Managed Money Reporter Newsletter — Issue 292, March/April 2016

Editors: Carl Spiess & Allan McGlade

Featured Articles

2016 Federal Budget Update

Carl Spiess

By Carl Spiess, CFP, CIM, FMA, FCSI, MBA

The March 22nd budget had several items of note for investors. Please see below for a detailed analysis from experts across Scotia Wealth Management and Scotiabank.

The main items include:

  • Switches on corporate class mutual funds to be taxable starting in October 2016
  • Capital gains inclusion rate remains at 50%
  • No changes to stock options
  • Corporate small business rate held at 10.5%
  • New Canada Child Benefit will provide up to $6,400 per child
  • Seniors - OAS remains available at 65 reversing the change to 67 proposed for 2023

In light of the changes to corporate class funds, we will review non-registered investment holdings and determine if any changes are required before October 1st. Note, switches within different series of the same fund will still be tax deferred. Corporate class funds will continue to offer other benefits such as potentially reduced distributions and tax effective return of capital.

We have also attached a few other firms' analysis and look forward to answering questions you may have. Please contact us directly if you want to review your investment strategies in light of these announcements.

More on federal budget 2016


We are Scotia Wealth Management — Enriched Thinking™

You may have seen the advertising. Our new brand is Scotia Wealth Management. Our team of 12 are still the same trusted wealth management specialists you have known for years. And now we have a more formal relationship with other experts at Scotia to help review your overall situation. It's your thinking, combined with our thinking, to create Enriched Thinking™.

Please see the attached recent article from the Financial Post and flyer introducing our team of specialists:


Marginal tax rates

With the changes to the Ontario and Federal tax rates, the top marginal rate for Ontario tax payers is now 53.5%. Our chart shows the rates on each additional dollar of income depending on your income (and whether you receive old age security). Naturally, we use TFSAs and RRSPs to shelter as much investment income as possible from tax, but for those with non-registered investment accounts, tax planning has become even more important.


Flow Through Shares for Tax Savings

As a result of recent tax rate increases, flow through resource exploration investments which provide up to a 100% up-front tax deduction are back on the radar for some clients. These funds invest in the currently depressed energy and mining sectors and as such could provide handsome returns if/when those sectors see a recovery from present levels. The after tax returns can be attractive, especially for clients with prior tax loss carry forward balances. We have flow throughs from proven managers like Sprott, CMP, MRF, Maple Leaf and Canoe. Please see our page on flow through investments and contact us if you want to discuss whether flow through shares make sense in the context of your personal financial goals.


Recommended Viewing for Youth — Why you will fail to have a great career?

Larry Smith was my economics professor and became my mentor at the University of Waterloo. He gave a very popular TEDx talk a few years ago. It now has over 4.9 million views.

I was honoured when Larry interviewed me last year for his class in entrepreneurship.

Larry has now written a book – it will be released in April and I look forward to reviewing it soon!

Stay tuned for more.


Tax Rules Changing for Insured Annuities

Even before the Federal Budget, it was announced that in 2017 the tax advantageous rules for prescribed annuities will be changing. For anyone considering an insured annuity, 2016 will be the year to set up that tax efficient guaranteed income stream with survivor benefits. This is of special interest to those aged 60-80 with significant non-registered investment assets.

Please contact us for a personalized analysis. For more information on annuities visit our page on annuities at:

And see the attached piece on the rule changes:


Recommended Link of the Month

IIROC carries out its regulatory responsibilities through setting and enforcing rules regarding the proficiency, business and financial conduct of dealer firms and their registered employees. Their investor page describes how they protect investors. They also set and enforce market integrity rules regarding trading activity on Canadian equity marketplaces. You can use their site to check the background of your advisors and learn about how to ensure you are receiving good advice.



Contact Us

T.  416.863.RRSP (7777)
F.  416.863.7479

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The Spiess McGlade Team is a personal trade name of Carl Spiess and Allan McGlade.