Optimism #64 - June 20, 2023

Dear clients and friends,

A Director and insider at National Bank recently bought a half million dollars worth of shares this past week.
There is only one reason insiders buy.

I have received dividends from Enbridge, Canadian Tire and Fortis this month, and expect more from CN Rail, Canadian Natural Resources, Telus and Rogers.  Share prices are flat, but dividends continue to roll in.

My Fortis natural gas bill was $98.89 for $22.46 of gas consumed.  I hope to own more shares of this terrific business one day.

If high interest rates are getting you down, try to keep it in perspective.  In Argentina, they recently raised rates to 97% to cool the rising cost of living.  Inflation is reported to be over 100%. Read the article here.

At first, I was worried about the proposed new minimum income tax (AMT) on we the passionate dividend collectors, thinking that our low tax income stream love affair was over. But it seems not so.  CIBC’s Jamie Golombek has produced a super summary.  See link below.  Dividend details are shown in the middle of page 3 under the heading Example 2: Eligible Dividends.
Read the article here.

If you have a kid or grandchild looking to get into the housing market, the new (FHSA) First Home Savings Account is worth a look.
  1. Contribute up to $8,000 per year for five years, total $40,000.
    1. This money and any growth can be withdrawn tax free, much like a TFSA.
  1. One can also use the old RRSP Home Buyer’s account in conjunction, a further $35,000 from the RRSP.
  1. Originally the $8,000 per year of contribution room could not be carried forward if unused, but rules were changed and now it can.
  1. If you have owned a home in the past, you may still be eligible.  According to CRA, you are considered a first-time home buyer if, in the [immediately prior] four-year period, you did not occupy a home that you owned, or one that your current spouse or common-law partner owned.
Have a wonderful Summer. I am here if you have questions.
Derek Moran