MARKET UPDATE “He who tampers with the
BUDGET 2015
MAY 2015
(source: MSN money) Yields on
currency robs labor of its
10 year Government of
bread”. Daniel Webster
Canada bonds moved from
The largest surprise in 2015 is
above 2.25% in 2014 to below
As you know, the
federal budget was
presented on April
the continued trend of lower
1.25% in February 2015 (source:
interest rates and their effect on
Bank of Canada). These
21st and the
the currency markets.
massive changes in currency
provincial budget on
and interest rates weren’t
April 23rd.
The Bank of Canada
surprised most observers with
limited to Canada. As an
their January 21st change in the
example, German 10 year
overnight rate target from 1% to
bond rates yielded as little as
0.75% in response to the sudden
0.05% annually in April of 2015
probably seen plenty
decrease in oil prices and the
(source: Marketwatch)
of media coverage, I
economic shock this had
All these changes remind us
delivered to the Canadian
that it pays to be diversified
economy.
Although
this only
resulted in the
prime lending
rate
decreasing
by 0.15% it
globally
ALL THESE CHANGES
REMIND US THAT IT PAYS TO
dollar and
mortgage
rates.
would appreciate an
overview of how
some of the budget
items relate to
single
investments and
AND TO NOT RELY TOO
economic
taxes.
MUCH ON ECONOMIC
forecasts.
BE PROPERLY DIVERSIFIED
FORECASTS.
“THE WAY TO LOSE
effects both
Canadian
rely too
thought that you
much on
had huge
on the
and to not
While you’ve
Peter Lynch
famously
said that
The opposite page
outlines the main
MONEY IN THE STOCK
“the way
themes; TFSA limit
MARKET IS TO START OFF
you lose
increases, changes
money in
to RRIF minimums, the
the stock
Family Tax Cut and
WITH AN ECONOMIC
PICTURE” PETER LYNCH
The tailwind
market is to
start off
of currency gains on global
with an economic picture”.
investments continued, with
Keep focused on the long
the proposed Ontario
Retirement Pension
Plan (ORPP).
most of the gains in 2015
term and don’t allow short term
resulting from the decrease in
market winds blow you off
We still have
the Canadian dollar, which
course. Feel free to schedule a
moved from a July 2014 high of
time to come in for a meeting so
appointment times
$0.9413 to $0.7798 in March.
we can review your situation.
available in October
and November and
would love the
[Pick the date] [Edition 1, Volume 1]
opportunity to make
sure that we can
provide you with
OAK TREE GIVES BACK - OPTIMISIM PLACE AND YFC NORTH PERTH
Thanks to community support
for women and children who
highlighted a silent and live
of our recent food drive, we were
experience domestic abuse.
auction. A special thank you to
able to contribute $3,510.24 of
We also were able to participate
the Johnson family for providing
food and funds to Optimism
in the annual fundraising
the auctioneering service for this
Place. A big thank you for
banquet for YFC North Perth. This
event.
helping us support this great
was a fun night at the Atwood
organization create a safe refuge
Community Centre which
TFSA limit increase
The most recent Federal Budget increased the annual TFSA contribution limit to $10,000 per year
for 2015, bringing the cumulative limit to $41,000. We are already taking advantage of the
increased limit with clients and topping up their TFSA plans. This is a great opportunity to do a
complete review of how the TFSA fits into your financial situation. Call our office or email
service@oaktreefinancial.ca to discuss your options.
Family Tax Cut – family income splitting
The 2014 Federal Fall Update created a new non-refundable tax credit of up to $2,000 for eligible couples
with minor children to transfer income to the lower income spouse. The maximum credit is realized if up to
$50,000 of an individual’s income is transferred to their spouse. If you have questions about how this affects
your situation, don’t hesitate to email service@oaktreefinancial.ca or call us at (800)291-1353.
Decreased minimum RRIF withdrawals
The Federal Budget also decreased the calculation of minimum required RRIF withdrawals.
While this is partly in response to longer life expectancies and decreased guaranteed interest
rates, this highlights the need for customized RRIF income. There are strategies to either
accelerate or delay RRIF income but it’s specific to your situation – call or email us to get a
strategy in place.
The recent Provincial Budget reiterated the plan to proceed with the Ontario Retirement Pension Plan (ORPP).
This is a mandatory pension plan modeled on the CPP, matching employer and employee contributions for
those not enrolled in a Defined Benefit Pension plan. While much of the discussion has been focused on the
perceived benefits of the plan, there has been little discussion on what the costs would be or who would pay
for them. While the concept of increased retirement income seems appealing, we feel the increased burden
on small businesses and their employees hasn’t been taken into account.
Yours Sincerely,
Trent Stanley CFP PFP CFSB
E&O.E.
Commissions, trailing commissions, management
feesandexpensesallmaybeassociatedwithmutual
fundinvestments.Pleasereadtheprospectusbefore
investing. Mutual funds are not guaranteed, their
valueschangefrequentlyandpastperformancemay
notberepeated.