Category Archives: Financial Planning

Terry Broaders

Weekly Update April 7 2017

“A Rich Man Is Nothing But A Poor Man With Money ” – W.C. Fields


TSX Ends Lower On Friday

Canada’s main stock index ended modestly lower on Friday as financial and natural resource shares lost ground, while concerns about escalating geopolitical tensions after a U.S. strike in Syria prompted a risk-off sentiment among investors. The Toronto Stock Exchange’s S&P/TSX composite index was down 30.05 points, or 0.19 per cent, at 15,667.13 shortly after the closing bell. Wall Street’s three major indexes edged lower on Friday to end well below session highs after a weaker-than-expected job report, a U.S. missile strike in Syria and comments by a key Federal Reserve official on the Fed’s plan to reduce its balance sheet. The Dow Jones Industrial Average fell 7.06 points, or 0.03 per cent, to 20,655.89, the S&P 500 lost 1.93 points, or 0.08 per cent, to 2,355.56 and the Nasdaq Composite dropped 1.14 points, or 0.02 per cent, to 5,877.81.
The news of the U.S.-Syria attack sent global stocks lower when it was announced, with the S&P 500 futures index falling as much as 0.5 per cent. But most of the losses ebbed after U.S. officials described the attack as a one-off that would not lead to wider escalation. U.S. employers added about 98,000 jobs in March, the fewest since last May and well below economists’ expectation of 180,000, as bad weather hit hiring at construction sites. However, wage growth ticked up slightly and the unemployment rate fell. Oil prices rose on Friday, trading near a one-month high and closing the week up 3 per cent after the United States fired missiles at a Syrian government air base, raising concern that the conflict could spread in the oil-rich region.


Canada Gains 19,400 Jobs 

Canada’s labour market pumped out another 19,400 net jobs last month, with the vast majority of the new work being full-time. However, Statistics Canada’s job survey Friday also showed the bulk of those new positions were created in the category of self-employment, which can include people working for a family business without pay. The report found that while 95% of the new jobs created last month were full-time, 95% of them were also self-employed positions. The agency says the country’s unemployment rate crept up in March to 6.7% from 6.6% because more people were looking for work. Compared to a year earlier, the categories of full-time and part-time work have each increased 1.5%.
The country lost 2,400 positions in the services sector last month, but added 21,800 factory jobs thanks to the biggest month-to-month surge in manufacturing work since 2002. The manufacturing sector added 24,400 positions, mostly in Ontario and to a lesser degree in Alberta, to climb back up to the same level it was 12 months earlier. Still, compared to its peak in the early 2000s, the manufacturing sector has about 630,000 fewer jobs, a drop of 27%, Statistics Canada said. Alberta easily saw the biggest overall job boost among provinces, adding 20,700 full-time jobs last month. At the other end of the spectrum, Quebec shed 17,800 full-time positions.



Your Tax Return Checklists for 2016 Tax Year Preparation 


Sources: Bloomberg; Investment Executive;;

Terry Broaders

Weekly Update March 17 2017

“Replace Negative Thoughts With Positive Thoughts And You’ll Have Positive Results” – Willie Nelson


TSX Slips On Materials And Financials

Gold miners and large financial services companies dragged Canada’s main stock index lower Friday, as Wall Street made modest moves. On Bay Street, the S&P/TSX composite index dropped 71.92 points to 15,490.49 with the materials sector being biggest decliner on the commodity-heavy index.  In New York, markets were mixed. The Dow Jones industrial average fell 19.93 points to 20,914.62, while the S&P 500 index inched down 3.13 points to 2,378.25. The Nasdaq composite index gained 0.24 of a point at 5,901.00. The Canadian dollar sat just below the 75-cent mark, up 0.06 of a U.S. cent at US74.98¢. In commodities, the May crude oil contract added US7¢ at US$49.31 per barrel and the April natural gas contract rose US5¢ at US$2.95 per mmBTU. The April gold contract added US$3.10 at US$1,230.20 an ounce and May copper gained a cent to US$2.69 a pound.


Canadian Household Debt Creeps Up To Another Record 

The amount Canadians owe compared with how much they earn hit another record high last year. Statistics Canada said the amount of household credit market debt rose to 167.3% of adjusted household disposable income in the fourth quarter (Q4), up from 166.8% in the third quarter. That means there was $1.67 in credit market debt for every dollar of adjusted household disposable income.

Fuelled by mortgages and low interest rates, household debt has been climbing steadily in recent years. Policymakers have raised concerns about household debt and see it as a key risk to the economy. While interest rates have been low for years, making borrowing money cheap for Canadians, some have expressed concerns about what could happen when rates rise or if there is a shock to the economy that results in a large number of job losses. Total household credit market debt, which includes consumer credit, and mortgage and non-mortgage loans, totalled nearly $2.029 trillion in the final quarter of last year. Mortgage debt accounted for 65.5% of the total. In Q4 2016, households borrowed an additional $28.4 billion on a seasonally adjusted basis, up from $18.7 billion added in the previous quarter. However, even as borrowing rose, household sector net worth at market value rose 1.0% in Q4 2016 to $10.268 trillion, boosted by gains in the stock market. The latest reading on household debt from Statistics Canada came as consumer credit company Equifax said in its national consumer credit trends report that total consumer debt held by Canadians, including mortgages, in Q4 2016 increased 6% cent compared with a year ago to $1.718 trillion.  The Equifax report also noted that while 46% of consumers were decreasing their debt, 37% were borrowing more.




Your Tax Return Checklists for 2016 Tax Year Preparation 


Sources: Bloomberg; Investment Executive;;

Terry Broaders

Weekly Update March 10 2017

“A Liar Will Not Be Believed, Even When He Speaks The Truth” – Aesop


TSX Makes a Small Gain In Flat Markets On Friday

Canada’s main stock index ended barely higher on Friday as sharp gains for gold miners were overshadowed by a slump in shares of Toronto-Dominion Bank after a report it pressured employees to meet high sales revenue goals. The Toronto Stock Exchange’s S&P/TSX composite index unofficially closed up 9.84 points, or 0.06 per cent, at 15,506.68. The index lost 0.7 per cent on the week. Shares in TD, Canada’s No. 2 lender, fell 5.6 per cent to $66, its biggest one-day decline since December 2014. The financials group slipped 1.1 per cent, despite some of its biggest members moving higher as solid domestic jobs data broadly boosted bond yields.  Of the index’s 10 main groups, just financials and energy were in negative territory.

In New York, the Dow Jones industrial average gained 44.79 points to 20,902.98, the S&P 500 index added 7.73 points to 2,372.60, and the Nasdaq composite index advanced 22.92 points to 5,861.73. The loonie gained a quarter of a cent to US74.28¢ while the April crude contract dropped by US79¢ to US$48.49 a barrel.  Crude oil resumed a sharp decline and global equity markets rose on Friday after a robust U.S. jobs report drove home the strength of the world’s biggest economy and set the stage for the Federal Reserve to raise interest rates next week.  Banking stocks in the euro zone hit their highest in more than a year on expectations the European Central Bank, after a meeting on Thursday, will tighten policy in March 2018.


Canada’s Unemployment Rate at 6.6%; Lowest In Two Years 

Canada’s unemployment rate dropped to 6.6% last month, its lowest level in more than two years, Statistics Canada said Friday.  The decline of 0.2 percentage points from the previous month brought the rate down to a number not seen since January 2015.  The agency’s February employment survey indicated the national labour market added 15,300 jobs overall last month, higher than analyst expectations. Economists had projected a gain of 2,500 jobs and the unemployment rate to stay at 6.8%, according to Thomson Reuters. “This continues the string of improving Canadian economic data and suggests that the underlying economy continues to gain steam,” said BMO senior economist Benjamin Reitzes in a note to analysts. “One more piece of evidence that the Canadian economy has turned the corner.”

The Statistics Canada report found most of the February job gains came from full-time work, offset by a decline in the number of people working part-time.  It said an estimated 105,000 more people found full-time employment last month while part-time positions dropped by 90,000. That was in contrast to the January labour market survey, which showed a surge in part-time work.  In the 12 months to February, Canada saw a net gain of 288,000 jobs with most of the increase coming in the last six months of  22016.  Much of the increased job activity was seen in the West with British Columbia, Saskatchewan and Manitoba all seeing gains. In contrast, fewer people were working in Nova Scotia and Newfoundland and Labrador while employment was little changed in the other five provinces.  Women in the 25-to-54 age bracket saw more work, marking the third monthly increase in that category. Men in the same age range saw employment holding steady in February after a notable increase the previous month.



Your Tax Return Checklists for 2016 Tax Year Preparation 


Sources: Bloomberg; Investment Executive;;

Terry Broaders

Weekly Update March 3 2017


“There Is No Elevator To Sucess, You Have To Take The Stairs” – Zig Ziglar


TSX Posts Solid Gain

The Toronto stock market rose, with energy stocks pushed up by rising oil prices, while U.S. indices were generally flat amid the comments from the U.S. Federal Reserve suggesting interest rate hikes were in the offing. On Bay Street, the S&P/TSX composite index gained 71.85 points at 15,608.50. In New York, major indexes had small gains following a speech today by Fed chairwoman Janet Yellen. Yellen said the central bank will likely lift interest rates later this month.At the close, the Dow Jones industrial average added 2.74 points to 21,005.71, the S&P 500 was up 1.20 points to 2,383.12, and the Nasdaq composite index advanced 9.53 points to 5,870.75.

The Canadian dollar, which has been sliding in value as of late, was trading at US74.60¢, down 0.10 of a cent from Thursday’s close. The April crude contract was up US72¢ at US$53.33 per barrel and April natural gas added US2¢ at US$2.32 per mmBTU.April gold shed US$6.40 at US$1,226.50 an ounce and May copper gained a cent to US$2.70 a pound.


Canada’s Economy Smashes Expectations

The Canadian economy outperformed expectations in the final three months of 2016 by growing at an annual rate of 2.6%, Statistics Canada said Thursday.  The agency’s latest report on real gross domestic product said the biggest contribution to the fourth-quarter increase came from household consumption, which rose at an annual rate of 2.6%.  Downward pressures on economic growth were led by an 8.2% decline in business investment..  A consensus of economists had predicted economic growth in the fourth quarter would expand by 2%, according to Thomson Reuters.  Overall, the economy expanded by 1.4% in 2016 ,  compared to 0.9%.  “There are worse ways to end a year,” TD Bank senior economist Brian DePratto in an analyst note.  “Canadians opened their wallets both at stores and construction offices, delivering a solid fourth-quarter economic performance. ‘

The real GDP figures were released as the Bank of Canada and the federal government try to gauge the direction of U.S. economic policy under President Donald Trump. Concern has spread through Corporate Canada and Ottawa over the effects of possible changes to taxation and trade policies by Trump’s administration.  The Bank of Canada held its benchmark interest rate steady on Wednesday and warned that it is keeping a watchful eye on “significant uncertainties” weighing on the outlook for the economy.  The fourth-quarter real GDP result followed growth in the third quarter at a revised annual rate of 3.8 per cent. That third-quarter reading was driven by a strong rebound in energy exports after the devastating spring wildfires in the Alberta oilpatch.  Over the final months of 2016, exports of goods and services increased at an annual rate of 1.3 per cent.  The overall GDP figure received a boost from a sharp quarterly drop in imports, which fell at an annual rate of 13.5 per cent. Statistics Canada said some of the decline was due to the one-time, third-quarter import of a large module for the Hebron offshore oil project in Newfoundland.



Your Tax Return Checklists for 2016 Tax Year Preparation 

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FundEX Bulletin About Fees

The You First Infokit About Fees


Sources: Bloomberg; Investment Executive;;


Terry Broaders

Weekly Update February 24 2017


“Whoever Is Careless With Truth In Small Matters Cannot Be Trusted With Important Matters” – Albert Einstein


Don’t Forget, RRSP Deadline Is Wednesday March 1


TSX Tumbles, Dow Jones Continues Winning Streak

Canada’s largest stock market racked up its biggest one-day loss in five months in a broad-based decline across all sectors. The Toronto Stock Exchange’s S&P/TSX composite index dropped 247.73 points or 1.57% to 15,533.47, with energy, consumer staples and metals stocks bearing the brunt of the slump. The last time the commodity-heavy index registered a loss of such magnitude was last September, when it fell 248.04 points.
On the flip side, Wall Street finished in the positive after being negative throughout most of the session. The Dow Jones industrial average was ahead 11.44 points at 20,821.76 and the S&P 500 was up 3.53 points at 2,367.347. The tech-heavy Nasdaq composite rose 9.8 points at 5,845.31. In currencies, the Canadian dollar was slightly higher, up 0.03 of a cent at US76.28¢. The April crude contract dipped US46¢ at US$53.99 per barrel.
On the economic ledger, Statistics Canada reported that January’s consumer price index rose 2.1% on a year-over-year basis in January, following hiking 1.5% in December. On a seasonally-adjusted monthly basis, inflation moved up 0.7% in January, after increasing 0.4% in December.


Average Life Expectancies Could Push Past 90 Years

A new study by Imperial College London and the World Health Organization (WHO) has revealed that human life expectancies may increase by 2030. The study surveyed data from 35 industrialized countries. High-income countries represented in the study include the US, Canada and Germany, while the emerging economies include Poland, Mexico, and the Czech Republic. Among the countries surveyed, South Korea had the longest life expectancy at birth, for both men (84.1 years old) and women (90.8 years old). As for the countries with the longest life expectancy for 65-year-olds in 2030, Canada topped the rankings for men (22.6 additional life years), while South Korea had the longest expectancy for women (27.5 additional life years). South Korea’s promising outlook is due to a number of factors including good nutrition in childhood, low levels of smoking, and uptake of new medical knowledge and technologies.
The study also reveals the possibility of life expectancies breaching the 90-year barrier – something scientists used to think was impossible, noted  Professor Majid Ezzati, lead researcher from the School of Public Health. “We repeatedly hear that improvements in human longevity are about to come to an end,” he said. “I don’t believe we’re anywhere near the upper limit of life expectancy – if there even is one.”   “The fact that we will continue to live longer means we need to think about strengthening the health and social care systems to support an aging population with multiple health needs. This is the opposite of what is being done in the era of austerity,” said Ezzati. “We also need to think about whether current pension systems will support us, or if we need to consider working into later life.”



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Sources: Bloomberg; Investment Executive;;

Frank Mueller

The new BC Home Owner Mortgage & Equity Plan explained.

Recently, the BC Liberal Government made waves by introducing the “BC Home Owner Mortgage and Equity Partnership.” For your own reference, you can go to the BC Housing website to read more about this new program, but I will highlight some of the main features, as well as some of the potential pros and cons of the program below.

How Does the Program Work?

This new program is designed to assist British Columbia residents who are eligible first-time homebuyers by providing a down payment assistance loan. The BC Home Partnership Loan will match your down payment up to a maximum 5% of the purchase price on a home, to a maximum of $37,500. The maximum purchase price is $750,000.

This loan is repayable over 25 years, but the first 5 years of the loan accrue zero interest and require no repayment. Starting in the 6th year of the loan, interest will begin to accrue, and the borrower(s) will begin to make payments using a 20-year amortization (the original 25 years minus the 5 year grace period). The interest rate will be calculated as Royal Bank of Canada Prime Rate plus 0.5%, and will be reset to the new prime rate + 0.5% on the 10th, 15th and 20th anniversary dates.

Who Qualifies?

The eligibility requirements can be a bit tricky. In order to qualify for the BC Home Partnership Loan, buyers must:

  • Be a Canadian citizen or permanent resident that has resided in Canada for at least five years
  • Have lived in British Columbia for at least the full 12 months preceding the application
  • Be a first-time homebuyer who has not owned an interest in a principal residence anywhere in the world at any time, and has never received a first-time homebuyers’ exemption or refund
  • Purchase a home that is $750,000 or less.
  • The combined, gross household income of all individuals on the title mustn’t exceed a GROSS annual income of $150,000
  • The home being purchased must be used as the principal residence of all individuals on the title for the five years after purchasing
  • Be eligible for a high-ratio, insured first mortgage for the home
  • Your primary lender on the high-ratio mortgage must also agree to have the BC Home Partnership Loan registered on title as a second mortgage

Recall that a new, separate, regulation for home purchasers with less than 20% down (i.e. requiring a high-ratio mortgage) states that the borrower(s) must pass a “stress test”. The stress test will measure the borrowers’ ability to pay their mortgage using the Bank of Canada’s 5-Year Fixed Rate (currently, 4.64%), rather than using the actual rate offered by the bank (currently, mid-2% range).

Detractors of the new program feel that injecting new money into the equation will simply encourage more spending, and ultimately, will fuel higher real estate prices – especially in the Greater Vancouver Area.

Supporters of the new program are quick to counter that this program is available for house purchases anywhere in BC, and that detractors are ignoring the potential benefits for non-GVA residents.

Here are a few handy links:

BC Home Partnership Loan Information

BC Home Partnership Loan Calculator