5. July 2009 by Dan Walkow, CFA, CMT.

I have never been a big fan of tax shelters. More often than not they become a tax writeoff at best and illegal at worst.

Jamie Golombek at the Financial Post comments that:

Tax-shelter season may be months away, but a series of ongoing battles are surfacing based on prior years’ tax shelters gone awry.

In April, the Canada Revenue Agency again warned Canadians about the dangers of investing in schemes that provide “inflated or unsubstantiated” tax losses or deductions.

The CRA warned investors that participating in these shelters puts taxpayers at risk of losing their entire investment. In addition, investors could be forced to repay any related tax refunds they may have received, plus possibly interest and penalties, which can amount to 50% of the taxes payable.

Posted in Taxation | No Comments »

5. July 2009 by Dan Walkow, CFA, CMT.

The housing market in U.S. and Canada have taken different paths since the credit crisis began. In the U.S. it continues to get worse since the crash that started last year. In 2008, more than 3 millions foreclosures were filed setting a record. Foreclosures in 2008 was up 71% from 2007. This year foreclosures have been in excess of 250K each month reaching 342K in April but backing down to 321K in May according to Realtytrac. A recent New York Times editorial mentioned that rising unemployment numbers and falling home prices are causing new foreclosures with no end in sight.

Unlike the U.S. housing market crash, home foreclosures have not yet become a serious problem in Canada.

TopForeignStocks.com provides a table outlining the differences between the Canadian and US mortgage markets here.

Posted in Economics | No Comments »

5. July 2009 by Dan Walkow, CFA, CMT.

At least thats the way I see it! The Canadian government provided GM a bailout package of almost 10 billion dollars, a figure that works out to an unprecedented $2.1 million for each of 4,400 assembly job it hopes to save.

Auto production in Mexico is profitable, due to low cost assembly and production costs, why would any auto company in their right mind not produce autos in Mexico and export them into the USA and Canada. It’s not as if you have to put them on a boat and ship them across the Pacific.

The Canadian govenment bailout package will buy a little time but with no sustainable competitive advantage it is difficult to envision why the auto industry in Canada has much of a  future.

Canadian taxpayers should be outraged.

Read more on While Canada Spends Big to Save GM, so Why Not Mexico?

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