At least one of Canada’s big banks is giving clients the go-ahead to top up their Tax-Free Savings Accounts by the extra $4,500 amount specified in Tuesday’s federal budget.
CIBC Wealth’s Jamie Golombek says the Budget included draft legislation that allows for an increased TFSA dollar amount for 2015 to $10,000, up from $5,500, the current 2015 TFSA dollar amount. But critically, he added:
CIBC’s Jamie Golombek
“We have received confirmation from the Canada Revenue Agency that, while the legislation is subject to Parliamentary approval, consistent with its general approach for proposed income tax changes, it is administering the measure on the basis that $10,000 is the new TFSA annual contribution limit. Clients may therefore proceed to contribute to their TFSA based on this proposed law.”
If you prefer pictures and graphics over text, you may enjoy this visual guide to Tuesday’s federal Budget, prepared by Vancouver-based robo-advisers, Wealthbar.com.
Until we figure out how to embed it here at the Hub, we’ll just send you over to the graphic housed at Wealthbar’s site. Just click on the red link below:
As you will note from the adjacent illustration of a horse race, we have focused on the big three measures we called earlier today the Findependence Trifecta.
As we noted on the Hub shortly after 4 pm, all three measures came through as telegraphed in the major media in recent days, including MoneySense. That is, almost-doubled TFSA annual contribution amounts ($10,000), reduced RRIF withdrawal rates and reduced tax on small businesses.
Now what’s all this about trifectas? Back in February, we ran a blog both at the Hub and at MoneySense about my reflections on harness racing in Florida, and its (somewhat remote) application to asset allocation. For those not familiar with the term trifecta, here is Wikipedia’s definition.
In a nutshell, horse-racing enthusiasts (“gambling” is such a harsh term!) make a bet on three specific horses placing one-two-three in a particular race. As you can imagine, this is not too likely: it’s a lot easier to bet on a single horse to “show” by coming in either first, second or third. But to correctly identify the first-, second- and third-place winners in exact order involves considerably longer odds. So it’s a big deal if you actually get it right and win a massive bet called the trifecta.
Of course, when it comes to financial independence, the analogy breaks down a little. But as I note in the MoneySense piece linked above, I think we should all be happy with the budget. Enjoy your potential future winnings from the Findependence Trifecta!
For convenience and archival purposes, we’ve also republished a version of the blog below: Continue Reading…
Finance Minister Joe Oliver (Department of Finance/Flickr)
By Jonathan Chevreau
Journalists and financial experts will be entering a “Lock-up” this morning in Ottawa, getting roughly a six-hour head start on the rest of us on the contents of the 2015 federal budget.
Even so, a combination of leaks and informed speculation give us a pretty good idea about the contents, which will gush forth within seconds of 4 pm, when the embargo is lifted.
Here at the Financial Independence Hub, we will be focusing on three main measures that if announced will do much to speed or improve our collective “Findependence.” Our hoped-for “trifecta” from Finance Minister Joe Oliver (pictured above) includes the much-delayed promise of a doubling of annual TFSA limits, a lowering of minimum withdrawal limits for RRIFs, and lower tax rates for small business. Continue Reading…
Excerpt: With the Bank of Canada holding still on further rate changes, BlackRock’s Head of Canadian Fixed Income Aubrey Basdeo explains why this may not be the end of the story.
The Bank of Canada left its key overnight interest rate unchanged in its April 15 announcement –- no surprise there. Given that the central bank had been signalling for some time that it was taking time to assess the impact of the “insurance” it took out in January with a surprise 25 bps rate cut, most analysts expected Governor Stephen Poloz to stand pat. And he did.
With that out of the way, the more important factor now is what the Bank sees as the trajectory of economic growth for Canada, because that will be fixed-income investors’ guide for how it will react to disappointment or surprises along the way. For the record, we believe there is a lot of room for disappointments that may derail the Bank’s forecast growth trajectory.
Strong rebound expected in second & third quarter
But first let’s look at what the Bank had to say about the economic picture going forward. The storyline goes something like this: Yes, the first quarter was terrible, maybe even atrocious, but things are going to get better real fast. Continue Reading…
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