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Federal Budget 2024: Here are the takeaways

The release of the Canadian federal budget is always a highly anticipated event. Serving as the government’s financial blueprint, it outlines its priorities and proposed spending initiatives across diverse sectors.

On April 16, 2024, the 2024 federal budget was released. Now, let’s take a closer look at what it contains and what you should know as an individual or business operator:

For Individuals

  • Personal Tax Rates: Personal tax rates remain unchanged from the previous year.
  • Increase in Capital Gains Inclusion Rate: The capital gains inclusion rate will increase from 1/3 to 2/3 or 66.6% on capital gains exceeding $250,000 when realized on or after June 24, 2024.
  • Lifetime Capital Gains Exemption (LCGE): The LCGE will be raised to $1.25 million. The indexing of the LCGE will resume in 2026.
  • New Capital Gains Inclusion Rate for Entrepreneurs: Entrepreneurs will benefit from a new 1/3 capital gains inclusion rate for up to $2 million of certain capital gains realized.
  • Principal Residence Exemption: Capital gains from the sale of a principal residence will continue to be exempt from tax.
  • Increase in Home Buyer’s Plan (HBP) Withdrawal Limit: The withdrawal limit for the Home Buyer’s Plan (HBP) will be increased from $35,000 to $60,000 for withdrawals from a RRSP made under the HBP after April 16, 2024.
  • Extension of Repayment Grace Period for HBP: The repayment grace period under the Home Buyer’s Plan (HBP) will be extended from 2 to 5 years.
  • Alternative Minimum Tax (AMT) Calculation Change: The calculation of the Alternative Minimum Tax (AMT) will be changed. This revision allows individuals to claim up to 80% of the proposed charitable donation tax credit when calculating AMT, instead of the previous 50%.
  • Extension of Disability Support Deduction: The list of expenses covered by the disability support deduction has been extended. You can find a complete list of eligible expenses here on this CRA list.

For Businesses

  • Corporate Tax Rates: Corporate tax rates remain unchanged from the previous year.
  • Increase in Capital Gains Inclusion Rate: The capital gains inclusion rate for corporations and trusts will be increased from ½ to 2/3 or 66.6% on capital gains realized on or after June 24, 2024.
  • Temporary Increase in Capital Cost Allowance (CCA) Rate: The capital cost allowance (CCA) rate for eligible new purpose-built housing projects will temporarily increase from 4% to 10%.
  • Amendments to Immediate Expensing: Amendments will be made to immediate expensing for productivity-enhancing assets purchased by businesses.
  • New Canada Carbon Rebate for Small Businesses: The new Canada Carbon Rebate for Small Businesses proposes to return a portion of the fuel charge proceeds to Indigenous governments and small to medium businesses.
  • Additional Details on Clean Electricity Investment Tax Credit: Additional details are proposed on the eligibility and implementation of the Clean Electricity Investment Tax Credit.

The release of the 2024 federal budget brings important updates for individuals and businesses. It is essential for individuals and businesses to review the budget carefully and seek professional advice to understand how these measures will impact their financial situations and investments.

For more information on how these budget measures may affect your financial situation, or have any questions about other financial or investment matters, please contact Rothenberg Wealth Management. We would be pleased to assist you.

Taxes and Investment Income Calculator

A taxes and investment income calculator is a practical tool used to find out the amount of taxes you will owe, depending on where you live, and how much you would keep in your pocket. This calculator is especially useful if you have various sources of investment income since they are taxed at different rates.

Why Use a Taxes and Investment Income Calculator?

Understanding Your Tax Liability

Calculating taxes and investment income manually can be prone to errors. Using a calculator can provide you with clarity and assurance when it comes to handling your tax responsibilities. By inputting relevant financial information, the calculator can generate tax estimates for various types of investment income, providing you a better understanding of your tax liability.

Investment Insights

Interest, capital gains and eligible dividends are three types of possible investment income. Since they are taxed at different rates, a taxes and investment income calculator can help you compare their after-tax implications. This can help you make more informed investment decisions on which type of investment offers the best returns.

How Does a Taxes and Investment Income Calculator Work?

To use a taxes and investment income calculator, you need two basic details:

  • Your taxable income (which you can find on line 260 of your personal income tax
    return)
  • The amount of investment income

The calculator takes these inputs and uses them to compute the total amount of taxes you
would owe and how much you would keep based on the amount of investment income you
have entered,

Benefits of Using a Taxes and Investment Income Calculator

For New Investors

Using a taxes and investment income calculator empowers new investors in the wealth building phase by providing a clear understanding of how investment income and taxes impact wealth accumulation. It guides them towards tax-efficient investment decisions and assists in determining optimal asset allocation. This empowers them to make informed and strategic decisions, laying a strong foundation for their financial future.

For Pre-Retirees

For pre-retirees, a taxes and investment income calculator offers critical support for transitioning into retirement. It helps them estimate their investment income and taxes, enabling more effective budget and expense planning. By understanding the tax implications of different investment options, pre-retirees can make informed decisions to enhance tax efficiency.

For Retirees

For retirees, using a taxes and investment income calculator provides valuable insights for financial planning. It offers a clear picture of how investment income and taxes will impact overall retirement income, helping retirees to estimate their investment income and taxes more accurately.

Conclusion

A taxes and investment income calculator is a handy tool for anyone who receives income from their investments. It provides a transparent, predictable way to see how much tax you would pay and how much you would keep. Utilizing this tool can give you valuable insights into your financial situation and help you make decisions regarding your savings goals and investment strategies.

As you navigate the complexities of investment income and tax implications, it’s essential to have a comprehensive financial plan in place. To gain personalized insights and strategic guidance tailored to your specific financial goals, consider reaching out to a Wealth Management Advisor at Rothenberg Wealth Management. Our experienced advisors can provide expert assistance in optimizing your investment strategies, maximizing tax efficiency, and aligning your financial decisions with your long-term wealth goals. Contact us today to schedule a consultation and take proactive steps towards securing your
financial future.

Claire Churchill-Smith Promoted to Wealth Management Advisor

Professional growth and development for our associates is very important to us, which is why we are excited to share that Claire Churchill-Smith has been promoted to Wealth Management Advisor!

As a Wealth Management Advisor, Claire provides personalized long-term wealth planning solutions for clients’ financial needs, including investment recommendations, portfolio management, retirement planning, estate planning, and financial education. Claire joined the Rothenberg team in August 2021 and previously worked closely with the advisor team at the West Island office, providing comprehensive support in various areas of wealth planning and client service.

We look forward to seeing Claire grow in her new role as she works with our existing clients and builds her own portfolio of clients with the firm. Please join us in congratulating Claire on her promotion!

To learn more about Claire: https://www.rothenberg.ca/pointe-claire-qc-team/claire-churchill-smith/

GIC brokers at Rothenberg & Rothenberg provide access to competitive rates from institutions across Canada

With interest rates at an all-time high, right now is the time to invest in GICs for long-term security and peace of mind.

Guaranteed Investment Certificates (GIC) provide a reliable source of income and are a great way to get closer to your financial goals. With competitive fixed interest rates, you can rest assured that your funds are invested safely and securely regardless of stock market fluctuations. It can be time-consuming, however, to shop around for the best rates. That’s why you may want to consider working with a GIC broker.

GIC brokers like Rothenberg & Rothenberg specialize in finding the best possible GIC rates on the market. As a broker, they monitor rates across dozens of institutions daily and compile this information to make sure you have access to the highest interest rates.

“We know what’s happening with the GIC rates on a day-to-day basis. We do the homework for the client,” said Tina Patel, GIC department coordinator at Rothenberg & Rothenberg. “We shop across Canada to get the best rate for our clients, and we don’t just deal with one financial institution. We deal with over 25 financial institutions across the country.”

But it’s not only a matter of easy and flexible access to great GIC rates from Canadian banks, trust companies and credit unions. When you choose to go with a GIC broker instead of buying from the issuer directly, you can potentially maximize your returns.

By purchasing directly from the issuer, your funds are at risk if you invest more than the $100,000 amount covered by the Canadian Deposit Insurance Corporation (CDIC). You want your interest protected, so you should always invest less than the eligible insured amount. By purchasing a GIC through a broker like Rothenberg & Rothenberg, you can increase your insurance coverage and invest across multiple financial institutions.

Further, using the services of a broker like Rothenberg & Rothenberg to purchase GICs has no cost for you as the client. Much like a mortgage broker that is paid by the provider and not by the client, GIC brokers are paid a fee by the financial institution offering the GIC.

“There is no fee charged to the client if a client were to come into Rothenberg. If we quote them a one-year GIC rate at six per cent, that is the rate the client will get,” Patel said. “The commission paid to Rothenberg does not affect the rate of return to the client in any form.”

With the help of a GIC broker, achieving your financial goals becomes a lot more realistic. Through their guidance and expertise, you can be confident knowing your investments are in good hands.

Rothenberg & Rothenberg has been serving the GIC needs of Canadians since 1979. With offices in Westmount, South Shore, Pointe-Claire in Quebec, and an office in Calgary, Alberta, we are conveniently located to serve your GIC needs. To see what rates they currently have available or to get in touch with a GIC broker, you can visit www.rothenberg.ca/gic-rates.

For those who are interested in wealth management, Rothenberg Wealth Management helps clients manage their investment portfolio and provides strategies to grow their wealth. Contact us today for a free, no-obligation consultation to review your financial situation.

This article originally appeared in the Montreal Gazette. To view the original article, click here.

Please note: Rothenberg & Rothenberg, the company mentioned in this article, deals exclusively with GICs and operates independently of its sister company Rothenberg Wealth Management, which provides a full suite of wealth management solutions.

Homeownership might be closer than you think: A Look at the New Tax-Free First Home Savings Account (FHSA)

Eligible Canadians can contribute up to $8,000 each year to an FHSA up to a lifetime contribution limit of $40,000 to help them buy their first home.

Purchasing a home is an important decision that requires careful financial planning. Fortunately, there is a specialized tool designed to help Canadians save tax-free towards their goal of buying a first home – the new Tax-Free First Home Savings Account (FHSA).

The FHSA is a game-changer for aspiring homeowners. This unique type of savings account allows eligible Canadians to contribute up to $8,000 a year with a lifetime maximum contribution limit of $40,000 towards the purchase of their first home. This can help you break down the cost of buying your first home into tangible yearly savings goals.

Once funds are deposited in an FHSA, you can watch them grow tax-free. This means that any interest earned, or investment gains made within the account are also free from taxes, allowing for potential compounding and greater returns. Most importantly, any qualifying withdrawals are tax-free. You also have the option to transfer existing RRSP amounts into the FHSA.

Adding to its appeal, contributions made to the FHSA are tax deductible, meaning you can claim them on your personal income tax return filing to lower your taxable income and potentially save more money in taxes. In this way, an FHSA is similar to an RRSP.

To be eligible to open an FHSA, you must meet certain criteria set by the government. These eligibility requirements are designed to ensure that the FHSA is accessible to those who genuinely need it and are committed to buying their first home.

Once you’re ready to purchase your first home and have a written agreement to buy or build your home, you can use the money in the FHSA towards a qualified home purchase, which can include a down payment, closing costs, and other related qualifying first home expenses.

You can even use an FHSA in conjunction with the Home Buyer’s Plan (HBP) to have an even greater amount to use for the purchase of your first home. It’s important to note, however, that the money in an FHSA can only be withdrawn for the purpose of buying your first home but you won’t need to pay it back like you do with the HBP.

If you already own a home, unfortunately, you cannot use the funds for a second home or investment property. You may also incur penalties and tax consequences if you withdraw funds from an FHSA for a non-qualified purpose.

But should you decide to forego your first home purchase and use your funds for something else, you can always transfer the money to your RRSP or RRIF on non-taxable basis until December 31 of the year following the year of your first qualifying withdrawal, without affecting your RRSP contribution room.

For complete details, please review the FHSA resources available on the CRA website. You can also find all applicable definitions for FHSAs here.

Starting on November 20, 2023, Rothenberg Wealth Management is offering clients the option to open their FHSA.

Contact a Rothenberg Wealth Management Advisor to discuss your goals and get advice on how to customize your investment portfolio in your FHSA to maximize your future savings potential. If you are not eligible (or are unsure you are eligible) for the FHSA, a Rothenberg Advisor can assess your situation and help you explore other savings options to meet your financial goals.

Summer 2023 Bucket List by Robin Esrock

Travel personality and bestselling author Robin Esrock has reported from over 100 countries on 7 continents.  We’ve invited him to share his summer travel inspiration.     

 

Global Dream of the Summer:  Slovenia

Of all the countries that once made up the former Yugoslavia, Slovenia has emerged as the undiscovered gem of Central Europe.  The country boasts lush countryside, medieval fortresses, the sweeping Julian Alps, crystal lakes, and the culture-rich capital of Ljubljana.  Straight out of a central European fairytale, mountains overlook green valleys so smooth you’d think they grow vegetables on manicured fairways.  Romantics will love the old church sitting in the middle of Lake Bled, a vista you may have seen in popular screensavers. Horse-lovers will relish a bucket list visit to Lipica, the ancestral home of the classic white Lipizzaner.  Ljubljana is quintessentially European: think cobblestones, churches, old town squares, canals, parks, bicycle lanes and busy outdoor cafes.  Easy to get to via air or if visiting from neighboring Italy, Austria, Croatia and Hungary, Slovenia offers great European value with abundant options for nature, culture, food and history.

 

 

 

Canadian Dream of the Summer: Prince Edward Island

What do you do with an abandoned province-wide railway line? You turn it into a 400km-long recreational trail running tip-to-tip across Prince Edward Island, resulting in an unforgettable bucket list East Coast adventure. With your bags shuttled ahead to homely inns and B&B’s, the trail takes you through gorgeous forest, beaches, rivers, farmland, restored railway stations and small towns bursting with Maritime charm. Kick off at the Confederation Bridge, load up on local lobster, pop into bays with the world’s best oysters, and work it off with some healthy daily exercise.  An optional e-bike upgrade can make it especially easy and fun for the whole family.

 

 

Leaving the Pandemic Behind

In May 2023, the WHO officially declared that the COVID-19 pandemic no longer constitutes a global health emergency.  Instead of wild celebrations that the pandemic is finally behind us, we’ve quickly moved onto new fears and uncertainty, heavily promoted by media that thrives on bad news (remember: if it bleeds it leads).  Tourism continues to boom, with heavy demand for airfare, accommodation and activities.  Prices are skyrocketing, as operators and airlines eagerly recoup lost profits.  It’s been a year since The Great Chaos of 2022, and the tourism industry has prepared for the rush.  Industry employment is almost back to pre-pandemic levels, and efficient new technologies have been implemented.  It’s going to be busy out there, but summer 2023 will see a significant improvement over 2022.

Pro Tips: Staying Safe

A surge in tourism brings a surge in opportunistic crime.  You’ll often hear “Use Your Common Sense” but little about what common sense actually means.    Very simply:  Avoid flashing your wealth or drawing unnecessary attention to yourself.  If a local or guide advises you not to go somewhere, take their advice seriously.   If something looks or sounds too good to be true, it usually isn’t.  Keep secure online back-ups of your passport, banking and insurance details (you can just email it yourself or leave a copy with someone at home).  Credit cards are accepted just about everywhere, so don’t carry too much cash.  Avoid unnecessary confrontation, and when in doubt, ask for help.  With a little common sense, it’s highly unlikely anything terrible will happen. Scams and crime grabs attention, but both are statistically rare for travellers worldwide.

 

 

 

Don’t Quote Me:

“Travel is fatal to prejudice, bigotry, and narrow-mindedness.”

Mark Twain

 

If you have any travel-related questions or inquiries, feel free to email me at robin@robinesrock.com

Robin Esrock’s Spring 2023 Bucket List

Bestselling author and travel personality Robin Esrock has reported from over 100 countries on 7 continents.  We’ve invited him to share some travel inspiration.

International Dream of the Season:

Sail a Tall Ship in the Caribbean

Unless you personally know someone with a luxury 16-sail, 62m-high, 15m-wide and 110m-long tall ship, chances are you’d never get to sail one.  Fortunately, Swedish-owned Star Clippers has a fleet of them, pampering guests with spectacular sailings around the world. Spring is an ideal time to board their Star Flyer for a week-long sail around the British Virgin Islands. Among sailing enthusiasts and first-timers, you’ll get to explore stunning coves, beaches and island communities where big cruise ships simply cannot go.  Star Flyer accommodates up to 160 passengers and 74 crew, combining luxury (think polished mahogany and brass interiors) with adventure (climb the mast and feel that wind!) Best spot on the yacht is the bowsprit, a thick, hammock like netting at the front of the ship where I felt the spray of the ocean, and spotted curious dolphins beneath the waves.  On board were seasoned cruise veterans who told me the Star Flyer had been their favourite cruise ship of all.  Sailing is just a different way to do it, and burning just 15% of the fuel of a similar sized ship, it’s an eco-friendly way to cruise as well.

Canadian Dream of the Season:

Blossoms, sugar shacks, wildflowers and whale watching are just some of the attractions that come alive each spring. It’s also a great time to hit the ski slopes as the crowds thin, the snow softens, and the days stretch longer.  An estimated 40,000 cherry blossom trees brighten up Vancouver (my favourite spot is Queen Elizabeth Park) for the annual Cherry Blossom Festival, while over a million tulips bloom in Ottawa at the Canadian Tulip Festival in May.  Returning after the pandemic hiatus, Elmira, Ontario once again hosts the world’s largest maple syrup festival, kicking off April 1st, and sugar shacks kick into high gear across Quebec too. On April 2nd, Stratford, Ontario releases swans onto the Avon River with a lively parade, and on the Manitoban prairies, the world’s largest concentration of snakes (all totally harmless!) slither from the Narcisse Snakes Dens creating a rather unique wildlife spectacle.  Less snakes, more chocolate?  Check out my inspiring story about a family of Syrian refugees in Nova Scotia producing the best chocolates in the country, and how a community rallied to support them.

Leaving the Pandemic Behind:

In December I attended a World Travel and Tourism Council conference in Saudi Arabia. Fifty-two Ministers of Tourism were attendance along with thousands of attendees to debate the future of sustainable tourism, ironically gathered in the world’s largest oil producer. Saudi Arabia is investing a staggering US$1 trillion into tourism as a strategy to wean GDP off fossil fuels.  Check out this jaw-dropping video for The Line, one of several Saudi ‘giga-projects’ that feel like they belong in a sci-fi movie.  You can read my full report on the kingdom’s wild and problematic transformation.

Pro Tips:

I used to always drink tomato juice on flights.  It must help in some way, I figured, otherwise why would they serve it?  A friendly flight attendant set me straight.  “Do your feet swell up on planes?” she asked me.  They do!  “Then stay off the salty tomato juice!”  Incredibly high in sodium, tomato juice is the worst liquid to put into your body in a pressurized cabin, and coffee, pop or alcohol are not much better.  Stay hydrated with water. A pro trip for long-haul flights is to wear a pair of compression socks (nowadays marketed as fashionable energy socks).   You’ll notice an immediate difference on arrival, with your legs and feet feeling fresh and ready to take on any new adventure.

Don’t Quote Me:

“Travel. Because money returns, and time doesn’t.” – Anonymous

If you have any travel-related questions or inquiries, we invite you to reach out directly to Robin at robin@robinesrock.com

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