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The number of Canadian millionaires will jump by more than half in the next five years: Credit Suisse

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The number of millionaires in Canada will jump by more than half in the next five years, a faster growth rate than other developed countries like the U.S., according to a new wealth report from banking giant Credit Suisse.

Canada had 1.3 million millionaires in 2018 and that’s expected to rise by 54 per cent to nearly two million people by 2023, the Global Wealth Report 2018 said.

Canada is ranked third — behind China and Russia — out of 24 large economies when it comes to the biggest percentage gain in the population of millionaires in the next five years.  In comparison, the number of millionaires in the U.S. will grow 18 per cent to more than 20 million individuals in the same time period.

The bank used financial and non-financial assets of wealth like home ownership and economic indicators like GDP (gross domestic product) and inflation from the latest International Monetary Fund (IMF) economic outlook database to create its forecasts.

Housing market wealth

High property values will continue to be an important driver of household wealth in Canada, despite recent cooling in the real estate market, the report said.

“One of the assumptions behind the increase in the number of millionaires is that Canadians’ housing wealth will continue to rise — no collapse in that market,” said Jim Davies, an author of the study and economics professor at Western University.

Data released by the Canadian Real Estate Association earlier this week showed that home sales fell almost nine per cent in September compared to a year ago. But, the national average price for a home sold last month rose 0.2 per cent to just under $487,000 from a year ago.

Another reason for the big forecasted increase in millionaires in Canada is that there are currently a lot of people with wealth just below $1 million US, Davies said. 

The predicted rise in wealth over the five years would take everyone with wealth equal to more than three times the average now into the millionaire group if it happened today,” Davies said.

A real estate sign is seen in front of a house for sale in Ottawa last year. Rising home prices have played a big role in growing Canada’s cohort of millionaires. (Chris Wattie/Reuters)

More than 46 per cent of Canadians have wealth between $100,000 to $1 million, according to the report.

He also added the figures for millionaires was in U.S. dollar terms, and the global study used the IMF forecasted exchange rate, which expects the loonie to rise 11.4 per cent to 86.3 cents U.S. by 2023.

“That approximately doubles the expected growth of average wealth in Canada, compared to what we would see if the calculation was done in Canadian dollars,” he said.  

Even with increasing wealth among Canadians, Credit Suisse does warn that the economy faces some challenges, and its outlook is “somewhat uncertain.”

“Approval has not been obtained for new oil pipelines, contributing to a glut of oil in the United States Midwest. This has forced the price for oil from Canada’s tar sands well below the world price,” the report said.

“Trade frictions have become serious, with the United States continuing punitive tariffs on Canadian lumber, steel and aluminum, despite having reached a tentative free trade agreement with Canada and Mexico to replace NAFTA.”

It had been widely expected that the metal tariffs imposed by the U.S. and Canada in June and July, respectively, would be lifted after a new trade deal was agreed to before the Oct. 1 deadline, but that has not yet happened.

Canada vs. the U.S.

The wealth report also gave a snapshot of how wealth has grown for Canadians in the 18 years from 2000 to present.

Wealth per adult in Canada grew at an average rate of 5.4 per cent, with a small dip during the global financial crisis in 2008-09, similar to other developed countries.

Meanwhile, average wealth per adult in 2018 was at $288,260, almost 30 per cent lower than in the U.S.

However, wealth in the country was more equally distributed in comparison to the U.S. The median wealth per adult in Canada was $106,340, compared with $61,670 in the U.S.

Canada also had both a smaller percentage of people with less than $10,000 and a larger percentage of those with above $100,000 in comparison to the U.S.

Overall, the country’s 1.3 million millionaires accounted for three per cent of the world’s top one per cent holders of wealth.  

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Ontario’s new automated speed enforcement explained

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(NC) To wage the war against speeding, many municipalities across Ontario have turned to automated speed enforcement. Most recently introduced in Toronto, speed cameras are a high-tech solution to reduce speeding and are considered one of the most effective ways to create safer roads and save lives.  

Recognizing police officers cannot catch all speeders, these cameras fill the gap, providing monitoring in specific locations around the clock. When a car’s speed is even one kilometre over the posted amount, it will take a picture of the offending vehicle’s license plate, using the captured photo as indisputable evidence. A ticket is then served to the vehicle’s owner, regardless of who was driving. 

With a focus on high-risk areas, Ontario’s automated speed enforcement cameras are located in two specific municipal areas: school and community safety zones. School zones are designated streets close to a school, featuring reduced speed limits as dictated by local bylaws. Community safety zones are high-risk corridors and intersections, subject to increased fines and penalties.  

While the Ontario Highway Traffic Act outlines the use of automated speed enforcement, municipalities can decide when and where to use cameras to curb speeding. The act does dictate financial penalties for speed violations captured with cameras, which vary depending on the number of kilometres caught over the speed limit.  

Speed enforcement is not new, but part of a broader, integrated road safety strategy that includes infrastructure improvements, awareness campaigns and new uses of technology. City officials hope for a halo effect, inspiring better driving behaviour across entire communities, not only in areas with cameras. A controversial topic, some critics take exception to speed cameras, labelling them as sneaky cash grabs for municipalities. Governments think the opposite. 

Safety advocate and auto insurance provider Onlia is hopeful that the cameras will provide drivers with a reminder to slow down, especially in high-risk areas like school and community safety zones.  

For those who obey the speed limit, automated speed enforcement shouldn’t change anything about your driving style, says Alex Kelly, Safety Ambassador at OnliaDrivers have fair warning as they approach areas with speed cameras, as mandatory signs provide reasonable notice of upcoming automated speed enforcement. Regardless of warnings, the best speed is the posted speed. 

You can start to understand your speeding style by downloading the insurance provider’s new safe driving app that coaches and rewards for you for safe driving habits.

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Online banking: How to protect yourself from fraud

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(NC) Since the start of the COVID-19 crisis, a growing number of consumers are regularly using mobile and online banking to paybill payments, transfer money and make purchases.

Although these tools can give you easy access to your personal finances on demand, there are also some risks involved. For instance, your banking information—such as your debit or credit card number, user name, or personal identification number (PIN)—could be stolen. If criminals have access to your online banking information, they can steal your money, which is why it’s so important to be  vigilant when you bank online.

Follow these tips to help protect your personal and banking information:

  • For your online bank accounts, use a strong password that can’t be easily guessed, and never share your user name or password with anyone.
  • Check your accounts regularly to make sure there are no transactions you didn’t make or authorize.
  • When making online purchases, never authorize a website to save your credit card information, password or other personal information. Giving websites this permission will save you some time the next time you access the site, but it poses a real threat if a hacker manages to access your information.

Most financial institutions have policies to protect you from transactions that you didn’t make.

However, you are responsible for protecting your online and mobile banking information. If you give your details to anyone—including your spouse or partner, a family member or a friend—your financial institution may hold you responsible for any unauthorized transactions in your account, and even strip you of protection from unauthorized transactions in the future.

If you suspect your information may have been compromised, change your passwords immediately, and check your account and credit card statements for anomalies and report any suspicious transactions to your financial institution.

The Financial Consumer Agency of Canada has created resources to help you protect your online banking information.

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Payday loans: Not the best way to borrow money

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(NC) Payday loans are a very expensive way to borrow money. Even if you’re struggling financially, think twice—and crunch the numbers—before getting this type of loan.

Depending on the rules in your province, payday lenders can charge fees of $15 to $25 per $100 that you borrow.

As an example, let’s say you borrow $300 for home repairs. The payday lender charges you $51 in fees, or $17 for every $100 borrowed. Your loan balance is therefore $351, which amounts to an interest rate of 442 per cent.

There can be serious consequences if you don’t repay your loan by the due date. These may include the following:

  • The payday lender may charge you a fee if there isn’t enough money in your account.
  • Your financial institution may also charge you a fee if there isn’t enough money in your account.
  • The total amount that you owe, including the fees, continues to increase.

There are better options out there

Payday loans should be your last resort to borrow money. Consider cheaper ways of borrowing money, such as:

  • Cashing in vacation days or asking for a pay advance from your employer.
  • Getting a line of credit, a cash advance on a credit card or a personal loan from your financial institution.
  • Getting a loan from family or friends.

Before getting a payday loan and to avoid getting stuck in a debt trap, consider other, less expensive ways to borrow money.

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