Canada gains again: 10.7K jobs, unemployment 6.8%, CAD wobbles – Forex Crunch

Another good month in the Canadian jobs market: a gain of 10.7K jobs.However, there are 19.4K part-time positions gained why full-time positions have actually fallen by 8.7K. The unemployment rate slipped to 6.8%, but so did the participation rate, hitting 65.6% from 65.8%.

The Canadian dollar likes it, also enjoying a mixed US NFP.

Canada was expected to report a loss of 20K jobs in November, after an excellent gain of 43.9K back in October and the unemployment was forecast to remain unchanged at 7%.

USD/CAD was trading around 1.33. The loonie enjoyed the OPEC deal. The oil exporting nations agreed to cut around 1.2 million barrels per day, something that has pushed oil prices higher.

It is important to remember that the US Non-Farm Payrolls report is released at the same time, and influencing USD/CAD as well.

Next week, the Bank of Canada convenes to make its decision. Poloz made some dovish sounds lately, but hasn’t followed through.

More: USD/CAD – 3 factors moving it up

Here is how it looks on the 30-minute chart:

usdcad-december-2-2016-technical-chart-jobs-day

Get the 5 most predictable currency pairs

Canada gains again: 10.7K jobs, unemployment 6.8%, CAD wobbles – Forex Crunch

Another good month in the Canadian jobs market: a gain of 10.7K jobs.However, there are 19.4K part-time positions gained why full-time positions have actually fallen by 8.7K. The unemployment rate slipped to 6.8%, but so did the participation rate, hitting 65.6% from 65.8%.

The Canadian dollar likes it, also enjoying a mixed US NFP.

Canada was expected to report a loss of 20K jobs in November, after an excellent gain of 43.9K back in October and the unemployment was forecast to remain unchanged at 7%.

USD/CAD was trading around 1.33. The loonie enjoyed the OPEC deal. The oil exporting nations agreed to cut around 1.2 million barrels per day, something that has pushed oil prices higher.

It is important to remember that the US Non-Farm Payrolls report is released at the same time, and influencing USD/CAD as well.

Next week, the Bank of Canada convenes to make its decision. Poloz made some dovish sounds lately, but hasn’t followed through.

More: USD/CAD – 3 factors moving it up

Here is how it looks on the 30-minute chart:

usdcad-december-2-2016-technical-chart-jobs-day

Get the 5 most predictable currency pairs

This Chinese State Bank Is Said to Be Quietly Clamping Down on Foreign Currency Sales – Fortune

Bank of China, one of the country’s “Big Four” state banks, has begun to sharply limit corporate customers’ ability to purchase foreign currency in Shanghai, in what sources said on Friday was a bid to help stem capital outflows and ease depreciation pressure on the yuan.

Under the unwritten new policy, described by two sources familiar with the details, bankers at China’s fourth-biggest lender began this week to discourage companies wishing to change yuan into dollars.

Those firms which insisted on doing so were told they would be restricted to exchanging a maximum of million. Previously, there had been no restrictions on companies’ forex purchases.

The policy comes as China’s government adopts increasingly aggressive measures to control movements of yuan out of the country and snuff out expectations that the currency would continue to spiral lower.

It has already lost nearly 6% against the resurgent dollar so far this year, taking it to more than eight-year lows.

“All preferential policies regarding forex purchases have been canceled,” said one of the sources, who declined to be identified by name because she was not authorized to speak publicly.

The source said the rules only applied to Bank of China’s Shanghai operations, but that other locations were free to set their own corresponding policies.

Neither Bank of China nor the State Administration of Foreign Exchange (SAFE), which oversees China’s forex policy, had an immediate comment.

Bank of China’s Shanghai operations were “starting to strictly control forex purchases… and have imposed restrictions on forex purchases worth million or more,” the second source said.

One source described the policy as “voluntary,” while the other said it had come from SAFE.

Either way, the measures appeared to be an escalation of the government’s war on outflows after SAFE earlier this week started vetting transfers abroad worth million or more and increased scrutiny of major outbound deals.

CLOSING LOOPHOLES

While limited in scope, the bank’s Shanghai foreign exchange restrictions are more than just a symbolic step.

Bank of China was once the only Chinese bank authorized to conduct foreign exchange transactions, and remains the country’s biggest trader of foreign currency. It has more overseas branches than any other Chinese bank.

At least one other bank was adopting similar measures to curb foreign exchange sales.

An official at a mid-sized shareholding bank in Shanghai, who declined to be identified, said the lender had suspended all forex purchases. It was also preventing individuals from transferring foreign currency to their relatives, taking aim at a common workaround to take money overseas.

Chinese regulations grant individuals a foreign exchange quota of ,000 a year. Many have moved larger sums abroad by tapping relatives’ quotas.

Capital outflows have grown as a concern this year for the government as it attempts to put the economy back on track and keep the currency stable without exhausting its foreign exchange reserves.

Last week, a senior central bank researcher warned that the fall in the yuan’s exchange rate was shaping market expectations of further losses and triggering capital flight, and that it was necessary to “break this feedback loop.”

Underscoring the risks, China’s foreign exchange reserves fell .7 billion – the most in nine months – in October and by far more than expected to the lowest since March 2011, indicating further capital outflows despite recent signs that the world’s second-largest economy was stabilizing.

The central bank is widely believed to have sold U.S. dollars to cushion the yuan currency’s descent in October.

On Friday, state banks sold dollars in the market for a fifth straight day on Friday, helping keep the yuan steady at around 6.88 to the dollar.

November’s foreign exchange reserves data is due out next Wednesday.

A Reuters poll of more than 50 foreign exchange analysts this week suggested that the yuan would likely slip to 6.90 per dollar by the end of this month, and then depreciate steadily to 7.14 in a year, which would mark its lowest level in nearly a decade.

Couple dreams of retiring to tropical paradise, but breaking ties with Canada may not be cheap – Financial Post

Mike Faille

Situation: Nearly a decade apart in ages, couple wants to anticipate pension income and tax abroad  

Solution: Verify payment of pensions abroad, taxes on pensions, replacement costs for social benefits

A couple we’ll call Eric, 49, and Louise, 58, live in Ontario. Both civil servants, they bring home ,653 a month, save conscientiously, yet have a dilemma. Their plan is to work another nine years, then retire perhaps to the Caribbean or Central America where they would have less need for central heating and parkas and, they expect, a much lower cost of living. 

“We want to leave Canada for good or, if that is not feasible, then to downsize our house and move to the East or West coast and live abroad for six months of the year,” Eric says. “We’d like ,000 a year income before tax. What needs to be done now to achieve this goal?”

Email for a free Family Finance analysis

Family Finance asked planner Guil Perreault, head of G. Perreault Financial Inc. in Winnipeg, to work with Eric and Louise. In his view, the plan will work in the simple sense of living economically in a low cost country. But breaking ties to Canada is the larger problem.

“CRA considers residency on a case by case basis,” Perreault says. “Living in Canada for less than 183 days a year is only one test. CRA also considers financial ties, social ties, driver’s licences, where you bank — it all has to be evaluated.”

The first issue is whether the couple can afford to leave. Their income in nine years, when they hope to leave, will consist of investment income from present and future contributions to their RRSPs, TFSAs and non-registered assets, work pensions for each, and Canada Pension Plan and Old Age Security benefits when each is eligible.

Estimating retirement income

screen-shot-2016-12-01-at-7-21-53-pmTheir present financial assets are 1,100. They have ,600 in TFSAs and contribute 0 a month to the plans. At this rate of contribution, growing at three per cent a year after inflation, in nine more years they would have 7,170 in 2016 dollars.

Eric and Louise have 8,000 in RRSPs and contribute ,980 a year to the plans. In nine years, growing through contributions and at three per cent after inflation, the RRSPs would have a value of 2,700. Their ,500 non-registered savings with no further contributions would have appreciated to ,700. Allowing for tax on accrued but unrealized gains and no tax on principal, we’ll assume that they have ,000 ready for travel.

RRSP income can be paid abroad with a withholding tax that is usually 15 per cent, but can be as much as 25 per cent depending on the tax treaty between Canada and the other country. TFSA balances could be cashed with no tax. Non-registered investments would be subject to a departure tax, which is effectively an acceleration of accrued but unrealized capital gains to a theoretical or actual sale. 

We’ll assume that the couple sells their 0,000 house, which would have a theoretical value of 3,000 after nine years of growth in price at three per cent after inflation. There would be preparation for sale and selling costs totaling about five per cent, or ,000, reducing the cash obtained to 7,000. If they keep 0,000 for a home in a warm place, they would be able to add 7,000 to their funds for living abroad.

On the eve of departure, the couple would have TFSA cash of 7,170, cash surplus from sale of their house of 7,000, and non-registered assets of ,000 — 4,170 total.

screen-shot-2016-12-01-at-7-22-06-pmIn nine years, Louise will be 67. She will be entitled to CPP of ,000 at 65, or she can wait to 67 when leaving Canada to obtain an enhanced benefit, with an 8.4 per cent per year bonus, net ,512. The virtue of postponing the benefit is that it enlarges the basis for indexation, which, despite foreign residence, will still apply.

Eric would be two years from early application for CPP. If he chooses to start benefits at 60, he would receive the basic ,110 less 36 per cent, for ,390 a year. Eric’s company pension would start at ,550 a year at age 58 with a drop to about ,000 a year at 65. Louise would have a company pension of ,000 a year starting at age 63.

Adding it all up, when each partner is at least 65, they will have combined company pensions of ,000; CPP benefits of ,390 for Eric with a start at his age 60, and ,512 for Louise with a start at her age 67; and two OAS benefits, ,832 for Louise if she waits until she is 67 to start benefits, and ,846 for Eric, assuming he starts his benefits at 65.

The sum of their various pension incomes would be ,580, or ,150 a year after 15 per cent withholding on government pensions and similar rates for other income streams, depending on how they are structured for income, capital gains and return of capital. Their own 4,170 of capital, if annuitized at three per cent after inflation for 28 years to Louise’s age 95 would generate ,300 before tax. Allowing for zero tax on TFSA payments and assuming that other income is subject to 15 per cent average tax in their new jurisdiction, they would net ,450 a year. With these assumptions, they would have pension and investment income of about 3,600 a year after 15 per cent withholding. They would surpass their goal of ,000 a year before tax.

Leaving Canada

The idea of breaking all ties with Canada for financial advantage is superficially easy but in practice quite problematic. For this couple, replacing coverage by the Ontario Health Insurance Plan could be costly if they have to buy private health insurance. If they remain in Canada for residence, then, ironically, their tax rates would rise to perhaps 17 per cent in British Columbia or 20 per cent in Nova Scotia based on current tax schedules and splits of eligible pension income. But there would be no departure tax to pay on accrued by unrealized capital gains.   

 “Our analysis is not by any means definitive,” Perreault explains. “If they choose to leave Canada, the couple must take advice from a tax professional who specializes in international tax and from a lawyer with experience in the expatriation process. There are potential financial gains to be had from living in a warm, low tax jurisdiction. On the other hand, low tax countries may have less developed health care systems. It can be costly to replace Canadian provincial health insurance depending on the foreign jurisdiction.”

 

This Chinese State Bank Is Said to Be Quietly Clamping Down on Foreign Currency Sales – Fortune

Bank of China, one of the country’s “Big Four” state banks, has begun to sharply limit corporate customers’ ability to purchase foreign currency in Shanghai, in what sources said on Friday was a bid to help stem capital outflows and ease depreciation pressure on the yuan.

Under the unwritten new policy, described by two sources familiar with the details, bankers at China’s fourth-biggest lender began this week to discourage companies wishing to change yuan into dollars.

Those firms which insisted on doing so were told they would be restricted to exchanging a maximum of million. Previously, there had been no restrictions on companies’ forex purchases.

The policy comes as China’s government adopts increasingly aggressive measures to control movements of yuan out of the country and snuff out expectations that the currency would continue to spiral lower.

It has already lost nearly 6% against the resurgent dollar so far this year, taking it to more than eight-year lows.

“All preferential policies regarding forex purchases have been canceled,” said one of the sources, who declined to be identified by name because she was not authorized to speak publicly.

The source said the rules only applied to Bank of China’s Shanghai operations, but that other locations were free to set their own corresponding policies.

Neither Bank of China nor the State Administration of Foreign Exchange (SAFE), which oversees China’s forex policy, had an immediate comment.

Bank of China’s Shanghai operations were “starting to strictly control forex purchases… and have imposed restrictions on forex purchases worth million or more,” the second source said.

One source described the policy as “voluntary,” while the other said it had come from SAFE.

Either way, the measures appeared to be an escalation of the government’s war on outflows after SAFE earlier this week started vetting transfers abroad worth million or more and increased scrutiny of major outbound deals.

CLOSING LOOPHOLES

While limited in scope, the bank’s Shanghai foreign exchange restrictions are more than just a symbolic step.

Bank of China was once the only Chinese bank authorized to conduct foreign exchange transactions, and remains the country’s biggest trader of foreign currency. It has more overseas branches than any other Chinese bank.

At least one other bank was adopting similar measures to curb foreign exchange sales.

An official at a mid-sized shareholding bank in Shanghai, who declined to be identified, said the lender had suspended all forex purchases. It was also preventing individuals from transferring foreign currency to their relatives, taking aim at a common workaround to take money overseas.

Chinese regulations grant individuals a foreign exchange quota of ,000 a year. Many have moved larger sums abroad by tapping relatives’ quotas.

Capital outflows have grown as a concern this year for the government as it attempts to put the economy back on track and keep the currency stable without exhausting its foreign exchange reserves.

Last week, a senior central bank researcher warned that the fall in the yuan’s exchange rate was shaping market expectations of further losses and triggering capital flight, and that it was necessary to “break this feedback loop.”

Underscoring the risks, China’s foreign exchange reserves fell .7 billion – the most in nine months – in October and by far more than expected to the lowest since March 2011, indicating further capital outflows despite recent signs that the world’s second-largest economy was stabilizing.

The central bank is widely believed to have sold U.S. dollars to cushion the yuan currency’s descent in October.

On Friday, state banks sold dollars in the market for a fifth straight day on Friday, helping keep the yuan steady at around 6.88 to the dollar.

November’s foreign exchange reserves data is due out next Wednesday.

A Reuters poll of more than 50 foreign exchange analysts this week suggested that the yuan would likely slip to 6.90 per dollar by the end of this month, and then depreciate steadily to 7.14 in a year, which would mark its lowest level in nearly a decade.

Canada gains again: 10.7K jobs, unemployment 6.8%, CAD wobbles – Forex Crunch

Another good month in the Canadian jobs market: a gain of 10.7K jobs.However, there are 19.4K part-time positions gained why full-time positions have actually fallen by 8.7K. The unemployment rate slipped to 6.8%, but so did the participation rate, hitting 65.6% from 65.8%.

The Canadian dollar likes it, also enjoying a mixed US NFP.

Canada was expected to report a loss of 20K jobs in November, after an excellent gain of 43.9K back in October and the unemployment was forecast to remain unchanged at 7%.

USD/CAD was trading around 1.33. The loonie enjoyed the OPEC deal. The oil exporting nations agreed to cut around 1.2 million barrels per day, something that has pushed oil prices higher.

It is important to remember that the US Non-Farm Payrolls report is released at the same time, and influencing USD/CAD as well.

Next week, the Bank of Canada convenes to make its decision. Poloz made some dovish sounds lately, but hasn’t followed through.

More: USD/CAD – 3 factors moving it up

Here is how it looks on the 30-minute chart:

usdcad-december-2-2016-technical-chart-jobs-day

Get the 5 most predictable currency pairs

AUD/USD Forecast Dec. 5-9 – Forex Crunch

AUD/USD was unchanged last week, as the pair closed at 0.7440. This week’s key events are the Cash Rate and GDP. Here is an outlook on the major market-movers and an updated technical analysis for AUD/USD.

In Australia, key indicators were mixed. Private Capital Expenditure posted a sharp decline of 4.0%, compared to a decline of 2.8%. Retail Sales edged lower to 0.5%, but beat the estimate of 0.3%. In the US, Preliminary GDP sparkled in Q3 with a gain of 3.2%, beating the estimate of 3.0%. Consumer Confidence data easily beat expectations. Employment numbers were mixed, as Nonfarm Payrolls met expectations, but wages declined.

Updates:

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

aud_usd_-daily-chart-dec5-9

  1. AIG Services Index: Sunday, 22:30. The indicator improved to 50.5 points in November, pointing to stagnation in the services sector. Will we see a stronger reading in December?
  2. MI Inflation Level: Monday, 00:00. The indicator dipped to 0.2% in October, down from 0.4% a month earlier.
  3. Company Operating Profits: Monday, 0:30. The indicator rebounded in Q2, posting a gain of 6.9%. This easily beat the estimate of 2.1%. The estimate for Q3 stands at 3.1%.
  4. Current Account: Tuesday, 00:30. Australia’s current account deficit narrowed in Q2 to A.5 billion, beating the forecast of A.2 billion. The deficit is expected to shrink again in Q3 to A.6 billion.
  5. Cash Rate: Tuesday, 3:30. The RBA has pegged the benchmark interest rate at 1.50% since August and no change is expected at the December meeting. The bank has cut rates by a quarter point twice in 2016.
  6. AIG Construction Index: Tuesday, 22:30. The index slipped to 45.9 points in October, indicative of contraction in the construction sector. Will we see an improvement in the November reading?
  7. GDP: Wednesday, 00:30. GDP is one of the most important indicators and an unexpected reading can have a strong impact on the movement of AUD/USD. GDP dropped to 0.5% in Q2, shy of the estimate of 0.6%. The downward trend is expected to continue in Q3, with the estimate standing at 0.2%.
  8. Trade Balance: Thursday, 00:30. Australia’s trade deficit narrowed to A.23 billion in September, much smaller than the forecast of A.71 billion. The deficit is expected to drop to A.72 billion in October.
  9. Chinese Trade Balance: Thursday, Tentative. Key Chinese indicators can have a strong impact on the Aussie, as China is Australia’s number one trading partner. The trade surplus jumped to 5 billion in October, but this was shy of the estimate of 6 billion. The surplus is expected to dip to 7 billion in November.
  10. Home Loans: Friday, 00:30. Home Loans provides a snapshot of the level of activity in the Australian housing sector. The indicator bounced back in September, posting a gain of 1.6%, well above the forecast of -1.5%. The markets are braced for a decline in October, with an estimate of -0.9%.

AUD/USD Technical Analysis

AUD/USD opened the week at 0.7442 and quickly touched a high of 0.7497, as resistance held firm at 0.7513 (discussed last week). The pair then reversed directions and dropped sharply, touching a low of 0.7361. AUD/USD then pushed higher, closing the week at 0.7440.

Live chart of AUD/USD:

Technical lines from top to bottom:

0.7835 has held in resistance since April.

0.7737 was a cap in June 2015.

0.7626 is next.

0.7513 was a cushion in April 2015.

0.7427 marked the low point for the month of September.

0.7333 was a cap in December 2015.

0.7223 has held firm in support since June.

0.7148 is next.

0.7001 is the final support line for now.

I remain bearish on AUD/USD

The RBA is expected to maintain rates at 1.50%, while the Fed is virtually certain to raise rates next week. So, monetary divergence continues to favor the US dollar.

However, the Aussie will likely remain under pressure, with the Federal Reserve expected to raise rates in December.

Our latest podcast is titled Eyeing OPEC – Critical crude

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Further reading:

Get the 5 most predictable currency pairs

Canada gains again: 10.7K jobs, unemployment 6.8%, CAD wobbles – Forex Crunch

Another good month in the Canadian jobs market: a gain of 10.7K jobs.However, there are 19.4K part-time positions gained why full-time positions have actually fallen by 8.7K. The unemployment rate slipped to 6.8%, but so did the participation rate, hitting 65.6% from 65.8%.

The Canadian dollar likes it, also enjoying a mixed US NFP.

Canada was expected to report a loss of 20K jobs in November, after an excellent gain of 43.9K back in October and the unemployment was forecast to remain unchanged at 7%.

USD/CAD was trading around 1.33. The loonie enjoyed the OPEC deal. The oil exporting nations agreed to cut around 1.2 million barrels per day, something that has pushed oil prices higher.

It is important to remember that the US Non-Farm Payrolls report is released at the same time, and influencing USD/CAD as well.

Next week, the Bank of Canada convenes to make its decision. Poloz made some dovish sounds lately, but hasn’t followed through.

More: USD/CAD – 3 factors moving it up

Here is how it looks on the 30-minute chart:

usdcad-december-2-2016-technical-chart-jobs-day

Get the 5 most predictable currency pairs

Couple dreams of retiring to tropical paradise, but breaking ties with Canada may not be cheap – Financial Post

Mike Faille

Situation: Nearly a decade apart in ages, couple wants to anticipate pension income and tax abroad  

Solution: Verify payment of pensions abroad, taxes on pensions, replacement costs for social benefits

A couple we’ll call Eric, 49, and Louise, 58, live in Ontario. Both civil servants, they bring home ,653 a month, save conscientiously, yet have a dilemma. Their plan is to work another nine years, then retire perhaps to the Caribbean or Central America where they would have less need for central heating and parkas and, they expect, a much lower cost of living. 

“We want to leave Canada for good or, if that is not feasible, then to downsize our house and move to the East or West coast and live abroad for six months of the year,” Eric says. “We’d like ,000 a year income before tax. What needs to be done now to achieve this goal?”

Email for a free Family Finance analysis

Family Finance asked planner Guil Perreault, head of G. Perreault Financial Inc. in Winnipeg, to work with Eric and Louise. In his view, the plan will work in the simple sense of living economically in a low cost country. But breaking ties to Canada is the larger problem.

“CRA considers residency on a case by case basis,” Perreault says. “Living in Canada for less than 183 days a year is only one test. CRA also considers financial ties, social ties, driver’s licences, where you bank — it all has to be evaluated.”

The first issue is whether the couple can afford to leave. Their income in nine years, when they hope to leave, will consist of investment income from present and future contributions to their RRSPs, TFSAs and non-registered assets, work pensions for each, and Canada Pension Plan and Old Age Security benefits when each is eligible.

Estimating retirement income

screen-shot-2016-12-01-at-7-21-53-pmTheir present financial assets are 1,100. They have ,600 in TFSAs and contribute 0 a month to the plans. At this rate of contribution, growing at three per cent a year after inflation, in nine more years they would have 7,170 in 2016 dollars.

Eric and Louise have 8,000 in RRSPs and contribute ,980 a year to the plans. In nine years, growing through contributions and at three per cent after inflation, the RRSPs would have a value of 2,700. Their ,500 non-registered savings with no further contributions would have appreciated to ,700. Allowing for tax on accrued but unrealized gains and no tax on principal, we’ll assume that they have ,000 ready for travel.

RRSP income can be paid abroad with a withholding tax that is usually 15 per cent, but can be as much as 25 per cent depending on the tax treaty between Canada and the other country. TFSA balances could be cashed with no tax. Non-registered investments would be subject to a departure tax, which is effectively an acceleration of accrued but unrealized capital gains to a theoretical or actual sale. 

We’ll assume that the couple sells their 0,000 house, which would have a theoretical value of 3,000 after nine years of growth in price at three per cent after inflation. There would be preparation for sale and selling costs totaling about five per cent, or ,000, reducing the cash obtained to 7,000. If they keep 0,000 for a home in a warm place, they would be able to add 7,000 to their funds for living abroad.

On the eve of departure, the couple would have TFSA cash of 7,170, cash surplus from sale of their house of 7,000, and non-registered assets of ,000 — 4,170 total.

screen-shot-2016-12-01-at-7-22-06-pmIn nine years, Louise will be 67. She will be entitled to CPP of ,000 at 65, or she can wait to 67 when leaving Canada to obtain an enhanced benefit, with an 8.4 per cent per year bonus, net ,512. The virtue of postponing the benefit is that it enlarges the basis for indexation, which, despite foreign residence, will still apply.

Eric would be two years from early application for CPP. If he chooses to start benefits at 60, he would receive the basic ,110 less 36 per cent, for ,390 a year. Eric’s company pension would start at ,550 a year at age 58 with a drop to about ,000 a year at 65. Louise would have a company pension of ,000 a year starting at age 63.

Adding it all up, when each partner is at least 65, they will have combined company pensions of ,000; CPP benefits of ,390 for Eric with a start at his age 60, and ,512 for Louise with a start at her age 67; and two OAS benefits, ,832 for Louise if she waits until she is 67 to start benefits, and ,846 for Eric, assuming he starts his benefits at 65.

The sum of their various pension incomes would be ,580, or ,150 a year after 15 per cent withholding on government pensions and similar rates for other income streams, depending on how they are structured for income, capital gains and return of capital. Their own 4,170 of capital, if annuitized at three per cent after inflation for 28 years to Louise’s age 95 would generate ,300 before tax. Allowing for zero tax on TFSA payments and assuming that other income is subject to 15 per cent average tax in their new jurisdiction, they would net ,450 a year. With these assumptions, they would have pension and investment income of about 3,600 a year after 15 per cent withholding. They would surpass their goal of ,000 a year before tax.

Leaving Canada

The idea of breaking all ties with Canada for financial advantage is superficially easy but in practice quite problematic. For this couple, replacing coverage by the Ontario Health Insurance Plan could be costly if they have to buy private health insurance. If they remain in Canada for residence, then, ironically, their tax rates would rise to perhaps 17 per cent in British Columbia or 20 per cent in Nova Scotia based on current tax schedules and splits of eligible pension income. But there would be no departure tax to pay on accrued by unrealized capital gains.   

 “Our analysis is not by any means definitive,” Perreault explains. “If they choose to leave Canada, the couple must take advice from a tax professional who specializes in international tax and from a lawyer with experience in the expatriation process. There are potential financial gains to be had from living in a warm, low tax jurisdiction. On the other hand, low tax countries may have less developed health care systems. It can be costly to replace Canadian provincial health insurance depending on the foreign jurisdiction.”

 

Canada gains again: 10.7K jobs, unemployment 6.8%, CAD wobbles – Forex Crunch

Another good month in the Canadian jobs market: a gain of 10.7K jobs.However, there are 19.4K part-time positions gained why full-time positions have actually fallen by 8.7K. The unemployment rate slipped to 6.8%, but so did the participation rate, hitting 65.6% from 65.8%.

The Canadian dollar likes it, also enjoying a mixed US NFP.

Canada was expected to report a loss of 20K jobs in November, after an excellent gain of 43.9K back in October and the unemployment was forecast to remain unchanged at 7%.

USD/CAD was trading around 1.33. The loonie enjoyed the OPEC deal. The oil exporting nations agreed to cut around 1.2 million barrels per day, something that has pushed oil prices higher.

It is important to remember that the US Non-Farm Payrolls report is released at the same time, and influencing USD/CAD as well.

Next week, the Bank of Canada convenes to make its decision. Poloz made some dovish sounds lately, but hasn’t followed through.

More: USD/CAD – 3 factors moving it up

Here is how it looks on the 30-minute chart:

usdcad-december-2-2016-technical-chart-jobs-day

Get the 5 most predictable currency pairs