Blog Posts by Liam Lahey

Supposing you'll get a tax refund, what will you do with it? A survey commissioned by a tax software maker finds fewer Canadians will use their refunds this year to eliminate personal debt.

Dr. Tax Software, better known for its UFile ONLINE and UFile for Windows do-it-yourself tax return products, finds only 29 per cent of Canadians plan to use their refund to pay down debt, representing a 14 per cent drop in comparison to the company's 2009 consumer poll.

"Fourteen per cent is pretty substantial considering the Bank of Canada is constantly telling us we have to pay our debts," remarks Joanne Birtch, vice-president of marketing, Dr. Tax Software in Toronto.

The national survey, which polled Canadians aged 18 and older, also reveals that location affected respondents' plans in using their refund for debt repayment.

• 35 per cent of respondents in Quebec and the Atlantic provinces plan to use their refund to pay down debt

• 21 per cent of respondents in British Columbia will use their refund

Canadians are playing the odds: Many of us don't have any money set aside to deal with job loss, significant medical bills, out-of the-blue home repairs or other unexpected expenses.

According to Raymond Chun, senior vice-president for TD Canada Trust, the overall number of Canadians that still don't have an emergency savings fund is alarming.

"We have about 38 per cent of Canadians that really don't have any way of meeting what we'd call life's unexpected surprises. I'd say that percentage has been fairly consistent (to previous years)," Chun says. "Having said that, it's promising that about 53 per cent of us are starting to save and we're beginning to see a bit of an upward trend. But generally, savings needs to be more of a priority for most Canadians."

Chun cites the "2012 TD Canada Trust Report on Savings", which finds 53 per cent of Canadians admit they have been in a situation where they needed to rely on cash savings to navigate an unexpected life event, yet only 26 per cent

It was federal Finance Minster Jim Flaherty's first true opportunity to wield the axe with the strength of a majority government behind him and he did so to the tune of $5.2 billion on Thursday, cutting more than 19,000 civil servant jobs over the next three years, raising the age to qualify for Old Age Security (OAS) from 65 to 67, and eliminating the hapless penny.

Dubbed the "Economic Action Plan 2012", the budget will see the eligibility for OAS -- a benefit worth more than $6,000 annually -- bumped up to the age of 67 beginning in 2023. Eligible Canadians can also defer OAS payments for a maximum of five years beginning in 2013 in exchange for higher benefits. These changes will affect Canucks under the age of 54.

"Today it is clear we must take action to ensure the sustainability of the Old Age Security program, which is the largest spending program of the federal government," Flaherty said in his speech.

Jobs growth a key element

Jobs growth was a key element highlighted in the

I'll give Ontario Finance Minister Dwight Duncan some credit: He's left virtually no stone unturned in his austerity budget, and virtually all sectors of the province's economy will pay the price in the years to come as the government struggles to balance the books.

As wrenching as some of the cuts could be if the budget ultimately passes — never a guarantee with a minority government — it's the business community, in particular, that could end up paying the heaviest price of all when the squeezed dollars and lost opportunities are tallied up.

At the core of the issue is the government's plan to freeze previously announced plans to drop the provincial corporate income tax rate. Originally set at 14 per cent, it had been dropping in stages — to 12 per cent in 2012 and 11.5 per cent last year — and if the plan had held it would have moved to 11 per cent this July and finally 10 per cent in July 2013. The budget freezes the rate at the current 11.5 per cent and keeps it there until the

Last week, amidst the latest mortgage wars being waged by Canada's big banks, it was suggested the Canada Mortgage and Housing Corp. (CMHC) would make moves to cool this country's heated housing sector. As it turns out, that's not exactly the case.

The federal government seemingly has no appetite at present to tighten mortgage rules, preferring instead to let the market correct itself if it can. Ottawa has already tightened up mortgage insurance three times since 2008.

A Globe and Mail article published last week stated the CMHC would essentially make its own move to "dramatically curtail its growth in the mortgage market in the coming years in an effort to cool Canada's sizzling housing sector."

"There are no changes because we don't have the power to make any. Those changes usually come from the Department of Finance," explains Kate Munroe, spokesperson for the Ottawa-based CMHC. "All we did was publish our corporate plan for 2012-2016 and we do so every year. In this plan, there are

It's been said that through chequing account banking fees Canadians are being taken to the cleaners annually. In fact, it's more like to the tune of about $185 per year but that's still $185 that could be put to better use arguably.

So suggests a 2010 study by Vision Critical commissioned by ING DIRECT Canada that finds more than half of Canadians (55 per cent) have a fee-based chequing account and on average, they dole out $185 per year in fees for these accounts.

"That average includes people that are paying monthly fees and most banks charge monthly fees in the range of $10-$15 per month. In some cases, these accounts are subject to additional fees on top of that," explains John Davis, head of product management and market research at ING DIRECT Canada in Toronto. "You might find other charges such as buying cheques for your account or viewing cheques online, a lot of banks charge for that. These types of things add up."

ING DIRECT has been in front and centre for many months

Are we inching towards a cashless society? The results of one retailer's joint customer poll would have you believe we are and women are leading the charge to digitize their wallets.

Three-quarters of Canadian women (76 per cent) typically carry $50 or less in their wallet compared to 66 per cent of men, according to the results of a recent RBC/Shoppers Drug Mart poll.

In comparison, men tend to use bank machines up to twice a week (41 per cent) to keep cash in their wallets, where only one-third of women (33 per cent) will hit up an ATM.  The poll also finds that almost three-in-10 women (28 per cent) say they rarely or never withdraw cash, compared to 22 per cent of men.

"We're evolving towards a cashless society but I do think cash will continue to play a role in society for a period of

Thankfully mortgage delinquencies aren't a major concern in Canada, but you can still do yourself a favour and save thousands of dollars in interest payments by eliminating your mortgage debt ahead of schedule.

Owning a home is one of life's best investments, says David Stafford, managing director, Real Estate Secured Lending at Scotiabank in Toronto, pointing to the fact that owning a house historically has proven to be an appreciating asset over time.

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“Most Canadians are not struggling with paying off their mortgage. We’re not seeing huge problems with delinquency. In fact, since 2009 any delinquency problems we have had has been trending downward,” he says. “Wherever you live it’s going to cost you something to live there . . . the same power that compounding rates have in investments over time and the ability toRead More »from How to pay down your mortgage early