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July 2013

July 31, 2021

U.S. retailers land on Canadian soil

First we saw big box stores popping up everywhere in Canada.

Now we are seeing an invasion of U.S. and international retailers setting up shop on Canadian soil.

Forget Wal-Mart -- the Target empire is quickly spreading across Canada.

Our "Truly Canadian" Zellers stores have been taken over by the Americans and are transforming into the Target brand.

Since March, 48 locations have opened across the country with 20 more set to open this month. By the end of the year, Target is aiming to launch 124 Canadian retail stores.

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Canadians now able to pay with credit card at U.S. gas pumps

Travelling to the US this summer? You'll be happy to hear that gas prices are still about 20% less than we’re paying here. Unfortunately, you may need stacks of cash to buy it.

Billed as an effort to combat card fraud, more and more ‘Zip Code-required’ gas pumps have been popping up along U.S. highways. 

The ZIP-code pump creates hassles for Canadians as it doesn't recognize Canadian postal codes, which include letters as well as numbers. As a result, drivers have to prepay (on-the-spot refunds if you guess wrong aren't attendants' top priority) or leave a credit card inside before filling up.  

But help is at hand, at least in many states. 

When prompted, Canadians can now enter the three numbers in their postal code, and two zeroes. So, if your postal code is A2B 3C4, you enter 23400 and roll on out.

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July 30, 2021

The high cost of free health care in Canada

Canada is admired around the globe for its free health care system.

But is it really free?

According to a new report from the Fraser Institute, a Canadian family of two parents and two children will pay on average $11,320 in taxes for public health care insurance in 2013.

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Canadians better off than they think: report

Despite shouldering record-levels of debt, Canadians are actually richer than ever with household net worth eclipsing the $400,000 mark for the first time in history.

The average household's net worth grew by 5.8 per cent at the end of last year from $378,093 at the end of 2011, largely, due to roughly a 5 per cent increases in real estate values and savings, according to a recent report from Environics

This keeps Canadian households ahead of their U.S. counterparts for the sixth straight year although, on a currency-adjusted basis, the gap isn't that dramatic.

In fact, that gap has actually narrowed a bit recently, largely because Canadians continue to borrow where most Americans seem to be saving a bit more. And U.S. housing prices are on the increase.

But will this gap continue?

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July 29, 2021

Misery index suggests that stocks have more room to rise

The misery index, as the name suggests, is designed to measure the level of wretchedness felt by ordinary people in the economy. Created by Yale economist Arthur Okun some years ago, it’s calculated by adding the U.S. unemployment rate to the prevailing inflation rate.

Since fear of job loss and shrinking purchasing power through inflation have pervasive effects on the lives of most workers, the index is considered to be a good snapshot of the real economy.

As inflation rises the cost of living increases and, as unemployment rises, more people cross the economic line into poverty.

In both Canada and the United States, the index peaked well above 20% in the early 1980s, largely due to incredibly high inflation. More recently, the 2013 number is around 9 down from a recent peak of 12.9% in November 2011 which is up slightly from a month ago when it was 8.6%.

All of which is good for stocks, claims strategist Ed Yardeni, who took a look at how the misery index has matched up with with bull and bear markets.

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July 26, 2021

Hosting a guest in your home may be opening the door to trouble

IStock_000000369764Medium[1]Hosting your home to strangers may be opening a whole new host of problems.

More and more Canadians are participating in home exchanges, hosting guests or even renting out rooms in their homes.

While this may give homeowners an extra little cash in their pockets or even provide an affordable vacation, it may also open the door to unexpected circumstances that are not covered by insurance.

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July 25, 2021

Men and women do business differently

Men and women both have a passion for business. But how they do it is altogether different.

A new survey shows clear differences in the motivations and characteristics of men and women business owners, and how they got to where they are.

For instance the study, conducted by Pollara for BMO Bank of Montreal, finds that male business owners (65 per cent) are more likely than their female counterparts (56 per cent) to have acquired their role by starting their own business.

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Should you be locking in your mortgage sometime soon?

Over the last few weeks, longer-term fixed rates have jumped by roughly half a percentage point.

The fixed-rate five-year closed mortgage, which was once as low as 2.99%, has risen steadily in the past few weeks and is closer to 3.5% at most banks. That may not seem like a big difference but it means a larger payment.

Even though rates aren't expected to jump significantly until next year, if you're coming up for renewal then it may be time to at least work in higher rates into your budget.

Mortgage debates used to centre around whether to go fixed or variable but the discussion these days is often not whether to lock in a rate but for how long? Most people choose a 5-year term. But is that the best option? You could, for instance, lock up a 7-year rate ... or even a 10-year term.

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July 24, 2021

More Canadians carrying debt

Nothing can be said to be certain, except death and taxes...and now debt.

According to a new report from BMO Bank of Montreal, more Canadians are carrying a household debt load (83 per cent) compared to 74 per cent in 2012.

The survey found that mortgage debt was the main source of debt for many Canadians followed by car loans and funding education.

The study also found that the average monthly debt payment has declined, dropping from $1,138 to $986.

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Could a Canadian city go the way of Detroit?

The recent bankruptcy filing in Detroit is raising red flags about other major U.S. cities also cracking under the weight of dealing with billions in retiree benefits and unpaid loans.

Could the same thing happen here?

Canada's municipalities may be unlikely to face the same fate, but the financial fall of Motor City carries lessons for towns and cities in this country as well, suggest some urban planners.

"Detroit is a wake-up call to say that long-term problems can eventually get to you if they're allowed to remain long term," policy consultant Brian Kelcey told CBC News.

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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...