Canadians Owe More , Polar Temps, CPP Survivor Benefits and #MoneyTalk

Stats Canada got out, just in time for your Christmas spending guilt, Distributions of household economic accounts for income, consumption, saving and wealth of Canadian households, 2016. What is it telling you? Canadians Owe More! For every dollar of disposable income, you owe more than you did previously! An interesting tidbit from the report is:

In 2016, the national average debt-to-disposable-income ratio was 172.1%

Simply stated for every $1 you have to spend you owe $1.72, isn’t that delightful? If you read the report in more detail you will see the real debt-load of lower-income Canadians is horrific (a mind-bending 333.4%). That is very scary if interest rates start going up quickly.

Canadians owe more

Debt-to-disposable-income ratio by household disposable income quintile, 2012 and 2016

If that doesn’t put you into a festive spending spree, good! Time to start figuring out how the heck to get out of the debt trap, so Canadians owe more be a thing of the past.

One more happy thought to consider:

Similar to wealth, the top 20% of income earning Canadian households accounted for 40.9% of total household disposable income.

Top 20% accounts for 40% of the disposable income? They better start spending!!!!

In Ottawa, the snow came down, and then lovely frigid temperatures arrived quickly afterwards, a delightful 1-2 punch. Thursday morning I drove in behind a car with Florida plates. First I wondered, “Who did he or she insult to end up being sent up here?” and then I wondered, “Have they ever heard of snow tires?”. Yes it is Canada, but it doesn’t have to be this cold this soon, does it?

A very interesting policy change for CPP survivor benefits outlined in , New CPP changes give survivors full benefits immediately. Previously this only happened when the survivor got older, but now it seems to be right away? I would be curious to find out what might have triggered this change of heart by the governments ? Someone commented, “It is the right thing to do…”, but that is rarely a driving force for Government Policy Changes.



My Recent Writings

In the summer I visited the Halton County Radial Railway with my family (my son loves trains), and saw a very interesting ad in one of the old TTC trams that turned into this week’s only article, Toronto Housing Bubble ? Yes housing prices have been out of control many times in Toronto, this is not the first time (nor will it be the last). I note no one has left a comment guessing on the possible year that poster was from, c’mon readers!

Micro Blogging on Finance

Glad to hear the CRA is starting to reconsider their policy change on the DTC, we shall see what comes of this.

How about a Bitcoin one? You’ll like this one, it is deep.

🖲️ If you want more great financial stories click here 🖲️

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Toronto Housing Bubble ?

A while ago you might have seen the following poster on the TTC and you would have said, “How can anyone afford that kind of money?”. The prices back then were starting to really inflate, and inflation was in very high gear. Interest rates might have been running around 15% for a mortgage. There was no mention of a Toronto housing bubble, but folks might have asked, “How can anyone afford this?“.

toronto housing bubble

When was this?
 Poster courtesy of the Halton County Railway Museum

My Father-in-law thinks this might be from the early 80’s, but I am not sure. If you know when this provocative poster about another Toronto Housing Bubble please comment. How much are these houses selling for now?


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DTC Changes, Christmas Present Ideas, Fraud and #MoneyTalk

It seems the CRA and the Minister of Finance are not on the same page. The Minister told Parliament that there had not been any change in Disability Tax Credit (DTC) policies towards Diabetics or any other group, however, the National Post disagrees. They seem to have found an e-mail that seems to imply that the CRA has change their policy towards Diabetics and the DTC. Whether this is true or not, there does seem to be a perception with some of my readers that it is getting harder to get the DTC, especially for parents of kids with Autism.

My suspicion suggests that the CRA is cracking down on Disability Tax Credit cheats, which I am OK with, but let us hope that folks aren’t getting to vociferous during this crackdown.

If you are having issues getting your Disability Tax Credit , contact Autism Canada about the troubles you are having.

Disability Tax Credit Problems

Are You Having Disability Tax Credit Problems ?

Christmas is about two weeks away, and there are a bunch of great finance books out there written by friends that would make excellent gifts. Nothings says Christmas more than a book that tells folks to stop over-spending (after they have over-spent). Tales from a Bankruptcy Trustee could become your new Christmas Eve tradition, or better still, How the Zombies Saved Financial Christmas (or the Leafs Season, not sure which).

This time of year is when you should be checking your credit card and bank statements to make sure there are no unexpected extra charges. Fraud seems to spike this time of year, and it is easy to miss unknown purchases if you have already spent a great deal. Be prudent and be safe with your debit card and credit cards, no sense in ruining your holidays.


My Recent Writings

I went into my archive of over 300 unfinished stories for Pension Income Splitting. It will be a money-saving technique I will use in my retirement, hopefully the tax laws won’t change by the time I retire.

Rampant Upselling was a reaction to a visit to have my Oil Changed at one of the Quick Oil Change places, and being accosted for all of the services that they offer. I have a regular mechanic, but I didn`t have time to make an appointment. Yes these places seem to do a good job, but be prepared to be badgered about every possible service they offer.

Micro Blogging on Finance

Our happy Bankruptcy Trustee friend has his own list of Christmas gifts.

🖲️ If you want more great financial stories click here 🖲️

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Rampant Upselling

After sitting through another rampant upselling session from my local “Quick Oil Change” place, I have sworn I will not return, it is just too much. All I want is an Oil Change, I do not want:

  • An air filter changed
  • A cabin air filter changed
  • The engine “power flushed”
  • My radiator flushed
  • Differential checked  nor my transmission flushed
  • New tires

Nor any of the hundreds of other things they are trying to upsell. Interesting that they were giving away free wiper blades (with a coupon) and no one asked me about that.

Why is every time I want to buy anything larger than a package of gum someone attempts to upsell services or products to me? Can I not be trusted to know what I want? Am I a dullard who doesn’t  understand the complicated  world I live in? Do I look like I want a $7 warranty on $20 worth of light bulbs? I suppose I must, because I am being offered that exact “deal”.


It is even worse if I visit a bank or talk to a financial service. No, I don’t need another credit card, in fact I’d  love to be able to  walk into a bank and close a credit card account (can’t be done). I do not wish to buy your balanced arbitrage forex enhanced Scandinavian backpack futures hedge fund (if such a thing exists, don’t buy it). Michael James tells a story of one of his loved ones (over 60 years old) being sold leveraged mutual funds, luckily MJ cleared that mess up for  them.

Upselling financially

You want fries with your GIC?

I know why this upsell is prevalent; most of the folks pushing it are getting financial reimbursement in some fashion for each customer they ensnare. Best Buy claims they don’t work on commissions, but if you buy their warranty you better bet someone is making a chunk of change on that. If you simply follow the money you will know why someone is trying to sell you something.

Does Any Deserve Rampant Upselling ?

If I walked in and said, “I have no idea what I’d like, please sell me something”, I would be fair game for being naïve enough to walk into any retail or service establishment making that statement. If you appear at my Mother’s front door, however, and bamboozle her into taking a service you know she doesn’t need, I hope to one day cross paths with you. There is a special place in Dante’s 17th Inferno, is my hope.

Let me be clear, “No I do not wish to BIGGY that!“. Let me have the service I asked for without being harangued into buying life insurance from you.

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Pension Income Splitting

Let me preface this by stating that I think Canada should adopt a combined family income model for taxation. In this model spouses could combine their income and then income split on the basis of that. As part of my retirement plan, I hopefully, will be able to use Pension Income Splitting (from T1032, joint election of split pension income).

Pension income splitting has been around for over 10 years. So far no government has tried to curtail the use of this tax avoidance tool. Who can use this powerful tool? Only couples with pension income, or pension-like income vehicles, and typically these couples will have one spouse that has a higher rate of income.


How does Pension income splitting work?

The arithmetic involved is quite simple: I can give up to 1/2 of my entire pension income to my wife and have it taxed at her rate of taxation. While this might raise my wife’s tax bracket, it will lower mine as well. My current estimates show that I might save up to $600 a year by pension income splitting.

The program is quite simple, all I need do is fill in the form T1032 when I submit my taxes. I can then opt out the next year, by not submitting that form in my taxes. Splitting your CPP income with your spouse is much more complicated (but can be done as well).

Pension Splitting

Pension Income Splitting is Bad For Canada?

The C.D. Howe institute has published a report that claims that income splitting will, “… infect your soul, curve your spine, and keep the country from winning the war…” (to paraphrase George Carlin). I am not sure exactly why there is a big hate-on for this program, as you can do similar things if you create a Spousal RRSP (but you have to do that far in advance of your retirement).

The major reason I can take advantage of this program is that my spouse has a small pension. If we both had the same income level, pension income splitting would make no sense.

I am hoping the Liberal government (or future governments) do not put the kibosh on this program, as they did on Combined Family Income.

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