Q: What is a LIRA and a LIF?


A LIRA is a Locked-in Retirement Account and a LIF is a Life Income Fund.

"Locked-in plans are when employers and employees’ vested contributions and interest are transferred into a Registered Retirement Savings Plan until the investor reaches a specific age (anywhere from age 50 to 70) depending on the pension legislation applicable to your plan."

A LIRA is basically what your pension plan becomes when you leave a place of employment. Similar to a RRSP converting into a RIF, a LIRA converts into a LIF and it has maximum and minimum annual withdrawal requirements.

Q: My bank told me they would lower my line of credit interest rate if I invested with them – why shouldn’t I invest with them?


When a bank makes an offer to reduce an interest rate on a product by purchasing another product from them, it is known as coercive tied selling. Coercive tied selling is the illegal practice of a company providing a product or service on condition the customer purchases a product from the same or related company.

Another example may include:

Your bank's mortgage specialist tells you that you qualify for a home mortgage. Then you're told that the bank will approve it only if you transfer your investments to the bank or its affiliates. You want the mortgage, but you don't want to move your investments. Read more: Tied Selling Definition | Investopedia

Q: When I invest money with you, how do you get paid?


When we invest you in a mutual fund, there is something called an MER, Management Expense Ratio, that generally ranges from 1.5% to 2.5%. This MER gets paid to a Portfolio Manager, who then gives a portion to our Dealer, Manulife, who then pays us. All mutual funds have an MER, no matter where you invest.

Q: I withdrew money from my TFSA – can I recontribute it?


When you withdraw money from your TFSA, there are generally no fees or tax penalties. However, if you are at your maximum allowable contribution and withdrew from your TFSA anytime during the year, you would need to wait until the next calendar year to recontribute that amount.

For example: If you had maxed out your TFSA contributions and withdrew $5,000 in 2016, you would need to wait until 2017 to recontribute the $5,000.

However, if you had not maxed out your TFSA contributions, you are able to contribute the amount you had available at the beginning of the year, not including the withdrawal.

For example: If you had $10,000 of room in your TFSA and withdrew $5,000 in the year, you are still able to contribute the $10,000 during that year. The $5,000 contribution room would become available the following year.

Interestingly, Revenue Canada sent out 54,000 overcontribution penalty letters. Some of the penalties were as much as $2,400... Clearly these simple rules are not so simple to understand.

Q: Should I buy a RRSP or a TFSA?


This is a fairly common question we receive. The short answer – if you make less than $45,000/year or you may need the money within the next few years, a TFSA is a better option for you. If neither of those questions apply to your circumstance, then you should consider speaking with us about an RRSP.

Q: What is a non-registered account?


A RRSP or a TFSA is a registered account – this means that there are rules in regards to how much you can invest and how withdrawals occur. A non-registered account has no contribution rules – it basically acts like a regular savings account, similar to what you would have at the bank. You can put as much as you want into the account, and withdrawals are easy. The one catch is that you must pay income tax on any interest, dividends or realized gains (if you sold the investment and it made money, you have to pay tax on the gain).

Q: Who qualifies for a RDSP?


To qualify for an RDSP, the investor must be eligible for the Disability Tax Credit, be a resident of Canada, have a valid SIN and be under the age of 60.

Q: What is a RDSP?


It is a registered disability savings plan.

“Designed to help build long-term financial security for disabled persons, the RDSP makes it easier to accumulate funds by providing assisted savings and tax-deferred investment growth.” -

The Key Benefits

  • Money contributed grows tax free.
  • Anyone can contribute to an RDSP with the written consent of the account holder.
  • Contributions can be matched, based on family income, with up to $3,500 a year in Canada Disability Savings Grants (CDSG) and up to $1,000 a year in Canada Disability Savings Bonds (CDSB).
  • Carry forward on CDSG and CDSB is available back 10 years or to date of diagnosis.
  • The total lifetime contribution for each beneficiary is $200,000, with no annual contribution limits.
  • If a parent or grandparent passes away and has a financially dependent child or grandchild, they can transfer up to $200,000 of their RRSP/RRIF or RPP to the dependent’s RDSP on a tax-deferred basis.


Q: What is a RESP?


It is a registered education savings plan.

“A Registered Education Savings Plan (RESP) is an effective way to save for, and maximize, the money available to children when they enroll in a post-secondary program. The Government of Canada and certain provinces offer several grants to help investors build their education savings. Contributions are not tax-deductible, but money inside the plan and any grant they attract can grow tax-free until it's withdrawn for educational purposes.” -

Q: What is a TFSA?


A: It is a tax-free savings account. Depending on your age and residency, there are rules regarding the maximum that can be invested in a TFSA. You pay no income tax on the interest, dividends or capital gains earned in the account. However, there can be fines and penalties for overcontributing.

The Key Benefits:

  • Canadian residents age 18 and over, can save up to $5,500 a year in a TFSA.
  • Contributions are not tax-deductible, but investment returns (i.e. capital gains, interest and dividends) earned in a TFSA are not taxed, even when they are withdrawn.
  • Withdrawals are tax-free and funds can be used for any purpose.
  • Unused contribution room can be carried forward indefinitely.
  • Any amount withdrawn from a TFSA can be re-contributed in a future year without requiring new contribution room.
  • Eligibility for federal tax credits or income-tested benefits are not affected by income earned in a TFSA or withdrawals.

Learn More

Q: What is a RRSP and a RRIF?


It is a registered retirement savings plan. It allows you to make tax-deductible contributions based on your earned income. At the age of 71, your RRSP must be converted into a RRIF. For a RRIF, you can no longer contribute money, and there are minimum annual withdrawal requirements.

Retirement Planning

Q: Should I opt to receive my CPP early?


Unless you really need the money, or are terminally ill, you should wait until you’re at least 65 to start receiving CPP. If you take your CPP early, for every month in advance of your 65th birthday, you’ll lose a portion of your CPP, and it adds up.


Q: What does ‘Joint with right of survivorship’ mean?


This is a joint account, that, if one of the account holders dies, remains with the second account holder. The second account holder has ‘right of survivorship’. This is beneficial in estate planning and transferring assets to family members.


Q: What is disability insurance?


“Disability insurance can provide you with financial security by replacing a portion of your earnings if an accident or illness causes you to become unable to work or earn an income. Accidents and illnesses are a fact of life. They could occur at any time. Disability insurance provides income to help manage your expenses during the period you are unable to work. A disability can strike anyone regardless of their age, gender or occupation. In this sense, anyone who earns an income could benefit from the added protection provided by disability insurance. In particular, those looking to help protect their family and other loved ones from possible financial disruption associated with suddenly becoming unable to work due to illness or injury would be appropriate for this insurance.”

Q: What is critical illness insurance?


“Critical illness insurance is a form of protection that can provide you with a tax-free lump sum payment to use however you need while recovering from a life-altering illness. You can use this money in whatever way you need while you recover. Critical illness insurance can be

suitable for anyone seeking financial protection to help cover the costs associated with recovering from a life-altering illness. It can also be suitable for those looking to protect loved ones in the event they experience a critical illness.”

Q: What is the difference between mortgage insurance you purchase at the bank and insurance you would sell me?


Mortgage insurance is in place should you pass away and still have a mortgage on your home. Mortgage insurance protects the value of the mortgage. As you pay off your mortgage, the value of the insurance declines as well.

For example: If you purchased mortgage insurance on your $500,000 mortgage and you passed away, the insurance would pay off your mortgage (the full $500,000). However, if you passed away a few years later, and your mortgage was only worth $400,000, then the insurance would only pay off $400,000. The value of the insurance declines as you pay off your mortgage.

However, if you purchase life insurance with us instead, the insurance value will remain the same.

For example: If you purchased $500,000 of life insurance and you passed away when your mortgage was worth $400,000, your family would receive $500,000, use $400,000 to pay off the mortgage and have a remaining $100,000.

And often, life insurance is less expensive than mortgage insurance.


Q: I am self-employed – what can I claim on my taxes?


This all depends on the type of business. There are three primary areas of expenses: Business, Car and Office in Home. You may qualify for all of them, or only one of them.

For business expenses, you may be able to claim supplies, office expenses, advertising and legal/professional fees (to name a few).

For car expenses, you may be able to claim a percentage of your gas, insurance/license, car washes and repairs/maintenance. And no, you cannot claim parking or speeding tickets.

For office in home, you may be able to claim a portion of your maintenance, property taxes, utilities, insurance and mortgage interest.

Q: I’m missing a small T4 slip – can I file without it?


You are required to include all sources of income on your tax return. If you know you are missing a T4 slip, you may have to contact that employer to get an additional copy mailed to you. As of last year, CRA has started putting various tax slips online – often, we can retrieve these slips for you, if we are authorized as your representative.

Q: I just started a new job and they gave me a TD1 Form – how do I fill it out?


We often have clients come in to do their taxes and we see that they had multiple jobs during the year, and in turn, they end up owing money at tax time rather than receiving a refund. A way this can be prevented is with a TD1 form. When you being a new job, you’ll receive a provincial and federal TD1 tax form. They often have a number close to $10,000 (on the federal form) and $9,000 (on the MB provincial form). This is based on how much income you can earn federally and provincially tax free.

For example: If you only made $10,000 during the year, you would owe no federal income tax.

The problem occurs when you have multiple jobs, and each workplace assumes you receive the first $10,000 tax free. If you worked three different jobs and made $10,000 at each workplace, you really made $30,000, which makes you taxable. However, if the TD1 was filled out incorrectly at each workplace, you may have had no income tax taken off, and in turn, owe at tax time.

To help avoid this problem, when you work multiple jobs, ensure that every TD1 after your first job has a zero written at the bottom of the page (scratch out the $10,000 federal and $9,000 provincial). This way, they will begin taxing you immediately and you’ll be less likely to owe at tax time.

Q: I want to buy a rental property – is there anything I should consider?


A major factor when considering a rental property is cash flow versus income.

For example: We often have people renting out a property and the mortgage is $1,000/month. The landlord then charges the tenant $1,000/month and tells their tax preparer that they had no income for the property. However, this is a difference between cash flow and income. The landlord has a zero cash flow ($1,000 rental income - $1,000 mortgage payment = $0), however the income is a different story. Seeing as the landlord can only deduct the INTEREST PORTION of their mortgage payment on their tax return (not the entire mortgage payment), they don’t actually have a zero profit. Let’s say the interest portion of the mortgage is $400, then the landlord technically has $600/month of profit ($1,000 rental income - $400 mortgage interest

expenses). The landlord then needs to include this $600/month on their tax return, and pay income tax on it. If the landlord was in a 35% tax bracket, they would then owe $210 for every $600 earned. Over a year, this is $2,520.00 in income tax.

This can get quite complicated… but in this landlord’s case, they had a zero cash flow from their rental property, but ended up owing $2,520 extra in income tax at the end of the year.

This is only one of the many considerations you’ll need to take prior to owning a rental property. Give us a call to discuss.

Q: My spouse and I have separated – do we still have to file our taxes together?


Your taxes are filed based on your marital status at the end of the calendar year. If you were still together on December 31st, your tax return would be filed married and for ease of completion, should be filed together. If you separated prior to the end of the calendar year, then you would file as separated. You’ll need a separation agreement, as CRA will most likely request one once they see the change in marital status – especially if you have children. We often like to continue doing each of the ex-spouses’ tax returns, to ensure all credits and deductions are done properly.

Q: I was told to pay quarterly instalments for my taxes – do I have to?


When asked to pay quarterly instalments, it usually means that you have owed over $3,000/year in two of the past three years. Instalments are just an early payment of what you would usually owe around tax time. While, you don’t have to pay them, you could face interest charges and penalties if you end up owing at tax time.