

#29 Ralph Cramdown on 12.08.15 at 5:48 pm

Well Garth, you and I disagree on the TFSA thing. While higher contribs would be good for me, I see it more in terms of who actually uses it, and to its full potential, than those who could use it, and would stuff it with GICs if they did.

Regardless, your defence was less incoherent than some in the Mop & Pail:

“It’s unfortunate when we are given a tool to provide better investment planning and now it’s being taken back from people who want to work towards having their own financial independence,” said Darren Coleman, senior vice-president and portfolio manager with Raymond James Ltd. in Toronto.

The tool wasn’t being taken away entirely, just shrunk.

#30 TurnerNation on 12.08.15 at 5:49 pm

KMI.US cutting its divided by 75%?! Oil’s well that ends well.

#31 W on 12.08.15 at 5:50 pm

The Ways and Means Motion said the TFSA would be indexed from 2009 onwards. If CPI is 2% in 2016 that would mean the TFSA contribution limit would be increasing to $6,000 in 2017 … not in seven long years.

Indexing ended in 2015. It will begin anew in 2017 from the $5,500 base. — Garth

#32 Drill Baby Drill on 12.08.15 at 5:50 pm

#27 Oceanside
I agree with you that the mere mention of this potential option is a trial balloon or worse a telegraph of what is truly being considered for 12 – 18 mths hence.

#33 Sheane Wallace on 12.08.15 at 5:57 pm

QE is coming.

I already said it 10 times.

#34 i am no economist, but.. on 12.08.15 at 5:59 pm

Michael Pento makes some interesting points including
‘forget(ting) about the “one and done” rate hike scenario (as also mentioned by Garth).

http://www.cnbc.com/2015/12/07/10-warning-signs-for-investors-in-2016-commentary.html

I recently cashed out of R/E (thanks Garth and blog dogs). I now thinking that holding cash (not PM’s) for the short-term is going to be the wiser choice heading into 2016.

#35 Wild Roasted Gonads on 12.08.15 at 6:01 pm

#15 Jeff B on 12.08.15 at 5:27 pm

Re: #2 (Wild Roasted Gonads): “RRSP benefit the so called “rich” far more..”

RRSP’s disfavour the rich and also the generously-pensioned.

When the “rich” and generously-pensioned convert their RRSP’s to RRIF’s, they pay the highest tax rates Canada has to offer. RRIF payments are wholly tax-disadvantaged; the payments cannot be made less taxable in any way that I am aware of (someone please educate me if I am wrong). The RRSP idea was, and is, a brilliant piece of tax scheming by government: “Save your money” … “so we can tax it more thoroughly later”.

In many cases, this is wrong. RRSP benefits are massively weighted to those with higher incomes who can claim very large tax deductions for contributing. Also the wealthy are generally more entrepreneurial than most, and many have the ability to regulate incomes in retirement. For them the RRSP is a tax-shifting vehicle par excellence. — Garth
—————–
Bingo. I sure won’t be paying max tax rates if any as I collapse them.. got to think ahead, and I’ve always maxed it out.

#36 Bobs ur uncle on 12.08.15 at 6:02 pm

#14 IHCTD9

My TFSA is maxed every year. I would’ve added another 10k in 2016 if given the chance. Now it will be $5500. Summary of the emotional toll this difference will have on my life: zero. As I am privileged enough that I can spend time on a finance blog instead of wondering where my next meal is going to come from. I just don’t understand all the fuss.

#37 Flarge on 12.08.15 at 6:03 pm

“Plus retired geezers aged 71 and above, who can no longer contribute to RRSPs, will be denied a reasonable tax shelter to help finance the remaining decade or two of life.”

yes they do. It’s called a $5500 TFSA that’s indexed with inflation. .

#38 Freedom First on 12.08.15 at 6:06 pm

RRSP’s were a great gift to Canadians. I have used them for decades the way Garth has laid out in his Blog. Then the TFSA became available, Garth’s idea, which F endorsed, another great gift to Canadians. If young people were to use these 2 financial tools to their maximum advantage throughout their lives, they would be very very happy with the results. Sadly, I am not surprised that both the RRSP and TFSA plans have been so underused by Canadians. Human nature.

#39 Godth on 12.08.15 at 6:07 pm

My life is great! Moment by moment by moment. The birds were having a terrific time in the stormy weather today. You money grubbers are the real losers, people matter; life matters. In twenty years expect that everything will have been for nought except those you care about. Do you really care about anyone except your ego? Probably not. I don’t think this is what makes life meaningful. Enjoy your Christmas, when gifts are exchanged that are really meaningless except for the $ assigned. What a success.
https://www.youtube.com/watch?v=CRwc_1sILkQ

#40 Leo Trollstoy on 12.08.15 at 6:08 pm

“I wouldn’t view what’s happening as anything but short-term cyclical weakness. And of course, a great buying opportunity in the CAD$, and a great shorting opportunity for USD$ stuff. Take out some loans in USD$, and pay them back with more valuable CAD$ in the not-so-distant future.” – Jan. 8, 2014

http://forums.redflagdeals.com/hot-deal-canadian-dollar-loonie-sale-1434335/

#41 Smoking Man's Old Man on 12.08.15 at 6:10 pm

It’s tragic that society is largely superficial. Every time I see T2 taking a selfie, I want to puke. When your a teenager and hung up on yourself, fine. But we need sound economic decisions, not a poster boy. I don’t think it will take long for this honeymoon period to end…

#42 Smoking Man on 12.08.15 at 6:12 pm

Why would Poloz even mention negative rates?

For starters lets look at the landscape.
Alberta is getting crushed by low oil prices. But that’s not what he fears.

The real issue is psychopathic, destroy the economy on purpose, communist cultural Marxists.
The current Alberta government a band of twisted Ideologs who openly say they don’t want the Oil Sands, or pipe lines, they want to eradicate hitch balls on pickup trucks and take the hard working men into salons for manicures.

They are anti business, and are in bed with outfits like the world wild life fund, who want to rid the planet of humans, return it to animals. I’m not making this shit up, its all over the internet.

Now we have a new Prime minister, first day on the Job he hands over to 3rd world countries, here is 2.6 billion, we are so sorry for developing our country. Please forgive us, here is your first installment. His mentor Gerard Butts a radical eco Nazi who advised Wynne, look how that turned out.

I saw a few clips of Justin in question period.
This little snot nose pansy, talking shit, then taking his seat with the arrogance of a roman emperor. This little boy is in the big leagues now, not in front his vulnerable history class, or adoring mother.

Canada is a small country with huge land mass, a bloated civil service, huge debt, and industry looking to leave, and now lead by industry killing tree huggers and Ideologs.

We need to export our oil, manufacture, build shit. How? in this anti-business environment by three levels of government.

Anyone with a brain is working on, or working for us dollars down south. Soon, no one left to with a brain to get us out of this mess.

Of course we are heading to negative interest rates.

Thank you Mr. Butts, in all your brilliant maneuvers behind the curtain you have the wheel now, I got to hand it to you, nice job.

But know this you eco freak of nature. While you and your crony’s start lining your pockets on your faux eco projects there will be a day of reckoning, faster than you think.

The International Forex Market is the leveler of all stupid’s that think they are smarter than everyone.

When you succeed in impoverishing all those young families’ that voted for your boy. When Bottoms_Up wakes up and arms himself with a pitchfork looking for someone to spear. Know this Butts, I will be telling him and the entire world who the real slime bastard is.

Dr. Smoking Man
PhD Hedonomics
Radical Tree Assassin

#43 Leo Trollstoy on 12.08.15 at 6:15 pm

QE is coming.

I already said it 10 times.

Are you proud of being wrong 10 times?

#44 ed on 12.08.15 at 6:15 pm

Going to set this in my E-calendar to pop up in time for the next election to remind me of just how wacked T2 really is. “Sunny ways” yeah right; it’s like living in Nanaimo :(

#45 Leo Trollstoy on 12.08.15 at 6:15 pm

Amass USD and throw the CAD and gold away.

#46 Godth on 12.08.15 at 6:17 pm

#342 Wild Roasted Gonads on 12.08.15 at 5:32 pm

“And that of course is why the bilderberg boys are planning their escape to mars. It’s a big plot don’t ya know. Ya didn’t get the secret handshake?”

So you concede that you’re a completely irrational lunatic. Fair enough, you’re a dime a dozen.

#47 bigM on 12.08.15 at 6:20 pm

#24 Shane
Poloz, however, stresses that the fact he is listing these measures should in no way be taken as a sign the bank is about to use any of them.
———-
Which means absolutely without question they are going to do it. The article has a huge fail with respect to using Switzerland and the others.
At the time, the Swiss were trying to devalue their currency, it was getting too strong compared to the Euro.
The Canadian dollar has the exact opposite problem.

If the Fed raises rates, and the BoC goes negative,
the bottom will drop out of the loonie.

Garth, let’s admit the different directions in interest rate directions will scare a lot of people out of the CDN dollar.

#48 mitzerboy aka queencity kid on 12.08.15 at 6:21 pm

nice snowperson pic
not a flake out here yet….

#49 Mark on 12.08.15 at 6:24 pm

“QE is coming.

I already said it 10 times.

I personally sure hope not. The problem with QE is that basically the Fed in the US threw it at their favoured asset classes of choice (MBS, Government bonds), rather than reliquefying the entire economy. The end result was predictable — a new real estate bubble, and a government bubble. With no meaningful ‘recovery’ in the private sector which ultimately has to support both in the long term.

Negative rates, IMHO, are far more desirable than QE, as they allow the market, not central bank bond buyers, to determine where the lower cost credit flows in the economy. And there’s a pretty good chance investors won’t direct it to sectors of the economy which are clearly in overcapacity such as the public sector or into RE financing.

#50 Dwilly on 12.08.15 at 6:24 pm

“So by almost halving the limit, the Libs are seriously curtailing opportunity.”

What has been made abundantly clear (by reputable sources like the PBO) is that the vast majority of Canadians have no ability, based on their incomes, to use the additional $5k room per year. This is like arguing that installing a governor in my car that will reduce the top speed limit from 250km/h to 180km/h is going to “seriously curtail” my ability to get home quickly. It’s a strawman argument, because I can only drive at 100km/h anyway. Curtailing “theoretical opportunity”, perhaps.

“Among those most impacted will be young people who may not be able to max out now, but will lose tens of thousands in contribution room they can employ later in life.”

See above

“In short, ripping the tax-free account is a political move, not an economic one.”

Wasn’t increasing the limit to $10k in the first place a political move, not an economic one?

“It saves the current government no money.”

You can’t argue that it’s such a great tax shelter, then say it doesn’t cost tax revenue. It’s not a huge expenditure. But again, the point on this always was: why spend ANY money, even a small amount, where the dollars go almost entirely to people who really don’t need them?

“It’s not a punishment of the wealthy, to whom ten grand a year is car detailing money.”

Exactly my point.

“It’s also sexy. It appeals to those who are jealous of others’ success, wealth and income, or feel entitled but denied.”

It also appeals to thoughtful, engaged members of our society who have taken the time to read the reports and evaluate this issue in full.

Why has this become so binary? This is not an attack on the TFSA or a political party. I use the TFSA and love it! Rather this is a question of degrees, the grey space between the black and white that is sorely lacking in society today.

What if a government proposed raising the limit to $20k? $30k? Heck why not $100k/yr for all Canadians! More “opportunity” is better, right? Clearly at some point it becomes unusable to the masses, just a giveaway to very wealthy individuals. The question is where is that point?

The PBO says it was closer to $5500 than $10k. The previous government read that report, and decided to increase it anyway in an attempt to energize its voter base. It didn’t work, and the current government promised to put it back, and are. I don’t see the issue.

#51 Doug t on 12.08.15 at 6:25 pm

Pay off debts – cash out of the banks – bartered for install of hot water tank – paid cash to mechanic for brakes – little things add up. Control what you can when you can

#52 not 1st on 12.08.15 at 6:26 pm

Just think how Garth will react once QE in the US starts up again.

#53 Saskatchewanite on 12.08.15 at 6:34 pm

Great post, Garth. Thank-you. Is there anything we mere citizens can do to change T2’s mind on the TFSA decision now … or in the future?

Are TFSAs just for wealthy people?
Well, my husband and I make 68K in combined net annual income and have been fortunate enough to fully max out our TFSAs. In fact, the TFSAs are what made us feel as though we actually had a chance at not only a retirement but an EARLY retirement. We figured out that all we really needed to do was max out our TFSAs every year, and we could retire in 2035 at 55yrs old and live off the interest income generated every year (yes, we accounted for inflation). So, to us, that seemed like a nice, simple retirement plan: 1) Max out TFSA every year. 2) Retire in 25 years. And a SIMPLE, EASY TO UNDERSTAND plan is exactly what most Canadians need. People at the low end of the tax brackets don’t necessarily benefit from the RRSP advantage of putting you into a lower tax bracket and they also need every cent of their modest nest egg when they retire and wouldn’t want to be ‘taxed thoroughly’ at that fixed income point in their lives. The TFSA gave us the practical HOPE we needed to start saving aggressively and systematically. It is unfortunate that the limit has been reduced because the long-term effects are far-reaching, as Garth has pointed out.

Good comments from:
#16 Alberta Ed
#2 Wild Roasted Gonads

#54 Wild Roasted Gonads on 12.08.15 at 6:34 pm

#46 Godth on 12.08.15 at 6:17 pm

#342 Wild Roasted Gonads on 12.08.15 at 5:32 pm

“And that of course is why the bilderberg boys are planning their escape to mars. It’s a big plot don’t ya know. Ya didn’t get the secret handshake?”

So you concede that you’re a completely irrational lunatic. Fair enough, you’re a dime a dozen.
——–
Absolutely, I am a bark at the moon howler. How else could one function.
So the van allen belts.. .moon landing a fake then?

#55 Hawk on 12.08.15 at 6:35 pm

There is one beneficiary in all these actions by T2, and its not millenials, basement dwellers, etc etc.

Its the public sector workers, who get to continue the gravy train will the private sector gets shafted.

That’ll be T2’s legacy………..although it was Harpie’s too

#56 takla on 12.08.15 at 6:43 pm

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiPkv6yqs3JAhUEyGMKHRylAhQQqQIIGzAA&url=http%3A%2F%2Fwww.cbc.ca%2Fnews%2Fcanada%2Fcalgary%2Fsuicide-rate-alberta-increase-layoffs-1.3353662&usg=AFQjCNFqj74O9rcSNjVTFih-iclVLVArUA&bvm=bv.109395566,d.cGc

sad commentary on the ongoing commodity collapse…

#57 Ben B on 12.08.15 at 6:43 pm

The Ways and Means motion reads as follows:

(d) for each year after 2015, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1.

The inflation adjustment calculation does indeed go back to 2009, so I would expect to see an increase to $6,000 sooner than 7 years from now.

TFSA’s are great for retirement savings if one expects to be in a higher tax bracket after retirement than during one’s working years but frankly, if that’s the position I’m in I’ll probably be enjoying myself too much to lose sleep over my annual tax bill.

As stated. The indexing begins in 2016 and in seven years, at the current inflation rate, it might add $500. — Garth

#58 Godth on 12.08.15 at 6:43 pm

#54 Wild Roasted Gonads on 12.08.15 at 6:34 pm

“So the van allen belts.. .moon landing a fake then?”

Nah, they glued it together with duct tape. Didn’t you watch Apollo 13?

Get real man.

#59 Wild Roasted Gonads on 12.08.15 at 6:47 pm

#39 Godth on 12.08.15 at 6:07 pm

My life is great! Moment by moment by moment. The birds were having a terrific time in the stormy weather today. You money grubbers are the real losers, people matter; life matters. In twenty years expect that everything will have been for nought except those you care about. Do you really care about anyone except your ego? Probably not. I don’t think this is what makes life meaningful. Enjoy your Christmas, when gifts are exchanged that are really meaningless except for the $ assigned. What a success.
https://www.youtube.com/watch?v=CRwc_1sILkQ
—————–

Yer such a cheery dude.!

Good music.. didn’t know him.
Thanks.
(Just an honest comment – no snark or lunacy added!)

#60 OXI in GREECE on 12.08.15 at 6:51 pm

#307 OXI in GREECE on 12.08.15 at 3:21 pm
http://www.cknw.com/2015/12/08/bank-of-canada-says-below-zero-interest-rate-possible/

Wait a minute….we were promised many times on this blog that negative interest rates will never happen.

How can so many people not read past a headline? No negative rates are even contemplated unless 2008 repeats, which is not going to happen. — Garth
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Truly. Please tell us why it is a 100% certainty that 2008 will not happen again with the world economy slipping into chaos…..

I see no economic chaos. — Garth

#61 MF on 12.08.15 at 6:52 pm

#36 Bobs ur uncle on 12.08.15 at 6:02 pm

Like Garth said, you missed the point.

I make about 50k year and did my best to scrimp and save to be able to utilize the 10k limit.

It was a vehicle that millennials like me could have used to fund our retirements in a world where fewer and fewer of us have pensions, job security and rrsp’s.

This was just another stupid election ploy by this clown we elected and it would have made Marx proud. It’s sad but not surprising my fellow millennials fell for it. A sad reflection of society tbh.

MF

#62 Hope & Ruin on 12.08.15 at 6:53 pm

#50 Dwilly on 12.08.15 at 6:24 pm

Garth did the numbers a few months back

http://www.greaterfool.ca/2015/10/26/losing-it-4/#respond

“So a 30-year-old starting now and putting in $5,500 a year for three decades earning 7% will have $561,000 at age 60, of which $390,000 is untaxed growth….thus, an income close to $60,000 and zero tax, while having half a million in net worth. All for saving $105 a week.”

VS

“Even though the 30-year-old I mentioned above would have $1.02 million if the contribution limit were left at ten thousand – plus an annual tax-free income of more than $90,000.”

I don’t know what speed that corresponds to but $1million vs 560k is a substantial difference and not just “theoretical opportunity”.

#63 Harley Davidson on 12.08.15 at 6:59 pm

Seems to me that at least ONE rich guy keeps bitchin’ about his extra “Harley detailing money” not being put to work in his TFSA because of the new rules…

Good thing it’s “not that important”…..

Like most people who are doing fine, a full TFSA is not consequential to my personal future. But it was my recommendation originally, and it’s a sound one. The more incentive people have to save, the better for them and the country. There is no economic reason to roll back this limit. — Garth

#64 Rexx Rock on 12.08.15 at 7:02 pm

Poloz the clown talking about negative rates.Bring it on baby,I don’t care anymore.Currency devaluation is coming big time.We all know this country is going into a depression if oil stays down for a considerable amount of time.They’ll be qe and tax increases.40 year mortgages will return and other incentives to get the masses more in debt.Just accept it you sheeple and be happy.Nothing phases me anymore about stupid government policy.

During the 1990s oil averaged less than $20 and there was no depression. The TSX gained by an annual average of 8%. Stop the moaning already. — Garth

#65 David Lee on 12.08.15 at 7:06 pm

Maybe the “negative interest rate” thing is just the BOC firing a shot over the bow of the big banks.

From the ECB experience:

“Banks have been reluctant to pass on negative rates for fear of losing customers”.

“They (negative interest rates) punish banks that hoard cash instead of extending loans to businesses or to weaker lenders”.

http://www.bloombergview.com/quicktake/negative-interest-rates

#66 Nagraj on 12.08.15 at 7:07 pm

Today’s post “It’s Here” is a hoot.
Our gracious host best displays his considerable imaginative powers when he’s frothing at the mouth –

First of all there was “llama”, as in “if you take money out to buy a llama in any one year”.
“Lost Horizon”?
(To get to Shangri La, a lamissary or lamasery, you might ride a llama, and find there alpacas, little llamas, kept as pets, eh?)

But I completely cracked up and spilt my coffee with “Selfie Robespierre”.
(This turned into a bit of a debacle because it was my last ready cup of coffee and when I finally got back to reading, my screen had got itself into update Scheissdreck mode and my train of thought went off the rails.)
“Selfie Robespierre” is winningly original. (Selfie Robin Hood, too Errol Flynny.)
– let me stress that that Robespierre did NOT shoot himself, that idea is ridiculous. And neither did his brother Auguste kill himself, there are eyewitnesses who saw him SLIP off the window ledge, he didn’t jump. And Couthon did NOT deliberately throw himself down the stairs. So there.
[G. Butts : JT = de Sainte-Just : Robespierre ? ]

“Surprising stupidity in this comment section today.
– Garth”
That retort might have been more appropriately appended to a post other than one by KREDITANSTALT, in my opinion.

Finally, glad to see GT celebrating two million new voters . . .

Gosh, even Frosty the Snowman . . .

#67 sm_yyc on 12.08.15 at 7:08 pm

Hi Garth, would appreciate a refresher on legal tax avoidance strategies given the recent tfsa announcement.

#68 Baz on 12.08.15 at 7:08 pm

Garth, excuse our ignores but pls either expand on the below quote or write an article about it, call it whatever you want , maybe policy options 101 or policy options for dummies :)

“He gave a speech on expanded policy options, including QE. Talk about that. It’s more likely. — Garth “

#69 Jed on 12.08.15 at 7:09 pm

RE # %% hawk:

I don’t begrudge public sector workers their pay and pension, but I do hold it against the government for creating a two-tiered system. It is stacked against a self-employed person (unless you are a doctor, but in Canada doctor’s are not a fair representation of being self-employed as they have a captive, guaranteed source of income.)

T2 is in essence saying “Private sector employees do not have the right to a fair retirement income.” Yet he protects the rights of public sector employees to do so. The way to end this enforced class system is to create tools like the TFSA. I think the limit should be even higher–more like 15,000 per person per year. Then we should not have to worry about a retirement crisis. I can imagine how that the poverty rate for seniors will sky-rocket in 20 to thirty years…

Private sector work should be more enticing than public sector work. I want civil servants who serve, not who are there for the benefits because there is no other way to survive your working life and retirement. But in Canada we have this backwards; no wonder we are so uncompetitive on a global scale.

#70 Andy on 12.08.15 at 7:16 pm

Really surprised at the number of “energetic” comments today on whether TFSA’s are bad etc.

Make it simple – whether you like TFSA’s or not, the fact is that an option you might have wanted to use either now or in the future has been significantly reduced. AND – this loss will provide no financial benefit to the government or to anyone else.
Seems like a lose / lose regardless of whether you used this saving tool or not!

#71 nnso on 12.08.15 at 7:18 pm

lesson for some Canadian. Do not spend your own money. If Bank give you free money, take it to the maximum.
10. Mark Zuckerberg’s $7M house
http://financesonline.com/10-luxurious-celebrity-homes-with-outrageous-features-from-will-smith-to-mark-zuckerberg/

10 mark zuckerbergIt’s outrageous in a sense that this tech mogul could have afforded a celebrity-level mansion than his $7-million house in Silicon Valley. It has neat porch, big windows, a yard, and all the nooks and crannies of an upper middle-class house. With all his money as among the richest men in the world, this guy seems to tell us that it’s not all about how big your house. Okay, maybe just your bank account.

#72 saskatoon on 12.08.15 at 7:18 pm

#42 Smoking Man

world wildlife fund founded by president of british eugenics society…

julian huxley.

huxley also was the first director of unesco.

#73 Godth on 12.08.15 at 7:19 pm

#59 Wild Roasted Gonads on 12.08.15 at 6:47 pm

“Yer such a cheery dude.!” I know! I can’t wait until the folding moon rover technology is declassified either! Just imagine the possibilities, we won’t have any more parking problems. It will be so revolutionary.

Why do you think they’re withholding this technology? I don’t understand it, I want to invest.

#74 Harry Painter on 12.08.15 at 7:21 pm

The TFSA move is another example of why Trudeau is being called “a man of little intellectual heft”. To kill a savings plan in a country that doesn’t save enough is pure lunacy….exactly what we expected from the Liberals. This has been done only to spite the fact that the Conservatives had instituted it…political terror.

#75 MF on 12.08.15 at 7:22 pm

#3 TRT

I love those CBC comment boards. All these people that voted for these guys and now regret it complaining.

I actually wish Trudeau would step down (serious)

MF

#76 Josh in Calgary on 12.08.15 at 7:22 pm

During the 1990s oil averaged less than $20 and there was no depression. The TSX gained by an annual average of 8%. Stop the moaning already. — Garth

So what’s different this time around? Still a hang over from the credit bubble, since we kept partying while the rest of the world has had time to sober up?

Near term our prospects look bleak, but if the US keeps doing well does that not bode well for Canada in the medium term since they’re our number 1 customer by a country mile? Will there be a return of manufacturing now that big American corps can pay us in Canadian Pesos again?

Seems to me that we must pay the piper for living high on the hog while the rest of the world licked their wounds, but after that we should stabilize out ok.

#77 Frank on 12.08.15 at 7:23 pm

Can you talk to your web guy and make this more mobile friendly. The page is a bitch to read on toilet.

Upgrade to an iToilet6. — Garth

#78 Yitzhak Rabin on 12.08.15 at 7:24 pm

Garth’s hissy fit in the comments section today over Poloz’s open talk of negative rates is amusing. Perhaps his perception of central bankers being all knowing, benevolent masters of world economics is finally being challenged within his own mind.

The blog Freakonomics interviewed Ben Bernanke last week here:
http://freakonomics.com/2015/12/03/ben-bernanke-gives-himself-a-grade-a-new-freakonomics-radio-podcast/

Let’s leave Garth alone with this tidbit to ponder if there are any similarities to today.

DUBNER: What do you think? What do you say when you hear that statement of yours from 2005?

BERNANKE: Well, it was partly the result of the fact that I was representing the administration. And you don’t really want to go out and say, “Run for the hills,” right?

You can connect enough of the dots if you want to Garth. Central banks have hopelessly screwed things up. Don’t toe the party line when you know better and go down like Dr. Robert Stadler in Atlas Shrugged.

Too erudite for me. All I know is there will be no negative borrowing rates in Canada. — Garth

#79 prairie person on 12.08.15 at 7:29 pm

Royal Bank of Canada 5.50% 5-Year Rate Reset Preferred Shares, Series BK

#80 Sheane Wallace on 12.08.15 at 7:30 pm

#43 Leo Trollstoy on 12.08.15 at 6:15 pm
QE is coming.

I already said it 10 times.

Are you proud of being wrong 10 times?
——————————

How could I be wrong if I did not say when?

But it is coming, be patient.

#81 Wild roasted Gonads on 12.08.15 at 7:30 pm

#77 Frank on 12.08.15 at 7:23 pm

Can you talk to your web guy and make this more mobile friendly. The page is a bitch to read on toilet.

Upgrade to an iToilet6. — Garth
————
You’re on fire today!

#82 MR.Mike on 12.08.15 at 7:31 pm

#13 Johnny d on 12.08.15 at 5:05 pm

Negative interest rates possible in Canada!!! The bank of ‘under my mattress’ will be the best place to hold cash apparently. USD of course… Our new polimer bills won’t even make good toilet paper when Poloz pulls that lever.

When stitched together, our new polimer bills make for an excellent shelter…get your facts straight!

#83 Jeffrey of Saskatoon on 12.08.15 at 7:33 pm

Bowed heads last longer.

#84 Wild roasted Gonads on 12.08.15 at 7:33 pm

#73 Godth on 12.08.15 at 7:19 pm

#59 Wild Roasted Gonads on 12.08.15 at 6:47 pm

“Yer such a cheery dude.!” I know! I can’t wait until the folding moon rover technology is declassified either! Just imagine the possibilities, we won’t have any more parking problems. It will be so revolutionary.

Why do you think they’re withholding this technology? I don’t understand it, I want to invest.
———
Tang is all the great unwashed can handle at once.

#85 Godth on 12.08.15 at 7:33 pm

#72 saskatoon on 12.08.15 at 7:18 pm

Oh wow, are you telling us those that have the gold make the rules and they’re duplicitous? Whoah dude, that’s shocking. They play both sides? Noo waay!

You’re breathing my air, die dumbo die.

#86 Smoking Man on 12.08.15 at 7:34 pm

#75 MF on 12.08.15 at 7:22 pm
#3 TRT

I love those CBC comment boards. All these people that voted for these guys and now regret it complaining.

I actually wish Trudeau would step down (serious)

MF
….

Don’t waste your time here. Go to the USA

You have a brain…

#87 Ray on 12.08.15 at 7:37 pm

http://www.cbc.ca/news/business/stephen-poloz-monetary-policy-1.3355704

Negative rates?? Are we living in an economic twilight zone?

#88 Smoking Man on 12.08.15 at 7:38 pm

Too erudite for me. All I know is there will be no negative borrowing rates in Canada. — Garth

Your handycap. Erudite…

Look around you man….Soviet uninon number 2 all around.

#89 Randy on 12.08.15 at 7:38 pm

…the preppers aren’t looking so dumb anymore…..

#90 Jeffrey of Saskatoon on 12.08.15 at 7:39 pm

Maximilien never figured that out.

#91 Smoking Man on 12.08.15 at 7:41 pm

#72 saskatoon on 12.08.15 at 7:18 pm
#42 Smoking Man

world wildlife fund founded by president of british eugenics society…

julian huxley.

huxley also was the first director of unesco.

These people are dangerous, way worce than ISIS

Why have our spy agencies not rounded them up…

#92 CdnMom on 12.08.15 at 7:42 pm

#5
All I hear are a bunch of well-off folks whining about a loss of an entitlement that existed for less than a year. If that was room you could take advantage of, count yourself blessed to be prosperous. Many, 93+ percent apparently, are not in the same boat.
..…

If that’s all you hear, then you have selective hearing. My 20 year old, two-job working daughter is lamenting the fact that she’s not getting that TFSA room, because her peer group wants to openly smoke pot. See, she needed that room to sock away her money made after putting herself through college because she can only find non-renewable contract jobs. She needed it to grow because she’s at the bottom of the ladder, trying to gain independence and a life in a shitty economy, and needs income after the end of the contract.

#93 steerage steward on 12.08.15 at 7:43 pm

By the Cons own estimates, the extra room in the accounts will cost government coffers $85 million in the current fiscal year, jumping to $360 million annually by 2019. Five years on, that’s $1.1 billion in foregone revenue.

http://www.cbc.ca/news/business/budget-2015-tfsa-limit-hiked-to-10-000-as-election-budget-delivers-few-goodies-1.3040853

Seems odd people saying this change won’t make a difference in revenue.

#94 liquidincalgary on 12.08.15 at 7:44 pm

TurnerNation on 12.08.15 at 4:44 pm
Requesting “Western bums and creeps” stay away from Ontario. Et tu, King Ralph? RIP.

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

what in hell do you have that we already don’t?

#95 BC Guy on 12.08.15 at 7:45 pm

The economic mess that Canada is in right now is the fault of Harper and the Conservative ideology, which is:

– give tax breaks to the rich
– give tax breaks to corporations
– give tax shelters to the upper income and the rich
– magnify the housing bubble with low interest rates
– put all your eggs in one basket – the oil industry

The end result: .73 cent dollar, wealth disparity, TSX crashing, young Canadians and middle class who can’t find a decent place to rent or buy and are struggling to keep their job.

You and your Conservative ideologues lost. Accept defeat.

#96 Mark on 12.08.15 at 7:50 pm

“Maybe the “negative interest rate” thing is just the BOC firing a shot over the bow of the big banks.”

This doesn’t make a lot of sense. Low interest rates are great for the banks. Their funding costs are suppressed, while they get to make loans against significantly expanded notional valuations of interest rate sensitive assets. Banks make the spread between their funding costs and the return on investment. Higher rates are what harm banks by suppressing asset prices and narrowing their gross margins.

The reason why the BoC might be forced to press the short end of the curve into negative territory is if the yield curve flattens way too much. Which appears to be in the process of happening as money is now flowing out of stocks and into bonds out of fear of a further melt-down in the O&G and RE sectors which have delivered so much (relative) vibrance to the Canadian economy over the past decade.

Can you talk to your web guy and make this more mobile friendly. The page is a bitch to read on toilet.

Strange. Reads just fine on my 7″ Android tablet.

“Will there be a return of manufacturing now that big American corps can pay us in Canadian Pesos again?”

I doubt it. There’s not a lot of market confidence that the currency is going to remain this low for an extended period (the bond market is still behaving as though nothing happened). And the cost environment is still ridiculous compared to that of overseas or even Mexican centers.

” The TSX gained by an annual average of 8%. Stop the moaning already. — Garth”

TSE 300 January 1, 1990 = 3272.9
TSE 300 January 1, 2000 = 8431.1

Annualized price gain = 9.92%/annum + Dividends

#97 saskatoon on 12.08.15 at 7:55 pm

#69 Jed

the solution is simple:

don’t extend suffrage rights to government workers.

#98 rk usa on 12.08.15 at 7:56 pm

re: #3 TRT on 12.08.15 at 4:30 pm

I think anger should be directed at Poloz. Looking at comment boards at the Globe and CBC, people are ticked.

what do you expect him to do raise interest rates and bring on a major recession that would result from a complete collapse of the housing market

Canada live through a 60 something cent dollar before you will make it again

and remember you are an energy superpower

LOL

and a housing superpower too!

LOL

#99 Millennial Realist on 12.08.15 at 7:58 pm

Wow, Garth, if we could somehow harness the kinetic power of “snark”, so prevalent in today’s post, we could use it to fuel all vehicles and end global warming. I’ll send a memo to Paris – let’s look into that!

“….those who are jealous of others’ success

….feel entitled but denied…

….over-educated mouldy Millennials ….

…. the us-against-them theme….

…. a form of class warfare at the very core of the tax reform now before Parliament…

….believe they can be better off by pulling down others.”

Any other ad hominem attacks on people who really just want tax fairness, and you’d have two columns written today!

Class warfare? Are you kidding? Ironically, this is a term that for generations in Canada and the U.S.A. has only been trotted out by the wealthiest elites wanting to protect their turf – you don’t hear most blue collar people or service workers thinking this way. They just want fairness, a real chance.

Like it or not, this last election saw the “mouldy millennials” you seem so bitter about take a position they will not relinquish for decades, as the new controllers of the balance of power in our democracy. The boomer dynasty is now on the wane, so everyone should get used to that idea. The poll numbers tell the truth. The numbers don’t lie; Elections Canada ain’t CREA.

Even in the U.S.A., the people are speaking, and we’d best pay attention. The economy there remains weak and divided, with a slow and painful recovery that might still be at risk. The disaffected hordes who are flocking to Trump are doing so because they see the whole economic and socio-political system tilted against them unfairly, and they are willing to just tip over the whole apple cart and damn the consequences. A powerful, historic sentiment that we would do well not to ignore.

Such wealth inequality and lack of fairness in our tax and financial system (perceived or ‘real’, doesn’t matter, it’s the same thing to ordinary people) has historically lead, if unchecked, to depression, war, Hitler, Bolsheviks, you name it. 1789. 1933. 1918. 2001. Scary stuff.

Next might be Trump. More Fergusons. Americans and Canadians attacking their own police. Read about the racism and chaos today in Thunder Bay, just one omen of the future.

http://www.thestar.com

You are bang on Garth, about the idiocy of this real estate mania. It is simply stupid. But it is far from the only alternative millennials see when it comes to fairness and opportunity.

This class warfare stuff seems very bitter, personal and short-sighted with you today.

Unfortunately, history tells us when it is clearly apparent to the .1% that the interests of the masses also are a benefit to the wealthy, it will be too late. The unravelling will already be upon us.

So let’s promote more objective fairness now and for the future, consistently.

Roll back the TFSA – not a big deal at all.

Make all income equally taxable – wtf is up with special treatment for capital gains on shares, many of which are given away to insiders who did nothing to earn them.

Take action to ensure that everyone has a better chance to actually contribute to RSPs and TFSAs.

Don’t subsidize corps that want to hire TFWs, or outsource their work. Require products brought from China and elsewhere to include a full carbon tax for production and transportation, plus cover a living wage for workers.

And don’t let government into the business of creating policies to promote real estate bubbles – you have truly been correct on this one, Garth!

We’re all in this together. Blaming and finger pointing is usually hypocritical at best, destructive at worst.

We’re heading down a very scary path, but there is still time. Harper lies and demagoguery are gone, thankfully.

Canada has really sucked for about a decade. I am willing to give it another chance.

#100 Freedom First on 12.08.15 at 8:00 pm

#61 MF

MF. You have learned a lot since you first started visiting this Blog. Kudos. You are on the right track and the longer you keep doing what you are doing the easier it will get. You will reap the rewards, and every step of the way too.

#101 Barbara McWeatherly on 12.08.15 at 8:01 pm

Garth, Did my preferred shares go down today because the Bank of Canada Governor spoke about Negative rates policy options? I am concerned about my investment. Please tell me I am not being too paranoid here!!

You are being too paranoid. — Garth

#102 conan on 12.08.15 at 8:08 pm

Llamas? I thought it was camels. Time to check the E&O!

#103 TFSAs Do Cost Governments Money on 12.08.15 at 8:09 pm

I’m a bit bummed about the TFSA contribution limit being reduced too, but let’s not kid ourselves and act like the TFSA doesn’t cost the government any money.

The government will make additional tax revenues from this move, assuming that the $4,500 that can no longer go TFSAs is invested elsewhere. Seems pretty basic to me.

Over the long term the government is going to make a lot more revenue by having a lot more investment returns taxable as a result of this move.

#104 gut check on 12.08.15 at 8:12 pm

@ #39 Godth on 12.08.15 at 6:07 pm
My life is great! Moment by moment by moment. The birds were having a terrific time in the stormy weather today. You money grubbers are the real losers, people matter; life matters.

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

You said it. :)
You’ve heard this I’d bet, but here it is for those who haven’t:

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied, “only a little while. The American then asked why didn’t he stay out longer and catch more fish? The Mexican said he had enough to support his family’s immediate needs. The American then asked, “but what do you do with the rest of your time?”

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siestas with my wife, Maria, stroll into the village each evening where I sip wine, and play guitar with my amigos. I have a full and busy life.” The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually New York City, where you will run your expanding enterprise.”

The Mexican fisherman asked, “But, how long will this all take?”

To which the American replied, “15 – 20 years.”

“But what then?” Asked the Mexican.

The American laughed and said, “That’s the best part. When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions!”

“Millions – then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

#105 White Crock BC on 12.08.15 at 8:14 pm

Cost of living 2%?

2% is the StatsCan fudged figure so as to not panic the masses. Keep adjusting that basket of goods boys.

Oh, I forgot. Grocery prices may be high and climbing higher, but it’s that cheap gas ($1.22/L) that keeps the official rate down.

#106 Kenchie on 12.08.15 at 8:14 pm

“The tax cut will come out of everyone’s pocket, just as this TFSA mistake will help create a society less affluent and more taxed.”

Garth, you’re looking at it all wrong. Less tax revenue for the government means more money left in Canadians’ pockets. As for those 264,000 who will be more likely to mitigate the extra taxes, that’s their right. They’ll either spend or save/invest.

If I had to choose between less government revenue and more government revenue from income taxes, regardless of how it’s done achieved, I’d take less government revenue 999 times out of 1000.

#107 Bytor the Snow Dog on 12.08.15 at 8:15 pm

#29 Cramdown-

And as everyone knows, there’s nothing good about a shrunken tool.

If rates go negative (I don’t believe they will) then it will be indeed true that all of my everyday use money will be under my mattress.

F the banks.

#108 gut check on 12.08.15 at 8:15 pm

By the by, did we eulogize this madman here yet?

This will do:

http://www.therebel.media/maurice_strong_is_dead

Sionara, Maurice. May you …. nevermind.

#109 common sense on 12.08.15 at 8:17 pm

Freedom First..

Your right..more people should have been maxing RRSP and TFSA’s but their priorities were wrong. Glad the USA continued to raise it’s ROTH contribution levels for us fortunate to contribute to them.

Just curious…are you buying Garth a matching velour track suit this Xmas to go with the bicycle built for two that you let Garth drive with you in the front?

#110 Freeman on 12.08.15 at 8:21 pm

If any of this is true, if it is true that Canada is mostly a COMMODITY EXPORTER, then unemployment in Canada is going to double over the next 2 years, as we enter into one of the worst recessions we have ever seen before:

http://www.theautomaticearth.com/2015/12/plunging-commodities-interfere-with-the-new-world-order/

Quote: ((” Anglo American, one of the world’s biggest miners, and a ‘producer’ of platinum (world no. 1), diamonds, copper, nickel, iron ore and coal, said today it would scrap dividends AND fire 85,000 of it 135,000 global workforce (that’s 63%!).
Anglo is just the first in a long litany line we’ll see going forward. Commodities ‘producers’ are being completely wiped out, hammered, killed, murdered. ” ))

WELL, IF THAT IS TRUE, then Canada’s economy is about to be hammered, killed, murdered also.

So what about home prices, can they continue to stay up in the clouds when all this is happening? Probably not for long.

#111 Daisy Mae on 12.08.15 at 8:22 pm

“It seems a responsibility of government is to encourage its citizens to save, instead of just pigging out on debt and snorfling real estate.”

***********

Except governments don’t, and have never, done either….

#112 Daisy Mae on 12.08.15 at 8:26 pm

“It sure doesn’t help all the newly unemployed, looking for reasonable places to put their severance packages so they can better cope with the future.”

***********

The unemployed need those severance packages just to survive. None of it will be invested.

#113 Daisy Mae on 12.08.15 at 8:28 pm

“It’s not a punishment of the wealthy, to whom ten grand a year is car detailing money.”

***********

Then why are the 1% wealthy so hostile?

What hostility? It’s just bad policy. — Garth

#114 acdel on 12.08.15 at 8:28 pm

I do not get this; why punish the very people who are just trying to build some sort of nest egg? Raising taxes on the so called 1% is laughable, they have the resources to side step this law. What should be done it to close all the tax loopholes; if one is draining Canada’s resources for one’s profit then one should pay the full tax of taking advantage of what Canada has to offer.. What is so difficult about this idea????

#115 Ronaldo on 12.08.15 at 8:30 pm

#99 White Crock BC on 12.08.15 at 8:14 pm

” ,but it’s that cheap gas ($1.22/L) that keeps the official rate down.”

You think that’s cheap. Try 79.9 at Costco in Red Deer today. I think we’re getting hosed here in the lower mainland and the island.

#116 ROCK BEATS PAPER on 12.08.15 at 8:31 pm

#98 Barbara

Low rates are related to prefs going down. There are two other factors today. First, two bank prefs were released today and the terms are more favourable than the prefs you own. Secondly, many people are contemplating selling at the current lows with their advisors tacit approval for tax loss selling. You may not have panicked but others will.

All the bond proxies have been under pressure for months including prefs, REITS, pipelines, Corp bonds etc… because too many people crowded in at any price blinded by the juicy dividend. As rates go up, there will now be a headwind instead of the tail wind of dropping rates.

So, the markets do not see negative rates for now in north America.

#117 Vundo on 12.08.15 at 8:32 pm

#74 Harry Painter: it may well have been insane to abolish the TFSA if the Liberals were doing anything of the sort. They are not. As a matter of fact, with the lower limit and the middle income tax cut, more dollars are going into my TFSA than if income tax stayed the same and the TFSA limit was increased to $10k or $100k or $1 million per year. Hell, make it a trillion! The impact on me and the other 93% of TFSA holders, who don’t have them maxed, would be exactly the same.

#7 JG: between this and other comments Garth has made, it further confirms that the Liberal plan is so far inadequate. I can’t believe they are oblivious to those tax avoidance strategies, as many of them have personally taken advantage of them. If they are serious about asking the wealthy to pay more, they will have to do more than just create the bracket. Otherwise, it will just be empty words from them.s

#118 Bytor the Snow Dog on 12.08.15 at 8:32 pm

#84 Millennial Realist

Excellent post Grasshopper. If only we would learn from our past mistakes.

Alas it seems we don’t.

#119 paul on 12.08.15 at 8:33 pm

#92 BC Guy on 12.08.15 at 7:45 pm

The economic mess that Canada is in right now is the fault of Harper and the Conservative ideology, which is:

– give tax breaks to the rich
– give tax breaks to corporations
– give tax shelters to the upper income and the rich
– magnify the housing bubble with low interest rates
– put all your eggs in one basket – the oil industry

The end result: .73 cent dollar, wealth disparity, TSX crashing, young Canadians and middle class who can’t find a decent place to rent or buy and are struggling to keep their job.

You and your Conservative ideologues lost. Accept defeat
———————————————————-
Sounds like you are lost!

We lost a battle which most likely means you lost the war!

#120 Whoever on 12.08.15 at 8:34 pm

Bank of canada will drop key lending rate to zero in a last ditch effort to ignite growth.

Do not rule out some other form of quantitative easing , Canada style.

So , do not rule out further years of RE prices increases.

Nope. Rates would only fall amid a seriously sick economy, in which rising unemployment would mean tumbling houses. — Garth

#121 crowdedelevatorfartz on 12.08.15 at 8:37 pm

Excellent photo today.

#122 ben on 12.08.15 at 8:38 pm

Where are the policies that are going to stick it to the boomers instead of the workers?

#123 earthboundmisfit on 12.08.15 at 8:38 pm

Funny (sic) how Morneau changed hats so quickly. From benefits and retirement specialist where the TFSA was good public policy to finance minister where it suddenly became bad tax policy. Perhaps the twain shall never meet.

The photo reminds me of Bill Waterson’s Calvin and Hobbes – the deranged killer mutant monster snow goon.

#124 Daisy Mae on 12.08.15 at 8:42 pm

“And tax-free accounts even up the playing field with public-sector workers, who enjoy indexed defined-benefit pensions.”

***********

This may be ‘subject to change’ going forward.

#125 paul on 12.08.15 at 8:42 pm

#111 Daisy Mae on 12.08.15 at 8:22 pm

“It seems a responsibility of government is to encourage its citizens to save, instead of just pigging out on debt and snorfling real estate.”

***********

Except governments don’t, and have never, done either
———————————————————-
When our host was in Government he did.
But don’t let that stop you from making you usual blanket statements!

#126 NoDoubt on 12.08.15 at 8:43 pm

Canada is finished economically and Poloz knows it.

#127 frankTols on 12.08.15 at 8:45 pm

Garth. You believe there’s little chance Canada may find itself in a negative interest rate situation. Perhaps the citizens of various european countries were told the same but it happened:

Financial post Oct 29/15

‘The Swedish central bank held its benchmark interest rate at -0.35% today, the level it has been at since July.

Although retail banks have yet to pass on that negative to rate to Swedish consumers, the longer it’s held there the more financial pressure there is for banks to pass the costs onto their customers. That’s a problem because Sweden is the closest country on the planet to becoming an all-electronic cashless society.

Remember, Sweden is the place where, if you use too much cash, banks call the police because they think you might be a terrorist or a criminal. Swedish banks have started removing cash ATM machines from rural areas, annoying old people and farmers. Credit Suisse says the rule of thumb in Scandinavia is: “If you have to pay in cash, something is wrong.”

So Garth, if the long shot happens and we Canadians enter a negative interest rate environment, do you think I’d be able to claim a capital loss on funds held in those accounts where I lost money?

#128 Caught In The Grip on 12.08.15 at 8:48 pm

Garth, do you think we are in a bond bubble?

#129 Gulf Breeze on 12.08.15 at 8:50 pm

“The more incentive people have to save…” Garth

The middle class has all but disappeared. The economy is bifurcating. People who would most benefit from the tfsa don’t, with rare exception, exist. They live pay check to pay check, working in the service industries. Every cent they make circulates in the economy, as it should.

Wealthy people who hide money to avoid paying taxes will one day be considered a curiosity. More entrepreneurial than most? Really?

Let’s flip that around. Many entrepreneurs, my age, came if age when all that was required to get ahead was a pulse. If they are very accomplished they didn’t do it all on their own.

They had loans from their parents and likely paid a steady stream of new immigrants minimum wage or a little better to propel them forward.

Wealthy doctors, referred to frequently on this blog, had government subsidized education and then became virtual government employees. Had the 10% tfsa contribution been in effect 40 years ago, it would have removed enough from govt. coffers their OWN incomes could have taken a hit.

Wealth — so much of it is pure smoke and mirrors.

I want to make another point. If money in tfsa’s is held in stock there is the potential to drive shares up into bubble territory where the P/E ratios makes no sense. Not sustainable and NOT good for what is left of Main Street

#130 Jack Manning on 12.08.15 at 8:52 pm

All our bonds and strip bonds are at 4% to 5% fixed rates that mature from 2039 to 2045 so Poloz can take a hike with us.

Just hearing the world negative makes me feel negative so we were already towards spending less on Christmas but now we are thinking why spend anything more than for food, gas and a small gift like wine, dessert etc.

I think alot of people with money will feel more bitter, frustrated, angry and just stop spending.

Those already in debt will get more in debt and housing will fall as 2016 to 2017 is the Liberal Federal, provincial, municipal tax year, TFSA 45% cut contribution limit, carbon taxes, tolls, eco fees, cap and trade, much higher electricity rates 10%+ annual increases new and higher water rates, garbage fees, etc. etc.

#131 John on 12.08.15 at 8:53 pm

Lots of worry and anger or something here today. humm

#132 Ralph Cramdown on 12.08.15 at 8:54 pm

Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth

#133 amazon girl on 12.08.15 at 8:56 pm

TFSA , since the day it started. I MAXED out.
Thanks to you, GARTH. I DON’T DRINK SCOTCH.
I prefer Grand Maurier but tonight all these comments,
about negative interst rates and QE. I will have one
for you.
Good night and thanks.

#134 Bobs ur uncle on 12.08.15 at 8:56 pm

#61 MF

I’m happy you have the income and focus to be able to do that. Keep it up and you will have no worries financially in future. However, lots of folks don’t have that much income, or have much higher expenses with kids, mortgage, commute, etc that make it impractical to set aside 10k in a year. So the number of people who are affected is pretty small, and they’re just not hurting to begin with.

We who are affected can spend our time angrily complaining about how we have been wronged, like many do here, or focus instead on the opportunities we have been lucky to get. Personally I am trying for the latter, as your health suffers when you’re pissed off all the time. I guess we’ll see if that can last…

#135 Smoking Man on 12.08.15 at 8:56 pm

DELETED

#136 pwn3d on 12.08.15 at 9:00 pm

#40 Leo Trollstoy on 12.08.15 at 6:08 pm
“I wouldn’t view what’s happening as anything but short-term cyclical weakness. And of course, a great buying opportunity in the CAD$, and a great shorting opportunity for USD$ stuff. Take out some loans in USD$, and pay them back with more valuable CAD$ in the not-so-distant future.” – Jan. 8, 2014

http://forums.redflagdeals.com/hot-deal-canadian-dollar-loonie-sale-1434335/
——————
Thankfully there’s some smart people there as well:

“All a person need to do is do the opposite of what Mark77 suggest, and they would do really well financially.”

“^ +1000000”

#137 Daisy Mae on 12.08.15 at 9:05 pm

#51: “…bartered for install of hot water tank – paid cash to mechanic for brakes…”

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

This may become far more common.

#138 For those about to flop... on 12.08.15 at 9:13 pm

#273 Broke Dick on 12.08.15 at 1:23 pm
#243 Doug in London on 12.08.15 at 11:45 am
@For those about to flop, post #31:
Batter in my ears? You should study English, batter is the liquid you make pancakes with. You might put batter in your ears, but I fail to see the point in doing so, but even if I did, communication here is VISUAL, not audio. Also, your response to my comment should be in yesterday’s post where it belongs. Based on the rubbish you’ve posted, it’s obvious you haven’t figured these things out. You don’t have any CPD? All the better, if you had an IQ greater than your shoe size you’d figure out that CPD is ON SALE and NOW is a good time to buy it. However, you probably still don’t get it so go ahead and put your money into GICs with their paltry interest rate or better yet, buy a condo in Toronto or Vancouver. Hey, they’ve had a good run up in value and will continue to go up, up, up forever. How could you possibly go wrong?
——————————————————-

Someone hasn’t had their morning coffee!

///////////////////////////////////////////////
The guy is not right in the head.
I asked Garth what was the story with CPD and ol douggy boy has been trying to get people to buy them to make himself feel better.
I’ve always said Doug t. is my favourite Doug on here!

#139 AlbertaGuy on 12.08.15 at 9:14 pm

I guess we will just have to wait until 2019 when the political world will once again “right” itself and we get our 10k TFSA limit back.

#140 Mark on 12.08.15 at 9:14 pm

“All our bonds and strip bonds are at 4% to 5% fixed rates that mature from 2039 to 2045 so Poloz can take a hike with us.”

If that’s the case, then why are you complaining? You’re sitting atop returns that are significantly greater than most other asset classes can offer. Inflation officially at 1%, and trending lower. Your bonds have gained a lot of purchasing power over the past few years.

The more negative Poloz needs to cuts the rates, the better for bondholders like you as your payments are fixed.

Its a return a higher rate environment which will prove to be a real hardship for people with your sort of investment strategy. But until then, you really should enjoy the fact that you’ve selected some outperforming investments.

Thankfully there’s some smart people there as well:

The problem with such trolling of yours is that its selective quoting at best, and what was described was a longer-term strategy ideally measured in a time span far greater than just a few years. The long-term trend of the USD$ is down, on account of running chronic trade deficits. Here we are, a year or two later, and opportunities to enter the described trade haven’t been better in a long time.

#141 Freedom First on 12.08.15 at 9:15 pm

#109 common sense

You are an oxymoron.

#142 gut check on 12.08.15 at 9:16 pm

Smoking Man! You’re already being DELETED tonight? Naw, dog, it’s too early for that!

#143 For those about to flop... on 12.08.15 at 9:17 pm

#262 JimH on 12.08.15 at 12:41 pm
#171 For those about to flop… on 12.07.15 at 11:37 pm
re comment to Mark
“…you know everything about nothing.”
================================
Actually, in all fairness to Mark, I think he knows nothing about everything!

//////////////////////////////////////////////
I like it!

#144 Adam on 12.08.15 at 9:18 pm

Garth you hit the nail on the head: $10K is car detailing money for the wealthy…..lowering the TFSA limit appeals to those who feel entitled yet denied.

#145 bubu on 12.08.15 at 9:20 pm

Negative interest rates…. hahaha… I think Poloz forgot many Canadians still have dual citizenships so they can move the money and their assets out pretty quick.. Same as Notley in AB. If people don’t make money in AB and they are taxed more they move out… Most of the people in AB are there for the money and nothing else… Edmonton or Reed Deer are not cities where people want to move for the culture, weather or other things. Keep adding more taxes guys!!!

#146 Smoking Man on 12.08.15 at 9:22 pm

#142 gut check on 12.08.15 at 9:16 pm
Smoking Man! You’re already being DELETED tonight? Naw, dog, it’s too early for that!
….

Check your inbox…lol.

It was a bit insensitive… happens every time a nectoniteJD pilot switches from wine to JD

#147 common sense on 12.08.15 at 9:23 pm

#141 Freedom First

You would make Levitt on Barney Miller proud.

#148 Gulf Breeze on 12.08.15 at 9:23 pm

#110 Freeman,

Thanks for link. Interesting about Anglo American. I agree that Canada is going to be entering a new Great Depression. I don’t think there is much we can do about it and therefore was happy when the liberals were elected. I think that they are better equipped to handle the inevitable, humanely, than the Harper dinosaurs.

I think too, that Poloz is looking at very limited options to deal with the very deep crisis that’s coming. That’s why negative interest rate idea is being floated.

I really feel it’s time Canadians do just that, remain Canadians, help those we can, gladly, if we have the means. If that means paying higher taxes if we are well off, we should rejoice that we are in a position to do so.

How very very lucky we are to be living in a country that has dealt with prior economic crises in such a way that they didn’t become moral and ethical crises.

#149 Cdn Mom on 12.08.15 at 9:24 pm

#95 BC Guy on 12.08.15 at 7:45 pm
The economic mess that Canada is in right now is the fault of Harper and the Conservative ideology, which is:

– give tax breaks to the rich
– give tax breaks to corporations
– give tax shelters to the upper income and the rich
– magnify the housing bubble with low interest rates
– put all your eggs in one basket – the oil industry
………..
Hunh, funny. As a single income, blue collar family, Harper saw that we received a $2,000 tax break (family income splitting), which T2 is taking away.

As a SAH mom, someone finally recognized that I gave up my career chances and the money, pension, benefits etc., to raise my kids without your ilk subsidizing their daycare. And I got to raise them as productive citizens. You won’t need to cover their unpaid student loans because they have no student loans, they’ve worked since 14 and 15. The youngest is working full time while finishing high school. They do not thank you for your knee-jerk attitude, and appear to put more thought into their opinions than you.

#150 pwn3d on 12.08.15 at 9:31 pm

I’m so happy there are people like Mark in this world, because I know no matter how bad things get, there will always be people out there I can make a buck off. He’s like the ATM you invite to your poker game so you increase the payout with no risk to them actually winning.

I’m totally convinced that I’m successful not because I’m a genius, but because there are so many of these people out there. Wynne getting a majority just proved my point yet again. You got to love being alive.

#151 Dee on 12.08.15 at 9:36 pm

@#49 and others

I think one point Garth made, and a lot of others missed, about these contribution limits: because you carry them forward, what you can’t use now you can use later.

When the TFSA was introduced in 2009, I was two years out of undergrad, buried in student loans, and barely getting by in Vancouver. The TFSA cap of $5,000/year might as well have been infinite; I didn’t even bother.

Left Vancouver in 2010 (good riddance; best decision I ever made). Got a much better job in 2011. Paid off the student loans by 2014. By then I had $31k in cap room, which I almost entirely used up; this year, I put the full $10k in plus what cap room I had left by July. Ready to go with the full $5,500 on 2016 Jan 1.

Sure, there was a time I looked at the TFSA and was like, pff, that’s for rich people, I’ll never use that. Now–as someone ‘middle class’–I’m sad to see that clawback. The TFSA has been my favourite investment vehicle and helps make up for the fact that the startup I work for provides no retirement benefits at all.

With any luck, the young folks crowing about TFSA cuts will find, by their 30s and 40s, that life is different on this side of university.

But hey, maybe the coming hike in CPP withholdings means I’ll get another ten bucks a month out of CPP when I’m old…

#152 Smoking Man on 12.08.15 at 9:36 pm

#147 pwn3d on 12.08.15 at 9:31 pm
I’m so happy there are people like Mark in this world, because I know no matter how bad things get, there will always be people out there I can make a buck off. He’s like the ATM you invite to your poker game so you increase the payout with no risk to them actually winning.

I’m totally convinced that I’m successful not because I’m a genius, but because there are so many of these people out there. Wynne getting a majority just proved my point yet again. You got to love being alive.

A smoking man, yeah..

#153 Whoever on 12.08.15 at 9:40 pm

15 at 8:34 pm
Bank of canada will drop key lending rate to zero in a last ditch effort to ignite growth.

Do not rule out some other form of quantitative easing , Canada style.

So , do not rule out further years of RE prices increases.

Nope. Rates would only fall amid a seriously sick economy, in which rising unemployment would mean tumbling houses. — Garth
———-
Nope. It is a sick economy in the U.S that orchestrated U.S fed policy of lower rates and quant easing between the GFC onward which coincided with a recovering housing market and higher prices.

What would make the result any different here ?

#154 For those about to flop... on 12.08.15 at 9:40 pm

#141 Freedom First on 12.08.15 at 9:15 pm
#109 common sense

You are an oxymoron.

////////////////////////////////////////////
Cheer up ” common sense” I would rather be an oxymoron than just an average moron like Females First.

#155 Mark on 12.08.15 at 9:44 pm

“I’m so happy there are people like Mark in this world”

Why is that? Because I shine light onto the sort of nonsense you Realtor types have been spreading about house prices going up? I can kind of understand why you’re so upset — after all, how long did you really expect the RE sellers to get away with such nonsense?

The whole situation reminds me of the Iraqi Minister of Information. The bombs are a’dropping, undeniably yet he’s out there front and center claiming that not only is everything all right, but that Iraq is strong. Well that’s how ridiculous the modern Realtors look at this point. Even the banks, not exactly the bastions of responsibility, have tightened up credit considerably now that the RE market is clearly well past peak and is now decelerating rapidly with falling prices. With the BoC/CMHC without really any meaningful policy tools to stop such.

#156 For those about to flop... on 12.08.15 at 9:44 pm

Donny Rump might have gone to far this time.
Ah well it was fun to watch at the start but now it’s turning into a circus.

#157 Bobs ur uncle on 12.08.15 at 9:45 pm

#92 CdnMom

Thanks for providing the example. But as to tax-deferral for a future year, couldn’t your daughter use RRSP contributions for that? If she will be in a lower tax bracket later, seems like it would make sense, plus she gets the tax break now. Though if she needs the money soon (like next year) I don’t know how much value there would be in either TFSA or RRSP. Nothing truly safe yielding much of anything these days, so unless she wants risk, may be just as well just sitting on the cash. My $0.02, but your mileage may vary.

#158 Retired Boomer WI on 12.08.15 at 9:48 pm

HA!!! We two US retied Boomers fully funded our TAX-Free ROTH accounts assign as we were able to do so.

2016 begins my 5th year on the tax payer’s nickel, and my wife’s 3rd. We have managed to take some money out of our taxable retirement monies to improve our lives each year. (Who wants to be denied anything when you are retired??)

The strange thing, the balance has grown rather nicely from 2012 until today. Our tax free dough totals nearly 200K plus the taxable stuff.

Not too shabby for 2 high school graduates who only one year -together-we earned above $100,000 combined.

At least we have something to show for it, besides a modest paid off home.

All built on 12% into tax deferred 401K, plus funding the Roth tax free as we could. Yeah, it took nearly 30 years,

what are you planning for the next 30 years? Besides paying for an over priced home, I mean…

#159 Gonkman on 12.08.15 at 9:50 pm

@ #42 Smoking Man on 12.08.15 at 6:12 pm

Great post SM. Your comments are much better when you haven’t downed a Quart of JD…. lol

I don’t even bother anymore trying wake idiots up to how things really work. Just too many sheeple.

If the sheeple has a smartphone they can’t live without because they need to be “connected” and “be social” they are not worth saving. They are officially socialized.

Well off to smoke a cig and emit some C02 for the Carbon Cops to tax me on.

#160 T.O Girl on 12.08.15 at 9:51 pm

Garth I think you overestimate Canada’s enthusiasm for voting for T2. For many of us it was a vote against Harper. And a bitter pill to swallow.

#161 go with the flow on 12.08.15 at 9:54 pm

Canadian investors and Harper’s government made a big bet on oil and commodities.

The world has just turned:

One of the world’s biggest miners is about to cut two-thirds of its workforce, 85 000 people, will dump 60% of assets, won’t pay dividend, cuts USD3.7 billion cost, reduces 6 businesses to 3

Morgan Stanley cuts 1200 jobs

So it’s not just oil, commodities – or real estate.

How will Canada reinvent her own economy – instead of just waiting for the demand to come back for the low hanging fruits?

To quote Arnold Terminator: will we wait for Blockbuster to resurrect or will we do Netflix?

The loss of oil revenues might as well be a good opportunity to shift focus on alternative energy.. shall we say BALANCED energy producing portfolio?

#162 Smoking Man on 12.08.15 at 9:54 pm

#132 Ralph Cramdown on 12.08.15 at 8:54 pm
Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth
….

Obviously Garth is into the JD early tonight, try flying a space ship on that shit…

It doesn’t end well for repitilians.

#163 Grassroots on 12.08.15 at 9:55 pm

It’s discouraging to read comments from people intelligent enough to read your blog but who are obviously not financially literate – they swallow populist rhetoric without any analysis. Thanks for trying Garth.

#164 HFT Dude on 12.08.15 at 9:56 pm

TFSA shrinkage, negative interest rates and $7 cauliflowers thanks to the dollarettes. I will be part of the 2016 brain drain, thanks to the TN visa.

#165 salonist on 12.08.15 at 9:56 pm

146
dude, you may have walked around with a bag over your head pimping your finger into the sky

but you certainly do not imbibe
nectonites self destruct on jd,they lose the ability to ever make it home

#166 charles on 12.08.15 at 9:59 pm

“over two million new voters were added”
What drew these people out of the woodwork? Let me take a minute to twist one up and think about it.
Do silver and gold fall in value with the Loonie?

#167 Smoking Man on 12.08.15 at 10:05 pm

#165 salonist on 12.08.15 at 9:56 pm
146
dude, you may have walked around with a bag over your head pimping your finger into the sky

but you certainly do not imbibe
nectonites self destruct on jd,they lose the ability to ever make it home
….
Some people collect stamps…what’s wrong with self destruction, have you met my wife…

#168 joblo on 12.08.15 at 10:08 pm

Was Harpo sly enuff to tank at the right time?

#169 Bottoms_Up on 12.08.15 at 10:14 pm

If rolling back the TFSA was a mistake, why not advocate for unlimited TFSA room?

The same reason I tolerate small doses of you. — Garth

#170 experienced.optimist on 12.08.15 at 10:14 pm

Concerning Poloz’s comment today that “In short, should the need arise, we’ll be ready. The effectiveness of each tool will depend on the situation, making it more a matter of choosing the right one at the right time,”

Mike “Mish” Shedlock, a U.S. financial blogger had a simple question for Poloz “If you know the right tool for the right time, why is Canada in or flirting with recession?”

http://globaleconomicanalysis.blogspot.ca/2015/12/bank-of-canada-announces-tools.html

His comment near the end of his article is priceless “In practice, central banks pull tools out of their collective asses, making them up as they go along, hoping to cure the messes their policies created. The results speak for themselves: a series of asset bubbles of increasing amplitude over time.”

In another Mish article: “Bernanke’s “Helicopter Drop” Hits Finland; Prime Minister and 70% of Finnish Support “Free Money”; Dauphin Canada Revisited” he talks about Finland’s new helicopter drop money policies, and his views are as expected. But within this article he reference’s an experiment that occurred between 1974 and 1979 in Dauphin, Manitoba that assured a guaranteed income. Interesting analysis from both Mish’s article and the article he references from the Huffington Post.

http://globaleconomicanalysis.blogspot.ca/2015/12/bernankes-helicopter-drop-hits-finland.html

I have also linked directly to the article referenced above about the Dauphin experiment. The read is interesting , but more so the comments by Hugh Segal about guaranteed incomes and Jim Flaherty. I have to admit that Conservative fiscal managers with a progressive social conscience is what this country really needs. Few and far between and never really in control. I also put Romanow/McKinnon in this category, being fiscally conservative and socially responsible when the Conservatives nearly bankrupted Saskatchewan.

http://www.huffingtonpost.ca/2014/12/23/mincome-in-dauphin-manitoba_n_6335682.html

#171 For those about to flop... on 12.08.15 at 10:15 pm

Message to Ralpie Calmdown,I don’t always agree with you but none the less you are a solid contributor.
Maybe just take a time out and hit it hard tomorrow.
I sucks when something doesn’t get published the way you want it ,but is it the end of the world?
Some people think the comment section is full of idiots,I strongly disagree . I can only guess but I think some of the brighest people who read this blog actually bother to comment because some people just read but can’t decipher what it means to them .
As Rodney King said” can’t we all just get along?”
Except ff ,I’m not interested in getting on with that codger.

#172 Smoking Man on 12.08.15 at 10:17 pm

#159 Gonkman on 12.08.15 at 9:50 pm
@ #42 Smoking Man on 12.08.15 at 6:12 pm

Great post SM. Your comments are much better when you haven’t downed a Quart of JD…. lol

I don’t even bother anymore trying wake idiots up to how things really work. Just too many sheeple.

If the sheeple has a smartphone they can’t live without because they need to be “connected” and “be social” they are not worth saving. They are officially socialized.

Well off to smoke a cig and emit some C02 for the Carbon Cops to tax me on.

The fuax words of Hunter s Thompson, and Hemingway

Like they could write in this state.. it was all marketing man.

I’m not an idiot, best bull shitter of em all.

Unfortunately swallowed their cool aid, now a lush,they eliminated a worthy Challenger.

Live and learn…

#173 CannyCanuck on 12.08.15 at 10:17 pm

I wouldn’t invest in TFSA ever for the simple FACT that ‘the rules’ can be changed anytime, anywhere by any a-hole BROKE government that finds it expeditious to GUT the hell out of them after CCP fails & goes bankrupt.

Already the CRA is trying to reclassify contributors who ‘daytrade’ their TFSA as ‘operating a business’…aka “you were too successful and made tooo much money in your TFSA so pay up while we tinker with retroactive rule changes suckas!” (Notice how CRA only targets profitable traders…if you have a loss -even with daytrading-they dont give a damn!)

RRSP are scams for the same reason.

#174 Mark on 12.08.15 at 10:26 pm

http://www.marketwatch.com/story/api-data-show-oil-supplies-down-19-million-barrels-according-to-sources-2015-12-08

Oil inventories finally turning the corner?

#175 HD on 12.08.15 at 10:28 pm

#132 Ralph Cramdown on 12.08.15 at 8:54 pm
Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth

——————

Too bad. Cramdown was a solid contributor to this blog.

Unfortunate what ego can do even to very intelligent people…

Best,

HD

#176 rawdiswar on 12.08.15 at 10:31 pm

Millennials don’t have any money, and therefore don’t think, act or vote like they do. JT campaigned on spending money he didn’t have and that resonated with the current generation.

No concept of value, and most will only know a life of debt and wage slavery, if they are lucky enough to get a job.

Amazing how many jumped into mortgages with literally no other assets and pretty much zero down (borrowed DP from not-so-well-off parents).

No sub-prime market my arse…

#177 Harbour on 12.08.15 at 10:33 pm

#41 Smoking Man’s Old Man on 12.08.15 at 6:10 pm
It’s tragic that society is largely superficial. Every time I see T2 taking a selfie, I want to puke.

……………………………………………………………………….

What about that nude selfie what’s his name posed for

#178 Joe Schmoe on 12.08.15 at 10:38 pm

I immediately flipped the lost $9K of TFSA room a year (married) into a sweet lease on a German car.

Might as well spend some money before my various levels of government take it all.

As per a previous rant, I did send letters to three charities we support asking them to get the money from their MPs. Some of the answers are rather astounding.

How much of the $8 a week will filter down to the truly poor? Think small numbers are you are probably correct.

We’ll do the right thing and keep supporting those who actually need it, but it made some high level charity folk really look at the fools in HOC and realize they may have forgotten some key aspects of “surplus wealth”.

#179 Victor V on 12.08.15 at 10:44 pm

Mining giant Anglo American to shrink by two-thirds, cut 85,000 jobs

http://www.theglobeandmail.com/report-on-business/international-business/anglo-american-to-slash-assets-cut-thousands-of-jobs-as-commodity-rout-hits/article27640676/

That bolder action includes a suspension of the company’s dividend through 2016 as well as a pledge to slash Anglo’s number of assets by about 60 per cent and take an axe to the company’s head count, reducing it over an unspecified period from the current 135,000 employees to less than 50,000.

Anglo said it doesn’t yet know what the impact will be on its Canadian holdings.

The miner owns Peace River Coal, a metallurgical coal miner in northeastern British Columbia, which halted production in late 2014 because of declining prices. Through its 85-per-cent-owned De Beers arm, it also has an interest in three Canadian diamond mines, including the Snap Lake mine in the Northwest Territories. De Beers announced Friday that it was mothballing Snap Lake, putting 434 people out of work.

#180 Yuus bin Haad on 12.08.15 at 11:04 pm

Shall we revive the argument based on the premise that politicians can never admit they’re wrong?

#181 Where's The Money Guido? on 12.08.15 at 11:05 pm

Re: #99 White Crock BC on 12.08.15 at 8:14 pm

” ,but it’s that cheap gas ($1.22/L) that keeps the official rate down.”

I know that’s sarcasm.
Prince George is 89 cents/liter. The lower mainland is awash is carbon taxes and about to get worse!
All for an agenda to bankrupt every working stiff….

#182 Timing is Everything on 12.08.15 at 11:05 pm

EZ Garth. ‘Forward guidance’ Warning: A link to Mish

Better get that (another?) scotch. No, not that one…The good stuff you keep hidden, for your use only.

“I have a very simple question for Poloz: If you know the right tool for the right time, why is Canada in or flirting with recession?

If the Fed knew how to use tools, why was there a global financial collapse?

If the ECB knew how to use tools, why can’t the eurozone hit inflation targets?

It may be a “matter of choosing the right one at the right time” but don’t expect central banks to come close.” – Mish

http://tinyurl.com/nnzbo8q
———————————————————
Insanity here. I’m done. — Garth

Is it hot in here, or is it just Garth? ヽ(o`皿′o)ノ

Away, the joker’s closing in,
Reform and they will win,
The light is fading fast.
I know, you know, they know, we all know,
Everybody’s gonna burn down. – ELO

http://tinyurl.com/npna9bw

#183 Sheane Wallace on 12.08.15 at 11:05 pm

It is not just me calling him idiot.
———————————————
Expecting a bunch of economic illiterates who do not understand the irreplaceable role of the free market is like expecting an idiot to divine the theory of relativity.

Mike “Mish” Shedlock

#184 Patrick on 12.08.15 at 11:05 pm

“if you take money out to buy a llama in any one year”
__________________________________
This might be a good idea with the carbon taxes coming. We can import them from Peru under TPP. Did we negotiate this?

#185 For those about to flop... on 12.08.15 at 11:12 pm

Time to play matchmaker … Freedom First you should take Daisy Mae out on a date .
What a lovely couple you would be,full of positivity ,encouragement and laughter.
Daisy ,tell me when the wedding is and I’ll bring Stephen Harper as my plus one!

#186 Harbour on 12.08.15 at 11:13 pm

#174 Mark on 12.08.15 at 10:26 pm

http://www.marketwatch.com/story/api-data-show-oil-supplies-down-19-million-barrels-according-to-sources-2015-12-08

Oil inventories finally turning the corner?

……………………………………………………………………..

Took 30 seconds to look at a few Oil headlines today…

http://finance.yahoo.com/news/3-reasons-why-oil-prices-092832469.html

http://finance.yahoo.com/news/big-oil-why-things-just-025000633.html

http://finance.yahoo.com/news/venezuelan-government-losing-grip-low-232925985.html

http://blogs.barrons.com/stockstowatchtoday/2015/12/07/offshore-drillers-64-of-investors-say-no-way/?mod=yahoobarrons&ru=yahoo

http://www.bloomberg.com/news/articles/2015-12-08/oil-bounce-boosts-russia-markets-as-ing-says-ruble-too-expensive?cmpid=yhoo.headline

http://finance.yahoo.com/video/oil-metals-touch-2009-market-161228269.html

http://finance.yahoo.com/video/signs-yet-oil-prices-bottomed-124446723.html

http://www.thestreet.com/story/13380092/1/why-you-should-dump-these-3-large-cap-high-yield-energy-stocks-now.html?puc=yahoo&cm_ven=YAHOO

http://realmoney.thestreet.com/articles/12/07/2015/chesapeake-energy-still-searching-bottom?puc=yahoo&cm_ven=YAHOO

http://finance.yahoo.com/news/energy-companies-lead-early-stock-153117251.html

Then I just bored because there was so many negative articles.

#187 Patrick on 12.08.15 at 11:16 pm

Ralph “Cram-Socialism-Down-your-throat” will be missed but quickly forgotten. Such is life. I hope somebody else takes up the communist mantle. We need entertainment.

#188 Herethere on 12.08.15 at 11:18 pm

Negative rates? Silly, one per centers with their trail balloons. Silly, to talk about Canada’s industries, for the most part that ship sailed long time ago, thru different treaties. Silly, to talk about communism, to paraphrase the Rusian guy as he said about religion. “It is the opium of the people.” Take China per sample. As today confirms it. It is easy to imagine that people surrounding Mao at the time, saying “Let the fat boy had his fun entertaining the suckers with the little red book. When this cookie crumbles, we will own two or three provinces. Our sons and daughters will be Yale and Harvard educated. Life will be sweet.”

#189 Washed Up Lawyer on 12.08.15 at 11:32 pm

Mr. Poloz gives a speech about the inventory in his tool box. Same as mine. Baling wire, WD40, duct tape and Vice Grips. He should come to the garage sale I am holding at the homestead next spring. Lots of Lee Valley stuff. Cheap.

#190 John on 12.08.15 at 11:35 pm

Don’t visit here everyday, but Garth seems to be more prolific on the one-liners tonight. Guess that TFSA is dear to his heart and our wallets…. still…. So any bets on the loonie diving into the low 60s in 2016. Nice round number. Makes one wonder just what anyone has to stick into a TFSA anyway, (including stocks etc bought with after tax dollars) as the Loonie circles the drain lower and lower?

#191 Leo Trollstoy on 12.08.15 at 11:39 pm

It takes no small amount of talent to be unemployed for 13 years.

#192 John on 12.08.15 at 11:41 pm

http://www.wsj.com/articles/less-than-zero-living-with-negative-rates-1449621094 Yo! Even the Wall Street Journal is cruising around the negative rates barndoor. Not too comforting… Lots to learn on that file. Enlighten us another time, Garth.

#193 Sheane Wallace on 12.08.15 at 11:41 pm

https://en.wikipedia.org/wiki/Stephen_Poloz#cite_note-3

fantastic resume, great leader, truly qualified to lead BOC

#194 Leo Trollstoy on 12.08.15 at 11:42 pm

How could I be wrong if I did not say when?

But it is coming, be patient

If there is no ‘when’ then it’s always wrong.

#195 DON on 12.08.15 at 11:43 pm

Outlaw majority governments – they don’t seem democratic in their nature. Who cares if it takes time to make the right balance decision at least ideology will play a lesser part.

Balanced portfolio, Balanced numbnut leaders (pseudo leaders) and balanced life.

#196 Millmech on 12.08.15 at 11:44 pm

Taking the extra $4500 and putting it into RRSPs get back some extra cash that I will stuff back into more RRSPs,rinse repeat.Keeping as much cash as I can out of T2 coffers,will max out RRSP&TFSA for the next 4years.

#197 squidly77 on 12.08.15 at 11:45 pm

Here’s my take on what Poloz said today.

By saying that the BOC have a tool that would allow them to take interest rates down to -25 or -50%, and considering that US will raise rates in a week, which Canada must and will follow, hasn’t he just sent a message to panicked home buyers that it may be wise to wait for a possible Canadian rate cut ?

Of course it won’t happen, or, ah, perhaps maybe rates will fall, so lets not be in a such a rush to buy honey, why don’t we just wait and see.

Just sayin….

#198 Joe Schmoe on 12.08.15 at 11:47 pm

#190

I had a meeting this week with some financial egg heads at the company I work for about a currency strategy for 2016.

They think 0.68 and I couldn’t find any rational argument to disagree with them.

I quickly bought some Mickey Mouse ears online in case my wife wants to take the kids to Disney this upcoming spring. One hedges where one can.

Interesting though, is the hotel we stayed at last year in Palm Springs has a 30% room rate reduction YoY. Must need to keep us wrinkly Canadians coming.

#199 DON on 12.08.15 at 11:48 pm

By the way Freedom First.

Your comment about men being more valuable to their families dead was a little offside. Money is not the end all be all. I have had my father, and step father die early in their lives. I value wisdom and experience more than money. Life is about growing buddy.

#200 squidly77 on 12.08.15 at 11:52 pm

In a simpler term.

If the BOC says rates will likely go up next month, people will rush out to buy.

If the BOC says rates could go down next month, what’s the rush to buy.

#201 Retired Boomer WI on 12.08.15 at 11:53 pm

TFSA limit was reduced. Too bad, but IS this the end?

Hardly, I would think. Opposition party might take restoring it as a “plank” in a future election. Not versed in Canuck politics, not sure what party might take up that concept.

PLUS every person has a local MP they can write, or call. I am sure they hear from some constituents on a regular basis, but are you one of them?

Maybe you are screwed for the duration of this regime, but from initial appearances, T2 will be a one hit wonder.

#202 pwn3d on 12.08.15 at 11:53 pm

#155 Mark on 12.08.15 at 9:44 pm
“I’m so happy there are people like Mark in this world”

Why is that? Because I shine light onto the sort of nonsense you Realtor types have been spreading
——————-
Not a realtor, just someone who has made a ridiculous amount of money from real estate. The last 2 years especially. I almost feel guilty as it was too easy. But it is what it is. I planned to sell some this year but held off and I think it will pay off again with a new peak spring market. It’s as if I can do no wrong (except for my ETFs lol, what a fail those were this year).

Next spring I will reduce my exposure at what I think will be peak and I’ll be diversified and home free.

Next spring you will be saying real estate has been going down for 4 years, CAD is about to rebound from .65 and go to 1.50, and Liberals don’t lie. That’s gold Jerry, gold.

#203 Roland on 12.08.15 at 11:54 pm

The higher TFSA limit was of no use to the vast majority of working people in this country, for the simple reason that their incomes are too low to save much in any case.

Over the course of time, the TFSA programme was going to represent a bigger and bigger dent in potential government revenue. Junior had to corral that beast before it got too big to handle.

The programme remains sufficient to help most Canadian households have a tax-free emergency fund.

As for the Plozzer taking us to Magic Minusland, I’m hoping that he’s just trying to jawbone down the CDN, without taking any real steps. However, I wouldn’t be surprised to see the mini-Me central banks in Canada and Australia engaging in unconventional monetary policy. We are all Japan nowadays.

#204 kommykim on 12.08.15 at 11:59 pm

RE:

In short, ripping the tax-free account is a political move, not an economic one. It saves the current government no money.

As far as I’m concerned, it’s going to cost them money. The extra $4500 that was destined for my TFSA is now going into my RRSP. Can we say “tax refund”? I knew you could!

#205 ANON on 12.09.15 at 12:06 am

Unsuccessfully attacking windmills. Hmmm…I think I’ve read about this one before.
Cheers from the peanut gallery :)

#206 Mark on 12.09.15 at 12:06 am

“By saying that the BOC have a tool that would allow them to take interest rates down to -25 or -50%, and considering that US will raise rates in a week, which Canada must and will follow, “

There’s no reason why Canada “must” follow the US monetary-policy wise. Canada invested heavily over the past decade in productive capacity. The US only invested minimally, and primarily only in short-term capacity (ie: short-term oil wells, not long-term oilsands production).

Its for this reason that inflation is far more likely in the US going forward than in Canada. The US is deficient export capacity. Canada has a long-term surplus of export capacity. Exports over the long term are what keep a currency strong, and nations that run chronic trade deficits, such as the United States, are expected to experience a long-term decline in their currencies. Even if short-term “short squeezes” might provide a temporary reprieve or two.

The real problem for Canada going forward is going to be replacing the domestic consumption that is lost as the housing bubble collapses. This is why Poloz was talking about negative rates. There’s simply few other consumption drivers left in the Canadian economy, and as the capital outflows subside and even reverse (in anticipation of an eventual global recovery), keeping the CAD$ at a reasonable level will likely prove difficult.

#207 BG on 12.09.15 at 12:11 am

#99 Millennial Realist

I agree with the ideas in you express.
Unfortunately I do not believe the roll back of the TFSA limit will help reduce the gap between the 99% and the 1%.
Probably the opposite.

It sucks that it had to be treated with such high level of demagogy during the campaign.

#208 kommykim on 12.09.15 at 12:16 am

RE:

#190 John on 12.08.15 at 11:35 pm
Don’t visit here everyday, but Garth seems to be more prolific on the one-liners tonight

The one-liners were funnier yesterday. A much more serious tone from our host tonight.

#209 Panhead on 12.09.15 at 12:18 am

#181 Where’s The Money Guido? on 12.08.15 at 11:05 pm
Prince George is 89 cents/liter. The lower mainland is awash is carbon taxes and about to get worse!

Gas .84 CDN in Point Roberts tonight.
6 – 16oz. cans of Yankee beer 4.99 USD.
Fresh chicken 1.49/lb. USD.
Can’t afford to move away from the border even with our dollarette…

#210 Grunmen on 12.09.15 at 12:18 am

Maybe next election we will vote in Conservatives again and TFSAs will be raised again. Hopefully the election won’t be about class envy, the Harper hate will be forgotten by then. I hope.

#211 Where's The Money Guido? on 12.09.15 at 12:24 am

Re: #193 Sheane Wallace on 12.08.15 at 11:41 pm

https://en.wikipedia.org/wiki/Stephen_Poloz#cite_note-3

…..fantastic resume, great leader, truly qualified to lead BOC

From wiki: Poloz attended the 62nd Bilderberg Annual Conference in Copenhagen, Denmark, on May 29 – June 1, 2014

no need to say more…It’s all coming to fruition….tin foil hat strapped on

#212 DON on 12.09.15 at 12:36 am

42 Smoking Man

…We need to export our oil, manufacture, build shit. How? in this anti-business environment by three levels of government…

Harper’s gone – mucked around then left. In comes Justin and nothing really changes other than approach – seems more collaborate – time will tell. You know this, you preach it all the time. I know just a weak moment.

Life altering change in is on the way…regardless of which party is in. I believe you know this as well.

#213 DisgustMadeMePost on 12.09.15 at 12:39 am

If one takes ROC or dividends over the course of the year… One could use this income to fill up an RSP … If one didnt make enough income to have any left over to put into their RSP.. Right? Or TFSA?

I find I have nothing left over to stuff in there anymore!

Ah yes ! Love the snowman … Typical Vancouver style… Muddy with a few rocks rolled into it…

#214 Leo Trollstoy on 12.09.15 at 12:44 am

Unfortunately the Canadian economy will leave JT as the bag holder while the U.S. economy continues to get stronger.

http://www.cbc.ca/beta/news/business/jobs-economy-united-states-canada-1.3350749

#215 DisgustMadeMePost on 12.09.15 at 12:45 am

Feels like a lot of stress in here tonight…

#216 Basil Fawlty on 12.09.15 at 12:53 am

Given that the Swiss and European central banks alraedy have negative interest rates, how can anyone say with confidence that Canada will never have negative rates?
In regards to the financial crisis of 2008, was it ever fixed, or just papered over? The credit bubble is larger now than in 2008, yet it appears most everyone is stumbling around wearing horse blinders to protect themselves from the reality of the current crisis.
The US Labor Participation Rate proves that the reported 5% unemployment rate is a joke, yet people still believe the hookum.

#217 DON on 12.09.15 at 12:57 am

#109 common sense on 12.08.15 at 8:17 pm
Freedom First..

Your right..more people should have been maxing RRSP and TFSA’s but their priorities were wrong. Glad the USA continued to raise it’s ROTH contribution levels for us fortunate to contribute to them.

Just curious…are you buying Garth a matching velour track suit this Xmas to go with the bicycle built for two that you let Garth drive with you in the front?
*******************

I don’t care who you are…that’s funny.

Thanks for the laugh!

#218 Chris on 12.09.15 at 1:02 am

If Canada does QE, real estate will keep going up and up? Harper is pro business but he did not know how. Too bad he and his gang (kenney and the like) are also hostile to immigrants that are non european otherwise they may still be in power.

#219 DON on 12.09.15 at 1:02 am

#122 ben on 12.08.15 at 8:38 pm
Where are the policies that are going to stick it to the boomers instead of the workers?
*************************

Once the millennials realize how they were suckered into paying more for the boomers houses. Then the show begins.

#220 OXI in GREECE on 12.09.15 at 1:08 am

You people think its bad now? Wait until 500K govt workers retire in the next 4 years…..and there is NO MONEY in the kitty to pay for their gold plated pensions. Guess whose taxes are going up and up and up and up? Not theirs…..they are retired….at your expense I might add.

#221 kommykim on 12.09.15 at 1:17 am

RE:

#175 HD on 12.08.15 at 10:28 pm
Too bad. Cramdown was a solid contributor to this blog.

I’m going to miss his posts too.

It’s not my blog, but I would prefer either a “EDITED BY GARTH” or a “DELETED” appended to the message as required.

#222 Adam Smith on 12.09.15 at 1:33 am

I’m not sure I understand. Sure, more than 7% of people COULD take advantage of a higher TFSA limit as right now it is mostly just the people doing pretty well. They aren’t but I agree that maybe they could eventually. But there’s no doubt that the best off are maxing out and then maxing our their kids and other family members meaning that tax revenue is gone.

Why is getting rid of a tax shelter that is only being fully enjoyed by the richest people not progressive? The money would still need to be made up somewhere. This way, there will be far more people capable of maxing out and gaining the full benefit.

#223 slick on 12.09.15 at 1:50 am

T2 could have thrown TFSA users a bone and lowered the limit to say $7500.
That would have appeased the users of a TFSA, and sent them to complain about something else.
The T2 voters would have gotten at least 1/2 of their pound of flesh.
Owners of small businesses massage their income to support the business, and don’t have T4 slips that are supportive to large RSP contributions. The RSP room is useless as they are in a low tax bracket, and putting money into an RSP now, just to have it taxed at a higher rate later is foolish.
The TFSA does the opposite.

slick

#224 Great Canadian Bubble Co. on 12.09.15 at 2:08 am

Can anyone explain this to me …. What happens to variable mortgage rates in Canada if the US raises rates over the next two years and the bond market sets fixed-rates at a much higher level?

Would that just mean everyone would go variable and benefit from a lower interest rate?

#225 Randy Randerson on 12.09.15 at 2:43 am

Oh well, I guess instead of taking the extra $4,500 (after non-eligible dividend tax) out of my CCPC and contribute to my TFSA, I’ll keep it, along with the tax, within my CCPC then. Less money for the retarded government.

#226 NoOn eOfConsequence on 12.09.15 at 2:53 am

Garth! Your exasperation really showed through today! Sit back and have a scotch. We need you!

As for T2 rolling back the TFSA….HE IS FOLLOWING THROUGH ON ONE OF HIS CAMPAIGN PROMISES.

So…all you whiners….too fricking bad. I would rather have a politician who does what he says he is going to do, rather then immediately change his mind when he gets voted in.

Yeah…it sucks. Yeah it’s bad policy. Yeah it ain’t going to make a difference. But holy crap! He is actually DOING WHAT HE SAID HE WAS GOING TO DO.

Refreshing change…a really refreshing change.

Perhaps the public needs to encourage T2 to find a wiser policy adviser to help him…right Garth? (hint, hint).

#227 TRT on 12.09.15 at 2:57 am

Here is the Holy Grail.

http://www.bloomberg.com/news/articles/2015-12-09/china-s-illicit-outflows-estimated-at-1-4-trillion-over-decade

This is what I’ve been trying to tell people (thru countless deletes) that it is this money that is propelling YYZ and YVR housing markets.

Even if 20% of that money made it thru…over $280 Billion USD entered Canada. All into RE and cars.

#228 TRT on 12.09.15 at 3:00 am

And the other thing people should know is all the imports into China are fake!

Phantom goods going into China and money leaving to ‘pay’ for it.

Hmmm, wonder how many empty containers with ‘commodities’ are heading to China on a ship right now? In any case, money will come here to pay for those imaginary commodities….and buy Vancouver houses.

#229 Freedom First on 12.09.15 at 3:02 am

#199 Don

Hey, buddy, I never said that.

#230 BS on 12.09.15 at 3:30 am

Ralph Cramdown on 12.08.15 at 8:54 pm
Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth

Not at all is fine with me. Hasta la vista Ralphy!

Lets hope someday you may make something of yourself. Sorry the government is not going to do it for you.

#231 Frank on 12.09.15 at 3:39 am

Meanwhile 100 more RE sales than listings today in Vancouver. Inventory is at a half-decade low. Except December to be another record setting month of prices.

#232 BS on 12.09.15 at 3:47 am

Re: Negative rates

If we ever have negative rates in Canada it will be after housing is in free fall. There is no saving housing. We are going back to 2002 prices where the bubble started. Japan tried to save housing with low rates and prices fell for 15 years straight until they got back to pre bubble prices. The same will happen here no matter what the BoC does.

#233 BS on 12.09.15 at 4:02 am

Just watched some technical analysis on what happens when the Fed raises rates for the first time which appears to be a done deal for Dec 16th.

Since 1955 the S&P 500 has tanked every time in the preceding 3 months from the first hike for an average decrease of 10% (about what we are down from August). In the first 3 months after the first rate hike the S&P 500 has averaged a 10% increase.

Note that is 12 out of 12 times (13 including this cycle) the S&P has declined in the 3 to 4 months prior to the first Fed hike and then 12 out of 12 times the S&P was positive in the 3 months following the Fed hike (average 10%). The TSX has also done well in the 3 months following and the USD typically peaks and then weakens at the first Fed hike.

If that is not a pattern worth betting on I don’t know what is. In other words time go long the S&P 500 hedged to CAD on Dec 16th if the Fed hikes.

#234 -'ve Rates, Harper Failed Us & TFSA on 12.09.15 at 4:51 am

#11 RealtyUpUp

Negative rates work like this (e.g., Italy right now and other EU countries within the last 5 years):

1. You get no interest on your bank deposits.

2. The state charges you a yearly flat rate tax on your bank deposits, up to a threshold amount (e.g., in Italy: €34.20 flat tax on deposit accounts of more than €5,000). Other EU states have done something similar to this and in the past (UK contemplated doing the same in May 2015).

How you think the above will stimulate RE is beyond me.

_______________________________

#95 BC Guy

You are correct and this from a “righty”.

Harper showered upon us all the budget surplus of Paul Martin and subsequent increases in oil & gas tax revenue rather than investing it to increase Canadian productivity in existing GDP sectors (e.g., oil & gas, manufacturing) and investing in new GDP sectors. He also muzzled Canadian Govt R&D.

We are now paying the price for Harper trying to be “Santa Claus” to everyone.

T2 is trying to claw back many of the “gifts” given out by Harper which do nothing for our competitiveness.

Unfortunately, T2 is redistributing the gifts as well but to a different group of Canadians; rather than, investing them in what matters to all of us – now and into the future.

Garth et al:

How the heck does your little $5000 extra TFSA yearly amount do this:

1. Increase Canada’s lagging and getting worse competitiveness (e.g., 2000-2012 Mfg. productivity is negative, Labor productivity negative, CAPITAL INTENSITY stagnant or decreasing and B of C thinks it can stimulate this…like beating a dead horse)?

2. Invest in NEW GDP sectors for tomorrow’s wealth and jobs?

I can only conclude the whining is greed motivated, self-absorbed and myopic at what is happening in the big picture to Canada.

What we need is to increase our productivity (and usually, competitiveness follows) and invest in future (NEW) industry sectors.

T2 take note.

Harper failed us completely here.

#235 Fortune500 on 12.09.15 at 4:57 am

My family is part of that brain-drain people are talking about above. We have worked overseas for a few years and always intended to return. We are mid 30s with significant net worth and resources, and we are currently looking elsewhere due to persistently high home prices relative to incomes in Canada.

A weak dollar, a financial system that punishes savers, and a lack of investment in small business and entrepreneurship in my native land are sadly starting to push us elsewhere.

The message is clear. Canada doesn’t want ‘our type’.

#236 Hope & Ruin on 12.09.15 at 7:01 am

“Will there be a return of manufacturing now that big American corps can pay us in Canadian Pesos again?”

Export manufacturers are ramping up production. Orders coming in droves from the US. Problem is that there isn’t too many of these companies left. Nobody new will invest here. Plus workers wages in these plants are stagnant. Have to compete china. When minimum wage was $7/hr then $18-24/hr was looking good. Every year these workers are closer to making the minimum.

#237 lost in space on 12.09.15 at 7:29 am

Hey Garth and the few readers who make it this far

My nephew is about to become a doctor, careful money management means they (husband doctor wife nurse) are about to graduate debt free. Sent them you’re latest column and told him tax planning is as important as investment returns.

I expect they’ll be millionaires. before they own there first house

Again thanks

#238 LL on 12.09.15 at 8:48 am

# 17 – Negative. The bank made it clear this is not a policy alternative unless we face a crisis. We are not. — Garth….

…We will face a crisis.

Why? — Garth

#239 Buy? Curious? on 12.09.15 at 9:14 am

DEFAULT! DEFAULT! All the cool people are doing it! Think about it. Would you rather have poor credit for 7 years or spend a lifetime paying back debt?

Do it! DO IT!!!!

#240 Balmuto on 12.09.15 at 9:23 am

#194 Leo Trollstoy

“If there is no ‘when’ then it’s always wrong.”

Well said. It’s the oldest trick in the book – you make a forecast with an ambiguous timeframe like “in the not-so-distant future” and as soon as it turns out to be right it’s “see? I told you so.” If it turns out to be wrong, then the bad trade idea morphs into “a longer-term strategy ideally measured in a time span far greater than just a few years.” I’ve got no respect for that.

I like Smoking Man’s predictions, e.g. 1.50 USD-CAD by the spring. A level, and a timeframe. And if turns out to be wrong he won’t pretend he never said it.

#241 Adam on 12.09.15 at 9:23 am

Garth, you’re very smart and very good a what you do (as a vocation, and this blog). You know exactly the real economic reasons why the Liberals got rid of dumb move by the Conservatives that increased the limit to $10,000. It was not a popular move by any means (which verifies how low the financial IQ of most people, who save about $3000 a year, actuall is) so they couldn’t have done it for political reasons as you’re suggesting.

Your comment “It saves the current government no money.” is pretty much correct. But that does not mean that it doesn’t prevent longer term damage of allowing more and more taxable money to be taken out of the government’s revenue stream. Most of that money taken out of the pool of taxable money also belongs to people who have the means (or for actual “middle class” Canadians, the will) to be able to put away $10k in after-tax dollars a year, not including the money you put away in your own, or employer sponsored, RRSPs.

The Conservative’s spouted how wonderful a gift this was for “middle class” Canadians when only an extremely small percentile of middle class Canadians would ever be in a position to take advantage of it. Bald-faced lie.

The TFSA is a great tool, doubling the limit was always bad policy.

Removing any tool that allows people to increase their financial independence, thereby breeding reliance on the public purse in the decades to come, is far worse policy. The signal being sent here is one of defeatism and dependence. Worrisome so many, like you, accept it. — Garth

#242 TurnerNation on 12.09.15 at 9:46 am

So let’s say we are ruled by a bunch of elites bent on another world conflict ( they sell and arm both sides as usual) isn’t it a good game plan to have their man running for most powerful elected position talk smack against the other ‘side’?
Then blame the next event on people acting against his words?

This global war for our minds is being fought one tweet at a time.

I saw it on TV
..it must be trusted.

#243 Tom Jones on 12.09.15 at 10:06 am

Garth – still recommending CPD? Can it survive another rate cut by BOC?

I do not recommend individual securities. Preferreds as an asset class are a permanent hold in a balanced portfolio. — Garth

#244 TnT on 12.09.15 at 10:08 am

#132 Ralph Cramdown on 12.08.15 at 8:54 pm

Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth

********

Garth… in the past you deleted posts if they fail to meet your standards.

Ralph’s request was legit, it’s BS to edit a post… just sayin….

I edit posts daily, removing such things as foul words and potentially libelous references. This comment section will not descend into the hideous morass and low ethical standards that characterize most MSM sites. Go there and have a dump. Not here. — Garth

#245 Gonkman on 12.09.15 at 10:10 am

@ #220 OXI in GREECE on 12.09.15 at 1:08 am

You people think its bad now? Wait until 500K govt workers retire in the next 4 years…..and there is NO MONEY in the kitty to pay for their gold plated pensions.
Guess whose taxes are going up and up and up and up? Not theirs…..they are retired….at your expense I might add.
————————————-

You sir are a moron…

Number of Federal Govt Employees as or March 31st 2015 = 257,034 (But you are close with 500K…lol)

Fyi… Harper Cut over 35,000 positions during his 10 year run.

Govt Employees pay 50% into their Pensions now. Its not FREE Money.

The Government Pension Fund is managed by PSP Investments.

Current Total Assets in the Federal Government Pension Plan as at March 31, 2015: $81,348 million.

Total Return was 14.5% for 2014 FYI..

But thanks for you BS Post…

#246 Daisy Mae on 12.09.15 at 10:38 am

#103: “Over the long term the government is going to make a lot more revenue by having a lot more investment returns taxable as a result of this move.”

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

I’ve wondered about this, too. How can non-taxable earnings from TFSA investments NOT be costing the government future revenue?

#247 IHCTD9 on 12.09.15 at 10:45 am

#39 Godth on 12.08.15 at 6:07 pm
…You money grubbers are the real losers, people matter; life matters. In twenty years expect that everything will have been for nought except those you care about. Do you really care about anyone except your ego? Probably not. I don’t think this is what makes life meaningful. Enjoy your Christmas, when gifts are exchanged that are really meaningless except for the $ assigned. What a success.
____________________________________________

Indeed, people matter, life matters.

But – money matters too.

A lot.

If you improve your attitude, you’d probably benefit significantly just from that.

#248 Ole Doberman on 12.09.15 at 10:59 am

Looks like sub prime lender Home Capital Group continues to crater as the breaks in the housing market are becoming obvious.

HCG.TO

#249 Tom Jones on 12.09.15 at 11:01 am

#242 Tom Jones on 12.09.15 at 10:06 am
Garth – still recommending CPD? Can it survive another rate cut by BOC?

I do not recommend individual securities. Preferreds as an asset class are a permanent hold in a balanced portfolio. — Garth
____________

So can they ever go to zero? Just thinking if its worth getting more while they are on a big discount. Didn’t you once recommend CPD? Or am I mistaken?

#250 Smoking Man on 12.09.15 at 11:15 am

Kiss the Canadian Dollar Good Bye.

Don Braid: Liberals blindside Alberta with Paris carbon pledge

http://news.nationalpost.com/full-comment/don-braid-liberals-blindside-alberta-with-paris-carbon-pledge

#251 Doug in London on 12.09.15 at 11:27 am

@For those about to flop…post #138:
You’re looking for a complicated answer to something ridiculously simple. I said buy CPD (as well as XPF, XRE, and ENB) because they are on sale now. Yes, of course I would feel better when I’ve scooped up anything that’s on sale. Is that really so hard to understand?

#252 Doug in London on 12.09.15 at 11:37 am

@NoDoubt, post #126:
No, Canada isn’t finished, it’s not like we’ve never had difficult times before. Does anyone remember oil going down to $11/barrel in 1998? However, the next 2 years or more will be a rough ride, especially for those not prepared for it. There’s difficulty in every opportunity, and opportunity in every difficulty. Right now, there are some good sales on some assets like CPD, XPF, ENB, and XRE. Deja vu here, haven’t I mentioned that idea previously? Also, a good time to buy a house will eventually come. I have no idea when that will be, (depending on which market you’re in) but it will come sooner or later. Everything goes full circle.

#253 Doug in London on 12.09.15 at 11:42 am

There’s been a lot of talk here about negative interest rates. While the probability of that happening is extremely low, there’s a bright side to it if such a thing should occur. If we have a repeat of 2008-09, stocks and ETFs will likely go on sale again. Imagine that, getting paid to borrow money to buy assets that are on sale!

#254 Hot Albertan Money on 12.09.15 at 11:43 am

Hence the special tax on the 264,000 people who make over two hundred grand, in order to throw a bone to six million others. Classic.

The above just made me question something…How much of the 264,000 represents Oil execs and workers? If it’s a high enough %, it might feasible those being laid off or let go will throw these projections out of whack since these folks are likely going from the “tax them more” to the “give them a break” brackets

#255 Bill on 12.09.15 at 11:43 am

And for those who didn’t get CPD at the lows and now have their knuckles cracked like me (I should know better)
I blew it out at a small loss. Your better off to get 2.5% at a bank and forget these markets for a while. A long while.
http://www.theglobeandmail.com/globe-investor/investor-education/why-you-cant-trust-the-yields-on-preferred-etfs/article26231003/

And as I warned months ago. Its called a bear market Garth.
TSX still declining and the Loonie just broke down. History may be your guide.
http://jugglingdynamite.com/wp-content/uploads/2015/08/TSX-and-C-since-1997.png

No, we are not in a bear market. Just because you suck at investing does not mean investing sucks. — Garth

#256 IHCTD9 on 12.09.15 at 11:56 am

#243 TnT on 12.09.15 at 10:08 am
#132 Ralph Cramdown on 12.08.15 at 8:54 pm

Apologize, and puke up what you snipped, or we’re done. Your blog, your rules, but I’m published as is, or not at all.

A fair edit. So bye. — Garth

********

Garth… in the past you deleted posts if they fail to meet your standards.

Ralph’s request was legit, it’s BS to edit a post… just sayin….

I edit posts daily, removing such things as foul words and potentially libelous references. This comment section will not descend into the hideous morass and low ethical standards that characterize most MSM sites. Go there and have a dump. Not here. — Garth
____________________________________________

Cram:

1. You threaten to remove your input here due to a perceived injustice indicates some belief that your personal opinion has some kind of value.

2. The fact that you feel you deserve an apology indicates you feel the edit was an offense to you.

Ralph, this is the internet. Your opinion here means even less than it does in real life. No one cares what you (or anyone else) thinks. YOU might think you’ve got something important to say, but no one else does.

No point in threatening to leave – we don’t care if you do. No point in demanding an apology, we’re not concerned that you’re offended. As for whatever it was that you posted, we could care less, and that goes for 99.9% of everyone else on the net.

Getting emotional even to the slightest degree over “losing” some posting “freedom” you though you had (but never did) as if your posts contain some cosmic importance – is a waste of the calories provided by that pancake you ate this morning.

Anyway, happy trails…

CLIFFS: No one really cares what you say or think.

#257 jaybee on 12.09.15 at 11:58 am

“Like most people who are doing fine, a full TFSA is not consequential to my personal future. But it was my recommendation originally, and it’s a sound one. The more incentive people have to save, the better for them and the country. There is no economic reason to roll back this limit. — Garth”

Do you mean that the origin of the TFSA was your recommendation originally? If so you are my new hero :)

#258 A box in the Sky on 12.09.15 at 12:01 pm

I agree that it’s annoying that the TFSA limit being reduced from 10k to 5.5k but the amount of outrage here is laughable.

That incremental 4.5k difference is not going to negatively affect your life. It was only only in place for one year and I don’t recall anyone in 2013 saying “geeze my retirement planning at the current TFSA limit is ruined, the government needs to double the limit”.

If you can’t adjust by taking the lost $4500 of room and putting it 1) into your RRSP 2) into a margin account or 2) paying off your mortgage faster then you’re a muppet.

The bile being spewed here is incredible. People are no longer going to donate to charities or stop tipping wait staff? Get a grip and have some perspective, you’re just an awful human being.

#259 A box in the Sky on 12.09.15 at 12:05 pm

#92 CdnMom on 12.08.15 at 7:42 pm

If that’s all you hear, then you have selective hearing. My 20 year old, two-job working daughter is lamenting the fact that she’s not getting that TFSA room, because her peer group wants to openly smoke pot. See, she needed that room to sock away her money made after putting herself through college because she can only find non-renewable contract jobs. She needed it to grow because she’s at the bottom of the ladder, trying to gain independence and a life in a shitty economy, and needs income after the end of the contract.

————————

lol this makes no sense. At 20 years old and done college means at most she took a 2 year diploma program? The % of people with a 2 year diploma and in their first year of work having enough earning power to save the full $10,000 into a TFSA has to be minimal.

“Needs income after the contract”.

Lol, you do realize the dividend income differential thrown off between $10,000 and $5500 is worth at most a few tanks of gas right?

Anybody that is < 55 years old and is using their TFSA to generate an income stream in the short run is doing things very, very wrong.

#260 SWL on 12.09.15 at 12:08 pm

I edit posts daily, removing such things as foul words and potentially libelous references. This comment section will not descend into the hideous morass and low ethical standards that characterize most MSM sites. Go there and have a dump. Not here. — Garth

AWESOME!!!

#261 Doug in London on 12.09.15 at 12:11 pm

@DON, post #219:
Were they being suckered into paying more for the boomers houses, or did they do so by their own foolish choice? Look at it this way, if I bought a bunch of XEG in June 2014, when it was at its all time high of $20 or more, whose fault would that be?

#262 noel on 12.09.15 at 12:15 pm

The TFSA limit decrease will effect around 5% of the population who can afford to fully contribute, and even then its not that big a deal.

Like its been said on this blog several times, the richest will find a way to shelter their cash – always has been always will be.

It will be totally inconsequential to the vast majority of Canadians.

As stated, those who cannot use it now get to use it later. Surely you do not believe you will never accumulate some wealth. — Garth

#263 The Other Chris on 12.09.15 at 12:19 pm

@257 A box in the Sky on 12.09.15 at 12:01 pm

The real damage done by the $4500 reduction isn’t the one-time effect of the reduction. It’s the loss of tax-free compounding over time, which will dwarf the original $4500 for anyone who is reasonably young.

Compounded over time, the effect of the $4500 loss is huge for people with moderate incomes.

#264 Wild roasted Gonads on 12.09.15 at 12:20 pm

#249 Smoking Man on 12.09.15 at 11:15 am

Kiss the Canadian Dollar Good Bye.

Don Braid: Liberals blindside Alberta with Paris carbon pledge

http://news.nationalpost.com/full-comment/don-braid-liberals-blindside-alberta-with-paris-carbon-pledge
—————

Its all got a religious zeal to it.. A giant carbon tax orgy. Combined with a stick it to those western knuckle draggers.

Alberta is so screwed for a along time. Lots to spill over to the rest of Canada.

Hey would you like to buy my house!

#265 IHCTD9 on 12.09.15 at 12:26 pm

#240 Adam on 12.09.15 at 9:23 am

Your comment “It saves the current government no money.” is pretty much correct. But that does not mean that it doesn’t prevent longer term damage of allowing more and more taxable money to be taken out of the government’s revenue stream. Most of that money taken out of the pool of taxable money also belongs to people who have the means (or for actual “middle class” Canadians, the will) to be able to put away $10k in after-tax dollars a year, not including the money you put away in your own, or employer sponsored, RRSPs.

The Conservative’s spouted how wonderful a gift this was for “middle class” Canadians when only an extremely small percentile of middle class Canadians would ever be in a position to take advantage of it. Bald-faced lie.
____________________________________________

If a guy puts 100.00 after tax money into a TFSA the government can never tax the interest on the gains.

If a guy put 0.00 after tax money into a TFSA, the government can also never tax any interest on any gains.

I fail to see where there is any difference, all of the money going in has already been taxed. The government get’s nothing regardless of usage of the TFSA from there on in.

____________________________________________
“But that does not mean that it doesn’t prevent longer term damage of allowing more and more taxable money to be taken out of the government’s revenue stream.”
____________________________________________

Taxable money put in a TFSA is taxed, and not “removed from the governments revenue stream” one iota. You are thinking RRSP’s, not TFSA. You put after tax money into a TFSA, and from there on in the government gets nothing until you spend it on something, (sales taxes etc…) it does not matter if you put in $0.00 or $1,000,000,000.00 – the government gets zero tax revenue until withdrawn and spent.

In fact, the more revenue a guy earns inside a TFSA, the better off the government is, since he will eventually be withdrawing and spending the gains along with the original capital which will generate more tax revenue. If the guy puts in less money, and has less gains, then the gov gets less revenue at the end of the road.

#266 Bottoms_Up on 12.09.15 at 12:28 pm

#256 jaybee on 12.09.15 at 11:58 am
————————
During his tenure as finance minister.

#267 Wild roasted Gonads on 12.09.15 at 12:32 pm

#240 Adam on 12.09.15 at 9:23 am

Garth, you’re very smart and very good a what you do (as a vocation, and this blog). You know exactly the real economic reasons why the Liberals got rid of dumb move by the Conservatives that increased the limit to $10,000. It was not a popular move by any means (which verifies how low the financial IQ of most people, who save about $3000 a year, actuall is) so they couldn’t have done it for political reasons as you’re suggesting.

Your comment “It saves the current government no money.” is pretty much correct. But that does not mean that it doesn’t prevent longer term damage of allowing more and more taxable money to be taken out of the government’s revenue stream. Most of that money taken out of the pool of taxable money also belongs to people who have the means (or for actual “middle class” Canadians, the will) to be able to put away $10k in after-tax dollars a year, not including the money you put away in your own, or employer sponsored, RRSPs.

The Conservative’s spouted how wonderful a gift this was for “middle class” Canadians when only an extremely small percentile of middle class Canadians would ever be in a position to take advantage of it. Bald-faced lie.

The TFSA is a great tool, doubling the limit was always bad policy.

Removing any tool that allows people to increase their financial independence, thereby breeding reliance on the public purse in the decades to come, is far worse policy. The signal being sent here is one of defeatism and dependence. Worrisome so many, like you, accept it. — Garth

—————–
TFSA is the best thing the CONs did.
$5k is kinda too small. $10k is a good number. Over a career can build up a good chunk for yourself.

It a huge help to the middle class not the rich.
It’s already taxed money.
The “rich” couldn’t care less.

If I was 20 with no dependents I would have easily dumped $10k into it. Others years it might have been challenging but it accumulates.
And when you are 70+ can collapse RRSP into it as well.

A silly decision to claw it back.

#268 Bottoms_Up on 12.09.15 at 12:37 pm

Removing any tool that allows people to increase their financial independence, thereby breeding reliance on the public purse in the decades to come, is far worse policy. The signal being sent here is one of defeatism and dependence. Worrisome so many, like you, accept it. — Garth
————————————
The tool is not being removed. A 30 yr old starting today could put in $233,500 until 65 (todays dollars). Reasonably invested this could definitely get to half a million by 65 (in today’s dollars). The tool is still there.

Seriously diminished for no valid reason. — Garth

#269 Gonkman on 12.09.15 at 12:45 pm

@ #257 A box in the Sky on 12.09.15 at 12:01 pm

I agree that it’s annoying that the TFSA limit being reduced from 10k to 5.5k but the amount of outrage here is laughable.

That incremental 4.5k difference is not going to negatively affect your life. It was only only in place for one year and I don’t recall anyone in 2013 saying “geeze my retirement planning at the current TFSA limit is ruined, the government needs to double the limit”.

If you can’t adjust by taking the lost $4500 of room and putting it 1) into your RRSP 2) into a margin account or 2) paying off your mortgage faster then you’re a muppet.

The bile being spewed here is incredible. People are no longer going to donate to charities or stop tipping wait staff? Get a grip and have some perspective, you’re just an awful human being.

———————————————

1. I have No RRSP Room – DB Pension eats up my Contribution Room every year.

2. My Mortgage is Paid.

So yes it does negatively affect some people.. especially those with DB Pensions who actually save for the future.

It wasn’t “ruining” my planning in 2013… but I was happy that it would make my retirement better when they said they would increase it.

The Liberals don’t want people saving. They want people spending.

When our new Finance Minster says “The Cupboard is Bare” and our new PM Selfie leader pisses away 2 Billion to Foreign Governments to “Combat Climate Change” that tells you everything.

The next 4 years this new Government will remind me of my childhood watching the Flintstones.

JT will act like Wilma Flintstone when Fred hands her his credit card… She goes running out the door yelling “CHARGE IT!!!”

We will be paying for Wilma’s Credit card bill…

#270 gut check on 12.09.15 at 12:46 pm

@ #235 Fortune500 on 12.09.15 at 4:57 am.

My family is the same, although for the moment still in Canada. The handwriting on the wall is undeniable.

#271 fancy_pants on 12.09.15 at 12:48 pm

#224 Great Canadian Bubble Co. on 12.09.15 at 2:08 am

I would suspect the discount from prime would slowly evaporate to minimize the spread between variable and fixed.

A question that nags me is how does the govt come up with inflation checks every time with the dollar in the $hitter. it is a load of bs. inflation is much higher than fudged numbers would indicate. They have to in order to keep rate suppressed. BofC overnight rate is no longer a tool to manage inflation IMO. it is a tool to float RE.

#272 gut check on 12.09.15 at 12:49 pm

IHCTD9

blech. the edit was done, the offended party spoke up, the guy in charge defended himself — what role do you think YOU have to play in it? Grab some dignity.

#273 IHCTD9 on 12.09.15 at 12:49 pm

#258 A box in the Sky on 12.09.15 at 12:05 pm

lol this makes no sense. At 20 years old and done college means at most she took a 2 year diploma program? The % of people with a 2 year diploma and in their first year of work having enough earning power to save the full $10,000 into a TFSA has to be minimal.
____________________________________________

After I got out of College, I made 12.00/hr. I paid off a 13K student loan in 1 year, and still had 10K+ to dump into RRSP’s

Impossible you say? Try living at home, everything is paid for except car and entertainment.

If you’ve been reading the news you’ll note that more students are returning home after grad than ever before.

My younger years before marriage, house, and kids were by far, the most potent saving years of my life.

#274 Sheane Wallace on 12.09.15 at 12:56 pm

#239 Balmuto on 12.09.15 at 9:23 am
#194 Leo Trollstoy
“If there is no ‘when’ then it’s always wrong.”
Well said. It’s the oldest trick in the book – you make a forecast with an ambiguous timeframe like “in the not-so-distant future” and as soon as it turns out to be right it’s “see? I told you so.” If it turns out to be wrong, then the bad trade idea morphs into “a longer-term strategy ideally measured in a time span far greater than just a few years.” I’ve got no respect for that.
I like Smoking Man’s predictions, e.g. 1.50 USD-CAD by the spring. A level, and a timeframe. And if turns out to be wrong he won’t pretend he never said it
————————————————————–

Predicting the use of one specific policy tool (QE) in a specific time frame is one thing, predicting the outcome from the use of all tools – entirely different thing.

I will put it this way: The chance of QE in the next 5 years in Canada is 70 % without the use of NIRP. It becomes 90 if they don’t use nominal NIRP.
BTW the banks bailout in 2008/2009 was effectively form of QE – government buying MBS.

With the unpredictable idiot at the helm of BOC is very hard to make specific predictions.

So we will get QE in one form or another as there is no other way to mitigate the fallout from the credit overexpansion.
Europe and US got it. What is so special about us except that we are in a bigger mess?

#275 Sheane Wallace on 12.09.15 at 12:59 pm

Correction:

I will put it this way: The chance of QE in the next 5 years in Canada is 70 % with the use of NIRP. It becomes 90 % if they don’t use nominal NIRP.

#276 LL on 12.09.15 at 1:05 pm

#238 …We will face a crisis.

Why? — Garth

…Petro Dollar is important for a country and we cannot be help/support by oil anymore (not at that price).
….Mortgages cost too much compare to salaries..peoples cannot spense for other stuff (some rent rooms in their house to meet monthly payments).

…and much more…

Slow growth, lots of families suffering for dumb decisions, more unemployment. But that does not constitute a crisis. — Garth

#277 OXI in GREECE on 12.09.15 at 1:09 pm

#244 Gonkman on 12.09.15 at 10:10 am
@ #220 OXI in GREECE on 12.09.15 at 1:08 am

You people think its bad now? Wait until 500K govt workers retire in the next 4 years…..and there is NO MONEY in the kitty to pay for their gold plated pensions.
Guess whose taxes are going up and up and up and up? Not theirs…..they are retired….at your expense I might add.
————————————-

You sir are a moron…

Number of Federal Govt Employees as or March 31st 2015 = 257,034 (But you are close with 500K…lol)

Fyi… Harper Cut over 35,000 positions during his 10 year run.

Govt Employees pay 50% into their Pensions now. Its not FREE Money.

The Government Pension Fund is managed by PSP Investments.

Current Total Assets in the Federal Government Pension Plan as at March 31, 2015: $81,348 million.

Total Return was 14.5% for 2014 FYI..

But thanks for you BS Post…
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

As usual its the GOVT WORKER who calls people names

1. There are THREE levels of Govt in bloated inefficient Kanada…..

2. 35K in ten years? HAHAHAA…..the feds have hired way more than that since then. Go look at Stats Can.

3. yeah…..FIFTY percent. The rest is paid for with taxes from taxpayers whom have ZERO percent in pensions and have ZERO benefits. So while your blind crooked teeth kids get all their work done for free, the public has to fork out 10,000 dollars of their own money for the same work.

try again…….

#278 pwn3d on 12.09.15 at 1:11 pm

#226 NoOn eOfConsequence on 12.09.15 at 2:53 am
Garth! Your exasperation really showed through today! Sit back and have a scotch. We need you!

As for T2 rolling back the TFSA….HE IS FOLLOWING THROUGH ON ONE OF HIS CAMPAIGN PROMISES.
——————
Well, thank God he followed through on one of them. He’s already broken how many now? 10B deficit – gone, tax cut will be revenue neutral – gone, 25k vetted refugees by end of year – gone…

#279 Annoyed on 12.09.15 at 1:15 pm

#4 Mark on 12.08.15 at 4:31 pm

“Then again, Trudeau and the gang could just be vindictive towards upper-income Canadians. A plausible explanation in and of itself. Just like Poloz who is hinting that the BoC is going to declare war against cash “investors” in the not-so-distant future with negative policy rates.”

Where is the real Robespierre when we need him? Heads need to be rolling!

#280 Mark on 12.09.15 at 1:22 pm

“The above just made me question something…How much of the 264,000 represents Oil execs and workers?”

Not that many. Figure every doctor (~77k) in Canada is over $200k/year, along with every dentist (~20k) and say, 1/3rd of the lawyers (~90k, so 30k). Throw in a few random engineers, small business owners, successful investors, upper-level public servants, etc., and that 264k really isn’t a high number. In fact, its rather shocking (although quite unsurprisingly) that its not much higher.

What Fort McMurray (or many oil patch) workers ‘claim’ to earn (often gross pay, out of which they must take their significant expenses) and their taxable bottom line is often two very different numbers. My former neighbour is a welder up there, and grossed well over $200k in the glory days of 2006-2008, but by the time he properly amortized his truck, paid for living and copious amounts of diesel, he barely had an income much better than the guys working in the local manufacturing shops as hourly or piece-meal welders. In Oil Bubble 2.0 (2011-2013), rates never did return to their previous levels either. And we can just open the newspapers and see what’s happening right now.

#281 Millmech on 12.09.15 at 1:25 pm

245 Daisy May
The TFSA won’t cost the govt future revenue because it will be spent on products and services in your retirement which are taxed and this generate revenue for the govt.The bigger the nest egg the better the retirement(you can’t see this) at least for me anyways since I can’t take my money with me.

#282 Bram on 12.09.15 at 1:34 pm

Will the rate go negative at some time, or will it not?
Hard to say at this moment.

But let’s be fair: there is still quite a drop to go from 0.5 to 0.0

So 0% would be more likely than -0.5%
See how long Japan has been on 0% now….
http://www.tradingeconomics.com/japan/interest-rate

Bram.

PS: I agree that an integral delete of a posting is better than an edit. Garth, may I suggest moving to verified logins for comments? That way you can make bans more permanent too. Should be easier to police, and attract less anonymous trolls.

#283 Mark on 12.09.15 at 1:37 pm

“Fyi… Harper Cut over 35,000 positions during his 10 year run.”

Have a hard time believing that. Maybe if you include government workers transferred to the private sector perhaps, ie: the AECL “sale” to SNC-Lavalin? Or various outsourcing schemes? Sure didn’t help the government much as Harper ran an average $25B/year deficit. That’s what really made me sad about the Harper government — they came to power on a platform of fiscal prudence, but in practice were anything but responsible stewards of public money.

“I will put it this way: The chance of QE in the next 5 years in Canada is 70 % with the use of NIRP. It becomes 90 % if they don’t use nominal NIRP.”

And 90% of statistics are wrong. Care to tell us how you derived those numbers? If you really have an econometric model that is so sophisticated that you can assign probabilities, I wouldn’t mind seeing it.

And just what does “nominal NIRP” mean? Real policy rates are already negative, so does that mean we’re in “real NIRP” already?

So we will get QE in one form or another as there is no other way to mitigate the fallout from the credit overexpansion.

Very likely. Unless something countercyclical comes out of the ashes. IMHO, the tech sector in the 1990s was a sort of miracle that saved the CAD$ from going down to $0.40. A single factory in Calgary employing a mere 400 people or so exported over $2B worth of stuff in one year (cell base stations). Figure out the sort of staffing or capital intensity required to achieve the same in the O&G sector, and you’ll understand just how tragic it is that Canada has lost much of its ICT R&D sector over the past decade due to the government’s obsession with propping up housing as an economic growth engine.

#284 S.Bby on 12.09.15 at 1:38 pm

BC Assessments: massive valuation increases for some lower mainland areas.

http://www.bcassessment.ca/news/Pages/BCAssessmentreleasesexamplessignificant2016valueincreases.aspx

Don’t know why they would bother to send out warning letters to property owners though.

#285 IHCTD9 on 12.09.15 at 1:46 pm

#271 gut check on 12.09.15 at 12:49 pm
IHCTD9

blech. the edit was done, the offended party spoke up, the guy in charge defended himself — what role do you think YOU have to play in it? Grab some dignity.
____________________________________________

I offer you the same advice.

Don’t get mad bro, save a pancake…

#286 Victor V on 12.09.15 at 1:47 pm

26% of Ontario homeowners struggling to afford homes

http://www.thestar.com/business/2015/12/09/26-of-ontario-homeowners-struggling-to-afford-homes.html

An analysis of housing affordability — the first to factor in such things as daycare and transportation — estimates that some 26 per cent of Ontario homeowners are under “significant pressure” to cover their shelter costs.

About 480,000 of the estimated 840,000 homeowners being seriously squeezed by monthly mortgage and other costs are middle-class workers under the age of 45 — those who’ve had the hardest time breaking into the house market because of skyrocketing real estate prices and their disproportionate dependence on part-time and contract jobs.

According to groundbreaking research to be released Wednesday by the Canadian Centre for Economic Analysis (CANCEA), housing affordability pressures have grown an average of 13.5 per cent across Ontario since 2006.

#287 espressobob on 12.09.15 at 1:54 pm

So, our TFSA contribution room is rolled back to 5.5k for 2016. Ever considered a non-registered account, which can be tax friendly with Canadian equities?

It ain’t perfect, but it beats whining.

#288 IHCTD9 on 12.09.15 at 1:55 pm

#277 pwn3d on 12.09.15 at 1:11 pm

Well, thank God he followed through on one of them. He’s already broken how many now? 10B deficit – gone, tax cut will be revenue neutral – gone, 25k vetted refugees by end of year – gone…
__________________________________________

There might be a net benefit if he broke all of them!

Well, it would be nice if he hung on to the child benefit changes and the tax break – I look forward to those :)

Of course, I am now quite committed to giving myself a hefty tax break. Avoiding retail, conventional energy, overall consumption, and much more.

Meanwhile, I look forward to reading the news headlines over the next 4 years, should be all the entertainment I need.

#289 Fleurdelis on 12.09.15 at 2:06 pm

Hello Garth,

did you read the news? Central bank is thinking to go below zero…

I mean… below zero!

This is why democracy scares me. — Garth

#290 Gonkman on 12.09.15 at 2:08 pm

@ #276 OXI in GREECE on 12.09.15 at 1:09 pm

As usual its the GOVT WORKER who calls people names

1. There are THREE levels of Govt in bloated inefficient Kanada…..

2. 35K in ten years? HAHAHAA…..the feds have hired way more than that since then. Go look at Stats Can.

3. yeah…..FIFTY percent. The rest is paid for with taxes from taxpayers whom have ZERO percent in pensions and have ZERO benefits. So while your blind crooked teeth kids get all their work done for free, the public has to fork out 10,000 dollars of their own money for the same work.

try again…….

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

I only call people what they are. And your post was Moronic so if the shoe fits.

1. Yes there are 3 Levels… But I highly Doubt all 500K Employees at all 3 levels are retiring in 4 years.

Federal Government pensions are fully funded and managed externally.

Do you really think every time a Retiree gets his monthly check it comes out the tax coffers?

2. Fed Employees in 2010 = 282,980.
Fed Employees in 2015 = 257,034 = 26,000 LESS employees.

Harper was cutting which was needed. But don’t worry JT will hire more.

Stats on Number of Federal Employees by Department and Year.

http://www.tbs-sct.gc.ca/psm-fpfm/modernizing-modernisation/stats/ssa-pop-eng.asp

3. If you can’t get a Job with pension and benefits. That’s not my fault.

Employees of private companies with Benefits and pensions get paid those benefits with my money when I buy the company’s Services/Products.

DAMN Those companies to hell!

How the hell can they use my money to give benefits and pensions to those employees!!

Lol… I don’t care because I invest in those companies.

I also invest in Canada by paying my share in Taxes and I don’t bitch about it.

You can hate on Government and Government employees all you want but your statements were still moronic and false.

I am not Pro More Government at all. It is inefficient and can be wasteful.

But if you think the last 10 years were bad wait until PM Selfie empties your wallet.

And if you live in AB or ONT… You will get double teamed by either the JT/Nutley or JT/Winnie crew.

#291 CJBob on 12.09.15 at 2:08 pm

Chances of a rate cut in Canada increases:

http://business.financialpost.com/news/economy/odds-of-a-bank-of-canada-interest-rate-cut-rise-as-commodity-carnage-weighs-on-economy

CIBC Chief Economist also sees no chance of an increase in Canada in the next 18 months.

Just like many of us have been saying. A rate increase in the U.S. may happen but it won’t spill over the Canada anytime soon.

#292 Harbour on 12.09.15 at 2:09 pm

When Oil Turns 40, the Aches Turn Into Real Pain

http://finance.yahoo.com/news/oil-turns-40-aches-turn-210400767.html

#293 noel on 12.09.15 at 2:12 pm

#4 Mark on 12.08.15 at 4:31 pm

“Then again, Trudeau and the gang could just be vindictive towards upper-income Canadians. A plausible explanation in and of itself. Just like Poloz who is hinting that the BoC is going to declare war against cash “investors” in the not-so-distant future with negative policy rates.”

________________

Negative interest rates do not apply to individual savings accounts, only to interbank lending. Financial institutions eat the costs of holding depositor’s cash in savings accounts, and more than make up for it in fees.

If negative interest rates were applied to savings accounts, people would either move their deposits to cash or to another bank that would happily take all the new customers.

#294 Bytor the Snow Dog on 12.09.15 at 2:20 pm

@155 IHCTD9- I’m sorry, did you post something?

@ Oxi- Moron- OMERS, TEACHERS Pension Fund, among other gov’t employee pension plans, are known to be among the most well managed pension funds in the world. Try again.

@Garth- I think you’re being a bit ingenuous here. Yes, there is no tax effect of the TSFA reduction now, but the effects 35-40 years down the road have been well documented. I know it’s hard to let go of your baby, but it might be time.

#295 IHCTD9 on 12.09.15 at 2:30 pm

#93 steerage steward on 12.08.15 at 7:43 pm
By the Cons own estimates, the extra room in the accounts will cost government coffers $85 million in the current fiscal year, jumping to $360 million annually by 2019. Five years on, that’s $1.1 billion in foregone revenue.

http://www.cbc.ca/news/business/budget-2015-tfsa-limit-hiked-to-10-000-as-election-budget-delivers-few-goodies-1.3040853

Seems odd people saying this change won’t make a difference in revenue.
____________________________________________

The only way TFSA contributions could “cost” government money, is by not being spent while in a TFSA, delaying the retail taxes and so on that would result from said expenditure.

I say this within the context that no Canadian would be boneheaded enough to make a serious effort at retirement savings within a vehicle where the proceeds are taxed.

IE. that the funds within a TFSA earning tax free proceeds would not just default to funds in taxable savings if the TFSA had never existed, or were to be cancelled altogether.

This then, is not a cost, rather a delay. And if everyone in Canada with a healthy TFSA died broke, the government would be ahead of the game after one full cycle as the proceeds from the TFSA would be spent along with the original capital invested – all of which would produce revenue for the government.

#296 bdy sktrn on 12.09.15 at 2:32 pm

VANCOUVER — BC Assessment is sending a “significantly higher” number of early notification letters informing homeowners to expect a 2016 assessment that is at least 15 per cent above the average increase in their area.

Last year, BC Assessment sent between 20,000 to 24,000 of these letters. This year, it is sending out about 37,000, an increase of more than 55 per cent.

More than 65 per cent of the letters will be received by owners of single-family homes located within 20 to 30 minutes of Vancouver, including the North Shore, Burnaby, Tri-Cities, New Westminster, Richmond and Surrey.

#297 LL on 12.09.15 at 2:39 pm

Slow growth, lots of families suffering for dumb decisions, more unemployment. But that does not constitute a crisis. — Garth

Maybe not at this moment but it can be a crisis beginning.
Wait & see…

#298 AB Boxster on 12.09.15 at 2:39 pm

Re Preferreds..
____________________________________________
Bank of Nova Scotia and Royal Bank each offering new Rate Resets at 5.5%, to reset in five years at a reset price of 5 yr GOC + 4.5.%
Even if the rate stays at the pathetic .84%, these shares will pay 5.5 for 5 years, and then reset at about the same rate.

Rate resets preferred that were floated 5 years ago at around 3.5% still have a ways to fall in price to provide returns equivalent to these recently offered products.

Is this not a pretty strong indication that the banks expect rates to rise?
While buying a fund like CPD now makes sense, does it not also make sense to own some of these preferred shares currently being floated?

#299 LL on 12.09.15 at 2:43 pm

#254 – No, we are not in a bear market. Just because you suck at investing does not mean investing sucks. — Garth

If it’s not a bear market I am not impressed by any performance (performance: English word?)

#300 AB Boxster on 12.09.15 at 3:04 pm

Preferreds redux

—————————–
If you look at an individual preferred share like:
Capitol Power Corporation CPX.PR.A
This preferred was offered at $25 with a dividend of 1.15 per share, so a rate of 4.6%.

This preferred share resets at a paltry rate of GOC + 2.17, or approximately 3%.
So after reset the share will pay a dividend of .75 per share.

It also resets on Dec 31, 2015, so very soon.

Today’s price for these shares is $9.70.

So after the reset, these shares will pay dividends of .75 on a share that can be bought for $9.70.
This gives an effective rate of about 7.75%.

So, if the original share offering was sold out on $25 shares that made 4.6% , what would be the down side of buying these shares today, on sale, with a 5 year rate of 7.75%.

Anyone?

#301 Sean on 12.09.15 at 3:09 pm

“Putting interest-bearing investments inside is like Beyoncé in a burka. Tragic.”

You every think of becoming a rapper, or maybe writing rap lyrics? I think you and Norm would be a great duo.

Truth on the TFSA – bad move and it doesn’t make sense as you pointed out if its not saving the guv money and isn’t being utilized anyway. It’s for future growth and savings.

#302 young & foolish on 12.09.15 at 3:24 pm

Market outlook for 2016 ….

Mr. Wall Street, meet Mr. Main Street

#303 saskatoon on 12.09.15 at 3:26 pm

#261 noel

Surely you do not believe you will never accumulate some wealth. — Garth

sadly, such is the extent of the canadian victimization project.

#304 young & foolish on 12.09.15 at 3:34 pm

Interest rates will stay low everywhere …. until the boomers are all broke and dead. Nobody is going to pay you for hoarding money these days. Yield chasers better look for ways of creating something of actual value to other people.

#305 The real Kip on 12.09.15 at 3:36 pm

Dow Jones went up 200 today and lost all of it and is currently down 100. Fixed Ponzi.

Yellen doesn’t have the balls to raise interest rates. Economies around the world are already a trainwreck and the US economy is smoke and mirrors.

Care to bet? — Garth

#306 Cristina on 12.09.15 at 3:38 pm

Hi Garth love your blog and a long time avid fan. Question to you and bloggers.
If I make an ‘in kind contribution’ from my non-registered account to my registered TFSA, will it trigger a capital gain or a capital loss? I am thinking of sliding my stocks that are going to trigger a capital loss to my TFSA account but am just concerned if this wil be a red flag with CRA. Thanks for your assistance.

Yes, it is a taxable event. — Garth

#307 jess on 12.09.15 at 3:57 pm

 May 19, 2003 Issue

Inverted Totalitarianism

http://www.thenation.com/article/inverted-totalitarianism/

https://en.wikipedia.org/wiki/Inverted_totalitarianism

#308 leslie on 12.09.15 at 4:03 pm

Would have been more fair to remove RRSP contribution past 150k income for tax return purposes..

TFSA is weak if government was thinking that they are going to tax the capital / income gain from the $5000 from the TFSA

#309 Freedom First on 12.09.15 at 4:41 pm

AB Boxter

For Canadian utilities my choice is the ETF ZUT . I don’t buy single stock anything.

#310 Mark on 12.09.15 at 4:42 pm

I am thinking of sliding my stocks that are going to trigger a capital loss to my TFSA account but am just concerned if this wil be a red flag with CRA.

TFSA’s are considered related trusts for the purposes of tax. The Income Tax Act is fairly explicit in denying capital losses associated with transactions for which property is transferred between related entities if you do not wait the prescribed length of time.

Interest rates will stay low everywhere …. until the boomers are all broke and dead. Nobody is going to pay you for hoarding money these days. Yield chasers better look for ways of creating something of actual value to other people.

I concur. There is no demographic support for higher systemic interest rates in most of the “Western” world. Although risk premia of lending against certain asset classes, and against certain economies most certainly can and will change over time.

I’ve written many times here of how mortgage rates are likely going to rise over the next few years, even as the BoC further cuts its policy rates. Taken a lot of heat for such as well, but its now becoming a lot more mainstream.

#311 Doug in London on 12.09.15 at 4:45 pm

@LL, post #298:
You got that right, the performance of many assets, or the TSX in general, has left much to be desired to date. However, there is an upside to it all as a lot of those assets (yes, including CPD) are on sale now. Did the rest of the world decide to go back to the Julian Calendar and not tell me, because from what I see the stock and ETF trading world believes it’s Black Friday or Boxing day.

#312 Arse on 12.09.15 at 4:56 pm

I do not think there will be negative interest rate. I am Expecting the Fed to raise the rate soon.

#313 jaybee on 12.09.15 at 5:02 pm

Great entertainment!

Lately I’ve been reading the comments on this blog. Well not all of them. I skip all of Mark’s posts of course. I tend to focus on the one’s that Garth takes the time to respond to because they tend to end up in one of two categories:

1) They are laughably stupid comments, and Garth calls them out on it a witty and sarcastic manner;

2) They offer a reasonable counterpoint to the argument of the post, and one can’t help but learn something.

#314 DON on 12.10.15 at 1:23 am

Removing any tool that allows people to increase their financial independence, thereby breeding reliance on the public purse in the decades to come, is far worse policy. The signal being sent here is one of defeatism and dependence. Worrisome so many, like you, accept it. — Garth
**************
And housing debt adds to the dependence. I had a glimmer of hope that Trudeau would forget about his TFSA promise. “In the best interests of Canadians, that is”.

Perfect time of the year for given. Imagine the positive spin. Trudeau is Santa Claus to those who can use it.

#315 DON on 12.10.15 at 1:24 am

Perfect time of the year for given. Imagine the positive spin. Trudeau is Santa Claus to those who can use it nonetheless, a gift to all.

Wasted opportunity?

#316 Bill on 12.10.15 at 9:22 am

Garth, I must suck at investing…
I didnt lose a dime 2014.
2.2 mil in cash
700k in realestate paid for. Gone up the last 5 years.
Vehicles and machinery paid for.
$250k income annually.
If only everybody sucked like me eh? 48yrs old and worked for the fon company for most my years. Lol
The stock market is a BS game. Commerial real estate is the ONLY THING you can count on long term.

If you were only modest, you’d be perfect. — Garth

#317 Bill on 12.10.15 at 11:32 am

You want to shoot me down…Ill get in your face.
Its simple.
You have a ton of great info. Better then anyone I’ve read for free…. But one needs to admit when they are wrong.
My regrets? Selling my last commercial business and not selling gold right at the top. Got out on silver @ $49 though. Everyone Fs-up.
Your were right as rain on Gold bug idiots. Credit where it is deserved.

“Get in my face”? You are so gone. — Garth

#318 Bill on 12.10.15 at 12:13 pm

DELETED

#319 Bill on 12.10.15 at 2:34 pm

DELETED