The report, Immigrant Labour Market Outcomes in Canada: The Benefits of Addressing Wage and Employment Gaps, estimates that the potential increased incomes for immigrants if observable skills were rewarded similarly to Canadian-born workers is $30.7 billion or 2.1 per cent of GDP in 2006 (the latest census data available).

“Employment growth is slowing as Canada’s population ages, which make it essential that every worker produce at their full potential. Underutilizing skilled labour is a gap we need to fill and immigrants represent more than 20 per cent of our population,” said Dawn Desjardins, assistant chief economist, RBC. “Even small improvements in immigrant outcomes could contribute positively to the Canadian economy.”

The report outlines the increasing size of the immigrant employment and wage gap in Canada during the past 30 years. While there was little difference between the unemployment rates of new immigrants and the Canadian-born in 1981, a large gap emerged during the 1980s and 1990s. By 2006, immigrants had unemployment rates that were significantly higher than those of Canadian born — 6.9 per cent for immigrants, compared to 6.4 per cent for the Canadian born. In 2005, the entire population of immigrants working full time in Canada earned an average of $45,000 yearly, which is about $700 or two per cent less than the average wage for Canadian-born workers; however, the most recent among them earned just $28,700, on average.

The report concludes that immigrants tend to possess an observable-skills profile that would usually be associated with higher economic rewards. The population of working-age (16-64) immigrants in Canada is more likely to have a university degree than the Canadian born, and is older, on average. They are also more likely to live in large cities, where earnings tend to be higher.

Adjusting for immigrants’ observable characteristics makes a big difference. If we take into consideration the stronger profile of immigrants, the ‘potential’ immigrant unemployment rate would have translated into approximately 42,000 additional jobs.

By gender, male immigrants had a higher earnings gap than female immigrants (24 per cent compared to 17 per cent). In dollar terms, this is about $16,500 for men and $7,000 for women. Conversely, the excess in the unemployment rate for women was larger than that for men, at 2.5 percentage points, compared to a 0.7 percentage point difference for men.

The research to this point suggests that gaps may be due to both genuine skill differences between immigrants and Canadian-born workers, and labour market inefficiencies that prevent immigrants from making full use of their skills. In either case, there could be room to improve on immigrant outcomes through more extensive language training, faster credential recognition, or other integration initiatives. More rigorous evaluation of existing programs would also be helpful in understanding why gaps persist and how we can best address them.

“This report shows that we are still not recognizing the skill level and talent that newcomers bring to Canada - and it’s as much the country’s loss as it is our immigrants,” said Camon Mak, director, Newcomer and Multicultural Markets, RBC. “Canada was built on immigration, and that’s just as true today.”

Download full report (PDF)

If there was something new in the one-page statement issued by the bank alongside its early morning policy announcement Tuesday, it is that bank governor Mark Carney thinks the risks from around the world may be intensifying.

The bank said it now expects the recession in Europe “to be more pronounced,” a downgrade from October when it said the continent would go through a brief slump.

While economic activity in the U.S. has been more robust than anticipated, the spillover effects of Europe and the country’s own internal problems will weigh on growth going forward. As for China and emerging nations that have been the mainstays of the global economy over the past few years, all signs point to the pace of expansion “moderating.”

“The weaker external outlook is expected to dampen GDP (gross domestic product) in Canada through financial, confidence and trade channels,” the bank said.

“The economy also continues to face competitiveness challenges, including persistent strength of the Canadian dollar…. Reflecting all of these factors, the bank has decided to maintain the target for the overnight rate at one per cent.”

The bank views its current policy setting as helping stimulate economic growth in Canada by keeping the cost of borrowing for both businesses and households low, thus encouraging investments and spending.

Some economists have called on the bank to lean on the rate further, to as low as 0.25 per cent, but there were no signals in the statement that Carney is thinking along those lines.

The bank said it is not worried about inflation at the moment. While at 2.9 per cent it is higher than the two per cent target the bank strives for, it expects weaker economic activity and moderating energy and food prices will bring overall inflation in line.

But Carney has often expressed concerns that his low interest rate policy, in place for about three years, is encouraging irresponsible behaviour among households, particularly overspending in the housing market.

As the bank noted in October, the Canadian economy is doing slightly better during the current second half of 2011 than was previously anticipated. GDP in the third quarter was one point higher than the bank’s two per cent call, and analysts believe the same adjustment will be made to the bank’s 0.8 per cent growth prediction for the fourth quarter.

The better performance, the bank said, has been due to stronger than expected household spending and continued healthy business investment. But exports have also so far defied the worsening global trends, recording solid gains in the third quarter.

The stronger second half will likely result in 2011 overall growth higher than the predicted 2.1 per cent, but the bank gave no guidance on its milder 1.9 forecast for 2012.

In the last five years, I have been transferring UK pensions to Canada for clients. During that time I have been interviewed for articles on the subject, and have been contacted by people from all over Canada, with questions about the process. Several of the people who have contacted me have tried finding answers through other British Expats, or searching online, or asking at their local financial institution. This is often a frustrating experience, as there is not a lot of information available, and sometimes the information you find can be unreliable.

I have heard from several Expats who went to their financial advisor or bank with questions, only to be very disappointed. In some cases, their financial institution had not been approved by the HMRC to do transfers. In other cases, they were on the approved list, but the employee had no experience in the area, and had no idea where to begin. More than once I have heard from someone whose advisor said they could do the transfer, and started the process, only to give up before completion. Their excuses were that they ran into a problem that they didn’t know how to fix, or they didn’t realize how much work was involved, or their financial institution decided that they didn’t want to deal with UK pension transfers anymore. These clients were kept in the dark about what was happening with their pensions, and had months of their time wasted.

The process of having your pension transferred does not have to be so frustrating or complicated. You just need to enlist the services of someone who has the required knowledge and experience, and who is willing to put in the time and effort for you.

This is a very specialized field, so seek out an expert.

In the coming weeks, I will be writing an article about frequently asked questions I receive on UK pension transfers. Please send me your questions, and I will try to reply to everyone directly. Some questions (and the corresponding answers) will be included in my article.

Writers Bio: This column, written and published by Investors Group Financial Services Inc. (in Québec a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances.

For more information on this topic please contact Shannon Walker, CFP at 1-888-291-7024 or Shannon.walker@investorsgroup.com.

Statistics Canada says all eight major components it tracks from housing to clothing to recreation costs were higher last month on an annual basis. As has been the case so often before, the major drivers of the rising inflation rate last month were gasoline and food. The cost of gas was up 22.7 per cent over last year, while prices for fuel oil rose 27.4 per cent and prices for natural gas fell 4.7 per cent. Prices for food were 4.3 per cent from a year ago, overall. Consumers paid more for meat, with prices up 6.1 per cent; bakery products, which rose 7.2 per cent; and fresh vegetables, which soared 13.0 per cent.

Statistics Canada notes that the country’s underlying core inflation increased to its highest level in almost three years in September. The core inflation rate excludes volatile items, such as gasoline, and is considered a more accurate reflection of inflation trends.

The annual core rate rose two-tenths of a point to 2.2 per cent the largest year-over-year gain since December 2008. It’s the first time it’s been above the Bank of Canada’s two per cent target since February 2010.

Commenting on the numbers, David Madani of the research firm Capital Economic predicted in a note to clients that the consumer price index will continue to rise “somewhat above” the Bank of Canada’s expectations, and that inflation on food prices will reach at least six per cent by next year.

Still, while the jump in core inflation will likely raise some eyebrows at the central bank, few expect bank governor Mark Carney to raise interest rates next week.

“We still believe the Bank will refrain from removing any further monetary stimulus for the foreseeable future,” wrote Madani.

Some even expect Carney to cut rates. But in a note to his clients, Bank of Montreal’s Doug Porter says the “stickiness” of inflation makes this unlikely.

“While this result doesn’t completely rule out rate cuts, it relegates them to only the most extreme circumstance,” he said in the note.

“Moreover, if core stays close to this level let alone rises further the Bank of Canada may return to the tightening wheel sooner than most now expect, especially if financial markets stabilize.”

The central bank has held its policy rate at one per cent for over a year and Carney has made it clear he is remaining vigilant for signs of weakness of the economy, as well as keeping an eye on the European debt crisis and the potential for another global recession.

National sales activity rose 2.7 per cent in September when compared to August, and follows three months of stable activity. September’s increase reflects strengthened activity in a number of major markets, led by Toronto. The monthly increase pushed national sales to its highest level since recently tightened mortgage regulations dampened sales earlier this year.

Highlights:

• Sales activity rose 2.7 per cent in September from the previous month.
• Holding in line with the ten-year average, activity during the first nine months of this year pulled ahead of sales over the same period last year.
• The number of newly listed homes held steady when compared to the previous month.
• The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory.
• The national average price posted the smallest year-over-year increase since January.

TD Bank economist Francis Fong said the housing start numbers suggests the housing market remains “extremely healthy as the three-month moving average increases to its highest level since November 2008.”

“Employment and income growth remains sufficiently healthy and economic fundamentals, though having slowed recently, remain stable.” Fong said in a note to clients.

“In addition, recent financial turmoil emanating from Europe has hit Canadian markets hard and has led to a renewed flight towards the safety of government bonds. This has helped to keep mortgage rates at their record low levels, meaning affordability is still supportive of housing demand.”

In the CMHC report, the agency said starts in urban areas rose by eight per cent to 185,900 units.

Multiple-unit urban starts increased 14.2 per cent to 118,000 units, while urban single starts decreased by 1.5 per cent to 67,900 units.

Quebec was the big winner in the September numbers, with a 14,000 increase in starts to 57,800 — a 13.9 per cent jump and the highest level of starts since February 2008.

“Multiple housing starts are expected to move back towards levels consistent with demographic fundamentals in the near term,” said Mathieu Laberge, CMHC’s deputy chief economist.

Rural starts were estimated at a seasonally adjusted annual rate of 20,000 units in September, up from 18,900 units in August.

World oil prices are set in U.S. dollars, so a rising loonie against the greenback offsets some of the impact of higher crude prices. Now that the loonie has slid below parity, consumers are getting a raw deal even though oil prices are 20 per cent lower than they were in July.

The loonie lost about five cents against the U.S. dollar last week, but rose 0.11 of a cent to 97.25 US on Monday (sept 26 2011).

Fear that another recession could be triggered by government debt problems in Europe and the United States has oil traders betting global energy demand will fall — pushing the price down from around US$100 per barrel in July to around US$80 on Monday.

Since crude is used to make gasoline, the price-drop should filter through to the gas pump, but the weaker loonie is offsetting the drop in Canada, McKnight said.

The Canadian average for regular unleaded gasoline Monday was just under $1.22 per litre, according to the price-tracking website Gasbuddy.com. That compared with about $1.25 a litre a month ago and $1.01 a litre a year ago when crude was at about US$77 per share.

McKnight, whose firm helps transportation sector clients manage their fuel costs, sees gasoline prices falling by about five cents over the next few months as demand weakens in the winter. While lower fuel prices are certainly a welcome silver lining for consumers, they are also symptomatic of wider economic challenges, said TD Bank economist Derek Burleton.

“In this kind of environment, oil prices are a bellwether of general global sentiment. It’s more symbolic of bigger challenges globally,” Burleton said.

“Unfortunately nobody wins in Canada’s economy when that happens, even if gasoline prices fall back a bit.”

Canada’s economy is highly reliant on exports of resources and manufactured goods. So if crude prices are falling because key trading partners are ailing, particularly the United States, it’s bad news for Canada. While falling crude prices will benefit gasoline consumers, it could also harm some Alberta oilsands producers, which need enormous amounts of capital to build and operate their projects.

“If oil settles below US$80, one tends to start getting a little concerned about near-term outlook for energy-producing provinces like Alberta,” said Burleton. ”I think US$80 is a little bit of a psychological threshold there.”

“It’s clear that there is a real need to educate Canadians on the basic components of real estate purchases, as well as the options available in terms of private sales versus selling with a realtor,” said Patrick Sullivan, general manager and vice-president of ComFree. “The do-it-yourself model doesn’t stop with home improvement – it also applies to home sales, it just requires a little knowledge. ComFree is a good example – we offer what homeowners need to sell their home commission-free and save thousands of dollars.”

Barriers to Private Sale

For many home owners, there remain several key roadblocks in the decision making process about whether to sell privately or work with an agent. Respondents listed the following as their top three:

• The visibility of the listing to potential buyers – 57 per cent
• The time commitment involved – 55 per cent
• Concern over making a legal error – 52 per cent

And while time commitment was one of the top deterrents mentioned by Canadians, the survey shows that an almost identical time investment (overall average was 29.7 hours) is required regardless of whether a home is being sold by the owner or with a realtor.

“The legal process is the same with or without a realtor,” said Sullivan. “Either way, it’s important to hire a lawyer who specializes in real estate to review an offer, conduct a title search and finalize the deal.”

The Mystique of the Realtor

The poll showed that nearly half of respondents (48 per cent) incorrectly stated that a realtor is required to list one’s home on the Multiple Listing Service (MLS) and a further 13 per cent indicated that they weren’t sure. In fact, ComFree can obtain a listing, through our brokerage partners, on MLS for any Canadian looking to sell their home privately.

Canadians also overestimate the services that are included in realtor fees. One in five of the respondents polled incorrectly stated that at least one of the following would also be included:

• Home inspection to determine any necessary home repairs (21 per cent)
• Setting up mortgage insurance where necessary (19 per cent)
• Financing & pre-approval of a mortgage (16 per cent)

And while the majority of respondents indicated that they had previously worked with a realtor vs. selling privately (79 per cent and 19 per cent respectively), a greater proportion of home owners said they would be likely to sell privately in the future (28 per cent).

Likelihood to sell privately in the future is significantly higher in Atlantic Canadaand Quebec compared to other provinces:

• Atlantic provinces – 48 per cent
• QC – 39 per cent
• MB/SK – 32 per cent
• AB – 29 per cent
• BC – 22 per cent
• ON – 21 per cent

“Realtors with their high commissions, like TV dinners and eight-tracks, are relics best left in the past,” said Sullivan.  “Today, anyone can sell their home on their own as long as they are willing to invest a few hours of their time and look for the legal and marketing expertise.”

Protecting your mortgage with a personal insurance plan can offer you and your loved ones better guarantees, greater choice and more flexibility—and in most cases at a lower cost.

Writers Bio: This column, written and published by Investors Group Financial Services Inc. (in Québec a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances.

For more information on this topic please contact Shannon Walker, CFP at 1-888-291-7024 or Shannon.walker@investorsgroup.com.

Highlights:

• Sales activity was stable from July to August, but posted another big year-over-year gain reflecting weakened demand last summer.
• Year-to-date sales pulled ahead of 2010 levels for the first time this year, and remain in line with the ten-year average.
• The number of newly listed homes was also little changed from July to August.
• The national housing market stayed firmly entrenched in balanced territory.
• There were more balanced local markets in August than at any other time on record.
• The national average price posted another year-over-year gain in August, but has moderated from elevated levels earlier this year.
• Upward skewing of the national average price is diminishing due to fewer expensive sales and a declining share of national activity in Vancouver andToronto.

For a second consecutive month, national home sales activity held steady in August 2011 when compared to the previous month. Among major urban centres, Toronto and Ottawa posted a monthly increase in activity while Calgary, Montreal and Vancouver saw activity decline slightly.

“The housing market in Canada remained on a firm footing in August when compared to volatile financial markets,” said Gary Morse, CREA President. “Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up.”

Actual (not seasonally adjusted) sales activity came in 15.8 per cent above national levels reported one year earlier. This was the largest year-over-year increase since last April, but largely reflects weakened activity one year ago.

A total of 324,030 homes have traded hands via Canadian MLS® Systems so far this year. While this stands only marginally above levels in the first eight months of last year, it nevertheless marks the first time this year that year-to-date activity has pulled ahead of 2010 levels.

As has been the case for much of this year, the year-to-date sales figure continues to run in line with the ten-year average.

The number of newly listed homes nationally was also little changed from July to August. This kept the national housing market firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 51.6 per cent in August, unchanged compared to July.

Based on a sales-to-new listings ratio of between 40 to 60 per cent, 70 per cent of all local markets in Canada were in balanced market territory in August – a greater percentage than at any other time on record. There were just 12 buyers’ markets in August, which was the lowest figure so far this year.

The number of months of inventory stood at 6.2 months at the end of August on a national basis, which is little changed from the end of July (6.1 months). The national months of inventory figure has been stable at about six months since April. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.

The actual (not seasonally adjusted) national average price for homes sold in August 2011 stood at $349,916. This is 7.7 per cent above its year-ago level, which marked the low point for 2010.

The national average price has moderated compared to earlier this year, with sales activity in Vancouver, and more recently in Toronto, exerting less of an effect on the national average. Their share of provincial and national sales activity reached unusually elevated levels earlier this year, but has since receded in line with normal seasonal variations.

“Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said Gregory Klump, CREA’s Chief Economist. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank ofCanada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

Even the stronger loonie hasn’t been able to overcome obstacles that include import tariffs ranging as high as 18 per cent, a number of higher fixed costs and, admittedly, the fact that retailers in Canada can simply get away with charging more.

“The people who should win from a stronger Canadian dollar are consumers,” said BMO’s deputy chief economist, Douglas Porter. “They don’t feel that way.”

“We have been above parity for basically all of 2011 and when you get to those levels it makes the price comparisons very straightforward and it’s frustrating for consumers,” said Porter, who has been tracking price differences between the two countries since the loonie soared in 2007.

Hockey parents have noticed that equipment is cheaper in the United States and some are finding ways to bring it back to Canada unnoticed.

“It depends on the equipment, but it can vary from 20 per cent to 45 per cent cheaper in the U.S.,” said one parent. “When you get into the high-quality products, the price difference is higher.”

Some U.S. retailers such as Hollister, the California surfer clothes chain, are upfront about advertising their two-tiered policy, listing both Canadian and U.S. prices on their price tags.

Others, like American fashion retailer J. Crew, charge an average of about 15 per cent more in Canada compared with its U.S. stores and website. A Senate committee plans to study the price gap, a process that will take time and could run into 2012, which would miss the holiday shopping season.

Tariffs on most goods between Canada, the United States and Mexico were phased out under trade deals signed in the late 1980s and early 1990s. But there are still import duties paid on some goods not covered by these trade agreements as well as a range of clothing and sporting goods that come into Canada from Asia, Europe, South America and other countries.

There’s also the cost of doing business in Canada, which adds to the price of goods — from bilingual labelling to transportation, payroll taxes and real estate, said marketing professor Ken Wong of Queen’s University in Kingston, Ont.

“The other part of it is quite simply what the market will bear,” Wong added.

“So, to a certain extent, there is an element of artificial inflation of some Canadian prices. From a consumer perspective, you could say it is gouging. From a manufacturer’s perspective, I would guess you see it as smart business.”

Cotton clothing such as T-shirts and track suits, women’s and girl’s ski jackets and overcoats, pillows, cotton bras, towels and bed linen face import duties of between 14 and 18 per cent, according to the Retail Council of Canada.

These items aren’t out of the ordinary, said Anne Kothawala, a spokeswoman for the council, which would like to see the tariffs removed.

“Clothing and sporting equipment are the particularly egregious areas,” she said.

Federal Finance Minister Jim Flaherty has conceded that removing such tariffs might be one way the government could help, but he wants the Senate committee to take a thorough look at the whole issue.

A bright spot for Canadians is consumer electronics, such as TVs and laptops, because the price difference between the two countries usually isn’t significant, according to Christopher Bennett, spokesman for Best Buy Canada and Future Shop.

“It could be $50 more or it could be $50 less in Canada or the U.S.,” Bennett said.

Technology is getting cheaper and being mass produced and is resulting in ever lower prices, he said from Vancouver.

“The up and downs every month of the dollar in the U.S. or Canada won’t drive your excitement,” Bennett said of consumers buying consumer electronics.

Meanwhile, Kothawala said there was “no question” Canadians would see a reduction in prices if import tariffs were removed.

“However, because of the time lag in the supply chain and the time it takes to place an order for products, that will not be able to happen overnight,” she said.

Kothawala also noted that Canada retailers are typically charged more by multinational suppliers than their U.S. counterparts, making goods more expensive.

And, she added that Canadians shouldn’t expect to see absolute parity on consumer goods even if tariffs are removed.

“Our fixed costs are in Canadian dollars — they’re not coming down because the Canadian dollar has gone up,” she said.

The others were open to cutting corners, usually by paying cash for goods and services. However, almost all are reluctant to fudge on their actual tax returns, preferring under-the-table deals to dodge taxes.

The survey didn’t say how much is lost to tax cheats, but in July, Statistics Canada estimated that the underground economy in Canada was worth as much as $36 billion in 2008, a 90-per-cent increase over 1992.

At the time of the StatsCan release, the revenue agency said it used “a mix of outreach, education, and communications, as well as enforcement and audit actions to combat” the underground economy.

“The CRA plans on continuing its efforts to combat the underground economy. It continues to be a high priority, and the CRA will use the study’s findings to further improve its tools and activities.”

The newly released poll by Phoenix Strategic Perspectives Inc. was conducted Jan. 29-Feb. 28 this year. The survey sample of 3,884 people gives it a margin of error of plus or minus 1.9 percentage points, 19 times out of 20.

The report divided respondents into six categories, according to their attitudes.

The 31 per cent called “law abiders” and 18 per cent dubbed “altruistic compliers” are low risks to fudge on taxes. The former are likely to be women, over 65, less educated and retired. The latter tend to be age 45-64, married, working full time, university-educated and with household incomes of $100,000 plus.

The other four groups, of about 12-15 per cent each, were more open to cheating.

One group rationalizes cheating. They feel the tax system is unfair. Another group doesn’t think tax dodging is risky. A third think they already pay too much in taxes and look for a chance to pay cash and dodge the tax collector.

The last group, about 13 per cent of respondents, are called “outlaws.” They’re willing to cheat, don’t think it’s a big deal and tend to believe that most people feel the same way. This group tends to be male, under 30 and self-employed.

“The outlaws are the least likely to articulate traditional values and among the most likely to feel that control over their lives lies elsewhere,” the study said.

The $140,000 report offered few prescriptions to remedy the situation. For example, it said focusing on penalties is most likely to be ineffective against those most likely to cheat.

It also conceded that since the survey relied on people to admit to wrongdoing, the likelihood of tax cheating may actually be higher than the results indicated.

Catherine Swift, president of the Canadian Federation of Independent Business, scoffed at the study.

“I just don’t know why they waste our money in this way,” she said.

“There’s no surprising revelations here. There have been other studies done on underground economy activity, tax cheats or whatever you want to call it. Big deal.”

Swift said there are many reasons people cheat. They see taxes as too high, they see government wasting tax money and in hard times, they may simply be trying to make ends meet.

Even the study’s “outlaws” are hardly a surprise, she added.

“They’re young guys who are probably a little marginal, at least at the moment, and they’re not seeing taxes as a high priority in their lives. It’s all common sense.

“I have no idea what the utility is of piddling away $140,000 on this study. I really don’t. Big waste of money.”

A spokesman for the Canada Revenue Agency was not immediately available for comment.

The vast majority of economists now are convinced Carney will keep the short-term rate at one per cent for another year.

Analysts say that if there is any change to the policy, it may be to lower the rate rather than raise it by the year’s end, say analysts.

In the United States, the Federal Reserve Board has said it will keep rates at current low levels for at least another two years to try and stimulate the sagging economy.

On Wednesday, the markets are eagerly awaiting the governor’s views about the near future prospects and whether he will signal a possible rate decrease.

In July, the last time Carney pronounced on interest rates, the bank’s statement began with the often-voiced mantra that “the global economic expansion is proceeding broadly as projected.”

That won’t do anymore, says Bank of Montreal economist Douglas Porter.

At the time, Carney had expected the second quarter to show a 1.5 per cent growth rate — anemic perhaps, but far better than the minus 0.4 per cent the economy actually got.

Now the prospect of a second recession, particularly in the U.S., has gained currency, which will have stark implications for Canada in terms of jobs and government budgets.

Scotiabank economist Derek Holt says he doesn’t believe there is sufficient urgency to cut interest rates now, but he says the governor must become more realistic about the economic landscape.

“Our research indicates that Canadians don’t stay in one home too long,” says Farhaneh Haque, Director, Mortgage Advice, TD Canada Trust. “Before making the decision to move, explore all your options and ensure that your new home will suit your changing needs and lifestyle.  It might be more affordable to renovate and make your current home work for you.”

The top five features that Canadians felt they compromised on when they purchased their previous home that they are not willing to budge on this time are price (34%), layout of home (33%), features of home (31%), garage or sheltered parking (30%) and number of bedrooms (28%).

“If you are dissatisfied with something like the layout or features of your home, a renovation can be a convenient option to save the hassle and expense of moving. A Home Equity Line of Credit will allow you to use the equity you’ve built up in your home to finance the renovation.  Further, if you do ultimately decide to sell, the renovation could increase your resale value,” says Haque.

Fifty percent of repeat buyers considered a Home Equity Line of Credit (HELOC) and are just as likely to say they would like to have it simply as a cushion (46%) as for the purposes of a renovation (45%). Thirty percent would use the line of credit for investment purposes.

Timing is everything: Canadians think it’s a good time to buy – and to sell

In this year’s survey, Canadians were more likely to say that investment opportunities and market conditions played a factor in their decision to buy another home (both at 21% versus 15% in 2010). The large majority (82%) plan to sell their current home and of those who are selling, four in five expect to sell at or above asking price (78% versus 66% in 2010).

Among those who have purchased a second home and do not plan to sell their previous home, 42% will keep the first home as a rental property.  More buyers this year than last indicated that they will stay in their current home and the new home they purchase will be a rental property (32% versus 20% in 2010).

Interestingly, there was a big increase this year in the number of buyers who said that rather than selling their current home, a family member will move into it (12% versus 4% in 2010).

“Buyers should keep in mind that if they are expecting to sell above asking price, it’s likely they will need to also buy at above asking price,” says Haque. “A home is, obviously, a very big purchase – especially if you will not be selling your previous home to put towards the cost. A mortgage expert at your bank can walk you through your financing options and show you strategies and products that may save you money and provide flexibility over the course of your mortgage.”

Canadians are savvier sellers than last year

The report showed that 63% of Canadians have a mortgage on the home they are moving from and 69% will take out a mortgage on their new home.

In 2010, nearly three in ten Canadians (27%) who planned to sell their home didn’t know they had options when it came to their mortgage.  This year, that number decreased to only 9%.  Thirty-eight percent of sellers say they will bring their mortgage with them and 14% say they will use it as a selling feature. Although they say they are aware of the options, 39% haven’t considered what they will do.

“It’s just as important to consider your mortgage options as a seller as when you are buying. You may be overlooking your mortgage as an important selling feature of your home or you may be able to save money by keeping your low rate and bringing your mortgage terms with you. Talk to an expert to find out what option might work for you,” says Haque.

So, the first question you must ask yourself is, Do I need a financial plan? The simple answer is yes if you have an income, a family (or the hopes of one), dreams of a comfortable retirement, and any of the dozens of other financially-rooted reasons that are unique to you.

The next question is, What are the elements of a sound financial plan? There are two answers to that question: the general and the specific.

In general, every financial plan should include: investment planning, cash flow planning, education planning, estate planning, insurance planning, retirement planning, and income tax planning.

The key to a successful financial plan is making sure that each of those elements is made specific to you and your needs and to do that, a competent professional advisor will take you through this six step planning process:

1. Goal setting – to determine and prioritize your goals and concerns.
2. Data gathering – assembling the relevant financial information to understand your current financial situation.
3. Financial analysis – using your current and projected financial situation to identify and answer questions like: “How much tax must I pay?” How can my taxes be reduced?”  Will I have enough income to cover my expenses during retirement?” “How can I better meet my income needs?” “How can I protect my family and income if I should become disabled or die unexpectedly?”
4. Plan formulation and recommendations – discussing, reviewing and deciding on various alternatives and solutions for achieving your financial goals and improving your overall financial life.
5. Plan implementation – providing you with a written report summarizing the steps you need to take to make your plan work.
6. Monitoring and plan review – financial planning is not a one-time event. You should review your plan at least annually or when major life events occur.

Comprehensive financial planning is complex and necessary. To be sure you get exactly the right one for your situation, it’s a good idea to put a professional advisor on your financial team an advisor with the qualifications, tools and track record you can count on to develop a personalized financial plan that will the job for you  today and tomorrow.

Writers Bio: This column, written and published by Investors Group Financial Services Inc. (in Québec a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances.

For more information on this topic please contact Shannon Walker, CFP at 1-888-291-7024 or Shannon.walker@investorsgroup.com.

When it comes to making significant decisions regarding insurance products and services, 63% of Canadians don’t go to an insurance provider, but instead ask their friends, family or colleagues for advice (25%), rely on searching the Internet (33%), or simply go with their gut (4%).

“Doing your own research online and asking friends for advice about insurance is certainly a good starting point, but if you rely solely on these sources, then you may encounter some issues down the track,” says Henry Blumenthal, Vice President & Chief Underwriter, TD Insurance. “A reliable source can clarify any mistruths and ensure you understand your coverage to avoid any costly headaches in the event that something unexpected happens.”

Myth: Red cars are more expensive to insure

Many Canadians think auto insurance premiums are more expensive for red (29%) and two-door (54%) cars. And almost half (48%) think that if you’re in an auto accident your insurance rates won’t go up if you don’t file a claim. None of these statements are true.

“Most people may not know it, but the insurance industry is colour-blind. It doesn’t matter if your car is blue, red, striped or chequered, your insurance rate for that make, model, and age of the vehicle will be the same,” says Blumenthal. “There are so many factors that make up the formula for auto insurance premiums. For example, a mom who lives in the city centre and drives to work each day may actually be more expensive to insure than a 28-year-old man who lives in a suburb and catches the bus to work.”

Myth: If you file a claim through home insurance for stolen or damaged items due to fire or water damage, you will be reimbursed for replacing the items in your home at today’s prices

Sixty-three percent of Canadians wrongly believe they will be reimbursed at today’s prices if they file a home insurance claim for stolen or damaged items.

“A standard home policy only covers you for the value of your contents, less depreciation. For example, if you purchased a television five years ago for $500, you might only get $100 for it if it were destroyed in a fire even if it costs $600 to replace that same TV today,” says Blumenthal. “If you want a higher form of protection you should choose to add the Replacement Value option to your contents coverage, which will ensure the contents of your home are insured for the amount it costs to replace them today.”

Myth: You only need travel insurance if you’re vacationing outside of Canada

One quarter of Canadian adults (28%) think that you only need travel insurance if you travel outside of Canada, and almost half (48%) have travelled outside of their home province without it.

“Getting sick or injured while on vacation isn’t only bad timing, it’s very expensive. Provincial medical coverage won’t provide comprehensive coverage if you’re outside of your home province, so it’s important that you ensure you’re covered even when you’re travelling domestically,” says Minor. “And when it comes to international travel, many Canadians don’t realize that the average out-of-country in-hospital bill can cost up to $10,000 per day, and the average emergency room visit is $1,000.”

Top features Canadian travellers shouldn’t budge on in their travel insurance policies include 24/7 assistance, more than $1 million of emergency medical coverage, and expense coverage if you need to be flown home for medical care.

The bank found that of those debt-holders, four in 10 say their current debt level is an obstacle to reaching future financial goals.

Broken down by age, the survey found that 35- to 44-year-old Canadians are most likely to hold various forms of debt, with 89 per cent of that group saying they hold at least one form of debt.

Those aged both 18 to 24, and 65 or older, were least likely to have debt. By region, the survey found that more Albertans are carrying debt, with 77 per cent of respondents in the province having at least some.

British Columbia has the lowest levels of debt in all of the provinces.

Traditional mortgage life insurance can be conveniently obtained from your lender as part of your overall mortgage ‘package’. The premium is added to your monthly mortgage payment.

• The policy has no cash value and the benefits are paid directly to the lender.
• Your lender owns the policy. If you decide to change your lending institution to get a better mortgage rate or move to a new home, you have to re-qualify medically for new protection, potentially at higher premiums.
• Your coverage ends when the mortgage is paid off.
• Although it is unlikely, the fact remains that the insurance company that underwrites the policy could change the rate structure or cancel coverage as a whole.

Personal life insurance is all yours. You own the policy and it insures you, not the mortgage. You decide on the type of policy that’s best for you – either term or permanent insurance – and you choose the beneficiaries who can use the funds any way they wish – to pay off the mortgage, provide an income, or cover immediate expenses.

• Your coverage isn’t reduced by a declining mortgage balance – so your beneficiaries stay protected. Any benefit payout in excess of the amount owing on the mortgage is available for use by your beneficiary.
• If you choose term insurance, you can convert it to permanent insurance at a time suitable to you.
• Your coverage goes everywhere with you – from home to home, mortgage to mortgage – and you can reduce the amount of coverage any time you want.
• It’s your plan — with the options, features and premiums that fit your needs and budget. And you can add disability and critical illness insurance that can include the benefit of waiving your premiums should you become disabled, providing the money to continue making mortgage payments, or paying your medical expenses.

Your home is your family’s protective nest – it makes sense to protect it (and your family) with life insurance. Your professional advisor can help you get the right protection that blends with your overall financial life.

This column, written and published by Investors Group Financial Services Inc.(in Québec  – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. 

For more information on this topic please contact Shannon Walker, Financial Consultant, CFP at  1-888-291-7024  or shannon.walker@investorsgroup.com. 

Insurance products and services are distributed by I.G. Insurance Services Inc. (in Québec  – a Financial Services Firm). Insurance licence sponsored by The Great-West Life Assurance Company outside of Québec .

Maybe that’s because a comfortable retirement is something we take for granted but when you look at the many benefits available to Canadian retirees – benefits not available to retirees in many other countries – it’s clear we have much to celebrate.

• All wage earning and self-employed Canadians are eligible to receive either Canada Pension Plan or the Québec Pension Plan (CPP/QPP) retirement benefits, which are indexed for inflation. There are also CPP/QPP survivor and dependents’ benefits as well as a lump sum death benefit. A couple can choose to share CPP/QPP benefits for tax purposes.
• Canadians can take advantage of the tax-deferred, compound growth benefits of Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs). Any Canadian resident who receives periodic payments from a registered pension plan can potentially reduce their taxes by splitting pension income with a spouse/common-law partner. Those over age 65 who receive RRIF income are also eligible for the federal and provincial Pension Income Credit and can allocate up to 50% of their RRIF income to a spouse for tax purposes.
• Those who have lived in Canada for at least 40 years after age 18 will receive the full monthly Old Age Security (OAS) benefit, which is indexed for inflation. Canadian residents who have lived in Canada for at least 10 years after age 18 will receive a prorated OAS monthly payment.
• Seniors with a lower income may be eligible for the Guaranteed Income Supplement (GIS), a tax-free monthly payment, which is indexed for inflation.
• Canadians can invest in Tax-free Savings Accounts (TFSAs) that generate tax-free investment income that does not affect income-tested federal benefits.
• Every tax-eligible Canadian gets the Basic Personal Tax Credit and those over age 65 also receive an Age Credit. Other tax credits that can benefit retirees include the Medical Expense Credit, the Dependent Credit, the Disability Credit, and the Caregivers Credit. There are also generous tax credits for those making charitable donations.
• And, of course, Canadian retirees have access to a wide range of health care services at little or no direct cost.

Yes, Canada is a great place to retire! But to make your retirement all it can be, you need a plan that includes retirement income from other sources such as your company or personal pension plan and your own investments. Your professional advisor can help make sure your first day of retirement is as much a cause for celebration as the first day of July.

Writers Bio: This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact Shannon Walker, CFP at 1-888-291-7024 or Shannon.walker@investorsgroup.com.

Incomes of the poor increased marginally in the period, it said, but the gap between rich and poor widened.

The average income of the poorest Canadians rose from $12,400 in 1976 to $14,500 in 2009.

However, the gap between the real average income of the richest 20 per cent of Canadians and the poorest 20 per cent widened from $92,300 in 1976 to $117,500 in 2009.

“While the poor are minimally better off in an absolute sense, they are significantly worse off in a relative sense,” said board CEO Anne Golden in a release.

“High inequality raises two questions. First, what is the impact on the economic well-being of a country? The answer is that high inequality can diminish economic growth if it means that the country is not fully using the skills and capabilities of all its citizens or if it undermines social cohesion, leading to increased social tensions.”

“Second, high inequality raises a moral question about fairness and social justice.”

The analysis found that Canadians in general are better off than they were a generation ago.

The average income in 1976 was $51,100. By 2009, it had increased by 17 per cent to $59,700, even after adjusting for inflation.

But using the measure of median income, which divides the sample into two equal parts and better reflects how the majority of people are doing, the growth was only 5.5 per cent.

Another measure, the Gini index, suggests how the income gap has grown from 1993 to 2008.

The index number corresponds to the percentage share of total income that would need to be redistributed to achieve exact income equality, from 0 to one. (Zero means everyone has the same income and one means one person has all the earnings.)

Canada’s 2009 Gini index of 0.32 meant that 32 per cent of the country’s national income would need to be redistributed in order to have complete equality of income.

The pattern of inequality growth throughout the past three decades has been uneven, the board said.

Poverty among elderly rises

The income gap narrowed in the 1980s, with the Gini index reaching a low of 0.28 in 1989, but remained around 0.32 in the 2000s.

The study found inequality is rising worldwide, but that two countries most similar with Canada in terms of per capita income had narrower gaps. Austria’s was 0.265 and Denmark’s was 0.232.

The board found that every province except Ontario reduced its share of the population living in low income in the period.

“Recent data, however, indicates that income inequality rose during and after the recession,” it said.

“Between 2007 and 2009, seven out of ten provinces experienced a rise in their low-income rates — Prince Edward Island, Saskatchewan, and New Brunswick were the exceptions. The largest jump occurred in Alberta, where the low-income rate rose from 6.6 per cent to 9.9 per cent.”

The study concluded poverty among the elderly, especially women, has risen since the mid-1990s, following a dramatic drop over 20 years.

Between 2006 and 2009, the number of low-income seniors rose by almost nearly 128,000, with 70 per cent of those being women.

Click here for more information and to read the report in more detail

According to the survey, the majority of Canadians have let their budgeting (38%), saving (37%) and bill payments (50%) slip by the wayside as they enjoy the warm weather this year.

“Summer is a great time to relax and have fun with friends, but it doesn’t mean you should take a vacation from your financial responsibilities,” says Raymond Chun, Senior Vice President, TD Canada Trust. “If you take a little time to plan ahead and tweak your budget in preparation for your summer spending, you can make the most of the warmer weather without compromising your savings plan.”

Canadians attribute the lure of the summer sun, patios and travel opportunities as the cause of their lax attitudes towards their personal finances. Two-thirds say the weather makes them feel happier and more willing to spend money (66%) or that there are so many activities to enjoy in the summer they figure they’ll make up the money in the colder months (64%). Six-in-ten attribute their splurges to eating and drinking out more with friends (61%) or taking more vacations (60%).

“Summer vacations can certainly take a toll on your wallet. If you think you’ve been too carefree with your spending, there are simple things you can do to get your finances under control without compromising on summer fun so that you’re in good financial shape by the end of the season,” he said.

Chun offers his advice on how Canadians can enjoy this summer without compromising their savings plan:

1. Automate your financial responsibilities – Set up pre-authorized transfers to your regular bills and minimum credit card repayments. That way you don’t have to worry about interest and fees incurred on forgotten bills while you’re out enjoying the summer sun.

2. Revisit your budget – Calculate how much money you earn each month then subtract your  expenses, like rent or mortgage repayments, food, utilities, insurance and credit card bills, to understand how much you really have left over. Subtract the amount you want to save every month, and only then do you have a true picture of what you have left for discretionary spending. “Many Canadians find their food and entertainment bills are higher in the summer, because they’re out more with friends. If this is the case, you should revisit your budget to cut down on spending in other areas to make up the difference, and not cut into your savings or take on debt,” says Chun.

3. Don’t get carried away with summer spending – Look at ways to cut down on unnecessary expenses, but don’t deprive yourself or it will be a tough budget to follow. Invite friends over for a backyard barbeque instead of frequenting restaurant patios regularly after work. Canada’s summers are beautiful so it’s tempting to splurge on summer accessories, but remember you may only get another two months out of a new pair of sandals or summer dress before the cooler weather starts rolling in.

4. Get any debts under control – Review your unpaid bills and debt obligations. If you’re low on cash and can’t make all your payments then pay the minimum required. High interest debts like credit cards should take priority. At the end of the summer if you’re still struggling with your repayments, then speak to your bank about ways to consolidate and manage your debt.

5. Start planning now for your next seasonal splurge – While enjoying the summer months can be fun, getting yourself into serious credit card debt is not. You need to break the cycle on how you pay for summer activities like vacations and eating out.  Start putting aside money in advance for next year’s holidays.

What else falls by the wayside in the summer?

One-in-two Canadians admit they are also more lax in the summer in terms of keeping in touch with family (56%), exercising (55%), keeping their homes tidy (54%) and eating healthily (53%). One-in-ten say they are even more likely to call in sick to work.

Average house prices in Canada continued to rise in the second quarter across housing types surveyed. The national average price of a detached bungalow rose 7.5 per cent year-over-year to $356,625; the price of a standard two-storey home rose 6.1 per cent to $390,163; and the price of a standard condominium rose 3.5 per cent to $238,064.

While prices continued their recent climb, signs of moderation are appearing, and vary from region to region. In the Atlantic provinces, markets that had recently enjoyed unusually high price appreciation such as Halifax and St. John’s are still seeing gains, although smaller than those in recent quarters. In Montreal, additional inventory coming on the market has provided home buyers with more choice and opportunities for negotiation. Home prices in Calgary declined modestly as the market continues to adjust after the Alberta housing boom experienced in the middle of the previous decade. The Vancouver market continues its rally, with the average price of detached bungalows and standard two-storey homes both over $1 million and seeing double digit year-over-year gains, though the average price for a standard condominium saw a very modest increase of 2.5 per cent.

“In many of Canada’s regional markets, we saw house prices appreciate at a significantly faster rate than wages and salaries, and this trend cannot continue indefinitely,” observed Phil Soper, president and chief executive, Royal LePage Real Estate Services. “We expect price gains to moderate considerably in the latter half of 2011, which should reduce the stress associated with purchasing a new home,” Soper said. “Vancouver, and specifically certain neighbourhoods in the lower mainland of British Columbia, remains an anomaly, as investment from outside of the country continues to support higher price levels.”

While price appreciation and housing activity are expected to slow during the second half of 2011, the strong start will support a 2011 national average house price forecast at end of year 7.7 per cent higher than the close of 2010. Sales volume is forecast to decrease marginally by 2.0 per cent over the same period. Year-over-year prices should appreciate modestly in 2011’s third quarter as most Canadian housing markets cooled during the same period in 2010. Similarly, this year’s final quarter should display a flat year-over-year price performance when compared to an unusually strong fourth quarter of 2010.

“While the global economy struggles to find its footing, here in Canada we are seeing indicators of a return to long-term norms,” noted Soper. “There is an expectation of continuing improvement in employment levels across the country and accompanying strength in wages and salaries, which should provide support for the housing market. Looking ahead to 2012, signs are pointing to stability for Canadian home owners and new buyers. We believe we are past the period of peak house price appreciation.”

Regional Market Summaries

The residential real estate in market in Halifax saw healthy year-over-year price gains across all three housing types surveyed. Strong local economy coupled with low interest rates has driven demand in the region. At the end of 2011, average house prices in Halifax are forecast to be 3.3 per cent higher than 2010.

Detached bungalows and two-storey houses in Montreal posted strong year-over-year gains – higher than 7 per cent in the second quarter, while standard condominiums rose modestly by 1.9 per cent. At the end of 2011, average house prices in Montreal are forecast to be 7.0 per cent higher than 2010.

Ottawa’s housing market posted healthy year-over-year price appreciation across all housing types surveyed. An average standard two-storey home rose 5.2 per cent year-over-year to $371,500. Despite modestly rising inventory, at the end of 2011, average house prices in Ottawa are forecast to be 5.0 per cent higher than 2010.

Toronto’s seller’s market witnessed strong year-over-year price appreciation. Price gains ranged from 4.7 per cent to 6.1 for the housing types surveyed. Low inventory coupled with low interest rates continue to drive real estate prices. Lack of inventory was cited as the main reason for reduced market activity.

Confidence in the local economy has brought optimism to the Winnipeg market and is reflected in the real estate market’s performance. Detached bungalows rose 7.5 per cent to $281,125, while condominiums rose 6.6 per cent. At the end of 2011, average house prices in Winnipeg are forecast to be 6.0 per cent higher than 2010.

The largest year-over-year gain was seen in Regina, where standard two-storey homes jumped 15.6 per cent. Detached bungalows also posted a strong 11 per cent gain. Regina’s limited inventory has not been able to keep up with the demand created by the booming local job market. At the end of 2011, average house prices in Regina are forecast to be 12.4 per cent higher than 2010.

Calgary witnessed moderate year-over-year price declines as it continues to adjust from the boom experienced in the middle of the previous decade. Edmonton, posted modest gains for standard two-storey homes and standard condominiums, while detached bungalows posted a moderate year-over-year decrease. At the end of 2011, average house prices in Calgary are forecast to increase 3.8 per cent while Edmonton house prices are expected to decrease moderately by 1.2 per cent compared to 2010.

Vancouver experienced some of Canada’s largest year-over-year price increases with detached bungalows rising 14.1 per cent and standard two-storey homes rising 12.0 per cent. Average prices for standard condominiums stabilized rising 2.5 per cent. At the end of 2011, average house prices in Vancouver are forecast to be 15.4 per cent higher than 2010. Unit sales in Vancouver, during 2011, are expected to be 6.0 per cent higher than 2010 indicating strong market activity.

Royal LePage’s quarterly House Price Survey shows the annual change of prices for key housing segments in select national markets. Click here to view the chart

Stats-Canada also says credit market debt grew by 1.3 per cent in the quarter, while personal disposable income grew by 0.7 per cent.

In the report, Bank of Montreal economists Douglas Porter and Sal Guatieri say households “can’t fully resist the lure of interest rates at persistently rock-bottom levels.”

They note that household credit market debt climbed to a new high of 147.3 per cent of disposable income, on the back of the Bank of Canada’s decision to leave overnight rates unchanged since last September.

“Canadian debt ratios are now leaving their U.S. counterparts in the rear-view mirror, despite the repeated exhortations by domestic policymakers to rein in borrowing. It seems that (interest rate) actions speak louder than words.”

However, the increase in consumer credit debt slowed along with lower household spending.

The weakness in consumer spending also reflects the fact that higher energy and particularly gasoline prices are taking a bigger bite out of household budgets, leaving less for other spending. That, combined with high levels of indebtedness are expected to weigh down purchases going forward.

“Although household debt growth has cooled notably in recent months–April’s 5.5 per cent (year-over-year) was the slowest pace since early 2002–the plain fact remains that it continues to outstrip income growth,” Porter and Guatieri wrote.

Consumer credit slowed more than mortgages in the first quarter, as mortgage borrowing may have been boosted by a rush into the housing market ahead of tighter mortgage lending rules that took effect in March.

The debt-service ratio — the ratio of cash available to pay principal, interest and lease payments — also rose in the first quarter, due to weaker income growth and moderately higher borrowing costs.

Bank of Canada governor Mark Carney warned last week that Canada’s housing market is entering overheated territory and many Canadians could be financially hurt once interest rates begin to rise.

Carney has been cautioning Canadians for about two years against getting overextended on mortgage borrowing, but his speech to the Vancouver Board of Trade last week suggested some frustration that his words have mostly fallen on deaf ears.

The governor said he has been expecting the housing market to slow, but besides some stuttering signals, it has picked up again recently, along with borrowing and mortgage credit.

“Immigration continues to be a factor in supporting rental housing demand. Recent immigrants tend to rent first before becoming homeowners,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “In addition, condominium completions moved lower in the past months, while rental apartment unit completions remained relatively stable. As a result, the overall demand for rental apartment units increased faster than supply for this type of housing. Accordingly, this pushed Canada’s vacancy rate downward. “

The results of CMHC’s spring survey reveal that, in April 2011, the major centres with the lowest vacancy rates were: Winnipeg and Regina (0.7 per cent); Québec (1.0 per cent); Toronto (1.6 per cent); and Kingston (1.7 per cent). At the provincial level, Manitoba has the lowest vacancy rate at 0.7 per cent. All other provinces were above 2.0 per cent.

The survey reveals that the major centres with the highest vacancy rates were: Windsor (9.4 per cent); Kelowna and Abbotsford (6.6 per cent); and Charlottetown (4.9 per cent). On a provincial basis, the highest vacancy rate was in Alberta (4.7 per cent).

The Canadian average two-bedroom rent in new and existing structures was $864 in April 2011, compared to $848 in April 2010. With respect to the CMAs, the highest average monthly rents for two-bedroom apartments in new and existing structures in Canada’s major centres were: Vancouver ($1,181); Toronto ($1,124); Ottawa – Gatineau (Ontario Part $1,056); Calgary ($1,040); Edmonton ($1,029); and Victoria ($1,024). These are the only major centres with average rents at or above $1,000 per month. Provincially, the highest average monthly rents were in Alberta ($1,029), British Columbia ($1,015) and Ontario ($980).

The lowest average monthly rents for two-bedroom apartments in new and existing structures were: Saguenay ($542); Trois-Rivières ($546); and Sherbrooke ($577). On a provincial basis, the lowest monthly rents were:  Québec ($671); New Brunswick ($672); and Newfoundland and Labrador ($683).

Year-over-year comparisons of average rents can be slightly misleading because rents in newly built structures tend to be higher than in existing buildings. Excluding new structures and focussing on structures existing in both the April 2010 and April 2011 surveys provides a better indication of actual rent increases paid by tenants. Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased 2.2 per cent between April 2010 and April 2011, slightly higher than what was observed between April 2009 and April 2010 (1.8 per cent).

CMHC’s spring Rental Market Survey also found that the rental apartment availability rate in Canada’s 35 major centres was 4.3 per cent in April 2011, down from 5.4 per cent in April 2010. A rental unit is considered available if the unit is vacant (physically unoccupied and ready for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. Availability rates were highest in Windsor (11.3 per cent), Sherbrooke (8.7 per cent), London (8.3 per cent), Abbotsford (8.1 per cent) and Kelowna (8.0 per cent). The lowest rates were in Winnipeg (1.1 per cent), Regina (1.7 per cent), St. John’s (2.6 per cent) and Québec (2.8 per cent).

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

But now that the economy is improving, companies are concerned about keeping their top performers and attracting new ones. In order to retain their star talent, companies may be sweetening the pot with non-monetary benefits, according to a new Accountemps survey.

When chief financial officers were asked about the perks they plan to offer or are already offering, 29 percent said subsidized training and education topped the list. Twenty-four percent said flexible schedules, telecommuting and mentoring programs.

“On the heels of the recession, perks are a cost-effective way employers can reward and retain staff and attract new employees,” says Max Messmer, chairman of Accountemps and author of Human Resources Kit For Dummies. “The most popular incentives are those that aid in career development and give employees some control over their work schedules.”

The problem is, many job seekers and employees don’t know how to negotiate for such perks — they’re only used to bargaining for money.

“Many job seekers are tied to the notion that monetary compensation from a salary is the only factor to consider. What many fail to see is that there are many other benefits that hold ‘monetary value’ outside of what’s directly reflected on a paycheque,” says Tina Chen, vice president of operations for Employco USA, Inc. “Just because a company may not be flexible with salary negotiations doesn’t mean that they are not willing to offer other extras in lieu of a higher salary. There are many ‘perks’ that can make up for the difference to make the workplace more attractive.”

Some of these perks include but aren’t limited to extra vacation time, flexible scheduling, continuing education benefits or tuition reimbursement. And sometimes, negotiating these perks can actually be better than negotiating for a higher salary, says Bill Driscoll, district president of Robert Half International.

“Because perks typically are less costly, employers may have more flexibility to offer these benefits than a higher salary. Keeping this in mind, candidates may feel more comfortable asking for more perks than they do asking for more money,” Driscoll says.

There are several reasons why employers may not be willing to pay you a higher salary, says Jean Baur, senior consultant, Lee Hecht Harrison and author of “Eliminated! Now What? Finding Your Way from Job-Loss Crisis to Career Resilience.”

“It really has to do with company structure. A hiring manager can’t bring in a middle manager at a higher salary than the senior managers, so asking for a sign-on bonus or additional vacation days may be more successful,” she says. “It’s often a lot easier to get an extra week of vacation than it is to raise the base salary by $10,000.”

Additionally, there are instances when the worker’s performance or skill sets don’t merit a pay increase, says Driscoll.

“Most employers want to make sure that salaries correspond to the employees’ skill set and direct output versus meeting a ‘demanded salary,’” adds Chen. ”As more employers are becoming cognizant of hiring costs they want to make sure employees are delivering the level of work that is required and can exceed expectations. Employees have to prove that they are worth the asking price, so unless the employers feel they have seen exceptional work – chances are higher salaries will not be considered.”

Here are eight tips to help you negotiate for perks in lieu of a higher salary:

1. Be prepared for the discussion. “Research current trends related to perks in your area and industry, and understand the types the employer is most likely to offer,” Driscoll says.

2. Cover your position. “If you are negotiating for more vacation time, have a plan as to how your work will be covered in your absence,” Chen says. “This will alleviate the headache of your employer having to scramble to fill the gap and make the absence less visible.”

3. Present a business case. “Employees must be able to show how the perk they seek will help them meet not just their personal objectives but also benefit the company,” Driscoll says. “For example, by attending a seminar on a new industry software application, you can help your colleagues get up to speed on the new technology more quickly.”

4. Stay employer focused. “Before you ask for an item that will be beneficial to you, ask yourself how it will benefit the employer,” says Chen. If you’re asking for flex time so you can drop off and pick up your kids at school and would like to work 7:00 a.m. to 3:30 p.m. instead of 8:00 a.m. to 4:30 p.m., for example, try something like “Working 7:00 a.m. to 3:30 p.m. will also allow me to take the early phone calls that come through the reception desk, which generally go into the voicemail box. I can also accept the early packages that are delivered instead of having them being left at the front door where they can easily be stolen,’” Chen says.

5. Don’t be demanding. Remember you’re asking for, not entitled to, more vacation or a sign-on bonus, Baur says. “Prioritize what’s more important to you: is it money, flexibility, time off or health benefits — then only ask for one or two things. This is not the time for a laundry list as that could make the employer not want to hire you. If you negotiate in a positive way and limit your requests, you won’t lose the offer.”

6. Prepare a back-up plan. “Negotiating requires flexibility and employees should have a second option in mind in case their first choice is denied,” says Driscoll. “If your employer doesn’t allow you to telecommute, for instance, you may be able to work from a satellite office closer to your home.”

7. Be knowledgeable. Continuing education is not only beneficial for your personal growth but also to the company, Chen says. “If you want the company to pay for a course or seminar that you would like to attend – consider adding the following: ‘I am really interested in attending this workers’ compensation seminar on claim management. I feel by polishing up in this area I would be able to process the claims more effectively and minimize our exposure to pay on these claims.’”

8. Remain professional. “No matter the response to your request, stay positive, and always try to end the discussion on a positive note. If your request is denied, ask your manager if there are specific steps you can take to earn the perk in the future,” says Driscoll.

Original article by Rachel Farrell, Special to CareerBuilder

Decisions, decisions – make them now!

Your adult children have always enjoyed your vacation property but there’s no guarantee that will always be the case. Owning and maintaining a vacation property is a big responsibility and it’s not for everyone. That’s why you should talk with your children and find out who wants the responsibilities that accompany ownership, and who doesn’t. For example, if you don’t make those decisions now, you could leave an equal share of your cottage property to some of your children who might want to sell the property and use the money for other things. If any of your children want to keep the cottage, but don’t have the money to buy their siblings out, this could result in the property being sold even though this is not your desire. By talking it over now, you can make arrangements to ensure that the children who are interested in inheriting the property do so, while other assets are ear- marked for your other children.

Taxes, taxes – plan to deal with them now!

Unless you’re passing assets to a spouse or common-law partner, when you die, you’re deemed to dispose of all your capital assets at fair market value. If your vacation property has appreciated in value, there could be a significant capital gains tax liability. You may be able to claim the principal residence exemption on the property, but that exemption usually applies to only one property and if you choose to use it on your city home, the gain on your vacation property will be subject to tax.

Another way to help minimize the capital gain on the asset is to keep track of all capital improvements made to the property by keeping the receipts of all material and labour costs that have been incurred.

One efficient way to cover these taxes and other estate debts, for that matter—is with permanent life insurance. The death benefit is usually tax free, and can be used to cover your estate’s tax bill. Without this ready source of cash, your personal representative (i.e. your executor) may be forced to sell estate assets, including your vacation property, to pay taxes. Time at the cottage plan to share it now!

If your estate does have sufficient funds to pay the capital gains tax, and your heirs do choose to share your vacation property after the time of your death, then they should discuss what type of co-ownership agreement they want. It will be very important for them to come to an understand- ing regarding what will happen if any of the co-owners die, divorce or become bankrupt. They should also discuss how they will use the cottage (e.g. can they all use the cottage during the same weeks? Or will they divide the weeks during which they will have exclusive use?).

Another contentious topic can be maintenance will they all contribute equal financial amounts, as well as completing equal number of “chores” and “who” will decide what maintenance is necessary? If one of the co-owners does not live close by, some co-owners may be forced to do more of the work associated with the cottage than others – by agreeing to responsibilities in advance and seeking the advice of a lawyer for a co-ownership agreement suitable to everyone, this can help to prevent and defuse arguments later.

Let us help coordinate your wishes for your vacation property with all other aspects of your financial and estate plan. And to avoid unexpected personal or tax implications for you, your beneficiaries, or your estate, it’s a good idea to discuss all of the options with your tax and legal advisors and of course, us.

Click Here For More Free Financial Planing Guides

With all components considered, Canada’s overall inflation rate fell one-tenth of a point to 2.2 per cent over the 12 months to the end of February, with energy prices the biggest factor holding it from dropping even further. It was at 2.3 per cent in January.

Energy prices rose 10.6 in February from a year earlier, compared to a nine per cent pace in January, Statistics Canada said. Gasoline prices jumped 15.7 per cent during the month, from a 13 per cent annual pace in January.

Economists were expecting the core rate to come in at 1.1 per cent and the overall rate to drop only slightly to 2.3.

On a month-to-month basis, consumer goods were 0.3 per cent more expensive last month than in January, again mostly due to higher energy and gasoline prices.

On a regional basis, Nova Scotia remained the province with the highest inflation rate at 3.4 per cent. Many people in the province use oil and other fuel to heat their homes. Alberta continued to enjoy the most stable prices, with an inflation rate of 1.2 per cent. Drivers in every province except Manitoba faced double-digit price increases for gasoline on a year-over-year basis.

If you take all the money away from a millionaire, and the last CDN$20 away from someone just making ends meet, then give them both CDN$1,000 each, within five months the millionaire will be well on his way to increasing his wealth back up to a million and the ‘making ends meet’ person will be back down to the CDN$20 only in his pocket. The same situation can be applied to emigration. Why is it that the majority will do well, by pushing themselves forward and getting into jobs easily, yet, there are those that  moan and complain about everything?

Ironically, the complainers tend to have been of a similar nature in their homelands. They were never satisfied at work, in their home lives, or socially. Sad fact is they will always go through life complaining and doing very little to change it. Still to this day it amazes me how so many of us don’t or won’t accept that we are, for the most part, where we are in life, financially and otherwise, because of the decisions we’ve personally made. So, how much should you budget for emigrating? Well, some of you will survive within your comfort zones on the base amount the Canadian High Commission recommends. Others of you will come with a few hundred thousand dollars and still feel you are struggling, due to capital upfront purchase choices you made.

So whilst I will write as logically as I can, none of these figures are cast in stone for any one individual’s situation. First and foremost, will you have to budget for new furniture or are you shipping most of your home contents you already possess?

• Are you the type of person that happily accepts cutting your cloth to suit your pocket? That is accepting a lesser home rather than over-stretching yourself on mortgage payments and ongoing bills?
• A single person or couple without children, emigrating with say CDN$30,000 will likely do okay if they intend to rent for the foreseeable future. You will need first and last months rent up front, and unless on a good transportation route, will need to budget for a vehicle. In addition you will need to allow yourself a ‘safety net’, say a couple of thousand dollars a month to live on for the first three to four months (allow more in higher rental rate areas).
• A family emigrating with children or a couple intending to purchase a home and furnish it should allow at least 35 per cent of the purchase price to put down (if you have work, 25 per cent or less is possible with written confirmation of a permanent position). respective of whether you are able to qualify for a lower downpayment or not, seriously consider on first arrival always trying to put down the 35 per cent, to lower your monthly mortgage costs.

When budgeting it is crucial you check within a month of landing of what’s happening on the economy in your chosen area. It can blow any budget totally out of the water. Make sure you understand that the bigger the home the higher the running costs: gas, electric, property taxes, insurance and so on. I’m a great believer that people shouldn’t get carried away on the initial capital purchases. It’s all too easy when you have a couple of hundred thousand dollars in the bank. However, once that’s all gone, you’ve nothing to supplement your income to pay the everyday bills. For most the biggest variable will be what salary you can expect to earn. Someone earning CDN$120,000 a year can likely handle the bills of a CDN$600,000 or more home, but can someone earning CDN$50,000 a year?

So, in a nutshell, what should you budget for when emigrating?

• Finalizing your UK affairs. For example, house sale, lawyers, debts etcetera;
• The 35 per cent downpayment for your home, if applicable, plus CDN$1,500 incidentals;
• First and last month’s rent (variable; depending on destination and style of home)
• Shipping costs – ship all or nothing at all, it is your choice;
• Flights to Canada;
• Initial temporary furnished accommodation for first arrival;
• Travel and three month’s health insurance (where not covered immediately);
• Cost of living day to day – food, travel and household bills for three months or more;
• Purchasing a vehicle and auto insurance;
• Replacing furniture and/or electrical good;
• School fees (variable depending on Grade);
• Medications if applicable, such as diabetics;
• Childcare expenses or one income earning in the interim; and  don’t forget to add sales taxes where applicable.

The matter of setting your budget essentially boils down to what you want to achieve out of emigrating to Canada. You will feel much more comfortable as a family if you can emigrate with at least CDN$150,000 or more. Then you will at least get a foot on the property ladder in most areas, have enough for a vehicle, replace household electrical goods and cover the first few month’s living expenses.

Remember that, no matter how much you budget, for most of us, it’ll never be enough. Do make sure you put in a large contingency figure and veer on the higher end of costs, not lower.

Remember that if you emigrate to Canada that city to city, and province to province, costs vary. I said it before and I’ll say it again: It’s all about the personal choices you make.

“While we do not expect a significant correction nationwide, the risk of such would increase, especially in some regions, if prices were to continue to outrun incomes or if interest rates were to increase rapidly,” economist Sal Guatieri says.

He notes that after slowing last summer, Canadian home sales rebounded in the fall and house prices have kept rising.

On average, home prices rose five per cent in the past year to January, while in Vancouver they rocketed 20 per cent. On average, home prices are 10 per cent higher now than they were before the recession, when they were at an all-time high. The problem is that the value of homes have increased much faster than incomes.

The bank says average home resale prices compared with personal incomes are 14 per cent above the long-run trend, up from last summer, although still below the 21 per cent peak that preceded the 1989 crash. But that is not the case in all markets. Five provinces are currently in the danger zone, led by Saskatchewan, where the ratio is 39 per cent above historic norms.

Also well-above the long-run levels is Newfoundland, 34 per cent higher; British Columbia and Manitoba, 31 per cent, and Quebec, 23 per cent above.

By comparison, in Ontario the price-to-income ratio is only 10 per cent higher than historic norms, suggesting prices are moderately overvalued but not in bubble territory. What’s made this possible have been historically low interest rates which have allowed Canadians to carry bigger mortgages. As a result, mortgage payments for the typical owner consume 35 per cent of disposable household income, about the same as the 23-year average of 34 per cent.

The bank says there should be no major correction if incomes increase faster than home prices in the future, as expected. It says sales are expected to cool and prices stabilize this year in response to higher interest rates and tighter mortgage rules that go into effect later this month.

“The risk of a correction would increase, however, if prices rose alongside rates and incomes,” the report cautions.

If prices don’t stabilize, the report says it would put the Bank of Canada in a tight spot. It risks creating a housing bubble if it keeps rates super-low too long, or could precipitate a crash if it hikes rates too quickly.

The Bank of Montreal report is the latest to throw up caution flags about the seemingly unstoppable Canadian housing market. Last month, Capital Economics warned the Canadian housing bubble was poised to burst, needing only the pin-prick of rising interest rates to set off the collapse. The economic consulting firm noted that by historical standards, almost all the key indicators around housing were at historic highs. It predicted prices could fall 25-35 per cent in the next three years once interest rates and mortgage upkeep costs begin rising.

Still, most private sector analysts see a soft landing rather than a crash, in part because the Bank of Canada is unlikely to raise rates sharply or quickly.

There are many ways to protect yourself as you potentially make a major investment in a used vehicle. Here are ICBC‘s top five tips to help you make the right choice:

A little research can go a long way in protecting you when you’re buying a used vehicle. Arm yourself with as much knowledge as possible before signing on the dotted line and handing over payment. If at any point along the process something causes you concern, your best option may be to walk away from the sale. Importantly, if a deal on a vehicle seems too good to be true – it probably is.

Visit icbc.com for more tips on buying a used vehicle including important guidelines on transfer of ownership and registering, licensing and insuring your vehicle. You can also download a copy of our used vehicle buyer’s checklist and get tips on selling a used vehicle and buying a new vehicle.

Should you contribute to your RRSP, your TFSA or both?

The introduction of the TFSA represents the most important change to the way Canadians save money since RRSPs were launched in the late ‘50s. The big question on many people’s minds is whether they should contribute to a TFSA, the tried-and tested RRSP, or possibly even both? Before shedding some light on their question, let’s first get a firm grasp on some of the innate differences and similarities. First and foremost, both RRSPs and TFSAs provide investors with the opportunity of tax-sheltered compound growth for investments held inside each plan. Unlike an RRSP, contributions to a TFSA are not tax deductible, but amounts can be withdrawn tax free at any time and withdrawn amounts are added back into your TFSA contribution room the following year.

Now that we’ve established their unique characteristics, let’s get back to our original question: Which is best? On a very basic level, looking at your pre-retirement and expected post-retirement marginal tax rates can provide you with an idea how to best allocate your investments. If you expect to be in a lower tax bracket during retirement, contributing to an RRSP is generally more beneficial. However, if in retirement you anticipate being in a tax bracket that is equal or higher than your pre-retirement tax rate, the TFSA may be more tax-efficient.

Although it’s tempting to settle on a simple rule-of-thumb, the decision on whether you should use a TFSA or RRSP is not that simple – your advisor needs to work with you to consider the entire spectrum of financial strategies at your disposal that could ultimately impact your approach. Even if you anticipate having a lower marginal tax rate in retirement, maximizing your RRSP contributions may not always be the most tax-efficient long-term strategy. Since RRSP withdrawals (directly or through your Registered Retirement Income Fund (RRIF) or an annuity) increase your taxable income, those withdrawals may affect certain government income-tested benefits and credits such as the Old Age Security benefit and the Age Credit.

On the other hand, if your expected marginal tax rate in retirement is equal or higher than during your accumulation years, contributing to your TFSA may not be the best approach either. For example, RRSPs that are converted to a RRIF or an annuity after age 65 can produce income that is eligible for the pension income tax credit, and thus qualifies for pension income splitting with your spouse. Other income splitting strategies such as the use of spousal RRSPs could effectively distribute a portion of your taxable income to a spouse with a lower marginal tax rate in retirement, further reducing your tax bill and reducing the claw-back effect on your income tested benefits and credits.

So where does this leave us? Generally speaking, a TFSA may be better suited for shorter-term goals, such as an emergency fund or saving for a major purchase, since there is no tax on withdrawals and these plan withdrawals are added back into your TFSA contribution room the following year. However, for long-term objectives, RRSPs are generally the vehicle of choice since there are strong incentives to keep your money invested, such as taxes and lost contribution room on the withdrawals from an RRSP. The TFSA can also be a powerful retirement savings tool. However, due to the ease with which TFSA savings can be accessed (no taxes on withdrawals or loss of contribution room) only a disciplined investor who can resist the temptation to dip into their savings prior to retirement will fully benefit from its potential as a source of retirement income.

Remember, there is no one-size-fits-all solution. In fact, there is a multitude of variables that must be taken into consideration. In many cases, the TFSA should be used as a complementary product, along with your RRSPs, as they both have their own advantages. Your personal savings strategy needs to take into account your unique circumstances as well as your short and long-term objectives. To discover which approach is best for you, contact me.

Andrew Filice, CFP Call me on 1-800-561-0659 or email me at andrew.filice@investorsgroup.com

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The  survey in the three countries also shows that American men are searching for clothing, tools, furniture and electronics deals through group buying, while Canadian and British women use group buying to get spa, cosmetics or salon discounts.

Canada becoming more price sensitive after taking advantage of a group buying offer

Awareness

Groupon has effectively achieved “top-of-mind” status on this new category of group buying facilitators. About half of Americans (45%) have heard of Groupon, along with 35 per cent of Britons and 34 per cent of Canadians. Groupon has the highest level of awareness with competitors trailing far behind. Second to Groupon are WagJag in Canada (23%), EverSave in the U.S. (20%) and Groupola in Britain (9%).

About half of respondents in the three countries (USA 41%, BRI 55%, CAN 51%) had not heard of any of the group buying websites mentioned by name in the survey. In Britain, of those who hadn’t heard of the sites, two thirds were over the age of 55 (62%) while roughly half of those under 55 had not heard of them either (18-34: 53%, 35-54: 51%). American and Canadian men are more likely than women to have not heard of group buying.

Habits of Group Buyers

Americans are most likely to purchase restaurant or food-related group buying deals (46%), product deals such as clothing, tools, furniture or electronics (43%) or entertainment deals like movie and concert tickets (39%). British men are more likely to buy restaurant and food deals from group buying websites (44%) while women prefer spa, salon and cosmetic deals (37%). Canadian women also buy spa and salon deals (42%) but both genders participate in restaurant deals (70% of men and 59% of women). Deals for children are the least purchased in Britain and Canada (8% and 4%) while spa and salon deals are the least bought in the U.S. (13%).

Habits of Non-Group Buyers

Americans who have not bought a group deal say this is because they had not heard of the concept (12%) or aren’t interested in group buying (27%). One-in-five Americans (18%) who haven’t bought from any group buying sites say this is because they do not want to share their credit card information. In Britain, some of those who have not participated also cited not wanting to share their credit card information (14%) but for the most part hadn’t seen any deals that were of interest to them (59%). When asked why they have not bought any group deals, Canadians mentioned not having heard of group buying until now (37%) or not having seen any deals they wanted to participate in (27%).

Regional Differences

In the United States, awareness about the concept of group buying is lowest in the Midwest with 46 per cent of respondents saying they have not heard of any of the listed group buying websites. Two thirds of people in the Northeast have heard of one or more of the sites (67%). Awareness is consistent throughout Britain, although Scotland has the highest level of awareness (53% of Scots have heard of one or more of the sites listed). In Canada, awareness is lowest in the Atlantic Provinces and Quebec (74% report having not heard of any of the websites listed) and highest in British Columbia, where 65 per cent of respondents have heard of one or more group buying websites.

Gender Differences

In Canada, women are driving the group buying trend, with 19 per cent having bought from Groupon (compared to 11% for Canadian men). Both genders are equally likely to purchase from group buying sites in the United States (Men 20%, Women 19%) and Britain (Men 20%, Women 17%).

Men in Britain are most likely to allow a group buying deal they’ve purchased to expire before they get a chance to use it (44%). Less than a quarter of British women (24%) have allowed a deal they bought to expire. In Canada, women are more likely than men to tell their friends about group buying deals they’ve seen using Facebook, Twitter or email (46% of women and 27% of men). As a result, one third of Canadian women who have purchased a group deal have received a referral incentive (29%). Nearly half of Americans who have bought a group deal have purchased it as a gift for someone else (45%).

Effects on Consumer Loyalty

In Britain, 26 per cent of men have purchased a deal, used it at a vendor, and then returned to that same vendor at full price. Only seven per cent of British women return to pay full price. American men are twice as likely as women to return (36% to 18%). In Canada, women are more loyal (28%) than men (19%) when it comes to returning to a vendor at full price.

Purchasing Habits

Among the three countries studied, Americans are least likely to pay full price and try to seek out a deal (35%), followed by Britons at 31 per cent and Canadians at 29 per cent. Almost two thirds of American men (64%) are willing to pay more for something they really want, but prefer to get a deal. Two thirds of women in Britain (68%) like to get a deal but will pay full price for something they really want. In Canada, 70 per cent of men and 65 per cent of women like to get a deal but will pay full price if required.

Al least three-in-five Britons (68%), Americans (66%) and Canadians (62%) who have bought a group buying deal say it has made them more price-sensitive and as a result they now think twice before paying full price.

Long-Term Effects

Two-in-five British men (40%) and one third of Canadian men (33%) who have purchased from a group buying website, feel that group buying ultimately harms the small businesses that participate in it—only 19 per cent of British women and 13 per cent of Canadian women share this view. Three-in-ten Americans (29%) feel group buying is detrimental to small business.

The trend of group buying is on the rise, as evidenced by the many websites that have followed Groupon’s model. More than two thirds of respondents in all three countries who have made a purchase from a group buying website say that the concept will affect the way consumers shop in the future (CAN 74%, BRI 64%,USA 61%).

Full Report, Detailed Tables and Methodology (PDF)

The 2.4 per cent annual gain was just under the 2.5 per cent that a consensus of analysts was expecting.

On a seasonally adjusted basis, consumer prices rose 0.3 per cent from November to December. The increase in gasoline prices was the main factor in that gain, too, the agency said. December’s increases helped contribute to a general growth in consumer prices throughout 2010.

The 2.4 per cent annual gain was just under the 2.5 per cent that a consensus of analysts was expecting.

For the year, Canada’s inflation rate averaged 1.8 per cent, much higher than the 0.3 per cent average in 2009, when inflation at times dipped below zero.

“For 2010 as a whole, prices increased in seven of the eight major components … the exception was clothing and footwear,” the agency reported.

“Prices rebounded in the transportation and shelter components — rising in 2010 after declining in 2009 — driven by price increases for energy and passenger vehicles.”

Still, economists note that inflation remains relatively tame in Canada. The much-watched Bank of Canada core index, which excludes volatile items such as energy, rose only one-tenth of a point in December to 1.5 per cent. That is still well below the central bank’s desired target of two per cent.

“Inflation averaged 1.8 per cent for all of 2010, up from 0.3 per cent in 2009, but still quite tame considering the HST [harmonized sales tax] in Ontario and B.C. hiked the total by nearly 0.4 percentage points,” BMO economist Doug Porter noted.

But for the energy component, so-called headline inflation would also be well-anchored below two per cent at 1.8 per cent.

Energy costs were higher across the board last month. Along with gasoline, natural gas rose 9.2 per cent from last year, electricity 6.2 per cent, and transportation costs, which are heavily influenced by gas prices, rose 4.9 per cent.

Costs of vehicles, shelter, food rise

Inflation pressures on most other items measured by Statistics Canada tended to be more moderate. Consumers paid 4.3 per cent more for passenger vehicles; 2.7 per cent more for shelter; 1.7 per cent more for food; and 1.7 per cent more for household operations, furnishings and equipment.

“The annual trend in food prices rose, but will hardly ring any alarm bells,” Porter noted.

Meanwhile, mortgage interest rate costs declined 2.5 per cent in December and clothing and footwear fell by two per cent on an annual basis.

Regionally, the agency said consumer prices rose in every province last month. Ontario continues to have the highest inflation rate in the country at 3.3 per cent.

The muted core rate likely gives the Bank of Canada more leeway in holding steady on interest rates.

After cutting the rate to a record low of 0.25 per cent during the recession, the central bank raised the rate in June, July and September before standing pat in its three policy decisions since then.

In explaining the decision to leave borrowing costs alone for the third time in a row, as expected by the markets, the Bank of Canada said the global recovery is “proceeding at a somewhat faster pace” than policy makers had anticipated last fall, though “risks remain elevated.”

The Canadian economy will grow 2.4 per cent this year and 2.8 per cent in 2012, the central bank said, in a teaser to a full quarterly forecast it will release Wednesday. That compares with an October forecast of 2.3 per cent growth for this year and 2.6 per cent in 2012.

Bank of Canada Governor Mark Carney left his benchmark interest rate at 1 per cent today (18 Jan 2011)

Updated Info:

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding at a somewhat faster pace than the Bank had anticipated, although risks remain elevated. Private domestic demand in theUnited States has picked up and will be reinforced by recently announced monetary and fiscal stimulus. European growth has also been slightly stronger than anticipated. Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. In response to overheating, some emerging markets have begun to implement more restrictive policy measures. Their effectiveness will influence the path of commodity prices, which have increased significantly since the October Monetary Policy Report (MPR), largely reflecting stronger global growth.

The recovery in Canada is proceeding broadly as anticipated, with a period of more modest growth and the beginning of the expected rebalancing of demand. The contribution of government spending is expected to wind down this year, consistent with announced fiscal plans. Stretched household balance sheets are expected to restrain the pace of consumption growth and residential investment. In contrast, business investment will likely continue to rebound strongly, owing to stimulative financial conditions and competitive imperatives. Net exports are projected to contribute more to growth going forward, supported by stronger U.S. activity and global demand for commodities. However, the cumulative effects of the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance are restraining this recovery in net exports and contributing to a widening of Canada’s current account deficit to a 20-year high.

Overall, the Bank projects the economy will expand by 2.4 per cent in 2011 and 2.8 per cent in 2012 – a slightly firmer profile than had been anticipated in the October MPR. With a little more excess supply in the near term, the Bank continues to expect that the economy will return to full capacity by the end of 2012.

Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the Canadian economy. Core inflation is projected to edge gradually up to 2 per cent by the end of 2012, as excess supply in the economy is slowly absorbed. Inflation expectations remain well-anchored. Total CPI inflation is being boosted temporarily by the effects of provincial indirect taxes, but is expected to converge to the 2 per cent target by the end of 2012.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Flaherty’s announcement comes on the heels of a recent warning from the Bank of Canada that Canadians’ domestic debt burden is the highest on record.

The announcement included three new rules for the mortgage industry:

• Mortgage amortization periods will be reduced from 35 years to 30 years.
• The maximum amount Canadians can borrow to refinance their mortgages will be lowered from 90 per cent to 85 per cent of the value of their homes.
• The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.

“Taxpayers should not bear any risk related to consumer debt products unrelated to house purchases. Those risks should be managed by the financial institutions that originate and offer these practices,” Flaherty said Monday.

Finance Minster Jim Flaherty

The new restrictions are intended to ensure that Canadian don’t slip into unmanageable debt, which could throw the economic recovery off the rails, he said.

“Today’s measures are about our government continuing to protect the stability of the economy by ensuring lenders’ practices are sustainable, which will in turn ensure Canadian families have increasingly secure and sustainable home ownership.”

“This will also help increase the savings of Canadian families, savings of tens of thousands of dollars over the life of a mortgage.”

The Bank of Canada announced earlier this month that Canadians’ domestic debt burdens had hit the highest levels on record. The bank said the ratio of household debt to disposable income has reached 147 per cent. Canadian household debt is now at $1.4 trillion, while mortgage delay payments have increased by 50 per cent. The International Monetary Fund recently warned that household debt is the number one risk to the Canadian economy.

The change would add 100 per cent of condo fees to the expenses considered when a buyer is applying for a mortgage. Currently, only 50 per cent of the fee is considered. Toronto realtor Brad Lamb says the move is going to push a lot of people out of the market.

“A lot of people are going to get locked out of buying a condo, which, in most cities in Canada, is the most affordable option for housing,” he said. “It’s a terrible idea.”

The maximum length of a mortgage could also come down from 35 years to 30.

“You’re talking $150 to $200 more per month, which works out to $40,000 in purchase price,” Lamb said.

Craig Alexander with TD Bank says the new rules might not take people out of the market completely.

“It really wouldn’t take people out of the market. It would mean people would end up taking a lower mortgage and buying a lower-priced house,” he said.

Prime Minister Stephen Harper acknowledged the rumours of the new rules.

“The government remains concerned about growth and the level of household debt, and will look at taking prudent steps to moderate that growth,” he told reporters. “We’ve seen some moderation recently.”

There is also speculation the government might increase the minimum downpayment required. Currently it is five per cent.

Every province and territory in Canada has it’s own rules regarding people who die intestate (without a will) and how their estate will be divided.

Many people don’t think about what will happen to our belongings and finances after death, after all you won’t be around to care – but someone will be. That someone could be a spouse, relative or friend and if you haven’t prepared in advance you could be leaving a potential nightmare for those left behind. By having a will you are clearly laying out how you want your estate to be handled after you are gone.

Many people think that they don’t have to bother with a will as they haven’t got much to leave behind, or they only have a few relatives and feel sure it will all get sorted out in the end, but this may not be the case. Every province and territory in Canada has it’s own rules regarding people who die intestate (without a will) and how their estate will be divided. You may find that your estate might not go to who you think! The following details give an overview of the way an estate might be distributed if a person dies intestate. In most cases if there is no spouse or children the estate will then go to grandchildren, parents, siblings, nephews and nieces etc.

Property jointly owned with right of survivorship, joint bank accounts and life insurance may be exempt from the estate as it is automatically transferred to the surviving person after death.

British Columbia

In BC the Estate Administration Act dictates how a persons estate will be distributed after death if no will is in place.

If a person dies, leaving only a spouse (no children) then the entire estate goes to the spouse. If the deceased has both a spouse and children then the spouse will receive the first $65,000 of the estate and the remaining amount of the estate will be divided equally between the spouse and children. Illegitimate children are included in this equation but step-children are not.

If you die but have no living spouse, only children, the estate is divided equally between them. If a child dies before you then their share of the estate will go to their surviving children. If the deceased child does not have children then the estate goes to the surviving children only.

If you have no spouse, children or grandchildren then the estate goes to your parents. If your parents are no longer living then your siblings share the estate. If a sibling pre-deceases you then their share passes to their children.

Finally if you have no siblings your estate will be divided equally between any nephews and nieces or closest direct relatives.

Alberta

In Alberta the Intestate Succession Act states who get what if no will is left. If the deceased leaves just a spouse then the entire estate will pass to the spouse.

If the deceased has a spouse and one child, the first $40,000 will go to the spouse and the remaining estate divided equally between the spouse and child. If there is more than one child the spouse receives one third of the remaining estate and the remainder is split equally between the children.

If the deceased has no spouse, only children the estate is divided equally between them. In the event there is no spouse or children then the estate goes to the parents of the deceased. If the parents pre-decease you then your estate will go to siblings in equal share or to the children of deceased siblings. If there is no immediate family the estate is divided between other next of kin.

Manitoba

The spouse of the deceased will receive the entire estate if there are no children. If the deceased has a surviving spouse and between them they have children, then the spouse will again receive the entire estate. If the children of the deceased are not the children of the surviving spouse then the spouse will receive one half of the estate or $50,000, whichever is greater with the remainder being shared between the children.

If you die in Manitoba and have no spouse or children then the estate goes to your parents. If there are no surviving parents the estate is divided between the next of kin.

Saskatchewan

If only a spouse survives the deceased the entire estate will go to them. However if the deceased is survived by both spouse and children the spouse will receive the first $100,000 of the estate and the remaining estate will be shared half and half if there is one child. If there are two or more children the spouse will receive one third of the estate and the remainder will be divided equally between the children. If there is no spouse or children the estate goes to parents, then to siblings, then nephews and nieces.

Ontario

If a person dies and only leaves a spouse, that spouse will receive the entire estate. If the deceased has no spouse the estate is divided equally between any children. If the deceased has a spouse and children the estate will be divided as follows: The spouse will receive the first $200,000 from the estate and the remaining estate will be divided equally between the spouse and a single child. If there is more than one child then the spouse will receive one third and the remaining two thirds will be divided equally between the children.

If there is no spouse or children, then the parents of the deceased will share the state. If there are no parents then the siblings will share the estate followed by nephews and nieces and then next of kin.

Québec

In Québec, the Civil Code of Québec dictates who succeeds if no will is left and it is very different to the rest of Canada. If the deceased is married and the marriage contract or civil union contains a clause stating that the surviving spouse should receive the whole estate then that is what happens. However if no such clause exists the estate is divided as follows: If the deceased has a spouse and children the spouse will receive one third and the remaining estate will be divided equally between children. If there are children but no spouse the estate is divided equally between them.

If there is a spouse, but no children or other descendants the spouse will receive the estate, however if there are other descendants the spouse will only receive one third of the estate and the remaining estate will be divided between descendants consisting of parents, siblings, nieces and nephews etc.

Nova Scotia

A surviving spouse shall receive the whole estate if there are no children. If the deceased has both a spouse and children the estate will be divided. The spouse shall receive the first $50,000 and the remaining estate will be divided equally between a spouse and one child or one third to the spouse and two thirds to two or more children.

If there are children but no spouse the estate will be shared equally between them.After this the order in which the estate is distributed is parents, siblings, nephews and nieces the next of kin.

New Brunswick

In New Brunswick there is a term known as “marital property” this includes property that was owned by one or both spouses before or during marriage such as shelter, transport, recreational property and business assets.

If the deceased dies leaving only a spouse the spouse shall receive the whole estate. If there is a spouse and one child the spouse shall receive the material property and one half of the remaining estate, the other half going to the child. If there is more than one child the spouse shall receive the material property and one third of the remaining estate. The remaining two thirds shall be divided equally between the children.

If there are children but no spouse the estate will be shared equally between them. Thereafter the estate is shared equally between grandchildren, parents, siblings then any other next of kin.

Prince Edward Island

If only a spouse survives the deceased they will receive the entire estate, however if there are children the estate is divided. The spouse will receive the first $50,000 of the estate and the remainder will be divided as follows: if there is one child the spouse and child will share the remainder equally. If there is more than one child the spouse will receive one third and the remaining estate will be split equally between the children.

If there are children but no spouse the estate will be divided equally between them. Thereafter the estate is shared equally between parents, siblings then any other next of kin.

Newfoundland and Labrador

A surviving spouse will receive the entire estate if there are no children. If there is one child the estate will be divided equally between the spouse and the child. If there is more than one child the spouse shall receive one third of the estate and the children the remaining two thirds, shared equally. If there are children but no spouse the estate will be shared equally between them. If there are no spouse or children then the parents share the estate, thereafter the siblings, nephews and nieces then other next of kin.

Northwest Territories

The surviving spouse shall receive the whole estate if there are no children. If there are children the spouse will receive the first $50,000 of the estate and the remaining estate shall be divided in half between a spouse and one child, or one third to the spouse and two thirds to the children if there is more than one. If there are children but no spouse the estate will be shared equally between them. If there are no spouse or children then the parents share the estate, thereafter the siblings, nephews and nieces then other next of kin.

Nunavut

If only a spouse survives the deceased they will receive the entire estate, however if there are children the estate is divided and the spouse will receive the first $75,000 of the estate and the remaining estate shall be divided in half between a spouse and one child, or one third to the spouse and two thirds to the children if there is more than one. If there are children but no spouse the estate will be shared equally between them. If there are no spouse or children then the parents share the estate, thereafter the siblings, nephews and nieces then other next of kin.

Yukon

A surviving spouse will receive the entire estate if there are no children. If there is one child the estate will be divided equally between the spouse and the child. If there is more than one child the spouse shall receive one third of the estate and the children the remaining two thirds, shared equally. If there are children but no spouse the estate will be shared equally between them.

Conclusion

There are many factors which can affect claims to estates and everyone is recommended to make a legal will to be sure your estate will be divided as you would want.

People in common-law or same sex relationships should always consult a lawyer regarding wills as different rules apply in different areas. For example in Quebec a common-law, gay or lesbian relationship is not recognized by intestate laws.

If your circumstances change such as a marriage, separation, divorce etc you should rewrite your will as these factors may void a previous will unless stipulated otherwise. Don’t think of a will as a morbid thing, rather as a gift to those you leave behind enabling them to settle your estate more easily and to your wishes.

Article Author: Jane Toombes C0-owner Muchmor Magazine

Existing newcomers, please feel free to add your typical costs for essential services or other items via comments as this is really useful information for everyone.

Prepare financially before you leave

Determine how much it costs to live where you are planning to settle in Canada. The cost of living will vary depending on where you decide to settle but some costs will be typical for items and services across Canada.

Check with your banker, lawyer, or financial adviser to find out if your home country has a limit on how much money can be removed. Find out more about bringing money with you to Canada and items you can import duty free and tax free on the Canada Border Services Agency website.

If you will be immigrating to Canada as a skilled worker, investor, entrepreneur or as a self-employed person you will have to provide proof that you have sufficient funds to support yourself and your family after you arrive in Canada. You will need to provide proof of your funds to the Canadian visa office in your home country when you submit your application for immigration.

Here are some typical costs for items and services in Canada.

Typical Canadian living costs

Household expenses - Your everyday costs

Up to half your take-home pay in Canada can be taken up by household expenses. These expenses include the cost of your home, heating and other utilities, food, clothing, health insurance and transportation.

Your home will cost the most

Most Canadians spend 35 to 50 percent of their income on housing and utilities. This includes the cost of renting your home or paying your mortgage (a mortgage is a long-term loan.) It also includes the often-high cost of heating your home and paying for electricity, telephone service and water.

If you rent

Many newcomers choose to rent an apartment on a monthly basis. Rental costs vary across cities and across Canada; they usually cost less outside large cities.

You will likely pay at least $350 a month to rent a room and at least $2,000 a month to rent a larger apartment or a large house. An immigrant-serving organization where you plan to settle can help you find a home that you can afford.

If you buy

If you want to buy a house, you will probably need to get a mortgage. Banks and other lending institutions give mortgage loans. They decide whether you have enough income, enough assets (things you own) and a good credit rating. Most banks will ask you to pay at least 10 percent of the cost of the house from your own money.

In addition to your mortgage payments, you will have to pay for property tax and household insurance. If you plan to purchase a condominium (condo), you will have to pay other fees.

You can compare the costs of housing in communities across Canada in the city profiles section of the Canada Mortgage and Housing Corporation (CMHC) website.

Health insurance

Some provincial and territorial health programs may not cover some newcomers for the first three months they are in Canada.

You should check with the ministry of health in your province or territory as soon as you arrive in Canada to see if you will need to buy extra health insurance.

Basic expenses

Food will be a basic expense and costs will depend on the size of your family. This cost can double if you often eat in restaurants or choose to buy specialty items.

Clothing expenses may be less than 10 percent of your take-home pay, but you may spend a lot more if you buy your clothing at designer stores. Second-hand shops sell used clothing and furniture at very low cost.

Alcohol and cigarettes

Some people include alcohol and cigarettes as part of their budget. Alcohol and cigarettes are expensive in Canada because they are heavily taxed.

Transportation

Many Canadian families have one or more cars. Canadians either buy their cars new or used or they lease them, which is a form of rental.

Make sure you think of all the costs before you decide to buy or lease a car. For example, when you own a car you will have to pay to keep it working well, for gas, monthly loan payments, registration and insurance. When you lease a car you will sign a contract to have the car for a set period of time. You will pay the same costs as you do when you own a car.

Many Canadians also choose to use public transportation, walk or bike.

Car insurance

It is the law that all cars must be insured and registered with your provincial or territorial government. Car insurance can be expensive, but it protects you and other drivers in case of an accident. In most provinces, you can find more information by contacting the Insurance Bureau of Canada.

Be ready for occasional expenses

Living in Canada, you will find that every now and then you have to make payments for occasional expenses. Some examples: buying prescription medicine (not covered by health insurance), school supplies and long-distance calls to friends and family in your home country.

Learn more about the costs for living in major cities across Canada at Statistics Canada’s website.

For more help understanding how to plan your finances and pensions when relocating to Canada talk to our experts.

“The perceptions don’t reflect the fact that things have been getting better for now a year and a half,” TD chief economist Craig Alexander told a gathering of the Economic Club of Canada in Toronto.

“There’s no question that the recession is over, so how do you actually reconcile the poll results with what the economic forecasters are talking about?”

Canadians list worries over the cost of living as one of their top concerns for the economy in 2011

Pessimistic Canadians

Economists declared the recession had ended in mid-2009 and had managed six quarters of economic growth and recovered all of the jobs lost during the recession. Still, Canadians don’t feel as optimistic.

The poll conducted by Pollara for the Economic Club of Canada suggests that 38 per cent of respondents believed that the Canadian economy would improve over the next year, compared with 54 per cent of those polled in December 2009. Also, some 20 per cent said the economy would worsen in 2011, compared with 14 per cent who felt that way one year ago.

Almost 30 per cent of respondents said the economy is in a state of moderate growth heading into 2011, compared with just 17 per cent last year. But concern over a severe recession occurring has dropped to 10 per cent from 17 per cent.

“Canadians were feeling overly bullish on economic recovery this time last year,” said Michael Marzolini, chairman of POLLARA. “But clearly, these lofty expectations in Canada and around the world have not yet been met, and Canadians are now more measured in their feelings about the economy.”

Cost of living

Among the major economic concerns of Canadians, 78 per cent cited the cost of living; 72 per cent noted the government deficit and national debt; 70 per cent listed having enough money to retire as their chief concern; 69 per cent said health-care costs were their No. 1 concern; 57 per cent responded with value of their investments; and 55 per cent marked their own family debt load as their top priority.

Despite lesser optimism, Canadians are much more confident about the domestic economy than prospects elsewhere. Some 42 per cent of Canadians feel the U.S. economy will actually worsen in 2011, compared with only 19 per cent who feel it will improve. On a larger scale, 43 per cent of Canadians feel the global economy will worsen in the next year, while only 20 per cent expect the global economy to improve.

“Canadians are reflecting, rightly, that the job market isn’t as good as it was when times were good and they say ‘we’re in recession’ because of that, where economists say ‘we’re in recovery’ because we’re not as bad as we were during the recession,” said CIBC chief economist Avery Shenfeld.

Canadians will get a first look at how the economy is faring when Statistics Canada issues its jobs report for December on Friday. Economists expect that the economy created another 20,000 jobs, on top of the 15,200 created during the previous month.

“Being mentally and socially active is important at any age, and we are happy to see that these are the main reasons Canadians continue to work after they retire, says the report.

“For the number of Canadians who feel they will not be financially prepared to retire we understand that planning for retirement can often be overwhelming and we want to help Canadians invest for their future so they can achieve their ideal retirement.”

It's important to plan ahead for your retirement

The study found that 56 per cent of Canadians think they will need less than one million dollars to fund their retirement, half of whom believe they will need less than$300,000. More than one-quarter of Canadians (28 per cent) think they will need between one and two million dollars and 16 per cent believe they will need two million dollars or more to fund their ideal retirement.

“While there’s no magic number that Canadians should be aiming for when saving for retirement, it’s important that Canadians are realistic about how they plan to spend their retirement and how much it will cost,” says the report.

“Whether it be $250,000 or$1,000,000, it can be daunting to think about needing such a large sum of money, so it is equally important for Canadians to consider how much they can afford to put away for retirement and understand what that amount will mean for them down the road.”

When it comes to how they plan to spend their retirement, the majority of Canadians plan to travel (86 per cent), spend time with family and friends (72 per cent), read (61 per cent) and exercise (60 per cent). Other retirement plans include taking up a hobby (50 per cent) and going back to school (24 per cent).

As for saving for retirement, three-quarters (78 per cent) of those expecting to retire are currently putting money away for their future and they have been doing so for an average of 15 years. Half of Canadians (55 per cent) who plan to retire report saving less than $20,000 over the past five years.

“We all know that it’s important to invest for our future, but with so many demands on our time and money it can be easy to put off saving for a goal that often seems far away.”

While the bulk of money for retirement will come from RRSP contributions and savings (78 per cent and 68 per cent respectively), many Canadians indicated their retirement would also be funded by money from the government (63 per cent), their work pension (55 per cent) or inheritance (27 per cent). A small number of Canadians expect to have retirement money come from the lottery (five per cent) or their kids (four per cent).

For more information about investments and pensions please click here

Canadians to pay more taxes in 2011

For working Canadians, however, 2011 will go down as the year they saw their net pay stubs shrink, in some cases by significant amounts.

“Everybody loses, but some people are bigger losers than others this year,” says Derek Fildebrandt, national research director with the Canadian Taxpayers Federation.

“It’s not a direct increase to actual income taxes, but the way it works out, we are going to be paying more from our paycheques towards the government.”

All workers will be paying higher premiums for employment insurance and the Canada Pension Plan, adding up to $76 more on anyone earning greater than $44,200. But a quirk in the way Ottawa indexes tax brackets to adjust for inflation means most Canadians will be paying higher income taxes as well, says the federation.

Ottawa calculates the indexing of tax rates using a two-year rolling national average for inflation, whereas workers experience inflation annually and based on where they live and often receive wage increases based on local rates.

According to the federation’s calculations, some families in Ontario — where inflation was highest last year — will wind up paying over $1,000 more in taxes in 2011 compared with 2010.

In order of who pays more, Ontario tops the list, followed by British Columbia and Newfoundland, tied for second, and Nova Scotia in third.

On average, a family with one earner and an income of $45,000 will pay about $184 more in taxes next year. A similar family with an income of $100,000 will pay $437 more. But in Ontario, those same families will wind up paying $390 and $1,077 more respectively, according to the lobby group.

The trouble, says Fildebrandt, is inflation was about one point higher last year than in the 2009, so many Canadians who got a cost-of-living adjustment in 2010 will be bumped into a higher tax bracket, since it was greater than the two-year average.

Ontario residents would be hit hardest because the province’s inflation rate has been consistently higher than the national average.

British Columbians also are disproportionately impacted by inflation since it could push many, particularly those in lower incomes, into a higher bracket in terms of the province’s health-care tax. Other changes announced by the federal government, this time on the benefit side, include a 1.7 per cent boost in CPP benefits to a maximum $960 a month, and a 0.5 per cent increase in Old Age Security to a maximum $524.23.

As well, Ottawa is allowing a five-point increase in the deductible portion of meal expenses for long-haul truckers, from 75 to 80 per cent.

But Canadians will no longer be able to receive a federal credit of up to $1,500 for improving the overall energy efficiency of their homes starting Jan. 1 2011. The major change this year is on the corporate side, where the business tax rate falls from 18 per cent to 16.5 per cent. It is due to fall to 15 per cent in 2012. The $1.65-billion gift to firms next year, rising to almost $4 billion in 2012, has become a key political bone of contention that is likely to be much debated in the next election campaign.

Finance Minister Jim Flaherty, in a statement released at the end of 2010, said the reductions place Canadian companies in a good position to compete globally and create jobs at home.

Canada's property market performed well during 2010

But while the Canadian home market was among the best performing, it was also one of the most volatile, the report notes. Home sales were unusually active during the winter and spring, but dropped off substantially during the summer, according to the report. It says that over the fall, sales returned to a more typical level.

“We are neither overtly optimistic nor pessimistic regarding the outlook for 2011,” said Adrienne Warren, a senior economist with Scotia Economics.

She expects interest rates to remain low well into 2011, providing an inducement for first-time and move-up buyers, which will keep sales at a decent level. However modest employment and income growth is expected to restrain the market somewhat.

“Overall, we anticipate a fairly lacklustre year for residential housing, with modestly higher sales volumes and flat inflation-adjusted prices,” Warren said. “The bigger risk likely awaits in 2012, when more significant interest rate increases, combined with record-high home prices, will notably strain affordability.”

Australia had the hottest real estate market in 2010, according to the report, with home prices rising nearly 10 per cent over the year.

Demand there was supported by low unemployment and a tight housing supply.

“While Australia’s close trade ties with Asia and resource wealth will continue to underpin a solid pace of domestic activity, higher interest rates will worsen already strained affordability,” Warren said.

France, Sweden, Switzerland and the U.K. also recorded growth in their housing markets.

Germany and the United States were flat in 2010, even as the U.S. market struggled to rebound from a 30 per cent price correction over the previous four years. Ireland, Italy, Japan and Spain all recorded price drops. Ireland’s market was the worst among the 12 nations tracked. It posted double-digit price declines in 2010. Weak demand, oversupply and high unemployment are expected to keep Ireland’s housing market in decline well into 2011.

Yet despite legacy-preferences having raised the eyebrows of sceptics pretty much since the idea’s inception, many universities still use family-alumni status as a deciding factor when assessing applicants.

Unfortunately, though, this type of family-and-friend favouritism doesn’t stop in college. Though there is no officially sanctioned system for nepotism in the workplace like there is in the higher-ed admissions process, it doesn’t seem to make it any less common.

Think about pop culture or politics, for example. Nepotism — which literally means “favouritism based on kinship,” according to Merriam-Webster — can be widely found in both.

Take Tori Spelling. Though she made a pretty convincing “Donna” in the nineties-series “90210,” it’s no secret that her dad, Aaron Spelling, was the show’s producer and a big influence on Tori’s role on the series. In U.S. politics, there’s the Kennedy family. During his time as President of the United States, John F. Kennedy appointed his brother as U.S. Attorney General. It all just makes you wonder if, despite any talent, these privileged relatives got to where they are because of their family ties.

At first glance, these advantages may not seem fair to the rest of us, who are expected to achieve success through mere merit. But when you think about it, isn’t nepotism kind of the same thing as asking a friend to pass your résumé on to her HR department, or landing an internship through a neighbour?

Are you well connected?

Yes and no. According to the experts, while there is certainly some overlap between nepotism and networking — both of which use connections to help get ahead — there is also a distinct difference between the two.

“There is indeed a difference between nepotism and networking,” says Nancy Irwin, a doctor of clinical psychology who has worked with Hollywood creative artists. “With the former, you are given an opportunity [or] work. With the latter, you create it and build it yourself. [Networking] is healthier psychologically for all parties concerned, because it is built on worth, not a favour.”

Lynne Sarikas, director of career services at Northeastern University’s Graduate School of Business Administration, agrees with Dr. Irwin’s conclusions. “Networking is not taking the easy way out; it is work, it takes time and the process needs to be managed but it is the single most effective tool in the job search arsenal.  While you will likely start your networking with family and friends, it should quickly expand to alumni connections, LinkedIn connections, former colleagues, etc. Nepotism is an attempt to shortcut the job search process and it often backfires,” she says.

Why? Because with nepotism, a candidate’s qualifications — beyond being a relative of a current employee — often aren’t considered, which can lead to a company hiring an unfit candidate. “Someone getting a job that they are not qualified for simply because of who they know is nepotism in my book,” Sarikas says.

John Boyd, founder of online networking portal Meetingwave.com, also feels that nepotism without merit ultimately causes resentment and harm within a business. “When a son or daughter is anointed with an elevated position despite a lack of talent, it seeds resentment among other workers and [causes] other disruptions. There’s a strong sense of unfairness and lack of a level playing field. If the person is unsuitable, the business is hurt,” he says.

Though nepotism is often a poor hiring practice for a company or industry, Boyd does still feel there is a place for it in the working world —  so long as the beneficiary is qualified for the job. “Often the offspring don’t fall far from the tree. So a great actor often has kids that are talented, etc. Jeff Bridges is a great actor — despite any benefit he might have received from being the son of Lloyd Bridges — and his brother Beau is pretty good as well. I guess it’s in their genes,” he says.

While nepotism — at least without merit — seems unfair to those of us who don’t have relatives in high places, Dr. Irwin believes that we may be better off in the long run without family favours, since it forces us to create our own networks. “Networking for oneself builds self-sufficiency and confidence. Those really can’t grow when it’s given to you by a family member,” she says.

Writers Bio: Kaitlin Madden is a writer and blogger for CareerBuilder one of our partners and its job blog, The Work Buzz. She researches and writes about job search strategy, career management, hiring trends and workplace issues.

158,000 British Pensioners living in Canada have their British pensions frozen without any cost of living increases.  Meanwhile, pensioners living in the United States, Israel, Philippines, Slovenia, Bosnia-Herzegovina, any European Union country, as well as many more, receive annual cost-of-living increases the same as the increases they get if they lived in the UK.

The UK is the only western nation which denies parity to all state pensioners regardless of where they live. The Canada Pension Plan (CPP), for example, gives annual increases to pensioners no matter where its pensioners choose to live in Canada or not.

With rising costs of living, this situation has put many pensioners in an extremely difficult financial state.

John Markham, a British Pensioner living in Ottawa and spokesperson for the International Consortium of British Pensioners, said, “David Cameron has pledged to make pensions fair for all and we applaud that goal. When all British pensioners, no matter where they live, including these brave veterans, win the right to have their pensions raised annually like everyone else we will know he has been true to his word.”

British veterans living in Canada ready to hand medals back

Many British veterans living in Canada and other Commonwealth nations are so outraged at their abandonment by the British government that they are prepared to hand back their medals.

“After 50 years of injustice it has come to the stage where men and women who fought for this country feel so abandoned that they would renounce their hard won war medals,” said Markham.

“Cashing a pension check that is the same amount as the first one received in 1989 Twenty-four years ago won’t buy the turkey this year in Canada,” said Alan May, veteran of the British Merchant Navy now living in British Columbia.

May came to Canada to join his two sons and five grandchildren in his declining years. He never imagined that his pension would be frozen. “Four years I spent dodging torpedoes for King and Commonwealth and there is no good reason why they refuse to index our pensions like those in other countries around the world,” May said.

The UK State Pension is similar to the CPP where the value of each pension reflects the number of years of contributions paid. There are currently 12-million UK state pensioners, all of whom contributed similarly to the UK state pension via compulsory National Insurance Contributions.  Approximately one-million of these live outside the UK.

About the Canadian Alliance of British Pensioners and the International Consortium

The Canadian Alliance of British Pensioners (CABP) is a not for profit organization  with over 11,000 members, dedicated to securing annual cost-of-living increases for all recipients of the UK State Pension, regardless of where they choose to live in retirement.

The Canadian Alliance of British Pensioners, in association with other similar pensioner organizations in Commonwealth countries has formed the International Consortium of British Pensioners (ICBP) to fight this inequity.

This was the first decline since the annual Survey of Household Spending was introduced in 1997. During 2009, the annual average rate of inflation as measured by the Consumer Price Index was 0.3%.

Personal taxes accounted for 20.2% of the average household’s budget in 2009, while shelter represented 19.8%, transportation 13.7% and food 10.2%. These shares were virtually unchanged from 2008.

Excluding personal taxes, spending on goods and services was down 0.7% in 2009 from 2008.

Average household spending declined in five provinces: Newfoundland and Labrador, Prince Edward Island, Quebec, Ontario and Alberta. The largest declines occurred in Prince Edward Island (-3.1%), and in Alberta (-2.2%), where average spending was highest at $84,976. The largest increase was in Manitoba (+4.9%), largely the result of a 5.5% increase in spending on shelter and a 4.9% increase on transportation. Spending on other categories remained stable.

Less spending on discretionary items

Putting the squeeze on spending

Households reduced spending in 2009 on discretionary items or those that could be postponed, such as recreation and household furnishings.

One exception was spending for home repairs and maintenance, which increased 22% in 2009 over 2008. In large part, this was likely due to the federal government home renovation tax credit program.

The largest declines in spending were for recreation, which fell 5.5% to $3,840 on average. Lower spending on recreation vehicles led the decline in this category; for example, spending on snowmobiles fell 11%.

Declines were widespread in such areas as sports gear, computer equipment and photographic equipment. However, spending at movie theatres rose 8.7% to an average of $100 per household.

Spending on household furnishings and equipment fell 3.6% to an average of $1,900 per household. This decrease was largely the result of declines in spending for rugs, window coverings, art, antiques, and workshop tools. Spending for furniture and appliances remained steady.

Overall, spending for transportation remained virtually unchanged at $9,750 per household. The largest change in transportation was for leased automobiles, where spending fell 16%. Many major auto corporations halted leasing during the downturn in the fall of 2008 and did not resume until the fall of 2009.

Spending associated with moving, such as the hiring of movers, real estate commissions, appraisals and land transfer taxes all showed sharp declines.

Technological change continues to affect spending

Not all changes were associated with the economic downturn. Technological change continued to drive a number of long-term trends in spending.

Spending for cell phone services rose 13% to an average of $620, surpassing spending for landline telephone services for the first time. Spending for landline services fell 4.5% to $550.

Over 77% of households reported having at least one cell phone. The proportion of households with landline service declined to 89%, a level last seen in 1965.

Spending on audio players fell 38%, while it was down 9.2% on digital cameras. These declines occurred as more cell phones were capable of playing music and taking photos.

Spending on reading materials, such as newspapers and books, fell 8.3% to $230 per household, while average spending for Internet access grew 10% to $340 per household.

Home Internet access was reported by 78% of households in 2009, while 72% reported having a broadband connection, up from 67% in 2008.

Food, shelter, clothing account for over half of spending by lowest income households

52% went to food, shelter and clothing

The one-fifth of Canadian households with the lowest income spent an average of $23,860 in 2009. Of this, almost 52% went to food, shelter and clothing. Personal taxes represented 2.8% of their budget.

In contrast, the one-fifth of households with the highest income spent an average of $147,090. They allocated about 27% of their budgets to food, shelter and clothing, while 30% went to personal taxes. These proportions were similar to 2008.

The report “User Guide for the Survey of Household Spending,” 2009 (62F0026M2010006, free), which presents information about survey methodology, concepts, and data quality, is available online as part of the Household Expenditures Research Paper Series. From the Publications module, choose Publications by subject, then Income, pensions, spending and wealth, then Household spending and Savings and finally, Household Expenditures Research paper series.

The problem of fraud has long been a major concern in Ontario, which has the country’s richest auto insurance benefits and the highest costs for drivers. Recently there has been an increase in fraudulent claims from staged collisions, which are car accidents deliberately set up to cash in on payouts from insurance claims. To make the collisions appear more authentic, fraudsters are increasingly involving innocent drivers.

Common tactics that authorities have identified are:

• Target and bullet: staged collisions in which an unsuspecting car is hit intentionally.
• Swoop and squat: a driver slams on their brakes to get an innocent driver to rear-end the vehicle. In some cases, two vehicles are involved in the fraud, causing an innocent third party to rear-end the second vehicle.
• Drive down or Wave-in: a driver exiting a parking lot is “waved in” by a driver on the roadway. The roadway driver accelerates into the merging car once they enter the roadway, intentionally hitting the innocent driver and causing a collision where the innocent driver appears to be at fault.

In these types of collision, the organizers pay their pre-arranged crash victims, tow truck drivers, witnesses and questionable medical clinics to falsify records to profit from insurance payouts.

To avoid becoming involved in a fraudulent accident, stay alert. Be aware of cars following too closely, suddenly cutting you off, or cars occupied by three or more adults that wave you in. If you’re worried about the actions of drivers around you, find a safe parking spot and pull over or wait to enter traffic when you feel it is safer.

If you are involved in a collision, there are a few things you can do to protect yourself from fraud.

1. Once you gather the other driver’s information, take pictures of the scene, including the damage to all vehicles involved.
2. Count how many people are in the other vehicle(s). Take note of ages and genders, and even obtain names and contact information.
3. Collect witness names and contact information.
4. Call the police to the scene, file a police report, and keep a copy. Do not take further direction from anyone other than a police officer.
5. Be wary if you are pressured or offered money by a tow truck operator to go to a particular body shop, paralegal or medical professional. Ask your insurer for a list of preferred auto shops.
6. Make sure all bills are detailed and accurate, medical treatments offered are necessary, and always read forms thoroughly before signing them.
7. If you have concerns about how the accident occurred, contact your insurer immediately.

Too often insurance crime is tolerated because it seems victimless, but it affects everyone with insurance in the form of higher premiums. The Co-operators insurers for example employs specialized investigators and trains all claims staff to keep them up to date on new trends in insurance fraud. If you suspect an incident of fraud, submit a confidential report by calling 1-877-IBC-TIPS or visiting the Insurance Bureau of Canada online. Be sure to also visit their list of the latest fraud alerts.

CCPA senior economist Armine Yalnizyan said the concentration of wealth for top-earning Canadians is staggering, with the richest citizens making consistent gains over almost everyone in the country over the decades.

“The higher up the ladder you go, the more colossal this glomming of wealth becomes,” Yalnizyan said in a recent interview.

Using data from income-tax forms, the CCPA reports that the top one per cent of earners doubled their share of total Canadian incomes from the 1970s to the 2007 tax year. During the same period, the top 0.1 per cent of earners tripled their own relative share. And the top 0.01 per cent of earners now make up more than four times what they did.

Yalnizyan said that many people in these privileged demographics have weathered the current recession in good stead because of their enormous wealth.

“Most Canadians are inching their way through recovery, trying to hang on to what they’ve got,” Yalnizyan writes in the study.

“But for some Canadians, things have never been so good.”

“The CCPA has concluded the wealth-consolidation trend is one that took root in the early 1980s but is now more pronounced than ever.

Prior to this sharp rise, a postwar trend had seen incomes become more equally distributed throughout the population. Analysts want to figure out why the trend has since gone the other way and if such a development is a cause for concern.

“It’s the best data we have on this issues,” said Andrew Sharpe, executive director of the Centre for the Study of Living Standards.

“The key issue is, what’s driving this?”

Yalnizyan’s study has concluded that today’s ultra-rich Canadians make their money from massive salaries — as opposed to the crème-de-la-crème of decades past, who tended to be entrepreneurs who made their fortunes from private businesses. These modern super-rich Canadians are typically those who run large companies and receive high levels of compensation.

Yalnizyan believes that income tax has not kept up with the higher earnings of today’s top earners, which has allowed them to make gains on other groups.

Researcher Peter Nicholson, who previously wrote his own analysis of an earlier version of the same tax data, said the trend is part of a larger cultural shift where corporate honchos are the “rock stars” of the modern era.

But he said there is no real consensus on why the trend has headed in the direction it has.

“At least you have to understand why this is happening. Is it fair, or is it a good thing?”

Before you say yes to bank/lender provided mortgage insurance, consider the options. Protecting your mortgage with an individual insurance policy can offer you and your loved ones better guarantees, greater choice and more flexibility – and in most cases at a lower cost.

The type of life insurance you need is dependent upon your unique needs, stage of life, and can change over time.  There are two types of life insurance in the marketplace; term and permanent.  Yet, they are very different.  We will sit down with you and conduct an insurance needs analysis to help you select the right combination of insurance coverage that best fits your plan.

For examples and to learn about the key differences view this table and read the rest of this article

If you have any questions about your personal finances please feel free to contact our partner Brian Lewington of the Investors Group at brian.lewington@investorsgroup.com or by toll free at 1-800-561-0659 x 346.