The Importance of Provincial Budgets: Elbows Up and No Bracket Creep!

Some of the right things are happening in Nova Scotia, from the perspective of improving standards of living in that province.  And that’s important news because according to the Fraser Institute, Canadians have suffered the worst five-year decline in their standard of living over the 2020-to-2024 period since the Great Depression.  It notes, our Gross Domestic Product (GDP) per person decreased by 2.0% (0.4% annually) ; this despite aggregate GDP growth of 1.5% over the period.  Further, all ten provinces are experiencing stagnation, which is unique in our history.  So what’s the good news in Nova Scotia, at this critical juncture?

When the new Canada Recovery Benefits become available later this month, it will come with a cost.  If the recipient’s net income for the year from other sources exceeds $38,000, they will be required to repay 50% of the lesser of the CRB received and their net income in excess of $38,000. 

Financial and insurance advisors, lawyers, accountants, bookkeepers, tax practitioners and gift planners…

According to a September 11 report from Stats Canada, households increased holdings of financial assets and reduced non-mortgage and consumer debt during the second quarter this year. The household debt service ratio, which is the total obligated payments of principal and interest on credit market debt over household disposable income, had the largest decline on record. It dropped from 14.54% to 12.40%.  Incredibly, there was only $1.58% of credit market debt for every dollar of household disposable income. But, is the good news temporary?

The extended September 30 filing deadline hasn’t arrived yet. But, according to the most recent processing statistics from the CRA, there are still 2019 returns outstanding.  And, with this unusual tax season soon to be behind us, top-of-class tax and financial advisors must start immediately to help Canadians manage tax debts, maximize remaining social benefit payments and plan to reduce taxes payable in 2020. It’s a tall order.

U.S. tax filers, including American Citizens living in Canada, will have received Economic Income Payments (EIP) based on income levels reported on their 2018 and 2019 tax returns filed in the U.S. Now CRA has confirmed in a technical bulletin issued August 31 that there is more good news:  the payments will not be taxable to residents in Canada.

According to a news release from the Canadian Securities Administrators (CSA), final rules were adopted to ban the payment of trailing commissions by fund organizations, such as order-execution only (OEO) dealers who don’t make investment suitability determinations.