Tag Archives: Tax Free Savings Accounts

Interview: Evelyn Jacks talks taxes*


Click here to listen
Click here to listen

Today I’m interviewing Evelyn Jacks for SavewithSPP.com. Evelyn is the founder and president of Knowledge Bureau, a virtual campus focused on professional development of tax and financial advisors. She was recently named one of Canada’s Top 25 Women of Influence. She is also one of Canada’s most prolific and best-selling authors of 51 personal tax and wealth management books, and a highly respected financial commentator and speaker.

Every year there are income tax changes and they impact individuals filing personal tax returns. First of all, I’d like to highlight some of 2017 changes that listeners should keep an eye on when they’re getting ready to complete their tax return.

Q: Evelyn, taxpayers with children are going to see a major change in tax credits for 2017. Can you bring us up to date on what these changes are? 
A: Yes, absolutely. The most notable changes found in the past are that the children’s arts amount which was the non-refundable tax credit on the Federal tax return has been eliminated and in addition, the refundable tax credit for the children’s fitness amount is gone.

On the employer’s side, the government has also discontinued a 25% investment tax credit for child care spaces of March 22, 2017. These are quite significant changes, especially because on the federal return, there are no other places, with the exception of disabled children, to claim minor children.

Q: What has happened to tax credits for tuition, education, and textbook amounts?
A: Again here, we’re seeing some significant changes. As of January 1, 2017, only the tuition credit can be claimed on the Federal tax return and then only if the total exceeds $100 in the year. What’s happened is that the finance department has removed the monthly education amount of $400 for full time students and $120 for part-time students, as well as the monthly text book amount, which was $65 for full-time students and $20 for part-time students.

However, when you look at the tax return you are still going to see references to the tuition education and textbook amount found in Schedule 11. That’s important because, students can still carry forward any unused amount from all three components of this credit from prior years.

The other thing I should mention is that the provinces all have education credits but that’s changing too, so, in Saskatchewan, for example, there has been an elimination of both the tuition and education credits as of July 1, 2017. Therefore, on the Saskatchewan provincial return you can only claim those credits for half of the year.

Q: Now, the public transit credit is also gone. What’s the effective date on that? 
A: On the Federal side, we saw that credit eliminated as of July 1, 2017. So again, it’s a situation where you’re going to have to keep your receipts and make the claim, just for half the year in 2017.

Q: In your view, what was the Liberal government’s rationale for eliminating these credits, and what did taxpayers get in return?
A: Well, the government is really undergoing quite a significant tax reform at the moment. When they came in with their first tax changes after the election, one of the first things they did was reduce the middle-income tax rate, for income between about $46,000 and about $92,000, from 22% to 20.5%. In addition,  they created an upper income tax bracket increasing the tax rate from 29%-33% on income over $202,800. The third thing they did was they introduced the more generous child benefits.

In fact, that benefit has recently been indexed for the beneficiaries starting in July 2018. If your family net income is under $35,450 then you’ll be able to receive over $500 a month for each child under the age of 6, and around $450 a month for each child age 6-17. These are quite lucrative amounts but they require the filing of a tax return and the combining of net family income.

Q: The eligibility for medical tax credits for fertility treatments has been expanded retroactively. Please explain those changes and what actions taxpayers who are impacted should take to realize the full benefit of these changes.
A: Yes, starting in 2017 and subsequent years, the expenses for medical treatments to conceive a child will be deductible even if the treatments are not required because of a medical condition, which was the criteria in the past. If the expenses ocurred in a year from 2008 forward they can still be adjusted, because we have a 10 year adjustment period that we can take advantage of.

Q: What, if any, other surprises might tax payers have when they start filling out their 2017 tax return?
A: Well, there are a lot of things that change every year including indexing of various tax credits, tax rates and claw back zones. But I think the one big change that I’d really like to point out is the caregiver credit. It’s new for 2017, and it replaces three credits from the past: the family caregiver tax credit, the caregiver tax credit, and the tax credit for infirm dependents. So now one caregiver can get credit.

The second thing is that there are two different amounts: one that I call a mini-credit of $2,150, and one that I’m going to call the maxi-credit of $6,883. So on the mini-credit side you must claim this. It’s the only credit you can claim for an infirm or disabled minor child. But not necessarily one who receives a disability tax credit, but someone who is infirm as it relates to normal development of other children on both a physical or a mental basis.

A person that can claim this mini-credit is someone for whom you are a claiming a spousal amount or an equivalent to spouse amount. Now, the maxi-credit generally is claimed for an eligible dependent who is over the age of 18. But in some cases, if you have a spouse with a low income, you can claim a top-up credit of up to $1,683.

So you’re going to have to take a close look at Schedule 5 on the tax return and at net income allowance, particularly for low income earning spouses, to make a complicated tax calculation. What you need to remember is that your dependents no longer need to live with you. You cannot claim this amount for someone age 65, who is healthy, which is what you could do before under the caregiver amount.

Q: It sounds very complicated. Can taxpayers typically rely on their tax software to guide them and ensure they get all the credits and deductions they are entitled to? In what circumstances do you think that they should seek professional advice?
A: Well, you know, I’m a big fan of tax software because these programs, first of all, take the worry out of the math for you, and some of the math calculations, particularly as you are calculating federal and provincial taxes is very complicated. But the tax program is not necessarily going to prepare the tax return to your best advantage. There are lots of ways to do the math correctly. What you are aiming for is to calculate to your family’s overall benefit, and to do some tax planning as well.

For example, there are a number of carry-forward provisions that people may not be aware of, or they don’t enter properly. You can carry forward charitable donations to up to five years. You can carry forward capital losses in stock market investments indefinitely to offset capital gains in your future.

The other thing is that starting in 2017, you absolutely have to file the refund titled T2091, a designation of principle residence form, even if you sell a tax-exempt principle residence. Anyone who sells property starting in 2017 has to fill in this complicated form. The tax software may or may not tell you about that, and if you miss it you could be issued a penalty of up to $8000. That could really hurt.

Q: What are the most frequent errors or omissions tax payers typically make when completing or filing their income tax return?
A: Any expense that is discretionary, so, I’m thinking of child care expenses and other kinds of expenses where people have out-of-pocket costs. Moving expense are really lucrative, for example. Also, missed medical expenses are very common.

Q: If you had three pieces of advice to offer tax payers to help ensure they file a correct tax return, and get all the credits and deductions they are entitled to, what would they be?
A: The first thing is to catch up on any delinquent filed returns. The option to benefit from the long available disclosure program is actually changing and it will close for some people, effective March 1, 2018. So if you chronically ignore your filing obligations, not only will you be unable to avoid tax-evasion policies, you may not be able to avoid interest relief in some harsher cases. That’s really important. Catch up if you’re behind.

The second thing is to make a RRSP contribution by March 1st this year because that RRSP contribution will reduce your family net income, which will increase things like your child’s health benefits, your GST credit or other refundable or non-refundable tax credits. The RRSP contribution is your ticket to bigger benefits or bigger tax refunds.

The last thing I would say, the average income tax refund in Canada is $1,735, which is a lot of money. That’s just your overpayment of taxes. Most people don’t realize that’s an interest-free loan that you give to the government. Turn that around, and put that money to work for you. Invest it in a TFSA because that’s going to allow you to earn tax- free investment savings for your future, or if you have children in the family, why not take advantage of the lucrative Canada Education Savings Grants and the Canada Learning Bonds by investing in an RESP. There’s lots of ways for people to leverage the money that they pre-paid to the tax department.

That’s really helpful Evelyn. Thank you very, very much. It was a pleasure to chat with you today.

Thank you so much for giving me the opportunity.


This is an edited transcript of an interview recorded 2/07/2018.

Canadians can receive easy-to-understand interpretations of breaking tax and investment news by subscribing to Knowledge Bureau Report at www.knowledgebureau.com.   Look for the Newsroom Tab. You can also follow Evelyn Jacks on twitter @evelynjacks.


Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Group vs Individual RESPs: What’s the difference ?

The “holy trinity” of tax-assisted savings plans available to Canadians are TFSAs, RRSPs and RESPs. RESPs (Registered Educational Savings Plans) are primarily designed to help families to save for post-secondary education.

Each year, on every dollar up to $2,500 (to a life time maximum of $50,000) that you contributed to an RESP for a child’s education after high school, a basic amount of the Canada Education Savings Grant of 20% may be provided. Depending on the child’s family income, he/she could also qualify for an additional amount of CESG on the first $500 deposited, which means $100 more if the 2017 net family income was $45,916 or less and up to $50 if the 2017 net family income was between $45,916 and $91,831.

In total, the CESG could add up to $600 on $2,500 saved in a year. However, there is a lifetime CESG limit of $7,200. This includes both the basic and additional CESG. Lower income families may also be eligible for the Canada Learning Bond (CLB) that could amount to an additional $2,000 over the life of the plan.

Contributions to RESPs are not tax deductible, but the money in the account accumulates tax-free. Contributions can be withdrawn without tax consequences and when your child enrolls in a university or college program, educational assistance payments made up of the investment earnings and government grant money in the RESP are taxable in the hands of the student, generally at a very low rate.

When our children were young, we purchased Group RESPs for them and their grandparents also purchased additional units. I was so impressed with the program that I even took a year before transitioning from family law to pension law and sold RESPs.

Each child collected about $8,000 from the plan over four years of university, which helped them to graduate debt free. Fortunately, both my daughter and my son took four straight years of university education so there was no problem collecting the maximum amounts available to them minus administrative fees.

However, I’ve come to realize the potential downside of Group RESPs so we started contributing $200/month to a self-administered plan with CIBC Investor’s Edge for our granddaughter soon after she was born. She is now 5 ½ and as I write this, there is already $22,000 in the account.

Our decision to self-administer Daphne’s RESP was influenced in part by what I learned from other personal finance bloggers about the potential downside of group plans.

Robb Engen notes that group plans tend to have strict contribution and withdrawal schedules, meaning that if your plans change – a big possibility over 18 plus years – you could forfeit your enrollment fee or affect how much money your child can withdraw when he/she needs it for school.

With a Group RESP, contributions, government grants and investment earning for children the same age as yours are pooled and the amount minus fees is divided among the total number of students who are in school that year. Typically the pool is invested in very low risk GICs and bonds.

In contrast, there are no fees in our self-administered plan other than $6.95 when we make a trade. The funds are invested in a balanced portfolio of three low fee ETFs. We can easily monitor online how the portfolio is growing and as Daphne gets closer to university age we can shift to a more cautious approach.

Macleans recently reported that the total annual average cost of post-secondary education in Canada for a student living off-campus at a Canadian university is $19,498.75 and it will be much higher by the time your child or grandchild is ready to go off to college. So learn as much as you can about RESPs, get your child a social insurance number, set up a program and start saving.

However, as Engen suggests before you choose a group or individual RESP provider make sure you read the fine print and ask about:

  • Fees for opening an RESP;
  • Fees for withdrawing money from a RESP;
  • Fees for managing the RESP;
  • Fees for services and commissions;
  • What happens if you can’t make regular payments;
  • What happens if your child doesn’t continue his or her education; and
  • If you have to close the account early, do you have to pay fees and penalties; do you get back the money you contributed; do you lose interest and can you transfer the money to another RESP or different account type.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Jan 22: Best from the blogosphere

I don’t know about you, but on these long cold winter nights, all I want to do is curl up on the couch under a blanket and binge on Netflix. But before you do, check out our latest collection of personal finance videos, both old and new. After all, a picture is worth 1,000 words!

If like me, you still haven’t figured out what the fuss is about bitcoin and other digital currency, Bridget Casey from Money After Graduation answers these question in a three -minute crash course: What is cryptocurrency? How does blockchain work? Does cryptocurrency have a place in your long-term investment portfolio? Why are Bitcoin, Ethereum, Litecoin and all the other cryptocurrencies is so popular and what are you supposed to do with them?

Three moms (Gillian Irving, Monika Jazyk, and Rachel Oliver) who are also real estate investors bring their expertise to the table as they interview Canada’s leading experts on creating wealth and financial security through real estate investing. On this episode: guest Sean Cooper (beginning at 7:40) , best-selling author of “Burn Your Mortgage” and a personal finance expert famous for paying off his home mortgage after just 3 years discusses the pros and cons of paying off a #mortgage when interest rates are so low and how people with kids can pay off their mortgage faster.

On Let’s Talk Investing, a joint project of Globe Investor and the Investor Education Fund, Rob Carrick interviews Gordon Pape about what investments you should hold in your TFSA. Pape says it really depends on what you want to use the plan for. He says there’s nothing wrong with using it as an emergency fund and investing it in low risk securities. However if you want to use it to maximize retirement savings, Pape suggests going to a brokerage firm and setting up a self-directed TFSA.

Jessica Moorhouse quit her day job over a year ago to concentrate on building her brand and her freelance business. She talks about finding balance in that year and acknowledging her own working style when setting her schedule. She was anxious every Sunday because her podcast and blog had typically been released on Mondays, but she realized there was no reason why she couldn’t shift these posts to Tuesday and reduce her stress.

You have recently been declined for life insurance. What are your options? Lorne Marr, director of business at LSM Insurance says the first thing to find out is why you were turned down. If you were declined for a significant reason like cancer, a heart attack or diabetes, you may want to look at a no medical life insurance policy. These policies fall into two categories: guaranteed issue coverage and simplified coverage.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

2018 New Year’s Resolutions: Expert Promises

Well it’s that time again. We have a bright shiny New Year ahead of us and an opportunity to set goals and resolutions to make it the best possible year ever. Whether you are just starting out in your career, you are close to retirement or you have been retired for some time, it is helpful to think about what you want to accomplish and how you are going to meet these objectives.

My resolutions are to make more time to appreciate and enjoy every day as I ease into retirement. I also want to take more risks and develop new interests. Two of the retirement projects I have already embarked on are joining a community choir and serving on the board; and, taking courses in the Life Institute at Ryerson University. After all, as one of my good friends recently reminded me, most people do not run out of money, but they do run out of time!

Here in alphabetical order, are resolutions shared with me by eight blogger/writers who have either been interviewed for savewithspp.com or featured in our weekly Best from the Blogosphere plus two Saskatchewan Pension Plan team members.

  1. Doris Belland has a blog on her website Your Financial Launchpad . She is also the author of Protect Your Purse which includes lessons for women about how to avoid financial messes, stop emotional bankruptcies and take charge of their money. Belland has two resolutions for 2018. She explains:
  • I’m a voracious reader of finance books, but because of the sheer number that interest me, I go through them quickly. In 2018, I plan to slow down and implement more of the good ideas.
  • I will also reinforce good habits: monthly date nights with my husband to review our finances (with wine!), and weekly time-outs to review goals/results and pivot as needed. Habits are critical to success.
  1. Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances and blogs at Money We Have. He says, “My goal is to work less in 2018. I know this doesn’t sound like a resolution but over the last few years I’ve been working some insane hours and it’s time to cut back. The money has been great, but spending time with my family is more important.”
  1. Chris Enns who blogs at From Rags to Reasonable describes himself as an “opera-singing-financial-planning-farmboy.” In 2017 he struggled with balance. “Splitting my time (and money) between a growing financial planning practice and an opera career (not to mention all the other life stuff) can prove a little tricky,” he says. In 2018 he is hoping to really focus on efficiency. “How do I do what I do but better? How do I use my time and money in best possible way to maximize impact, enjoyment and sanity?”
  1. Lorne Marr is Director of Business Development at LSM Insurance. Marr has both financial and personal fitness goals. “I plan to max out my TFSAs, RRSPs and RESPs and review my investment mix every few days in the New Year,” he notes. “I also intend to get more sleep, workout 20 times in a month with a workout intensity of 8.5 out of 10 or higher and take two family vacations.”
  1. Avery Mrack is an Administrative Assistant at SPP. She and her husband both work full time and their boys are very busy in sports which means they often eat “on the run” or end up making something quick and eating on the couch.  “One of our resolutions for next year is to make at least one really good homemade dinner a week and ensure that every one must turn off their electronic devices and sit down to eat at the table together,” says Mrack.
  1. Stephen Neiszner is a Network Technician at SPP and he writes the monthly members’ bulletin. He is also a member of the executive board of Special Olympics (Kindersley and district). Neiszner’s New Year’s financial goals are to stop spending so much on nothing, to grow his savings account, and to help out more community charities and service groups by donating or volunteering. He would also like to put some extra money away for household expenses such as renovations and repairs.
  1. Kyle Prevost teaches high school business classes and blogs at Young and Thrifty. Prevost is not a big believer in making resolutions on January 1. He prefers to continuously adapt his goals throughout the year to live a healthier life, embrace professional development and save more. “If I had to pick a singular focus for 2018, I think my side business really stands out as an area for potential growth. The online world is full of opportunities and I need to find the right ones,” he says.
  1. Janine Rogan is a financial educator, CPA and blogger. Her two financial New Year’s resolutions are to rebalance her portfolio and digitize more of it. “My life is so hectic that I’m feeling that automating as much as I can will be helpful,” she says. “In addition, I’d like to increase the amount I’m giving back monetarily. I donate a lot of my time so I feel like it’s time to increase my charitable giving.”
  1. Ed Rempel is a CFP professional and a financial blogger at Unconventional Wisdom. He says on a personal finance level, his resolution are boring as he has been following a plan for years and is on track for all of his goals. His only goal is to invest the amount required by the plan. Professionally, he says, “I want 2018 be the year I hire a financial planner with the potential to be a future partner for my planning practice. I have hired a couple over the years, but not yet found the right person with the right fit and long-term vision.”
  1. Actuary Promod Sharma’s resolutions cover off five areas. He says:
  • For health, I’ll continue using the 7 Minute Workout app from Simple Design.
  • For wealth, I’ll start using a robo advisor (WealthBar). I’m not ready for ETFs.
  • For learning, I’ll get my Family Enterprise Advisor (FEA) designation to collaborate better in teams.
  • For sharing, I’ll make more videos.
  • For giving, I’ll continue volunteering.


Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Don’t be fooled by CRA’s record of your TFSA contribution room

Several months after my husband and I filed our 2016 income tax returns and got our refunds, we received identical ominous envelopes from CRA.  They contained Notices of Assessment reporting that each of us had over-contributed $5,500/month for the last five months of the year, resulting in a $28,201 over-contribution to our TFSA accounts. Yet further down on the notices, it said the contributions to each of our accounts in 2016 totaled only $10,859.79.

Upon reviewing our bank statements, it appeared that one contribution of $5,500 was made in early March and a second amount was transferred into each TFSA in August 2016. When my husband checked our CRA accounts online mid-year, they said we still had $5,500 of contribution room in each account, so he made the second deposits in August.

However, upon calling CRA for clarification, we learned that unlike online banking records which are updated daily, CRA only receives information once a year by January 1st when financial institutions are required to report TFSA transactions for the prior calendar year. Therefore, because we made contributions after January 1, 2016, when we checked later in the year, they were not reflected in the total TFSA contribution room that could be viewed on CRA’s My Account feature.

The good news is that the total excess TFSA amount of $28,201.05 recorded in the first part of the Notice of Assessment was incorrect due to a programming error which totaled the overpayment at the end of each month instead of recording it as one amount of $5,500 for the balance of the year.

However, the bad news is that we had to withdraw $5,500 from each of our TFSA accounts and each pay $298.11 taxes and penalties. The tax payable for excess contributions to a tax-free savings account is 1% per month, for any month in which there is an excess amount at any time in the month.  This means there will be a tax payable even if the excess amount is withdrawn in the same month in which it is contributed.

While we could have appealed the penalties because the over contribution was due to a genuine misunderstanding, we decided to just pay the amounts and learn from our experience.

So the moral of the story is it is important to track TFSA contributions yourself. There is no deadline for contributions to a TFSA, as the unused contribution room is carried forward into the next year.  However, a withdrawal in any year does not increase the TFSA room until the following calendar year.  Thus, if you are thinking of making a withdrawal close to year end, make sure it is done by December 31st, in order to have the withdrawal amount added back to the TFSA room sooner.

The history of annual limits for each year is shown in the table below. The first year that contributions could be made was 2009.  At the current rate of inflation, the TFSA contribution limit will increase to $6,000 per year in 2019.

Years TFSA Annual Limit Cumulative Total
2009-2012 $5,000 $20,000
2013 $5,500 $25,500
2014 $5,500 $31,000
2015 $10,000 $41,000
2016 $5,500 $46,500
2017 $5,500 $52,000


Written by Sheryl Smolkin
Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.

Changes you need to know about on your 2016 Income Tax Return

By Sheryl Smolkin

If your financial affairs are fairly straightforward and the only income you receive is from employment, you should have already received all of your tax slips and you may have already filed your income tax return, although it is not due until midnight on Monday, May 1st.

But tax slips for mutual funds, flow-through shares, limited partnerships and income trusts only had to be sent out by March 31st, so if you have multiple, more complex sources of income you are likely among the group of Canadians who are under the gun this month to finalize and file your returns.

Here are some of the things that have changed since last year that individuals and families should be aware of when they are assembling documentation and preparing their returns.

MyCRA: A mobile app from the Canada Revenue Agency now allows you to view your notice of assessment, tax return status, benefit and credit information, and RRSP and TFSA contribution room.

Auto-fill: If you use electronic software to do your taxes, the CRA will fill in many of the boxes for you. You sign into CRA MyAccount and agree to a download that will include information on your RRSP contributions, plus information from T4s, T4As and T5s. Users are advised to double-check the CRA’s data before they file.

Canada child benefit (CCB): As of July 2016, the CCB has replaced the Canada child tax benefit (CCTB), the national child benefit supplement (NCBS), and the universal child care benefit (UCCB). For more information see Canada child benefit.

Child-care expenses: The amount parents can claim for child-care expenses has increased by $1,000 annually, per child, to $8,000 for a child under six and $5,000 for a child aged between seven and 16 years old. For more information see line 214.

Canada Apprentice Loan: Students in a designated Red Seal trade program can now claim interest on their government student loans. For more information see line 319.

Northern resident’s deductions: The basic and additional residency amounts used to calculate the northern residency deduction have both increased to $11 per day. See Form T2222, Northern Residents Deductions. For more information see line 255.

Children’s arts amount: The maximum eligible fees per child (excluding the supplement for children with disabilities), has been reduced to $250. Both will be eliminated for 2017 and later years. For more information see line 370.

Home accessibility expenses: You can claim a maximum of $10,000 for eligible expenses you incurred for work done or goods acquired for an eligible dwelling. This deduction typically applies to home renovations to improve accessibility for individuals eligible for the disability tax credit for the year or for qualifying seniors over 65. For more information see line 398.

Family tax cut: The Family Tax Cut allowed eligible couples with children under the age of 18 to notionally split the income of the spouse with higher earnings, transferring up to $50,000 of taxable income to the lower income spouse in a taxation year. The family tax cut has been eliminated for 2016 and later years.

Children’s fitness tax credit: The maximum eligible fees per child (excluding the supplement for children with disabilities) has been reduced to $500. Both will be eliminated for 2017 and later tax years. For more information see lines 458 and 459.

Eligible educator school supply tax credit: If you were an eligible educator, you can claim up to $1,000 for eligible teaching supplies expenses. For more information see lines 468 and 469.

Tax-free savings account (TFSA): The amount that you can contribute to your TFSA  every year has been reduced to $5,500.

Dividend tax credit (DTC): The rate that applies to “other than eligible dividends” has changed for 2016 and later tax years. For more information see lines 120 and 425.

Labour-sponsored funds tax credit: The tax credit for the purchase of shares of provincially or territorially registered labour-sponsored venture capital corporations has been restored to 15% for 2016 and later tax years. The tax credit for the purchase of shares of federally registered labour-sponsored venture capital corporations has decreased to 5% and will be eliminated for 2017 and later tax years. For more information see lines 413, 414, 411, and 419.

Burn your mortgage: An interview with author Sean Cooper

By Sheryl Smolkin

Click here to listen
Click here to listen

If you think you can’t possibly afford to buy a home or that paying off your mortgage is a pipe dream, Burn Your Mortgage is the must-read book of the year. Today I’m pleased to be interviewing author Sean Cooper for savewithspp.com.

By day, Sean is a mild-mannered senior pension analyst at a global consulting firm. By night he is a prolific personal finance journalist, who has been featured in major publications, including the Toronto Star, the Globe and Mail and MoneySense. He has also appeared on Global News, CBC, CP24 and CTV News Network.

Thanks for agreeing to chat with us today Sean.

My pleasure, Sheryl.

Q: As a 20 something, why did you decide to buy a house?
A: Well I guess a lot of people strive for home ownership. My parents were my biggest influence. We always owned a home growing up, so I thought that owning a home was kind of the path to financial freedom.

Q: How much did your home cost, and how much was your down payment?
A: I purchased my home in August 2012 for $425,000 dollars. My down payment was $170,000, leaving me with a mortgage of $255,000. I didn’t go out and spend the massive amount the bank approved me for. I could have spent over $500,000 dollars but I found a house with everything that I needed for $425,000 and because of that I was able to pay off my mortgage in three years.

Q: How on earth did you save a down payment of $170,000 dollars? How long did it take you to save it, and how many hours a week did you have to work to do so?
A: Yes, it was definitely a sizable down payment for one person. I pretty much started saving my down payment while I was in university. I was able to graduate debt free from university and while I was there, I was working as a financial journalist. I was also working at the MBA office, and employed part-time at a supermarket. When I got my full-time job I was saving probably 75%-80% of my paycheck. I wasn’t living at home rent free. I was actually paying my mother rent.

Q: Kudos for your determination and stamina. Do you think working three jobs is actually a practical option for most people, particularly if they have young families?
A: No. As I emphasize in the book, that’s how I paid off my mortgage as a financial journalist on top of working at my full time job. While for somebody like me who is single it makes sense, it’s probably not realistic if you have a spouse and children. But there are plenty of things you can do to save money.

Q: Many people again think they would never, never be able to save up enough for a down payment. Can you give a couple of hints or tips that you give readers in your book that will help them escalate their savings?
Definitely. First of all, you absolutely have to be realistic with your home buying expectations. You can’t expect to be able to buy the exact same house that you grew up in with three or four bedrooms and two stories. But you can at least get your foot in the door of the real estate market by perhaps buying a condo, or a town house, and building up equity, and hopefully moving up one day. Think about creative living arrangements. Rent a cheaper place than a downtown condo. Find a roommate.

Q: How can prospective home buyers use registered plans like their RRSP or TFSA to beef up their savings and get tax breaks?
A: If you are a first time home buyer, I definitely encourage you to use the home buyers plan. The government allows you to withdraw $25,000 dollars from your RRSP tax-free (it has to be repaid within 15 years). If you are buying with your spouse, that’s $50 000 dollars you can take out together. That’s a great way to get into the housing market. The caution I can offer is when you withdraw the money, make sure that you fill in the correct forms so you are not taxed on the withdrawal. If you’re not a first time home buyer, then I would definitely encourage you to use a Tax Free Savings Account, because it’s very flexible, and although you don’t get a tax refund, the balance in the plan accumulates tax-free.

Q: After shelter, which means mortgage and rent, food is a pretty expensive cost. How can people manage their food costs while still eating a healthy, varied diet?
A: I offer a few tips in my book. First of all, try to buy items like cereal and rice in bulk and on sale. Another tip I offer is to buy in season. I probably wouldn’t buy cherries during the winter  because they would cost me a small fortune. Try to buy apples instead, and during the summer if you enjoy watermelon, definitely buy it then. Try to be smart with your spending, and that way you can cut back on your grocery bill considerably.

Q: I enjoyed the section in your book about love, money, and relationships. Can you share some hints about how couples can manage dating and wedding costs, to free up more money for their house?
A: People like to spend a fair amount on their weddings these days, and there’s nothing wrong with that, but you just have to consider your financial future, and how that’s going to affect it. Also, when it comes to dating, make sure that you and your potential partner are financially compatible and have similar financial goals. For example, one might be a saver while the other is a spender. Sit down and make sure both of you are on the same page financially, and then find common financial goals, and work towards them.

Q: How can prospective home buyers determine how much they can actually afford?
A: If you are ready to start house hunting, I would definitely encourage you to get pre- approved for a mortgage. Basically, the bank will tell you how much money you can afford on a home. That way you don’t waste time looking at houses out of your price range. However, just because the bank says you can spend $800,000 doesn’t necessarily mean you have to spend that much.

Also don’t forget you will have to pay for utilities, property taxes, and home insurance plus repairs and maintenance. Come up with a mock budget ahead of time, and see how that will affect your current lifestyle. I would say if over 50% of your month income is going towards housing, that’s too much.

Try to kind of balance home ownership with your other financial goals, whether they are saving towards retirement, or even going on a vacation. That way all of your money won’t be going towards your house, and you will actually be able to afford to have fun and save towards other goals as well.

Q: You’re living in the basement and you rented the first floor. Why did you decide to do that, instead of vice versa?
A: Well I’m just one person living on my own, and upstairs there are three bedrooms and two bathrooms. I wouldn’t know what to do with all the space, so it made sense to live in the basement, because to be honest I lived in basement apartments for several years before that, so it wasn’t really much of an adjustment. I mean, personally I’d rather rent out the main floor than get a second or third job. It’s all about kind of maximizing all of the space that you have, and looking for extra ways to earn income.

Q: We rented the basement in our first house. Why did you decide to write the book?
When I paid off my mortgage, a lot of people reached out to me for home buying advice. In the media, there seems to be a lot of, I guess, negativity surrounding real estate and big cities.

I always hear that the average house costs over a million dollars in Toronto and Vancouver. It seems like for millennials home ownership is really out of reach. I wanted to write a book to really inspire them and show them that home ownership is still a realistic dream, and it is still achievable if you are willing to be smart about your finances.

Q: Congratulations Sean. It’s a great book. I’m sure people reading and listening to this podcast will want to run out and buy it. Where can they get a copy?
A: They can order a copy on Amazon. It will also be available in Chapters and other major book stores across Canada.

Well that’s very exciting. Good luck.

Thanks so much.






You can purchase Burn Your Mortgage by Sean Cooper on Amazon.

This is an edited transcript of a podcast interview conducted in February 2017.

Feb 20: Best from the blogosphere

By Sheryl Smolkin

Get out the popcorn! It’s time for our selection of monthly personal finance videos.

First of all, if you don’t have a company pension plan for your employees, you need to know about the SPP business plan. Find out why the Sutherland Chiropractic Clinic set up SPP for their employees.

Globe and Mail personal finance columnist shares some great ideas for protecting yourself from online scammers.

In Save Your #@%* Money with these RRSP, TFSA, and RESP recipes Melissa Leong brings you an amusing look at the ingredients it takes to successfully save in these registered vehicles.

Preet Bannerjee explains how disability insurance works and why it is so important in this Money School blog.

And finally, if you have made financial mistakes along the way, it doesn’t mean you have irreparably ruined your financial future. Blogger Bridget Casey (Money After Graduation) makes a case for forgiving yourself for financial regrets.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.