Canadian Personal Finance Blog

I think that loud bang I heard when I turned the water back on for my toilet repair yesterday was more than “just nothing”, given the huge water stain in the ceiling this morning. Yes, after bragging on this very blog of my great home repair skills, Karma or God or however you want to spin it, came and bit me for being so proud of myself.

We have a hole in the ceiling, but now the “leak” has decided to disappear? Might have been residual from the pre-gasket replacement, but I doubt that, should be interesting anyhow.

Coalition?

OK, I will wade into this murky swamp that is the Canadian Parliament, my guess is this is not going to work no matter what happens and we will be going back to the polls in February or March with a backlash against the Tories and the Liberals, and maybe the NDP making big inroads because the arguments are simple:

• Bloody Tories caused this election, arrogant bastards!
• Liberals kick their leader to the curb, go back and get him to run a government propped up by separatists?
• That Jack Layton, he’s a nice guy and was just trying to govern.

Advent Financial Calendar Box Day 3

Today’s box, is like those Russian stacking dolls, it is a box in a box. The box in the box is a Safety Deposit box, do you have one? If you don’t wear do you keep your important documents? Remember this is a carrying charge for investing, so you can actually write off your box for your taxes.

Safety deposit box, go get one if you don’t have one, or at least have somewhere safe to put your important documents.

Carnivals

Mentioned in a few carnivals this week:

• The Bankruptcy and Debt Blog #13is being hosted by Bankruptcy Acccess where they feature my post about Buying Lottery Tickets and Going to the Casino?
• The Carnival of Twenty Something Finances  - Thanksgiving Hangover edition is being hosted by Broke Grad Student and the same post is mentioned there.

Jim Flaherty came through with an interesting and I would say very optimistic Economic Update (mini-budget, whatever), yesterday that took aim at something that all voters love to see under financial siege, Government Agencies and MP’s. 

No Debt Financing?

With some very creative and optimistic accounting the Finance Minister is promising to try to have either balanced budgets or very small surpluses up to 2013, which is very contrary to what most economists are saying is possible in the current economic instability (i.e. Financial Apocalypse). 

Flaherty did couch his optimism with the following cold statement:

“Any additional actions to support the economy will have an impact on the bottom-line numbers in our next budget. These actions, or a further deterioration in global economic conditions, could result in a deficit.”

So he isn’t saying there isn’t going to be deficits, just that there will be measures taken to avoid a deficit if possible.

Take that Ottawa Fat Cats

Not Really an Ottawa Fat Cat

No that is not a real Ottawa fat cat, it’s my cat from when I lived in Kitchener, but he is a good Metaphor for the “Fat Cats” in Ottawa.

Some of the measures against the “Ottawa Fat Cats” taken will be:

• Elimination of the $1.75 per vote allowance to support political parties that receive more than 2 per cent of the vote, staring April 2009. I really like this one, because all of the politicians are howling about it, so it must be a good thing. 
• Wage controls holding increases to public servants, including MPs and senators, to 2.3 per cent for last year and 1.5 per cent for each of the next three years. I really like this one, because the MP’s are mad about this as well, and the public service doesn’t like it either.
• Slash cost overruns on government travel, hospitality, conferences, exchanges and political services, this sounds like something they should have been doing already? What exactly were they doing before this, wait, I don’t want to know the answer to that one, so please don’t answer.
• Provincial equalization payments are gauged to the average GDP growth over a three-year period. Can’t wait to hear Dalton McGuinty tirade about this one.
• No mention of any extra taxes, but since this is not a budget, then I guess nothing has to be mentioned about that (yet).

Some pro-active steps being taken are:

• Giving $350 million in equity into the Export Development Canada and another $350 million in equity into the Business Development Bank of Canada. Interesting, guess I should send my resume in there since they might be hiring soon.
• A scary one for soon to be pensioners is allowing federally regulated pension plans to spend 10 years instead of five to make solvency payments if necessary. This is a slippery slope I think and it could end up like some of the private pensions that are woefully underfunded these days.
• Only allowing seniors to withdraw $7,500 instead of $10,000 from their Registered Retirement Income Funds (RRIFs), which is supposed to slow the cashing in of stocks and mutual funds I guess. 

Good Graphic to Show Canada is Doing Better than Most:

Canada Doing Not Bad with Debt

There was hopeful statements from analysts that there might be a “honeymoon” for the new president elect and that the death spiral that the Stock Exchanges have been doing might slow down or stop, but that does not seem to be the case, as stocks continued to drop for another day. Looks like the president elect will be handed the rancid entrails that is the U.S. economy and that will be his first job to clean up. I get the feeling that the “good will” from the election is not going to last long if there is an extended downturn in the economy (who said recession?).

More Given by Less

Stats Canada reported an increase in the total amount that tax-filers reported as charitable donations, however, fewer people actually gave that money.

Canadian taxfilers reported making charitable donations surpassing $8.6 billion in 2007, up 1.4% from 2006. At the same time, the number of donors fell 0.9% to just under 5.7 million. Data are based on income tax returns filed for 2007.

I am happy to see that I am above the Median of $250 for givers (i.e. I am in the upper half), remember with the holiday season coming, that means your fiscal end of year is coming for charitable donations and you might want to think about giving a little more?

More Given by More

When we look at the Stats Canada data on RRSP contributions by Tax-filers you see a different picture.

Just under 6.3 million taxfilers contributed to registered retirement savings plans (RRSP) in 2007, up 1.6% from 2006. Their contributions rose by 5.3% to $34.1 billion. These data are based on tax returns filed for 2007.

More money going into Mutual Funds and such, the data for this year will be very interesting, given the stories of Mutual Fund flush outs (i.e. folks selling big time), what this might show in the RRSP world. I actually have given more than any other year this year, but that has more to do with my lay off than any other reason.

The RRSP silly season doesn’t really start until February, but you could put more money in now and it would have longer to start growing? Just a thought.

End of Year Financial Plan

Do you have an end of year plan for your finances? Might be time to figure out what needs to get done before December 31st, since it is usually hard to get anything done after December the 15th. I have pointed out RRSP, but remember the TFSA is coming too, how will that change next year’s plans? The TFSA may well cause a big change in how Canadians save, let’s hope.

Strong Minority?

My prognosticative skills are about as good as my stock picking skills, my Liberal minority turned into a “Strong” Tory Minority, but we are back where we started. The Tories still cannot run the country without the help of 12 close friends of some kind (i.e. they are short of a majority by about that many seats), so where does that lead us? Back where we started and a question about whether this government will last as long as the last one did, that remains to be seen.

The Liberals will now “eat their young” and go looking for a new leader, Jack Layton is kind of a power broker so his job is relatively safe, and the Greens did better, but their leader really needs to get into Parliament as the next big step. The Bloc, I still have no idea what their goals are now, since they didn’t mention sovereignty much over the campaign.

Plus ca change, plus ca reste la meme.

Economic Recovery?

Not really, not yet. The Markets in Canada recovered somewhat but most stocks are still well down and don’t show signs of a huge recovery just yet. Canadian banks showed a strong recovery but other stocks were mostly mirrors of what happened in the U.S. on Monday. The TSX showed a record upswing, but it was mostly historical price fixes from the Monday boom on the U.S. markets, it will be interesting to see today whether this “rally” will keep going. 

Plan Started

As of yesterday some of my severance package was in place, so my wife and I started our plan to stay afloat as long as possible, given the “sketchy” job market currently. 

1. All short term debt has been eliminated, the only debt I now carry is my mortgage
2. A large part of money has been put in short term investments
3. A smaller amount will be more liquid
4. All bills have been paid