It’s Tax Szn.
This edition of Btchcoin is guest edited by Shivani Persad.
Shivani is a full-time model in NYC, a writer on the politics team at Brown Girl Magazine Inc, and a member of the leadership council at the Model Alliance, where she works towards improving labour protections for models through research, policy initiatives and activism. She is a graduate of McMaster University. You can find Shivani on insta at @liveshiv
Have you Opened an RRSP?
Why your brain doesn’t want you to save for retirement and what you can do to change your mind
Avoiding the looming RRSP contribution deadline?
You’re not alone… It turns out our brains aren’t programmed to save for retirement. A study done in Ontario shows that people don’t start saving for retirement because we are prone to sticking to the status quo. We also tend to view the process of setting up retirement savings as complex (which it totally can seem to be, so here’s a refresher on RRSPs).
Basically, we have an innate desire to avoid things that seems like they’re going to be a lot of work. The good news is that you can trick yourself into making personal finance choices that will help you to save for the long-term. Global News money expert, Erica Alini, suggests two ways to do this:
1) Think about how much money you’ll have! A good way to overcome a natural desire to procrastinate is to look at how much you can gain when you invest early. This doesn’t only apply to retirement, but also to making big purchases like a home, relocating to another country, or going back to school. Take advantage of the compound interest you can generate by starting to save early. According to Alini, a difference of five years can mean more than $100,000 lost in savings. Start now, you’ll be glad you did!
2) Don’t overwhelm yourself by setting unrealistic goals. If you can only contribute a little over the next few years, start with a small monthly contribution. This will help to develop good habits around saving and will give you a tax benefit while you build towards your future. When you start to have more disposable income, you can increase contributions to your RRSP or other retirement savings and establish new goals to reflect your new income. It’s a marathon, not a race.
If you want to make a change, now is the time. The RRSP contribution deadline for the 2019 tax year is March 2. Keep an eye on your inbox for Btchcoin’s upcoming guide to RRSPs.
It’s Been a Big Week for Google…
Attention all Btchcoin hackers, here’s some good news.
Google recently announced it intends to triple its Canadian workforce by adding offices in Toronto, Waterloo, and Montreal. This translates to 5,000 new jobs by 2022. Although Google was rumored to move Canadian headquarters to Alphabet Inc’s Sidewalk Lab “smart-city” project in Toronto, it’s unclear whether the Canadian expansion will transfer to the project.
Regardless, we think this is good news for Canada’s tech industry since our digital economy has been valued to create over $100 billion in annual revenue – that’s more than any of the major natural resources industries in the country. Let’s keep this trend going.
However, not everyone is super excited about this big move from Google. One executive in charge of Canada’s Council of Innovation noted that “the overwhelming majority of the jobs that foreign tech multinationals are placing in Canada are in technical fields that already have negative unemployment.” This means that the addition of these jobs won’t quite pack the same punch to Canada’s unemployment.
In other Google news, the company has changed up the way it reports its quarterly earnings.
For the first time, Google disclosed its revenue contribution from YouTube (which was scooped up by Google in 2015). Turns out advertising-related revenue from YouTube is actually growing faster than Google’s contribution. TBH, this doesn’t really surprise us given the sheer number of YouTube influencers, makeup gurus and ASMR vloggers (which we shamefully admit to watching more than we should).
Alphabet Inc. has a lot of exciting things going on, and we’ll keep you up to date with all the latest!
Shivani Breaks Down Tax Myths
It’s almost the most dreaded time of the year – tax season. To help you get through that downer of an activity known as filing your taxes, we’d like to debunk some common Canadian tax myths!
Let’s look at some common myths about taxes phrases heard around tax season and explore the reality of the situation.
Myth: We pay too much in taxes in Canada and don’t see equal benefits.
Reality: Our tax burden is actually among the lowest in the OECD (Organization for Economic Co-operation and Development). The average Canadian worker paid 23% tax – lower than the OECD average of 25.5%. Both Canada and the US stay around the OECD average of $12, 211 USD for average amount of taxes collected from each citizen. With such similar marginal tax rates, it’s actually quite impressive that Canadians receive benefits such as universal healthcare and 18 months subsidized parental leave, whereas Americans do not.
Myth: We don’t need to support the poor, I work so that I’m not poor and they should do the same, my tax money shouldn’t be going to them.
Reality: Many people living in poverty do have jobs. However, they are predominantly low-wage jobs that often do not have benefits and security. The job market has also significantly changed over the last few decades. For people without robust qualifications or basic skills, there isn’t an abundance of jobs open to them whenever they want them. The Canada Child Benefit, which is funded by taxpayer dollars, played a significant role in moving families with children out of poverty in 2019. However, despite welfare programs like the Canada Child Benefit, almost 13% of Canadians still live in poverty.
Myth: Why should my tax dollars go to refugees? We’re paying so much for them.
Reality: A very small amount of an individual’s taxes actually goes towards assistance for refugees. The cost of healthcare for refugees is just 10% of that of other Canadians. In terms of income support, refugees actually receive no special income assistance by virtue of their refugee status – like every other citizen, they are entitled to Canadian assistance programs, but only if they can prove they are eligible. Further, privately sponsored refugees are not entitled to government assistance. To read more about the financial assistance refugees in Canada receive, click here.