Canada Needs a Financial Plan

According to a July 23 publication by the Fraser Institute, we are getting poorer here in Canada and the prospects for economic growth are looking grim.  This should be of concern to every Canadian concerned about their “real income” – that’s their purchasing power – and by extension - their ability to fund consumption now and for important family milestones in the future:  retirements, education and homeownership.  It’s grim, but there are practical suggestions for a turn around plan. Here’s a synopsis of the report.   

Against the backdrop of high interest rates, complex tax changes and an economic climate that’s increasingly volatile, Knowledge Bureau has given professionals in the tax and financial services industry more tools to cope with their clients’ questions. With seven newly updated tax courses launching November 1, it’s an opportunity to enhance your education before year-end.

Michael Sunday Akpan of Akpan Corporation in Orleans, Ontario, graduated from the DFA – Bookkeeping Services Specialist Program and enthusiastically shared how this education has helped him reach new goals in his business: “I am successful because I have a vision for a better life. I have the power to do something incredible!”

Two important economic reports were released in Canada on October 19 and October 23. The former, by the Finance Department has raised eyebrows for its tax and spending increases. The second, from the Office of the Parliamentary Budget Officer, has warned about the effect of negative trade actions on Canada’s GDP.

Exactly what is the effect of high taxation on long-term economic growth in a country in which an aging population has limited capacity to pay more tax? It’s an important consideration in light of Finance Canada’s annual report, released on Friday October 19 and this week’s PBO Report.

These are interesting times for wealth advisors, amidst new fall volatility*. While High-Net-Worth (HNW) clients around the world enjoyed investment returns of over 20 percent for the second year in a row, increases in satisfaction levels did not correlate with increased returns. This is especially true in Canada.

Statistics show that small children who grow up with the expectation they will take higher education will reach those aspirations, and this is likely the key to breaking the poverty cycle in Canada. The Registered Education Savings Plan (RESP) can help, but governments and the private sector need to do more coaching with parents, because educational aspirations begin with them.