We all had to adapt to a new reality this year. We came together to face these difficult times both personally and professionally. We did everything in our power to maintain our service model and optimize your finances during a challenging market environment. We thank you for your patience, cooperation, and ongoing support.

With good news on the horizon thanks to a new vaccine, we are looking forward to 2021 being a year of renewal and opportunity.

In our final blog entry of 2020, we provide you with an “everything update”, a list of recent headlines in the areas of financial aid, investments, and taxation.

Please note that due to the holidays, our office will be closed on December 25 and January 1. Our team will have reduced service between December 21 and January 3, processing only urgent requests (contributions, withdrawals) during this time. We will be back to full service on Monday, January 4 to begin the new year together.

Anthony, Sandrine, Frank, & JoAnne

Financial Aid

Online application for the BC Recovery Benefit begins on December 18

Investments

From Myles Zyblock, setting the stage for 2021

Worried about investing near all time-highs?  All-time highs are not unusual

BlackRock’s current positioning: Upgrade U.S. equities

Brexit: What you need to know about the UK leaving the EU

How does Gold fit in a portfolio?

The Canada Pension Plan Investment boards commits $200M to a renewal energy projects

Taxes

It’s official: CRA allows simplified home office deduction process (max $400 deduction):

Year-end tax tips

Pandemic spending has budget watchers once again fretting about capital gains tax hikes

New York Property taxes will increase 5% next year

ICBC to drop rates by 15%

Retirement / Registered Accounts

The 2021 TFSA limit will remain $6,000

CPP premium increase to cover program enhancements will continue in 2021

Deferring CPP payments is the surest way to secure lifelong income (two articles on this topic)
Article 1
Article 2

COVID-19

Health care worker becomes first person to receive vaccine in B.C.

All Canadians who want a shot will be vaccinated by September 2021, public health agency says

Province confirms 1,215 British Columbians vaccinated so far

Canada expected to receive 168,000 doses of Moderna vaccine by month’s end, Trudeau says

The post The Everything Update appeared first on Smof Investment Manager, LLC.

BC Provincial Budget Announced

This week, the BC NDP government presented its 2020 Budget. Overall, the Budget calls for surpluses in 2019/20 ($203 Million), 2020/21 ($227 Million), 2021/22 ($179 Million) and 2022/23 ($374 Million).

Below are the highlights from the Budget announcement:

New Highest Provincial Tax Bracket

The province is adding a new highest tax bracket. The new bracket starts at $220,000 and will increase from 16.8% up to 20.5%. The province says BC will have the third-lowest rate for those earning $475,000 per year.

Electric Vehicles

With the province ahead of its target to get electric vehicle sales to 10% of all vehicle sales by 2025 (currently at 9%), the Budget allows for a continuation of the $3,000 credit for new EV purchases with an additional $20 Million of funding.

Another $5 Million in funding will be allocated to build more charging stations both at homes and at workplaces.

Sugar Tax

The province will no longer exempt sweetened carbonated drinks from PST. The province estimates $27 Million in revenue from this tax in 2020 and ~$37 Million in revenue in 2021.

BC Child Opportunity Benefit

Starting in October, the BC Child Opportunity Benefit will make families with one child eligible to receive up to $1,600 per year, and families with two children eligible for up to $2,600 per year.

BC Access Grant

Low- and middle-income post-secondary students will now be eligible for “needs-based” grants. Students in programs up to 2 years in length may be eligible for up to $4,000 a year, while students in programs greater than 2 years may be eligible for up to $1,000 a year.

Reducing Surgery Wait Times

Health care is the highest-funded program once again, and special attention is being paid to reducing wait times for some surgeries.

The Budget allows for $50 Million to help address wait times, though the specific surgeries to be focused on has not been finalized.

Education Funding

The province will provide $339 Million in funding over the next three years, with the intention to hire ~4,200 more teachers. However, the allotment does not provide for wage increases for existing teachers above the mandated 2% per year.

Modular Housing

The Budget calls for $56 Million in additional funding to build 200 more temporary modular housing units, aimed at getting homeless people and people at risk of becoming homeless off the street.

Wildfire Funding

After states of emergency were declared in 2017 and 2018, the 2019 “fire season” was not as severe. Still, the Budget calls for an increase of $35 Million in funding to fight wildfires, with overall funding rising to $136 Million.

Forestry Sector Assistance

The forestry sector has been hard-hit, with projections of $867 Million in revenues for 2020/2021, down from the $1.14 Billion projections from a year ago. The Budget allows for $13 Million to help support the struggling industry.

Money Laundering Public Inquiry Funding

The province is allocating $11 Million to fund inquiries into money laundering in casinos, real estate and luxury car markets.

Illegal Pot Crackdown

The Budget allows for $12 Million to enforce compliance & enforcement on illegal marijuana sales.

Weekly Update – By The Numbers

Sources: Gov.BC.ca, Global News, Yahoo! Finance, CNBC.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

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 2019 B.C. Provincial Budget Announced

The B.C. New Democrats released their second provincial budget this week. While the budget mostly stuck to the script, there were a few surprises. Here are some key takeaways:

The B.C. Child Opportunity Benefit. A major addition to help lower-income families, this new benefit will replace the Early Childhood Tax Benefit and offers lower-income families a substantial increase in both monthly benefits and eligibility. The COB will cover all children under the age of 18, while the ECTB ended once a child turned six.

A family with income below $25,000 per year will receive a refundable tax credit of $1,600 for the first child, $1,000 for the second child, and $800 for each subsequent child.

The amount of the benefit will scale down as income scales up. Families with one child will receive no benefit at an income level of $97,500, while families with two children will receive no benefit at the $114,500 income level.

In order to align with the federal tax code, this benefit will take effect and can be applied for starting October 2020.

No Daycare. A key platform promise was to introduce universal, $10-a-day child-care. While the 2019 budget mentions last year’s commitment of $1 Billion to create child-care spaces and reduce daycare costs over three years, it did not address the universal child-care promise.

Interest-Free Student Loans. The provincial portion of student loans will be interest-free, effective immediately. This covers existing, current student loans as well as new loans going forward.

Disability & Income Assistance Rate Increases. People receiving income assistance or disability assistance will get $50 more each month, starting in April 2019. Last year, the NDP budget increased these payments by $100 per month.

A single, employable person on income assistance will now be eligible for $760 per month, while a person with disabilities will now receive $1,183 per month.

Health Care. An expansion of the pharmacare program with additional $42 Million in funding. This will cover more drugs, including diabetes, asthma and hypertension medicines.

$30 Million in additional funding to combat the drug overdose issue.

Mental Health programs targeting the prevention and early intervention of mental health issues in children, youth, and young adults, in amount of $74 Million.

Medical Services Plan (MSP) premiums will be fully eliminated as of January 1, 2020, saving families up to $1,800 per year.

Housing. The NDP announced a budget for 200 extra temporary modular housing units, plus a new $10 Million rent bank – through Ministry of Social Development – to assist renters who need short-term help to stay housed. The rent bank has been a key recommendation of the 2018 Rental Housing Task Force (one of 23 such recommendations).

There was no progress of the NDP’s promise of a $400 annual renters’ rebate, but Finance Minister Carole James stated that work on this front is ongoing.

Clean B.C. Rebate. $900 Million committed over the next three years to fund rebates and incentives in the Clean B.C. program.

Included: Rebate of up to $6,000 on new zero-emission vehicles, $14,000 for home improvements to improve energy efficiency, and $700 for high-efficiency natural gas furnaces.

The Clean B.C. goal is to reduce provincial greenhouse gas emissions by 40 percent below the 2007 level by the year 2030, as part of an overall strategy to combat climate change.

ICBC Presents Risk. The Crown corporation suffered significant losses in multiple recent quarters, and the insurer has been flagged as a risk going forward, especially if the situation doesn’t improve.

Markets Continue Steady Ascent

Since the end of 2018, markets have rebounded significantly, to the point that your December 31 2018 year-end statements are now quite outdated.

The New York S&P/TSX Composite continued its rise this week, closing out north of the 16,000 mark for the first time since last October, settling at 16,013.01. The TSX has now spiked 16.2 percent since the Christmas Eve trough.

The S&P 500 flirted with the 2,800 mark, settling at 2,792.67. The S&P is now up 18.8 percent since Christmas Eve.

The Dow Jones Industrial Average breached the 26,000 mark for the first time since last November, closing Friday at 26,031.81, good for a rebound of 19.5 percent since Christmas Eve.

The NASDAQ closed at 7,527.54, good for another weekly gain. More importantly, since Christmas Eve, the NASDAQ has rebounded 21.6 percent.

Across the pond in Europe, the FTSE 100, the United Kingdom’s main index, has risen from its December 27, 2018 trough of 6,584.70 to close out Friday at 7,178.60, a 9 percent increase. While the FTSE has not rebounded from its trough to the same extent as the North American markets have, it is facing significant headwinds due to ongoing Brexit uncertainty.

This uncertainty is not expected to dissipate prior to March 29th at 11pm GST. At 11pm on March 29th, the UK will officially be out of the European Union, unless either the UK cancels their withdrawal (highly unlikely at this stage), or all 28 EU members agree to an extension.

RRSP Deadline is March 1, 2019

One final reminder that we are only one week away from the 2018 RRSP Deadline. As we approach the March 1st deadline, we encourage you to contact us with any questions about your RRSP. We can work with you to determine your estimated tax saving on a last-minute contribution.

Contact our office if you have any questions about your portfolio, or to contribute to your RRSP prior to the deadline.

Sources: The Globe and Mail, CBC.ca, theprovince.com

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.

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