New Aspirations for Canada’s Kids

Mar 03

I don’t often have wonderful things to say about television’s impact on kids, however the Olympic Games are a clear exception to my usual rant against the boob tube.¬† Canada’s spirited display of a country bursting with pride at not only their stellar athletes, but the nation itself has been an inspiring experience for all of us who have been watching.¬† The television has managed to spread that indefatigable thrill of seeing fellow Canadians push their physical and mental strengths to the limits.¬† And succeed.

My kids now have a new aspiration to add to their list of things they want to be when they grow up.¬† In fact, my 7-year old son came home today with a fill-in-the-blanks activity that he’d completed at school.¬† He was asked to describe himself as a person in a community.¬† Here’s what he wrote:

I am a… Olympic skier.

Here are three things I do in my work.

  1. I ski
  2. I use poles
  3. I start at a mini hut

Something hard about my work is…¬† trying not to crash into trees

Something satisfying about my work is… people watching me on tv.

My work helps make God’s world a good home by… letting people watch their own country skier ski.

Look out firefighters – there’s a new career in town.¬†

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Tax Free Savings Accounts for Canadians

Jan 07

It’s January 2009.¬† And, do you know where your money is?¬† I’m guessing it’s not in your wallet, and worse, it may not even be in your savings account.¬† In fact, if you’re like the average Canadian, your money is tied up in paying off debt and you owe $9,000 on a line of credit and $2,400 on credit cards.¬† If we’ve learned anything over the past two decades, it is – spend now, pay later.¬†

In 1984, household debt (including mortgage and credit cards) equalled 71 cents of every dollar of income.¬† Fast forward to today and the debt has increased to $1.27 for each dollar of income.¬† The average Canadian today saves about 3% of their earnings (versus 20% in 1982.)¬† It’s no wonder new debt gets shovelled onto old debt.¬† With no savings to cushion unexpected expenditures (anything from car repairs to your pre-teen kid’s braces) the only option is to use a line of credit or charge it – and pray that somehow you’ll be able to pay it off… one day.¬†

TFSAs allow you to withdraw your money anytime with no penalty

The Canadian government is now offering an incentive to rebuild the savings that were lost over the past three decades with the new Tax Free Savings Account or TFSA (pronounced tifsa).¬† According to National Post , TFSA’s “were the biggest innovation and tax break since the registered retirement savings plan (RRSP) was introduced a half-century ago.”¬† And if you haven’t heard about it yet (it’s been written about in every newspaper), you probably also don’t know that you should stop buying $5 lattes at Starbucks and settle for a home brewed cup of java.¬†

As of now, January 2009, Canadians can open a TFSA and start earning money, tax free.

The plan is similar to a Registered Retirement Savings Plan (RRSP), so if you understand how they work, the TFSA is even simpler.  Here are the major features:

  • You must be at least 18 years old to own a TFSA.
  • You may invest in anything, such as a savings account, bonds, stocks, mutual funds, GIC’s.¬† Like RRSPs.
  • All dollars earned – either through interest or capital gains – are not taxed when withdrawn.¬† Unlike RRSPs (a tax-break is given when you contribute, then you are taxed on withdrawal.)
  • The contribution limit is $5000 per year, regardless of your income.¬† Unlike RRSPs (contribution room is based on income.)
  • If you do not contribute the full $5000 one year, the remaining amount is carried forward every year for the rest of your life.¬† So, if you put $4000 into a TFSA in 2009, you can put in an extra $1000 in 2010, or whatever year you have that extra thousand dollars to save.¬† Unlike RRSPs (there is an age limit to contributing.)
  • You can withdraw your money anytime you want with no penalty.¬† Need to purchase snow tires one particularly blustery winter?¬† Have to pay for your son’s speech therapy?¬† No problem.¬† Just dip into your TFSA and withdraw your necessary funds.¬† Unlike RRSPs.
    • The amount withdrawn is added to your contribution room the next year, so you can replenish that tire money later, in addition to your annual $5000 limit.
  • If you are in a single earner family because one spouse is at home with the kids, any income earned in a TFSA by the stay-at-home parent is not attributed back to the working spouse.

It’s so simple.¬† For families, the main benefits of a TFSA appear to be the steady availability of funds (versus RESPs and RRSPs), the income splitting opportunity, and the tax-free earnings to help save for big purchases (think house, car, private schooling.)¬† For more detailed and professional guidance on how to make the most of TFSA’s, you can buy a book written by Gordon Pape called (surprise!) Tax Free Savings Accounts.¬†

Now – how to cut back on your spending and actually acquire enough money to put in a TFSA?¬† You’ll have to figure that one out by yourself.

Financial Post has a number of with author Gordon Pape to further illuminate Canadians on the qualities of the TFSA.

Sources: National Post New TFSAs change a guru’s game plan by Jonathan Chevreau, MoneySense December/January 2009 issue

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Marriage a Conservative Vote

Sep 26

As married folk, we know well the chasm that separates our lifestyle with that of the swinging single. We’ve been there.  Done that. That gives us license (says ‘us’) to complain that they have it easy, that they can’t appreciate the challenges of married life – much less the self-sacrifice of raising a family. We disdain their freewheeling ways (and admittedly, envy them occasionally) as we carry our burden of familial responsibility with pride and tenacity. It should come as no surprise, then, that these differences appear on election day in our voting preferences. According to the results of a large-scale exit poll from Canada’s 2006 election, married persons are almost twice as likely as single persons to vote Conservative; whereas, singles split their votes equally among all the parties.

Do married people become Conservative supporters after their vows or are Conservatives simply more likely to get married in the first place? No one can say for sure, but it is likely a combination of the two. If suburban living and diaper changes led to Conservative votes, then those couples living together without wedding bands would also show a propensity toward . However, according to the research, their voting preferences mirror that of the single population with 26% Conservative, 21% Liberal, 24% NDP, and 21% .

In today’s accepting climate of alternative families, those couples who actually choose to tie the knot are, in fact, advocating their support for traditional marriage and rejecting less conventional partnerships. With 43% of their vote going to the Conservative party they are clearly supporting policies that protect the institution and that are sympathetic to their lifestyle needs (think $1,200-a-year per child payments.) While a national daycare program, as promised by the NDP and Liberal party, is a boon to single parents, it is of little allure to more traditional families that are more likely to have a stay-at-home parent or a combined income high enough to afford the daycare they want for their child.

Divorce changes a person’s priorities however, and the Conservative vote dips to just 30% upon dissolution of a marriage, with the NDP gaining the Conservatives’ loss. Strangely, the Liberal support hovers at about 26% regardless of any change in marital status.

The Prime Minister seems to be paying attention to the trends. Last election, Harper was like the awkward guy at the bar who couldn’t get the ladies to look his way. Now, according to an article in Maclean’s Magazine by John Geddes and Aaron Wherry, he’s the new chic magnet in Parliament – stealing female votes from not-so-suave Stephane Dion. And now that he’s the new stud in town, he’s hoping to seduce more Liberal voters by moving his party’s reputation toward the center – a hipper, more forward-thinking party. In Maclean’s Magazine’s Special Campaign Edition, Paul Wells portrays a Prime Minister who is intent on transforming the Progressive Conservatives into the nation’s “natural governing party.”

“You do that in two ways,” says Harper, “One thing you do is you have to pull Conservatives, to pull the party, to the centre of the political spectrum. But what you also have to do, if you’re really serious about making transformation, is you have to pull the centre of the political spectrum toward conservatism.”

If Harper wins a majority on October 14, he can credit himself for convincing the population that his right-wing agenda isn’t as scary as the Liberals would have Canadians believe. But if he hopes to affect long-term electoral success for his party, he’s got a long way to go. While married couples (his bread and butter voters) make up 68.6% of Canada’s population, they are on the decline. Based on 2006 census data, common-law and lone-parent families are on the rise, each making up 16% of the population. For the first time in census history, Canada has more unmarried people (51.5%) than legally married people (48.5%).

As more people toss convention out the bedroom window, Harper will face an ever-threatening wave of left-leaning voters. And unless he’s got a shipload of incentives to calm that storm, a tsunami just might pull him under, along with his ship of Tories.

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