The pledge fell within the banking portion of a section dedicated to lower prices for consumers. Under leader Erin O’Toole, the Conservatives would also order the Competition Bureau to investigate banking fees and legislate open banking “so that Canadians can connect with fintech companies that can provide a better offer for banking services such as a mortgage, line of credit or credit card,” the 164-page document said.
Reports from financial industry regulators have found that most Canadian investors don’t understand what they’re paying in investment fees. Last month, the Mutual Fund Dealers Association of Canada said that expanded cost reporting that specifies investment fund charges should be included in fee summaries.
The Tories are also targeting “an unaccountable and overly aggressive” Canada Revenue Agency (CRA).
“It seems like every day brings new stories of CRA overreach: denying disability tax credits to people with diabetes, refusing benefits to single mothers because CRA is not satisfied with proof of separation, and auditing small businesses for tiny amounts while writing off large amounts owed by multinationals,” the platform said.
The Conservatives would impose a duty of care on the agency and revise the penalties so that first-time “problems or errors” receive minor fines. The party would also require the CRA to report on the tax gap so that resources could be devoted to problem areas, and increase funding to go after “wealthy tax cheats” and large corporations.
The NDP pledged to boost funding for the CRA and close certain tax loopholes.
For Canadians with disabilities, the Conservatives would reduce the number of hours
required to qualify for the disability tax credit (DTC) to 10 from 14 hours per week. The change would make it easier to access various programs and benefits for which the DTC serves as a gateway, the document said, including the RDSP and the child disability benefit.
The Tories would also double the disability supplement in the Canada workers benefit to $1,500 to help lower-income disabled Canadians. The plan would save a disabled person made eligible for the tax credit (or their family) an average of $2,100 per year, according to the platform.
The Liberals have proposed a Canada disability benefit modelled on the guaranteed income supplement (GIS) as well as changes to DTC eligibility. The NDP has promised a guaranteed livable income for Canadians with disabilities, as well as seniors.
As part of a plan to make housing more affordable, the Conservatives would encourage investments in rental housing by allowing those who sell a rental property and reinvest in rental housing to defer the capital gains tax.
The Tories also said they’d ban foreign investors not living in or moving to Canada from buying homes for a two-year period. A Conservative government would instead encourage foreign investment in purpose-built rental housing. The policy would be reviewed after two years. The NDP would introduce a 20% foreign buyer’s tax on homes, while the Liberals have proposed a 1% annual tax on the value of vacant real estate owned by non-residents.
The Conservative platform also had proposals to encourage more seniors to age in their homes. The home accessibility tax credit would change to $10,000 per person (rather than $10,000 per dwelling), and seniors and their caregivers would be eligible to claim the medical expense tax credit for home care. The party would also create a Canada seniors care benefit of $200 per month per household for anyone living with and caring for a parent over 70.
The platform has been costed internally and is being reviewed by the parliamentary budget officer, the Conservatives said.
Other measures from the Conservative platform include:
- doubling the Canada workers benefit to a maximum of $2,800 for individuals or $5,000 for families and pay it as a quarterly direct deposit rather than a tax refund at year-end;
- no longer requiring underfunded pension plans to convert to annuities, which can lock in losses;
- creating the Canada investment accelerator, a 5% investment tax credit for capital investment made in 2022 and 2023, with the first $25,000 refundable for small business;
- supporting gig economy workers ineligible for employment insurance (EI) by requiring gig economy companies to make contributions equivalent to CPP and EI premiums into a new, portable employee savings account every time they pay their workers. The money would grow tax-free and could be withdrawn by the worker when needed;
- converting the child care expense deduction into a refundable tax credit covering up to 75% of the cost of child care for lower income families;
- a one-month “GST holiday” this fall to help hard-hit retail stores recover; and
- eliminating the deficit, which hit $354 billion in 2020-21 as the federal government handled the Covid-19 crisis, within a decade.
Canada’s third-largest pension fund beefs ups plan to cut carbon emissions
CALGARY, Alberta/TORONTO (Reuters) – Ontario Teachers’ Pension Plan Board (OTPP), Canada‘s third-largest pension fund, announced on Thursday new interim targets to cut the carbon emissions intensity of its portfolio as part of a plan to reach net-zero emissions by 2050.
OTPP, which manages C$227.7 billion ($180.11 billion) in assets, plans to reduce emissions intensity by 45% by 2025 and 67% by 2030, from 2019 levels.
Fellow pension fund Caisse de dépôt et placement du Québec also has a net-zero target by 2050, but environmental campaigners said OTPP’s interim targets are the strongest climate commitment yet from a Canadian pension fund.
Ziad Hindo, OTPP’s chief investment officer, said the fund would be looking to invest more in clean-energy companies, as well as firms offering software and services that allow other companies to transition to a lower carbon economy.
“Climate change permeates the entire investing landscape. Tackling it requires substantial effort and massive amounts of capital,” said Hindo. He compared the climate sector today with the technology sector in the 1990s, and predicted it would cause huge disruption across every industry.
OTPP is increasing staffing across various asset classes to keep up with growing investment in the climate sector, Hindo added. The fund’s portfolio currently includes more than C$30 billion in green investments such as renewable energy, energy storage, electrification, electricity transmission, energy efficiency and green real estate.
Unlike some large pension funds in the United States, OTPP is not divesting from oil and gas altogether, although it stopped actively investing in listed exploration and production companies in 2019.
“OTPP will need to go further if it wants to be considered a global leader on climate,” said Adam Scott, director of pension activist group Shift. “While this announcement describes how the OTPP will invest in solutions to the climate crisis, it makes no mention of how it will eliminate its exposure to the causes of it, namely high-risk fossil fuels.”
($1 = 1.2642 Canadian dollars)
(Reporting by Maiya Keidan and Nia Williams; Editing by Peter Cooney)
A16z in talks to back CoinSwitch Kuber in first India investment – TechCrunch
A16z is inching closer to making its first investment in a startup in India, the world’s second largest internet market that has produced over two dozen unicorns this year.
The Menlo Park-headquartered firm is in final stages of conversations to invest in Indian crypto trading startup CoinSwitch Kuber, three sources familiar with the matter told TechCrunch. The proposed deal values the Bangalore-based firm at $1.9 billion, two sources said. Coinbase is also investing in the new round, one of the sources said.
CoinSwitch Kuber was valued at over $500 million in a round in April this year when it raised $25 million from Tiger Global. If the deal with A16z materializes, it will be CoinSwitch Kuber’s third financing round this year.
TechCrunch reported last week that CoinSwitch Kuber was in talks to raise its Series C funding at up to $2 billion valuation. The report, which didn’t identify a lead investor, noted that the Indian startup had engaged with Andreessen Horowitz and Coinbase in recent weeks.
Usual caveats apply: terms of the proposed deal may change or the talks may not result in a deal. The author reported some details about the deal on Wednesday.
The startup declined to comment. Coinbase and A16z as well as existing investors Tiger Global and Sequoia Capital India did not respond to requests for comment.
The investment talks come at a time when CoinSwitch Kuber has more than doubled its user base in recent months — even as local authorities push back against crypto assets. Its eponymous app had over 10 million users in India last month, up from about 4 million in April this year, the startup said in a newspaper advertisement over the weekend.
A handful of crypto startups in India have demonstrated fast-pace growth in recent years — while impressively keeping their CAC very low — as millions of millennials in the South Asian nation kickstart their investment journeys. Several funds including those with big presence in India such as Accel, Lightspeed, WEH and Kalaari recently began working on their thesis to back crypto startups, TechCrunch reported earlier.
B Capital backed CoinDCX, a rival of CoinSwitch Kuber that has amassed 3.5 million users, last month in a $90 million round that valued CoinDCX at about $1.1 billion.
Policymakers in India have been debating on the status of digital currencies in the South Asian market for several years. India’s central bank, Reserve Bank of India, has expressed concerns about private virtual currencies though it is planning to run trial programs of its first digital currency as soon as December.
About 27 Indian startups have become a unicorn this year, up from 11 last year, as several high-profile investors — and global peers of Andreessen Horowitz — such as Tiger Global and Coatue have increased the pace of their investments in the South Asian market. Apna announced earlier on Thursday that it had raised $100 million in a round led by Tiger Global at $1.1 billion valuation, becoming the youngest Indian firm to attain the unicorn status.
Groww, an investment app for millennials, is in talks to raise a new financing round that would value it at $3 billion, TechCrunch reported on Wednesday. The startup has engaged with Coatue in recent days, the report said.
Why Canadians are still struggling to understand investment fees – The Globe and Mail
Financial advisory fees remain a confusing subject to the vast majority of Canadian investors despite a decades-long effort by the investment industry and its regulators to provide greater clarity and transparency. That means financial advisors remain in the ideal position to help close that comprehension gap.
According to the results of a survey the Mutual Fund Dealers Association of Canada (MFDA) released in June as part of a more expansive research report, fewer than one in five Canadian investors could identify correctly what types of costs are included in current fee summaries.
“The challenge we have today is that most investors don’t get a full picture of all the fees,” says Jean-Paul Bureaud, executive director of the Canadian Foundation for the Advancement of Investor Rights (FAIR Canada), “they only get a partial picture and they might not appreciate that it’s a partial picture.”
Advisors can clarify that to clients relatively easily by making clear that current fee summaries only include the fees for advice and trailing commissions on mutual funds, he says, and that other costs – such as fund management fees and operational costs – also apply.
Advisors can also ensure investors understand as much as possible by avoiding “using all kinds of fancy terms for all the different types of fees,” Mr. Bureaud says.
In fact, the MFDA’s report states, “Even experienced investors struggle to understand key terms and how their choices influence the type and amount of fees they pay.”
That means even when dealing with sophisticated clients, advisors should not assume “MER” is universally understood to stand for management expense ratio, or what it means. Breaking down jargon such as “trailing commissions” in simple terms – perhaps as an annual fee the advisor receives each year a client holds a particular investment – will also help avoid misunderstandings.
Instead of simply noting what fees are or are not included in existing disclosures, the MFDA report urges advisors to get as close to total cost reporting as possible.
London-based global firm The Behavioural Insights Team ran an experiment on behalf of the MFDA testing four formats of expanded cost reporting. Three of them specified investment fund charges while the fourth, known as the “control” option, included only a disclosure that other charges, such as fund management and operation costs, applied.
Only 23 per cent of investors exposed to the control option were able to identify their total cost of investing correctly, while between 54 per cent and 70 per cent of investors exposed to the other three options were able to do so.
Karen McGuinness, the MFDA’s senior vice president of member regulation and compliance, says part of the reason the experiment succeeded was a focus on using plain language.
“When we did the format, initially, we were using industry terminology because it was just second nature to us, but we brought in the behavioural research firm and they were the ones who said we need to set up this information in a way that’s more easily digestible for the average retail investor,” Ms. McGuinness says.
Nevertheless, the MFDA report warns that dealers and advisors shouldn’t assume sharing more cost information will always lead to better comprehension among clients as they will eventually hit a point of diminishing returns.
Rather, the report recommends they should “eliminate any information presented in the fee summary that is unlikely to be useful to investors. People have limited attention [and] this is especially significant when information is complex.”
To establish a baseline for how much any given client already understands – and therefore how much education advisors should attempt to provide – regulators have developed a number of quick and straightforward tools for that purpose.
For example, the B.C. Securities Commission runs the InvestRight website that includes fee calculators and a short quiz designed to gauge investors’ overall comprehension of investment fees.
“It only takes about five minutes to answer the questions, and a lot of people would be surprised at what they learn,” says FAIR Canada’s Mr. Bureaud.
The Ontario Securities Commission (OSC) operates a similar website – GetSmarterAboutMoney – that offers even more comprehensive tools and resources.
Meanwhile, regulators are working on a new set of disclosure rules to replace the second phase of the customer relationship model (CRM2) that has been in place since 2016. The goal of what’s being called CRM3 is to provide what the MFDA’s Ms. McGuinness calls “total cost reporting,” as it should get disclosures as close as possible to breaking down all the fees investors pay and not just those their advisor receives.
Although there’s no timeline for when CRM3 will be complete, Greg Pollock, president and chief executive of Advocis, says advisors will need to be more transparent with their clients on fees before the current bull market goes bust.
“Investors tend to look at the bottom line, and if they see that year-over-year returns are looking pretty good, they don’t get too focused on the fees simply because they’re satisfied with the overall performance,” he says. “But it does raise the question of what happens in a bear market when performance suffers. That really gets people’s attention.”
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