CSI Blog & Newsroom

“Canada’s economy has been performing ever so slightly above its weight, providing, for now, a glimmer of hope that sustainable growth may finally be taking hold. But there could still be storm clouds gathering in Europe, emerging markets and, more recently, Ukraine that pose major threats to our growth and, possibly, to our financial stability. The biggest unknown, according to a major Canadian think-tank, is whether the recent eurozone recovery will have legs or be cut down by another ‘perfect storm'”, writes Gordon Isfeld for the Financial Post. Isfeld continues,”‘The eurozone area is not out of the woods yet,’ the C.D. Howe Institute said in a report Wednesday. In fact, the report’s author, Pierre Siklos, argues that ‘an economic downturn or financial shock there cannot be ruled out.’ ‘The effect of setbacks in the eurozone on Canada’s economy could be significant,’ warns Mr. Siklos, a professor at Wilfrid Laurier University’s School of Business and Economics. ‘Clearly, U.S. shocks dominate, but eurozone shocks cannot be ignored. Under eurozone worst-case scenarios, such as a credit-related shock on the scale of the Greek experience, Canada’s economy would suffer a substantial drop of almost 8% in real GDP after two and a half years.'” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

“As the federal government attempts to widen its net on foreign tax cheats, it faces pushback from inside and outside Canada over concerns that efforts to capture more revenue could cause greater harm than good — especially to direct investment in Canada. Even critics in Canada’s biggest trading partner are urging Ottawa not to take unilateral action against so-called ‘treaty shopping’ by out-of-country companies and individuals.” Gordon Isfeld wrote for a Financial Post article. Isfeld continues “instead, one of the largest business groups in the United States, along with legal and tax experts in this country, say a coordinated global approach — such as the one now being formulated by the Organization for Economic Co-operation and Development — would avoid what the OECD warns would lead to ‘global tax chaos.’ Finance Minister Jim Flaherty is pushing ahead with plans, announced in last year’s federal budget, to crack down on foreign tax abusers — although the government admits the financial impact of treaty shopping is difficult, if not impossible, to put a value on. ‘Arrangements involving treaty shopping, like other forms of aggressive tax planning, are often not disclosed by taxpayers and, as such, their impact is difficult to measure,’ a Finance Department official told the Financial Post.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS  

“Three years, five months and counting: That’s how long the Bank of Canada has kept its key interest rate fixed at a rock-bottom 1 per cent.And the rate isn’t likely to change Wednesday when central bank Governor Stephen Poloz makes his second monetary policy announcement of 2014. But with evidence that inflation is perking up a bit, the odds that Mr. Poloz’s next move is a rate increase, rather than a cut, are overwhelming.”Barrie McKenna writes in an article for the March 2, 2014 issue of Globe and Mail. McKenna continues, “combined with a cheaper Canadian dollar and better-than-expected fourth-quarter growth, the building blocks of an improving economy are starting to fall into place for Mr. Poloz, making a rate cut increasingly unwarranted. In a series of interviews at the recent G20 meeting of finance ministers and central bankers in Sydney, Australia, Mr. Poloz called the slide in the Canadian dollar a ‘welcome development’ because it means the U.S. dollar is getting stronger alongside the U.S. economy. He also said he’s feeling ‘a little more comfortable’ about disinflation risks. There was a hint of higher inflation in January. The consumer price index rose at a higher-than-expected 1.5-per-cent annual pace in January – the fastest pace in 19 months.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS