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Student Loan Debt – How Can I pay it off?

Calculator on a sheet of numbers

You go to university or college to help you to get a good job. But for most of us, we need to get a student loan to be able to do this. It seems easy enough, but we soon realize that we have taken on a small mortgage. It is like having a huge, heavy stone around our necks and we do not know how to take it off. You know you need to pay off your student loan debt, but how?

Step 1: Assess Your Student Loan Debt

The first thing you need to do is figure how much you have in student loans and from what sources. In the Canada student loan program, you can have a federal loan and/or one or more provincial loans. Once you have done this, you can then rank your loans from largest to smallest. For example, you might have a federal loan of $15000, a Manitoba loan of $10000 and an Ontario loan of $5000. Once you have created this list, you move on to Step 2.

Step 2: Figure Out Minimum Payment

The next step is to figure out the minimum monthly payment to cover the accrued interest on each loan. In our example above, we figure this out to be $150 for our federal loan, $100 for our Manitoba loan and $75 for the lst one – our Ontario student loan. Once we have done this, we can move on to step 3.

Step 3: Target Smallest Student Loan

Now we need to look at our smallest loan and see how much we can pay over and above just the interest payment. In our example above, our smallest loan is the Ontario loan at $75 per month to keep the interest off our principle amount. Suppose we can add another $75 from our household budget and pay $150 per month on this student loan. Then: just keep doing this until the loan is gone! That is the goal of course – getting each of these burdensome loans GONE. And then we are ready to move on to step 4.

Step 4: Rolling Payment to Next Student Loan

Rolling payment means taking the amount we were paying on our smallest loan and then adding that amount to the next smallest loan. In our example above, this means adding $150 per month to our $100 payment of our Manitoba loan. You’re really making progress now! Now it will be a total of $250 per month on our Manitoba loan until it is gone. We then move to Step 5.

Step 5: Rinse and Repeat

We now take the $250 we were paying on the Manitoba loan and add this to the $150 we are paying on the federal loan. We now will pay $400 per month our federal loan until it is gone. Just like that your loans will be gone!

Conclusion

The process above seems simple enough, but the reality is that it will take effort. You need to be disciplined enough to stick to the plan. Also, you need to be patient because it will take some time to pay it off, depending on how large your student loan debt is. However, if you stick to it, that heavy burdensome stone around your neck – called your student loans – will finally be removed. You will be free at last!

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Canada Budget 2021 Highlights

A picture of Canadian 50 dollar bill to denote Canada Budget 2021 highlights.

A few days ago, the Minister of Finance gave Canada budget 2021 highlights. She indicated that there would be 101.4 billion dollars in new spending over next three years. The goal is to recover from the pandemic and kickstart the move to a greener economy. So what are some of the main highlights of the budget?

Canada Budget 2021 Highlights – Main Points

Here are some of the main highlights of the 2021 budget taken from the government of Canada’s website and CBC’s website below. Both those sites go into great deal about the budget but here are the main highlights below:

-Extending the Canada Emergency Wage Subsidy, the Canada Emergency Rent Subsidy and Lockdown Support until September 25, 2021.

-Extending the weeks available for the Canada Recovery Benefit and the Canada Recovery Caregiving Benefit.

-Increasing the Employment Insurance sickness benefits from 15 to 26 weeks.

-$30 billion over five years and $8.3 billion per year after that to create and sustain a national child care program. Goal is a $10/day child care service by 2025-2026.

-Taxable grant payment of $500 to Old Age Security pensioners age 75 or older as of June 2022 and a 10 per cent boost to maximum OAS benefits for pensioners 75 or older starting July 1, 2022.

-$18 billion to build safer, healthier Indigenous communities.

-$17.6 billion for green recovery which means to conserve 25 per cent of lands and oceans by 2025. Also, put Canada on course to exceed climate change targets by cutting emissions to 36 per cent below 2005 levels by 2030.

-A new $15 federal minimum wage.

Conclusion

The above are some of the main highlights of the budget. The government’s plan is ambitious but opponents are worried about the excess spending and huge debt that will be incurred. Will the government’s plan work? Only time will tell as life is pretty unpredictable right now.

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When is the Deadline for Filing for 2020 Tax Year?

A calculator to use to help you know when to file for 2020 tax year.

When is the deadline for filing taxes this year for 2020? It is a good question because with the pandemic still ranging on, many Canadians are not sure. Last year, the deadline was extended but what about this year? Here are some dates that you need to know.

When is the Deadline for Filing for 2020 Tax Year? Individuals

If you go to the government of Canada’s website, the deadline for individuals this year is April 30, 2021. Also, if you are going to owe any amount in taxes for the year 2020, the due date for payment is also April 30, 2021. If you do not pay any amounts owing by this date, you could incur a late filing fee and interest on the amount owing.

Deadline For Self Employed Individuals and their Cohabiting Spouse or Common Law Partner

The government of Canada website indicated that the deadline for self employed individuals, spouses, or common law partners is June 15, 2021. However, the deadline for any amount owing in taxes for these ones is April 30, 2021. If taxes owing are not paid by then, you could incur a late filing fee and interest on amount owing.

Deadline to File a Deceased Person’s Return

The government of Canada’s website says that if a person died between January 1, 2020 and October 31, 2020, the deadline to file the deceased person’s return is April 30, 2021. And the deadline to pay any tax owing on the deceased person’s return is also April 30, 2021.

If the person died after October 31, 2020 and before May 1, 2021, then the deadline to file the deceased person’s return is six months after date of individual’s death. The deadline for taxes owing on deceased person’s return is also six months after individual’s death. However, the surviving cohabitating spouse or common law would still have to pay any tax owing on their returns by April 30, 2021.

Deadline for Corporations

The deadline for for corporations is six months after the end of the corporation’s tax year.

When is the Deadline for Filing Taxes for 2020 Tax Year? Conclusion

Tax season is upon us but it looks like dates of filing are back to the status quo. However, it is good to know that because many might think differently due to the pandemic. But it is always good to check because no one wants to pay any extra interest or late filing fees. Stay safe out there.

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Current Canadian Mortgage Rates as of September 14, 2020

A graph to denote fluctuating current Canadian mortgage rates.

What are current Canadian mortgage rates in right now? It is an interesting question which will take much research as each bank has their own rates. This can be a long and arduous process. However, I thought I would post some currents rates of some of Canada’s big banks to help make things a bit easier for you guys. So without further ado, here are the current mortgage rates in Canada below:

Current Canadian Mortgage Rates

Royal Bank of Canada

TermSpecial OffersAPR
2 Year Fixed2.090%2.150%
5 Year Fixed2.290%2.320%
5 Year VariableRBC Prime Rate – 0.350% (2.100%)2.130%

TD Bank

TD Special Mortgage Rates

TermSpecial Rate3APR    4,   5
3 Year Fixed Closed72.19%2.23%
5 Year Fixed Closed72.24%2.26%
5 Year Fixed Closed
High-Ratio9		2.07%2.09%
5 Year Variable Closed62.05%2.07%
TD Mortgage Prime Rate is 2.60%

Scotiabank

Variable Rate Mortgages

Effective September 14, 2020

Posted Rate
Scotia Ultimate Variable Rate Mortgage – 3 Year Closed Term3.350%1
Scotia Flex Value Mortgage-Closed 5 Year Term2.650%2
Scotia Flex Value Mortgage-Open 5 Year Term5.750%3

Closed Term Fixed Rate Mortgages

TermRate
1 year3.090%
2 years3.190%
3 years3.790%
4 years4.090%
5 years4.790%
7 years5.390%
10 years5.890%

Short Term Fixed Rate Mortgages

TermRate
Open Mortgage – 6 month5.750%
Open Mortgage – 1 year5.750%
Flexible/Closed Mortgage – 6 month4.250%
Special Offer Information
1
APR 3.87%
2
APR 2.70%
3
APR 5.75%

Conclusion

Buying a house is one of the most important purchases you can make. And for most, obtaining a mortgage is necessary to make that home purchase happen. So finding the right mortgage rate for your circumstances is imperative because choosing the wrong rate could cost you thousands of dollars. So do your research; ask lots of questions; read the fine print and take an honest appraisal of what you can afford. Compare mortgage rates AND ask at the bank if they’ll match the better rates at other financial institutions. Doing so will give you the information you need to make the right decision. And, potentially save thousands upon thousands of dollars over the course of the mortgage. Happy house hunting!

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Canada Emergency Wage Subsidy Extension

A picture to denote business owner calculating the canada wage subsidy program for their employees

The Canada Emergency Wage Subsidy Extension was just announced today by the prime minister this morning. The news is definitely a relief for the many businesses struggling to stay afloat during this pandemic. How long is the extension for and when does the program end? See below:

What is the Canada Emergency Wage subsidy? Quick Review

Here’s a quick summary from a CBC article today: “The program covers 75 per cent of wages, up to a weekly maximum of $847, for workers at eligible companies and non-profits affected by the economic slowdown caused by the COVID-19 pandemic.”

Originally the program went from March 15, 2020 to August 29, 2020. This meant that an employer could collect a 75% wage subsidy on an employee’s wages up to 24 weeks as per the government’s website. For more details on the Canada Emergency Wage Subsidy Program, please look at my original article regarding this.

Canada Emergency Wage Subsidy Extension

As mentioned earlier, the prime minister announced that the government will be extending the program until December 2020. The exact weeks extension and when you can apply for the extension was not announced as of yet. Once further details are given, we will update these details.

Conclusion

As mentioned above, many small businesses will welcome the extension of the program as the economy recovery from the pandemic is slow. Also, with uncertainties surrounding covid-19 such as a potential second wave, many businesses are worried about their future. And any help during this unstable time is good help for sure. Stay safe!

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How Do I Apply For the CECRA For Small Businesses?

A picture of a store opening to denote a business being able to stay open due to their landlord applying for the CECRA program to help reduce their rent.

How do I apply for the CECRA for small businesses? What is the CECRA program? The Canadian government just announced more emergency measures for small businesses to help weather Covid-19. However, this time the focus is on helping commercial landlords. Let’s explain this new program.

How Do I Apply For the CECRA – What is it?

CECRA stands for Canada Emergency Commercial Rent Assistance for small businesses. The goal of the program is to provide rental relief for small businesses. The government achieves this by providing forgivable loans to commercial landlords as an incentive to lower rents for their tenants.

How Do I Apply For The CECRA – How Does it Work?

First, the commercial landlord goes into an agreement with their tenant(s) to reduce their rent to 25% of normal rate for three months (April 2020 , May 2020, June 2020). The landlord will then take a loan from the Government of Canada to cover the other 75% for this time frame. If the landlord and tenant meet the program’s criteria, the landlord can have 2/3 of his/her loan forgiven. What does this mean in layman’s terms?

Suppose a landlord had a tenant who was paying $20,000 in rent each month. If the landlord wanted to be part of this program, they would go into an agreement to reduce their rent by 75% for April, May and June. This means the tenant would only pay $5000 per month for these three months. The landlord would then take a loan for $15000 per month for the three months from the government or $45000 in total. The landlord then can potentially have $10000 per month of the loan forgiven or $30000.

So what does this mean? it means that landlord will receive 75% of the required rent for these 3 months instead of 100%. The tenant will only pay 25% of their rent for same period. This means the landlord will incur a 25% loss in rent this time frame. But this amount is covered by the loan in which they pay back. Why would landlords choose to do this?

What is the Incentive for Landlords?

The government is banking on 3 reasons that landlords will apply for the programs. Here is a summary of the reasons from the Canada Mortgage and Housing Corporation whom the government is using to administer this program.

  1. There is an incentive of getting a government loan where potentially 2/3 of it could be forgiven.
  2. The landlord is guaranteed at least 50% of your rent for the months of April, May, and June. This is huge considering the alternative could be receiving NOTHING in rent if businesses can’t afford to pay.
  3. Finally, eviction and finding new tenants can be an expensive and time consuming process that could be very costly. So, perhaps landlords can prevent this altogether.

How Can I Apply For The CECRA Program?

You will need to go to the CMHC website. However, the application portal for this program will not be open until Monday May 25, 2020 at 8:00 am eastern time. And then the government will take a staggered approach for applying due to the expected high volume. Here’s the schedule from the the CMHC website below:

NOTE: Once registered, the portal will be available 24/7 for applicants to input data and upload documents.

DayWho should register?
MondayProperty owners who are located in Atlantic Canada, BC, Alberta and Quebec, with up to 10 tenants who are eligible for the program
TuesdayProperty owners who are located in Manitoba, Saskatchewan, Ontario and the Territories, with up to 10 tenants who are eligible for the program
WednesdayAll other property owners in Manitoba, Saskatchewan, Ontario and the Territories
ThursdayAll other property owners in Atlantic Canada, BC, Alberta and Quebec
FridayAll

What Information Will I Need to Apply For the CECRA Program?

There are a few pieces of information you will need to give to apply for the program. Here are a list below from the the CMHC website:

Attestations

  • Tenant or Sub-tenant’s Attestation (sample PDF):
    Property owners must have each of their eligible commercial small business tenants and/or subtenants sign an attestation. The Tenants are responsible for attesting to their eligibility with the program requirements. 
  • Property Owner’s Attestation (sample PDF):
    Property owners must sign an attestation. This confirms the information relating to the property owner and the property provided in the application is correct. And it attest to their eligibility with the program requirements.

Agreements

  • Rent Reduction Agreement (sample PDF): All application documents will be accessible on May 25, 2020.
    Property owners must enter into a legally binding rent reduction agreement with each impacted tenant. And confirm the rent reduction in accordance with the program terms and conditions.  This agreement is conditional upon final approval of the application for CECRA for small businesses.
  • Forgivable Loan Agreement (sample PDF):
    Property owners must agree to the terms and conditions in the application and outlined in the forgivable loan agreement.

You’ll also need to provide the following information:

Property owner information

  • Property information includes: property address, property type, property tax statement, latest rent roll for each property and the number of commercial units
  • Applicant information includes: banking information, property owner contact information, co-ownership information and contact details for co-owners

Tenant information

  • Tenant information includes: tenant contact information, registered business name, lease area and the monthly gross rent for the period of April, May and June 2020

Conclusion

The CECRA program is a very detailed program. If you think you might want to apply, please go to the CMHC website and read it carefully. However, the amount of information provided could be overwhelming. Hopefully this summary helps you in understanding the program better. Which is important because this is a big decision to make and the stakes are high. Stay safe everyone.