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Email this12:30 pm
November 18, 2017
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Mostly because it's hard enough to keep businesses in Canada already, alas - that's the "race to the bottom." Tariffs where what stopped that in the past; they are casualties of globalization. (Which does have some advantages, to be fair.) But of course political donations count, though most big businesses make donations to ALL major parties to keep friendly.
RetirEd
RetirEd
2:01 pm
October 21, 2013
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Bill said
Been a while since we've had Conservative rule, plus everybody hates large corporations so would be hugely popular to increase corporate taxes meaningfully, so why haven't Libs, with NDP support, massively increased corporate taxes? Seems like an easy solution, everybody wants it, what's the hold up?
The "hold up" may be that they wouldn't make much out of it anyway. It doesn't matter what the rate is if you have enough ways to avoid or minimize the tax.
Some years ago, a close friend had occasion to meet the CEO of a small-to-medium-sized Cdn bank. Friend suggested the bank could reduce taxes with corporate philanthropy. CEO said, with pride, "we don't pay taxes". I still wonder how this is possible, but the source is impeccable and it's a true story. My friend didn't know what to say as he'd never imagined such an answer.
4:17 pm
September 11, 2013
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That's my point, i.e. if it's realistic, taxing corporations more, it would have been done. Obviously it's more complex than that.
5:03 pm
October 21, 2013
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Perhaps the large corporations pay some taxes. Isn't that how they justify the dividend tax credit?
5:35 pm
September 7, 2018
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Loonie said
Perhaps the large corporations pay some taxes. Isn't that how they justify the dividend tax credit?
Generally corporations pay taxes if they have a bottom-line profit. Corporations which are not profitable (bottom line loss) do not pay taxes but remember corporations with bottom line losses probably won't pay out dividends so the dividend tax credit becomes a non issue for the non profitable corporations. The dividend tax credit was meant to avoid "double taxation" - the corp has already paid taxes - dividends are simply a distribution of those profits to shareholders, so why should shareholders be taxed on the same profits on which the corporation has already paid taxes?
6:09 am
March 30, 2017
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Loonie said
Perhaps the large corporations pay some taxes. Isn't that how they justify the dividend tax credit?
Corporate that makes money definitely pay tax, one can just go to their income statement / statement of cash flow to find the details.
Dividends are paid out of a corporate net profit after tax. In other words, shareholders already pay the corporate portion of it. The individual dividend tax credit is to take care of that so there is no double taxation. Mind you the the shareholders still pay tax as the dividend is grossed up. The net effect of gross up plus dividend tax credit is to make the "total" tax ultimately paid by the shareholders to be equal to a personal income tax level that is consistent with other source of income.
Dividend income ultimately enjoys a lower tax than "risk free" principal protected income such is GIC as shareholders take principal risk. Its ALL FAIR if one looks at it fairly and not just skew and argue to suit their own purpose.
8:45 am
September 11, 2013
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Dividend income is not taxed less due to the increased risk vs interest income, it's because, as has been noted, that the corporation has already paid some tax on that amount distributed to shareholders. A side effect is that it encourages people to consider investing in Canadian dividend paying corporations over interest income instruments. Is my understanding.
As some politicians know, the big dough these days can be in non-profits. Compared to corporate sector, especially financials, the non-profits, once set up, are subject to virtually no scrutiny, either by CRA or other regulators, compared to private sector. It's kind of old-school to use corporations and their dividends, etc to line one's pockets, the smart ones now use non-profits, foundations, etc. I'm for much greater oversight of this sector of our economy, trouble is the regulators, etc are usually part of the same (public) sector.
10:10 am
April 6, 2013
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That's all the dividend tax credits are: Credit for the income taxes that have already been paid by the corporation on the income the dividends are out of.
The gross-up of dividends resurrects the before-tax amount of the income. Reporting the grossed-up amount effectively adds the before-tax amount of the income to one's personal taxable income.
Claiming the dividend tax credits claims the corporate taxes that were already paid.
One then ends up paying or receiving the difference between (1) one's personal taxes on the before-tax amount of the income and (2) the taxes the corporation has already paid on that same income.
11:08 am
January 28, 2015
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Looks like they increased their dividend 12 cents a share on the backs of savers paying almost 1% below BOC rate .... Goodbye
12:13 pm
October 27, 2013
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WADR, the owners (shareholders) of Equitable Group are not a charity. They are pension funds, retail shareholders like you and I*, etc. The objective is balance business growth and profitability and the shareholders pay management to make those decisions on their behalf.
If/when they need to boost rates to attract more funds, they will do so. My brief take from their latest quarterly financials is they have had success in recent quarters gaining depositors and funds, maybe too much.
* Have not been a shareholder though, at least not yet. Need to study their financials and objectives more to see if there is more room to run.
3:00 pm
October 27, 2013
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By the way, Note 19 on Page 62 of EQ's 2Q2022 MD&A (to June 30) shows how well balanced EQ's term matching is between deposits and loans outstanding. It is quite insightful for those wanting to understand more about their risk management processes.
EQ will thus tinker with interest rates on deposits and corresponding rates on the loans they make accordingly. No reason to rag on EQ or any FI for that matter for doing what they need to do to manage their business. Without it, we'd have less competitors to choose from.
3:34 pm
February 7, 2019
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AltaRed said
By the way, Note 19 on Page 62 of EQ's 2Q2022 MD&A (to June 30) shows how well balanced EQ's term matching is between deposits and loans outstanding. It is quite insightful for those wanting to understand more about their risk management processes.EQ will thus tinker with interest rates on deposits and corresponding rates on the loans they make accordingly. No reason to rag on EQ or any FI for that matter for doing what they need to do to manage their business. Without it, we'd have less competitors to choose from.
Kinda like running a business, not a charity ...
| CGO |
6:12 pm
April 18, 2022
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Majority of non-profits are tax dodges. Really incredible how there can be hundreds of thousands of them. The list is unbelievable. Why do they allow it
6:48 pm
November 18, 2017
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AllenB: Of course non-profits are tax dodges. That's what they are intended to be! Tax relief is a policy lever to encourage behaviors the governments consider worthwhile.
RetirEd
RetirEd
6:48 pm
April 18, 2022
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2:56 pm
August 12, 2022
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What happened to EQ ? They were one of the better FI's, now their rates are bottom tier. Transferred out my funds and getting 1.35% more. I've learned to play the game. When rates change significantly from one FI to the next, I won't hesitate to move my funds. It can make a big difference in income when rates are 3% at one FI vs 1.65% at EQ, especially on a significant deposit.
4:55 am
October 21, 2018
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I think they are encouraging you to lock in for a year. The 1 year GIC is 4.40% which is near the top of the list.
5:04 am
March 30, 2017
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pwm said
I think they are encouraging you to lock in for a year. The 1 year GIC is 4.40% which is near the top of the list.
Indeed. With too much uncertainty re housing mortgage, funding needs if recession, FIs only comfort zone to lock in funding cost is the 1-2yr term at the moment. They dont want to lock in much, but cant win it all.
12:46 pm
August 12, 2022
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In this time of continuously rising rates, I don't think locking funds in a GIC is a wise move. Another .5 or .75 hike is coming in Sept. with more to follow, just listen to Jay Powell of the FED. I'm old enough to recall when inflation skyrocketed in 1981. Once it's out of the bottle it's really hard to contain. That means higher rates for longer than people (and the market) anticipate.
At my age, I also like the liquidity a HISA provides. That said, EQ is not competitive with their HISA. Even the big bank brokerage HISA's are now at 2.25%. Motive and Oaken are both at 3%. Why EQ is not even in the neighbourhood I guess means they don't need the deposits.
9:22 am
April 6, 2013
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I suspect that the EQ Bank Savings Plus account has attracted more savings deposits than Equitable Bank needs through that channel. Increasing the account's rate from 1.65% to 3% would make things worse.
At the same time, Equitable Bank is paying 2.3% on their investment dealer ISA (EQB1000). 2.3% is likely the rate that attracts the right amount of savings deposits through that channel.
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