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Estate Planning: The Final Pillar in Your Financial Plan

June-20-2022

Sometimes it’s hard to imagine that it’s June already and we can look forward to another glorious Ontario summer. Let me start by wishing you my personal summer greetings as we begin to come out from under the COVID “winter” of the last 2 ½ years.

Enjoy the barbecue, beach, or campground of your choosing as we get ready to soak up the rays and bask in our glorious summer sunsets.

It can be difficult to believe that we will eventually be enjoying the summer sun as we bundle up to go out and scrape ice of the windshield in January, but the arrival of summer is inevitable. Just like the arrival of snow in January (oops, sorry about that).

While the arrival of each succeeding season is inevitable, so too, as the saying goes are “death and taxes”. And one of the major purposes of a good financial plan is preparing those eventualities.


Preparing for the inevitable

We’re all used to the annual ritual of preparing for tax season, each and every spring. After that - summer. But many Canadians don’t do much about planning for the other eventuality – death. While you might not be there for it, you still don’t want to make things more difficult for your loved ones after you’re gone. Or for yourself as you “get on in years”.

Building the elements of an effective financial plan includes estate planning – it has to…


What does your financial plan need?

An effective financial plan includes many different elements:

  • Having adequate insurance to prepare for the unexpected – you need to make sure you have enough insurance for your car, your house, your health, your senior years, and your life.
  • Building up an adequate rainy-day fund to help you get through any kind of financial rough patch – whether that’s three months, six months, an entire year.
  • Setting aside the money you need for the retirement you want. This will include workplace pensions, registered retirement savings plans (RRSP), tax free savings accounts (TFSA), and simple unregistered savings.
  • A fully thought-out estate plan that prepares your family and your estate for your eventual passing.

Although it’s only one element of an effective financial plan, it is generally the one that people pay the least attention – until it’s too late. And because of that I want to spend some time briefly talking about the main elements of a well-structured estate plan.


What does your estate plan need?

Like so many elements of an effective financial plan, most of us know what an estate plan should include:

  • A will – Set out what you want to see happen with your worldly possessions - not just your money
  • An executor – Who do you want to have handle your estate and make your last will and testament a reality
  • Bequests – You should also make arrangements, while you still can, for any charitable gifts you want to leave behind
  • Long term care insurance – Put aside the resources you need to cover your physical needs before you aren’t able to actually able to do it when you need it most
  • A communications plan – Don’t let your loved ones find out what your plans are while they hear your lawyer read out your will

Your Financial Plan needs a full team

As your financial advisor my goal is to provide you with my expertise in investment planning. And I can work with you to decide on your insurance and put the products in place to cover your insurance needs.

But you need to include other professionals on your team, to give you the expert advice you need on every aspect of your financial plan.

You need the advice of a lawyer as you plan your will, choose your executor, and decide on your bequests and final wishes. Although you might think that’s obvious, I need to say it. Find a lawyer and prepare your will as soon as you can. Go ahead and do it. Now!

And while you’re at it, find an accountant that can help you plan for your tax liabilities and sort out options regarding RRSPs and TFSAs, etc.

Once you have all of that in place, I can work with them to make sure the plan you have is right for you. Together we can make it happen. I do it for my clients all the time.

So, your job is to find a lawyer to prepare your will, find an accountant to review your tax needs, and come back to me to plan out investments.

And if you have done all of that already, thank you. I want to thank you. Your family want thanks you. And once you’re done you will definitely want to thank yourself.

As usual, if you have any questions, email me at [email protected] or call me at (519) 279-0186. I look forward to hearing from you soon.

And have a great summer.

Well, They Raised Interest Rates. What Happens Now?

May-12-2022

Last month I wrote about the state of the housing market in Canada. Housing prices in Canada in the last couple of years had been increasing dramatically – some would argue dangerously. Along with the overheated housing market, we are now witnessing inflation rates that haven’t been seen in Canada in close to 50 years.

So, to deal with these twin crises Tiff Macklem, the Governor of the Bank of Canada, announced an increase in the prime rate of 50 basis points on April 13. This raises the Canadian prime rate to 1% and is the single largest rate hike in over twenty years.


The inflation rate needs to come down

Macklem explained that the Bank of Canada had determined that “Inflation is too high. We need higher interest rates.” He blames much of the current inflationary environment on global events – specifically the war in Ukraine. This has driven up the price of commodities like oil.


The Bank of Canada want to manage expectations

According to the governor, one of the other factors affecting the bank’s decision was their need to make sure Canadians don’t begin to expect these inflationary conditions to continue. Once our expectations become fixed, breaking the inflationary cycle will become increasingly difficult to break.

We’ll have to see just how long the war in Ukraine continues and what its long-term impact on the world economy will be. Clearly Macklem is hoping these pressures ease soon and allow the Canadian economy to return to the Bank’s expected inflationary rate of about 2%. Current rates in the range of 6% are simply unstainable.

It seems interesting to me that things like the price of housing in Canada (which I wrote about last month) and the ongoing challenges to the global supply chain caused by COVID-19 got very little mention in the clips of the Governor’s announcement that I watched.

How much of the inflation we are currently seeing would still be hitting the Canadian economy if Putin had never decided to head for Kyiv? Would there have been any announcement or rate hike if we had never got to know Volodymyr Zelenskyy?


What is the impact of inflation on your pocketbook?

You and I know that inflation has hit Canadians hard in the spring of 2022. You just have to go fill the tank, wondering if you can afford to get an EV after all, or look around the produce department deciding between romaine and iceberg lettuce.

These rate hikes have already had a cascading effect on the price of borrowing. Mortgage rates have increased, and the housing market has begun to cool off. AS always, we will have to watch carefully to see how the economy continues.

If you think it’s time for a re-evaluation of your investment products or your overall economic expectations, let me know. As always, universal conditions affect each of us differently. You can only decide how to decide how to proceed by examining your own circumstances. Go ahead, let me help.

Can We Afford the Growing Cost of Housing?​

April-13-2022

It’s hard to ignore the skyrocketing cost of property in Canada. The Canadian Real Estate Association says that the average price of a home in Canada has increased by 52% over the last two years.

And things are no different anywhere in Ontario. Housing prices in March across Ontario rose by 18% and by 11.2% across the country. In fast the average price of a home in Canada has increased by 52% over the last two years.

Right in my hometown, the Housing Price Index (HPI) in Kitchener Waterloo increased by 36.8% between February 2021 and February 2022.

Have things topped out? Maybe they have. Last Wednesday, the day before the recent federal budget, there was a story in the The Record describing how housing prices had dropped over ten percent in March.


What Should Someone Hoping to Enter the Real Estate Market Think?

Maybe you own a house and speculate about how much it’s worth, compared to one or two years ago. Or even a few months ago.

Maybe you’re hoping to buy a home or know someone who is hoping to by a home. Are current trends pricing you out of the market? Is there anyway you can afford the million dollars that the average house in Kitchener Waterloo is now valued at?

It’s almost impossible to keep up with the escalating estate prices in the region. At this point it’s impossible to predict how prices are going to go over the near future.

And it’s not like you can hunker down in your rental apartment and wait it out. Average rents in KW are also up – around 15% in the last year as well.

So where do we go from here? Well, that’s exactly what people were wondering as we watched federal Finance Minister Chrystia Freeland present the 2022 budget on Thursday.


Efforts to Offer Housing Affordability in the Federal Budget

Provincial and municipal governments across the country (including KW) are lauding the efforts described in the 2022 federal budget to address housing affordability. The measures are being described as positive steps forward but are accompanied by a wish to see how details unfold.

The federal government has announced additional measures to address real estate speculators and foreign buyers. But this is considered a minor issue in the overall problem in the Canadian real estate market.


More Homes Needed

Most agree that the real problem is the lack of actual housing stock across the country. To address this the federal government has announced a $4 billion housing accelerator fund to encourage the construction of an additional 100,000 houses across the country over the next five years. On top of that they are putting $1.5 billion into their social housing efforts and $3.9 billion to repair existing affordable housing units.


FHSA? What’s That?

Another measure getting lots attention is the new Tax-Free First Home Savings Account (FHSA). First-time buyers can save up to $8,000 a year, tax-free to a maximum of $40,000 toward the purchase of their first home. While some are happy to see the new tool in place, other some are criticizing it as terribly inadequate when a 20% down payment on a million-dollar house (the average cost of a home in KW) is five time that, at $200,000. Others suggest it will simply drive up the price of houses as more money becomes available to home purchasers.


Mortgage Rates: Something We’re All Familiar With

By the time you read this the Bank of Canada may have already announced a rate hike. Most analysts are predicting a rise of 50 basis points. Others are suggesting they’ll stay put. We’ll have to see.

As you well know, Canadian’s are witnessing high levels of inflation. A trip to grocery store will make that clear.

Interest rates are a major tool in any efforts to cool inflation. And interest rates play an obvious role in the mortgages that new home buyers can afford to take out when looking for a home. So, higher interest rates generally lead to lower size mortgages. But then you already knew that.


What Does the Future Hold?

As we prepare for a post COVID world (or not) we are also trying to understand a world where working-from-home is a permanent option. This has had a profound affect on “cottage country” properties and on communities outside the immediate GTA.

So much has changed in the last two years. It’s impossible to know what impact these changes are going to have in the long run. All we can do is wait it out and see if the combination of the recent federal budget and rising interest rates have an impact on the housing market. 

Stay the Course – Build for the Future​

March-04-2022

Even though we count on February to be our shortest month it hasn’t felt like that this year. It’s hard to believe that the Truck Convoy arrived in Ottawa at the very end of January. Then the truckers and their supporters, bouncy castles and portable hot tubs planted themselves on Wellington Street and took over our nation’s capital. The story then filled news broadcasts here in Canada and around the world for the next three weeks.

And just as the truckers were removed from Parliament Hill, we were confronted with Putin’s attack on the Ukraine. And as I get ready to post this story it is difficult to know just how this story is going to unfold.

Both stories have real life consequences. They have meaning in our lives and the lives of everyone around us. But it’s important to get past the chaos these stories have generated.

Things like this happen - there is always something else around the corner. But when we are in the midst of them, we cannot properly understand their long-term consequences - which could be very different from their immediate impact.

You need to keep in mind that your retirement and investment portfolios should be treated as long term entities with a shelf life that extends over decades, not weeks.


Events in the news affect the markets – In the short term

You will see lots of stories about market fluctuations caused by events like this. It’s the kind of reactions that financial advisors warn their clients about all the time.

Back in January I wrote about the potential impact the Omicron variance could have on the market. And now, as of the first of March, we are seeing Ontario lift vaccine passports.

I don’t mean that events like this and many others are meaningless. Far from it.

But we need to recognize that a particular event’s long-term impact is affected by other events – events that never stop happening.

Yes, Omicron set back many efforts to reopen issues around the supply chain. Canadians are seeing inflationary pressures we haven’t seen since the 1970’s. The Truck Convoy reinforced that point, even though the vast majority of Canadian truckers chose to become vaccinated and were able cross the border. Whether they had anything to haul, or there were enough truckers to do the actual hauling is another issue.


It’s always something – Just stay the course

As a matter of fact, in recent months we all were fixated on a ship blocking the Suez Canal (You remember that don’t you). And now there’s another ship with millions of dollars worth of cars that keeps on burning and no one can put out the fire. These too, shall pass.

And the market is appropriately jittery about event in the Ukraine and its impact on Europe. But we don’t really know how that will roll out, do we?


The possible impact of events in Ukraine on ESG

In fact, I have seen stories about the need for Western Europe to accelerate their efforts to cut back on Russian natural gas. This might become a triggering event in our effort to cut back on fossil fuels and beef up renewables. But that’s just speculation on my part – for sure...


But what about inflation?

The important point to remember is that we have to look at what has a long-term economic impact and what doesn’t. Yes, we are seeing inflationary pressures that affect what we pay in the grocery store.

And, the Bank of Canada may have to increase the prime rate, triggering a rise in mortgage rates and the cost of capital.

But many analysts (some even smarter than me) think that these pressures may be short lived – caused larger by supply chain issues caused by the COVID shutdown and alleviated by its demise.


Build for the future you want to see

Here is where current events should affect your investment decisions.

Let me help you to choose investment vehicles that encourage positive economic and environmental change. And let me show you how you can use regular contributions to your investment portfolio (often called dollar cost averaging) to iron out those wrinkles that current events trigger.

Remember, we’re in this for the long haul.

Net Zero: Remaining true to the cause

Feb-02-2022

On July 29 of 2021, the Canadian Net-Zero Emissions Accountability Act became law. With the passage of that law Canada formally committed itself to reaching Net Zero by 2050. This was part of a long ongoing process – one that I have been following closely for years.


The term Net Zero was first introduced into public conversation in 2009. By 2015, net zero was included in article 4.1 of the Paris Agreement commits the members of the United Nations:

to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

https://unfccc.int/sites/default/files/english_paris_agreement.pdf


According to NetZero.org:

Net zero refers to a state in which the greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere.

The term net zero is important because – for CO2 at least – this is the state at which global warming stops.


We are not alone

Net zero is essentially our global commitment to combat climate change. You know – the environmental damage we are doing to our planet that is showing up as record setting heat waves, floods, and snowstorms – all in a single year.

And “(a)s of 11 November 2021… eight countries self-declared (their commitment to achieving) net zero... 16.. have a pledge in law, 59 in a policy document, 21 another kind of declaration or pledge, and 72 countries are discussing or proposing a pledge.” House of Commons Library, UK Parliament, Global net zero commitments


It’s essential to our survival – you know that. Doesn’t everybody?

Although challenging, we all understood that our survival as a planet is dependent on achieving this ambitious goal – as some would say, in our lifetime…

But this continues to be a debating point in Canadian politics event today. One of the biggest challenges in achieving Net Zero is reducing and eliminating our dependence on fossil fuels.

Fast forward six months, another wave of COVID, and one federal election to hear Erin O’Toole, federal Conservative leader and Leader of the Opposition, claim that Steven Guilbeault, the Minster of the Environment, wants to get rid of fossil fuels by the end of 2023. “(H)e wants to end fossil fuel usage in 18 months. He just said that in an interview! Someone so disconnected from reality that he’s making policy that will hurt our country.” O’Toole goes on to accuse Guilbeault of being “focused on implementing a radical agenda”

O’Toole has been lambasted for this as a “flat-out lie”.

In an interview with the Narwhal the minister of the Environment spoke of eliminating the use of fossil fuels by 2023. What he meant was that the Canadian government would be eliminating subsidies for fossil fuels by that time. This slip was quickly corrected.

O’Toole knew this. We all knew.


Net Zero is the law – Eliminating fossil fuel subsidies is the first step

Passage of the Canadian Net-Zero Emissions Accountability Act is the first step. The removal of fossil fuel subsidies is the next step. While these actions offer risks they also offer opportunities.

That is what using an ESG mindset to review your investment choices is both essential and profitable.

You know that I know that.

So, let’s get down to doing the work of saving our planet and building a better world together.

Are you with me? I hope so. 

2022-RRSP Deadline - March 1, 2022

Jan-28-2022

I would like to take this opportunity to wish you a prosperous, successful, and healthy new year.

You can't talk about the beginning of the year, without talking about RRSPs! Here is a reminder of the rules governing RRSPs:

  • The contribution deadline is March 1, 2022.
  • Your allowable RRSP contribution for the current year is 18% of your earned income from the previous year up to a maximum RRSP contribution limit of $27,830 for 2021. The maximum RRSP contribution limit for 2022 is $29,210.

Looking for reasons to contribute to your RRSP?  Here are some ideas to consider:

1) Save on Taxes.

  • You will get a refund on any taxes payable on the amount you contribute to your RRSP. This refund is equal to your marginal tax rate.

2) Increase Your CCB

  • Contributing to an RRSP  lowers your taxable or net income. A lower net income can make you eligible for more income-tested government (provincial and federal) benefits, such as the Canada Child Benefits (CCB) and GST/HST credit.
  • CCB benefits are updated every July. With a lower taxable income in 2021, your recalculated CCB payments for the July 2022 to June 2023 period could be significantly increased, depending on where your income falls on the sliding benefits scale.

3) Save For Retirement

  • The idea behind the creation of the RRSP is to encourage Canadians to save towards their retirement. 
  • You get to invest in a tax-deferred account, keeping and re-investing gains and staying tax-free until you start withdrawing funds in retirement.  Once you start withdrawing, the government  recoups some of  those taxes back.

If you want to contribute to your RRSP, please contact me as soon as possible.

If you have any questions, or if I can be of further assistance, please do not hesitate to contact me.

Floods, COP26, and Throne Speeches Make for a Busy Month

Jan-05-2022

Devastating floods hit both Canadian coasts in November. If you’re like me you were overwhelmed by images and stories coming out of British Columbia, and Atlantic Canada.

And then Omicron showed up and took our attention away from anything everything else.

Isn’t that what happens so often with climate change and environmental issues. We know they’re important but something else more pressing show up to distract us.


Environmental wake up call – don’t hit snooze

If we ever needed a home-grown reminder of the importance of climate action, this is it. We are being reminded, right here in our own backyard, that our planet earth can’t take much more. Planetary action is needed, and it’s needed now.

However imperfect, the agreement announced at the 26th UN Climate Change Conference (COP26) in Glasgow in mid November provided a glimmer of hope. And then the federal Liberal government introduced its throne speech. Highlights from that speech included federal action on the environment.


COP26 – A real commitment to change?

On Saturday, November 13, world leaders announced the adoption of the Glasgow Climate Pact. As CNN pointed out: “Some are calling it a success, others a failure, and many say it’ somewhere in between.”

I can’t help but think about the coffee sitting on my desk. Is it half full or half empty? All I know is it’s time to brew a fresh pot.

However corny the analogy, you and I know that action on the environment is essential to our planet – the only one we have. Despite the best efforts of Richard Branson, Jeff Bezos, and Elon Musk to distract us with trips into space, we have nowhere else to go.


ESG - Climate action is an opportunity as well a necessity

While action on climate change offers real challenges, it also offers real opportunities. This is the essence of an ESG investment strategy.

Our collective commitment to things like the development of a network for electric vehicles and conversion from fossil fuels to renewable energy sources are two examples. I don’t know about you, but I look forward to a day when we don’t have to dread looking at the price of gas posted at the station on the corner. And it might even be because there is no gas station on the corner.

One of the biggest hurdles to a universal commitment to COP26 was the language used to describe our use of fossil fuels. All the participating countries had to agree before the agreement could be announced. A decision by India to agree, after the agreement was amended so “that coal should be phased ‘down,’ not phased ‘out,’” serves to reinforce the fundamental notion we are all in this together.


Global action is essential

Only global action will solve this global crisis. We can only succeed when developed and developing nations work together.

COVID is another example of the global impact of local events. All of us were hit by the arrival of Omicron. First identified in South Africa, it spread within weeks all over the world. So much of this feels like a repeat of the last two years. However tired we might feel, we still need to take precautions.

And the same goes for action on the environment, doesn’t it.

This quote from a column in the Washington Post neatly sums up what many are saying about the global impact of and response to COVID vaccinations:

Perhaps no other moment in the pandemic has lent more truth to the often ignored mantra that “no one is safe until we are all safe.” Variants, experts say, are one deadly side effect of vaccine inequality — and a global system that has allowed wealthy nations, and large developing ones, to corral jabs for themselves, leaving poorer and less powerful countries to subsist on vaccine crumbs.


Global action needs to be taken. But then most of us have always known that. COPS26 just reinforced it.


Climate action right here in Canada? We’re talking about it

The discussion of words versus action is never ending. Especially when it come to acting on the environment.

The federal throne speech presented in November highlights many of the things we want to hear about the environment. The problem lies with the fact that words like these have been said before. Who knows how many times the environment has been a major focus of the throne speech?

Enough talk. It’s time for action.


Actions being discussed

A column on CBC lays things out from one perspective - Whatever else happens, this Parliament looks set to be (mostly) about climate change.

Greenpeace has a different perspective: “In most areas, the Liberals made some indications of progress but simply lacked enough detail for analysts to determine whether their plans truly made the grade.”

Federal initiatives include:

  • Removal of financial support for fossil fuels by 2023
  • Implementation of Clean Electricity Standard
  • The development of a zero-emission vehicle mandate
  • Creation of new methane regulations
  • New climate-related financial disclosure rules for federally regulated institutions

Let’ hope that these announcements bear fruit. Change is essential.

These governmental efforts, along with efforts in the private sector, offer us real opportunity to encourage and participate in this level of massive change. If you’re interested in looking for opportunities to benefit the world and yourself, then reach out. Let’s start a deeper conversation and work together to make a better world.  

Omicron. Here We Go Again? Maybe Yes, Maybe No

Nov-30-2021

I was preparing my thoughts on the devastating weather hitting British Columbia and the Atlantic provinces, when I started seeing the stories about a newly discovered variant of the COVID, now called Omicron.

It seems like we are not out from under the grip of COVID quite yet, even here in heavily vaccinated Canada. While we might be telling each other how tired we are of the virus, clearly it isn’t tired of us.


What is Omicron?

First detected in Gauteng, South Africa, Omicron is being discovered in new locations all the time. I can’t possibly keep up. The list of countries with detected cases is growing by the hour. And as of the 28th, it had even been detected here I Ontario.

The World Health Organization met last week to discuss the threat, give it a name, and begin the process of trying to bring it under control. While modern science may be push address new threats like this quickly, the availability of world travel allows for the virus to spread even faster than that.


The more things change the more they stay the same

Reactions by health and travel authorities are following a now familiar pattern. Flight cancellations and travel restrictions for countries where Omicron either originated or quickly spread to are being put in place. And where travellers have already arrived, they are being tested and placed into quarantine to help limit the spread of this particular mutation.

The lessons we learned from previous waves may help us limit its spread in the days and weeks to come.

But our best defensive options haven’t changed. Get vaccinated and practice social distancing wherever possible. In the end we’re all in this together.

And as many commentators have pointed out “no one is safe until we are all safe”. At last report, only about half of South Africans have been fully vaccinated. This compares to over ¾ in Canada and 60% in the United States.


It’s more than just a health crisis

The Dow Jones on Friday November 26 took a pounding, as investors considered the prospect of another crippling round of business and supply chain disruptions. I hear Command Central at the North Pole has returned to Code Red and placed Rudolph on emergency standby.

Kidding aside, it’s important to stay calm. Although we know that Omicron is out there, we don’t know how it is going to affect people. But health officials in South Africa seem to be suggesting that Omicron’s symptoms are relatively minor.

Meanwhile the world economy is trying to get back to normal, as production levels ramp up and supply chains return to normal.

Most of the economic problems triggered by COVID are short term or cyclical. Your investment portfolio is long term. You need to treat it that way.

Yes, the markets took a heavy hit on Friday, November 27, as investors began to contemplate additional significant business disruptions. The fact that there was a short trading day on Thursday because of American Thanksgiving has been blamed for some of the disruption, but the instability of events as the Omicron story unfolds is the central cause of the disruption.

And it’s impossible to predict how markets will react in the next couple of weeks, as this story continues to unfold.

When we look at recent history, we know the stock market plummeted in the immediate aftermath of the first COVID wave.

And it’s easy to see a repeat of those market trends this time around as well.

But we need to remember that much of those losses in the spring and summer of 2020 have already returned to normal pre-COVID ranges already.

This might be the most important thing to take away from Friday’s market difficulties. The stock exchange can act dramatically in reaction to very specific world or business events. But most of the time those dramatic reactions are quicky drawn upon only in the term of their immediate impact.

TFSA limit for 2022 released

Nov-18-2021

The TFSA contribution limit for 2022 has been officially released. That limit is $6,000, matching the amount set from 2019 to 2021.

With this TFSA dollar limit announcement, the total contribution room available in 2022 for someone who has never contributed and has been eligible for the TFSA since its introduction in 2009 is $81,500.

If you would like for information, or need to make a contribution in the new year please feel contact me.

• call me at (519) 279-0186 or 1-888-868-6689

• send me an email at [email protected]

• or find a time that works for both of us on my calendar 

Shareholder Engagement – What’s That?

Nov-03-2021

Over the last few months, I have shared my thoughts with you about the three basic pillars of ESG. It’s easy to see how reviewing and monitoring environmental, social and governance issues can help you make investment choices you are comfortable with. And you know that companies that act responsibly are the ones who have a better chance of succeeding and growing in the long run.

But when you look at responsible investing that way you limit your expectations. It is a passive way of using your investment capital to make a better world.


Engage to make change

Avoiding stocks that don’t meet your investment doesn’t bring about change. It may make you feel more comfortable about the way your money is being used, but other investors will just buy the stocks you have sold or decided no to buy at all.

That is a criticism often levelled at the responsible investment strategy. You aren’t making a difference unless you have skin in the game.

This is where shareholder engagement comes into play. When socially responsible investors pool their resources, they can push for change. IA Clarington Investments regularly publishes the Dialogue to Action: Shareholder engagement report. This report lists the actions IA Clarington has taken as an active stakeholder.


Please note: If you want a copy of the latest copy of Dialogue to Action: Shareholder engagement report, I can send you a copy. Email me at [email protected] and I’ll sent it out right away.


You may already be involved

Through their investment in these companies IA Clarington has a place at the table. They can actively work to make a difference. Many of the fund companies involved in responsible investing do this. And when they work together, they’re even more powerful.

If you are one of my clients, you are probably already part of the IA Clarington team.

Dialogue to Action lists how, in 2020 and the first quarter of 2021, IA Clarington engaged in shareholder engagement. They:

  • Engaged with 42 companies
  • Filed 9 shareholder resolutions
  • Advanced 10 UN Sustainable Investment Goals (SDGs)
  • Participated in 13 investor statements of support, alliance, or initiative

Together we CAN make a difference

As responsible investors we believe that companies will enjoy a healthier bottom line when they act responsibly and respect global environmental, social and governance standards. By participating in shareholder engagement, we actively push for positive change instead of sitting on the sidelines.

Shareholder engagement is a powerful social and economic tool. Together we can promote positive change with our investment dollars.

You may think you can only make change with your charitable contributions, your volunteer efforts, even what and where you buy food or household goods. All those things can help to make a better world. But your investment dollars can help too.

Let’s work together to use our investment capital to make a better world. And if you have friends and family who feel the same way you do, they tell them about the work we’re doing. Let them know they can make a positive difference too. Tell them to find a financial advisor involved in responsible investing (maybe a member of the Responsible Investment Association). Or get them to call or email me at 1-888-868-6689 or [email protected]a.

As Tommy Douglas, crowned Greatest Canadian back in 2004, was fond of saying “Courage, my friends; ‘tis not too late to build a better world.”

The G in ESG  

Sept-23-2021

Right here at home

As I began to think about how I could talk about governance in ESG, I was presented with a perfect local example. Although the biggest national take-away from the recently finished Canadian election was how little anything changed, we saw one of the few examples of significant change right next door in Kitchener Centre.

As you probably already know, a series of unexpected circumstances allowed the Green Party of Canada to elect their very first Member of Parliament here in Ontario. Mike Morrice had finished second in the 2019 campaign and chose to run again for the Green Party. Then, late in the campaign Raj Saini, the Liberal incumbent, decided to end his campaign amid allegations of inappropriate conduct towards female staffers.

Because it happened so late, the Liberals could not remove Saini’s name from the ballot. This gave Morris the opportunity to take advantage of his previously strong showing in the riding to become the first ever Green Party MP from Ontario.


Green Party local success contrasts with national collapse

Across the rest of Canada, the Green Party saw a collapse in their support. This has been blamed on the controversy that has plagued their federal leader, Annamie Paul.

Elected leader of the party less than a year ago, Ms. Paul, also ran three times for the Green Party than two years as a local candidate in Toronto Centre.

But things took a strange twist for Ms. Paul and the Green Party in June. At that point, Jenica Atwin, a Green Party MP from News Brunswick crossed the floor to sit with the Liberals. She referred to differences with Ms. Paul over the party’s position on the Israeli-Palestinian conflict. The party also announced that they were conducting an internal review of Ms. Paul’s leadership. That was suspended when the election was called. But that point the damage had been done.


Governance becomes consequential when it becomes public

In both these situations, the damage was done when problems became public.

If you are concerned about the presentation of environmental issues in the Canadian House of Commons, then the difficulties in the Green Party probably bother you. The fact that the root of the issue lies with apparent differences of opinion about in the Middle East just makes the story harder to figure out.

On the other hand, the problem for the Liberals in Kitchener Centre stems from the growing intolerance for sexual harassment in the workplace. Both Raj Saini and former Governor of the State of New York Andrew Cuomo can attest to that.

In both situations, allegations had been reviewed internally and dismissed. But when the stories went public the increased scrutiny forced each of these elected officials to resign. And their stories are not unique.

The issues addressed in these stories cover the entire ESG spectrum. And they serve as a stark reminder of the impact that these issues can have when they become public. Unfortunately, we cannot always foresee these occurrences.

And that can be one of the most difficult aspects of investing responsibly. But there are tools available to help make our decisions easier. Call or write me to start looking at using some of those tools in your own investment decisions.

The S in ESG

Aug-24-2021

Shall we continue?

Last month I shared a local example of an environmental concern right here in Cam-bridge to highlight the impact, both local and long term, of environmental mismanage-ment. This month I want to spend some looking at a local example of the social aspect of ESG.


Residential Schools in Canada: A Painful Legacy for All Canadians

This summer the legacy of residential schools and Canada’s treatment of our First Na-tions citizens regained public attention, with the identification of approximately 215 bodies on the grounds of the former Kamloops Indian Residential School in British Co-lumbia. Since then, numerous other sites all across Canada have been scanned with equally heart-rending results.

As a result, many Canadians sought to commemorate Canada Day differently this year with a recognition of this legacy and the ongoing difficulties our fellow Canadians from a First Nations heritage continue to have.


Woodland Cultural Centre - Bearing Wit-ness to Our Residential School Hereitage

Efforts at acknowledgement and reconciliation can be seen at the Woodland Cultural Centre in Brantford, located on the grounds of the former Mohawk Institute Indian Res-idential School.

One of the major projects of the Woodland Cultural Centre is an effort to renovate the Mohawk Institute to serve as a reminder of of our legacy. And with that knowledge, seek to atone for and correct our mistakes.

If this is something you would like to participate in join the Save the Evidence Cam-paign at Woodland.


Five Oaks - A Local Effort at Reconciliation

On another note, Five Oaks is a retreat centre here in South Central Ontario I have had the privilege of being involved with over the years. Five Oaks, a United Church retreat centre, states that their goal is: “To be a sacred place where people of all faiths as well as spiritual seekers can gather in community to live, work, learn, pray, play, heal, and act for justice.”

Although Five Oaks is a United Church retreat centre, it lists Six Nations of the Grand River and the local Muslim community as Vision Partners. I see this as a example of the power of shared experience and community right here in South Central Ontario.

Right now, one of the most prominent ongoing events at the center is titled Honor-ing Missing Students of IRSS through Prayer and Dialogue. It seeks to address the need for dialogue that we need to go through if we are ever going to properly addressing the disturbing legacy of residential schools in Canada.

The program runs on the second Sunday of every month from 2:00-4:00. I encour-age you to look into it.


Residential Schools - A Legacy for All Ca-nadians to Come to Terms With

The arrival of Europeans on the territory we now call Canada has painful elements for our First Nations neighbours. And that legacy has a local as well as a national presence.

In order for us to cope and move forward as a nation we need to address and atone for these historical legacies. Things like the Save the Evidence Campaign and places like Five Oaks are local examples of the opportunities we have right here in South Central Ontario.

The E in ESG – The What in Where?

July-27-2021

Maybe you were sipping your morning coffee and checking the news or talking to a colleague on a Zoom call the first time you heard or saw it. Now you’re wondering “Exactly what is E… S… G...”


Let’s start by saying the ESG acronym has been getting a lot attention in investment circles and the media in the last few years.


ESG, which stands for Environmental, Social and Governance, can be traced back to the founding of the United Nation’s Principles for Responsible Investment (PRI) in 2006. According to Investopedia, as of January 2020 there are 2300 participating financial institutions committed to PRI with Assets Under Management of over $80 trillion US. Nothing to sneeze at.


E is for Environmental

I am going to take the time in the next few blog posts over the next couple of months to describe ESG and explain its role in Socially Responsible Investing (SRI) and in your portfolio.


And it only makes sense to start at the beginning – Environmental.


Generally, environmental concerns can be the most easily identified issue in our portfolio. It’s relatively easy to ask, “Do I have fossil fuel extraction companies in my plan?”


We Can Make a Difference

But that isn’t the only way we can be environmentally supportive in our investment decisions. In a stunning and widely reported move:


“In May 2017, 62% of ExxonMobile shareholders went against management’s recommendations by voting to require the world’s largest oil and gas company to report on the impacts of climate change to its business (an increase of 38% over the previous year). This response followed the Paris Climate agreement.”

This is an excellent example of shareholder engagement, an SRI concept I will discuss is greater detail in the months to come.


And it’s a prime example of how there are real opportunities for investors to have an impact by getting involved instead of just “getting out”.


Let’s Bring It All Back Home

If you are a long-time resident of Kitchener, you may remember when the city discovered a coal tar deposit on the site of an old manufactured-gas plant at Joseph and Gaukel Streets. This plant used coal to generate heat and electricity for residents between 1882 and 1958, when they started using natural gas piped in from Alberta. The residue was just buried on site for future generations to deal with. Sound familiar?


Even though the plant had already been closed for 50 years by the time clean up started, it was still an environmental disaster that had to be addressed.


Clean up costs ended up costing $19 million in 2006-2007. The same year as the founding of PRI, hmm.


Fixing Things Before They get Any Worse

This is just one example of the type of long term financial and environmental costs of poor environmental stewardship that are left for future generations to deal with. Water quality issues in Flint, Michigan and in First Nations communities across Canada are a couple of other high-profile examples.


You and I know we have to start properly addressing the types of environmental damage we are inflicting on our planet – the only one we have. One major way to do that is by reviewing and acting on the environmental aspects of our investments and our financial lives.


In my practice I do just that. If you want to join me then go ahead and

• call me at (519) 279-0186 or 1-888-868-6689

• send me an email at [email protected]

• or find a time that works for both of us on my calendar 

Socially Responsible Investing is Good for your Portfolio as well as your Conscience

July-08-2021

I have been providing socially responsible financial advice to private investors for 6 years now. One of the things I hear most often is along the lines of “Socially responsible investing is all well and good but I need to make sure I maximize my earnings. Now.”

This response is frustrating because I know that one of the best ways to maximize your investments is by investing with socially responsible principles in mind.

In fact, a 2015 study conducted by the Carleton Centre for Community Innovation stated that:

  • The traditional investment approach argues that SRI limits the investment universe and results in a decrease in value. But this view is not backed up by empirical evidence… most studies show that SRI funds deliver comparable and, in some cases, superior returns to those of traditional funds.

SRI works as a solid investment strategy. Period.

Making investment decisions based on SRI is not about “or” – I can invest ethically or I can make money. It is about “and”. I can invest money ethically and I can make money on those investments.

In fact, you increase your returns and your security by investing in SRI related funds. Sort of like having your cake and eating it too.


SRI finds the best things to invest in - all round

Think about it. Corporate success relies on many factors. Ultimately, both financial and social perspectives play a role in determining a company’s long-term success and its bottom line.

While short term success may come from following fast and loose practices you should remember that you are investing for the long term.

By seeking out companies with a proven record as good corporate citizens you can minimize the likelihood that a centerpiece of your investment portfolio ends up on the front page of the newspaper with a story reflecting a lapse in corporate judgement.

In-depth reviews of corporate practices will help you to find the gems that will grow steadily into the future. And good solid SRI studies do that for you.

SRI does not ignore sound financial principles. It adds to them. And your portfolio is stronger for it.


The numbers prove it – SRI improves your chances and your return

The Carleton study, published in 2015, pointed out that the SRI sector was already seeing significant growth. That growth has only increased since then.

In February in a report titled Sustainable Fund U.S. Landscape Report, Morningstar pointed out that:

Sustainable funds attracted a record $51.1 billion in net flows in 2020, more than twice the previous record set in 2019. Sustainable fund flows accounted for nearly one fourth of overall flows into funds in the U.S.


Join the party – become an SRI investor today

So come on. Let’s work together to make the world a better place while securing your financial future. Make it happen today. You’ll be happy you did. On so many levels.

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