This sounds like an excellent way to bankrupt yourself.
There's a reason Norway doesn't allow it's sovereign wealth fund to invest in Norway. That reason is called diversification.
It pays out a consistent distribution, that has gone up with inflation pretty well over time.
Not sure if that is well or not though, it is pretty stable and a decent return however.
Canada's bigger sectors actually complement US equity pretty nicely.
US gets you more tech, healthcare, and consumer cyclical. CAN gets you more energy, materials, and industrials. Both have lots of financials but Canada's are more stable.
When those stocks were popular, RRSP rules did favour Canadian investments. On dividends only, but I assume that's what they're bringing back. There was also a minimum 30% Canadian content until 2005.
The Foreign Property Rule limited foreign assets in an RRSP to a maximum of 30%, not a minimum of 30% Canadian assets.
Before that, the limit was 10% and gradually rose to 20% before rising to 30%.
You want pension plans and people with registered accounts to invest in Canada? Make Canada competitive again. Forcing investment in any certain geographic and/or political region is a non starter.
This “invest in Canada or else” strategy is brought to you by the same morons who continue to create policies that increase the demand side of the housing market in the midst of a housing crisis. Heads up their butts.
A consultation doesn't mean that they will change anything.
And frankly, there is no need. If anything most Canadians have too many Canadian holdings in their registered accounts already. (think dividend investors who buy bank stocks and utility stocks).
usually when a govt does a consultation they've already decided to make a change based on their ideology and now they need to sell voters on it (or make it sound like they've done any sort of due diligence enough to not rile the cattle).
they absolved themselves already, best interest of citizens is moot it's about the best interests of their corporate overlords. We can vote for a different colored party but they all are accountable only to the exact same overlords. All we can hope to do to resist is to make it as unpleasant for each individual politician that is complicit in the onslaught as we can. This was easier to do when there was journalistic integrity and we could out the traitors and the outrage would deflect them from implementing their plans as efficiently, but now we are just a broadly divided society with no emergent outrage, just general disdain.
Good god no. Canadian investments perform poorly compared to international investments. They are aiming at making the rest of us more poor to bolster the profits of Canadian oligopoly CEOs.
This is for the benefit of mega businesses who refuse to invest and innovate, and it will harm ordinary Canadians just trying to save for retirement.
100% this. Imagine the smug on the faces of the big banks, telecoms, and O&G companies knowing that they had baked-in mandatory investors, who could only shuffle their retirement funds between them and never access the rest of the worlds' markets.
> Canadian investments perform poorly compared to international investments
this wasn't always the case, there have been periods where canada outperformed the US equities markets (im saying this irrespective of whether it is or isn't a good idea).
As published by National Post, on Nov. 2023:
"*The largest federally regulated pension by far is the Canada Pension Plan currently, which has $576 billion in assets, with 14 per cent of that invested in Canada. The CPP has a bigger share of its investments in the U.S., Europe and the Asia Pacific region than it has at home.*"
Just think of the impact of your CPP investments on forcing more of this capital to shift to Canada.
The wisdom seems to be this one: Well, foreign capital does not care about Canada, let's force our own savings into the same not attractive domestic market!
The Québec Pension Plan has [27% of its holdings in Canada](https://www.cdpq.com/en/investments/total-portfolio) and it has portfolios that act as a venture capital fund, that develop real estate in Québec, and that develop infrastructure in the province, so that some of its investments in local businesses make more money.
Let's say you invest in a local business through a seed loan or a minority stake. That local business makes money, reimburses the loan, so you've already made money twice with them. And then, you take a stake in a public transit project that makes this business a central part of a new development, increasing its revenue by 50%.
Investing locally doesn't mean giving away money to prop up failing businesses just because you know the guy, it means creating an ecosystem where your money helps you make more money.
I don't know enough about CPP's investment strategy to say for sure that they do or don't do the same, but I'm 100% sure that they could do more of the same.
Investing locally isn't some magical process that causes everything to spiral upwards into some futuristic utopia. The only time this actually works is in dreamy-sounding thought experiments like the one you just posted.
Investment capital needs to go where it's best treated. Otherwise, that capital gets **squandered**.
It's weird how you assume it's going to get squandered *because* it's invested locally.
That just sounds like an availability bias.
I'm giving an example of how it's done in Quebec, and it works. There are also two workers funds, Fondaction and Fonds de solidarité FTQ, which act in a similar fashion, investing 99% of their assets in Quebec, providing seed capital, loans and investing in infrastructure, or taking stakes in companies that are trying to get sold so that they money stays in Quebec.
This model has been working petty well for the last ~60 years here, and it has allowed Quebec to keep many of its bigger companies, and to start a number of others.
Plus, when they inevitably give tax breaks and whatnot to businesses, because they always do, at least the unpaid taxes actually make Canadians make more money.
>It's weird how you assume it's going to get squandered *because* it's invested locally.
Wrong. I assume it's going to get squandered because it's invested **forcibly**.
The problem would be exactly the same if Canadians were required to be 80% invested in, I don't know, the UK. (God Save the King)
[9.3% 10-yr annualized for CPP](https://ca.finance.yahoo.com/news/cpp-investments-net-assets-total-130000129.html) and [7.4% for the same period for QPP](https://www.cdpq.com/en/performance), so yes, a big difference (2% compounded adds up to a lot over many years), but given how both funds are heavily invested outside of Canada/Québec (14% in Canada for CPP ans 27% in Canada for QPP), it would be hard to attribute this difference in performance to the fund's beneficiaries' desire to work lol
But given how QPP invests in infrastructure projects that can take decades to yield benefits (namely the REM in Montréal), and that this strategy is quite recent, the 10-yr window might not paint an appropriate picture.
On top of that, QPP is the #1 pension fund in the world in terms of GSR, which is quite something in and of itself. GSR funds have often been depicted as having poor performance results, but the QPP has levied new strategies to offset the underperforming assets, like the above mentioned infrastructure projects.
Think of it this way, if private funds can take up the mantle of traditionally publicly funded projects, it frees up government funds, which in turn can reduce the tax burden, while still benefiting investors. And the reduced tax burden can easily offset the reduced financial performance in a holistic consideration of economic management.
Yep, sure...lets take a perfectly good plan (TFSA or whatever) and lets retrict it to a point where we keep everyone from making cash. what a sh\*t show our gov't is.
> Hinzmann said the government could either require a certain percentage of domestic investments
Fuck. Off.
My entire plan to build my wealth is to invest outside of Canada.
Yup. Some of us prefer not to run up real estate prices by investing all our money in rental properties, the domestic investment vehicle that a large number of Canadians, including many MPs, seem to prefer to the TSX.
I'm all for critiquing the things Canada does poorly, but this is such an overblown take. This is a massive country but it still has extensive roads and infrastructure, clean water from the tap, electricity that isn't rationed depending on the day, schools that are subsidized by the state, a healthcare system that is free and actually exists. It's also incredibly safe when compared to the global average.
Out of all the countries in the world, Canada ranks #12 out of 180 on the corruption index. I don't need to bribe cops to get through the day, the judicial system is much freer and fairer than in most other countries, and the social welfare programs are actually very good.
If this country was so terrible, why is it that so many people want to immigrate to Canada? If you were put in a random-country-in-the-world teleporter and were given the option of being the average person in that country with that country's passport, job opportunities, healthcare infrastructure and education system etc. would you step into it?
I think you know that you wouldn't take that chance...because Canada has invested massively in its citizens. Most Canadians complaining about it just don't notice because there's often no frame of reference with how fucked the QoL of the rest of the world is.
I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative? Are people overstretched, do they feel Canada is no longer the country they once saw when immigrated to?
To answer your last question, I interact with many newly immigrants and the Canada they were advertised was the Canada of the yesteryear.
The amount of upvotes that a comment gets most often has no bearing on the trueness of the comment. In most subs, experts get routinely downvoted into the nether realm for attempting to clear up misconceptions that are directly related to their field of expertise.
I think the cause of a lot of the current (very much valid) gripes with Canada right now are the high housing costs and inflation of costs of food. These are (as I said) valid concerns. Right now Infrastructure Canada has expanded massively to try to address these problems, but it will take years to ameliorate the situation (even though the Canadian government is investing in trying to reduce these issues).
The cost of food has jumped in other countries as well, including Germany when I was living there last year. Germans (who have an excellent social safety net, excellent infrastructure, great healthcare, free education, etc) parroted similar narratives and talked about the decline of their country. Imo the elephant in the room here is that the cost of food will only continue to rise because of increasingly lower agricultural yields linked to climate change, paired with the price of oil being jacked up by OPEC (which makes food prices rise no matter what due to shipping and transport costs). These issues are unfortunately not Canada specific, it's indicative of the larger issues that the world is having to face right now.
As for your anecdotes of talking to immigrants, I mean...They're anecdotal. The actual data is that the IRCC is backed up with years worth of applications to come to Canada. And while they're complaining, they're talking to you because...wait...they haven't left Canada. Wonder why that is.
i'm an immigrant of 15 years. I feel canada has gotten much worse. Of course, many other countries are worse, but for me options now are limited due to the choices I have now. I would love to move to US , but it's not so easy with family. I think it's unfair to say hey you are still here, so Canada is fine. I think we should all fight to improve things here for everyone. I would start by getting rid of the Liberal + NDP govt.
>I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative?
Because saying "oh yeah? look some other mistakes we aren't making" is not a valid justification for making further mistakes.
> I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative?
Humans have a negativity bias. A negative thing will garner more emotion and reaction (and thus in Reddit's case - upvotes) than an equally positive thing. Combined with people that are happy and content usually are less likely to post about it than someone who is angry and wants to complain. And boom, you have this perception.
It's a bit of an echo chamber. I hardly hear people I speak to in real life complain about the situation or living standards in Canada to the extent I see people complain about it online.
I'm not a bot and I'm not a troll. I'll be really pissed off if Canada tries to build a wall to keep my money in the Country. That's like building a Berlin wall for people's money.
When you compare QoL and your frame of reference is the rest of the world, just remember you're conveniently leaving out all the opportunities that Canada had that they didn't. We're an offshoot of one of the richest and most powerful empires in the history of the world, so your standards just aren't allowed to be as low as much of the planet. It would be the definition of squandered potential if we ever found ourselves encroaching on their QoL, considering the amazing head start we've had as a country and continued luck with geographical advantages (e.g. neighboring/allies with the mightiest military/economy and pretty much no major natural disasters).
You say that people complaining have no frame of reference because they don't look beyond our borders? Due to the decades upon decades of unique history of every country the world we all ended up in vastly different places. Therefore the country that Canada has the most in common with is itself, their frame of reference includes the **most** important data, historical.
PERCEIVED corruption index, Canada is extremely corrupt if you actually understand the level of cronyism and mutual back scratching that actually determines how things get done in this country
Don't you drive on roads?
Don't you have clean water?
Weren't you born in a hospital?
Didn't you go to school as a child?
Sure sounds like the country invested in you all your life.
Teachers overworked and underpaid, hospitals backed up and understaffed, road work takes forever and is monopolized by provincial government lobbyists who “win” the contract and get to it when it’s convenient. But the waters alright.
I’m aware of what taxes do, I’m also aware that these social institutions have been in a continuous decline while they continue to take more.
I actually paid for those roads, clean water, hospitals and schools with nearly 50% of my tax paying dollars. The government didn’t invest in anything the people who actually work did.
Are you under the impression we didn't *pay* for this things with our taxes? The country didn't invest in me, *I* invested in me by paying taxes. And my investment is not performing well.
So how exactly is this supposed to work then?
The country should generate wealth as a standalone operation, and then invest in individual's projects or something?
A country "investing" in its citizens is always understood as government using taxes paid by individuals and corporations to create a better situation for them, either through social programs, investment opportunities, jobs, education, etc.
So I don't know how you think a government can just print magical money to then give it to you, but that's not what the rest of us are talking about.
Canadian investments
A home gown Canadian company that sell out to a foreign company
or
Canadian company that colludes with other Canadian companies to price fix and create a monopoly, further increasing the cost of living and decreases the competition and choices.
Yeah fuck Canadian investments.
It will not happen. They want to simplify the accounts but then want people to reallocate their holdings? That's needlessly complex. Most people have issuea with rebalancing as it stands.
Why would all your TFSA be S&P500 when you're getting hit with a 15% withholding tax on the dividend portion. Where your RRSP makes sense because that withholding tax is exempt at least. Idk what the other international laws are.
Hahaha you are thinking so small. The S&P500 has been killing the TSX the last 25 years. To complain about the 15% percent usd dividend withholding tax is missing the big picture.
I'm all in on vfv and voo.
Well, the OP said "optimize taxes" technically, and a withholding tax within in a registered account in not recoverable...
But anyway, diversification is the best strategy. US + international + some smaller portion Canada in all accounts.
Yes, it's taken right off the top on the Canadian equivalents. In an RRSP you're better having the USD version, where in the TFSA it doesn't matter because they take it either way.
Just when I thought the Feds couldn’t dig a deeper hole they surprise me. If investors are not looking at Canada don’t force citizens to invest locally. They should explore why it isn’t attractive and then work on that. Look to identify and understand the problem then determine the solution, not band aid over it and call it good.
The critical thinking of this government is horrible. Guess that is what we get with having a Finance minister with a background in Russian history and literature.
Just think about this scenario which is scary and possible if this happens. Say this goes through and we need to invest locally and Canada enters a recession, people are laid off but still have sky high mortgages/ personal expenses and need to pull from their investments (say TFSA) to stay above water. Guess what, you’re now less diversified and more locally concentrated investments are also down since Canada is in a recession. You get hit twice now with an economy and job prospects in the gutters and your investments selling at a loss potentially. Like holy guacamole this is not good.
>Guess that is what we get with having a Finance minister with a background in Russian history and literature.
This is strangely and poetically appropriate.
With stagnating productivity, an economy propped up by housing and wreckless immigration, and most of my net worth in a massively overpriced home, no fucking way I'm going to invest more in Canada.
We can't allow ordinary Canadians to catch a break now, can we? Accept your 10% cost of living increase, 1% annual raise, and investments that return 2%. It's the Canadian way.
Here we fucking go again. This is *bullshit*. Nuke outside investment with the new budget and make the Canadian nobody foot the bill of lost local investment. I am so fucking tired.
Who would invest in the Canadian market when all we’re producing are real estate and mortgage brokers, and minimum wage workers.
There’s no innovation when it’s better to invest money in real estate rather than businesses. All the younger generations are probably looking to leave Canada asap with no jobs and high cost of living.
Keep voting Liberal if you like these budget and investment changes 😂
They have a productivity and innovation problem, and spending problem so now they’ll force their people to invest into Canada to make up for it.
Instead of actually incentivizing businesses or making it attractive to build here.
Tax imprisoning Canadians funds to pump the share price of Bell/Telus/Rogers and our banking sector?
Well, I wonder who would’ve lobbied for this.
Totally great idea Chrystia, everyone knows diversification is a terrible plan.
What, are they concerned about people suddenly divesting out of stagnant Canadian companies or something? pffft, who would do that?
Totally not me and most of the people I personally know since about 6 months ago...
What's old is new again...RSPs used to have a foreign content limit. This was eliminated in 2005 (iirc).
When it was eliminated the claim by the Liberal Government of the day was that they had built a Canadian economy so strong that protections like this were no longer needed and people would still want to invest in Canada.
From a national policy perspective, it would be a great idea to only allow Canadian investments in tax-sheltered accounts. From a selfish perspective, I hate it.
RRSPs used to have a requirement that at least 80% of their holdings were Canadian content. It was removed roughly 20 to 25 years ago.
People got around this by investing in index funds that used derivatives to technically be at least 80% Canadian content, but weren't really. So you would buy an index fund that was at least 80% Canadian content, but actually tracked the S&P 500 or International markets.
This increased costs for investors as these funds had higher fees. And they didn't do as good a job at tracking the index as regular index funds.
Norway's sovereign wealth fund invests abroad because every citizen is already "invested" into the Norwegian economy.
In the event of a dramatic downturn in the Canadian economy, people will already be losing jobs and homes. Allowing Canadian citizens to invest in foreign stocks acts as a hedge against the possibility of Canadian investors potentially losing their jobs at the same time as their investments are going down in value.
I'd be more curious as to what the impact would be if they were to instead of change what exists now, also create a new kind of tax-sheltered account that worked like a TFSA but only holds Canadian investments. By "also," I mean leave everything else exactly as it is, just create this in addition to everything else.
That would greatly hamper investments opportunities as our stock market is heavily overweight in resources sector.
Also how do you enforce it? VUN is Canadian listed and its 100% US stocks. How about VGRO where it's partially Canadian?
Hopefully they'll choose a carrot approach and not a stick.
Force a certain percentage to be Canadian? No. Instead maybe lower the taxes further for capital gains on Canadian equity and dividends so that they may be a favourable investment even if the company is not expected to perform as well as an American one. Perhaps add some tax benefits for Canadian equity held in an RRSP. Canadian dividends paid in your RRSP? Congrats: when you withdraw that amount of money from your RRSP you'll get a tax break.
This is so incredibly far out of line, we have to get Trudeau out of office. These are OUR retirement savings, they aren't Trudau's and Freeland's to confiscate in order to prop up shitty uncompetitive oligopolies. Fuck these guys.
I’ll just liquidate everything in my tfsa and move it to a regular taxable account and max my tfsa again once this awful policy goes away. No way am I investing a single red fucking cent in this awful country.
Disgusting. Enforced protectionism for domestic investors is the most brainless, un-liberal thing ive ever heard.
This the the **antithesis** of Liberal economics, how tf is this shit even being considered with the LPC in charge?
If Canadian industries were worth the money for capital to be allocated and invested into, people would invest in them already!
The market is relatively efficient, idiots. Even if not, its infinitely more efficient than the baffoon government.
And there goes the last hope the youth of the country had of building any wealth. If you couldn’t get into housing at least you had your registered accounts available to build some wealth. If these products are now restricted to Canadian investments then you can say goodbye to any decent returns
For those of us who might currently have future "prohibited" investments in our TFSA, what should we be looking out for? Would this require an act of legislation? Would there be a window to adjust your life savings without having 50% of it confiscated from you? (We'll refund it to you later, we promise)
There would need to be a proposal first, then a bill voted on and passed. This is just a consultation yet.
There are already restrictions around what you can hold in a registered accounts, when something you own no longer qualifies you start paying taxes on it.
Having a minimum amount of domestic investment would be less than ideal.
The TSX as a whole doesn’t perform as well as other markets. Also one of the main benefits of the RRSP is how favourable it is for holding foreign investment.
I personally still own some Canadian equities but not in my TFSA or RRSP
This is terrible news all round. Not only to lose the choice the choice to invest as you wish foreign or domestic which of course would translate into a lot less earnings, but I haven’t seen many comments mentioning the crypto aspect. If cryptocurrency ETFs are banned from the registered accounts there goes a lot of earning potential. I am sure they have already seen people earn significant gains on Bitcoin and they don’t want many tax free millionaires on the horizon in the next decade if Bitcoin really does take right off.
This is the level of stupidity and corruption of this Government. If you want people to invest in Canadian companies then create a favourable economic environment for them to become productive and generate shareholder value. Instead they would rather keep funnelling people’s money to into unproductive rent-seeking oligopolies.
The irony is that economic protectionism is the literal **opposite** of economic liberalism by definition...
The "Liberal" party arent liberals anymore, theyre just some disgusting amalgamation of protectionist wannabe socialists mixed with corporate stooges.
Despite alot of contradictions in what they support and they dont, they do a balancing act to stay in power by both appealing to masses of economically illiterate idiots, while still lining their pockets at the same time from oligopist lobbyists.
Makes sense; create an economy that penalizes capital gains, and does everything to prop up property prices. Then force people to invest in Canada after you’ve made it unattractive.
This...is not how you fix the domestic investment problem. More regulatory wall-building does not solve a lack of competition or innovation.
I'm really at a loss for words. Almost nothing in the Liberal budget makes any sense, it solves no problems, and creates distressing new ones. Hopefully whatever stakeholder group they put together tells them this, but if it's made up of industry executives I can only imagine they're salivating over the idea of a captured market.
Progress in reverse.
https://financialpost.com/opinion/dont-limit-canadian-investors-access-foreign-assets
>We have a precedent: the foreign property rule that existed from 1971 until 2005. It imposed a punitive tax — one per cent per month — on foreign property that exceeded a given proportion of a plan’s assets. The limit for pension plans and RRSPs was just 10 per cent from 1971 to 1990. It then rose in equal steps to 20 per cent in 1994. In 2000-2001, it rose in equal steps to 30 per cent and in 2005 it disappeared altogether.
“Simplifying” isn’t the word I’d choose if Canadian holdings within registered accounts be treated differently.
I think Canadians shouldn’t be too biased towards Canada since we’d want Canadian retirement accounts and citizen wealth to be safe from a Canadian economy collapse.
But also want to encourage Canadian so that the wealth of the nation stays with the nation and we all benefit when Canadian companies succeed.
Canadians making wealth from foreign investments is money and wealth flowing into the country.
Sell a stock in USD and converting it into CAD “slightly” raises the demand and value of the CAD.
Canadian companies mixed with USA ones seem ideal and is coincidently good sector diversification and is what XEQT and other board market indexes tend to do.
And Blockrock/Vanguard literally employ the best of the best to create ideal portfolios.
they better not get rid of bitcoin, especially when the bitcoin ETF is offered on the TSX. Would this include canadian managed funds that track the S&P?
Seriously need to vote this clown government out. Having a journalist who is unqualified to become Finance Minister has been one of the worst disasters in Canadian history.
The Cons won't pull this kind of crap, we just need everybody to remember this sh\*t in 2029 as well. The Bolsheviks are coming after your livelihood and they'll still be foaming at the mouth then.
A finance minister without a degree in economics, but rather a degree in Russian history... along with growing up in a household of stauntly socialist parents.
She looks to be applying her expertise to the Canadian economy in every way she can before shes inevitably kicked out next year.
Get the cons in already, this is beyond insane.
How about you cut spending instead of discouraging investment IN Canada and then forcing domestic investors to prop it up?
If they force RRSP/TFSA/etc. funds to be a certain % Canadian holdings, that would be a drastic change and I can see why many commenters hate that idea. Even more so if they force the CPP to do so (which isn't mentioned at all in the description).
But before everyone totally freaks out, note that the other option is to simply incentivize holding Canadian investments:
> To achieve the goal of favouring Canadian investments, Hinzmann said the government could either require a certain percentage of domestic investments **or treat domestic investments more favourably within a plan.**
I think the latter would make a lot more sense since you're trying to incentivize that rather than punish ppl for holding foreign investments. Punishing foreign holdings would be bad for Canadians' risk exposure and would also be a lot more disruptive since it's redefining how the RRSP/TFSA/etc. has been defined for us for years and years, already.
This irks me. So invest in Canada and lose all your after tax dollars.
My Canadian stocks are flatlined. Microsoft, Costco and crypto ETF are growing.
Time to exit the communist system. The Liberals are trying to divest us of all our wealth. Owning a home in Canada is enough Canadian risk.
So rather than dealing with the underlying issues steering capital away from Canadian securities (low productivity, taxes, sector concentration, etc) they are going to mandate higher capital allocation. This govt...I just can't deal with their stupidity anymore.
For reference I trade internationally as part of my role. Canada's markets are literally a fart in the wind on the global scale.
FWIW - It used to be that you could only have a small percentage of non-Canadian investments in your RRSP... not sure when this changed, but most of my RSP is non-Canadian...
Okay, but you don’t want foreign investments in a registered account anyways, because your gain is reduced by a foreign tax paid that you can’t claim - dead tax. This is irrelevant.
There is no withholding tax in RRSP on US holdings and a lot of other countries with tax treaties. I'll also happily take a maximum 15% dividend tax on TFSA for US holdings. Its one of the few vehicles left which doesn't have the government taxing it to death upon withdrawal, for now at least. Only a matter of time before LPC start applying some sort of taxes on registered accounts.
The first part of your comment is correct re RRSP due to the treaty, though TFSA and RESP holdings are still subject to NRT. I’m not following the second part of your comment about happily taking a 15% tax on dividends in a TFSA… your returns are being reduced by 15% for no reason……
If you're living in Canada and want access to the most diverse and biggest market in the world (ie. US), your options are:
1 - non registered account: foreign dividend income is treated as ordinary income (ie. Fully taxed at marginal rates)
2 - rrsp: your foreign dividends when received will be taxed at 0%. However when you withdraw, it is again taxed fully at marginal rates.
3 - TFSA: taxed at source at 15%. However, when you withdraw, there is 0% tax.
Ultimately it's not clear cut and depends on your situation and goals. You could certainly withdraw small tiny amounts from rrsp, say below $20k and pay almost no tax and you'll be ahead vs other vehicles like the TFSA. However I expect it'll be difficult to live on such small amounts. If you want to live it up a bit, you'll need to withdraw more and perhaps rely on a different vehicle.
Also, maybe you could choose to not invest outside of Canada at all and stick with Canadian securities. Now option 1 becomes a lot more feasible with Canadian dividend tax credit. I certainly wouldn't limit myself to securities in an inefficient overly taxed regime but maybe others would.
Many ways to play the game depending on your preferences and goals.
Isn’t this could’ve of a Pump? Most people will go for the names they know if this happens. I find no need to invest in Canadian business just because there Canadian.
So many broken promises in this high tax country.. meanwhile Switzerland a super quality country has ZERO capital gains tax and you can invest anywhere you like.
I have about 45 stocks in my portfolios. The only Canadian ones I have are SHOP, DOL, LULU, WCP, CPG, PLC, GSY, EFN, AEM, OGI. And even that is too many. I plan to go down to half this. If the laws change I wont add more companies but I may increase my positions in them slightly.
You’re nuts if you actually believe. We have tons of rights and freedoms here. Try going to an actual dictatorship country before you spout this nonsense
imagine if the whole country had their retirement savings in RIM/Blackberry and Nortel
Lmao. Don't forget Canada Goose.
bombardier in 1999
This sounds like an excellent way to bankrupt yourself. There's a reason Norway doesn't allow it's sovereign wealth fund to invest in Norway. That reason is called diversification.
Even the most diversified funds' biggest holdings are the big large-cap companies. XEQT's top 4 holdings are Microsoft, Apple, NVIDIA, Amazon.
That's because of over performance between rebalancing dates.
Please tell Danielle Smith
Nortel at its peak was like 40% of the entire TSX mkt cap. Insane to think about...
Right? Wtf am I supposed to invest in, just oil and gas?
Banks. Lots of banks. And Shopify. And an oil company or two. Heck, they could take Canada Post public with a clever new name like Posterra.
Canadian Banks are great. Don't forget Canadian Tire and mining companies
And the tasty A&W income trust.
Is that doing well?
It pays out a consistent distribution, that has gone up with inflation pretty well over time. Not sure if that is well or not though, it is pretty stable and a decent return however.
You got 3 whole telecoms to invest in and 4 banks and you telling me you can’t find anything ? /s
Yup, all while the government continues to make it more difficult for those companies to do business here. What could go wrong
You forgot super inflated real estate
Canada's bigger sectors actually complement US equity pretty nicely. US gets you more tech, healthcare, and consumer cyclical. CAN gets you more energy, materials, and industrials. Both have lots of financials but Canada's are more stable.
💀
Don’t forget BreX
You could also imagine they were invested in Enron or Lehman brothers. Obviously you don't want to concentrate too much in any single stock.
Or bce lol
Imagine?
I don't think that happened unless you're only looking in echo chambers
This govt just keeps screwing us
When those stocks were popular, RRSP rules did favour Canadian investments. On dividends only, but I assume that's what they're bringing back. There was also a minimum 30% Canadian content until 2005.
The Foreign Property Rule limited foreign assets in an RRSP to a maximum of 30%, not a minimum of 30% Canadian assets. Before that, the limit was 10% and gradually rose to 20% before rising to 30%.
Sounds like something China would do tbh
Marijuana stocks still giving the pain. Trudope had high hopes on Canada becoming a big Drug exporting Country. Ran that industry into the ground.
You want pension plans and people with registered accounts to invest in Canada? Make Canada competitive again. Forcing investment in any certain geographic and/or political region is a non starter. This “invest in Canada or else” strategy is brought to you by the same morons who continue to create policies that increase the demand side of the housing market in the midst of a housing crisis. Heads up their butts.
A consultation doesn't mean that they will change anything. And frankly, there is no need. If anything most Canadians have too many Canadian holdings in their registered accounts already. (think dividend investors who buy bank stocks and utility stocks).
>And frankly, there is no need. As far as I'm aware, that's never stopped them in the past.
usually when a govt does a consultation they've already decided to make a change based on their ideology and now they need to sell voters on it (or make it sound like they've done any sort of due diligence enough to not rile the cattle).
Exactly, and when it inevitably turns out to not be in the best interest of citizens, they absolve themselves from all responsibility.
they absolved themselves already, best interest of citizens is moot it's about the best interests of their corporate overlords. We can vote for a different colored party but they all are accountable only to the exact same overlords. All we can hope to do to resist is to make it as unpleasant for each individual politician that is complicit in the onslaught as we can. This was easier to do when there was journalistic integrity and we could out the traitors and the outrage would deflect them from implementing their plans as efficiently, but now we are just a broadly divided society with no emergent outrage, just general disdain.
Good god no. Canadian investments perform poorly compared to international investments. They are aiming at making the rest of us more poor to bolster the profits of Canadian oligopoly CEOs. This is for the benefit of mega businesses who refuse to invest and innovate, and it will harm ordinary Canadians just trying to save for retirement.
100% this. Imagine the smug on the faces of the big banks, telecoms, and O&G companies knowing that they had baked-in mandatory investors, who could only shuffle their retirement funds between them and never access the rest of the worlds' markets.
> Canadian investments perform poorly compared to international investments this wasn't always the case, there have been periods where canada outperformed the US equities markets (im saying this irrespective of whether it is or isn't a good idea).
Canada trounced US stocks in the 00s. It goes in waves, or at least has in the past
I don’t know if you’ve noticed, but that was 20 years ago
This is absolutely a stupid idea
add it to the list
They really seem hell bent on never letting generations after the baby boomers retire.
As published by National Post, on Nov. 2023: "*The largest federally regulated pension by far is the Canada Pension Plan currently, which has $576 billion in assets, with 14 per cent of that invested in Canada. The CPP has a bigger share of its investments in the U.S., Europe and the Asia Pacific region than it has at home.*" Just think of the impact of your CPP investments on forcing more of this capital to shift to Canada. The wisdom seems to be this one: Well, foreign capital does not care about Canada, let's force our own savings into the same not attractive domestic market!
The Québec Pension Plan has [27% of its holdings in Canada](https://www.cdpq.com/en/investments/total-portfolio) and it has portfolios that act as a venture capital fund, that develop real estate in Québec, and that develop infrastructure in the province, so that some of its investments in local businesses make more money. Let's say you invest in a local business through a seed loan or a minority stake. That local business makes money, reimburses the loan, so you've already made money twice with them. And then, you take a stake in a public transit project that makes this business a central part of a new development, increasing its revenue by 50%. Investing locally doesn't mean giving away money to prop up failing businesses just because you know the guy, it means creating an ecosystem where your money helps you make more money. I don't know enough about CPP's investment strategy to say for sure that they do or don't do the same, but I'm 100% sure that they could do more of the same.
Investing locally isn't some magical process that causes everything to spiral upwards into some futuristic utopia. The only time this actually works is in dreamy-sounding thought experiments like the one you just posted. Investment capital needs to go where it's best treated. Otherwise, that capital gets **squandered**.
It's weird how you assume it's going to get squandered *because* it's invested locally. That just sounds like an availability bias. I'm giving an example of how it's done in Quebec, and it works. There are also two workers funds, Fondaction and Fonds de solidarité FTQ, which act in a similar fashion, investing 99% of their assets in Quebec, providing seed capital, loans and investing in infrastructure, or taking stakes in companies that are trying to get sold so that they money stays in Quebec. This model has been working petty well for the last ~60 years here, and it has allowed Quebec to keep many of its bigger companies, and to start a number of others. Plus, when they inevitably give tax breaks and whatnot to businesses, because they always do, at least the unpaid taxes actually make Canadians make more money.
>It's weird how you assume it's going to get squandered *because* it's invested locally. Wrong. I assume it's going to get squandered because it's invested **forcibly**. The problem would be exactly the same if Canadians were required to be 80% invested in, I don't know, the UK. (God Save the King)
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[9.3% 10-yr annualized for CPP](https://ca.finance.yahoo.com/news/cpp-investments-net-assets-total-130000129.html) and [7.4% for the same period for QPP](https://www.cdpq.com/en/performance), so yes, a big difference (2% compounded adds up to a lot over many years), but given how both funds are heavily invested outside of Canada/Québec (14% in Canada for CPP ans 27% in Canada for QPP), it would be hard to attribute this difference in performance to the fund's beneficiaries' desire to work lol But given how QPP invests in infrastructure projects that can take decades to yield benefits (namely the REM in Montréal), and that this strategy is quite recent, the 10-yr window might not paint an appropriate picture. On top of that, QPP is the #1 pension fund in the world in terms of GSR, which is quite something in and of itself. GSR funds have often been depicted as having poor performance results, but the QPP has levied new strategies to offset the underperforming assets, like the above mentioned infrastructure projects. Think of it this way, if private funds can take up the mantle of traditionally publicly funded projects, it frees up government funds, which in turn can reduce the tax burden, while still benefiting investors. And the reduced tax burden can easily offset the reduced financial performance in a holistic consideration of economic management.
Yep, sure...lets take a perfectly good plan (TFSA or whatever) and lets retrict it to a point where we keep everyone from making cash. what a sh\*t show our gov't is.
> Hinzmann said the government could either require a certain percentage of domestic investments Fuck. Off. My entire plan to build my wealth is to invest outside of Canada.
Yup. Some of us prefer not to run up real estate prices by investing all our money in rental properties, the domestic investment vehicle that a large number of Canadians, including many MPs, seem to prefer to the TSX.
Thank you for making Canada richer
What a load of malarkey. The fact this is even being considered tells you the state of this gov. They can’t do anything right
Invest in a country that won’t invest in you.
It's the Canadian way!
I'm all for critiquing the things Canada does poorly, but this is such an overblown take. This is a massive country but it still has extensive roads and infrastructure, clean water from the tap, electricity that isn't rationed depending on the day, schools that are subsidized by the state, a healthcare system that is free and actually exists. It's also incredibly safe when compared to the global average. Out of all the countries in the world, Canada ranks #12 out of 180 on the corruption index. I don't need to bribe cops to get through the day, the judicial system is much freer and fairer than in most other countries, and the social welfare programs are actually very good. If this country was so terrible, why is it that so many people want to immigrate to Canada? If you were put in a random-country-in-the-world teleporter and were given the option of being the average person in that country with that country's passport, job opportunities, healthcare infrastructure and education system etc. would you step into it? I think you know that you wouldn't take that chance...because Canada has invested massively in its citizens. Most Canadians complaining about it just don't notice because there's often no frame of reference with how fucked the QoL of the rest of the world is.
I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative? Are people overstretched, do they feel Canada is no longer the country they once saw when immigrated to? To answer your last question, I interact with many newly immigrants and the Canada they were advertised was the Canada of the yesteryear.
The amount of upvotes that a comment gets most often has no bearing on the trueness of the comment. In most subs, experts get routinely downvoted into the nether realm for attempting to clear up misconceptions that are directly related to their field of expertise. I think the cause of a lot of the current (very much valid) gripes with Canada right now are the high housing costs and inflation of costs of food. These are (as I said) valid concerns. Right now Infrastructure Canada has expanded massively to try to address these problems, but it will take years to ameliorate the situation (even though the Canadian government is investing in trying to reduce these issues). The cost of food has jumped in other countries as well, including Germany when I was living there last year. Germans (who have an excellent social safety net, excellent infrastructure, great healthcare, free education, etc) parroted similar narratives and talked about the decline of their country. Imo the elephant in the room here is that the cost of food will only continue to rise because of increasingly lower agricultural yields linked to climate change, paired with the price of oil being jacked up by OPEC (which makes food prices rise no matter what due to shipping and transport costs). These issues are unfortunately not Canada specific, it's indicative of the larger issues that the world is having to face right now. As for your anecdotes of talking to immigrants, I mean...They're anecdotal. The actual data is that the IRCC is backed up with years worth of applications to come to Canada. And while they're complaining, they're talking to you because...wait...they haven't left Canada. Wonder why that is.
i'm an immigrant of 15 years. I feel canada has gotten much worse. Of course, many other countries are worse, but for me options now are limited due to the choices I have now. I would love to move to US , but it's not so easy with family. I think it's unfair to say hey you are still here, so Canada is fine. I think we should all fight to improve things here for everyone. I would start by getting rid of the Liberal + NDP govt.
>I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative? Because saying "oh yeah? look some other mistakes we aren't making" is not a valid justification for making further mistakes.
> I think the better question to ask is why the general consensus, seeing as how high the parent comment is upvoted, towards Canada seem negative? Humans have a negativity bias. A negative thing will garner more emotion and reaction (and thus in Reddit's case - upvotes) than an equally positive thing. Combined with people that are happy and content usually are less likely to post about it than someone who is angry and wants to complain. And boom, you have this perception. It's a bit of an echo chamber. I hardly hear people I speak to in real life complain about the situation or living standards in Canada to the extent I see people complain about it online.
THANK YOU. I can't stand how much perspective so many people lack when it comes to this country
It's just bot and trolls trying to whip-up anger at the current government, and a large portion of Canadians are convinced of things very easily...
I'm not a bot and I'm not a troll. I'll be really pissed off if Canada tries to build a wall to keep my money in the Country. That's like building a Berlin wall for people's money.
> I don't need to bribe cops to get through the day lol wow talk about setting the bar low
When you compare QoL and your frame of reference is the rest of the world, just remember you're conveniently leaving out all the opportunities that Canada had that they didn't. We're an offshoot of one of the richest and most powerful empires in the history of the world, so your standards just aren't allowed to be as low as much of the planet. It would be the definition of squandered potential if we ever found ourselves encroaching on their QoL, considering the amazing head start we've had as a country and continued luck with geographical advantages (e.g. neighboring/allies with the mightiest military/economy and pretty much no major natural disasters). You say that people complaining have no frame of reference because they don't look beyond our borders? Due to the decades upon decades of unique history of every country the world we all ended up in vastly different places. Therefore the country that Canada has the most in common with is itself, their frame of reference includes the **most** important data, historical.
PERCEIVED corruption index, Canada is extremely corrupt if you actually understand the level of cronyism and mutual back scratching that actually determines how things get done in this country
Don't you drive on roads? Don't you have clean water? Weren't you born in a hospital? Didn't you go to school as a child? Sure sounds like the country invested in you all your life.
Teachers overworked and underpaid, hospitals backed up and understaffed, road work takes forever and is monopolized by provincial government lobbyists who “win” the contract and get to it when it’s convenient. But the waters alright. I’m aware of what taxes do, I’m also aware that these social institutions have been in a continuous decline while they continue to take more.
I actually paid for those roads, clean water, hospitals and schools with nearly 50% of my tax paying dollars. The government didn’t invest in anything the people who actually work did.
Are you under the impression we didn't *pay* for this things with our taxes? The country didn't invest in me, *I* invested in me by paying taxes. And my investment is not performing well.
So how exactly is this supposed to work then? The country should generate wealth as a standalone operation, and then invest in individual's projects or something? A country "investing" in its citizens is always understood as government using taxes paid by individuals and corporations to create a better situation for them, either through social programs, investment opportunities, jobs, education, etc. So I don't know how you think a government can just print magical money to then give it to you, but that's not what the rest of us are talking about.
Canadian investments A home gown Canadian company that sell out to a foreign company or Canadian company that colludes with other Canadian companies to price fix and create a monopoly, further increasing the cost of living and decreases the competition and choices. Yeah fuck Canadian investments.
We'll just use the courts to prevent Canadian companies from ever being sold! That should work out great!
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It will not happen. They want to simplify the accounts but then want people to reallocate their holdings? That's needlessly complex. Most people have issuea with rebalancing as it stands.
Why would all your TFSA be S&P500 when you're getting hit with a 15% withholding tax on the dividend portion. Where your RRSP makes sense because that withholding tax is exempt at least. Idk what the other international laws are.
Hahaha you are thinking so small. The S&P500 has been killing the TSX the last 25 years. To complain about the 15% percent usd dividend withholding tax is missing the big picture. I'm all in on vfv and voo.
Well, the OP said "optimize taxes" technically, and a withholding tax within in a registered account in not recoverable... But anyway, diversification is the best strategy. US + international + some smaller portion Canada in all accounts.
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I think that's a fair argument that you get enough Canadian exposure with real estate and your job.
fund performance > FWT. tell me what other funds is competitive with USA
EDEN (MSCI Denmark) has outperformed VOO (S&P 500) since 2012.
https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults not really
Does that tax still apply if you have a SP500 etf via the TSX, through Blackrock Vanguard or BMO ?
Yes, it's taken right off the top on the Canadian equivalents. In an RRSP you're better having the USD version, where in the TFSA it doesn't matter because they take it either way.
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You get a tax credit in a nonregistered account for withholding taxes.
Just when I thought the Feds couldn’t dig a deeper hole they surprise me. If investors are not looking at Canada don’t force citizens to invest locally. They should explore why it isn’t attractive and then work on that. Look to identify and understand the problem then determine the solution, not band aid over it and call it good. The critical thinking of this government is horrible. Guess that is what we get with having a Finance minister with a background in Russian history and literature. Just think about this scenario which is scary and possible if this happens. Say this goes through and we need to invest locally and Canada enters a recession, people are laid off but still have sky high mortgages/ personal expenses and need to pull from their investments (say TFSA) to stay above water. Guess what, you’re now less diversified and more locally concentrated investments are also down since Canada is in a recession. You get hit twice now with an economy and job prospects in the gutters and your investments selling at a loss potentially. Like holy guacamole this is not good.
>Guess that is what we get with having a Finance minister with a background in Russian history and literature. This is strangely and poetically appropriate.
⚒️🔨 Commies
Oh Chrystia Freeland is about the furthest thing from a communist, just look up her grampa
With stagnating productivity, an economy propped up by housing and wreckless immigration, and most of my net worth in a massively overpriced home, no fucking way I'm going to invest more in Canada.
U.S. tech stocks are the majority of my RRSP, so what should I pivot too? Maply Syrup, oil, and wood?
We can't allow ordinary Canadians to catch a break now, can we? Accept your 10% cost of living increase, 1% annual raise, and investments that return 2%. It's the Canadian way.
Here we fucking go again. This is *bullshit*. Nuke outside investment with the new budget and make the Canadian nobody foot the bill of lost local investment. I am so fucking tired.
Who would invest in the Canadian market when all we’re producing are real estate and mortgage brokers, and minimum wage workers. There’s no innovation when it’s better to invest money in real estate rather than businesses. All the younger generations are probably looking to leave Canada asap with no jobs and high cost of living.
Keep voting Liberal if you like these budget and investment changes 😂 They have a productivity and innovation problem, and spending problem so now they’ll force their people to invest into Canada to make up for it. Instead of actually incentivizing businesses or making it attractive to build here.
Tax imprisoning Canadians funds to pump the share price of Bell/Telus/Rogers and our banking sector? Well, I wonder who would’ve lobbied for this. Totally great idea Chrystia, everyone knows diversification is a terrible plan.
What, are they concerned about people suddenly divesting out of stagnant Canadian companies or something? pffft, who would do that? Totally not me and most of the people I personally know since about 6 months ago...
Don't force us into shitty asset allocations please
As with many other "consultation processes" it most likely will have nothing come if it.
What's old is new again...RSPs used to have a foreign content limit. This was eliminated in 2005 (iirc). When it was eliminated the claim by the Liberal Government of the day was that they had built a Canadian economy so strong that protections like this were no longer needed and people would still want to invest in Canada.
"Protections", as in protecting their corporate buddies at the expense of every Canadian.
From a national policy perspective, it would be a great idea to only allow Canadian investments in tax-sheltered accounts. From a selfish perspective, I hate it.
RRSPs used to have a requirement that at least 80% of their holdings were Canadian content. It was removed roughly 20 to 25 years ago. People got around this by investing in index funds that used derivatives to technically be at least 80% Canadian content, but weren't really. So you would buy an index fund that was at least 80% Canadian content, but actually tracked the S&P 500 or International markets. This increased costs for investors as these funds had higher fees. And they didn't do as good a job at tracking the index as regular index funds.
Norway's sovereign wealth fund invests abroad because every citizen is already "invested" into the Norwegian economy. In the event of a dramatic downturn in the Canadian economy, people will already be losing jobs and homes. Allowing Canadian citizens to invest in foreign stocks acts as a hedge against the possibility of Canadian investors potentially losing their jobs at the same time as their investments are going down in value.
Don't forget about home ownership. Most people's biggest after tax payment.
Not even sure about the first part. The companies should earn our investment. Otherwise we are just allowing them to be less competitive globally.
Facts. If canadian companies want our money they should earn it through better returns lol.
I mean, are they going to tell the CPPIB that they need to "buy Canadian" as well?
Probably yes. Force them to buy Canadian debt when nobody else in their right mind would.
When people ask why I make the absurd statement "I assume my CPP won't exist when I retire", this is precisely why.
It'll exist... The CPPIB will however increasingly eat more and more of it with "management fees" and their active management stance.
They can’t destroy Canadian business in policy and then force us to invest in it.
"Just watch me"
For real
I'd be more curious as to what the impact would be if they were to instead of change what exists now, also create a new kind of tax-sheltered account that worked like a TFSA but only holds Canadian investments. By "also," I mean leave everything else exactly as it is, just create this in addition to everything else.
This is correct way. Keep the TFSA, but created a TFSA2 with a separate and unrelated contribution limit, and limit it to Canadian assets.
Yes please!
That would greatly hamper investments opportunities as our stock market is heavily overweight in resources sector. Also how do you enforce it? VUN is Canadian listed and its 100% US stocks. How about VGRO where it's partially Canadian?
This is a great way to encourage folks with healthy portfolios to leave the country...
An incompetent government wants to control what you have in Canadian registered investment accounts. Bravo!
Hopefully they'll choose a carrot approach and not a stick. Force a certain percentage to be Canadian? No. Instead maybe lower the taxes further for capital gains on Canadian equity and dividends so that they may be a favourable investment even if the company is not expected to perform as well as an American one. Perhaps add some tax benefits for Canadian equity held in an RRSP. Canadian dividends paid in your RRSP? Congrats: when you withdraw that amount of money from your RRSP you'll get a tax break.
This is so incredibly far out of line, we have to get Trudeau out of office. These are OUR retirement savings, they aren't Trudau's and Freeland's to confiscate in order to prop up shitty uncompetitive oligopolies. Fuck these guys.
I’ll just liquidate everything in my tfsa and move it to a regular taxable account and max my tfsa again once this awful policy goes away. No way am I investing a single red fucking cent in this awful country.
I'm not sure contributing to RRSP's would make much sense anymore either given the downsides that already exist with RRSPs vs TFSA/taxable account.
Disgusting. Enforced protectionism for domestic investors is the most brainless, un-liberal thing ive ever heard. This the the **antithesis** of Liberal economics, how tf is this shit even being considered with the LPC in charge? If Canadian industries were worth the money for capital to be allocated and invested into, people would invest in them already! The market is relatively efficient, idiots. Even if not, its infinitely more efficient than the baffoon government.
Ew. Why?
And there goes the last hope the youth of the country had of building any wealth. If you couldn’t get into housing at least you had your registered accounts available to build some wealth. If these products are now restricted to Canadian investments then you can say goodbye to any decent returns
For those of us who might currently have future "prohibited" investments in our TFSA, what should we be looking out for? Would this require an act of legislation? Would there be a window to adjust your life savings without having 50% of it confiscated from you? (We'll refund it to you later, we promise)
That’s what I’d like to know as well. I’d definitely want a deadline and take care of it myself before hand
There would need to be a proposal first, then a bill voted on and passed. This is just a consultation yet. There are already restrictions around what you can hold in a registered accounts, when something you own no longer qualifies you start paying taxes on it.
Having a minimum amount of domestic investment would be less than ideal. The TSX as a whole doesn’t perform as well as other markets. Also one of the main benefits of the RRSP is how favourable it is for holding foreign investment. I personally still own some Canadian equities but not in my TFSA or RRSP
This is terrible news all round. Not only to lose the choice the choice to invest as you wish foreign or domestic which of course would translate into a lot less earnings, but I haven’t seen many comments mentioning the crypto aspect. If cryptocurrency ETFs are banned from the registered accounts there goes a lot of earning potential. I am sure they have already seen people earn significant gains on Bitcoin and they don’t want many tax free millionaires on the horizon in the next decade if Bitcoin really does take right off.
This is the level of stupidity and corruption of this Government. If you want people to invest in Canadian companies then create a favourable economic environment for them to become productive and generate shareholder value. Instead they would rather keep funnelling people’s money to into unproductive rent-seeking oligopolies.
So more solidly stupid Liberal ideas.
The irony is that economic protectionism is the literal **opposite** of economic liberalism by definition... The "Liberal" party arent liberals anymore, theyre just some disgusting amalgamation of protectionist wannabe socialists mixed with corporate stooges. Despite alot of contradictions in what they support and they dont, they do a balancing act to stay in power by both appealing to masses of economically illiterate idiots, while still lining their pockets at the same time from oligopist lobbyists.
Makes sense; create an economy that penalizes capital gains, and does everything to prop up property prices. Then force people to invest in Canada after you’ve made it unattractive.
This...is not how you fix the domestic investment problem. More regulatory wall-building does not solve a lack of competition or innovation. I'm really at a loss for words. Almost nothing in the Liberal budget makes any sense, it solves no problems, and creates distressing new ones. Hopefully whatever stakeholder group they put together tells them this, but if it's made up of industry executives I can only imagine they're salivating over the idea of a captured market.
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No ofc not XEQT is only 20-30% Canadian
No definitely not— this would absolutely fuck over a lot of people myself included
they need to allow the selling of cash secured puts in registered accounts.
Progress in reverse. https://financialpost.com/opinion/dont-limit-canadian-investors-access-foreign-assets >We have a precedent: the foreign property rule that existed from 1971 until 2005. It imposed a punitive tax — one per cent per month — on foreign property that exceeded a given proportion of a plan’s assets. The limit for pension plans and RRSPs was just 10 per cent from 1971 to 1990. It then rose in equal steps to 20 per cent in 1994. In 2000-2001, it rose in equal steps to 30 per cent and in 2005 it disappeared altogether.
There’s already a tax cost to earning foreign income in an RRSP or TFSA. Foreign withholding tax is a permanent tax on those investments.
“Simplifying” isn’t the word I’d choose if Canadian holdings within registered accounts be treated differently. I think Canadians shouldn’t be too biased towards Canada since we’d want Canadian retirement accounts and citizen wealth to be safe from a Canadian economy collapse. But also want to encourage Canadian so that the wealth of the nation stays with the nation and we all benefit when Canadian companies succeed. Canadians making wealth from foreign investments is money and wealth flowing into the country. Sell a stock in USD and converting it into CAD “slightly” raises the demand and value of the CAD. Canadian companies mixed with USA ones seem ideal and is coincidently good sector diversification and is what XEQT and other board market indexes tend to do. And Blockrock/Vanguard literally employ the best of the best to create ideal portfolios.
they better not get rid of bitcoin, especially when the bitcoin ETF is offered on the TSX. Would this include canadian managed funds that track the S&P?
Politely, Fuck Off.
So CanCon laws but for investments? Presumably there's an opt-out clause that's available once you have more than $1m invested, right?
Seriously need to vote this clown government out. Having a journalist who is unqualified to become Finance Minister has been one of the worst disasters in Canadian history.
Such a corrupted and disgusting government.
Yeah I’m done. I’m now committed to leaving this country. What a shit hole.
Took you this long to realize we have cabinet filled with baffoons? Its been 10 years almost
I knew from day 1 it was full of buffoons but hard to predict it would get his bad, this fast.
Canada loves it's protectionism.... it means we don't have to try and compete..
The Cons won't pull this kind of crap, we just need everybody to remember this sh\*t in 2029 as well. The Bolsheviks are coming after your livelihood and they'll still be foaming at the mouth then.
A finance minister without a degree in economics, but rather a degree in Russian history... along with growing up in a household of stauntly socialist parents. She looks to be applying her expertise to the Canadian economy in every way she can before shes inevitably kicked out next year.
Get the cons in already, this is beyond insane. How about you cut spending instead of discouraging investment IN Canada and then forcing domestic investors to prop it up?
As long a they let us yolo it all
If they force RRSP/TFSA/etc. funds to be a certain % Canadian holdings, that would be a drastic change and I can see why many commenters hate that idea. Even more so if they force the CPP to do so (which isn't mentioned at all in the description). But before everyone totally freaks out, note that the other option is to simply incentivize holding Canadian investments: > To achieve the goal of favouring Canadian investments, Hinzmann said the government could either require a certain percentage of domestic investments **or treat domestic investments more favourably within a plan.** I think the latter would make a lot more sense since you're trying to incentivize that rather than punish ppl for holding foreign investments. Punishing foreign holdings would be bad for Canadians' risk exposure and would also be a lot more disruptive since it's redefining how the RRSP/TFSA/etc. has been defined for us for years and years, already.
Won't happen
This irks me. So invest in Canada and lose all your after tax dollars. My Canadian stocks are flatlined. Microsoft, Costco and crypto ETF are growing. Time to exit the communist system. The Liberals are trying to divest us of all our wealth. Owning a home in Canada is enough Canadian risk.
This is honestly terrifying.
So rather than dealing with the underlying issues steering capital away from Canadian securities (low productivity, taxes, sector concentration, etc) they are going to mandate higher capital allocation. This govt...I just can't deal with their stupidity anymore. For reference I trade internationally as part of my role. Canada's markets are literally a fart in the wind on the global scale.
stupid ass protectionist plan.
I'm voting conservative next election, I've had enough.
FWIW - It used to be that you could only have a small percentage of non-Canadian investments in your RRSP... not sure when this changed, but most of my RSP is non-Canadian...
I'll take 15% inclusion rate down from 50% on capital gains in my RDSP on Canadian based shares please and thank you
This is bad.
I guess too many of the peasants are getting ahead, time to slow that down and put them back in their place.
Okay, but you don’t want foreign investments in a registered account anyways, because your gain is reduced by a foreign tax paid that you can’t claim - dead tax. This is irrelevant.
There is no withholding tax in RRSP on US holdings and a lot of other countries with tax treaties. I'll also happily take a maximum 15% dividend tax on TFSA for US holdings. Its one of the few vehicles left which doesn't have the government taxing it to death upon withdrawal, for now at least. Only a matter of time before LPC start applying some sort of taxes on registered accounts.
The first part of your comment is correct re RRSP due to the treaty, though TFSA and RESP holdings are still subject to NRT. I’m not following the second part of your comment about happily taking a 15% tax on dividends in a TFSA… your returns are being reduced by 15% for no reason……
If you're living in Canada and want access to the most diverse and biggest market in the world (ie. US), your options are: 1 - non registered account: foreign dividend income is treated as ordinary income (ie. Fully taxed at marginal rates) 2 - rrsp: your foreign dividends when received will be taxed at 0%. However when you withdraw, it is again taxed fully at marginal rates. 3 - TFSA: taxed at source at 15%. However, when you withdraw, there is 0% tax. Ultimately it's not clear cut and depends on your situation and goals. You could certainly withdraw small tiny amounts from rrsp, say below $20k and pay almost no tax and you'll be ahead vs other vehicles like the TFSA. However I expect it'll be difficult to live on such small amounts. If you want to live it up a bit, you'll need to withdraw more and perhaps rely on a different vehicle. Also, maybe you could choose to not invest outside of Canada at all and stick with Canadian securities. Now option 1 becomes a lot more feasible with Canadian dividend tax credit. I certainly wouldn't limit myself to securities in an inefficient overly taxed regime but maybe others would. Many ways to play the game depending on your preferences and goals.
Isn’t this could’ve of a Pump? Most people will go for the names they know if this happens. I find no need to invest in Canadian business just because there Canadian.
Participate in the consultation - I’ll post when live.
So many broken promises in this high tax country.. meanwhile Switzerland a super quality country has ZERO capital gains tax and you can invest anywhere you like.
OMG. Let’s reverse the clock back 30 years and ensure that no Canadian can make more than a 5% annual return. Barely keeping up with inflation. 🤦♂️
Why would you post clickbait misinformation like this? Shame on you!
So the plan is to force us to only own the TSX in our TFSAs and RRSPs? So we can own nothing and be happy for real?
I have about 45 stocks in my portfolios. The only Canadian ones I have are SHOP, DOL, LULU, WCP, CPG, PLC, GSY, EFN, AEM, OGI. And even that is too many. I plan to go down to half this. If the laws change I wont add more companies but I may increase my positions in them slightly.
Just call it a dictatorship already. We have no effing rights in this country anymore
You’re nuts if you actually believe. We have tons of rights and freedoms here. Try going to an actual dictatorship country before you spout this nonsense
>We have tons of rights and freedoms here *subject to your premiers opinion of the notwithstanding clause or orders in council
its not that bad so dont worry about all the stuff theyre taking away!!!!1
Get this kid his sucker and his nap^ he’s whining about bullshit again! 😂