Hub Blogs contains fresh contributions written by Financial Independence Hub staff or contributors that have not appeared elsewhere first, or have been modified or customized for the Hub by the original blogger. In contrast, Top Blogs shows links to the best external financial blogs around the world.
Finances can become challenging when adding — or removing — a new partner, stepchild or extended family member into a household. The instances of blended or multigenerational families are becoming more and more common in Canada as the number of multigenerational families has grown in the last 15 years – rising 37.5 per cent. In addition, 12.3% of families in Canada are stepfamilies, according to recently-released 2016 Canada Census data.
A recent TD survey found 66% of Canadians living in a blended family say they face financial challenges because of their household situation. Additionally, 47% find juggling these challenges stressful. The top three financial challenges they faced are determining who pays for ongoing household expenses (25%), having different views on managing the household budget (23%) and determining household saving priorities (21%). Take a look at this infographic here for more survey findings, tips and advice.
No matter your family situation, money matters can get tricky. To guide you through the process, there are some simple steps blended families can implement to help create a more stable financial future for everyone involved. Continue Reading…
India Prime Minister Shri Narendra Modi chairing the ICT-based, multi-modal platform for Pro-Active Governance and Timely Implementation, in New Delhi on July 12, 2017.
By Caroline Grimont
(Sponsor Content)
The Narendra Modi government has made enormous strides in transforming project execution in India, enhancing the momentum of country’s growth.
Modi’s success is largely premised on his principle of “Minimum Government, Maximum Governance,” which has been the Prime Minister’s mantra for transforming project execution in India.[i]
Shortly after assuming power, Modi announced that India’s government systems suffered from two weaknesses: “They are complex. And they are slow.” He noted that this had to be changed and that government systems must be sharp, effective, fast and flexible.[ii]
Government has no business being in business
To do this, India needed a policy-driven state, with simplified processes in which the government needed to focus upon the things that are required of the state, which must in turn deliver on the things it sets out to do. He emphasized that government “has no business to be in business” and must instead focus on policy formulation and execution.” [iii]
Modi also noted that in 20 years of liberalization the government has not changed “its command-and-control mindset,”[iv] which is exactly what he set out to do in transforming project execution in India.
An earlier McKinsey report identified what Modi referred to. It stated: “Inefficiencies in implementing infrastructure projects in India occur at all stages. This includes awarding projects as per plan targets, securing financial closure, and executing projects within cost and time.”[v]
Cutting through red tape
In accelerating project execution Modi has personally taken on India’s notorious red tape to clear tens of billions of dollars in stalled public projects, hoping that his hands-on intervention can bend a vast, dysfunctional bureaucracy.
He has focused on improving governance and introducing changes to legislations, rules and procedures wherever necessary to make processes more efficient; and cut down on multiple clearances those choke investment.
To keep track of project execution Modi holds a meeting with top state and central bureaucrats once a month, to check why projects have not got off the ground: leading to the revival of tens of billion dollars in value of central government and state projects in a wide range of areas.[vi]
Central and state bureaucrats are linked by video to Modi’s office for the meeting, usually held on the fourth Wednesday of each month. They are typically from the finance, law, land, environment, transport and energy ministries whose clearances are needed for many projects. [vii]
The agenda is set the previous week and usually has about a dozen stalled projects, public grievances and other governance issues.
By empowering government officials to execute on project implementation and managing the process on a monthly basis, Modi has effectively been able to remove the policy paralysis that has plagued India for decades.
“Modi has won plaudits for the initiative that has chipped away at a $150 billion backlog of planned roads, ports, railways, power stations and other projects.”[viii]
He has also taken major steps to eliminate corruption and transparency that have in the past paralyzed project execution. Continue Reading…
On July 27, key Republicans from the U.S. House, Senate and White House released a joint statement on tax reform, echoing President Donald Trump’s tax plan announced earlier this year. In the statement, they repeated Trump’s commitment to make taxes “simpler, fairer, and lower.”
The GOP promises to protect American jobs, lower tax rates for all American businesses, and create a system that encourages American companies to bring back jobs and profits from overseas. The statement also had welcome news for many Canadian businesses since the border-adjustment tax is no longer on the table. It had been previously endorsed by Paul Ryan, Speaker of the House of Representatives.
Back in April, the White House revealed Trump’s tax plan promising significant tax cuts for corporations. His plan proposed to drastically cut the corporate tax from the top rate of 35% to 15%, which would be a welcome relief to American business. The initial plan with the border-adjustment tax would have unilaterally imposed U.S. tax on imports into the country, generating $1 trillion in revenue for the U.S. government. This border-adjustment tax would have replaced the revenue “lost” from the proposed tax cut.
75% of Canadian exports are to the U.S.
The U.S. is Canada’s largest trading partner, and exports to the U.S. represent about 75% of total Canadian exports. The border-adjustment tax would have been a heavy U.S. tax bill for many Canadian businesses, so its demise is a relief for any Canadian business with a U.S. presence. However, an America-first tax policy, along with the Trump administration’s tough stance during the initial NAFTA negotiation talks, will remain a concern for Canadian businesses, many of which rely on the American market.
The U.S. has one of the highest corporate income tax rates in the world. Slashing it to 15% would restore America’s competitiveness in the business world and give the U.S. a competitive edge over Canada, where the federal corporate tax rate is also 15%. In the past, tax-savvy American businesses have taken advantage of Canada’s lower corporate tax rate by moving operations north of the border; this is called an “inversion.” Continue Reading…
With August winding down and Labour Day around the corner, students across the country will be making their way to colleges and universities. As they say goodbye to their curfews and hello to independence, they’re forced to take on new responsibilities like doing their own laundry and managing their finances.
While this won’t be new for all millennials – a recent survey by H&R Block Canada found that 63% of respondents 18-24 were already filing taxes without help from their parents – everyone can benefit from a study session on personal finance and tax tips.
Take advantage of budgeting apps
Don’t put down your phones! Millennials should take advantage of mobile apps when it comes to managing their money. Apps like Mint and YNAB (You Need a Budget) can be valuable assets when budgeting. Most banks offer free apps to help their customers manage their finances.
Maximize your tax return
It’s never too early to start thinking about taxes. In 2016, the average refund for a student at H&R Block Canada was more than $1,100. That’s 21 music festival day passes, 346 thrift shop t-shirts, or 49 bottles of Canadian craft gin … depending how you look at it. There are simple things students and recent graduates can do in order to maximize their tax returns: Continue Reading…
Let’s HOPE this advisor’s financial plan means this senior couple won’t qualify for the GIS!
Here’s my latest MoneySense column, which looks at the headline-grabbing “news” that an  Enhanced Canada Pension Plan (CPP) would mean roughly 243,000 low-income seniors might not be eligible for the Guaranteed Income Supplement (GIS) once the full-bore enhanced CPP system is in place in the year 2060.
None of the five financial experts whose input appears in the piece disagreed with this article’s premise: that far from being a bad thing to make so much from CPP (or any other source of retirement income) that you exceed GIS minimum income thresholds, it’s actually a good thing. Yes, you have to work at a job to earn CPP benefits, whether “enhanced” or not, and yes, this entails payroll contributions taken off the top. That’s no different than anyone with a good employer pension or who saves in RRSPs or any other vehicles.
That’s what saving is all about: providing for future needs by taking a little out of current income. It’s all about living within your means, being responsible for your own future and all the other themes that the Financial Independence Hub espouses every day.
The Hub and MoneySense recently looked in-depth at OAS and the GIS, which you can find here. Â And earlier today we looked at Survivor benefits for CPP, OAS, GIS and other sources of retirement income.
One of the sources for the GIS article was TriDelta Financial’s wealth advisor, Matthew Ardrey. Time and space limitations meant we could include only a snippet of Matthew’s analysis in the MoneySense column itself but he has given us permission to run his whole opinion below:
TriDelta Financial’s Matthew Ardrey
The government plans to enhance CPP through two measures. One, increasing the contribution amount from 25% to 33% and two by increasing the income limit on which contributions are made to $82,700. Combined these two measures will take the maximum pension of $13,370 today to about $20,000 in the future.
There will be some measures to offset these contributions for the employee including an enhanced Working Income Tax Benefit (WTIB) to help offset the cost for lower income workers and making the enhanced contributions a tax deduction instead of a tax credit. Though that helps out today it does nothing for the low-income earner in retirement. Continue Reading…
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By Rowena Chan, TD Wealth
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