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| 2025 is upon us and, one way or another, it looks like we’re in for more interesting times.
In this month’s newsletter we feature articles discussing the announced deferral of the capital gains tax increase, the implications of the upcoming US tariffs, and an article examining the effects of our own biases in decision making. |
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| Our Best Rates (as of January 31, 2025) |
| | | Click the above rates to view our full rate tables.
Rates are subject to change without notice.
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| Fiscal Agents president David Newman wins the Alexander S. Melvin award! |
| David Newman, Advocate for the Creation of Tax-Free Savings Accounts and Increases in Canada Deposit Insurance Corporation Guarantees, wins 2024 Alexander S. Melvin Award
From the press release: David Newman, principal director of Fiscal Agents Savings and Investments, celebrating 45 years as a deposit broker in Oakville, Ontario, has been selected as the 2024 winner of the Alexander S. Melvin award for ethical and inspirational leadership in financial services. |
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| “David’s advocacy for Canadian consumers has helped shaped the entire deposit industry,” said Dennis Craig, vice president managing agents and national accounts, a member of the Alex S. Melvin Awards Nomination Committee. “David was instrumental in seeing the CDIC deposit guarantee limit raised to $100,000, and in the introduction of the Tax-Free Savings Account. As president and a member of the Board of the Registered Deposit Broker Association (RDBA), David was a driving force behind the establishment of a professional standards and accreditation regime to support member Financial Institution regulatory requirements.” |
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| | What’s new on the Fiscal Agents website |
| | | The Fiscal Agents Retirement Funding Calculator
Discover a glimpse of your financial future with our Retirement Funding Calculator. Developed for the web by Fiscal Agents, with expert guidance from the original creator, Bruce Cohen (former senior financial editor of The Financial Post and author of The Pension Puzzle and The Money Advisor), this quick tool provides you with a illustration of the estimated needed amount to fund your ideal retirement, or alternatively, to estimate the length of time your retirement savings can sufficiently fund.
Like our other tools, this calculator is completely free to use, and available now on our website in the Financial Tools section. You can give it a try using the button below. |
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| Good Reads: Articles we recommend from the web |
| | | Finance defers increase to capital gains inclusion rate to 2026 Deferral provides certainty to taxpayers, finance minister says Written by Michelle Schriver, The Investment Executive
From the article: The Department of Finance says the proposed increase to the capital gains inclusion rate (CGIR) will be deferred to Jan. 1, 2026, from the original proposed date of June 25, 2024.
On Jan. 1, 2026, the CGIR will increase to two-thirds from one-half on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and most types of trusts, the department said in a release on Friday.
“The deferral of the increase to the capital gains inclusion rate will provide certainty to Canadians, whether they be individuals or business owners, as we quickly approach tax season,” Dominic LeBlanc, minister of finance and intergovernmental affairs, said in the release. |
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| | | From avocados to autos, Trump tariffs on Canada and Mexico could hit close to home The tariffs threaten to blow up the trade agreement Trump himself negotiated with America’s neighbours Written by Paul Wiseman, The Associated Press (Posted on Advisor.ca)
From the article: The 25% tax that U.S. President Donald Trump plans to slap on imports from Canada and Mexico as soon as Saturday could drive up the price of everything from gasoline and pickup trucks, to Super Bowl party guacamole dip.
The tariffs would also invite retaliation. Doug Ford, the premier of Ontario, has already vowed to counterpunch by pulling American alcohol off store shelves in the Canadian province – no idle threat; Canada is the world’s No. 2 market for America’s distilled spirits (behind the 27-nation European Union).
Trump’s tariffs threaten to blow up the trade agreement he himself negotiated with America’s neighbours in his first term. His U.S.-Mexico-Canada Agreement – “the fairest, most balanced, and beneficial trade agreement we have ever signed into law,’’ Trump once declared — was supposed to bring predictability to North American trade, giving businesses the confidence to make investments. |
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| | | Status Quo Bias: Why we prefer to go with the flow instead of changing course Posted on GetSmarterAboutMoney.ca
From the article: Are you somebody who is comfortable with change? Or do you prefer things to stay the way they are? The field of behavioural insights shows that people have a general tendency to prefer to stick with the current state of things, rather than change course. This is a behavioural bias known as status quo bias. This bias pushes people to stick with the status quo, even though there are instances where changing things up makes financial sense. |
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| Mortgage Rule Changes - 2024 Summary Courtesy of John-Andrew Newman, NewmanMortgages.com |
| Note: While Fiscal Agents is not in the mortgage business, we are happy to recommend John-Andrew Newman (NewmanMortgages.com) of The Mortgage Group. |
| Last year saw a series of substantial changes to Canadian mortgages rules. We’ve provided a quick summary of the larger movements below:
Launched the Tax-Free First Home Savings Account, which allows Canadians to contribute up to $8,000 per year, and up to a lifetime limit of $40,000, towards their first downpayment. Tax-free in; tax-free out.
Enhanced the Home Buyers’ Plan limit from $35,000 to $60,000, in Budget 2024, to enable first-time homebuyers to use the tax benefits of Registered Retirement Savings Plan (RRSP) contributions to save up to $25,000 more for their downpayment. The Home Buyers’ Plan enables Canadians to withdraw from their RRSP to buy or build a home and can be combined with savings through the Tax-Free First Home Savings Account.
Mortgage stress test changes, since 2018, Canadian homebuyers have been regulated by a mortgage stress that determines whether the borrower can handle a potential increase in their mortgage interest rate. To pass the test, purchasers must prove they can afford a mortgage at a qualifying rate higher than what their lender has approved.
Under new guidelines, if a homeowner with an uninsured mortgage is switching to a new lender and keeping the same amortization and loan amounts, the new lender won’t be required to apply a new stress test. This is also known as a straight switch.
Increasing the $1 million price cap for insured mortgages to $1.5 million, effective December 15, 2024, to reflect current housing market realities and help more Canadians qualify for a mortgage with a downpayment below 20 per cent. Increasing the insured-mortgage cap—which has not been adjusted since 2012—to $1.5 million will help more Canadians buy a home.
Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds, effective December 15, 2024, to reduce the cost of monthly mortgage payments and help more Canadians buy a home. By helping Canadians buy new builds, including condos, the government is announcing yet another measure to incentivize more new housing construction and tackle the housing shortage. This builds on the Budget 2024 commitment, which came into effect on August 1, 2024, permitting 30 year mortgage amortizations for first-time homebuyers purchasing new builds, including condos.
A First Time Homebuyer is defined by meeting one of the following criteria: The borrower has never purchased a home before; OR In the last 4 years, the borrower has not occupied a home as a principal place of residence that either they themselves or their current spouse or common-law partner owned; OR The borrower recently experienced the breakdown of a marriage or common-law partnership.
Canada’s Prime rate dropped from 7.20% to 5.45% heading into 2025
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| Mortgage Market update: January 31, 2025 | Term | Conventional | Insured | Rental |
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| 3 Year Fixed | 4.44% | 4.39% ↑ | 4.89% ↑ | | 5 Year Fixed | 4.49% | 4.19% ↑ | 4.89% ↑ | | 5 Year Variable | 4.60% | 4.25% ↓ | 4.99% ↑ | | PRIME RATE: 5.20% ↓ | | Special (2 Year Fixed): 4.39% | | Market Update - Terms and Conditions: Insurable Rates follow the High Ratio Mortgage Rules | Conventional Rates are for refinancing, extended amortizations, jumbo mortgages, properties over 1.5M | Rates subject to change without notice | Rates down since the summer, up slightly over last few weeks. | These rates are general in nature to provide as a guide | Deeper Rate discounts available for larger mortgage/ good credit file |
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| | Our Featured Free Publication |
| | Planning for your children's future
In today's hectic world, planning plays an important role in the way we live our lives. From major decisions to relatively minor issues, planning is what makes our lives run smoothly. We often put off tackling the chore of making the most important choices: Planning for our future and the futures of our children. |
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