31 DECEMBER 2012WEEKLY

Life Insuranceand Taxation 2 2

HOME SALE PREDICTIONS FOR 2013

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Toronto, ON – All things considered, four in five (80%) Canadians say 2012 was a 'good' (25% very/55% somewhat) year for them and their family, accord-ing to a new poll conducted by Ipsos Reid on behalf of Post media News and Global Television. The proportion of Canadians who believe that 2012 was good to them and their family has increased 5 points since last year when three-quarters (75%) of Canadians said 2011 was good for them and their family. Only one in five (20%) cite 2012 as a 'bad' (5% very/15% somewhat) year for them and their family, down 5 points

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Income Taxes Going Up for the Very Rich in

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Dream Issue2 31

Canadians Say 2012 Was a Good Year !Also Optimistic about Economy in 2013!!

The new selection system for the are better positioned to adapt to chang-Federal Skilled Worker Program ing labour market conditions, and who (FSWP) will take effect on May 4, 2013 will spend a greater number of years at which time the program will re-open contributing to Canada's economy;fo r app l i ca t ions , C i t i zensh ip , Ÿ Introduction of the Educational Immigration, and Multiculturalism Credential Assessment (ECA), so that Minister Jason Kenney announced education points awarded reflect the recently. foreign credential's true value in

“The government's number one Canada;priority remains jobs, economic growth, Ÿ Changes to the arranged employ-and long-term prosperity,” said Minister ment process, allowing employers to Kenney. “The new Federal Skilled hire applicants quickly, if there is a Worker Program criteria will ensure demonstrated need in the Canadian Canada is selecting the skilled immi- labour market; andgrants our economy needs, who are the

Ÿ Additional adaptability points for most likely to succeed and fully realize spousal language ability and Canadian their potential in Canada.” work experience.

The improvements to the FSWP “For too long, too many immigrants points grid are based on a large body of to Canada have experienced under research which has consistently shown employment and unemployment, and that language proficiency and youth are this has been detrimental to these two of the most important factors in the newcomers and to the Canadian economic success of immigrants. economy,” said Minister Kenney. “Our

The final changes to the FSWP selection criteria include:

Ÿ Minimum official language thresholds and increased points for official language proficiency, making language the most important factor in the selection process;

Ÿ Increased emphasis on younger immigrants, who are more likely to acquire valuable Canadian experience,

Dawn Desjardins, Economist writes, "Consumer spending is at the Royal Bank of Canada also likely to remain solid given believes that in 2013, Canada´s the healthy labour market and economy is forecasted to return the prospect of wage gains to a firmer growth path with accelerat ing. Government business investment and exports restraint will be limited com-getting a lift as the uncertainties pared to most other countries. associated with the US fiscal After experiencing a volatile and cliff dissipate. highly uncertain 2012, we expect

Canada's economy to grow by 2.4% in She feels that domestic financial 2013 and 2.8% in 2014. This forecast conditions are supportive for business implies that the output gap will be investment while the persistent low eliminated in early 2014. "interest rate environment will limit the

correction in the housing market. She

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Toronto andGlobal Market

Review

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Looking ahead to the New Year, most Canadians have a positive outlook on Canada's economy, especially those living in the west, according to a new poll conducted by Ipsos Reid on behalf of Post media News and Global Television. Two-thirds (65%) of Canadians expect 2013 to be a 'good' (8% very/57% somewhat) year for the Canadian economy, while one in three (35%) believe it will be a 'bad' (6% very/29% somewhat) year going forward.

Those results suggest that the economic growth in the West has buoyed expectations relative to the economic fortunes in Ontario, Quebec and Atlantic Canada.

But the general sense of optimism is a continuation of a trend that has seen Canadian consumers show more

PAGES

Canadian prospects to climb in 2013 – RBC

confidence in their economy versus respondents from other countries. In the last monthly poll of consumer confi-dence in 24 countries, conducted by Ipsos Reid, Canadian respondents edged past people in Germany in terms of economic optimism.

transformational changes to the FSWP assessment from existing agencies will help ensure that skilled newcomers designated by the Minister and listed on are able to contribute their skills fully to the CIC website.the economy as soon as possible. This is Second, applicants will have their good for newcomers, good for the education credentials assessed prior to economy, and good for all Canadians.” arriving in Canada. A list of assessment

There are two new steps to the new organizations designated by the selection system. First, applicants will Minister will be made available early in have to demonstrate that they meet the the New Year. The assessment of foreign minimum language threshold, which is educational credentials will provide level 7 of the Canadian Language prospective newcomers with a more Benchmark assessment system. realistic understanding of how their Applicants will be able to get a language credentials compare to

News & ViewsDigest

>>Cont. Pg.2

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31 DECEMBER 2012MONEYDREAMS &

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Insure your dreams“Wouldn't it be nice if you could pass

on your entire estate free of taxation?

While this scenario is highly unlikely, there are some smart decisions that you can make to avoid future tax consequences.

One poor decision that investor shttp://images.intellitxt.com/ast/adTypes/icon1.png seem to make frequently is the naming of "payable to my estate" as the beneficiary of a contractual agree-ment such as a life insurance policy. However, when you name the estate as your beneficiary, you take away the contractual advantage of naming a real person and subject the financial http://images.intellitxt.com/ast/adTypes/icon1.png product to the probate process. Leaving items to your estate increases the estate's value, and it could This is an introduction to an subject your heirs to exceptionally high American article I read in investopedia. estate taxes” This introduction is equally applicable

Income Taxes Going Up for the Very Rich in Ontario and Quebec in 2013

become an asset for creditors to attach.

In fact, life insurance is an essential part of estate planning. They cover taxes at death on illiquid assets, though the most obvious reason why people buy life insurance is to protect their depend-ents. Here are some other equally important reasons why you might want to have life insurance:

Ÿ To pay off debts

Ÿ To cover final expenses like funeral expenses

Ÿ To provide income for your dependents

Ÿ To leave a larger estate for your beneficiaries

Ÿ To create a pool of cash to allow your executor to make things equal for your beneficiaries when some things

to the Canadian situations also.can’t be divided

When life insurance proceeds are Ÿ To help corporations and business

paid as a death benefit, no federal or arrangements remain viable

provincial incomes taxes are payable in Ÿ To help businesses cope with the Canada on the amount received.

loss of key people.However, the full tax benefits are

Obviously, this list is not exhaustiverealised only when one or more benefi-If you need to discuss any of these aspects, ciaries are named. On the other hand, you may call Perrii at 416 473 6100

when the funds go to the estate, they

For the very wealthy in Ontario just $100,000.though, the new year brings bad news "The highest marginal rate in from the tax man — the top rate for the Quebec for 2012 was 48.22 per cent and biggest earners in the province will now the highest marginal rate in Quebec creep a little higher for those earning more than $500,000.

Jeff Paisley, a senior manager at Deloitte, said those earning more than $500,000 a year saw the top combined federal-provincial marginal rate increase to 47.97 per cent from 46.41 this year.

The rate goes up again on Jan. 1, as of Jan. 1 is going to increase to 49.97 2013 to 49.53 per cent, he said. per cent," Paisely said.

And in Quebec, the marginal tax rate (Source : The Canadian Press)will also edge up, though it kicks in at

New Federal Skilled Worker ... actions taken over the past months, new applications under the FSWP will be From Pg.1processed in a few months, rather than a education standards in Canada. It few years. In order to ensure fast will also give them the opportunity to processing times and to avoid backlogs, upgrade their education prior to coming the new FSWP will accept a fixed to Canada if they choose.number of applications each year.

It is important to note that these In the medium term, the Government changes will not apply to people who

is also moving forward to develop and have applied to the FSWP prior to May implement an Expression of Interest 4, 2013 with a qualifying arranged job (EOI) model, which will provide offer or under the Ph.D. stream.employers with access to a pool of

As recently announced, due to the skilled workers.

Life Insurance and Taxation

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31 DECEMBER 2012MONEYDREAMS & Housing MarketDEBT

Dreams and Money takes care to present all the information as accurately and efficiently as possible. Any advice or recommendation appearing in the paper is also part of information only. They should not be construed as an expert opinion. Please note that no representation or warranty with respect to the accuracy or the completeness of the information is given. Information always keeps changing. Hence all the information, including advice and recommendations are to be treated as of general nature only. For your specific circumstances, you are always advised to consult an expert before acting on any information.

DISCLAIMER

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Editor-in-Chief & PublisherPerrii Muthuraman

Direct : 416 473 6100

Editor & Technical AdvisorAishwar Muthuraman

Moderation - not correction - on tap for Canadian housing markets in 2013, says RE/MAX

increases by year-end 2012, with Regina the country’s frontrunner at eight per cent, followed by Hamilton-Burlington, Greater Toronto, and The RE/MAX Housing Market Fredericton at seven per cent and Outlook 2013 examined trends and

Saskatoon at 6.5 per developments in 26 cent. The forecast for major markets across 2 0 1 3 s h o w s t h e the country. The upward trend moder-report found that the ating, but values still number of homes sold ahead of 2012 levels is expected to match in 85 per cent (22/26) or exceed 2011 levels of centres. Stability is in 65 per cent of forecast to character-markets (17/26) in ize Canadian real 2012, led by strong estate in the new year, activity in Western

with sales above or on par with 2012 Canada, including Calgary (up 13.5 per levels in 81 per cent (21/26) of markets.cent) and Regina (eight per cent).

Eighty-one per cent (21/26) of markets Nationally, an estimated 454,000 are set to experience average price homes will change hands in 2012,

CREA expects 2% Drop in Sales CREA also said it now expects sales next year to drop two per cent to T h e C a n a d i a n R e a l E s t a t e 447,400 compared with earlier expecta-Association (CREA) has updated its

tions for a drop of 1.9 per forecast for home sales as cent to 457,800 in 2013.d e m a n d s l o w s a n d

predicts a 2% fall in "Annual sales in 2012 transactions in 2013 but a reflect a stronger profile 0.3% rise in prices. prior to recent mortgage

rule changes followed by CREA, the industry weaker activity following association, now expects their implementation," home sales this year said Gregory Klump, (2012) to slip 0.5 per cent

CREA's chief economist.compared with 2011 to about 456,300.

falling one per cent short of the 2011 level of 456,749. Canadian home sales are expected to almost mirror the 2012 performance next year, holding steady at 454,000 units. The average price of a Canadian home is expected to remain stable at $364,000 in 2012—on par with the figure reported in 2011. Values are expected to appreciate nominally in 2013, rising to $366,500, one per cent above year-end 2012 levels.

Canadian Housing Starts to Moderate, Resales Stable in2013 - CMHC

Canada’s new home market is expected to continue to moderate in the last quarter of 2012 and into 2013. Meanwhile, activity in the existing home market is expected to hold steady, leading to house price growth in line with or slightly below inflation, accord-ing to Canada Mortgage and Housing Corporation’s (CMHC)

Price waterhouse Coopers (PWC)sees a balanced outlook

For 2013, a balanced outlook is expected. While Canada may do well compared to other economies, growth trends will be mediocre. But in this case "mediocre" should be viewed as the new "good" as real estate players need to scale back their expectations.

unsolicited articles are welcomeselected ones will be publishedemail : editor@dreamsandmoney.com

& community news

Copyright © 2010 Dreams and Money, Canada. All Rights Reserved.

At Dreams & Money, we want to help people lead happy lives. We want to help people reach their dreams. A lot of dreams in the world require financial awareness and proper planning to bring to fruition. To get this financial knowledge can be challenging. We realize this, and want to make this process simpler.

We will bring you financial news happening around you that impacts you, along with timeless classics on topics like financial planning, life skills, health etc. to help you grow all around to reach your dreams.

If you are someone who shares this same passion, and think you can contribute to us in any way (writing articles, spreading the message etc.), please let us know. We’ll be happy to hear from you.

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31 DECEMBER 2012MONEYDREAMS & INVESTING

Review of Global markets

Weekly outlook – week begins from 31 December 2012

Review of Indian markets

net buyers of Indian stocks boosted sentiment. Sensex rose 1.05% to European and US markets traded 19444.84 and Nifty rose 1.03% to volatile with mostly negative trend 5908.35 in the week ended 28 December whereas Asian markets were higher 2012.during the week. Asian share markets

extended gains as investors held on to Market slender gains on Monday as hopes U.S. lawmakers could still reach trading across the globe remained thin an agreement before the year-end to avert ahead of Christmas holidays. The stock the fiscal cliff. market remained closed on Tuesday on

account of Christmas. Market rose on The broad region-wide rally came as Wednesday after the government President Barack Obama called on announced measures to boost India's congressional leaders to the White House merchandise exports. Market edged Friday to hammer out an 11th-hour lower in choppy trade on Thursday as budget compromise on a pact to avoid index heavyweights Reliance Industries imminent tax increases and spending cuts and ITC dropped. Market advanced on that are feared to potentially drag the Friday as index heavyweights Reliance world's largest economy into a recession.Industries and ITC were in demand. Lawmakers have until Monday night

to reach a deal before hundreds of billions of dollars in automatic tax increases and deep cuts to government spending kick Market may follow the trend of in. With U.S. President Barack Obama macroeconomic data and decisions with having reportedly cut his holiday short, regard to US fiscal cliff. Results of and returning to Washington to meet U.S. monthly surveys on manufacturing and leaders for last ditch talks, there is services sectors and automobile and growing optimism that a deal can be cement sales data for December 2012 knocked before the deadline will be in focus next week. Auto and

cement stocks will be focus as companies Japan's industrial output tumbled more than forecast to the lowest level since the aftermath of the record 2011 earthquake, bolstering the case for Prime Minister Shinzo Abe to unleash large-scale stimulus. The 1.7% drop in November from October exceeded fore-casts. The nation also remained mired in deflation, with con-sumer prices excluding fresh food dropping 0.1% from a year before, compared with a central bank goal of 1% and Abe's desired target of 2%.

Japanese manufacturing activity contracted in December at the fastest pace in more than three years as companies focused on drawing down inventories due to a mild recession at home and weak demand for exports. The

from these two sectors will start unveil-Markit/JMMA Japan Manufacturing ing monthly sales data for November Purchasing Managers Index (PMI) fell to 2012 from Tuesday, 1 January 2013.a seasonally adjusted 45.0 in December

Markit Economics will unveil HSBC from 46.5 in November. The index India Manufacturing PMI, which gauges showed that manufacturing contracted at the business activity of India's factories, the fastest pace since April 2009.for December 2012 on Wednesday, 2 President Barack Obama and January 2013. Markit Economics will lawmakers are launching a last-chance unveil HSBC India Services PMI and round of budget talks just days before a HSBC India Composite PMI for New Year's deadline to reach a deal or December 2012 on Friday, 4 January watch the economy go off a "fiscal cliff." 2013. Obama will meet congressional leaders

Indian companies will start unveiling from both parties at the White House on Q3 December 2012 results from mid-Friday to try to revive negotiations to January 2013. Investors and analysts will avoid tax hikes and spending cuts - closely watch the management commen-together worth $600 billion - that will tary that would accompany the result begin to take effect on January1. In order which could cause revision in their future to be ready to legislate if an agreement earnings forecast of the company for the takes shape, the Republican-dominated current year and or next year. House of Representatives convened a

The Reserve Bank of India (RBI) session for Sunday.undertakes Third Quarter Review of Monetary Policy 2012-13 on 29 January Indian Market edged higher during 2013. RBI said it is closely monitoring the week. The market gained in 3 out of the evolving growth-inflation dynamic four trading sessions in the week just and will update the formal numerical gone by. Data showing that foreign assessment of its growth and inflation institutional investors (FIIs) remained

Representatives convened a session for Sunday, 30 December 2012.

The US fiscal cliff refers to the year-end deadline for the expiration of hundreds of billions of dollars worth of projections for 2012-13 as part of the tax cuts and the triggering of $109 billion third quarter review in January 2013.in across-the-board spending cuts, if the It remains to be seen if the Union US Congress fails to act. The US Budget for 2013-2014 due in February Congress created the hazardous deadline 2013 is a reformist budget or a populist of 31 December 2012 in August 2011, budget. Given that next general elections when it agreed to a deficit deal as a way in India must be held before May 2014, it out of a deadlock over raising the US debt will be the last full-fledged budget of the ceiling. The Congressional Budget Congress-led UPA government at the Office has estimated the US economy Centre and hence could be a populist one.would drop into a recession in the first

Among key global events, Markit half of the new year if a deal is not

Economics will unveil China's final reached.

manufacturing PMI for December 2012 India attracts the potential investors on Monday, 31 December 2012. Markit

from all over the world. The investment Economics will unveil final US sector of India has emerged as a great Manufacturing PMI for December 2012 wealth creator. In fact it has been termed on Wednesday, 2 January 2013. as the world's fastest growing creator of

Investors will continue focusing on wealth. The government of India also

US fiscal cliff. President Barack Obama taking steps to attract investors from all

and lawmakers are launching a last-over the world to invest in India. You can

chance round of budget talks just days make money by investing in India with a

before a New Year's deadline to reach a good financial plan. We provide

deal or watch the economy go off a "fiscal advisory services to frame a good

cliff." Obama will meet congressional financial plan, which able to manage

leaders from both parties at the White your debts as well as save money and

House on Friday, 28 December 2012, to create wealth. We also provide practical

try to revive negotiations to avoid tax training to make you independent

hikes and spending cuts - together worth investor

$600 billion - that will begin to take effect on 1 January 2013. In order to be ready to legislate if an agreement takes shape, the Republican-dominated House of

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M.Shekar

Global Indian Market and Weekly Review - Week Ended 31 December 2012

Uncertainty ContinuesTSX Trend From Dec.20, 2012 to Dec.28, 2012

TSX Trend From Jan.3, 2012 to Dec.28, 2012

The Toronto Stock Exchange's S&P/TSX composite index closed at 12,316.12.The volumes are quiet low. There is also a short-term uncertaintyThe clock is ticking towards huge spending cuts and significant tax increases that will automatically click in after Dec 31 if there's no deal in the US.

Source : Yahoo Finance