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Prepare in Advance for Next Year’s Tax Filing

Phew! Tax season is over!  You have hopefully just filed your 2017 personal income tax returns.  Was it a satisfying experience for you?  Do you feel a sense of accomplishment or dismay?  For many, the April 30th deadline seems to arrive way too soon.  If this is the case with you, starting the process much earlier would seem to be the answer.

The process should include proper record keeping, taking advantage of the tax saving methods available to you, and, perhaps, finally getting a professional to complete and file your return on your behalf.  The problem with handing your taxes alone is that often people don’t know what they don’t know.  This results in paying more in taxes than was necessary.  The cost of a professional completing your taxes potentially could be offset by the savings that might be gained.

Even if you earned little to no income, filing your return is a good idea and could prove to be advantageous.  This is because there are a number of federal and provincial government programs that you might be eligible for if your declared income is below a certain threshold.  You can refer to the Government of Canada website for the child and family benefits that might be available to you. Read more

Six Important Reasons to have a Will

It has been said that a Will is the last message you will leave your family.  Having a Will can provide clear direction as to what your wishes are and who will get what.  Die without a Will (known as dying intestate) and chaos will likely be the result.  Having a Will allows you to provide for certainty instead of chaos.

Most of the reasons to have a Will have to do with what happens if you don’t have one and that often will depend on what province you reside in.  Each provincial government has its own Wills and Estate legislation which also provides for the rules regarding intestacy.  The following are some of the reasons to have a Will and what could result without one.

  1. Informs your family how and when your property is to be distributed

Your Will affords you the opportunity to give clear instructions as to whom will receive your wealth.  It also allows you to make bequests of certain items such as family heirlooms which you may wish to leave to a specific individual. For those who wish to leave funds to a charity, the Will allows you to do this.  Without a Will, this opportunity may be lost. The bottom line is that you make the call.  Dying without a Will means that the provincial government will make the determinationon how your estate is to be distributed depending on the intestacy laws. Read more

Private Corporations Dodge a Bullet with the 2018 Federal Budget

The Liberal Government’s Federal Budget was delivered by Finance Minister, Bill Morneau, on February 27, 2018.  There had been much concern and speculation about the direction the budget would take with respect to the taxation of private corporations.  This was due to a release of the Department of Finance in July 2017 which contained private corporation tax proposals which addressed areas of concern to the government involving, among other things, business owners holding passive investments inside of their corporation.  There was speculation that if these proposals were implemented the effective tax rate on investment income earned by a private corporation and distributed to its shareholders could increase astronomically.  Thankfully, the concerns voiced by business and professional groups following the July proposals were effective in moderating the government’s actions.

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The Importance of Critical Illness Insurance in Retirement Planning

There are a number of obstacles that could potentially de-rail a comfortable retirement. These include marriage breakdown, a stock market crash, and being sued. Another huge obstacle would be the diagnosis of a life threatening critical illness affecting you or your spouse. While it might be difficult to insulate yourself against some of the threats to retirement security, Critical Illness insurance goes a long way to mitigate the financial disaster that could result from a change in health as we approach retirement.

Considering that the wealth of many Canadians is comprised of the equity in their homes and the balance of their retirement plans, having to access funds to combat a dreaded illness could put their retirement objectives in jeopardy. Imagine that you are just a few years into or approaching retirement and you or your spouse suffers a stroke. The prognosis is for a long recovery and the cost associated with recovery and care is projected to be substantial. Statistics show that 62,000 Canadians suffer a stroke each year* with over 80% surviving* many of whom would require ongoing care. Since 80% of all strokes happen to Canadians over 60 those unlucky enough could definitely see their retirement funding jeopardized. Read more

How to Keep the Family Business Thriving For Generations to Come

Most corporate dynasties fail to make it to a second generation, making these Canadian firms thriving under the leadership of the founder’s grandkids (and great-grandkids!) truly remarkable

Izzy Asper never wanted his children to work at Canwest Global Communications, the now defunct media empire he founded. His drive and hunger for acquisitions turned Canwest into one of the most powerful firms in Canada and, for a time, earned the Aspers a spot on the Rich 100. He wanted his kids to succeed elsewhere, however.

“They were all practising lawyers and were doing very nicely on their own. It was they who got this dynastic glaze in their eyes—which I generally discouraged,” he told journalist Peter C. Newman. “I don’t believe in dynasties.” But his daughter, Gail, “slipped through the net” to become general counsel at Canwest, and brothers David and Leonard followed. It was under Leonard’s stewardship that Canwest filed for bankruptcy in 2009. Read more

Why Private Wealth Management?

I am asked frequently the benefits of being in the Private Wealth Management (PWM) stream versus investing in mutual funds and/or bank funds. In order to answer this, we define PWM as the following:

  • Minimum investment $500,000
  • Custodial account (TD/National Bank/Laurentian Bank) managed by an Investment Counsellor (IC)
  • IC buys and sells securities within your account based on a rigid Investment Management Agreement (IMA) signed by you
  • A fixed fee of between 1-2% per annum is charged monthly based on the dollar amount of your account
  • The portfolio is managed according to the “discretion” of the IC, and done without your signature or acknowledgement. You give the IC the authority to trade on your behalf

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ARTICLES OF INTEREST

13
Jun

Cardinal Update – June 2018

THE CANADIAN BANKS – The Canadian banks have been consistent operators over the last several years, (even through a severe oil and gas downturn) yet remain largely underappreciated. This is partly attributable to the media’s focus on the slowdown in Canadian housing, due in part to new mortgage rules and high consumer leverage, and the potential concerns these raise for the banks. With the Canadian banks having recently completed another quarterly reporting season, it is worthwhile to look at the data points that help to assess the concerns, as well as some broader trends supporting the investment thesis.

Click here to read more:  Cardinal Update – June 2018

11
May

Cardinal Update – May 2018

FEDERAL BUDGET 2018 –  TAXING PASSIVE INCOME – The federal government released a consultation paper last summer targeting tax planning strategies using private corporations. This proposal was met with strong criticism from the business community and resulted in some awkward town hall meetings for Finance Minister Bill Morneau. Five months after the close of the consultation period, we are being presented with a federal budget far less dramatic than originally feared. But there are still some material changes that we need to understand. One of the more impactful changes involves passive income earned within a Canadian Controlled Private Corporation (CCPC). Passive income is earned on corporate investments separate from active business operations.

Click here to read more:  Cardinal Update – May 2018

10
May

DM Monthly Report – May 2018

MANAGING RISK THROUGH INTERIM POSITION MANAGEMENT  – In June of 2013, we first purchased shares in IAC/Interactive Corp., a company that owns more than 150 media and internet brands and which had established a long history of creating shareholder value through the management of its assets. Our investment thesis at the time said that the company would provide our portfolios with exposure to two of the fastest growing online business segments:

Search – IAC’s “Ask.com” is a niche offering, providing search functionality based on natural language questioning; it’s the world’s fourth most popular search engine.

On-line personals – IAC was (and is) the global leader in online dating, both through its flagship “Match.com” and other brands at the top of the space.

Click here to read more:   DM-Monthly-Report-May-18