What You Need to Know Heading Into November

This blog post will follow the format of a news article by listing noteworthy financial events that will affect many Canadians. Here they are in order of importance:
Bill C-27 is rightly back in the news. The government has quietly tried to slip this into law, changing defined benefit plans into target date benefit plans. The employee then assumes more investment risk, and this creates uncertainty for their final retirement benefit. Although it will only affect federally regulated employees, other jurisdictions are already adopting target date plans.

Morneau Shepell the management company connected to the federal Minister of Finance may stand to benefit if the bill becomes law. That same company was also appointed to manage the Sears pension plan. Sears pension plan holders could lose a portion of their retirement benefit because of the Sears bankruptcy.

The CRA is revising the eligibility requirements for the disability tax credit(DTC). They are within their right to do so, but they are also going further by examining existing DTC claims. Sometimes they have revoked existing claims. The latest puts diabetics in the spotlight, where the CRA is requiring proof of the amount of life sustaining therapy that is performed weekly.

Revoking the DTC can have repercussions such as having to revise past tax returns, or closing the Registered Disability Savings Plan, or the repayment of RDSP grants. Mental disabilities are also being examined more closely.

Homebuyers who have a greater than 20% down payment will now be subject to a stress test, to see if they can afford their monthly payment if interest rates rise. Of course you already know that lenders would prefer to charge a higher interest rate to borrowers. The Bank of Canada still sees consumer debt as a vulnerability in the Canadian economy, which I agree with.

The proposal to change the taxation of investment income within a corporation is ongoing. The government has backtracked on its initial proposals and there are changes almost weekly it seems. Nothing has been finalized so please contact me if you have questions.

The Canada Child Benefit will be indexed.

Please contact me if you would like to discuss any of these topics further

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