Category Archives: Financial

Topics involved with financial sovereignty

Investing in Japan for Canadian investors with Tokyo skyline, weak yen, Japanese equities and corporate reform

Investing in Japan: Is the Weak Yen Creating an Opportunity for Canadian Investors?

I am writing this from Japan. My family and I are here for a few weeks, moving between Osaka, Kyoto and Nara, and the weak yen is impossible to ignore. I was here more than a decade ago, and the difference this time shows up within the first day. Meals that would feel properly expensive back in Ontario come out costing a fraction of that once I convert. Local trains barely register as an expense. Even convenience store snacks, the onigiri and canned coffee that quietly add up on any trip, feel almost free.

I have already looked at Japan from the other direction in Living in Japan as a Canadian: what it costs to live here, how residency works, and where the country fits as an expat destination. This is a different question entirely.

Anyone who has glanced at CAD/JPY over the last couple of years already knows the yen has been weak. But standing in a train station doing currency math in my head, a different question kept nagging at me. If my Canadian dollar buys an unusual amount of Japan at the restaurant, the convenience store and the ticket machine, does it also buy an unusual amount of value on the Tokyo Stock Exchange?

The answer, after spending real time on this, is not necessarily.

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HOOPP pension deep dive showing defined benefit income, early retirement, bridge benefits, CPP, OAS and retirement investments

HOOPP Pension Deep Dive: What Is It Actually Worth, and How Should It Change Your Financial Plan?

Picture two households, both 55, both about to retire.

Household one has $1 million sitting in RRSPs and non-registered accounts. No pension. They look at their net worth statement and feel good about it. A million dollars is a million dollars.

Household two has $600,000 in investments and a HOOPP pension that will pay roughly $45,000 a year for the rest of their life, starting now. Their net worth statement, the conventional kind, says they have $600,000. Six hundred thousand dollars looks a lot smaller than a million.

So which household is actually in the stronger position?

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Canada's $50 billion Maple Fund showing CPP Investments and Brookfield funding Canadian infrastructure and strategic industries

Brookfield’s $50 Billion Maple Fund: Can Individual Canadians Invest Alongside It?

One of the announcements that caught my attention coming out of this week’s Canada Investment Summit was the creation of something called the Maple Fund.

The headline number is enormous: $50 billion.

CPP Investments and Brookfield Asset Management have created a new framework to pursue some of the largest infrastructure and strategic investments in Canada. Each organization could put as much as $25 billion into it over the next five years.

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TOSI and income splitting in Canada showing family tax planning strategies for business owners, couples and retirees

TOSI and Income Splitting: The Family Tax-Splitting Toolkit

Ask any Canadian business owner what happened to income splitting and you will get the same answer: TOSI killed it. Before 2018, a private corporation could pay dividends to a spouse who did nothing, to adult children away at school, to whoever in the family sat in the lowest tax bracket that year. Then the rules changed, and the general understanding is that this entire category of planning simply stopped working.

That understanding is half right, which is the most dangerous kind of half right. What actually happened is narrower and more interesting than “income splitting is dead.” The Tax on Split Income did shut down one specific manoeuvre: paying private-company income to family members whose only qualification was being related to the person who owned the business. That manoeuvre is genuinely closed. But it was never the whole of income splitting, and treating it as though it were has left a lot of Canadian households ignoring a real, current, and in some cases newly attractive set of tools, while continuing to half-remember advice that stopped being true eight years ago.

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Multi-generational wealth in Canada showing capital and opportunity being passed from one generation to the next

Multi-Generational Wealth in Canada: How Do You Actually Build Wealth That Survives Generations?

CIBC has cited estimates that roughly a trillion CAD will change hands between Canadian generations from 2024 through 2026, the largest transfer of its kind in the country’s history. Statistics Canada reports that the average size of a monetary gift to first-time home buyers rose 73% to $115,000 between 2019 and 2024. Nearly a third of first-time home buyers are now getting help from family to close the deal, up from a fifth in 2019. Whatever else is true about the Canadian economy right now, this is happening, and it is happening at a scale that will shape who owns what in this country for the next generation. It is worth noting, for reasons that will become clear a few sections from now, that some of CIBC’s own wealth commentary on this transfer repeats the claim that seventy percent of family wealth disappears by the second generation. It is a small, useful demonstration of how far that number has travelled, and how little scrutiny it has received along the way.

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Mortgages in Canada deep dive covering fixed and variable rates, penalties, HELOCs, porting, refinancing and prepayment privileges

Mortgages in Canada: The Deep Dive

I want to start with the sentence this entire article is built around. The mortgage with the lowest rate is not necessarily the cheapest mortgage.

Most Canadians shop for a mortgage the way they shop for a toaster. They compare a number on a rate sheet, pick the smaller one, and sign. Then, three years later, life happens. They get a job in another city. They have a third kid and need a bigger house. Their marriage ends. They get an inheritance and want to pay down a chunk of principal. They want to buy a rental property. And in that moment, the mortgage they picked because it was 0.10 percent cheaper than the alternative turns out to be a contract that punishes them for doing the ordinary things people do with their lives.

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Mortgage prepayment versus corporate investing in Canada comparing household debt reduction, business reinvestment, passive investing and corporate taxes.

Mortgage Prepayment vs Corporate Investing: Should a Business Owner Leave Money in the Company or Pay Down the House?

The previous articles in this series compared mortgage prepayment with a TFSA, RRSP, non-registered investing and an RESP. Corporate investing is a different problem because the money may not start on the personal side of the balance sheet at all.

Suppose I own a profitable Canadian corporation. The company earns more than I currently need to fund its operations or my lifestyle, and I still have a mortgage on my house. I could retain the money inside the corporate structure and use it to grow the operating business, fund an acquisition or build an investment portfolio. Alternatively, I could extract additional money personally, pay whatever tax applies to that extraction, and use the remainder to reduce my mortgage.

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Mortgage prepayment versus RESP in Canada comparing debt reduction with education savings and CESG grants

Mortgage Prepayment vs RESP: Should You Pay Down the Mortgage or Save for Your Kids?

The previous articles in this series compared mortgage prepayment with investing inside a TFSA, an RRSP, and a non-registered investment account. The RESP creates a different decision because there are really two RESP comparisons hiding inside the same account.

The first is whether I should contribute enough to receive the available Canada Education Savings Grant or put that money against the mortgage instead. The second is what I should do after I have already captured the grant. Should another dollar go into the RESP without receiving any additional CESG, into my TFSA if I still have room, or against the mortgage?

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Mortgage prepayment versus non-registered investing in Canada comparing debt reduction with taxable investment returns

Mortgage Prepayment vs Non-Registered Investing: Where Should a Canadian Put Their Extra Money?

The first two articles in this series compared mortgage prepayment with investing inside a TFSA and an RRSP. The TFSA comparison was relatively clean because both sides could be considered largely on an after-tax basis: paying down a non-deductible mortgage avoids an after-tax borrowing cost, while investment growth inside a TFSA is generally tax-free. The RRSP complicated the comparison because the contribution can generate a valuable tax deduction today while withdrawals become taxable income later.

Non-registered investing creates a third version of the same decision, and in some ways it is the hardest one.

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Mortgage prepayment versus RRSP in Canada comparing debt reduction with tax-deferred retirement investing

Mortgage Prepayment vs RRSP: Where Should a Canadian Put Their Extra Money?

The mortgage-versus-TFSA decision is relatively clean. If I have $25,000 available, I can use it to reduce a non-deductible mortgage or invest it inside an account where future growth is generally tax-free. The mortgage gives me something economically close to a guaranteed after-tax return equal to the interest I avoid. The TFSA gives me an uncertain investment return, but if that return materializes, I generally keep all of it.

Replace the TFSA with an RRSP and the comparison gets considerably more interesting.

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