What is a consumer proposal? How does it work? + MORE May 23rd

Though they’re well represented in Canadian stock indices, you can see why some investors would want even more exposure to Canadian banks. They have enviable dividend growth histories and ample current yields. They offer relatively stable earnings that are not vulnerable to global tariffs or supply-chain shocks. For decades (and with support from the regulatory regime), they’ve successfully fended off all competitors that have tried to breach their moats. Plus, their payouts typically qualify for the Canadian dividend tax credit when held in taxable accounts, making them highly tax-efficient. 

But, banks are a different animal than most TSX stocks. Typical valuation metrics like price-to-earnings ratios don’t always apply cleanly because bank earnings are heavily regulated, cyclical and influenced by capital requirements, interest-rate spreads and credit risk—factors that aren’t captured well by earnings multiples alone.

Instead, Canadian investors need to consider balance sheet and risk management metrics…

Getting trapped in a perpetual cycle of debt with seemingly no way out is one of the most stressful situations life can throw at you. For anyone looking for a way forward, experts say a consumer proposal can break the chain without the need for a bankruptcy filing.

While everyone’s debt tolerance is different, Véronique Lalonde says if someone is failing to get ahead in their month-to-month finances, it’s a sign they need help.

“You need to look at what’s going on,” said Lalonde, partner and licensed insolvency trustee at Montreal-based Raymond Chabot. “If you’re behind, you’re receiving collection calls or notices, if your phone’s being cut off, your hydro is being cut off obviously, these are all signs.” 

If you find yourself in this situation, there are lifelines available.

What is a consumer proposal?

Consumer proposals are settlements a trustee negotiates with banks and other lenders that buy you time to pay back creditors a portion of what they’re owed, based on your ability to pay…