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.   

The CRA recently released an important technical newsletter to make changes to Independent Pension Plan (IPP) rules. Some experts in the personal pension planning space think that this is a good thing.  Here is what’s at the centre of the  issue and why.

Trading goods and services has become much more sophisticated over the years.  In particular CRA is watching social media for evidence of unreported income or capital transactions, for example, popular Airbnb rentals. They consider this new “platform economy” to include any economic and social activities that connect buyers and sellers of goods or services via mobile apps or the internet.  There are 4 platforms in particular that will be audit-prone in 2021.

With the dramatic increase in digital solutions, and the challenges presented by the pandemic, more of your clients may require more frequent communications, improved collaboration between their financial professionals and more efficient processes in building wealth with all family stakeholders.  In a highly complex tax and investment environment, differentiate yourself as a Real Wealth Manager™.  Your new high value professional skills will help you connect the dots, and when you do, a bonus:   you’ll receive an invitation to join in on some important peer-to-peer networking opportunities coming up this spring – exclusively for Real Wealth Managers™.

It’s April 1st next week, and that means a number of rates for the second quarter to reflect inflation calculations.  This includes prescribed interest rates that affect how much you will receive on interest on refunds owed to you by CRA and pay on CRA overdue balances due from you.  Will seniors get a raise on their OAS payments?  What will be the prescribed interest charge on shareholder loan accounts?  Here are the details:

According to the Vanier Institute, the pandemic that began a year ago may have a significant effect on family life in Canada, particularly for those who experienced unemployment as part of the equation.  Families who may have separated or divorced in 2020 will now have significantly altered income tax profiles.  Here is what you need to know to ensure support payments are properly reported.  

“My 69-year-old mother now lives with us, and we had to make renovations to our home so that she could be safe after her accident at her personal care home.   Can we write off the costs of those renovations?”  It’s not an uncommon question this year as Canadians coped with the stress of the pandemic. The Home Accessibility Tax Credit can provide some financial relief in these cases.