Around the World in 100 Words - March 2017, Week 12

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This week's Around The World (ATW) concerns the Budget, which is pretty much what you're going to need to do going forward with all the changes proposed. I have included a link below to a need-to-know summary for your benefit, saving you the time and effort of actually having to wade through the document from beginning to end:

https://www.mackenzieinvestments.com/en/assets/documents/marketingmaterials/mm-tep-2017-budget-bulletin-en.pdf

Though Canadian investors got a stay of execution on two issues: the taxing of Health & Dental plans and reducing the Capital Gains inclusion rate -for now, what is clear is that the current government is committed to getting their hands on more of your money. The sales pitch is that "Canadians need to pay their fair share of tax," as if we're somehow not already, even with marginal tax rates over 50%. Forget reducing the size and cost of government, or reforming our tax code to let hardworking Canadians keep more of their money. No, no, this government sees everything through the lens of tax-and-spend. There's an old saying: 'to a hammer, the whole world looks like a nail.' So it can be said here as well.

So what's the remedy? Short of renouncing your citizenship and taking your money and running, the best solution is to give serious consideration to saving more and more of it in non-registered investment vehicles. Canada taxes income, not assets (for now anyway), so holding assets that are either exempt from tax (such as the TFSA) or tax-preferred in the case of Corporate Class funds, makes sense. By contrast RRSPs represent an untaxed pool of money that current and future governments want more of. All they have to do is change the tax rates in their Budgets, and your portfolio declines in value.

I've included a funny from the New Yorker that speaks to how language is used to camouflage what is really happening. And so it is with our current Federal government when then insist that the tax code needs to be fair, when what they really mean is that your money is fair-game for them to take.

Martin Weiler
Financial Advisor
Manulife Securities Investment Services Inc.
1-519-546-5088