Varmints

Blog doggess Sue borrowed a bunch of money against her home from her bank. The one with the Penguins.

She knows the drill. Get a HELOC. Invest the proceeds in non-registered financial assets. Make interest-only payments. Then deduct every dollar from taxable income. All good. Especially when the loan is so damn cheap – the prime rate (2.45%).

But whoa. What’s this letter from the bank?

The loan rate has changed. Now it’s prime +1%. Sue quickly beat on [email protected] and as a result the branch has agreed to review things. But here’s the question:

I’m reaching out to you now as I don’t know anyone else on the planet that speak to this unequivocally.

•             Can Canadian banks unilaterally change rates on HELOCs?

I presented the facts of this matter to our banker and she replied: I will forward your concern to customer care department . To see if they can give you an answer on the changes that took place.

I have not received any correspondence from CIBC since. I look forward to your comments… given the indebtedness of our nation, it would be a great shock for thousands of Canadians to learn their HELOC’s can be unilaterally changed.

My response: Duh. Yes. “If you look at the fine print on your agreement you will likely see that the ‘prime +%’ is a guideline, and the bank has the right to change it arbitrarily (so long as you are informed) just as they have the ability to call the loan immediately without recourse. The bank always wins, Sue…”

And her reply was as expected:

Thank you… not what I was hoping to hear but you are 100% correct. It wasn’t under ‘Interest’, or in soft wording, it’s spelled out clearly on the last page under ‘Guarantee’… “We may, at any time and from time to time, without the consent of or notice to any guarantor… increase or decrease the Interest Rate…”

I wonder how many people leveraging themselves to the eyeballs know that tidbit. It seems like a good plan… using home equity for wealth generation… but clearly not without risk.

Indeed. Borrowing money to invest is an intoxicating concept when (like now) relatively boring balanced & diversified portfolios pump out robust returns, yet loan rates are historically repressed. And when the interest is deductible at your marginal rate, it’s party time. But, as Sue reminds us, there is always risk.

Not only can markets fluctuate but so can rates. HELOCs are demand loans. They can be called on a banker’s whim. The rate of interest can be changed with one email. They’re registered against your property’s title. And they essentially turn your house into an ATM, offering a seemingly ‘free’ giant pot of money that can go to work earning more money, plus tax advantages. Accepting a home equity line of credit and using it appropriately takes discipline and planning. If it’s called and you lack liquid assets to repay the loan or a higher rate means you can’t handle the payments, well, yer pooched.

Having said that, money borrowed at less than 2.5% with deductible interest to plow into a portfolio turning out 6-7% is a no-brainer. But, but, but… (a) understand it’s a long-term strategy and don’t hyperventilate during inevitable downturns, (b) be balanced, diversified and consider professional help, (c) no crypto or Reddit suggestions (d) know the loan can be called anytime or the rate upped, (e) don’t tell your MIL, (f) always have a strategy to repay the principal and (g) borrow modestly – not 65% of your home’s entire equity, as allowed,  but more like 20% max.

And yes, the bank always wins.

Now, a question from Sal who sees his Mama as a useful investment vehicle.

I have POA over my mother’s financial affairs.  She lives month to month on her pensions at 80 years of age and does not have a TFSA and wouldn’t know what one is.  I’m thinking of opening a TFSA in her name and fund it with money from selling my house, and assigning myself as the beneficiary.   What issues do you think I might have with such a plan and is it wise?  I’m concerned that the CRA might look at this unkindly should they find out.    Should I avoid linking my bank account with the TFSA and funnel money into her accounts and then into it?  Should I do it in small amounts to avoid potential flags?

So it’s perfectly okay to open a TFSA for your spouse or adult kids and fund it. Technically the money becomes theirs, but you can always have an agreement with them to repay you. Stuffing your aged mom’s account with your money when you’re power of attorney – just to designate yourself as beneficiary and benefit when the old gal kicks – is, well, despicable. And illegal. And you deserve two quarts of fire ants in your shorts.

A POA cannot designate him/herself as bene unless the document clearly states so. Sal, you need to know what a power of attorney is – someone legally obliged to put the interests of another person above your own. The POA must keep accurate records, act in complete good faith, avoid all conflicts of interest and keep their property separate from that of the one who granted this authority.

Did Mom bring you up to be such a scheming weasel?

142 comments ↓

#1 Dogman01 on 03.29.21 at 2:02 pm

Taxing extreme wealth to offset the costs of the pandemic would be unquestionably fair
https://www.thestar.com/opinion/contributors/2021/03/29/taxing-extreme-wealth-to-offset-the-costs-of-the-pandemic-would-be-unquestionably-fair.html

First they came for the $+20 Millionaires
And I did not speak out
Because I was not a $+20 Millionaire

The extremely wealthy establishment, after decades of gleefully offshoring jobs with no thought to the health of the societies they benefit from, have few supporters amongst the plebeians.

Chrystia “the Impaler” did write the book on Plutocrats.
Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else; by Chrystia Freeland
https://www.goodreads.com/book/show/15797932-plutocrats?from_search=true&from_srp=true&qid=xoJWEDP5KI&rank=1

Now I think they should really focus on Offshore Tax havens cheats and money laundering this is one of those corruptions that needs done and needs to be “seen to be done” .

#2 CERB - Fraud on 03.29.21 at 2:17 pm

If there is someone on this site that was a victim of CRA -CERB fraud and – Identity Theft – please indicate what you think is the best way to protect your banking information.

If the fraudsters have all of your information from the CRA site including your bank account number what is the best way to minimize future bank fraud?

Would you switch banks or stay with the same bank and put security alerts?

#3 This is why ... on 03.29.21 at 2:19 pm

you buy the banks … they can’t lose.

#4 Veronica on 03.29.21 at 2:20 pm

In Canada it is easier to become a POA than it is to become the coach of a children’s soccer team. To become a POA you need the signatures of two witnesses on a form; to be a coach you have to undergo a criminal background check. If an unscrupulous POA drains granny’s bank accounts, it is up to the other beneficiaries to hire a lawyer and go after him or her. Good luck if you can’t afford a lawyer or if the money is all gone. The system relies too much on the basic decency and ethics of those entrusted with this fiduciary responsibility.
There is no regulatory oversight.

#5 Rakiki on 03.29.21 at 2:29 pm

This story is one of the very reasons why we moved our investment loan to a fixed rate mortgage from a line of credit. The fixed rate was 1% lower, but also gave us ironclad 5-year protection. The capital repayments do make the strategy less tax effective since the interest charges are reduced over time. But it’s fine since we want to gradually retire the loan. My favourite financial hack, yet so underused!

#6 Sandy Weston on 03.29.21 at 2:38 pm

Dogman01, there is one tax which they are screwing everyone which is not 1% a year, 2% a year. It is more like 7% to 10% a year.

It is a necessities inflation rate. There are at lest 5 things everyone needs, food, shelter, transportation, water, other utilities electricity, heating, energy like gas, natural gas.

Take all these 5 things and the Liberal, NDP, Green Party and other socialist, communist, marxist, left leaning parties, policies all do, they increase the cost of living, inflation by high amounts like the high carbon tax, high sales taxes, high HST/GST, high property taxes, high land transfer taxes, high rents due to these policies, high energy, gas, heating costs due to these policies and I can go on and on.

The bottom line is all this high debt, massive printing of money in the hundreds of billions, high taxes, high new taxes, ridiculous over regulation, wasteful pet projects and government spending, ridiculous low to lower interest rates manipulation by central banks, governments is all screwing taxpayers, consumers.

The more you tax, spend too death, put everyone, every government, agency, business in debt, the more everything will cost and it will make everyone poorer. You are clueless about how things really work in this world.

#7 Jens Happe on 03.29.21 at 2:40 pm

Garth, could you explain what exactly makes Sal’s move illegal?
Let’s say if it was Sal’s mom who decides on her own to open a TFSA, and accepts a gift from Sal to fund it. As long as Sal takes care of all the taxable capital gains from selling the house, can the CRA still make enough of a conflict-of-interest case, just because Sal has POA over her finances?

#8 TurnerNation on 03.29.21 at 2:40 pm

What’s going on with the Economic & social Lockdowns? Again expect more very soon to try and stamp out EASTER.
As noted early last year the #s on the telescreens will rule our lives. Lockdowns into 2023, minimum, it seems.

.Strict seven-week lockdown would nearly wipe out all COVID cases in Alberta: (edmonton.citynews.ca)

.Brisbane, Queensland plunged into urgent LOCKDOWN after four new cases of coronavirus are found (dailymail.co.uk)

. Phillipines: more lockdowns

.Stricter corona rules in Berlin from Wednesday (berliner-zeitung.de)

.Wetherspoon boss says vaccine passports would be ‘the last straw’ for pubs(itv.com)

. New Brunswick sending more regions into Red economic/social lockdowns

………
— As I always said “Distancing” is the tool used to destroy our economy and culture.

Romeo and Juliet play axed over ‘distancing fears’s (bbc.co.uk)

………….
— The industrial revolution kicked off March 2020. Could A.I. tech kids? The bots are almost human-like on the screen.

Arizona: GILBERT, AZ (3TV/CBS 5) – Gilbert Public Schools announced Friday that the district is laying off more than 150 employees. It said the cuts were due to low student enrollment next year because of the pandemic.

–It’s all here, waiting for the right crisis.

https://www.avantiseducation.com/devices/school-virtual-reality-vr-headset/
ClassVR brings affordable, innovative Virtual Reality lessons and experiences to students of all ages. It comes complete with hardware, software, curriculum-linked activities and lesson plans, equipping teachers with everything they need to introduce this cutting edge technology straight into the classroom.
———

This other blog details it all in exacting detail. Who are all the big tech players too.

https://wrenchinthegears.com/?s=education&orderby=relevance&order=DESC

#9 Felix on 03.29.21 at 2:41 pm

Correct, canines are truly dogawful varmints.

Skunks, on the other hand, actually make positive contributions to the ecosystem.

#10 Bryan on 03.29.21 at 2:42 pm

A dilapidated cottage near where I live hasn’t had anyone in it for at least 20 years (I can’t imagine the mold party going on in that place).

It was finally listed last week for $269 000, it sold in 7 days for $565 000 with 11 bidders. That’s over 200% of asking price…..during a pandemic.

#11 Alphonse Kehaulic on 03.29.21 at 2:52 pm

#31 TurnerNation on 03.28.21
Yes thanks I did speculate way back in November but come on, it was plain to see no? A June reminder sounds about right.

Folks, I hate to haarp on it but at this point Easter ain’t looking too good. On the other hand, did you really think hunting season for chocolate bunnies was going to open?

A crash course in what’s here and what’s to come. Just 4 movies: Demolition Man, They Live, The Running Man, and Total Recall, the original. The Devil’s in the details, so to speak (total surveillance, travel passes, censorship, food riots, heavily armed cops on the beat, even deep fake videos.)
… Probably just a coincidence.

Speaking of predictive programming:
“Border officials have nabbed 30 people trying to enter Canada with fake COVID-19 test results (cbc.ca)”
Those pesky number 3s just seem to love chaos!
If we could only do SOMETHING to stop these test cheats. I know: a digital travel pass. The Cloud will save us. Cloud: (verb) To darken, to make less transparent.

#12 Smartalox on 03.29.21 at 2:54 pm

Question though: if Sal were to take his money, “gift” it to his mom, invest in preferred within the TFSA, and use the divvies to supplement mom’s income, that would be OK, right?

It would seem that taking the opportunity to generate additional income for her, in a way that would preserve capital while minimizing taxes and not threatening any government support she might receive would be in her best interest, right?

Mama might want to designate him as a ‘successor holder’ – if he’s her only kin, for example – but he may want to retain POA to prevent Mama from taking the capital out of the TFSA to buy lottery tickets.

Asking because I may be in a very similar situation shortly.

#13 ElGatoNerodeYVR on 03.29.21 at 2:55 pm

Regarding Sal’s question.
I think you mabe went down to the deep end a bit there Garth.
While I agree it sounds illegal and the CRA would not take a kind view ,there is no indication the poor guy was trying to profit off his mom in any way. There is no money in the TFSA now so he was inquiring about using his own money in his mother’s name so I think the name calling is undeserved.
And really when the millionairs and billionaires of the world do everything they can to not pay any taxes or very little,and the rich seniors(talking about those with millions saved here, not those that do have any) try to hide income so they can steal some more OAS all of them at the taxpayers expense can you blame this poor taxpayers guy for trying?
This is how the French and bolsevich revolutions started ,when the elites stopped giving “insert choice word here” about the 90% of the working poor and people became too desperate and without a future or any option in sight.

#14 Pete on 03.29.21 at 2:56 pm

According to many economists, housing needs more than a crash to unwind. If our libs do nothing, even our banking structure may destabilize. So how will the markets respond to such an event? Interesting read from RBC…

https://thoughtleadership.rbc.com/hot-canadian-housing-markets-call-for-a-policy-response/?utm_medium=email&utm_source=salesforce&utm_campaign=housing

https://www.google.ca/amp/s/betterdwelling.com/this-weeks-top-stories-canadas-property-bubble-is-too-big-for-a-crash-to-fix-and-banks-say-it-threatens-to-destabilize-the-economy/amp/

#15 Love_The_Cottage on 03.29.21 at 3:14 pm

#10 Bryan on 03.29.21 at 2:42 pm
That’s over 200% of asking price…..during a pandemic.
______
Asking price is absolutely meaningless. Always was. Always will be.

Did it sell for more than similar properties in the area? More than it would have last month? Last year?

#16 Sail Away on 03.29.21 at 3:16 pm

#3 This is why … on 03.29.21 at 2:19 pm

you buy the banks … they can’t lose.

———–

Interesting timing to say that.

I see your assertion and raise you… reality:

https://financialpost.com/investing/nomura-credit-suisse-warn-on-big-losses-after-archegos-share-dump

#17 Jesse on 03.29.21 at 3:17 pm

#64 Diebel Ryan on 03.28.21 at 2:06 pm
I think it’s about time time the wealthy ( thats pretty much all commentors on this blog) payed more tax. As working individuals it sure feels like we pay for everyone.
Fill up rrsp allowances – yeah right. We are very good with our money. Couple income of 130K. Managed to save about 30K over the last ten years with little debt but there is nothing left for saving. You guys call yourselves savers like you are doing something others can’t. Obviously you’ve been given a large advantage by one means or another but instead of helping others with that money, most of you spend your time trying to hide it for yourself. The taxes I pay take all my extra money, the dollar value may not be as high as “lord business “ pays but the percentage of my income is way higher. When is the last time lord business had to decide which bill to pay and which to hide from ? I am working poor. Work five days( usually 6) , rest for two ( usually one) which clearly is not the case for money who follow this blog.
We’ll keep our heads above water for now with little to no plan for the future but at least we are greedy goblins shim shamming our way to an elite lifestyle.
Shame on all of you. Pay your bloody taxes, enjoy the ammenities around you without the guilt of knowing that it’s the working poor who support you all.
Hide your money- shame
********************************

4 out of 10 families pay ZERO taxes… they are the ones getting a free ride. If you want to shame someone for not paying their fair share, don’t go after the middle class…

#18 Stop the nonsense! on 03.29.21 at 3:18 pm

Like most of the half wits who follow this pathetic blog, Sue will be happy to know that there are others “on this planet who can speak to this unequivocally.”

I reviewed the details of Sue’s account and found the following.

Sue has signed herself up for the “revolving portion” of her HELOC, which is the cause for her predicament. The revolving portion is meant for short term needs and is truly the ATM portion of a HELOC. It comes with higher rates and the rate can fluctuate, both the prime but also the premium, as happened in this case.

Sue needs to visit me ([email protected]) and convert this to a “fixed term”. The rate will remain for the term. Yes, it does require some principal re-payment but this can be minimized considerably by choosing the longest amortization period available.

For heaven’s sake everyone … please stop giving advice if you don’t know what you are talking about.

#19 Inequity on 03.29.21 at 3:19 pm

#1 Dogman01

or maybe Canada could start living within its means and it wouldn’t have to keep figuring out how its going to pay for it all….

#20 Don Guillermo on 03.29.21 at 3:28 pm

It’s incredible how many commenters happily sit around thinking of different ways to raise Canadian taxes. Especially for a government that so recklessly firehoses money out the window. Of course their ideas are ones that don’t or least effect them. More “let’s shoot Boris’ goat” mentality.

#21 Ballingsford on 03.29.21 at 3:37 pm

Wouldn’t it be better for Sal to take out life insurance on his mom?

What a schmuck!

#22 Looking Up on 03.29.21 at 3:40 pm

Garth,

If you borrow to invest can you still write off the interest on the investment loan if the ETF’s you buy hold a majority of US equities or do they have to be Canadian equities?

I’ve heard different opinions on this. Thanks.

No difference, of course. – Garth

#23 Linda on 03.29.21 at 3:50 pm

The issue with ‘Sal’ is not opening a TFSA for Mom, but his designating himself as the beneficiary of the TFSA. As Garth correctly points out, having POA means being ultra careful to dot the ‘i’s’ & cross the ‘t’s’ so that your actions are clearly in the best interests of the person you are acting on behalf of. From a legal standpoint, if ‘Sal’ is using the POA to make himself the beneficiary of one asset it really calls into question whether this was an isolated incident. ‘Sal’ may have in all innocence thought this would be in Mom’s best interest, but that isn’t how its going to look should his actions fall under legal review.

#24 Sail Away on 03.29.21 at 3:56 pm

Sal’s question could be a reasonable one, depending on circumstance.

His mother currently lives month to month by pension, meaning no reserve. If an unexpected cost arises and Sal is the one responsible for her (and with POA, he likely is), then the shortfall would need to come from Sal’s personal funds.

Registered accounts were created to assist people managing money, so if that’s what is being done in benefit of Sal’s mother, then all is well.

Nope. He’s illegally making himself a beneficiary. – Garth

#25 Zed on 03.29.21 at 3:58 pm

For all the people asking the rich to pay more, how about asking a refund from:
– the students living at home and who collected more in CERB than their weekend hours the previous year?
– the part-timers who collected more from CERB than the income they usually earn?
– the retired doing a few hours of contract work and who earned more from CERB than the income from previous year?

Chrystia and Justin should look more at money taken from the government under wrong pretence over taxing money from people who invested their money to earn more and create jobs along the way.

The tax system has to be fair and honest, not a way to create jealousy between people asking to be supported and lounge about and the people willing to work and earn money.

Why is the PM so quick to give a chance/a pass to the abusers of the CERB generosity?

#26 Smartalox on 03.29.21 at 4:01 pm

@Ballingsford #21:

Why would Sal want to buy a life insurance policy? Just to have the principal returned to his mother at a rate prescribed by a corporate entity, while that same entity benefits from the gains made by the capital? No thanks.

That said, I did know a widow who benefitted tremendously from a 25-year annuity that was set up for her by her husband before he died. In the 1980s. When interest rates were around 11%.

#27 Paul on 03.29.21 at 4:02 pm

“Stuffing your aged mom’s account with your money when you’re power of attorney – just to designate yourself as beneficiary and benefit when the old gal kicks – is, well, despicable. And illegal. And you deserve two quarts of fire ants in your shorts.”

Kudos Garth – funniest one in a while.

#28 Sail Away on 03.29.21 at 4:08 pm

#20 Don Guillermo on 03.29.21 at 3:28 pm

It’s incredible how many commenters happily sit around thinking of different ways to raise Canadian taxes. Especially for a government that so recklessly firehoses money out the window.

————

Absolutely baffling. I’m pretty sure people who say that are either a totally separate domesticated humanoid species or governmental AI bots.

#29 -=withwings=- on 03.29.21 at 4:08 pm

You know if your house doubles in value, your property taxes don’t double.

If the CDN debt doubles, or triples, it doesn’t really matter in the same way. See: the USA. See: China.

Fiat money is worth whatever the government backs it says it is as long as people believe the government is somewhat trustworthy. Nixon wins.

We’ll be fine. Print an extra 25B a year and chip away at the debt. We’re small potatoes on the global scale

#30 leebow on 03.29.21 at 4:08 pm

#14 Pete

It’s too late to do anything about it. It is a zugzwang.

#31 UCC on 03.29.21 at 4:23 pm

#9 Felix on 03.29.21 at 2:41 pm
Correct, canines are truly dogawful varmints.

Skunks, on the other hand, actually make positive contributions to the ecosystem.

———
For contribution to the ecosystem, I prefer fishers. They are smart enough to leave the dogs alone and fast enough to catch a stray Felix.

#32 Stealth on 03.29.21 at 4:23 pm

Is the lesson not to borrow money?
Or when should one borrow? If ever?

Talking to few businesses owners and even my dentist, no one seems to have any debts, and exhibit old school money management style. Have money=buy, don’t have money=no buy, cash is king. If you mention the word “borrow” make sure you stand back right after.

Comparing that with what everyone else does, who is the crazy one here?

Thank you

#33 Tbone on 03.29.21 at 4:24 pm

The Tfsa limit is 75 k .
Sal is selling his house to fund this .
I guess every little bit helps .

The back story is he sold his house and is trying to avoid tax on investing the proceeds. No altruism. And he is considering an illegal act – Garth

#34 Dogman01 on 03.29.21 at 4:28 pm

#19 Inequity on 03.29.21 at 3:19 pm
#1 Dogman01
or maybe Canada could start living within its means and it wouldn’t have to keep figuring out how its going to pay for it all….

———————————-

Far too late for that, first we need the “near death experience”.

“Of course, nobody listens to me. I’m like the guy who gives you the colonoscopy. You know when you hear the rubber gloves snap you should have eaten way more fibre. It’s the epiphany.” – Garth Turner

“when in a hole, stop digging”

Why not a “Climate tariff” anything imported from a place with lower Climate Standards than us gets a tariff. Odd that we are destroying our own industry with higher costs while allowing imports from places with no standards? We seem to be incentivizing more offshoring.

#35 Inequity on 03.29.21 at 4:34 pm

#34 Dogman01

No, no one listens to you because you sound like another entitled teacher/politician or Russian history major/reporter…

#36 Tbone on 03.29.21 at 4:40 pm

Garth , I think Sal is less than an upstanding citizen .
I was trying to say what he was doing is petty.
Anyone taking advantage of a senior is despicable.

#37 Silent the people on 03.29.21 at 4:47 pm

Well said Garth! Too bad there are so many
People out there who only think of what’s in it for them!
I would love to see what CRA could find on him!
Keep up the great work!

#38 TurnerNation on 03.29.21 at 4:57 pm

Here come the Easter Lockdowns.
Not to worry it’s only for 3 weeks! This is war. Ending our way of life, economy. Entire province being hit:

– B.C. temporarily halting indoor dining at restaurants (Canada) (bc.ctvnews.ca)
– B.C. implements sweeping restrictions on indoor dining, group fitness for 3-week circuit breaker (cbc.ca)
– Mayor Tory suggests Toronto lockdowns could remain in April . (twitter.com)
https://twitter.com/CP24/status/1376525203895951363?s=20
Barbershops, salons may not open in 2 weeks if COVID-19 cases continue to climb: Tory

I dunno guys…Q3 beginning in April – from this crazy talk:

“- Enhanced lock down restrictions (referred to as Third Lock Down) will be implemented. Full travel restrictions will be imposed (including inter-province and inter-city). Expected Q2 2021.”

———————–
– Only in Kanada. More control over land coming? Things which come true from this comments section:

https://cottagelife.com/general/quebec-river-is-granted-legal-personhood/
“In a first for Canada, Quebec’s Magpie River has been granted legal personhood|”

Hmm as noted a while ago, trees will have more rights than a person:

#49 TurnerNation on 09.10.19 at 8:54 pm
I beleive in my lifetime good foodstuffs will be trashed as armed men look on and people are starving. Maybe the correct karbon permit was not applied for, or the WHO claims dread disease and we comply. Trees have more rights than yourself.

#39 Stone on 03.29.21 at 5:01 pm

It might be enticing but I find no interest in borrowing to invest into a balanced and diversified portfolio. This way, there is no stress and I don’t need to be concerned about making payments. Instead, I receive dividends and other distributions from the B&D as it should be. Work for me portfolio, not the other way around. B&D at 8.89% ytd. No leverage included.

#40 Trojan House on 03.29.21 at 5:02 pm

With a name like “Sal”…

“Strict seven-week lockdown would nearly wipe out all COVID cases in Alberta: (edmonton.citynews.ca)”

Do they know this for a fact? Did they produce any study to confirm? I think I know what it may wipe out…small businesses.

#41 Drew on 03.29.21 at 5:27 pm

Do banks ever demand HELOCs re-payed? I figure if any 1 of 5 did it would cause bedlam.

If they did it here and there, there would probably have been a sob story on the news about someone using it to pay for renos, a vacation, and a convertible, but the banks want their money now and aren’t they mean.

#42 fredy on 03.29.21 at 5:30 pm

lol, real estate agents gotta feel like bandits at this point

https://www.theglobeandmail.com/real-estate/toronto/article-north-york-house-goes-for-612000-over-asking-after-17-bids/#:~:text=Royal%20LePage%20Real%20Estate%20Services%20Ltd

#43 Concerned Citizen on 03.29.21 at 5:30 pm

Borrowing money to invest in stocks is a risky strategy at any time, but especially now with valuations so stretched. Stocks are much more expensive now than they were pre-COVID, and they weren’t cheap pre-COVID either. The S&P 500 could plunge 20% tomorrow and it would still be quite expensive on an historical basis.

I wonder if that’s why Sue’s bank increased the borrowing rate.

Nobody suggested buying stocks. – Garth

#44 Flop... on 03.29.21 at 5:43 pm

I saw a guy walking down the street today with this written on his hoodie…

Work
Repeat
Work
Repeat
Work

I figured it was the hipster way of telling everyone that he is only working 3 days a week at the moment…

M46BC

https://www.marks.com/en/logo-hoodies-mens-work-repeat-work-graphic-hoodie-341784.html?cid=DRMKT&gclid=EAIaIQobChMI-NiHs7vW7wIVkTytBh0Z7AljEAQYASABEgIX8_D_BwE&gclsrc=aw.ds#341784%5Bcolor%5D=CHRHTR

#45 Ponzius Pilatus on 03.29.21 at 5:46 pm

#4 Veronica on 03.29.21 at 2:20 pm
In Canada it is easier to become a POA than it is to become the coach of a children’s soccer team. To become a POA you need the signatures of two witnesses on a form; to be a coach you have to undergo a criminal background check. If an unscrupulous POA drains granny’s bank accounts, it is up to the other beneficiaries to hire a lawyer and go after him or her. Good luck if you can’t afford a lawyer or if the money is all gone. The system relies too much on the basic decency and ethics of those entrusted with this fiduciary responsibility.
There is no regulatory oversight.
—————
Bang on.
If they money is gone:
Hasta la Vista, Baby.

#46 Andrew MacNeil on 03.29.21 at 6:09 pm

#7

First of all, as the POA she would have access to privileged information (IE, mom’s tax returns), and would be using that information for her own benefit. Secondly, as POA, if she were to open TFSA’s, she would probably be forging a signature, especially if her mother does not understand what she is doing. There’s no mention of other children…but imagine the surprise when it’s disclosed, the other children could go after the POA for the money with lawyers.

In reality, this is cheating the government.

Why would someone even consider this?

Too many questions, so much wrong ethically.

#47 Ponzius Pilatus on 03.29.21 at 6:14 pm

#204 IHCTD9 on 03.29.21 at 12:29 pm
#196 Ponzius Pilatus on 03.29.21 at 10:50 am
It’s a “no-brainer”.
Tax the F-150 owners.
And tax them hard.
___

I don’t own an F150, but as a 2500HD owner – I must protest…

I pay my “fair share” through gas taxes!
————-
Sure you do.
What puzzles me is that seemingly intelligent and prudent people complain about paying income taxes and property taxes etc, but have no problem blowing their  money on expensive cars HST/GST and excessive gas taxes.
BTW: 2500 HD? What does the HD stand for? High definition?
Another question.
What’s the draw of a car like the F-150?
For me it looks like a streched out Ford T model. Ugly.
I can see a farmer or contractor finding use for it.
But a single guy commuting from Hope to Vancouver?

#48 NOTHING SURPRISES on 03.29.21 at 6:17 pm

Sal opens a TFSA for Mom.
Able to invest max. $75,500 this yr. of his money.

Puts in $500 a month for five years of his money compounded at 6%, annually the TFSA would =$140,880.60 in 5 years tax free.

He put in $105,500 after taxes.

The money always available for his mothers needs!

He is the sole beneficiary in her will.

Say she dies in 6 years; he gets the money from the TFSA.

He put the funds up to be used if ever required for his mother and now gets them back with interest made.

What is the problem with this?

This is good financial estate planning.

He’s her POA. Do you not understand? – Garth

#49 Bezengy on 03.29.21 at 6:21 pm

#4 Veronica on 03.29.21 at 2:20 pm
In Canada it is easier to become a POA than it is to become the coach of a children’s soccer team.
—————-
Criminal check, introduction to coaching course, ethics in sports course, concussion awareness course, competitive training course, transgender awareness course, on field/ice evaluation, etc.

Yes, much easier to become a POA.

#50 Garth's Son Drake on 03.29.21 at 6:21 pm

Looks like Whistler for Spring Break was a bad idea. Two COV idiots I know of were sharing on social media about their Whistler trip with kids.

Picked up the P1 variant, now booked for a room in ICU. Both under 40.

Then today, Horgan closed all of Whistler down. When has that ever happened?

Restaurants are done. Summer travel will be hit.

Numbers are skyrocketing. This is more dangerous and worse than any point in pandemic. And the variants are more deadly.

Probably looking more towards the fall before things get better.

Can’t see how the economy does not feel this in coming months.

A bit too much optimism out there right now. Jumping the gun.

#51 Brian Ripley on 03.29.21 at 6:24 pm

“I think I know what it (a strict 7 week lockdown) may wipe out…small businesses.” #40 Trojan House on 03.29.21 at 5:02 pm

This is already happening. I have added 2 more charts to my Employment/Unemployment page: http://www.chpc.biz/employment.html

In the last 40 years in Alberta:
The Employment rate has declined the most in Canada for 3 out of the last 4 decades. The Unemployment rate has increased in all 4 past decades.

The 1976 through 2021 employment and unemployment charts have two major visible trend change inflection points… 1981 and 2008.

If employment rates are falling in Alberta for 4 decades, either businesses are more productive (✓) and hiring fewer people, or businesses are closing (✓) or Alberta’s population is increasing (✓)

Counter to this, employment earnings are the highest in Canada and yet prices are declining in the strata sector along with the chronic erosion of energy pricing. (charts available)

Ontario and BC (where housing affordability is collapsing) are of interest as their employment rates have dropped 6% in ON over the last decade and in BC employment it’s down 1%.

Alberta employment is down 12% in the last decade, down 11% in the last 20 years and down 12% since 1981 when Mortgage rates peaked.

This appears to be a trend as the AI revolution continues.

#52 Re., Stone on 03.29.21 at 6:25 pm

How insecure does a person need to be to post ytd returns at an anonymous blog ?

Kid , nobody cares

#53 Bdwy on 03.29.21 at 6:43 pm

2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.

#54 Steve on 03.29.21 at 6:47 pm

Garth,
What is a reasonable interest rate for a second mortgage?
I saw a video of holding one own mortgage in both your RRSP and TFSA, with the tfsa holding the second mortgage. The scheme is a tax avoidance scheme. The scheme seemed sketchy.

#55 Nonplused on 03.29.21 at 7:12 pm

Sal didn’t mention if he has other siblings. If he or she does, even if it were legal to open a TFSA in his mom’s name and designate himself as the beneficiary, (which it is not), who says his siblings don’t want part of that room? The whole thing is a can of worms.

—————————————

I wonder if a HELOC can be used instead of a reverse mortgage? (Should the need be.) Just use the HELOC to pay the interest on the HELOC until you run out of room or the bank calls the loan and then sell the house? It would be a desperate move of course but probably much better than a reverse mortgage, which is also a desperate move.

————————————

And if they do move to tax capital gains on primary residences (which they should not because a primary residence is not “capital”, we need to start using a different term, perhaps “appreciation”), how would this affect HELOCs and reverse mortgages? Most certainly the bank isn’t going to lend 65% against equity anymore if part of that equity might have to go to the taxman. So instead of a simple calculation of 65% x Equity, it’ll become 65% x (Equity – “appreciation tax”). And since taxes are very hard to predict, governments can and do change them all the time, it’ll be 65% x (equity – “appreciation tax” – a buffer of 30%). Basically a capital gains tax on housing would squish HELOC’s and reverse mortgages down to certainly less than 50% of equity. That may not be a bad thing, all things considered, people borrow too much money, but if what you are trying to do is prop up the economy by encouraging people to borrow and spend with low rates these ideas are at cross-purposes. You can’t lower the rate low enough to avoid the “appreciation tax”.

Anyway it only really applies to YVR and YYZ. Not much appreciation going on in YYC. My house assessment has dropped $60,000 in the 8 years I have owned it. How are they going to tax that? Do I get a “non-refundable tax credit”? Fair is fair.

——————————————-

Sue has, I think, exposed something of the bank’s risk management and marketing policies that I don’t think many people considered previously. Here is what I think is going on:

When you sign up for that HELOC and have a zero balance, you get a nice low prime rate. Why wouldn’t you? There is no balance and hence no risk to the bank. If you borrow 10% of your HELOC amount they are probably still “Meh, no worries”. But if you max it out they are probably “woah, wait a minute here! What’s up??” Up goes the rate. Two things will cross their minds at the bank; this is more risky, and you obviously need the money.

It doesn’t matter that Sue used her HELOC to buy a B&D portfolio. The bank is going to look at how much she borrowed and what their path is to reclaiming the assets she bought with that leverage in bankruptcy, what it might be worth at the time of repossession, and what they will have to pay the lawyers.

So ya if you max out your HELOC expect the rate to go up. A lot. In Sue’s case it is up 40%. Which is a lot. You only get prime when the balance is nearer than not to zero.

#56 GRG on 03.29.21 at 7:16 pm

“#25 Zed on 03.29.21 at 3:58 pm
…Why is the PM so quick to give a chance/a pass to the abusers of the CERB generosity?”

Simple. There’s more of them out there and they all have a vote.

******************************************
“it’s spelled out clearly on the last page under ‘Guarantee’… “We may, at any time and from time to time, without the consent of or notice to any guarantor… increase or decrease the Interest Rate…”

I wonder how many people leveraging themselves to the eyeballs know that tidbit. It seems like a good plan… using home equity for wealth generation… but clearly not without risk.”

Poor Sue. Typical Canadian. “…but clearly not without risk”.
LOL. Imagine being surprised by that.

#57 Sail Away on 03.29.21 at 7:20 pm

#24 Sail Away on 03.29.21 at 3:56 pm

“Nope. He’s illegally making himself a beneficiary. – Garth”

———–

Well, there is that whole illegal thing.

Removing Sal from the picture, establishing a TFSA with a broker for separation and not listing Sal as beneficiary could be a prudent way to establish a reserve fund for the mother while taking advantage of a tool she has every right to use.

#58 Sail Away on 03.29.21 at 7:23 pm

My versatile Munsterlander pointer is similar to a Springer Spaniel with a 6″ lift kit and HD undercarriage.

#59 Vin-sanity on 03.29.21 at 7:23 pm

Garth – recently discovered Interactive Brokers. They allow margin loans borrowed against your investments at blended rates that are far lower than any HELOC advertised prices I have found. Can the interest on this borrowing be deducted similarly to a HELOC used for investing? What’s the catch if any? I.E Is this a viable option versus HELOCs for investing?

Thanks

#60 Flop... on 03.29.21 at 7:25 pm

Has anyone taken a senior citizen to do vaccination and taxes in the same day yet?

I thumbed through Guinness World Book Of Records, but I couldn’t find The Vaxx and Tax section.

My Father In Law is turning 80 soon, and is becoming non-verbal, but I think he can handle it.

I will give him all the direction he needs.

Pull your pants down in the morning, pull your sleeve up in the afternoon…

M46BC

#61 Nonplused on 03.29.21 at 7:27 pm

#1 Dogman01 on 03.29.21 at 2:02 pm

“Taxing extreme wealth to offset the costs of the pandemic would be unquestionably fair”

If only they had any money. Well they have more money than you or I do, but most of their assets are in shares or other holdings. It is not money. To pay a “wealth tax”, they would have to sell. But sell to whom? You? Me? I’ve already got all my “wealth” in a Garth ™ B&D, I can’t just be buying out Bill Gates so he can pay his taxes.

Income taxes and perhaps capital gains taxes are the way to go. That is real money, not notional wealth.

#62 The West on 03.29.21 at 7:29 pm

#25 Zed

Who is going to vote for Trudeau in the fall?

His mandate is well on its way – he just needs four more years to ensure Canada is never able to recover.

#63 Drinking on 03.29.21 at 7:31 pm

Blog Doggess, hmm, seriously?? If you have been reading this blog there has been been hundreds if not thousands of posts and including all of Garths blogs that spell it out.

YES, banks CAN and WILL do whatever is in there BEST INTEREST!

Good-luck!!!

#64 Nonplused on 03.29.21 at 7:32 pm

#4 Veronica on 03.29.21 at 2:20 pm
In Canada it is easier to become a POA than it is to become the coach of a children’s soccer team. To become a POA you need the signatures of two witnesses on a form; to be a coach you have to undergo a criminal background check. If an unscrupulous POA drains granny’s bank accounts, it is up to the other beneficiaries to hire a lawyer and go after him or her. Good luck if you can’t afford a lawyer or if the money is all gone. The system relies too much on the basic decency and ethics of those entrusted with this fiduciary responsibility.
There is no regulatory oversight.

——————————————

Veronica, designate a lawyer or a bank trust group to be your POA. Lower rates usually (most family member POA’s will go for the full 5% but lawyers and banks compete, usually about half that rate depending on the size of the portfolio).

Some things, like investment advice for example, are worth what you pay for them.

#65 Ponzius Pilatus on 03.29.21 at 7:33 pm

#53 Bdwy on 03.29.21 at 6:43 pm
2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.
————–
I understand.
Heavy duty driver and passengers.

#66 Nonplused on 03.29.21 at 7:38 pm

#7 Jens Happe on 03.29.21 at 2:40 pm
Garth, could you explain what exactly makes Sal’s move illegal?
Let’s say if it was Sal’s mom who decides on her own to open a TFSA, and accepts a gift from Sal to fund it. As long as Sal takes care of all the taxable capital gains from selling the house, can the CRA still make enough of a conflict-of-interest case, just because Sal has POA over her finances?

——————————————-

I think Garth explained it. Sal cannot appoint himself a beneficiary of anything not specified in the will. And if he convinces mom to change the will, his brothers and sisters will be a suing. If he can even get a lawyer to write it up.

A POA cannot alter a will. A POA cannot make himself a beneficiary of any account unless the contract with the grantor specifically allows it. A POA has a legal and fiduciary responsibility to avoid any and every conflict of interest. – Garth

#67 Retired on a Gulf Island on 03.29.21 at 7:45 pm

Back to the Sal thing.

The issue is not whether Sal has a POA, but whether this transaction is done without his mother’s informed consent.

If his mother is willing to allow Sal to gift her the money and have it invested in a TFSA with Sal as the beneficiary I do not see anything wrong with that. Sal would actually be at risk since his mother could change the beneficiary or even withdraw the funds.

The thing that would make the scheme problematic would be if Sal used the POA to effect the scheme without first obtaining the informed consent of his mother.

The assumption that Garth made is that Sal was intending to do this using the POA and his mother did not know about it, or was not mentally capable of giving her consent to it.

Capable people do not hand over financial control to a POA. Of course he seeks to personally benefit. – Garth

#68 Nonplused on 03.29.21 at 7:50 pm

#21 Ballingsford on 03.29.21 at 3:37 pm
Wouldn’t it be better for Sal to take out life insurance on his mom?

What a schmuck!

————————————

Life insurance on an 80 year old woman? Do you think the life insurance companies are idiots? All you have to do to figure this one out is try and insure your 16 year old new driver with a driving course as a secondary driver to figure out how they price things. I presume you have never done that.

Unless you have had a long term life insurance contract that the company cannot get out of, life insurance after 65 is useless. It’ll cost more than it is worth.

It is a good idea, even if you have a corporate life insurance plan, to sign up for another one that the company cannot cancel by age 35 and keep it. A job loss can mean no life insurance otherwise, and no insurance company will sign you up for much of a payout without huge premiums when you get wrinkly.

#69 The Woosh on 03.29.21 at 7:56 pm

#52 Re., Stone on 03.29.21 at 6:25 pm
How insecure does a person need to be to post ytd returns at an anonymous blog ?

Kid , nobody cares

———————————————

How old are you that you’re calling Stone “kid”? Something like 102? Gramps…it’s time for your nap and a change of your diaper. And lay off the whiskey…it’s making you cranky!

#70 Dolce Vita on 03.29.21 at 7:57 pm

Immoral.

Fire ants not enough.

——————–

I had POA for my Mother for years. Ended up in 7/24 care, she was in bad shape…lasted 5 years there God Bless her Soul (near stroked, 2 hip replacements, 1 re-replaced and then removed, MRSA and Crohn’s – ya, I was chief bag person for years before the care home).

Visited her 1 time per week for those 5 years (according to the 7/24 care home that was 50 times more per year than the rest got), took care of all her bills, made & brought her home cooked Italian meals, did her taxes you name it and NEVER once did it cross my mind to use her as a TFSA or let alone raid her larder. NOT once. NOT a single cent.

You are CORRECT Garth. Reprehensible.

The rest that think it’s fine, you are heinous…sorry, but you are.

Trying to find some shred of right in what is nothing more than a ruse, sham, ultimately naked self-interest. Are you joking?

Painful for me to read Garth but a good lesson to all.

ONE day and it will come, that may be your fate at a grown up child’s hands and you do not know what DESTINY has in store for you, no, you don’t.

…the best laid plans of mice and men.

#71 Dogman01 on 03.29.21 at 7:59 pm

#61 Nonplused on 03.29.21 at 7:27 pm

“Taxing extreme wealth to offset the costs of the pandemic would be unquestionably fair” – That is the title of the opinion piece, penned by Nathaniel Erskine-Smith, MP. Liberal Party, Member of Parliament, representing Beaches-East York.
https://www.thestar.com/opinion/contributors/2021/03/29/taxing-extreme-wealth-to-offset-the-costs-of-the-pandemic-would-be-unquestionably-fair.html

Trial Balloon? – not much love for the wealthy by the average Canadian so it will not hurt at the polls. Might hurt LPC donations.

From what I see of Canada’s natural ruling party, their ideas do not have to have efficacy, they just need to be popular with the “peoplekind” of Canada.
https://www.youtube.com/watch?v=UTG2fTRI6BI

#72 Nonplused on 03.29.21 at 8:01 pm

#53 Bdwy on 03.29.21 at 6:43 pm
2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.

———————————————–

There are people that understand trucks, and people that don’t. If you need/want to haul stuff, you need a truck. Even if it is just an RV. But then the question becomes, “if I need a truck to haul drywall for my business, is it cheaper to buy a Corolla for when I am not hauling drywall or just pay the extra fuel?” Well, it is pay the extra fuel.

Non-truck people will never get this.

#73 Drill Baby Drill on 03.29.21 at 8:03 pm

“Did Mom bring you up to be such a scheming weasel?”
This guy has to be a lawyer, banker or a real tard.

#74 Sal on 03.29.21 at 8:06 pm

So I see the people are split on my plan … here’s more details. My siblings are aware of the plan they are for it. My mother is aware of the plan and is for it. I’ve been POA for 20 years and have supported her financially as necessary. I am now on a fixed income and looking for ways to invest to yes … pay less taxes … like everyone? My mother does not have a will or money to invest in a TFSA … guess who’s paying for her funeral eventually … me. How is this illegal exactly? I’m certain there are many rich folks doing such a thing and stuffing their parents TFSA’s with their money. I don’t think I’m despicable surely? And I get to pay for a divorce as well hence my house sale ugh.

#75 Nonplused on 03.29.21 at 8:15 pm

#196 Ponzius Pilatus on 03.29.21 at 10:50 am
It’s a “no-brainer”.
Tax the F-150 owners.
And tax them hard.

————————————

And not the Porsche and SUV owners? You are taking the “tax everyone! (but not me.)” ideology far too far.

What do you drive and what mileage do you get compared to a Ford Ecoboost?

#76 Dolce Vita on 03.29.21 at 8:16 pm

Canada Vax, Variants

The sooner the former, adios to the latter.

Latest update:

https://twitter.com/bsant54/status/1376483858242269193

Vax’ng down, not good. New variants down, good and overall 8% of all Covid cases, also good. Still, a 10X increase in 5 wks, worrying.

Sick of it all like everyone else.

#77 Bill Grable on 03.29.21 at 8:16 pm

Mr. Turner – you would not believe (*uh, on second thought. you would believe) how clueless so many people are regarding Mortgages and HELOCS.

I have a number of friends who know that Economics is an avocation of mine – after spending most of my shortened University career – as an Economics and Poly Sci major – so I get a few calls now and then asking me questions…

An example – I get a call a while ago from a dear friend who was perplexed. He said he got a note from the [email protected]
– and she asked that he come in and rebalance his HELOC against his Mortgage. I said – “ok, what’s the problem….?” – I patiently explained (as noted in today’s post) that a HELOC is a demand loan. He had no clue. I then asked (feeling sick to my stomach) – “do you have any other debts?” – BIG PAUSE – yes – we owe money on our Credit Cards….” How many cards do you and Eleanor have…..?” (he asked meekly) – “together we have 6”. (OMG) – “OK, may I ask how much you owe…..? Another BIG pause – “around $32,000″….(he is a teacher and she is on maternity leave from her Nursing gig). Income total = #97,000.
I asked how much cash and investments? “Oh, we have about $111,000 – in RRSPs.” The savings are about $5500 – (his Mortgage is $711,00). My heart sank…I told him what a demand loan was….and he said he didn’t have anywhere near the 36K they wanted. I asked him if he knew what a Mortgage means?…(he lives in Victoria) – he sounded rather irritated….”Of, course”. (Yeah, sure)… I explained it is two Latin words – MORT and GAGE = DEATH PLEDGE…..and only in Alberta and I believe, in Quebec, can you walk away from a Mortgage……and then I asked about car loans…..”Yeah, we have leased Lexus”- with the Lexus on a 6-year loan – (Total cost $780 a month). After finding out their combined income, (see above)…..it was my unpleasant duty to explain – that he should be talking to you, Mr. Turner, or another capable investment advisor tout suite…..because he was in effect nearing insolvency and he should sell the Home, NOW, while the market is insane….and rent. He said he would never rent….”that is for losers and you are wasting all that money”. .

They should have a course in High School called MONEY.

I am so sorry to say, that my gut tells me, there are a lot of people in for a rude awakening.

Financial illiteracy is rampant.

Oy, vey.

#78 Damifino on 03.29.21 at 8:22 pm

A Chinese consul general in Brazil has derided Trudeau as a “running dog” of the USA and a “spendthrift”

Priceless. I love political insults that lose impact through unintended corniness. (The North Koreans are masters).

It won’t be long before the gloves come off and Chinese officials are calling our beloved PM a common scallywag, and a bounder. Not to mention a rapscallion, scapegrace, and scofflaw.

That’s really going to hurt.

#79 crossbordershopper on 03.29.21 at 8:25 pm

i hope this budget does some things like try to re define work, and salary, and investments.
its a major problem, where people get a free pass on some things and others pay full pop
the inequities are everywhere.
Friedland may change inclusion rates, didle with dividend tax credits, bla bla bla, increase gst to 6% or something, but its all nickel and dimes
the deficit will be 100billion a year every year moving forward, we are in a whole new time now.
tones of business will never be back and i dont think new ones will pop up much. too much uncertainty.
if you have money you will keep it, if you are lower middle class, well as always, go back to work.
If you are totally at the bottom, well at 65 the govt will look after you, so have a coffee i guess.
unless your 25 and just married and have a kid, and want to buy a 1.2 million dollar house, and still have 20 grand in student loan and might scratch together 25 grand or so from your folks , well your cooked. i would honestly move to the usa if i was the 25 year old. you will work for nothing for your entire life. I have seen it.

#80 KaleyCat on 03.29.21 at 8:29 pm

#41 Drew

Yep, they pull lines of credit. In my case it was secured by my (paid for) house. But they got nervous about the industry I was in, and basically started demanding accelerated payments, pulled lines of credit etc from myself and most all of my co-contractors. It was across several banks, with several different small businesses. Most of us were professional consultants and contractors.

So yeah, don’t bother going there.

#81 the Jaguar on 03.29.21 at 8:42 pm

@#51 Brian Ripley on 03.29.21 at 6:24 pm

So, Brian, I love your contributions….
Any conclusions drawn from the statistics and charts as to how those numbers are likely to impact regional prices going forward? Particularly in the GTA where a grass fire is raging out of control? Predictions?

About those other two cases. Staggering that anyone might sit in front of two people ( [email protected], and then a legal professional) and wouldn’t think to ask about the interest rate being charged. Seems reasonable that a copy of all documents would be acknowledged to have been received by any borrower, etc. One is responsible, after all.

As for the other case, somebody hand me my smelling salts. More plots twists than a Hollywood B- movie going on. Probably lots of this weasel activity going on.

It may be time for the Big Five to get together and agree on an approach to solve some of the current issues arising out of an overheated real estate market. I think it goes something like this…..

“Don Barzini, I want to thank you for helping me organize this meeting here today. And also the other heads of the Five Families . New York and New Jersey. Carmine Corleone from the Bronx. And, ah..,Brooklyn, Philip Tattaglia. And from Staten Island, we have
with us Victor Strachi. And all the other associates that came as far as from California, and Kansas City, and all the other territories of the country — thank you.

How did things ever get so far? I don’t know. It was so unfortunate …..so unnecessary…”

Curtain comes down…

#82 Heather on 03.29.21 at 8:45 pm

I don’t get the impression that Sal is a scheming weasel. I think it’s very possible he honestly didn’t think of the legal or moral issues around this. I’m giving him the benefit of the doubt.

A POA cannot make himself the beneficiary of a grantor’s account. How is that not obvious to all? – Garth

#83 crowdedelevatorfartz on 03.29.21 at 8:49 pm

Well, fellow Blog dogs….
Meet “Running Dog”

https://www.theguardian.com/world/2021/mar/29/china-canada-justin-trudeau-tensions-escalate

#84 crowdedelevatorfartz on 03.29.21 at 8:51 pm

@#73 Drill baby
“This guy has to be a lawyer, banker or a real tard.”

+++

You omitted politician, accountant, used car salesman……

#85 D C on 03.29.21 at 8:52 pm

An awful lot of talk about borrowing these days. Am I noticing it more because I’m doing it? Or has it jumped the shark.
Or has it jumped the shark because I am doing it?

@Flop… #60: love it!

#86 Retired on a Gulf Island on 03.29.21 at 8:52 pm

“Capable people do not hand over financial control to a POA. Of course he seeks to personally benefit.” – Garth

My wife and I are still capable and we will be granting an enduring POA to our daughter this weekend. The purpose of that is that if we become incapable, our daughter will have the legal capacity to act on our behalves.

The law actually requires that one has to be “capable” in order to make an effective grant of a POA.

You (Garth) are making the assumption that Sal is already acting under the POA and does not intend to disclose his plan to his mother. If that is the case I agree with you. But it is also possible that Sal could do this completely lawfully, if he obtains the informed consent of his mother, and in such a case it does appear to be an interesting investment strategy, and the risk appears to be on Sal, not his mother.

#87 Ford EGO boost on 03.29.21 at 8:53 pm

#69 Nonplused on 03.29.21 at 8:15 pm
#196 Ponzius Pilatus on 03.29.21 at 10:50 am
It’s a “no-brainer”.
Tax the F-150 owners.
And tax them hard.

————————————

And not the Porsche and SUV owners? You are taking the “tax everyone! (but not me.)” ideology far too far.

What do you drive and what mileage do you get compared to a Ford Ecoboost?

___________________________

Or as we sag around these parts, the EGOboost. The vast majority owned by younger/middle-aged, testosterone laden males…. With a variety of gawdy and repulsive tattoos, unkempt facial hair and backwards balll caps. Not to mention their trucks with oversized tail pipes, jacked suspensions, modified exhaust systems, etc.

All in an effort to compensate for…. shall we say, a variety of “shortcomings”!

#88 bestlest on 03.29.21 at 8:55 pm

General CERB question that I can’t seem to find a definitive answer on.

I’ve been working non-stop through COVID luckily and I haven’t applied for or received any special COVID money. Did I miss out on an free money? Am I a dunce if I did? Thanks for any help. I’m ok without it but just wondering if I missed out on something that was offered to every Canadian.

#89 Dr V on 03.29.21 at 8:56 pm

17 jesse

“4 out of 10 families pay ZERO taxes… they are the ones getting a free ride. If you want to shame someone for not paying their fair share, don’t go after the middle class…”

Dog I get tired of explaining this! Many of these people DO PAY TAXES. it is just that they receive more in benefits. Think of working all you adult life and being a
Net tax payor then retiring and receiving $7k/yr in OAS but only paying $6k in tax. Get it now??

#90 Heather on 03.29.21 at 8:59 pm

#4 – You may be right about that. I was caregiver for my parents here in BC. I was POA for my mother on the advice of her financial adviser. I said I was paying all the bills and getting cash for my mother without the POA process. He said that if my mother became incapacitated I wouldn’t even be able to sell her condo. I thought about that for a couple of days and decided “so what?” I could continue to live in her condo and pay all the bills out of my money since I didn’t have the cost of another property to worry about. However, my mother set my sister and I up as POAs on the advice of her financial adviser. Here, in BC there’s concern about seniors getting ripped off but having a POA doesn’t protect them. It simply gives the POA the ability to do it easily. The only way that I can see to protect the seniors is a requirement that POAs be audited from time to time so the POA would have to be registered. That wouldn’t have worried me for five minutes. I kept meticulous records.

#91 Flemington Park Millionaire on 03.29.21 at 9:06 pm

Looks like covid central of all Canada is also the first to kick off the federal Liberal election campaign . The new liberal candidate for riding was in the building campaigning yesterday . Nice young fellow who hopes to replace the woman who was kicked out of caucus for hiring sister and well , basically completely useless to anyone else . First two lines in bold on front of pamphlet as follows . 1) Free national pharmacare 2) Guarantee of income for all.
FYI very few here are getting covid tested these days but everyone knows someone that is sick . Much more so than in last year actually.

#92 -=withwings=- on 03.29.21 at 9:07 pm

#53 Bdwy on 03.29.21 at 6:43 pm
2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.

———————————————–

There are people that understand trucks, and people that don’t. If you need/want to haul stuff, you need a truck. Even if it is just an RV. But then the question becomes, “if I need a truck to haul drywall for my business, is it cheaper to buy a Corolla for when I am not hauling drywall or just pay the extra fuel?” Well, it is pay the extra fuel.

Non-truck people will never get this.
————————–

Forget HD, there are no ‘light duty’ trucks anywhere else in the world. I guess that explains why there are no tall buildings in China, no one goes off roading in Russia and no one ever goes camping in Europe. Most truck owners I know spend a lot of time with a hockey stick fishing out things from under their tonneau cover. That’s real truckin’!

#93 Don Guillermo on 03.29.21 at 9:16 pm

#74 Nonplused on 03.29.21 at 8:15 pm
#196 Ponzius Pilatus on 03.29.21 at 10:50 am
It’s a “no-brainer”.
Tax the F-150 owners.
And tax them hard.

————————————

And not the Porsche and SUV owners? You are taking the “tax everyone! (but not me.)” ideology far too far
***********************************

The highest taxes should be on Audis driven by Austrian born Canadians. Especially if owners do a lot of adding and subtracting.

#94 Moses71 on 03.29.21 at 9:28 pm

Being in the retirement home industry for over 10yrs now as an executive, provinces should all follow BC and mandate an “attack the will” option vs “contest”. Many shameful abuses.
And as far as the future to tax certain primary house appreciation windfalls, Liberals may be the only party in a situation AFTER an election to justify it with their belief system- NOT Conservative.
So yes to Liberal and watch and wait..

#95 Ken from BC on 03.29.21 at 9:37 pm

#17 Jesse

How much more does Trudeau want? All of it? Why would I continue to work? I admit that I did alright last year but CRA didn’t even split it with me! They took 52% and let me “keep” 48%. This is before GST, PST, property tax, fuel tax, carbon tax and on and on and on. In essence, I was probably left with 25% of my gross income to live on. Seems like a zero sum game that I am not sure I want to play anymore. Any suggestions?

#96 Nonplused on 03.29.21 at 10:11 pm

#66 Nonplused on 03.29.21 at 7:38 pm
#7 Jens Happe on 03.29.21 at 2:40 pm
Garth, could you explain what exactly makes Sal’s move illegal?
Let’s say if it was Sal’s mom who decides on her own to open a TFSA, and accepts a gift from Sal to fund it. As long as Sal takes care of all the taxable capital gains from selling the house, can the CRA still make enough of a conflict-of-interest case, just because Sal has POA over her finances?

——————————————-

I think Garth explained it. Sal cannot appoint himself a beneficiary of anything not specified in the will. And if he convinces mom to change the will, his brothers and sisters will be a suing. If he can even get a lawyer to write it up.

A POA cannot alter a will. A POA cannot make himself a beneficiary of any account unless the contract with the grantor specifically allows it. A POA has a legal and fiduciary responsibility to avoid any and every conflict of interest. – Garth

—————————————————–

Umm, I think I was agreeing with you. But your comment is more clear than mine was, and always a good day when Garth comments on a comment.

#97 Nonplused on 03.29.21 at 10:19 pm

#86 Ford EGO boost on 03.29.21 at 8:53 pm

If you are not driving a Corolla, or something you need for work, you are driving an EGO boost. Stop pointing fingers.

Sure, the country’s finances are a mess, but the “tax them but not me!” attitude isn’t going to get us anywhere. If taxes are to go up, it will affect everyone.

#98 Doug in London on 03.29.21 at 10:23 pm

I wonder why Sue didn’t use that HELOC to borrow money a year ago when stocks and equity ETFs were on sale. That way when stocks go up again, as they always do, she could have sold off enough to pay off the loan and still have some money left over.

#99 Capital One on 03.29.21 at 10:39 pm

#94 Ken from BC

Just did a quick calculation in one of those on-line tax calculators. You’d have had to earn $3,000,000 for your tax bill to be 52% of income. And one third of that is for John, not Justin.

CO

#100 Handsome Ned on 03.29.21 at 10:55 pm

#86 Ford Ego Boost

“All in an effort to compensate for…Shortcomings.”

I think I have only seen the genitalia of a couple of truck drivers and that was a quick glimpse in a locker room. They seemed normal to me. You obviously have seen hundreds at close quarters in a non flacid state to come to your conclusions. How do they compare with Prius drivers; I bet they are massive.

#101 Reality is stark on 03.29.21 at 11:05 pm

Yes. The bond vigilantes can raise the rate as a country becomes a higher credit risk. A country that borrows heavily into perpetuity with a payback plan based on the reasoning that the loans will solve themselves.
A country like Canada.
Doesn’t really matter what the governor of the Bank of Canada says.
Keep that in mind as you smugly laugh at your US neighbour.
Things can get real, real fast.

#102 Zen Investor on 03.29.21 at 11:44 pm

Hah, limit HELOC investment scheme to 20%? Garth you know it’s a fact that 99% of Canadians are leveraged to the hilt, and every credit facility is a burning grenade about to go off. Isn’t it a fact that a majority of Canadians can’t finance a $500 dollar emergency? Isn’t it a fact that the majority of mortgages are less than 1% away from being underwater. It’s no wonder the woman mentioned freaked when her Helix rate went up, she’s riding a razor thin margin and the spread she was counting in to invest was really just a greedy notion the her investments might pay off some part of a crushing debt. Because isn’t that really the case in Canada that people are leveraged to the hills are exist rather than live under a hammer of ever expanding debt slavery? As for the HELOC investment strategy being a long term play, it doesn’t always work out does it, some of the best mutual funds can languish for years without a single year of black ink and only by a twenty year overlay might the ghost of profit be resurrected as paint on the tape for a session of window dressing after fees absorb any speck of honey left by the odd year where money was not entirely disappeared by the Management Expenses Ratio.

#103 Cici on 03.29.21 at 11:48 pm

#12 Smartalox

I don’t there’s any way that could be legal. The CRA would probably see it for what it is: a total scam in which one person wants to take advantage of another family member’s unused registered contribution room to boost their own net worth through compounding investments in an untaxed shelter.

For any such transaction to be clean, Sal would need to invest his own money on his own side (probably in an unregistered account) and hand/gift only the divvies (after paying out tax on them) over to Mom so she could stuff her TFSA with them.

Otherwise, Sal would effectively be creating two TFSAs for himself whereas everyone else only gets one. Even though her TFSA account would be taxed in his hands on her passing, he’d still be gaining an unfair advantage during all her living years over every other citizen and resident who had to stuff their home sale proceeds and other sources of income into taxable accounts.

#104 Ponzius Pilatus on 03.29.21 at 11:53 pm

Trade in your F-150 for one of those.
———-
 It’s a girl, my Lord, in a flat-bed Ford Slowin’ down to take a look at me. Come on, baby, don’t say maybe. I gotta know if your sweet love is gonna save me.

#105 Ponzius Pilatus on 03.30.21 at 12:10 am

#94 Ken from BC on 03.29.21 at 9:37 pm
#17 Jesse

How much more does Trudeau want? All of it? Why would I continue to work? I admit that I did alright last year but CRA didn’t even split it with me! They took 52% and let me “keep” 48%. This is before GST, PST, property tax, fuel tax, carbon tax and on and on and on. In essence, I was probably left with 25% of my gross income to live on. Seems like a zero sum game that I am not sure I want to play anymore. Any suggestions?
——-
Typical Canadian complainer.
Let’s see, if you can do without the following:
Police, Ambulance, Hospitals, Street cleaning, Public transport, parks, schools, military, libraries, SPCA, etc.
Be free to add to the list.

#106 Fortune500 on 03.30.21 at 12:33 am

If you are concerned about the situation, sign the petition:

https://www.change.org/p/justin-trudeau-recognize-the-housing-affordability-crisis-in-canada?utm_source=share_petition&utm_medium=custom_url&recruited_by_id=00a14c50-82e3-11eb-a198-9f0aaef485b2

#107 Ponzius Pilatus on 03.30.21 at 12:50 am

This is for BillyBob
Citizen of Prague on way to a COVID Protest.
————————-
https://cdn.prod.www.spiegel.de/images/84ae70d5-deab-4e91-a835-74e6847c7e86_w920_r1.5001373249107388_fpx44.66_fpy52.98.jpg

#108 cuke and tomato picker on 03.30.21 at 1:00 am

Garth it would be nice to know what you think of the Smith Manoeuvre? We never used it tempted but never went to the bank for money

#109 willworkforpickles on 03.30.21 at 1:23 am

As I’ve said before…you tax the rich , it comes back on the middle class and poor in higher costs of everything as they offset their increased costs coming from higher taxes. We are near the tax saturation point on the middle class now too. Interest rates will creep up and then more and more.

#110 Dr V on 03.30.21 at 1:48 am

86 ego boost

Or as we sag around these parts, the EGOboost. The vast majority owned by younger/middle-aged, testosterone laden males….

– North of 60 actually. My T is holding up, thanks.

With a variety of gawdy and repulsive tattoos,

-nope, not a one

unkempt facial hair and backwards balll caps.

– No and no. I’ve been seen in it in spandex though

Not to mention their trucks with oversized tail pipes, jacked suspensions, modified exhaust systems, etc.

– 3 more NOs. It does have some off road tires from the last owner, And some after-market window tint.

Are you confusing us with Ram drivers?

#111 slick on 03.30.21 at 2:17 am

#36 Tbone;
Sal isn’t trying to take advantage of a senior, he is trying to double dip the benefits of a TFSA.

my brother and I were POA for my mother, and trustees of a family trust she had set up, and executors of her will. We opened a TFSA in her name, contributed from her RIF monies, and made my brother beneficiary. The reason was after she passed, we needed access to funds to pay bills etc. as her personal accounts would be frozen. When she did pass, all the RIF money was evenly distributed to all the kids, WITHOUT WITHHOLDING ANY INCOME TAX!. Guess who was on the hook for paying the income tax on a $200K RIF? That’s right, us, the executors. The TFSA was collapsed, and the funds paid to my brother within a couple of weeks. Small town, and we both knew [email protected] Good thing we had the TFSA money, as it just covered the income tax bill of $75K. Otherwise, we would have had to try to extract RIF money back from siblings. I don’t think it would have been a problem, but you never know what people have got going on.

BTW, the family trust setup worked great, but the name is the key: ‘FAMILY’ and ‘TRUST’.

#112 BillyBob on 03.30.21 at 4:58 am

#86 Ford EGO boost on 03.29.21 at 8:53 pm

Or as we sag around these parts, the EGOboost. The vast majority owned by younger/middle-aged, testosterone laden males…. With a variety of gawdy and repulsive tattoos, unkempt facial hair and backwards balll caps. Not to mention their trucks with oversized tail pipes, jacked suspensions, modified exhaust systems, etc.

All in an effort to compensate for…. shall we say, a variety of “shortcomings”!

——————————

I think it’s brave of you to publicly state your sagging problem. Perhaps you could consult with Faron? I offered to help out his partner when he was struggling with something like that awhile back.

No need for thanks, I just believe in paying things forward.

#113 BillyBob on 03.30.21 at 5:14 am

#4 Veronica on 03.29.21 at 2:20 pm
In Canada it is easier to become a POA than it is to become the coach of a children’s soccer team. To become a POA you need the signatures of two witnesses on a form; to be a coach you have to undergo a criminal background check. If an unscrupulous POA drains granny’s bank accounts, it is up to the other beneficiaries to hire a lawyer and go after him or her. Good luck if you can’t afford a lawyer or if the money is all gone. The system relies too much on the basic decency and ethics of those entrusted with this fiduciary responsibility.
There is no regulatory oversight.

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

A POA can be written to restrict the holder to very specific limits. They’re incredibly useful legal tools to enable things to be accomplished remotely.

I’ve used them extensively to allow proxies to get things done, from signing documents to installing services somewhere I’m not present at. The POA is written to very precisely define what is permitted on my behalf.

Granted their utility diminishes the more narrow the parameters, but it probably isn’t helpful to scare people off their use by implying every POA is automatic license to “drain bank accounts”. Decency and ethics are important, but writing them correctly helps.

#114 under the radar on 03.30.21 at 5:21 am

54 – You can hold mortgages in your self directed RSP and TFSA. When the mortgage is on your own principal residence , non arms length , it must be CMHC insured. If the mortgage is arms length ,then no CMHC is required. Totally legal and have been lending arms length money this way for 30 years. Annual returns with fees in excess of 15%.
Giving yourself a mortgage at the prescribed rate defeats the purpose as you want to lend at the highest rate you can get as the interest is tax free in both plans.
This type of lending requires you know the true value of what your lending on, how long to get possession and how long it will take to sell or you will get hurt.

#115 Do we have all the facts on 03.30.21 at 6:03 am

So our generous Federal government decided to increase the M2 money supply by $400 billion in 2020 and as a result the average income of Canadian households increased in spite of higher unemployment rates and the closure of thousands of businesses.

As a response to Covid 19 major portions of the global economy were shut down and the supply of essential goods and services became constrained. In 2020 the net deficit in the balance of trade for Canada increased by more than 20% from $36 billion to $44 billion. In essence Canadian families had additional income to purchase a reduced supply of goods and services.

So we have $400 billion of additional currency and income chasing a reduced supply of goods and services and our Federal government continued to claim that official inflation remains below 2.0% per annum.

Since real inflation was definitely higher than 2.0% the purchase of Treasuries, Bonds and MBS by the Bank of Canada became necessary to keep interest rates from rising. The large purchase of assets by Central banks became euphemistically known as quantitative easing.

Recently the Bank of Canada indicated that they intended to reduce their monthly purchases of longer term bonds
to reflect recovery of the Canadian economy. This decision will probably contribute to a modest increase in longer term interest rates including mortgage rates.

Since quantitative easing in 2020 contributed to inflation and since the usual response to control inflation is to increase interest rates I am sensing that the Bank of Canada promise not to increase the bank rate until 2023 might be difficult to keep.

If the Bank of Canada does not intervene to purchase assets the interest rates attached to longer term securities, including MBS, will have to increase to attract investors.

On the other hand the Federal government cannot continue to increase M2 money supply through quantitative easing without contributing to inflation.

Starting to look like a Catch 22 that can only be resolved by a gradual increase in interest rates. Without an increase in interest rates Canada may find it difficult to attract the capital required to stimulate economic growth.

Just one man’s opinion!

#116 crowdedelevatorfartz on 03.30.21 at 7:34 am

@#104 Perpetual protesting

“Typical Canadian complainer.”

++++

As opposed to the endless Austrian moaning…?

#117 Another Deckchair on 03.30.21 at 8:47 am

BillyBob, or others in the know;

Aircraft and “renewable energy”.

If, kerosene has 50x the energy density by weight than batteries do;

If, you fuel the aircraft by fuel weight to suit the flight plan and loading;

If, you assume that the energy efficiency of an electric “jet” is the same as current (I know, I know…)

How many passengers can one take on a 787-E from (say) Toronto to London on a charge? (or, how many recharging stops would be required?)

What I see watching ADS-B data, there are still lots of aircraft flying (even though military aircraft, such as the Snowbirds do not emit ads-b) and I wonder what our government will do to curtail the CO2 from aircraft if/when COVID gets under control.

You see, our leader seems to do a lot of flying during election times; 2x 737s last time, 2x large busses doing in excess of the speed limit on the 401 for “local” stops…

#118 Ballingsford on 03.30.21 at 9:07 am

102 Cici on 03.29.21 at 11:48 pm
#12 Smartalox

I don’t there’s any way that could be legal. The CRA would probably see it for what it is: a total scam in which one person wants to take advantage of another family member’s unused registered contribution room to boost their own net worth through compounding investments in an untaxed shelter.

For any such transaction to be clean, Sal would need to invest his own money on his own side (probably in an unregistered account) and hand/gift only the divvies (after paying out tax on them) over to Mom so she could stuff her TFSA with them.

Otherwise, Sal would effectively be creating two TFSAs for himself whereas everyone else only gets one. Even though her TFSA account would be taxed in his hands on her passing, he’d still be gaining an unfair advantage during all her living years over every other citizen and resident who had to stuff their home sale proceeds and other sources of income into taxable accounts.

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

Ceci, you are allowed to open more than 1 TFSA account as long as you don’t go over your allowable limit. In Sals case tho, he probably has his maxed out. Two separate issues.

#119 Rosco on 03.30.21 at 9:16 am

BBB
Build Back Better
Buy Bigger Boat
Bring Back Barter
Bake Brown Beans
Big Bond Bubble

#120 IHCTD9 on 03.30.21 at 9:34 am

#72 Nonplused on 03.29.21 at 8:01 pm
#53 Bdwy on 03.29.21 at 6:43 pm
2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.

———————————————–

There are people that understand trucks, and people that don’t. If you need/want to haul stuff, you need a truck. Even if it is just an RV. But then the question becomes, “if I need a truck to haul drywall for my business, is it cheaper to buy a Corolla for when I am not hauling drywall or just pay the extra fuel?” Well, it is pay the extra fuel.

Non-truck people will never get this.
____

On top of that, modern trucks have evolved to become virtually anything you want them to be. A luxurious, fuel efficient family hauler, or a goose-neck trailer back-hoe mover, and everything in between. That’s why everyone wants one, and will pay the big bucks for it. The powertrain and trim level option sheets are a mile long. The utility, luxury, flexibility and efficiency is worth a lot more to most buyers than the extra 10 mpg a one-trick pony tin-can econobox offers.

I feel that 2019 is where things really got exceptional with pickups with the all new RAM/Silverado/Sierra. The F150 needs an update badly now, I can’t wait to see what Ford has coming down the pipe!

#121 IHCTD9 on 03.30.21 at 9:46 am

#116 Another Deckchair on 03.30.21 at 8:47 am
BillyBob, or others in the know;

Aircraft and “renewable energy”.

If, kerosene has 50x the energy density by weight than batteries do;
_____

I’ve been watching a lot of those “air disaster investigation” shows on YouTube. I’m thinking at the first glimmer of possibility for an electric airliner to work – that it will be built.

All these crashes – it appears that the fuel burn on impact takes a lot of the passengers, more than just a time or two. Even an uneventful belly landing on an airstrip sometimes turns into a fireball and many losses. Many documented crashes due to fuel starvation (faulty gauges, pumps, valves, fuel lines, etc) too.

To me – it looks like an electric airliner (when possible) would likely be built more for safety, than environmental reasons.

#122 Penny Henny on 03.30.21 at 10:00 am

#86 Ford EGO boost on 03.29.21 at 8:53 pm
#69 Nonplused on 03.29.21 at 8:15 pm
#196 Ponzius Pilatus on 03.29.21 at 10:50 am
It’s a “no-brainer”.
Tax the F-150 owners.
And tax them hard.

————————————

And not the Porsche and SUV owners? You are taking the “tax everyone! (but not me.)” ideology far too far.

What do you drive and what mileage do you get compared to a Ford Ecoboost?

___________________________

Or as we sag around these parts, the EGOboost. The vast majority owned by younger/middle-aged, testosterone laden males…. With a variety of gawdy and repulsive tattoos, unkempt facial hair and backwards balll caps. Not to mention their trucks with oversized tail pipes, jacked suspensions, modified exhaust systems, etc.

All in an effort to compensate for…. shall we say, a variety of “shortcomings”!
////////////////

I remember the day when said shortcomings meant small penis.
Such a simpler time.

#123 IHCTD9 on 03.30.21 at 10:37 am

#108 willworkforpickles on 03.30.21 at 1:23 am
We are near the tax saturation point on the middle class now too. Interest rates will creep up and then more and more.
____

An interesting development as a result of Trudeau’s handouts and job losses – tax freedom day for 2020 is expected fall on May 19. In 2019, it fell on June 8.

At some point, the Liberals will have to start doing something about their spending abominations – and part of that will involve more taxes on more people, same with the Provinces and municipalities. This will likely plunk tax freedom day into July fairly quickly.

That means we will have exceeded a total tax burden of 50% for the average Canadian. From here we walk into dangerous territory where workers begin to resist more vigorously to increases.

France found themselves bleeding millionaires at the highest rate on the planet after pushing too far with “tax the rich” and lost revenue due to the tax increase. Then Macron raised gas taxes and got the yellow vest protests which are still continuing nearly 2.5 years after their start having now cost 4400+ injuries, 11 deaths, and Billions of Euros to date.

Moral of the story is, at some point, increasing revenues through increased taxation becomes almost impossible to do.

#124 Jesse on 03.30.21 at 10:46 am

#104 Ponzius Pilatus on 03.30.21 at 12:10 am
#94 Ken from BC on 03.29.21 at 9:37 pm
#17 Jesse

How much more does Trudeau want? All of it? Why would I continue to work? I admit that I did alright last year but CRA didn’t even split it with me! They took 52% and let me “keep” 48%. This is before GST, PST, property tax, fuel tax, carbon tax and on and on and on. In essence, I was probably left with 25% of my gross income to live on. Seems like a zero sum game that I am not sure I want to play anymore. Any suggestions?
——-
Typical Canadian complainer.
Let’s see, if you can do without the following:
Police, Ambulance, Hospitals, Street cleaning, Public transport, parks, schools, military, libraries, SPCA, etc.
Be free to add to the list.
************************

How about we stop buying Liberal votes with my tax dollars. There are far too many free hand-outs in this country. 4 in 10 people pay ZERO net tax… that’s an embarrassment and should infuriate every tax paying Canadian. This situation is completely ridiculous. Throw in the ever-escalating carbon taxes and this country is basically finished.

#125 NSNG on 03.30.21 at 11:03 am

“Inflation Is Always A Political Choice”

As Jim Reid leaves the Deutsche Bank credit desk for the next few weeks (“I’ll be taking holiday and sending the kids to Easter holiday camp and playing golf every day as courses in the UK open on Monday for the first time in 3 months”), his last Friday “chart of the day” covers an especially sensitive topic: inflation.

As Reid writes, “there is clearly a lot of talk about inflation at the moment and a lot of talk about whether the Fed and ECB (amongst others) will meet their respective targets” However, for Reid personally, and a statement we wholeheartedly agree with, “inflation is largely a political choice in the fiat currency world that we’ve been in since 1971″ and he explains why:

When you have full control over how much money you can print and spend, rather than the money supply be fixed to Gold, you can always create inflation if the inclination is there regardless of demographics, digitalisation, globalisation or weak growth.”

https://www.zerohedge.com/markets/inflation-always-political-choice

#126 Ballingsford on 03.30.21 at 11:07 am

#68 Nonplused on 03.29.21 at 7:50 pm
#21 Ballingsford on 03.29.21 at 3:37 pm
Wouldn’t it be better for Sal to take out life insurance on his mom?

What a schmuck!

————————————

Life insurance on an 80 year old woman? Do you think the life insurance companies are idiots? All you have to do to figure this one out is try and insure your 16 year old new driver with a driving course as a secondary driver to figure out how they price things. I presume you have never done that.

********

Thanks Captain Obvious! I guess you didnt see the humor in that comment. I was just showing the depths some may go after the almighty dollar.
I doubt if Sal is on the phone this morning with a life insurance company seeing it he can take out insurance on his mother. I could be wrong though.

#127 Another Deckchair on 03.30.21 at 11:15 am

@120 IHCTD9

Good point; may I throw in one or two more?

1) having been “kind of” involved in aircraft black box data retrieval (back when it was continuous tape loop) I’d think that the kinetic energy is a huge factor. (the investigators were rebuilding – so to speak – a passenger jet that cost a lot of lives next door to where I did my little bit of black-box work)

2) Batteries have issues, too. The 787’s initial battery box was a “bit too tight” on design leading to issues, and, the lithium battery on a self-contained EPIRB on another 787 caused lots of damage in a parked aircraft.

I don’t honestly know what the way forward is, but IMHO somehow our love of long distance travel and GHG emissions are going to cause lots of grief!

#128 Dr V on 03.30.21 at 11:51 am

113 Under the radar

“Giving yourself a mortgage at the prescribed rate defeats the purpose as you want to lend at the highest rate you can get as the interest is tax free in both plans.”

I don’t believe this is optimum for the RRSP mortgage. You pay the mortgage back with after tax money, but
get no deduction. With the high interest rate the RRSP would be larger, but all that money is taxed upon withdrawal so you are paying tax twice.

This is not the case in the TFSA due to contributions
not being tax deductible. In fact, it may allow you to effectively “overcontribute” as you would still be allowed your normal limit as well.

So now I am thinking that the CRA knows this, and will quash this if they have not already.

Back to the RRSP, I wonder if you took the mortgage and invested it, would you be able to write off the
interest?

#129 IHCTD9 on 03.30.21 at 11:57 am

#126 Another Deckchair on 03.30.21 at 11:15 am
@120 IHCTD9

Good point; may I throw in one or two more?

1) having been “kind of” involved in aircraft black box data retrieval (back when it was continuous tape loop) I’d think that the kinetic energy is a huge factor. (the investigators were rebuilding – so to speak – a passenger jet that cost a lot of lives next door to where I did my little bit of black-box work)

2) Batteries have issues, too. The 787’s initial battery box was a “bit too tight” on design leading to issues, and, the lithium battery on a self-contained EPIRB on another 787 caused lots of damage in a parked aircraft.

I don’t honestly know what the way forward is, but IMHO somehow our love of long distance travel and GHG emissions are going to cause lots of grief!
___

Now that you mention it – yeah, Lithium Ion batteries do have a history of bursting into flame – one of those air disaster vids actually referenced a cargo plane that went down due to fire, and it was traced to a pallet of lithium ion batteries on board catching fire.

One of those vids (which were old) mentioned that “4 billion people traveled by plane last year” – I suspect it’s higher than that now.

Air travel can only get more popular in the future given the love of luxury and globalized nature of the planet. I agree there will be more, and new issues coming our way on this front.

#130 Ken on 03.30.21 at 12:08 pm

Anybody thinking Sal’s two illegal acts are justified — shame!

Spend less, save more, eliminate debt…it is not rocket science!

#131 Dr V on 03.30.21 at 12:09 pm

123 jesse

“4 in 10 people pay ZERO net tax… that’s an embarrassment and should infuriate every tax paying Canadian. This situation is completely ridiculous.”

I’m not sure what you are actually unhappy with here Jesse. If every Canadian paying no net tax would be the ideal (or some people’s version of an ideal) that would land us in a perfectly balanced situation.

If every Canadian was a net tax payor where is the money going?

Our progressive tax system is designed so that there is always some payors and benefitors. I am transitioning from the one to the other. I think my total tax last year from income sources was about $45k, and will probably be the same this year. That’s a reasonable chunk of change, so I have no guilt becoming a net benefitor.

#132 Keith on 03.30.21 at 12:14 pm

Forty percent of Canadians pay zero net tax. And 47 percent of Americans. And 46 percent of Britons. When the economy grows in real terms for decades, and wages don’t, people disappear from the tax system. Fry the working middle class, keep stiffing wage earners, offshore jobs to places that pay a fraction of our wages, enjoy lower real prices on goods and services – but then you have to pay higher taxes to make up for everyone who got stiffed or downsized or doesn’t make enough to live. There are very few free lunches in economics.

#133 KLNR on 03.30.21 at 12:19 pm

@#123 Jesse on 03.30.21 at 10:46 am
#104 Ponzius Pilatus on 03.30.21 at 12:10 am
#94 Ken from BC on 03.29.21 at 9:37 pm
#17 Jesse

How much more does Trudeau want? All of it? Why would I continue to work? I admit that I did alright last year but CRA didn’t even split it with me! They took 52% and let me “keep” 48%. This is before GST, PST, property tax, fuel tax, carbon tax and on and on and on. In essence, I was probably left with 25% of my gross income to live on. Seems like a zero sum game that I am not sure I want to play anymore. Any suggestions?
——-
Typical Canadian complainer.
Let’s see, if you can do without the following:
Police, Ambulance, Hospitals, Street cleaning, Public transport, parks, schools, military, libraries, SPCA, etc.
Be free to add to the list.
************************

…Throw in the ever-escalating carbon taxes and this country is basically finished.

love me some hyperbole in the morning.

#134 KLNR on 03.30.21 at 12:26 pm

@#119 IHCTD9 on 03.30.21 at 9:34 am
#72 Nonplused on 03.29.21 at 8:01 pm
#53 Bdwy on 03.29.21 at 6:43 pm
2500 HD? What does the HD stand for?
…..
It stands for heavy duty.

You wouldn’t understand.

For others, it means it can carry stuff that would crush a lighter truck.

———————————————–

There are people that understand trucks, and people that don’t. If you need/want to haul stuff, you need a truck. Even if it is just an RV. But then the question becomes, “if I need a truck to haul drywall for my business, is it cheaper to buy a Corolla for when I am not hauling drywall or just pay the extra fuel?” Well, it is pay the extra fuel.

Non-truck people will never get this.
____

On top of that, modern trucks have evolved to become virtually anything you want them to be. A luxurious, fuel efficient family hauler, or a goose-neck trailer back-hoe mover, and everything in between. That’s why everyone wants one, and will pay the big bucks for it. The powertrain and trim level option sheets are a mile long. The utility, luxury, flexibility and efficiency is worth a lot more to most buyers than the extra 10 mpg a one-trick pony tin-can econobox offers.

I feel that 2019 is where things really got exceptional with pickups with the all new RAM/Silverado/Sierra. The F150 needs an update badly now, I can’t wait to see what Ford has coming down the pipe!

most folks see the vehicle they drive as a badge defining who they are or at least how the want to be perceived, regardless of what they actually use it for.

#135 IHCTD9 on 03.30.21 at 12:33 pm

#130 Dr V on 03.30.21 at 12:09 pm
___

I think the stat is 40% of *working* Canadians pay zero net tax.

#136 Sail Away on 03.30.21 at 12:51 pm

#76 Bill Grable on 03.29.21 at 8:16 pm

Re: friend’s finances

———–

I dread the friend request for financial advice. It usually comes after they’ve glimpsed the looming pit of despair.

I’ll usually meet for lunch, then send them a white paper laying out a bland vanilla approach with 4-5 BD funds with historical returns and an interactive updating Google Docs spreadsheet…

…which 95% will promptly ignore. It makes sense, though: they didn’t achieve their current financial status by taking advice.

Just call me Sisyphus. Or maybe Persephone would be more apt as I oversee their fruitless struggle.

#137 Cici on 03.30.21 at 12:51 pm

#117 Ballingsford

Yes, indeed. That’s exactly what I meant. He would effectively be creating a situation in which he would have access to 2x more TFSA contribution room than the average citizen or resident.

Sorry for the confusion, I was posting past my bedtime ;-)

#138 IHCTD9 on 03.30.21 at 1:04 pm

#133 KLNR on 03.30.21 at 12:26 pm

most folks see the vehicle they drive as a badge defining who they are or at least how the want to be perceived, regardless of what they actually use it for.
___

Maybe a few do – but definitely not most.

#139 jess on 03.30.21 at 2:16 pm

How is Canada measuring up?

https://thetyee.ca/News/2021/03/29/Canada-Reducing-Poverty-Increasing-Equality/

“Canada has a target of reducing poverty from 2015 levels by 20 per cent by 2020 and by 50 per cent by 2030.”

Income inequality differs from poverty in that it is about the spread between people with the highest incomes and those with the lowest.

In the case of child poverty, which is closely related to a long list of negative outcomes for both the individual and society, there were 680,000 children living below the poverty line in 2019, down significantly from 1.1 million in 2015.
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=1110006601
The median after-tax income of Canadian families and unattached individuals was $62,900 in 2019. This was virtually unchanged from the previous year. Canada’s official poverty rate fell to 10.1% in 2019, down 0.9 percentage points. While these estimates are for 2019, emerging evidence for 2020 suggests that COVID-related pandemic benefits may have offset increases in low income for many Canadian families….”

https://www150.statcan.gc.ca/n1/daily-quotidien/210323/dq210323a-eng.htm

#140 FreeBird on 03.30.21 at 4:49 pm

I’ve been POA for both parents and kept very detailed records but maybe that’s why I was trusted and chosen.

Did Sal take ethics lessons from our PM? If JT reads this I’m (not) kidding. Not that he cares or many politicians are much better.

#141 LP on 03.30.21 at 8:40 pm

#134

Or men like my son who, at six foot nine and about 275 lbs, needs a truck to fit comfortably in. But I have to say, the only time I ever drove it I really loved the power and the sound.

#142 Question for Rakiki on 03.31.21 at 2:41 pm

At #5 Rakiki

Could you elaborate on how you moved your investment loan into a fixed rate mortgage from a line of credit?

Thank you