The ability to buy your own home is one of the most frequent topics of conversation I have with my younger clients struggling to establish themselves. Along with saving for retirement and for your children’s education, it is the financial goal most frequently discussed.
And these days, as we see both mortgage rates and house prices continue to climb, I need to share some new options for saving for your home recently introduced by the Canadian government.
The First Home Savings Account (FHSA) became available in April of this year. As its name suggests, it was introduced by the Government of Canada to help Canadian families save the money they need for the down payment on their first home. And to qualify, you must be between the ages of 18 and 71, a resident of Canada and a first-time home buyer. The same goes for your spouse/partner. And this home must be for your personal year-round use.
Okay, where do I start?
You will want to reach out to an FSHA issuer to set up and register an account. That would be your bank, credit union, trust company, or insurance company. They can help you get started but be ready to provide them with your social insurance number and date of birth. I suspect that if you have an established relationship, they will already have that information.
The FHSA is tax-deductible (like an RRSP) and has a lifetime limit of $40,000 with yearly limitis of $8,000.
Different types of FHSAs basically designate how you have chosen to save or invest that money, much like any other tool for saving your money. Other rules cover when to close the FHSA and how to get money in and out of the account. You need to review these rules as you set up your account to ensure you make the best use of an FHSA in your circumstances.
How can I use my RRSP? And what about the Home Buyer’s Plan?
You can transfer money from your RRSP to your FHSA, but you cannot claim any additional tax deductions on that transfer. And yearly transfer limits also apply.
The Home Buyer’s Plan (HBP) is also available as a transfer from your RRSP. You can use both an HBP and an FHSA while purchasing your house. But because everyone’s financial situation is different, you will need to discuss your situation with your advisor to decide what you should plan to do.
The biggest difference between the two options is that money transferred to an FHSA does not need to be returned, while money redeemed under HBP needs to be repaid to your RRSP. All of these are details you will need to discuss with your advisor.
Buying a house is a big financial decision. Make sure you understand all your options.
While the FHSA Is an exciting new option for first-time Canadian home buyers, the whole process is still a challenging experience. Figuring out the financial details - on top of finding a home that you can afford and enjoy - can be stressful. Finding the right professionals to help you through the process - like real estate agents and financial advisors - will help you make the best of a situation that can be both exciting and stressful. If you want to talk through your options, please feel free to text or call me at (519) 279-0186 or email me at [email protected]. You don’t need to go through this alone.
Last month I shared my thoughts about a very powerful panel discussion I participated in at the recent Responsible Investment Association (RIA) conference in Toronto. The Next Imperative: The Urgent Need for Investor Action on Biodiversity was led by Anita De Horde, Co-Founder and Executive Director Finance, Biodiversity Foundation, Finance for Biodiversity Pledge.
I was so impressed by the work that BIOFIN is doing that I decided to share more information about this organization with you in another blog post. As I explained last month, BIOFIN stands for Biodiversity Finance Initiative. And according to their website, BIOFIN is “a United Nations Development Programme-managed global programme (that) exists to demonstrate how nature-positive economies can work for people and the planet.”
Every day we see the destructive power of climate change. It is harming our health as individuals, our ability to function as a society, and our planet’s ability to cope and adapt. I mean, just the other day, they announced that our planet had suffered the hottest day ever on record.
Who is BIOFIN?
BIOFIN was created a decade ago as a direct response to the need to find ways of directing much-needed financial support for global biodiversity efforts. It is managed as a United Nations Development Program and received most of its initial funding from the European Commission. Now, it is present in over forty countries, from Argentina to Zimbabwe and Sweden to South Africa. BIOFIN is working with the local leadership in these countries, encouraging efforts to invest in and protect their communities and our natural world.
BIOFIN is finding ways to encourage economic growth that doesn’t destroy our planet – that protects and encourages global biodiversity – just like its name suggests. As the BIOFIN website points out that “(t)he COVID-19 pandemic has reminded us that human and planetary well-being are intertwined, that the economy and the health of our planet go hand in hand. That the ecosystems of our economies are embedded within our natural ecosystems.”
BIOFIN is demonstrating that with proper thought and planning, we can build an economy that works for people and the planet. Their archive of stories lists hundreds of exciting projects going back to 2014, leading right up to the present. Glancing at these stories fills me with hope and fresh determination for the future.
There is even a free online Biodiversity Finance course available in four languages. With close to 600 enrollees, the course is recognized by governmental agencies and NGOs from around the world.
Together We Can Accomplish So Much
BIOFIN is an inspiring example of the things we can do together as world citizens. But it is not the only option we have to make a positive difference. There are many exciting options available for you to participate in, contribute to, and benefit from in the years to come.
These are the things that inspired me to become involved in responsible investing. It offers hope on all fronts – financial, social, and environmental. If you want to look for these kinds of opportunities in your portfolio, then reach out. The possibilities are endless. And rest assured, your planet appreciates the effort.
Earlier this month, I attended the Responsible Investment Association (RIA) conference in Toronto. I have been a certified RIA financial advisor since 2018 and always enjoy attending their functions, in person and online, and catching up with like-minded financial advisors and advocates.
Because of COVID, the 2023 conference was the first in-person RIA conference since 2019. It was great being able to catch up with old friends and make a few new ones. It was also encouraging to discuss trends in the industry and seek out opportunities to have a positive and profitable impact.
One of the most meaningful panel discussions I attended was called The Next Imperative: The Urgent Need for Investor Action on Biodiversity. As the first session of the second day, it worked well as a wake-up call for all the attendees. Much of the discussion was led by Anita De Horde. Her title is Co-Founder and Executive Director Finance, Biodiversity Foundation, Finance For Biodiversity Pledge.
Anita helped start BIOFIN ten years ago at the CBD COP 11. She has played a lead role in its growth ever since.
What is BIOFIN? I’m glad you asked
BIOFIN stands for Biodiversity Finance Initiative. And according to their website BIOFIN is “a United Nations Development Programme-managed global programme (that) exists to demonstrate how nature-positive economies can work for people and the planet.”
I’m not sure I could come up with a better definition of how we, as responsible investors, can hope to make the positive environmental impact we know we must achieve to save the planet and ourselves. Once again, we are confronted with the very real consequences of climate change right here in Canada. Wildfires struck from coast to coast - generally considered to be the worst ever. The problem of climate change will not go away. We must address it and we must address it now.
But once again, what must be addressed as a problem can also be considered an opportunity. Over the last couple of months, I have shared stories about governmental efforts both here in Canada and among our allies in Europe and the United States to make investments in a cleaner and more sustainable future.
What does BIOFIN hope to do?
According to the BIOFIN website, they are:
During her presentation, Anita made it clear that we are at a crossroads in world history. While climate change is a very real crisis, it is also offering us a very real opportunity to bring about a brand-new world – one that works for all of us. I could not help but feel excited by her story.
Together we can make a difference
This is the kind of discussion that inspired me to get involved in the practice of responsible investing in the first place. I believe that efforts like BIOFIN can make a difference.
While the work that BIOFIN is doing is important is only one small part of the overall effort to make this a better world for the planet itself and we humans as inhabitants of it.
So, let’s get to work
As usual, I have come away from the RIA conference with fresh confidence and a renewed commitment to making a difference. And I am here to help you make that commitment too. So, if you think there is still work you can do to increase the impact your investments can have, for you, your neighbours around the world and the planet itself, then drop me a line. I’d be happy to help.
Last month I wrote about Canadian efforts to address climate change and work towards Net Zero. This month I am going to look at some of the efforts our American and European compatriots are making. But first, I want to acknowledge what is happening in Western Canada as another terrible season of wildfires begins.
Western Canadian Wildfires are running wild – literally
This spring, news about wildfires in Western Canada has reminded us of the severity of the issue and the need to address it. Last week American environmental officials described conditions in both Alberta and BC.
Alberta has been hit hardest by the wildfires, and as of today, May 11, there are 82 actively burning in the province, 23 of which are out of control. In total, Alberta alone has seen 426 wildfires so far this year. In neighboring British Columbia, there have been
179 fires so far this year. Of those, 46 are actively burning, 8 of which are out of control.
And even earlier than that, record high temperatures in communities across Northern Alberta were being recorded - 34 records in a single day.
Our hearts go out to all those affected by these terrible conditions and especially those being driven from their homes.
Biden’s Anti-Inflation Bill is having a huge impact on American environmental efforts
Last summer, President Biden signed the Inflation Reduction Act, and the headline from an article published last month says it all - The US has seen 5 years’ worth of clean energy investments in just 9 months. The article opens by stating that “The US utility-scale clean energy sector has announced more than $150 billion in capital investment since the Inflation Reduction Act was signed into law last August.”
This is an exciting piece of news, and although there has been pushback from Biden’s opponents, the US is taking a serious crack at addressing the need to move forward with clean energy initiatives.
The recent announcement by the federal Canadian government is a similar effort.
It also fits well with the Canadian announcement of a battery manufacturing plant in St Thomas. The Volkswagen plant will be a significant piece in the move to electric vehicles in the future. The Stellantis announcement that they are stopping construction of a battery plant in Windsor shows how significant these investment changes are. Let’s hope they can sort things out soon and get that plant back on track.
Besides, I don’t know about you, but I can’t help but notice the number of ads on TV for all the latest EVs.
Europe moves forward as well
One of the most significant environmental stories of the last year has been Europe’s efforts to handle the removal of Russian oil and gas from its energy portfolio. It is generally accepted that Putin assumed that his threat to cut off energy supplies to Western Europe would blackmail them into accepting his move into Ukraine. But quite the opposite has happened.
Western Europe was able to get oil and liquid natural gas from around the world – including North America – in the short term. And they have drastically increased their efforts to convert to clean, renewable energy. Ironically, there are stories about solar and wind farms being temporarily shut down because of oversupply. Improved distribution and storage will address this overabundance soon enough. Another sign that these changes are moving forward and need to be encouraged.
Local renewable energy can make society more stable
One of the benefits of renewable energy is its localized nature. Wind, solar and thermal energy are available everywhere and can be accessed anywhere. This gives each of us much more control over our energy needs in the future.
Some of us will remember the OPEC crisis of the early 1970s. Or maybe you heard your parents and grandparents tell you stories about those distant times. (Go ahead, ask them again now. We’ll wait until you get back)
That was a powerful example of international events having a significant impact on energy supplies. It was also one of the first times that discussions about renewable energy entered the public conversation. By getting our energy from nearby sources, we can all feel more secure about meeting our energy needs. And if we can store that naturally available energy (read batteries) for ourselves, then we are that much safer - environmentally and politically. One more reason to keep on pursuing renewable energy.
Let’s keep up the conversation
Let me close this post by offering you my best as spring moves into summer. I hope you have a chance to plant all the plants and vegetables you could possibly want and enjoy as much time at the cottage and around the barbecue as possible.
And remember, if you want to continue the conversation (financial or otherwise), call me at (519) 279-0186 or email me at [email protected].
As we celebrate another Earth Day, we recognize our planet's vital role in our existence. We are responsible for keeping it and us safe. And a recent announcement by the federal government is intended to address just that.
At the end of March, the Canadian government released the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy. As the title suggests, the plan is intended to significantly reduce our emissions here in Canada – by 40 percent below 2005 levels by 2030 with the ultimate goal of achieving Net Zero by 2050.
This plan fits with efforts around the world. The Americans’ announced changes with last summer’s passage of the Inflation Reduction Act is just one example of that.
But according to Ipsos, “Only one in three Canadians believe that the government has a clear plan in place to tackle climate change.” A similar number of Canadians admit to concern for climate change, where “34% worry a great deal/a fair amount vs. 48% global country average”.
As you can see, Canadians’ concerns seem to be well below the level of concern expressed elsewhere in the world. I find that disappointing.
That said, it will be interesting to see if this announcement and the initiatives it lists will change Canadians' perception of what is happening, what could happen and what should happen.
Are we making any progress?
Items listed in the report were fleshed out in the most recent federal budget.
And according to Clean Energy Canada, “Today’s federal budget was the first step toward realizing last week’s historic Emissions Reduction Plan to reach Canada’s 2030 climate target. It’s also the first Canadian budget that truly links climate action with economic growth. In today’s world, they are two sides of the same coin.”
The report lists efforts to encourage Canadians to:
There is reason for hope – let’s get on with it
Yes, there are challenges as we go forward. But change itself is both inevitable and essential. Clean Energy Canada summed it up nicely when it said, “(w)hile some will always look for reasons to stall clean energy investments, wondering if now is the time, our response must be unequivocal: now is the only time.”
We can all find ways to get involved
We can all get involved in Canada’s move toward net zero. Whether that means making your next car an EV, installing heat pumps and solar panels in your home, or making environmentally progressive investments. The choice is yours.
If you’re looking for even more ways to help facilitate positive change, then have a look at the Earth Day Canada Website. There are lots of ideas for things you and your family can do.
And remember, if you want to continue the conversation (financial or otherwise), text or call me at (519) 279-0186 or send me an email at [email protected].
Thanks for joining me. I wish you and yours a lovely summer. And let me close by wishing you a Happy Earth Day.
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This Blog was written, designed, and produced by Todd Race Copywriting for the benefit of Brian Kettles who is a investment fund advisor at BJK Financial Group a registered trade name with Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc. The information contained in this article comes from sources we believe reliable, but we cannot guarantee its accuracy or reliability. The opinions expressed are based on an analysis and interpretation dating from the date of publication and are subject to change without notice. Furthermore, they do not constitute an offer or solicitation to buy or sell any securities.
Mutual Funds, approved exempt market products and/or exchange traded funds are offered through Investia Financial Services Inc.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently, and past performance may not be repeated. Investia is not liable and/or responsible for any non mutual fund related business and/or services.