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Why some young Canadians are investing their CERB money – The Globe and Mail



CERB has been modified into an employment-insurance program since last September.

Giordano Ciampini/The Canadian Press

Some younger Canadians have used portions of their Canadian Emergency Response Benefit to jump into the hot stock market and learn to invest, but they’ve discovered it’s not easy to make a big buck fast.

Known online as the “stimmy,” federal stimulus cheques have been a financial lifeline for many to pay for daily living expenses. While there is no data showing exactly how people used their CERB, some young people have invested it over the past year.

In 2020, Canadians opened more than 2.3 million new do-it-yourself investor accounts between January and December, according to a press release from the Investment Industry Regulatory Organization of Canada.

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CERB, which originally dispensed up to $2,000 a month, has been modified into an employment-insurance program since last September. As the pandemic pushes past a year, young people have had to seek out ways to financially support themselves beyond it, with some turning to investing online.

Jake Friedrich, 26, is one of those people. Before COVID-19, Mr. Friedrich worked at a hockey club in Vancouver. When the pandemic hit, he lost his job and was forced to return home to Edmonton in April to live with his mother and brother. There, he applied for CERB.

His brother suggested using some of the money to invest. In May, using his brother’s referral link (which gave them both a $5 bonus), he opened a Wealthsimple account and invested the money he had leftover from paying off bills and moving expenses – about $50.

“The idea I ran with was, if I can turn this money into extra money, so I can get by a little further with it, then it’s worth a shot,” he said.

His original investment has gone up and down “a couple hundred dollars,” but he doesn’t expect to see any real gains at this point. “It’s not trading, it’s more of a gamble.”

Mehdi Batata, a 21-year-old student from Montreal, had a similar experience. Mr. Batata had a job at his university before the pandemic but lost it when the campus shut down. Knowing it would be a long time before the school reopened, he applied for CERB.

“I thought to myself, if I’m about to be unemployed for quite a while, let’s invest it and hope to make a little bit of cash right now.”

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Mr. Batata said even though he had expenses and bills to pay, his modest student lifestyle allowed him to have some extra money. “I feel like if I did not invest it, I would have simply lost an opportunity.”

Some of his investments were made through a robo-adviser, but he chose a few himself, including airline and travel stocks such as Air Canada and Delta Air Lines, as they were trading low because of the pandemic and had upside potential.

“It wasn’t profitable for a long, long time,” he said. Though he was initially worried about the risk of investing, Mr. Batata said making an eventual return was worth it.

University of Toronto finance professor Lisa Kramer said “FOMO,” or fear of missing out, is driving many people to invest. First-time investors might aim to replicate something they saw online – such as the recent GameStop phenomenon, in which the gaming company’s stock soared based on online posts. But they don’t necessarily understand the basics of risks and return, or realize that the market’s stellar gains recently aren’t sustainable in the long term, she said.

She recommended investors take a step back and reallocate their holdings into a more diversified portfolio.

Another driving factor is an increase of free time. “What we’re seeing is a little bit reminiscent of the tech bubble of the late 1990s, where, similarly, the market was going up by leaps and bounds. Some people were quitting their jobs to become day traders,” Prof. Kramer said.

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“These days, people don’t even have to quit their jobs, because they’re already unemployed.”

The investing pull seems to be affecting more men than women. Financial services market research firm Dalbar Inc. conducted a poll of 1,116 North Americans in February and found that 34 per cent of male respondents had opened a new online brokerage account in the past 12 months, while just 16 per cent of female respondents had done the same.

And according to Wealthsimple, 84 per cent of their clients who traded in GameStop stock were men. (Sixty-three per cent were millennial, 29 per cent Gen Z.)

“The reality is that a lot of females are still bearing the brunt of the household responsibilities [and] looking after the kids. So how much time do they actually have to monitor the market?” said Anita Lo, vice-president of Canadian practice at Dalbar.

Will Berecz, an 18-year-old student, recently finished a personal finance class at his Windsor, Ont., high school. Previously a YMCA lifeguard, Mr. Berecz went out of work when the pandemic hit, and applied for CERB in May. His original game plan was to put the money toward paying for university.

After completing his personal finance class, however, Mr. Berecz changed directions. “Once I had a greater understanding of what to do with my money to see greater returns, I decided that investing would be the smarter option.”

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Mr. Berecz did some research, opened an account through TD Direct Investing , and has holdings in stocks such as automaker Stellantis, as well as a TD mutual fund and a Bank of Montreal emerging markets fund.

“Unfortunately, so far it hasn’t paid off,” he said. He said he’s “playing the long game right now,” but added investing has still been an eye-opening learning experience.

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British Columbia tackles innovation investment gap – The Globe and Mail



Lt.- Gov. Janet Austin delivers the Throne Speech at Legislature in Victoria, B.C., April 12, 2021.

CHAD HIPOLITO/The Canadian Press

The B.C. government will create its own investment fund to help promising B.C. companies scale up and keep jobs here at home, as part of its post-pandemic recovery plan.

The InBC strategic investment fund, announced in Monday’s Throne Speech, will be administered by a new Crown corporation. The initiative is designed to respond to concerns that the province’s world-leading innovations in sectors such as life sciences are consistently flowing to other jurisdictions with better investment climates.

The Throne Speech, read by Lieutenant-Governor Janet Austin, offers a self-congratulatory account of the government’s response to the health and economic challenges brought by COVID-19 over the past year, and acknowledges that the province is still in the grips of the pandemic. But it also focuses on plans to rebuild the economy.

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“We open this sitting of the legislature at a turning point in our fight to end the pandemic,” she read. “The threat of new variants means we cannot relax, even as your government accelerates the largest mass-immunization program in B.C.’s history.”

Ms. Austin cited the province’s contributions to the global effort to fight COVID-19, noting that its life-sciences companies have helped develop a vaccine and a treatment for the virus, as well as the development of an ICU ventilator for use in Canadian hospitals.

“Their work will not only help bring us out of the pandemic, it will position our province for success in the years ahead,” she said.

The speech predicts the province will find continued growth in trade. “Global markets are changing in ways that offer significant opportunities for B.C.’s goods and services. Prices are expected to continue to reflect environmental, social and governance aspects of production,” it states. “British Columbia firms will be able to take advantage of a premium paid for inclusive and sustainable products.”

But leaders in health sciences and the high-tech sectors have noted that B.C., while it excels in research and development, fails to foster a business environment where those innovations can stay and grow.

Quebec and Ontario have helped secure life sciences investments by partnering with Ottawa to offer incentives. Most recently, the global pharmaceutical giant Sanofi unveiled its plans to build an influenza vaccine manufacturing facility in Toronto, after the federal government and the province of Ontario committed to invest close to half a billion dollars in the project.

The B.C. government provided no detail on the new investment fund on Monday, and it is unclear how the new agency will assist. “This new strategic fund will help promising B.C. companies scale up, anchor talent – keeping jobs and investment at home in British Columbia,” it reads.

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It also promises additional funding to address the challenges that COVID-19 has exposed for the homeless, for health care and for seniors in long-term care. “In the year ahead, your government will continue to improve care for seniors by hiring thousands of new workers for long-term care and fixing the cracks COVID-19 has exposed.”

The Throne Speech also promises initiatives to assist British Columbians who struggle with the cost of living. The budget, which will be introduced on April 20, will include funds to help get thousands of rental homes built throughout the province, and will expand access to the province’s $10-a-day daycare spaces.

The government is also promising changes to its vehicle insurance rates through the Insurance Corporation of B.C. ICBC will deliver a 20-per-cent cut to car insurance rates, in addition to the COVID-19 rebate that was issued earlier this year.

We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.

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eBay Is Helping Gen-Y and Gen-Z Get Their Investment Kicks – Forbes



At a time when Sotheby’s is auctioning off rare sneakers, you know the nature of investing has changed. Those changes are coming as Generations Y and Z are looking to invest in what they love, while changing the nature of what investment-grade goods look like.

eBay, for one has been leading the charge and looks to remain the go-to agent for its monetization. And, to combat counterfeiting while supporting the segment’s growth, the online marketplace is innovating. eBay has begun a series of pop-up authentication events, intended to give their collectors and sellers a new source to both authenticate and value their rare kicks, as well as high-end watches, and collector cards.

Sneakers and watches are two of eBays most popular luxury categories. There are more than a half-million sneaker listings on eBay, and over 165,00 luxury watches listed on any given day. And over the past year the marketplace saw a 10 percent increase for high-end time pieces like Rolex, whose sales have jumped 60 percent since 2019.

Authentication Station

The on-site authentication events are an extension of the recently expanded “Authentication Guarantee” services that eBay offers, utilizing an independent team of industry experts. It’s the same group that authenticated a $1 million pair of 1985 Air Jordon 1’s, signed by non-other than the “Air-apparent” himself.  

The program first launched in LA’s Koreatown, back in November 2020 in a vintage, fifties-looking converted gas station. Participants handed the goods off to an attendant, who brought the items in to the inspection teams. The process was in full view via large outside screens, and successful assessments earned an eBay Authentication Guarantee. Participants were able to receive “on the spot” offers or elected to list the items themselves.

The East-Hollywood, LA experiment was successful enough to replicate. And pop-up authentication events took place this past Friday and Saturday in Atlanta. They are expected to again be replicated in Las Vegas, Seattle, Nashville, and Austin in coming weeks. Admissions to the events are free, without an appointment.

Playing A New Card

In a parallel effort, by late April eBay will add an imaging listing tool to its mobile app, designed to facilitate more efficient listings of trading cards. This is another category that has evolved from mere collecting to high-buck investing.

Beginning in late April 2021, eBay plans to launch an image listing tool in its mobile app to initially support Magic the Gathering cards and ultimately Pokémon and Yu-Gi-Oh! as well.  Users will point their camera at the card and hold to scan. A list of possible matches will pop-up, along with details on game name, title, card set, number and rarity. After tapping the closest match, the user can add their details and pricing to post. eBay plans to add other collectable and trading cards to the offering later in 2021.

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Joe Biden tax plan affect US investment in Ireland?




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Wander around Dublin’s Grand Canal Quay and you get a sense of how successful the Republic of Ireland has been in attracting US technology companies.

Google has its international headquarters across a campus of offices and will soon have more space nearby at the Boland’s Mill development.

Just across the canal, Facebook has its international HQ with Tripadvisor and AirBnB close by.

Stripe, the United States-based payments firm, could soon be in the area.

Last month its Irish founders said they’re planning about 1,000 new jobs in Ireland.

The head of the country’s inward investment agency, Martin Shanahan, described the Stripe investment as a “phenomenal signal from Ireland and about Ireland”.

But there’s now a risk that the pipeline of investment from the US could dry up if President Joe Biden can lead a major change to global tax rules.

Irish tax advantage under threat

In among those tech company HQs in Dublin’s docklands, you will also find the offices of the lawyers and accountants who help US firms use Ireland’s tax system to reduce their global tax bills.

For the last 20 years Ireland has had a simple message: invest here and you will pay just 12.5% tax on your Irish profits.

That compares favourably to headline corporation tax rates of 19% in the UK, 30% in Germany and 26.5% in Canada.

It is an article of faith in Irish politics that the 12.5% rate has been vital to attracting US investment.

But that tax advantage could be seriously undermined if President Biden gets his way.


Google head office Dublin


The most striking of his proposals – and the one of most consequence for Ireland – is for a global minimum corporate tax rate.

The US Treasury Secretary Janet Yellen has suggested a 21% minimum rate.

“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” she said in a speech last week.

“Together we can use a global minimum tax to make sure the global economy thrives based on a more level playing field in the taxation of multinational corporations.”

What would it mean for Ireland’s economy?

Essentially that would mean if a company paid tax at the lower Irish rate, then the US (or other countries) could top up that company’s tax in their jurisdiction to get it to the global minimum.

So if a US company had a presence in Ireland primarily for the tax advantage, that advantage would disappear.

This is a matter of urgency for the Biden administration because it is planning to raise corporate taxes at home and would prefer not to see more tax revenues leaking to other countries.

Peter Vale, tax partner with accounting firm Grant Thornton in Dublin, thinks a global minimum rate is now an inevitability.

“If you’d asked me six months ago I’d have been quite sceptical, there was a lot of opposition,” he said.

“But it’s now moving by the day and, with the US behind it with its plans, I think we’re going to arrive at some sort of global consensus.”

He said the key issue for Ireland becomes the level at which the rate is set.

“I don’t think 21% is where it will land, I suspect it will be somewhere in the teens.”



Niall Carson/PA

Other details will be important too: “Exactly how will you work out what the rate is a company is paying in Ireland and what does that mean in terms of any top up? The detail becomes pretty critical.”

The Biden proposals have reinvigorated work which is being led by the OECD (Organisation for Economic Co-operation and Development), an intergovernmental economic organisation.

It began a project known as Base Erosion and Profit Shifting (BEPS) in 2013, which aims to mitigate tax loopholes which currently allow companies to shift profits from higher tax countries to lower tax countries like Ireland.

‘Intention to target Ireland’

Perhaps ironically Ireland appears to have been a major beneficiary of some of the early outcomes of the BEPS project.

The country’s corporation tax receipts have soared from about €4bn (£3.5bn) in 2013 to around €12bn (£10.5bn) in 2020.

That is the principle that companies should declare their profits in the location where they have real operations or activities.

“Countries like Ireland have been a huge winner from BEPS mark one,” he said.

“The objective was to align profit with substance and we actually are one of the countries where these companies have substance, whether it be pharmaceuticals, computer chips, medical devices and the ICT companies.

“I think when countries in the G7 looked at this they thought ‘that’s not quite what we wanted’ – maybe the intention was to target countries like Ireland, not benefit them.”

When could we see an impact?

In the next round of BEPS, with the US on board, those other rich countries are more likely to get what they want at Ireland’s expense.

But even if President Biden can agree the reforms at home and abroad, how quickly would that have an impact in Ireland?

Mr Coffey thinks any negative effects would not be instant because tax is not everything.

“Are the ICT companies likely to head off around the world, scattering their headquarters to various different cities?” he said.

“There are benefits to being co-located. At least in the medium term we are not likely to see a huge shock.”

That is echoed by the IDA (Industrial Development Authority), the inward investment agency, which points to Ireland’s workforce and significant clusters of specialisation in areas like medical technology and pharmaceuticals.

The IDA also sees the Brexit angle, pointing out that Ireland, unlike its UK neighbour, is part of the EU’s single market.

In a statement, it said: “Ireland is at the heart of Europe. Ireland’s continued commitment to the EU is a core part of Ireland’s value proposition to foreign investors, offering a base to access the European Single Market and to grow their business.

“Ireland also benefits from free movement of people within the EU, giving businesses located in Ireland access to a European labour market.”

The Irish government has been engaged in the BEPS process, though in a speech last year the Finance Minister, Pascal Donohoe, said he remained to be convinced of the need for minimum taxation, beyond the specific challenges relating to the digital economy.

This week a government spokesman said: “Ireland is aware of the US proposals.

“We are constructively engaging in these discussions, and will consider any proposals carefully noting that political level discussions on these issues have not yet taken place with the 139 countries involved in this process.”

Source: – BBC News

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