TFSAs Turn 5 – But Canadian Savers Still Stumped + MORE Jan 20th

The first round of discounts as a result of the Ontario Government’s Cost and Rate Reduction Strategy are hitting car owner’s pockets. Average auto insurance rates have dropped 4.66 per cent so far this year, according to the Finance Services Commission of Ontario.
 The Strategy is part of an agreed-upon deal between the NDP and Liberal provincial government. The NDP demanded the Liberals cut auto insurance premiums by 15 per cent, or risk losing their support for the proposed budget. As a result, Ontario drivers will enjoy an average discount of 15 per cent over the next few years, with a deadline of eight per cent this August, and the remaining discounts to occur next year.
It’s estimated that the 15 per cent discount will equal $225 in savings for drivers.
The FSCO has posted this chart, indicating which insurance companies are offering lower rates as part of the implementation:

What Does This Mean For Drivers?
It’s a great time to compare the market, as you could be in for a discount on your own rate…

Looking forward to a hefty tax refund this spring? That’s actually poor planning, especially if you’re lugging around credit card debt, student loans or a negative balance of any kind.
It’s not like you’re really coming out ahead. That money was always yours to begin with. In fact, getting a large tax refund simply means you’ve remitted too much tax to the Canada Revenue Agency from the outset. Here’s how to keep more of your money, right from the start.
Keep That Money For Yourself
When you file your income taxes in April, the Canadian Revenue Agency will compare what you actually owe to what you’ve already paid through pay cheque deductions. You only get money back if you paid too much. That means you’re effectively giving the federal government an interest-free loan, since it’s really only refunding the overpayments you’ve been sending in throughout the year.
Settling up early this way is generally a bad idea, particularly if you expect to claim any deductions or non-refundable tax credits like RRSP contributions or child care expenses that will ultimately reduce your tax bill, says Toronto accountant Tim Cestnick, author of author of 101 Tax Secrets for Canadians…

The first economic reports of the new year have been released, and they paint a decidedly brighter picture of Canadian and global economic growth. Could the limbo Canada has endured finally rise this year, with inflation (and rates) following suit?
T’is also the season for tax planning – read on for our handy guides to scoring government benefits, keeping your tax cash upfront (why wait for a refund?!), plus this week’s top finance headlines.
Canada Has A Low Loonie – But That’s Good News!
Canada’s currency is at a four-year low – one Canadian dollar is now equal to 91 cents USD! While this means higher prices for cross-border shoppers and travellers, a weaker Loonie is actually good news for our nation’s economy, as the export industry finally has a fighting chance.
Read Rubina’s Blog | Canada Has A Low Loonie
TFSAs Turn 5, But Canadians Still Stumped
The Tax Free Savings Account, a handy savings and investment vehicle introduced by the government, turns five this year – but many would-be savers are unclear on how to use one…

The Canadian market may be recovering but the confidence of Canadian investors is lagging. According to the latest Manulife Financial Investor Sentiment Index, Canadians continue to approach investment and savings vehicles with wariness, evidence by a one-point dip to a level of +21 on the Index.
Quebec Investors Least Confident
Skepticism is strongest amongst Quebecers. The Index sits at +8 in la belle province, which, according to Manulife Financial, is a measly three points higher than levels before the economic crisis in 2008. Asked whether it was a good time to invest in products like Tax-Free Savings Accounts (TFSAs), their own home and mutual funds, Quebecers ranked lower than Canadians from any other province.
But, says Guy Couture, regional vice president of retail markets at Manulife Financial, in a press release about the findings, Quebecois skepticism may be healthy.
“In comparison to other provinces, Quebec leads the way with more than half of residents reporting that they are on track with their financial goals (53 per cent)…

The Tax Free Savings Account (TFSA) – the Canadian Ministry of Finance’s baby – turns five this year… but don’t expect much of a birthday throw down.
Turns out, even after five years on the market, many Canadians are still struggling with the concept of how to use the account. While 68 per cent of Canadians say they are knowledgeable about TFSAs, what goes into the account and understanding contribution limits are still very much grey areas, according to the Bank of Montreal’s third annual Tax-Free Savings Account report.
Canadians Confused Over Investment Options
The poll found that while 48 per cent of those surveyed had an account (which, by the way, is a 23 per cent rise from 2012), only 11 per cent can identify the types of investments that go in a TFSA and just 19 per cent know the new annual contribution limit.
Further to that, only 52 per cent of Canadians understand how and when TFSA contributions are taxed, just 47 per cent get the rules surrounding how much you can re-contribute after making a withdrawal, and one in 10 TFSA holders have over-contributed since they opened their account…