Canadians wealthier; debt burden still near record + MORE Jun 12th

OTTAWA – The ratio of household debt to disposable income edged lower in the first quarter after increasing for three quarters.
Statistics Canada says leverage, as measured by household credit market debt to disposable income, was 163.3 per cent, down from 163.6 per cent at the end of last year.
That means households owed about $1.63 in consumer credit, mortgage, and non-mortgage loans for every dollar of disposable income.
The slight improvement came as disposable income rose faster than debt.
Total household credit market debt reached $1.841 trillion at the end of the first quarter, up 0.7 per cent from the previous quarter.
Consumer credit debt was $519.5 billion, while mortgage debt stood at $1.197 trillion.
The post Household debt-to-disposable-income ratio edges lower as income rises appeared first on Canadian Business – Your Source For Business News.

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(Getty Images / Peter Dazeley)
Nobody likes to pay taxes.
But while they are inevitable, you can minimize the amount you pay.
Brent Vandermeer, a portfolio manager with HollisWealth, says to build a tax efficient portfolio you need to pay attention to what you hold and where it’s held.
“A lot of people view each of their own accounts that they have set up as distinct little buckets that they manage,” he said.
“From a tax efficiency point of view that actually negates some of the benefit of having certain kinds of investments in more tax efficient accounts.”
That’s because in the eyes of the Canada Revenue Agency, not all investment income is created equal.
Under the tax rules, interest income from investments like savings accounts, GICs and bonds are fully taxable at your marginal tax rate, while dividends benefit from the dividend tax credit that helps reduce the amount of tax you owe.
And only half of any capital gain is included when calculating your taxes.
Vandermeer says those differences mean you need to pay attention to where your investments are held, whether it is your RRSP, tax-free savings account or other non-registered account…

(Mike Kemp/Getty Images)
Canadians with consumer debt were better at making payments on time in the first quarter of this year than they were in the same period over the previous two years, according to the TransUnion credit monitoring agency.
It says the delinquency rate on non-mortgage debt like credit cards, auto loans and lines of credit was down in the first three months of 2015, even though the average balance owing remained stable at just under $20,800.
The delinquency rate fell to 2.66%, down from 2.72% in the same period a year earlier and 2.87% in the first quarter of 2013.
Jason Wang, TransUnion’s director of research, says one of the reasons for the decline was that lenders and borrowers were increasingly cautious.
Wang says another factor was the Bank of Canada’s decision to reduce a key interest rate in January following a collapse of global oil prices that started in late November and continued into this year.
He says the central bank’s move reduced mortgage costs for some homeowners, who used the savings to manage their other types of debt…

Credit-market debt including mortgages, consumer credit and non-mortgage loans was 163.3% of disposable income in three-month period