Canadian Personal Finance Blog

Archive for the ‘Federal’ Category

That is a Credit Card Debt!

Here in Canada we are flagelating our government because they are going to be running a budget deficit (they are going to spend more than they make this year) of over $50B, and rightfully so, given we have been runnnig surpluses for several years (i.e. making more than we spend), however we are humble overspenders compared to our brothers to the south (the USA). The estimate now is that this year the US Federal Government will run a deficit (remember that is overspending this year’s budget) of over $1 Trillion, wow.

That is effectively the same as giving every single human being on the earth (assuming the Trillion they are talking about is 10 to the power of 12) $140.00, this year.  Canada’s deficit would only give every human a paultry $7 , as you can see we Canadians are small time in this overspending world.

How will this be remedied in either country. Some are arguing in both cases there are 1 time bail outs that do not reflect actual spending habits (Bank Bail outs, Car Company Bail outs, etc.,), and that may well be the case, but what is going to be the fall out trying to pay back this deficit? Canada had been paying back the National Debt (i.e. the money we owe, from accumulated deficits over the years) however this latest set back is not a good thing.

As with personal finance every time a deficit is run for a year, it will eventually need to be paid back, Live Now but you will Pay A Lot More Later.

Local Ponzi News

If you think Bernie Madoff is a uniquely American issue, think again, evidently a new collapsed Ponzi scheme has been uncovered in Montreal. Earl Jones, the advisor in question is missing, as is all of his “clients” money as well.

This begs the question, do you trust your financial advisor? Are you sure you know where all your money is, and why it’s there?

You Gonna Use those Air Miles?

The LCBO evidently has fired 10 employees for allegedly de-frauding the Air Miles system (according to the CBC). This one while upsetting, is not surprising. 

More than once I have thought (while standing in line behind someone at a store that takes Air Miles or some other rewards program where your number is put in at the end end of sale) about asking whether their sale could go onto my account. The problem with this idea is it is fraudulent in the eyes of the rewards program, since I didn’t purchase the goods, and evidently this is sort of what these employees were doing (taking points on sales where the consumer didn’t have their card, or didn’t care). 

This is another example of the problem of “insider trading” (i.e. employees or insiders taking advantage of the system, which we have seen in the lottery sales area, and now with this reward system).  The LCBO policy quoted is:

“Staff are … prohibited from using the purchase by any customer to issue reward miles to their own personal account or the account of other staff, family, friends, other customers or any other person,”

How can this be remedied? Not sure, but it is something to be prudent about, to make sure you don’t lose any rewards you should get.  In this instance no one lost their points, it was a situation where fraudulent points were created where none should have been given out, not to rationalize or worse condone this bad behavior, but the victims were the folks at the Air Miles reward program.

Federal Language Test Leaked?

On Thursday I took two Federal Government language tests (for French), and they were quite challenging (I was close to being able to work in a French environment in my younger days, my French now is very rusty). I found out Friday morning that evidently these tests may have been leaked (according to the Ottawa Citizen), which is intriguing, and may prove very costly to the Federal Government (which will have to retest a large group of folks who have been tested (hopefully not me)).

The tests leaked were the two which I took, and they were done on line, on a private network, so how the questions were “copied” seems to suggest another “insider job”, but we shall see.

$30 Billion is Quite a Debt

Stephen Harper told the CBC that the coming fiscal year the Canadian Government could run up to a $30 Billion debt thanks to the Financial Apocalypse? Wow, that is quite the turn around from running surpluses for years, and if it is a one time thing that does stimulate the economy and gets people (like me) back to work, I guess it isn’t too bad, however my concern is that this isn’t going to be a one time thing. When deficit financing started in the 70’s it was not planned to be the “Standard Business Practice”, but it did end up being that way and we are still paying for it now.

The statement by Harper is also a contradiction of his own finance ministers statements of a week or two ago where it was claimed Canada would only run a $5 Billion deficit, makes me wonder what is the real number (and we won’t know that until December 31 2009 or later) and how much “stimulation” the Tories plan on putting into the economy (and what happens to this whole mess if the Three Headed Coalition Monster rears it’s head as well). Should be a very interesting fiscal year coming ahead, that is for sure.

The specter of Deflation or Hyper-Inflation is what has me concerned as well, because we are now in uncharted waters that is a certainty.

Advent Financial Calendar Box Day 20

Advent is slowly coming to a close and the Christmas Festival begins on Sunday and our Financial Calendar has very few boxes left for us to open.  In today’s box we find House Plan, complete with blue prints, cost estimates, the works. This plan has a few ways you can look at it as part of your financial journey:

1. If you succeed in your financial journey, you may one day be able to afford building your Dream House where you and your family can live and prosper.
2. For me this signifies the importance of a complete Plan for your Financial Journey. If you do not have a Financial Plan which is honest, and complete you cannot succeed and worse still, you cannot tell if you have succeeded as well (which is more important). 

Every week I write at least one article on the importance of Financial Planning, but many times I don’t mention why it is so very important.

There is a line from a Tom Clancy novel that rings in my ears, “… if you don’t write it down, how do you know it happened…”, but better still if you don’t write down what your goals and plans are, how do you know if you are succeeding? That is the positive view you should take of any financial plan, it gives you the positive feedback that you are succeeding, or the Shepherdly tap on the shoulder to get back on track, if you are not.

Make that Financial Plan for next year today, before Advent is over.

Snowmagaedon?

After visiting Toronto (to pick up my daughter from school), I had to chuckle at Environment Canada’s interpretation of the coming snowstorms for Southern Ontario.  The weather forecasts on Wednesday night quoted Environment Canada saying the storms would be Snowmagaedon (my spelling), which is a little over the top, given I don’t think the Rapture will be occurring during this event (if it is, my apologies), but it is even funnier to think that Environment Canada feels it is important to get people’s attention so they use these kind of sensationalized colloquialisms.

The storm does look quite serious, and I would suggest not traveling during it, but I am hoping that the Rapture does not come during it (because then we’d miss Christmas). Hunker down my fellow Ontarians, here comes another snowstorm!

Deficit? Booo!

Yes, Jim Flaherty announced the likelihood of a budget deficit in 2009 for the first time (a planned one at least) in a while.

“There tend to be delays in infrastructure projects and, given the seriousness of the economic situation, it’s important that shovels get in the ground, that repairs on buildings start as quickly as possible,” Flaherty told CBC News.

He also warned of much higher unemployment as well. The year 2009 is shaping up to be a very “interesting” year economically.

The Day the TSX Died

Unbelievable but, the TSX did not open yesterday due to a network glitch? Amazing. An allegedly world class stock exchange is crippled by a network problem, in the middle of the Financial Apocalypse?

“Because the data feeds provide information to investors to guide their trading decisions, trading was halted to ensure market integrity,” the TSX said in a statement.

Integrity may have been saved, reputation on the other hand, who knows?

Are Banks a Bargain?

For those who remember, I still hold banks in my portfolio, mostly because I view them as a good Dividend providing investment.

BMO

Bank of Montreal had a new stock offering and thus added more shares and lowered their stock value thanks to this, which doesn’t make me very happy, but on the converse side of things, thanks to this my DRiP(Dividend ReInvestment Plan) will be buying more this quarter for this stock.

TD

Toronto Dominion continues to get hammered as part of the Bank Backlash with all the shenanigans that have gone on in the U.S. (and around the world).

Again, this means my dividend reinvestment program will be buying more shares, so that is good.

I am holding these stocks as a long term investment vehicle, which creates dividend income as well, and they continue to be good for that.

Advent Financial Calendar Box Day 19

Opening this box, you find a card, a Library Card. The Library is our friend, because we can do our Personal Finance research without having to buy books to do it. In Ottawa you can get books on CD, DVDs and a lot of on line information as well. Research is a cornerstone of your Personal Finance Journey, the more you read, the more you learn and the more you can apply to your financial planning.

If you are planning for next year (as you should in Advent), visit your Library and use your Library card.

Special Report: Federal Speech from the Throne

My Kind of Throne

I’m sorry I just could not resist the picture, since every time I think of the Throne Speech my mind naturally moves to the water closet.

The Speech From the Throne

You can find the complete speech on this link, have a read it’s a lot of fun to read something that implies so much and says so very little.

• A Fiscal statement is coming next week from Jim Flaherty (mini-budget? budget? whatever).
• We are going to try not to run a deficit, but we make no promises.
• Support of workers in transition. Does that mean they are going to give me an athletic supporter, money or training? Support is a generic term, training is implied, but not sure.
• Quoted Warren Buffett, who quoted Wayne Gretzky who said we should “to skate to where the puck is going to be, not to where it has been.”, commenting about how we need a Dynamic economy. I always liked Yogi Berra’s “Hit ‘em where they ain’t..” as a colloquialism.
• More effective government, that’s kind of like promising to eat right, words are interesting, actions are the telling part of it.
• One very interesting statement about Electric Power generation:
  “Our Government will set an objective that 90 percent of Canada’s electricity needs be provided by non-emitting sources such as hydro, nuclear, clean coal or wind power by 2020. ” 
  Interesting target to have, given a lot is already Hydro and Nuclear how close are we to that number already?
• Improving the UCCB, no real statement what that improvement might be, but I like that idea.
• Lots of motherhood statements about funding the military and the police to keep us all safe (not bad things, just fairly standard stuff).
• “May divine providence guide us in our deliberations.” Really not sure what that is supposed to mean, but it reads well, that is for sure.