March, 2010 | Straight answers
Regular readers of Straight Answers will know that we are very bullish on exchange traded funds (ETFs). In fact, we believe most investors would benefit from holding ETFs in the 'core' of their portfolios. In this issue, Weigh House Chief Investment Strategist Ken Hawkins provides a basic primer on Canadian equity ETFs, including some strategies for eight popular funds. This is an interesting read for the vast majority of Canadian investors holding significant positions in home grown equities.
In a related article, Weigh House Investor Consultant Neal Chambers illustrates the damaging, long-term effects of 'fee compounding' on portfolio values and retirement security. He reminds us that ETFs are attractive alternatives to mutual funds for their low management fees.
Finally, we present a summary of investment news that caught our eye recently in a segment we call the Good, the Bad and the Ugly.
Carlo Palazzo
Understanding Canadian Equity ETFs
by Ken Hawkins
Introduction
It is a little known fact that the world’s first Exchange Traded Fund (ETF) was created in Canada. Introduced in 1990, TIPS (short for Toronto 35 Index Participation Units) tracked the Toronto 35 Index. It comprised the 35 largest and most liquid stocks on the Toronto Stock Exchange. Now ETFs are traded worldwide and their use is growing rapidly.
Since most Canadian investors hold significant portions of their portfolios in Canadian equities, it is important to fully understand Canadian equity ETFs, and the indexes they are based on. This article reviews the following relevant ETFs:
|
Market Capitalization
ETFs
|
Other Broad-Based ETFs
|
|
iShares CDN Composite
Index Fund (XIC)
|
Claymore CDN Fundamental
Index (CRQ)
|
|
iShares CDN Large Cap
60 Index Fund (XIU)
|
iShares CDN Value Index
Fund (XCV)
|
|
Shares CDN Completion
Index Fund (XMD)
|
iShares CDN Growth Index
Fund (XCG)
|
|
iShares CDN Small Cap
Index Fund (XCS)
|
iShares CDN S&P 500
Index – Hedged (XSP)
|
S&P/TSX Composite Index
The S&P/TSX Composite Index, the benchmark for the Canadian equity market, is used by the majority of professional money managers to gauge their Canadian equity portfolios. Developed in 1977, the Composite Index now represents about 95% of the Canadian equities market by market capitalization. It is a market capitalization index, which means that the weight given each constituent stock is determined by its market capitalization.
The Composite Index is subdivided into two other indexes. The 60 largest companies by market capitalization make up the S&P/TSX 60 Index with the remaining stocks in the S&P/TSX Completion Index. On March 2, 2010, the S&P/TSX 60 represented 77.7% of the Composite Index and the Completion Index accounted for 22.3%.
|
|
S&P/TSX Composite
|
S&P/TSX 60
|
S&P/TSX Completion
|
|
No. of Stocks
|
210
|
60
|
150
|
|
Total Market Cap ($ millions)
|
1,302,810
|
1,012,810
|
290,010
|
|
Avg. Market Cap ($ millions)
|
6,200
|
16,880
|
1,930
|
|
Top 10 Holdings (% Market Cap)
|
35.10%
|
45.15%
|
20.31%
|
Each stock is categorized into a different industrial sector. For the Toronto Stock Exchange, the sector classification standard is the Global Industry Classification Standard (GICS) jointly developed by Morgan Stanley Capital International (MSCI) and Standard and Poors (S&P) in 1999. The GICS classification system consists of four levels or hierarchies. Currently there are 10 sectors, 24 industry groups, 76 industries and 147 sub-industries. The 10 sectors are Energy, Materials, Industrials, Consumer Discretionary, Consumer Staples, Health Care, Financials, Information Technology, Telecommunication Services and Utilities.
Much of the weight of the Composite Index is concentrated in three sectors, Energy (27.3%), Financials (30.7%) and Materials (18.5%) which represent 76.5% of the overall Index. Although representative of the overall stock market, those weights are not characteristics of the Canadian economy.
|
Sector
|
Weight
|
|
Consumer Discretionary
|
4.5%
|
|
Consumer Staples
|
2.8%
|
|
Energy
|
27.3%
|
|
Financials
|
30.7%
|
|
Health Care
|
0.5%
|
|
Industrials
|
5.7%
|
|
Information Technology
|
3.6%
|
|
Materials
|
18.5%
|
|
Telecommunication
|
4.4%
|
|
Utilities
|
1.7%
|
The S&P/TSX Composite Index is a very concentrated – poorly diversified by any standard of portfolio management. When building a portfolio using ETFs, one must take care not to incur any more sector risk than necessary. For those using S&P/TSX Composite Index as a benchmark, it is important not to vary significantly from to ensure benchmark risk and tracking error are minimized.
Market Capitalization ETFs
ETFs based on market capitalization include the most actively-traded Canadian ETF – the iShares CDN Large Cap 60 Index (XIU).
| MER |
Price March 2/10 |
Market Cap ($ millions) |
Avg. Daily Vol. ('000) |
|
|
iShares CDN Composite
Index (XIC)
|
0.25%
|
$18.67
|
$9,613
|
227
|
|
iShares CDN Large Cap
60 Index (XIU)
|
0.17%
|
$17.45
|
$11,130
|
7,420
|
|
iShares CDN Completion
Index (XMD)
|
0.55%
|
$19.05
|
$168
|
35
|
|
iShares CDN Small Cap
Index (XCS)
|
0.55%
|
$14.66
|
$103
|
74
|
iShares CDN Composite Index Fund (XIC)
The iShares Composite Index Fund seeks to replicate the performance of the S&P/TSX Capped Composite Index net of expenses. ‘Capped’ means that no stock can have a weight greater than 10% of the Index. The Composite Index is predominately a large cap and mid cap index, with 76.5% of the Index represented by large cap stocks and 22.2% in mid cap. As noted earlier, it is dominated by Energy (27.3%), Financials (30.7%) and Materials (18.5%).
Strategy
Since this ETF matches the benchmark, investors can hold it outright for exposure to Canadian equities. Usually considered a ’core’ holding, the XIC can be approximated with 78% S&P/TSX 60 (XIU) and 22% S&P/TSX Completion (XMD) in a portfolio.
| Large Cap | Mid Cap | Small Cap | |
|
iShares CDN Composite Index
|
76.5%
|
22.2%
|
1.2%
|
|
iShares CDN Large Cap 60 Index
|
94.3%
|
5.7%
|
0.0%
|
|
iShares CDN Completion Index
|
14.8%
|
79.6%
|
5.6%
|
|
iShares CDN Small Cap Index
|
0.0%
|
61.4%
|
38.5%
|
iShares CDN Large Cap 60 Index Fund (XIU)
The iShares 60 Index Fund is designed to mirror the performance of the S&P/TSX 60 Index. The Index comprises 60 of the largest (by market capitalization) and most liquid TSX securities selected by S&P. With a MER of 0.17% and an averaging daily trading volume of 7,420,000 shares, it is both the least expensive and most active Canadian ETF. It is predominately large cap with 94.3% of constituent stocks classified as such. It has a very similar sector breakdown as the Composite Index with Energy shares comprising 28.4%, Financials 32.5% and Materials 18.1%.
Strategy
Due to its liquidity, low MER and small tracking error (relative to S&P/TSX Composite), the XIU is the most actively traded Canadian ETF among institutional investors. It has outperformed the Composite in many years. When higher risk pays off however, as it did during most of 2009, the XIU will underperform the broader benchmark. The XIU is a ‘core’ holding and also the best choice for investors looking to actively trade an ETF.
| Value | Blended | Growth | |
|
iShares CDN Composite Index
|
34.3%
|
34.7%
|
30.9%
|
|
iShares CDN Large Cap 60 Index
|
33.2%
|
36.8%
|
30.0%
|
|
iShares CDN Completion Index
|
38.2%
|
27.7%
|
34.1%
|
|
iShares CDN Small Cap Index
|
37.1%
|
31.8%
|
31.0%
|
iShares CDN Completion Index Fund (XMD)
The iShares CDN Completion Index Fund tracks the S&P/TSX Completion Index. The Index comprises predominately mid cap stocks, which make up 79.6% of the Index versus 14.8% large cap and 5.6% small cap. Like the large cap Index, it is dominated by Energy (26.4%), Financials (24.2%) and Materials (22.0%) for a total of 72.6%. It has a smaller proportion of Financials (24.2%) than the Composite (30.7%).
Strategy
The XMD is typically an ’explore’ or ’satellite’ holding that complements other holdings in a portfolio. It can be used in conjunction with the S&P/TSX 60 Index (XIU) to mirror the overall Composite. A ratio of 78% XIU and 22% XMD will approximate the S&P/TSX Composite. Depending on the prevailing view of the market, one might overweight either the XIU or XMD. If an investor believed that Financials and large cap stocks were going to outperform in general, then he or she might hold 90% to 100% in the XIU, and 10% or less in the XMD. Alternatively, if an investor believed that Resources, cyclical stocks and small cap stocks will outperform, then he or she might have 40% to 50% in the XMD, and 50% to 60% in the XIU.
|
Sector
|
XIC
|
XIU
|
XMD
|
XCS
|
|
Consumer Discretionary
|
4.5%
|
4.4%
|
5.0%
|
6.4%
|
|
Consumer Staples
|
2.8%
|
2.6%
|
3.9%
|
4.1%
|
|
Energy
|
27.3%
|
27.5%
|
26.4%
|
25.8%
|
|
Financials
|
30.7%
|
32.5%
|
24.2%
|
14.0%
|
|
Health Care
|
0.5%
|
0.3%
|
1.2%
|
3.3%
|
|
Industrials
|
5.7%
|
5.1%
|
7.6%
|
12.4%
|
|
Information Technology
|
3.6%
|
3.6%
|
3.6%
|
2.2%
|
|
Materials
|
18.9%
|
17.9%
|
22.0%
|
30.1%
|
|
Telecommunication
|
4.4%
|
5.1%
|
2.0%
|
0.0%
|
|
Utilities
|
1.7%
|
1.0%
|
4.1%
|
1.7%
|
iShares CDN Small Cap Index Fund (XCS)
The iShares CDN Small Cap Index ETF reflects the S&P/TSX Small Cap Index. The Small Cap Index was created for the small cap segment of the Canadian equity market. It comprises smaller securities (by market capitalization) listed on the TSX; specifically 61.4% mid cap and 38.5% small cap stocks. It is dominated by Materials (30.1%) Whereas S&P/TSX Composite, 60 and Completion Indexes are part of the same system for calculation, the Small Cap Index is totally separate with a different set of rules.
Strategy
Like the XMD, the XCS is most often a satellite holding, complementing other assets in a portfolio. The XCS has the potential for greater returns in strong markets, but will fall farther than large cap ETFs in weak markets. It provides good upside when small resources stocks are doing well. It should never be a ‘core’ holding or ‘held’ throughout a complete market cycle. It is intended to provide extra upside potential for modest risk takers.
Other Canadian Equity ETFs
Broad-based ETFs are also used for exposure to Canadian equities. Four examples are described in the following table.
| MER |
Price March 2/10 |
Market Cap ($ millions) |
Avg. Daily Vol. ('000) |
|
|
Claymore CDN Fundamental
Index (CRQ)
|
0.65%
|
$11.34
|
$107
|
51
|
|
iShares CDN Value Index
(XCV)
|
0.50%
|
$19.15
|
$44
|
15
|
|
iShares CDN Growth Index
(XCG)
|
0.50%
|
$21.54
|
$39
|
6
|
|
iShares CDN S&P 500
Index - Hedged (XSP)
|
0.24%
|
$12.97
|
$1,150
|
422
|
The Claymore Canadian Fundamental Index ETF (CRQ)
The Claymore Fundamental Index is designed to replicate the performance of the FTSE RAFI Canada Index. It is made up of 65 of the largest Canadian companies. Rather than market capitalization, the Index weights stocks based on fundamentals, using four accounting factors;
- Total cash dividends (five-year average of all regular and special distributions)
- Free cash flow (five-year average cash flow)
- Total sales (five-year average total sales)
- Book equity value (current period book equity value)
By using these factors, the Fundamental Index takes advantage of price movements by reducing the Index’s holdings of constituents whose prices have risen relative to other stocks, and increasing holdings in companies whose prices have fallen behind. In addition, fundamentals-weighting decreases exposure to high P/E stocks during episodes of unsustainable P/E expansion.
The net result is that the Claymore Fundamental ETF has a large cap, value bias. It has 90% in large cap versus the 76.5% for the TSX Composite and is 50.9% value by weight compared to the Composite with 34.3%. The Fundamental ETF has a greater focus on Financials (47.1%) and less on Energy (18.1%) and Materials (12.7%) than the overall S&P/TSX Composite with weights of 30.7%, 27.3% and 18.9% respectively.
Strategy
The Claymore Fundamental ETF varies too much from the benchmark to be considered a ‘core’ holding. It is used to add additional exposure to the Financial sector. The Fundamental ETF can be combined with the iShares CDN Growth ETF to create balance and diversification in a portfolio.
|
Value
|
Blended
|
Growth
|
|
|
Claymore CAN Fundamental Index
|
50.9%
|
30.6%
|
12.9%
|
|
iShares CDN Value Index
|
62.2%
|
35.3%
|
2.5%
|
|
iShares CDN Growth Index
|
11.7%
|
28.2%
|
60.1%
|
|
iShares CDN S&P 500 Index - Hedged
|
34.7%
|
34.1%
|
31.6%
|
iShares CDN Value Index Fund (XCV)
The iShares CDN Value Index ETF matches the Dow Jones Canada Select Value Index. The Index comprises Canadian securities selected by Dow Jones & Company based on value characteristics. It contains 60 large cap stocks (on average) with 62.2% value and 35.3% ‘neutral’ stocks. The Value ETF is 15.0% Energy and 6.0% Materials, and even more concentrated in Financials (61.1%) than the Claymore Fundamental ETF.
Strategy
This ETF is never considered a ‘core’ holding. It can be used to diversify a portfolio, providing exposure to Financials when overly concentrated in Resources. The XCV can be used with the XCG (the iShares Growth ETF) to mirror the S&P/TSX Composite or S&P/TSX 60. A ratio of 50% XCV and 50% XCG will approximate the S&P/TSX Composite.
|
Large Cap
|
Mid Cap
|
Small Cap
|
|
|
Claymore CDN Fundmental Index
|
90.0%
|
10.0%
|
0.0%
|
|
iShares CDN Value Index
|
82.7%
|
17.3%
|
0.0%
|
|
iShares CDN Growth Index
|
83.1%
|
16.9%
|
0.0%
|
|
iShares CDN S&P 500 Index - Hedged
|
86.0%
|
13.8%
|
0.2%
|
iShares CDN Growth Index Fund (XCG)
With approximately 60 growth stocks, the iShares CDN Growth Index Fund mirrors the Dow Jones Canada Select Growth Index. Comprising 83.1% large cap and 16.9% mid cap stocks, the Index offers greater large cap exposure than the S&P/TSX Composite. Sector weights are considerably different however. The Growth ETF is heavily weighted in Energy (36.7%) and Materials (30.5%) with very little Financials (4.7%).
Strategy
The XCG can be used with the XCV (the iShares Value ETF) to mirror the overall S&P/TSX Composite or S&P/TSX 60. A ratio of 50% XCG and 50% XCV will approximate the Composite. Portfolios overly concentrated in Financials use this ETF for better diversification. It offers exposure to large cap resource stocks, with lower volatility than the XCS Small Cap ETF.
|
Sector
|
CRQ
|
XCV
|
XCG
|
XSP
|
|
Consumer Discretionary
|
7.4%
|
4.6%
|
4.0%
|
9.7%
|
|
Consumer Staples
|
3.7%
|
1.2%
|
4.0%
|
11.6%
|
|
Energy
|
18.1%
|
15.0%
|
36.7%
|
11.4%
|
|
Financials
|
47.1%
|
61.1%
|
4.7%
|
14.7%
|
|
Health Care
|
0.3%
|
0.7%
|
0.0%
|
13.2%
|
|
Industrials
|
4.6%
|
3.4%
|
8.6%
|
10.5%
|
|
Information Technology
|
2.6%
|
0.5%
|
6.7%
|
18.8%
|
|
Materials
|
12.7%
|
6.0%
|
30.5%
|
3.4%
|
|
Telecommunication
|
2.3%
|
7.4%
|
3.2%
|
3.0%
|
|
Utilities
|
1.2%
|
0.1%
|
1.8%
|
3.7%
|
iShares CDN S&P 500 Index Hedged (XSP)
The iShares CDN S&P 500 Hedged to Canadian Dollars Index ETF imitates the performance of the S&P 500 Hedged to Canadian Dollars Index. Weighted by market capitalization, this Index comprises 500 of the largest U.S. public issuers, hedged to Canadian dollars. Investors achieve the performance of the S&P 500 (less the cost of hedging) without currency risk. We believe this ETF can be used within a Canadian equity portfolio. Research shows that sector exposure is more important than country diversity in determining performance. The S&P 500’s sector diversification makes it desirable, as it provides exposure to sectors and companies not available in Canada. As an example, Consumer Discretionary is 4.5% of the S&P/TSX Composite but 9.7% of the S&P 500. Similarly, Consumer Staples (2.8%), Health Care (0.5%) and Information Technology (3.6%) have little representation in the Composite, but carry weights of 11.6%, 13.2% and 18.8% respectively in the S&P 500.
Strategy
Just about any Canadian portfolio can improve diversification and reduce volatility by including the S&P 500 Hedged ETF. Benchmark risk does increase however.
Conclusion
Since Canadians hold Canadian equities in large measures, Canadian equity ETFs are important considerations. Only two such ETFs are considered ‘core’ – the iShares Composite (XIC) and the iShares Large Cap 60 (XIU). The rest support very specific strategies in conjunction with other securities or funds. The iShares S&P 500 Hedged to Canadian Dollars Index ETF can be part of the ’Canadian’ portion of an equity portfolio because of its unique diversification properties.
Ken Hawkins is Chief Investment Strategist at Weigh House Investor Services. Ken can be reached at ken.hawkins@weighhouse.com.
The Importance of Minimizing Fees
By Neal Chambers
While Canadians seem acutely aware of the effect taxes have on their savings, it seems many do not appreciate the impact of investment fees on their long-term net worth. This article reviews mutual fund fees, as many Canadians rely on these funds as their primary savings vehicle. It proposes exchange traded funds (ETFs) as a viable alternative to mutual funds.
A 2007 study* concluded that Canadian investors pay the highest mutual fund fees (as measured by Total Expense Ratio) among 18 western nations.
Many Canadians do not realize how much they are paying in annual fees, or how ‘fee compounding’ erodes their portfolios over the long term. We all remember learning about compound interest back in school. Interest paid on prior interest payments, accelerates the rate by which savings grow.
A similar effect – but in the opposite direction – can be seen with fee compounding:
- Let’s say you lose 2.5% of your investments to fees in the first year (a typical value in Canada).
- In the second year, you are charged another 2.5% on the same investments. You also lose 2.5% of new contributions in year 2. Plus, you lose the gains you would have had on year 1 fees, had you not been required to pay them.
With each subsequent year, the amount of potential gains lost due to fees paid in previous years is magnified, and another 2.5% is taken. How does this look over the long term?
The chart illustrates the long term impact of excessive fees:
- Point A represents the average investor who pays no attention to fees.
- Point B is the fee-conscious investor who reduced annual investment fees by 2%. Over 35 years, he accumulated approximately 50% more in savings (without actually saving any more).
- Perhaps Point A ($360,000) represents all the savings you’ll need for retirement. Point C illustrates that by reducing fees by 2%, you could retire 5.5 years earlier. Paying those extra fees equates to working 5.5 years for your advisor! (I hope he or she is worth it).
The investor who follows the curve leading to Point A loses almost $200,000 by not reducing annual investment fees by 2%. A rough breakdown of the loss indicates an extra $100,000 is paid in fees, and another $100,000 is lost opportunity cost – paying the extra 2% meant there was less cash in the account to grow each year. This example assumes a 7% growth rate with $4,000 deposited every year. For simplicity, the effects of taxation on gains are ignored. (If the account was an RRSP, then taxation is not an issue). Weigh House Investor Services offers a cost of underperformance calculator and a compound earnings calculator that may be of interest to those who wish to evaluate their own situations.
Many Canadians do not realize that mutual fund companies levy annual management
fees. Returns are often reported net of fees, which makes them hard to find.
For obvious reasons, the industry prefers obfuscation – you’ll likely never see
mutual fund fees included on your account statement.
So what can be done? Enter the ETF!
Exchange Traded Funds (ETFs) have many advantages over mutual funds:
- Management fees for ETFs are much lower, typically in the range of 0.25% to 0.50%.
- ETFs tend to outperform mutual funds over longer time periods (five to 10 years).
- ETFs are easier to trade, more tax efficient and a better choice for buy-and-hold investors.
ETFs are bought and sold in the stock market, which means you require a brokerage account to invest in them. While trading ETFs may seem like a big step up from mutual fund investing, it’s actually quite easy. If you need assistance, Weigh House offers a Do-It-Yourself Coaching Program that provides a personal financial plan, investment policy statement, and help to get started with online trading. The service includes quarterly coaching sessions to assist with investment decisions.
Do-it-yourself investing with ETFs represents a very attractive alternative to mutual
funds. Perhaps it’s worth $200,000 to give it a try.
* Mutual Funds Fees Around the World, Ajay Khorana , Henri Servaes, Peter
Tufano, July 23, 2007
Neal Chambers is an Investor Consultant with Weigh House Investor Services in Barrie.
Neal can be reached at neal.chambers@weighhouse.com.
The Good, the Bad and the Ugly
In this issue of Straight Answers, we present a short compendium of investment news that caught our attention recently. With apologies to Clint Eastwood, we present our take of the Good, the Bad and the Ugly ...
The Good
Questrade Rebates Trailer Fees
Online broker Questrade reimburses mutual fund trailer fees to its clients under a rebate service it calls Mutual Fund Maximizer. First introduced early last year, the service was clearly welcome news for independent, do-it-yourself investors who make up Questrade’s client base.
Trailer fees are paid by the fund company directly to your broker as compensation
for procuring your business, and they can be as much as 1% (or even more!) of your
portfolio. According to the Ontario Securities Commission
website, “trailer fees are meant to compensate
mutual fund salespeople for ongoing services they provide to their clients.
These fees are paid by the fund management company (out of the management fee) to
your mutual fund salesperson on an annual basis as long as you remain invested in
the fund. Trailer fees are typically 1% for funds sold on a front-load basis
and 0.5% for funds sold on a back-end load basis. Some trailer fees go up the longer
you stay invested in the fund.”
In introducing the service, Questrade correctly believed that clients should not pay for ongoing services they weren’t getting. All Questrade clients are automatically enrolled in the Mutual Fund Maximizer program, and rebates are paid directly into their accounts. The company does withhold a $29.95 per month processing fee, so investors need about $36,000 in mutual fund investments before rebates start coming their way (assuming a typical trailer fee of 1%). Questrade points out that clients do not pay the processing fee unless they are entitled to more than $29.95 in reimbursements. In addition, the processing fee is fixed, whereas the trailer fee rebate grows with the size of the mutual fund portfolio.
All in all, we think this is a pretty good deal for independent Canadian investors. For more information, please visit http://www.questrade.com/trading/mutual_funds_maximizer.aspx.
New ETFs from iShares and BMO
The launch of new exchange traded funds by iShares and BMO provides investors more choice and diversification potential. The new funds offer investors increased access to emerging markets – China, India and Brazil – as well as the U.S. fixed income market.
BMO’s foray into the EFT market represents strong testament that these finds have gone mainstream. Look for ETFs to continue to gain market share at the expense of traditional mutual funds.
OSC Launches Investor Advisory Panel
In February, the Ontario Securities Commission (OSC) announced the formation of an Investor Advisory Panel that will provide input on the Commission’s priorities and policies. In a written statement, OSC Chair David Wilson said he was “confident that the panel will be an effective voice for Ontario investors as well as a great asset to the Commission and its work.” The OSC’s full press release can be found at http://www.osc.gov.on.ca/en/NewsEvents_nr_20100226_investor-advisory.htm.
The Bad
U.S. Financial Reform Bill Backs Away from the Fiduciary Standard
On March 15th, U.S. Democratic Senator and Senate Banking Committee Chairman Christopher Dodd introduced a bill to overhaul the American banking system. Although much back and forth is yet to come, the reform bill is likely to pass as many blame that nation's banking sector for the recent financial crisis that led to the worst recession since the ‘30s.
Missing from the proposed legislation is a provision that would have required brokers to adhere to the fiduciary standard and always put clients’ interests first. Instead, the bill requires only a study on whether brokers who dispense investment advice should adhere to fiduciary rules. Under the status quo, brokers are held to a relatively low duty of care when selling investments. The standard is one of ‘investment suitability’ – that is, brokers can only sell investments that they deem appropriate for their clients.
Chalk one up for the powerful U.S. brokerage lobby – they appear to have successfully stifled some important consumer protection legislation.
The Ugly
As if Paying Taxes Wasn’t Bad Enough
Every year around this time, we hear reports of phishing scams designed to dupe unsuspecting taxpayers into disclosing personal information to identity thieves. The fraudsters, posing as representatives of the Canada Revenue Agency (CRA), solicit the personal information in emails and other forms of communications. Invariably, the communications argue that the information is needed so that the taxpayer can receive a refund or benefit payment. CRA is wise to these scams and has posted a number of warnings on its website – please take heed.
http://www.cra-arc.gc.ca/ntcs/bwr-eng.html
http://www.cra-arc.gc.ca/nwsrm/lrts/2007/071119-eng.html
http://www.cra-arc.gc.ca/ntcs/nln-rfnd-eng.html
http://www.cra-arc.gc.ca/nwsrm/lrts/2008/l080818b-eng.pdf
And Minister Flaherty Makes It More Expensive to be Good Looking
While Budget 2010 offers very little for average investors, it does make cosmetic
surgery a little more expensive. Without a sound medical requirement, botox injections,
liposuction and hair replacement will now be ineligible for the Medical Expense
Tax Credit. Unlike basic health care services, these procedures are also subject
to the GST/HST. (Frankly, it’s hard to believe it was ever any other way.)
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Bruce Freedman, former hedge
fund manager and top ranked investment analyst, is now blogging for Weigh House.
Follow his thoughts and observations at www.weighhouseblog.com
