Cardinal Update – December 2018
CANADIAN OIL: WHAT’S THE DIFFERENTIAL? Beginning in August of 2018 the differential between Western Canadian Select (WCS) and West Texas Intermediate (WTI) widened from <US$20/bbl to $50/bbl. In this note we will address why differentials have increased, our rationale for an average $25-$30/bbl differential in 2019, the low $20’s/bbl in 2020, and a longer-term view. In sum, we do not believe that panic is warranted.
The writing has been on the wall that a sub-$20/bbl differential was not sustainable. Utilizing Canadian production forecasts from CAPP and adding up available pipeline capacity, a clear gap between the two was emerging for late 2018/2019. With no pipeline capacity expected to start until late 2019, this production would have to be transported by rail.
Click here to read more: Cardinal Update – December 2018
Holiday Spending Survival Guide
Are you crazy for the holidays, spending thousands of dollars on holiday gifts, lights, entertaining, food and decorations each year? If so, you’re not alone. Many Americans feel the sting of holiday spending well into the new year. If you love to celebrate the holidays but don’t love the financial pinch you experience afterward, there are several great tricks for giving and celebrating, without breaking the bank. Read more 
Steps to Avoid the OAS Clawback
According to the Canadian government website, Old Age Security is the largest pension program in Canada. OAS pays a monthly income to seniors who are age 65 and over. The amount of the payment is not based on past income but rather how long you resided in Canada after the age of 18. If you have turned 65 you are eligible for the maximum OAS income if you have resided in Canada for at least 40 years after turning 18 AND have resided in Canada for at least 10 years prior to receiving approval for your OAS pension. There are some exceptions for those who don’t fully qualify based on temporary absences during that requisite 10-year period.
For the last quarter of 2018, the maximum monthly OAS payment regardless of marital status is $600.85. Don’t get too excited as, as the title suggests, the government can clawback part or all of your OAS benefit depending on your taxable income. As of 2018, you can earn up to $75,950 in annual taxable income (up from $74,788 in 2017) without affecting your payment. For every dollar earned over this threshold amount however, you will be taxed (referred to as an OAS recovery tax) at a rate of 15%. Once you reach taxable income in the amount of $ 123,386 the government will have fully recovered or clawed back the entire amount of your Old Age Security. Read more
DM Monthly Report – Nov 2018
VPI CANADIAN BALANCED POOL PASSES 10-YEAR MARK – A little over a decade ago, a financial services firm based in Winnipeg called Value Partners Investments (VPI) hired Dixon Mitchell to manage a soon to be launched balanced mutual fund. Since that time, VPI has flourished to become a significant player in the Canadian fund and advisory space, while DM has added assets, expanded our portfolio management team, and continued to hone our equity and fixed income investment processes. As both firms have grown, so has the size, following and track record of the VPI Canadian Balanced Pool.
At inception, VPI set the asset mix ranges for the fund with fairly wide bands, allowing DM a high degree of management flexibility and the ability to provide unit holders with an investment experience very similar to that of our typical internal client with a balanced asset allocation:
Click here to read more: DM-Monthly-Report-Nov-18
