2025 Canada Money Facts

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Staying informed about financial limits and benefits is essential for effective planning. The 2025 Canada Money Facts infographic provides a clear breakdown of key financial limits, including TFSA, RRSP, FHSA, RESP, CPP, and OAS. Here’s what you need to know:

Tax-Free Savings Account (TFSA)

The 2025 TFSA contribution limit is $7,000, bringing the cumulative contribution room to $102,000 for those who have never contributed since its inception. This account remains a flexible, tax-free way to grow your savings.

Registered Retirement Savings Plan (RRSP)

The RRSP contribution limit for 2025 is $32,490, based on 18% of earned income from the previous year, with a required income of $180,500 to maximize contributions. Contributing to an RRSP can provide tax deferral benefits and help with long-term retirement planning.

First Home Savings Account (FHSA)

Introduced to help first-time homebuyers, the FHSA limit remains at $8,000 for 2025, with a cumulative limit of $24,000. Contributions are tax-deductible, and withdrawals for a first home purchase are tax-free.

Registered Education Savings Plan (RESP)

The lifetime RESP contribution limit remains at $50,000 per beneficiary, with a maximum annual CESG grant of $500 and a lifetime CESG maximum of $7,200. This is a great way to plan for a child’s future education.

Canada Pension Plan (CPP) & Old Age Security (OAS)

  • CPP retirement benefits can reach up to $17,196 annually, while disability benefits max out at $20,079.

  • OAS pensions for 2025 provide up to $8,732 per year (ages 65-74) or $9,605 per year (age 75+), but high-income earners may face a clawback if net income exceeds $93,454.

This infographic is a quick reference to help Canadians stay on top of their savings and retirement planning. Whether you’re maximizing contributions, planning for retirement, or saving for a child’s education, understanding these limits ensures you’re making the most of available benefits.

Stay ahead in 2025 by planning wisely and optimizing your financial future!

How Tariffs Affect Your Wallet: A Canadian Perspective on the US–Canada Trade War

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Explaining the US–Canada Trade War

What Is It All About?

The US–Canada trade war has far-reaching implications for every Canadian, affecting everything from the cost of groceries to the stability of our economy. The US–Canada trade war refers to the series of tariff impositions and trade barriers that the United States and Canada have used as negotiating tools in various disputes. Historically, while the two countries share one of the world’s largest trading relationships, disagreements have erupted over issues such as softwood lumber, dairy, steel, and aluminum [1, 2]. In recent developments, U.S. President Donald Trump ordered a 25% tariff on all Canadian goods—with a 10% tariff on energy—to go into effect on February 4, 2025 [3].  Effective February 3, 2025- this has now been delayed 30 days. 

What’s the Timeline so far? 

  • Pre-Announcement and Rumors: In the weeks leading up to February 4, President Trump had repeatedly threatened to impose steep tariffs on Canada, along with China and Mexico. Early reports even suggested that the tariffs might be postponed until March 1 [3].

  • Confirmation of Tariffs: Shortly after these speculations, the White House clarified that the tariffs were indeed set to take effect on February 4, leaving little room for negotiation or delay [3].

  • Immediate Economic Reactions: Once announced, the Canadian dollar (loonie) took a significant hit, dropping to approximately US$0.68 per Canadian dollar, signaling market concerns about the economic impact [3].

  • Canadian Retaliation: In response to the U.S. measures, Prime Minister Justin Trudeau declared that Canada would retaliate with a 25% tariff on American goods. This response includes immediate tariffs on $30 billion worth of U.S. products, with additional measures on another $125 billion scheduled to begin three weeks later to give Canadian companies time to adjust [4].

  • Enhanced Border Security and Tariff Pause Announcement: In a statement on February 3, 2025 shared via social media, Prime Minister Trudeau commented: “I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border. In addition, Canada is making new commitments to appoint a Fentanyl Czar, we will list cartels as terrorists, ensure 24/7 eyes on the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering. I have also signed a new intelligence directive on organized crime and fentanyl and we will be backing it with $200 million. Proposed tariffs will be paused for at least 30 days while we work together.”

This announcement not only outlines significant border security enhancements but also temporarily pauses the proposed tariffs, giving both nations time to coordinate their responses [4, 18].

How Tariffs come into play

Tariffs are essentially taxes imposed on imported goods. The current measures reflect a tit-for-tat strategy. The United States has imposed a 25% tariff on Canadian goods and an additional 10% on energy products [3]. In response, Canada announced it will counter with a 25% tariff on American goods [4]. These aggressive measures are meant to protect domestic industries and gain leverage in negotiations. However, they also create uncertainty for businesses, raise production costs, and ultimately result in higher prices for consumers [5].

The Broader Economic Picture

For individuals, the main takeaway is that these trade policies disrupt the balance of supply and demand. Tariffs can:

  • Increase Costs: Importers and manufacturers face higher costs that are passed on to consumers.

  • Shift Markets: Businesses may alter where and how they source materials, impacting product availability and quality.

  • Impact Jobs: Industries may slow down, affecting employment and wage growth.

  • Fuel Inflation: As production expenses rise, so do retail prices, adding inflationary pressure to the economy [6, 7].

How the Tariffs Affects Canada

Direct Economic Impacts

Tariffs affect key sectors of the Canadian economy in several ways. Recent news indicates that the Canadian dollar has taken an immediate hit, falling further to a level where one Canadian dollar is now worth approximately US$0.68 [3]. This depreciation means that imported goods will become even more expensive for Canadians. Specific sectors affected include:

  • Manufacturing and Exports: Higher prices make Canadian goods less competitive in the U.S. market.

  • Agriculture: Farmers risk losing market access if American tariffs restrict Canadian produce and meat.

  • Consumer Prices: Increased production costs are passed on to consumers, causing everyday items—from electronics and clothing to food—to become more expensive over time. This not only contributes to inflation but also erodes Canadians’ purchasing power [8, 9].

Additionally, industries such as automotive manufacturing may experience significant disruptions since vehicle parts frequently cross the border and could become uneconomical to ship.

Indirect Effects on Personal Finances

The ripple effects of the tariffs can significantly impact daily life:

  • Higher Living Costs: As companies face increased input costs from tariffs, consumers are likely to see a gradual increase in prices for everyday goods, further contributing to inflation.

  • Increased Cost of Goods: Basic commodities and consumer products may rise in price, reducing household purchasing power.

  • Investment Uncertainty: Market volatility is likely as investors react to the uncertain effects of the tariffs on corporate profits and economic growth.

  • Employment Concerns: Industries severely impacted by tariffs may delay hiring or reduce their workforce, leading to concerns over job security and income levels [10, 11].

Government and Business Responses

To mitigate these challenges, both the Canadian government and businesses are taking proactive steps:

  • Diversification: Shifting trade relations toward new markets to lessen dependence on the U.S.

  • Innovation: Investing in technology and automation to reduce reliance on imported goods.

  • Support for Local Industries: Prime Minister Justin Trudeau has urged Canadians to buy domestic products, and several provinces have taken non-tariff actions—such as pulling U.S. liquor from store shelves—to pressure U.S. consumers and prompt a tariff rollback [4, 12, 13].

The Case for Buying Canadian

Strengthening the Local Economy

Purchasing Canadian-made products supports local businesses and helps keep money circulating within the national economy. When you choose domestic goods, you contribute to:

  • Job Creation: Local companies are more likely to hire Canadians, which can help reduce unemployment and boost regional growth.

  • Economic Stability: A strong local economy can shield consumers from international market fluctuations and inflation, offering a more predictable environment for personal finances.

  • Innovation and Quality: Canadian firms reinvest in research and development to remain competitive, so buying Canadian helps promote ongoing innovation and quality improvements [14, 15].

Practical Tips for Buying Canadian

  • Read Labels: Look for products that clearly state they are made in Canada; local certifications and branding help you identify them.

  • Support Local Retailers: Shop at local stores and markets whenever possible, as these businesses are more directly affected by trade disruptions and inflation.

  • Be an Informed Consumer: Stay updated on the sectors most affected by tariffs and inflation so you can adjust your purchasing decisions and budget accordingly [16].

Balancing Your Budget

Managing your personal finances becomes even more crucial when prices rise:

  • Budget Adjustments: Expect imported goods to become more expensive due to tariffs and inflation, so plan your monthly budget with a buffer for these increased costs.

  • Diversify Spending: Strike a balance between purchasing domestic and international products, taking availability and price into account.

  • Monitor Economic Trends: Keep an eye on economic news, particularly regarding inflation and price changes, to make informed decisions about savings, investments, and major purchases [17].

Final Thoughts

The US–Canada trade war, marked by a complex mix of tariffs, countermeasures, and inflationary pressures, is poised to affect personal finances significantly. As production costs rise due to these measures, companies often pass increased expenses on to consumers, driving up prices and adding to inflation. Recent events—including the dramatic fall of the loonie and swift retaliatory actions by Canada—underscore the real impact of these trade disputes. Despite the challenges posed by the trade war, Canadians have shown remarkable resilience. By supporting local businesses and making informed financial decisions, we can navigate these uncertain times and emerge stronger. 

Disclaimer: This article is for informational purposes only and should not be considered personalized financial advice. Always consult a professional advisor for guidance tailored to your individual circumstances.

Works Cited

  1. Government of Canada. Trade and Investment. Retrieved from https://www.international.gc.ca/trade-commerce/index.aspx?lang=eng
  2. USTR. United States Trade Representative. Retrieved from https://ustr.gov/
  3. CNN. “Trump Tariffs on Canada.” CNN, 1 Feb. 2025, https://www.cnn.com/2025/02/01/economy/trump-tariffs-mexico-canada-china-increased-costs/index.html
  4. Reuters. “Canada’s Trudeau Announces Counter-Tariffs.” Reuters, 2 Feb. 2025, https://www.reuters.com/world/americas/canadas-trudeau-announces-counter-tariffs-2025-02-02/
  5. Investopedia. “Tariff.” Retrieved from https://www.investopedia.com/terms/t/tariff.asp
  6. BBC. “What Are Tariffs?” Retrieved from https://www.bbc.com/news/business-23939589
  7. Investopedia. “Inflation.” Retrieved from https://www.investopedia.com/terms/i/inflation.asp
  8. Conference Board of Canada. Retrieved from https://www.conferenceboard.ca/
  9. Statistics Canada. Retrieved from https://www.statcan.gc.ca/
  10. Bank of Canada. Economic Research. Retrieved from https://www.bankofcanada.ca/research/
  11. CBC. Business News. Retrieved from https://www.cbc.ca/news/business
  12. Innovation, Science and Economic Development Canada. Retrieved from https://www.ic.gc.ca/eic/site/icgc.nsf/eng/home
  13. Business News Network. Retrieved from https://www.bnnbloomberg.ca/
  14. Canadian Chamber of Commerce. Retrieved from https://chamber.ca/
  15. Retail Council of Canada. Retrieved from https://www.retailcouncil.org/
  16. Canadian Consumer Handbook. Retrieved from https://www.canada.ca/en/competition-consumer.html
  17. Financial Consumer Agency of Canada. Retrieved from 18https://www.canada.ca/en/financial-consumer-agency.html
  18. X, 2025. Retrieved from https://x.com/JustinTrudeau/status/1886529228193022429

2024 Year-End Tax Tips and Strategies for Business Owners

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As a business owner, managing your finances well can make a big difference for your business’s future. Whether it’s choosing how to compensate yourself or making the most of opportunities like the small business deduction and lifetime capital gains exemption, thoughtful planning can help you save on taxes. This guide offers practical tips to help you make informed decisions.

Salary and RRSP Contributions

Taking a salary from your corporation can help reduce the company’s taxable income while creating RRSP contribution room for you. In 2024, a salary of up to $180,500 allows you to maximize your RRSP contribution room for 2025, which is $32,490.

Dividends

Dividends offer another way to take income from your business. They’re paid from the corporation’s after-tax income, but thanks to the dividend tax credit, they’re often taxed at a lower rate than salary.

Compensating Family Members

If family members are involved in your business, paying them can be a practical and tax-efficient option:

  • Salaries to Family Members: Paying a fair salary to family members who work for your business not only compensates them but also gives them access to RRSP contributions and CPP. You must be able to prove the family members have provided services in line with the amount of compensation you give them.

  • Dividends to Family Members: If family members are shareholders, dividends can provide them with tax-efficient income. The tax-free amount varies by province or territory, so it’s worth checking the rules where you live.

  • Income Splitting: Distributing income among family members can help reduce overall taxes. However, be mindful of the Tax on Split Income (TOSI) rules to avoid penalties. A tax professional can guide you through this process.

Deferring Income

If you don’t need the full amount for personal use, leaving surplus funds in the corporation could be a smart move. This keeps the money invested within the business, benefiting from lower corporate tax rates. Over time, this approach may allow the funds to generate more income compared to personal investing, depending on your goals and investment strategy. However, be mindful of passive investment income limits, as exceeding $50,000 in passive income could reduce or eliminate your corporation’s access to the small business deduction. Monitoring this threshold is essential to maintaining the tax advantages available to your business.

Compensation

It’s always a good idea to review how you handle compensation beyond base salary.

Consider these options:

  • Shareholder Loans: Borrow funds from your corporation with deductible interest but ensure repayment to avoid personal tax.

  • Profit-Sharing Plans: These can be a tax-efficient alternative to bonuses for distributing profits.

  • Stock Options: Only the employee or employer—not both—can claim a deduction when options are cashed out.

  • Retirement Plans: Explore setting up a Retirement Compensation Arrangement (RCA) to save for retirement tax-efficiently.

Passive Investments

Canadian-controlled private corporations (CCPCs) benefit from a reduced corporate tax rate on the first $500,000 of active business income, thanks to the small business deduction (SBD). The SBD can lower the tax rate by 12% to 21%, depending on your province or territory.

However, passive investment income over $50,000 in the previous year reduces the SBD by $5 for every additional dollar, potentially eliminating it altogether. To maintain access to the SBD, it’s important to keep passive investment income below this threshold.

Here are some strategies to help preserve your SBD:

  • Defer Portfolio Sales: Delay selling investments that generate capital gains if possible.

  • Optimize Your Investment Mix: Focus on tax-efficient investments like equities over fixed income.

  • Exempt Life Insurance Policies: Income earned within these policies isn’t included in your passive investment total.

  • Individual Pension Plan (IPP): This defined benefit plan is exempt from passive income rules and offers tax-advantaged retirement savings.

  • Consider Corporate Class Mutual Funds: These funds offer tax-efficient growth by deferring taxable distributions. While recent tax changes have limited their benefits, they remain a viable option for minimizing taxable passive income.

Carefully managing passive investments can help your business maintain access to the SBD and maximize its tax advantages for continued growth.

Capital Gains Inclusion Rate Increase

With recent changes to the capital gains inclusion rate, business owners personally holding investments with unrealized gains may want to consider realizing up to $250,000 in capital gains in 2024. This approach allows you to benefit from the lower tax rate on gains within this threshold, provided it aligns with your overall financial strategy.

Tax-Free Dividends

If your corporation has investments with losses that haven’t been sold yet, it’s a good idea to check the balance of its Capital Dividend Account (CDA) before selling. The CDA keeps track of the non-taxable portion of capital gains and some other amounts. You can pay tax-free dividends to shareholders using this account if you don’t go over the balance. However, if you sell investments at a loss, the CDA balance will go down, which might reduce or even remove your ability to pay these tax-free dividends. To avoid this, think about paying out any available tax-free dividends before selling investments at a loss.

Business Transition

If you’re planning to transition your business and believe its value has decreased, now might be a good time to explore options like an estate freeze or refreeze as part of your strategy.

Lifetime Capital Gains Exemption (LCGE)

The 2024 Federal Budget increased the LCGE from $1,016,836 to $1.25 million as of June 25, 2024. This allows you to benefit from tax savings on up to $1.25 million in capital gains over your lifetime when selling qualifying small business shares, farm properties, or fishing properties. Ensuring your corporate shares qualify for this exemption can help reduce the tax burden when selling or transferring your business.

Canadian Entrepreneurs’ Incentive (CEI)

The 2024 Federal Budget also introduced the Canadian Entrepreneurs’ Incentive (CEI) to lower taxes on selling qualifying shares. Starting June 25, 2024, the CEI reduces the taxable portion of capital gains to one-third for gains over $250,000 on qualifying sales.

In 2025, the CEI will go even further, lowering the taxable portion of capital gains to half the usual amount for up to $2 million in lifetime gains. This $2 million limit will start at $400,000 in 2025 and increase by $400,000 each year until it reaches $2 million in 2029.

To use the CEI, the shares must meet certain rules. However, it does not apply to shares of professional corporations or businesses focused on financial services, insurance, real estate, food and accommodation, arts, recreation, entertainment, consulting, or personal care services.

Together, the LCGE and CEI offer tax savings for business owners when selling or passing on their businesses.

Employee Ownership Trusts (EOT)

An EOT is a way for employees to own a business. A trust holds shares of the business on behalf of the employees, so they don’t have to pay directly to buy shares themselves.

Starting in 2024, EOTs are allowed in Canada. If a business is sold to an EOT in 2024, 2025, or 2026, the first $10 million in capital gains from the sale is tax-free, if certain conditions are met. This $10 million limit applies to the entire business, not to each individual shareholder. If multiple people sell shares to an EOT as part of the sale, they can each claim part of the exemption, but the total claimed by everyone combined can’t be more than $10 million. All sellers must agree on how to split the exemption.

Depreciable Assets

Purchasing depreciable assets can be a smart tax planning move, as they allow you to claim Capital Cost Allowance (CCA) to reduce taxable income.

To maximize the benefits:

  • Take advantage of the Accelerated Investment Incentive, which offers an enhanced first-year CCA for eligible assets.

  • Postpone selling depreciable assets if it could trigger recaptured depreciation in your 2024 tax year.

Timing your asset purchases and sales can help optimize your tax savings.

Donations

Making donations, whether charitable or political, can provide valuable tax benefits. To maximize these advantages, consider options like:

  • Donating securities

  • Giving a direct cash gift to a registered charity

  • Using a donor-advised fund for ongoing charitable contributions

  • Setting up a private foundation

  • Donating a life insurance policy by naming a charity as the beneficiary or transferring ownership.

Each option offers unique tax advantages depending on your situation.

Final Corporate Tax Balances

Pay your corporate taxes within two months of year-end (or three months for some CCPCs) to avoid interest charges that can’t be deducted.

Contact Us

For guidance on implementing these strategies, connect with your trusted tax professional. If you’d like to discuss how these tips align with your overall plan, let’s schedule a meeting.

Sources:

CPA Canada, “2024 Federal Budget Highlights,” https://www.cpacanada.ca/-/media/site/operational/sc-strategic-communications/docs/02085-sc_2024-federal-budget-highlights_en_final.pdf?rev=6d565a6a66ef4e20b1e01dc784464c93, 2024.


Government of Canada, “Capital Gains Inclusion Rate,” https://www.canada.ca/en/department-finance/news/2024/06/capital-gains-inclusion-rate.html, 2024.


Advisor.ca, “Lifetime Capital Gains Exemption to Top $1M in 2024,” https://www.advisor.ca/tax/tax-news/lifetime-capital-gains-exemption-to-top-1m-in-2024/, 2024.


PwC Canada, “Year-End Tax Planner,” https://www.pwc.com/ca/en/services/tax/publications/guides-and-books/year-end-tax-planner.html, 2024.


CIBC, “2024 Year-End Tax Tips,” https://www.cibc.com/content/dam/personal_banking/advice_centre/tax-savings/year-end-tax-tips-en.pdf, 2024.


Government of Canada, “Federal Budget 2024,” https://budget.canada.ca/2024/report-rapport/tm-mf-en.html, 2024.

2024 Personal Year End Tax Tips

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The end of 2024 is quickly approaching – which means it’s time to get your paperwork in order so you’re ready when it comes time to file your taxes!

In this article, we’ve covered five different major types of 2024 personal tax tips:

  • Investment Considerations

  • Individuals

  • Families

  • Retirees

  • Students

Investment Considerations

Investment Portfolio Mix

Different investments are taxed differently, so reviewing your portfolio ensures optimal after-tax returns. With the recent increase to the capital gains tax rate on gains realized after June 24, 2024, it might make sense to focus on investments that yield eligible dividends instead of capital gains. Whether this works for you depends on your marginal tax rate and where you live, so take some time to evaluate your options.

Capital Gains Inclusion Rate

The 2024 federal budget introduced changes to the capital gains inclusion rate that could affect your tax planning. For individuals, the first $250,000 of annual capital gains remain taxed at the 50% inclusion rate. However, any gains exceeding this threshold are now taxed at 2/3 of the total. If this applies to you, consider strategies like tax-loss selling to offset realized gains.

Tax-Loss Selling

Selling investments in non-registered accounts with losses can offset capital gains elsewhere in your portfolio. Unused net capital losses can be carried back up to three years or forward indefinitely to offset gains in other years. To ensure the loss applies for 2024 (or the prior three years), the transaction must settle within 2024.

Be aware of the “superficial loss” rule: if you or an affiliated person repurchases the same investment within 30 days before or after the sale, the loss cannot be used to reduce taxes immediately. Instead, it’s added to the cost of the repurchased investment, and you’ll benefit from the loss when you sell it later.

Tax-Free Savings Account (TFSA)

You can contribute up to a maximum of $7,000 for 2024. You can carry forward unused contribution room indefinitely. The maximum amount you’re allowed to make in TFSA contributions is $95,000 (including 2024) if you have been at least 18 years old and resident in Canada since 2009.

Registered Retirement Savings Plan (RRSP)

For the 2024 tax year, you have until March 3, 2025, to contribute to your Registered Retirement Savings Plan (RRSP) or a spousal RRSP. However, contributing earlier can benefit you more due to tax-deferred growth. Your deduction limit for 2024 is 18% of your 2023 income, up to $31,560, but this will reduce if you have pension adjustments. Don’t forget, any unused contribution room from previous years or pension adjustment reversals can increase your limit.

Also, you can deduct contributions on your 2024 income if they are made within the first 60 days of 2025. It’s possible to defer these deductions to a later year if that suits your financial strategy better. 

Interest Deductibility

If you can, focus on paying off debts with non-deductible interest first, like personal loans or those with non-refundable credits (e.g., student loans). Use borrowing for investment or business purposes and save your cash for personal expenses. 


For Individuals

Income Timing

If your marginal personal tax rate is lower in 2025 than in 2024, defer the receipt of certain employment income; if your marginal personal tax rate is higher in 2025 than in 2024, accelerate.

First Home Savings Account (FHSA) 

If you are a Canadian resident, age 18 or older and planning to become first-time homebuyers. Starting from April 1, 2023, this account serves as a valuable tool for saving towards the purchase of a qualifying first home. 

The FHSA program comes with an annual contribution limit of $8,000, and a cumulative lifetime cap of $40,000, with the flexibility to carry forward up to $8,000 in unused contributions. Importantly, contributions made to the FHSA are tax-deductible, offering potential tax benefits. Additionally, the returns earned on your savings within this account are not subject to taxation, which can enhance the overall growth of your savings. Most notably, when you make qualifying withdrawals to buy your first home, these withdrawals are non-taxable.

Medical expenses

If you have eligible medical expenses that weren’t paid for by either a provincial or private plan, you can claim them on your tax return. You can even deduct premiums you pay for private coverage. Either spouse can claim qualified medical expenses for themselves and their dependent children in a 12-month period, but it’s generally better for the spouse with the lower income to do so.

Charitable Donations

Federal and provincial donation tax credits can significantly reduce your taxes, with the savings depending on your province. Larger donations receive higher federal credits, and you can pool receipts with your spouse or carry them forward for up to five years.

For 2024, changes to the Alternative Minimum Tax (AMT) limit the portion of the donation credit that can be applied for AMT purposes. Be sure to make your donations by December 31 to claim them for 2024.

Alternative Minimum Tax (AMT)

The Alternative Minimum Tax (AMT) ensures a minimum level of tax is paid by limiting certain deductions, exemptions, and credits. If your AMT calculation exceeds your regular tax, you’ll pay the difference as AMT for the year.


Revised for 2024, AMT changes include a higher tax rate, a larger exemption, and stricter limits on tax-reducing measures like capital gains, stock options, Canadian dividends, and non-refundable tax credits. These changes may increase your AMT if your taxable income exceeds $173,205. 

For Families

Childcare Expenses

If you paid someone to take care of your child so you or your spouse could attend school or work, then you can deduct those expenses. A variety of childcare options qualify for this deduction, including boarding school, camp, daycare, and even paying a relative over 18 for babysitting. Be sure to get all your receipts and have the spouse with the lower net income claim the childcare expenses. In addition, some provinces offer additional childcare tax credits on top of the federal ones.

Caregiver

If you are a caregiver, claim the available federal and provincial/territorial tax credits.

Registered Education Savings Plan (RESP) 

RESP can be a great way to save for a child’s future education. The Canadian Education Savings Grant (CESG) is only available on the first $2,500 of contributions you make each year per child (to a maximum of $500, with a lifetime maximum of $7,200.) If you have any unused CESG amounts for the current year, you can carry them forward. If the recipient of the RESP is now 16 or 17, they can only receive the CESG if a) at least $2,000 has already been contributed to the RESP and b) a minimum contribution of $100 was made to the RESP in any of the four previous years.

Registered Disability Savings Plan (RDSP)

If you have an RDSP open for yourself or an eligible family member, you may be able to get both the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB) paid into the RDSP. The CDSB is based on the beneficiary’s adjusted family net income and does not require any contributions to be made. The CDSG is based on both the beneficiary’s family net income and contribution amounts. In addition, up to 10 years of unused grants and bond entitlements can be carried forward.

For Retirees

Registered Retirement Income Fund (RRIF)

Turning 71 this year? If so, you are required to end your RRSP by December 31. You have several choices on what to do with your RRSP, including transferring your RRSP to a registered retirement income fund (RRIF), cashing out your RSSP, or purchasing an annuity. Talk to us about the tax implications of each of these choices. 

Pension Income

Are you 65 or older and receiving pension income? If your pension income is eligible, you can deduct a federal tax credit equal to 15% on the first $2,000 of pension income received – plus any provincial tax credits. Don’t currently have any pension income? You may want to think about withdrawing $2,000 from an RRIF each year or using RRSP funds to purchase an annuity that pays at least $2,000 per year.

Canada Pension Plan (CPP) 

If you’ve reached the age of 60, you may be considering applying for CPP. Keep in mind that if you do this, the monthly amount you’ll receive will be smaller. Also, you don’t have to have retired to be able to apply for CPP. Talk to us; we can help you figure out what makes the most sense.

Old Age Security (OAS)

If you’re 65 or older, enrolling in OAS is essential. If your income exceeds OAS thresholds, strategies like income splitting can help reduce clawbacks.

You can defer OAS for up to 60 months, increasing your monthly payment by 0.6% for each month deferred. Planning ensures you maximize your benefits and optimize your retirement income.


Estate planning arrangements

Regularly reviewing your estate plan is essential to ensure it aligns with your objectives and complies with current tax laws. An annual review allows you to adjust for life changes and legal updates, keeping your plan effective. Additionally, exploring strategies to minimize probate fees can preserve more of your estate for your beneficiaries. Regularly examining your will ensures it remains valid and reflects your current wishes. 

For Students

Education, tuition, and textbook tax credits

If you’re attending post-secondary school, claim these credits where available.

Canada tuition credit 

If you’re between 25 and 65 and enrolled in an eligible educational institution, you may be eligible for the Canada Training Credit, a refundable tax credit designed to help cover tuition and other fees associated with training. Additionally, you can claim tuition paid on your taxes, carry forward unused amounts to future years, or transfer unused tuition amounts to a spouse, parent, or grandparent. 

Need some additional guidance? Reach out to us if you have any questions. We’re here to help.

Renewing Your Group Benefits Plan

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When it’s time to renew your organization’s group benefits plan, it’s a chance to step back, take a close look, and ensure everything still makes sense for your team and budget. Each year, your provider will review past claims and usage to help adjust coverage and premiums, so the plan remains relevant. Here’s how to get the most out of this process.

Reviewing Your Benefits: Focus on What Matters

Take time to examine each part of your benefits package to see if it still meets the needs of your team:

  • Health Coverage: Look at what’s covered for prescription drugs, hospital care, and specialist visits. Are the current limits in line with what your team uses most?
  • Dental Coverage: From cleanings to crowns, check that the plan covers routine and advanced dental needs. If usage is low, maybe it’s time for an update.
  • Disability and Life Insurance: Disability insurance protects income during tough times, while life insurance gives peace of mind. Make sure coverage levels are right for your team.
  • Critical Illness and Accident Insurance: These benefits can provide extra financial support for serious illnesses or accidents, with options for additional coverage if it’s a priority for employees.

Specialty Benefits That Add Flexibility

Consider adding options that give employees more control over their benefits:

  • Health Care Spending Accounts (HCSAs): With HCSAs, employees have a set allowance to cover eligible health expenses. This flexibility lets employees pick and choose the coverage that fits their needs.
  • Emergency Medical Coverage: This can be particularly valuable for employees who travel frequently, covering unexpected medical costs on the road.
  • Retiree and Self-Employed Benefits: If you offer benefits for retirees or contractors, make sure these plans focus on the essentials, like prescriptions, dental, and vision, to keep things simple and effective.

Checking Value and Staying on Budget

Once you know what you’re covering, see if it aligns with what your team values most and if it’s worth the premium cost:

  • Utilization Analysis: Look at which benefits are most used. If something like dental care isn’t being used much, that could mean there’s room to adjust.
  • Employee Feedback: Ask employees directly what benefits do they find most valuable? This feedback can guide your decisions.

Making the Right Adjustments

When you have the full picture, it’s time to consider if adjustments would make the plan stronger or more efficient:

  • Benefit Modifications: Maybe it’s time to add a health spending account, adjust critical illness coverage, or tweak other benefits to better reflect what employees want.
  • Cost-Sharing Adjustments: Evaluate how the premium costs are split. Adjusting the cost share may help keep the plan sustainable for everyone.

With the right approach to your group benefits renewal, you can keep your plan valuable, easy to understand, and tailored to what your team needs most. This way, you’re not just offering a benefits package—you’re providing a solution that works.

Why Life Insurance Should Be Part Of Your Estate Planning

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Why Life Insurance Should Be Part Of Your Estate Planning

You’ve worked hard and managed your money carefully throughout your life. So rest easy knowing that you will have more than enough assets to fulfill your needs during your retirement years.

You also need to think beyond your retirement years and consider what will happen to your assets after your death. For example, it is essential to consider whether your assets could result in tax liabilities for your heirs.

Generally, there are three types of assets during estate planning:

  1. Capital assets – shares in public or private companies, or real estate such as a second home or cottage.
  2. Income-producing assets – assets that produce income, such as RRSPs and RRIFs.
  3. Non-taxable assets – such as cash, TFSAs, your principal residence, and the proceeds from a life insurance policy.

How can life insurance help my heirs cover their tax liabilities?

There’s an old saying that there are only two things certain in life – death and taxes. So naturally, you do not want your loved ones to be burdened with tax liabilities when they inherit capital or income-producing assets from your estate. In most situations, the estate may not have enough cash to leave to your heirs to cover those tax liabilities.

Providing the means to cover tax liabilities upon your death is where life insurance can be such a valuable part of estate planning. With life insurance, you can both guarantee your heirs have the funds when they need them, as well as receive the death benefit tax-free. In addition, your heirs won’t have the stress of how they’ll come up with the money to pay taxes on any assets they inherit.

Are there any other reasons I should include life insurance as part of my estate planning?

Since life insurance death benefit is tax-free, it is an excellent source of liquidity to include in your estate planning. Your heirs can use the funds for a variety of purposes, including:

  • Paying off debts
  • Covering funeral expenses
  • As a source of income – If your family has suddenly gone from two income-earners to one, this can significantly affect their standard of living.
  • Provide funding for a considerable expense, such as college or university tuition.

We can help with estate planning

If you’d like to include life insurance as part of your estate planning but aren’t sure where to start – we can help you with that! We’ll talk to you about different types and amounts of life insurance coverage to see what works for you – call us or email us today!

Different types of life insurance explained

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Different types of life insurance explained

You may already have or are interested in life insurance because it can provide significant financial protection for you and your family. To get the best coverage that suits your needs and lifestyle, it is essential to be familiar with the four most common types of life insurance available:

  1. Term life insurance
  2. Permanent life insurance
  3. Participating life insurance
  4. Universal life insurance

1) Term life insurance

Term life insurance provides coverage for a specific period, such as five, ten, or even fifteen or twenty years. Once that term is up, you can choose to renew your policy – but your premiums may go up.

If you die while your term life insurance policy is in effect, your beneficiaries will receive a tax-free death benefit equal to the amount of coverage you selected. Your beneficiaries can then use that benefit to pay for whatever they choose, such as debts, a mortgage, tuition, and everyday living expenses.

2) Permanent life insurance

With permanent life insurance, you will have coverage for your whole life. In addition, the cost of insurance can be structured so that the cost does not increase as you age, even if your health worsens. However, the level cost for life means that permanent life insurance may be more expensive than term insurance premiums in the early years but potentially less costly than term insurance premiums as you age.

As with term life insurance, your beneficiaries will be entitled to a tax-free death benefit after you die. Permanent life insurance also offers a cash value feature. You can use this cash value as collateral for a loan or withdraw the value – but this will reduce your death benefit.

3) Participating life insurance

Participating life insurance is a type of permanent life insurance – which offers the added bonus of letting you earn dividends. With these earned dividends, you can either reinvest them to help reduce the cost of your premiums or withdraw them as cash.

As with all life insurance policies, upon your death, your beneficiaries will receive a tax-free death benefit to spend as they deem fit.

4) Universal life insurance

Universal life insurance is also another form of permanent life insurance. Along with a tax-free death benefit, Universal Life also lets you invest extra money (if you choose) that can grow in a tax-advantaged account! With universal life insurance, you can provide for your beneficiaries upon death while saving extra cash for yourself or your business.

We can help!

If you are unsure what kind of life insurance is best for you, give us a call today! We can answer any questions about these different kinds of life insurance and what features and benefits are best for you.

What is disability insurance?

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If you cannot work because you are seriously injured or ill, disability insurance will provide you with a monthly, tax-free income to help replace your lost wages.  An injury does not have to be as blatant as a broken leg or arm – suffering from chronic pain or dealing with mental health issues can also qualify you for a disability insurance payout.  

Why do I need disability insurance?

Unfortunately, people become disabled – whether temporarily or permanently – quite often. In 2017, over 20 percent of Canadians had one or more disabilities. 

If you’re disabled, you may lose one of your most valuable assets – your ability to work and bring in a paycheck. Disability insurance can help replace that paycheck for as long as you need it to. Being able to rely on a disability insurance payout means you won’t have to dip into your savings if anything happens to you.

Disability insurance is especially important if you are self-employed, particularly if you are the family’s sole income earner.

What if I already have disability insurance through work?

If you have disability insurance through work, that’s great – but it may not replace 100 percent of your paycheck, especially if you’re off work for a long time. If you purchase private disability insurance, you can:

  • Choose how much coverage you want.
  • Adjust your coverage as needed.
  • Not have to worry if you leave your employer – you won’t lose your disability insurance coverage.

Having private disability insurance will give you peace of mind that you either have additional coverage if you are employed and at least some disability coverage if you lose your job.

How does disability insurance work?

We’d be happy to answer any questions you have about disability insurance. There are five main steps to disability insurance:

  1. Determine the amount of coverage you want. The higher your salary, the more coverage you should get.
  2. Pay your monthly premiums. Factors like your health, your age, and the amount of coverage you have will all impact the cost of your premiums.
  3. File a claim if you become disabled – we can help you with this.
  4. Receive your monthly payments once your waiting period has passed – a longer waiting period can lower your premiums, but it does mean you’ll go longer without any income.
  5. When you are healthy enough to return to work, or your coverage period runs out, you will stop receiving disability insurance payments.

We’re Here To Help

If you’d like to know more about disability insurance – from how much it would cost you to what you can file a claim for – we’re here to help! Give us a call today.