Canadian Personal Finance Blog

Consumer Price Index at 2.2% for May

Yes, inflation is on the rise folks, up from 1.7% in April, hope you aren’t surprised, because I sure as shooting am not!

For those who wish to note the obvious, from this month’s report we have the following statement:

The acceleration in consumer prices in May was mainly a reflection of the 12-month increase in gasoline prices. This acceleration in gasoline prices occurred as crude oil prices almost doubled between May 2007 and May 2008. Gasoline prices increased substantially across the country, rising the most in Quebec and Ontario.

I’ll take “State the Obvious” for $1600 Alex. This is only the beginning folks and this is going to trigger a reaction in interest rates, I think this might be time to start partying like it’s 1974, because we may be hitting that “tipping point” (to use an overused and trite term) and may be heading for some heady inflation rates real soon.

Property Tax Day in Ottawa

Given that the Hockey Night In Canada theme’s rights are already owned, I am curious what tune I might play as the theme for Property Tax Day in Ottawa (feel free to add ideas in the comments section), I’ll settle for the Beatles “Tax Man”, for now.

I had a look at my second payment for my property taxes this year, and I am struck by a few major points that I hadn’t noticed when I first bought it.

The City of Ottawa thinks my house has appreciated in value over the past 8 years by over 50% (if you calculate this by ( (New Price - Old Price) / Old Price ). I have done some work on the house, mostly upkeep things, but what would cause such an astronomical increase I have no idea. Yes I am living in one of the fastest growing suburbs in Canada (Nepean/Ottawa South), but new houses are going up around me faster than mushrooms in my back lawn!

There are a plethora of other interesting charges on my tax bill:

• Solid Waste Curbside pick up fee of $82.00, interesting, and I guess I don’t mind that, given I don’t want to go to the dump every week to drop my trash off.
• I am paying the Conservation Authority about $20.00, my only wish would be that they keep the Canada Geese and vermin in the parks and not in my backyard.
• A Capital Tax Levy, which I think is translated to “Give us more money dammit” of over $40
• Standard fees for Fire, Police, Transit and the actual money that goes to the City of Ottawa so they can afford all the interesting services they offer.

Am I getting good bang for my buck here? I guess, I do like the libraries a great deal, and we do use the recreational facilities a great deal. I just drove into work on the roads that the City supports, so I guess I should be paying for those as well, so I guess I am getting a bargain? At the end of it, I am paying %3.5 of my gross income on this.

According to the Fraser Institute Tax Freedom Day for 2008 was Saturday June 14th. This alleged end of you earning money for taxes means you have the rest of the year to pay for all your other expenses. Speaking as a highly taxed individual (no matter how much I bitch about over spending in my household Taxes by far out strip all other spending we do).

The institute even has a fun little tool to figure out when your specific Tax Freedom Day which was kind of cool to play around with as well.

This artificial celebration really means very little, except that most Canadians pay over 50% of their income in various taxes (if you simply count the number of days until this happy day). How can things change? Less Government spending might help, smarter spending might be nice too (get more from all the money I give you). Given I haven’t had a raise in 5 years, it would be nice if the government was forced to do the same rethinking on spending that my household has had to do (I mean government in the Generic across the board sense, not just the Federal or Provincial folks).

Enjoy earning money for yourself now (figuratively, if not factually).

Mortgage Rates on the Rise?

Thanks to last week’s non-cut by the Bank of Canada most of the major banks are raising their Mortgage rates in reaction.  Any debt vehicle that has a variable rate hasn’t changed that I can tell, but the banks seem to think rates will be going back up very soon, and they are reacting accordingly.  TD Canada Trust’s rates can be found here, Scotiabank’s can be found here, but remember all these rates can be negotiated, and if you don’t want to do that, go to a Mortgage Broker and get a better rate there.

Funny no one has lowered the Credit Card rates lately (sorry had to have a jab at one of my favorite topics).

Netfile Tax Reprieve

Freedom from having to pay taxes, for 5 more days, if you Netfile. This extension only applies if you are going to use Netfile to submit your return, and it only applies if you owe money. As was pointed out by someone, if the government owes you money, they don’t really care WHEN you submit your taxes (but you better be sure you are getting a refund before you procrastinate like that).

Shrinking Economy

Stats Canada reported that economic activity shrunk by 0.2% in February, and this was caused by shrinking manufacturing and wholesale trade, what caused this? Don’t know but it’s not a good indicator that the Canadian economy is going to “weather the U.S. downturn well” as has been said by a few economists.  One month does not a downturn make, but it’s something to remember.

Interest Drops

This month is a new month, and for me, it means a complete month with lower interest rates on my Mortgage and my line of credit.  TD’s prime lending rate is 4.75% right now and if you are curious what rates you can get on a Line of Credit, read Michael James’ essay on that topic, especially the comments, which are very telling as well.  I will be taking this opportunity to make the same payments I always make and thus taking more principal off these debt devices.

Gas Prices at $1.20 per Liter

That is where they have been in the Ottawa area, and driving has been much more expensive. I am paying about $10 more a week for my car to drive (which is a 50% gain in what I was spending), just in gas costs also (not including car wear and tear and insurance). I am attempting to offset that by NOT buying coffee at work (yes I am attempting that again). So far this week, I have only bought 1 coffee, which means I have not bought about 8, so that is quite good (and it does add up to my goal of $10.00 or so). I will keep my readers informed of my progress.

Ottawa High Tech

Alcatel (ALA) announced some hefty bad numbers yesterday, with a 5th consecutive losing quarter.  This combined with a warning on sales figures and fresh lay off talk, makes the Ottawa Tech sector a little more jittery this month. Nortel (NT) announces Friday morning, and there are concerns of similar statements from the former High Tech juggernaut.

What does this have to do with me? I live in this world, and a jittery world it is right now.