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The future of cash in Canada

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There have never been more ways to pay for something as there are now and the oldest way — cash — is on the decline, especially in Canada. But some experts are raising concerns about the risks of a cashless society.

Timothy Lane, deputy governor of the Bank of Canada, outlined a few reasons to reconsider going completely cashless during a recent talk about cryptocurrency at the University of Calgary.

“Cash works even when the systems are down, when the power goes out and people can still make payments using bank notes,” said Lane. “Second, bank notes offer privacy for your transactions. You can use them without giving anyone your personal or your banking information. Using cash avoids the risk of being hacked or having your card compromised.”

The Bank of Canada staff economists considered all of this in a discussion paper released this fall called “Is a Cashless Society Problematic?” The paper cites the consistent decline of cash payments in Canada for decades.

It also mentions an analysis by Forex Bonuses, which declared Canada the top country in the world embracing cashless technology. A very close second was Sweden, a country where the government is now studying how going cashless could affect the nation.

The findings, referenced in the paper released by the Bank of Canada, focused on indicators such as the number of credit cards per person and the volume of cashless transactions.

Cashless systems aren’t perfect

To save drivers time and to reduce traffic congestion, New York state switched to cashless toll booths at Grand Island, where millions of tourists travelling to Niagara Falls pass through every year.

For users without a pass, the state mails the registered owner a bill. The complication is mailing bills to Canadian addresses attached to license plates. The state can’t access that information, which they didn’t fully consider when implementing the system.  

Still, New York governor Andrew Cuomo has said he wants the cashless system to be implemented statewide by 2020.

Meanwhile, the Royal Canadian Legion experimented with cashless fundraising efforts this year with their digital Remembrance Day poppy.

“It gives us an opportunity to perhaps reach a younger Canadian audience,” said Pamela Sweeny, executive director of the Royal Canadian Legion. “We feel that, in this day and age, most people aren’t walking around with wallets and change purses.”

Canadians could purchase, personalize and post a digital poppy, while still contributing money to veterans. An opportunity they might not have had if they were limited to putting cash into a box.

The future of digital payments

Andreas Park, an associate professor of finance at the University of Toronto, supports these initiatives and believes in a cashless society.

“I would really appreciate it if cash would go. I think it is inconvenient,” said Park, who read the paper released by the Bank of Canada with interest.

Andreas Park, an associate professor of finance at the University of Toronto, says cash is “inconvenient.” (University of Toronto)

“They did discuss, for instance, the possibility of introducing a digital currency, which would then be issued by the central bank,” said Park. “I hope that they actually will be going with it because I like the idea of a digital currency being issued alongside the mobile banking and the banking system.”

The Bank of Canada authors describes this technology as “simple monetary value stored electronically … [that] can be used to make payments.”

Concerns about seniors and security

We aren’t there yet, and Park acknowledges the concerns around going cashless.

“My mother, she’s old and she has dementia and, for her, dealing with a card is just too difficult. The only way she can spend money is with cash,” said Park. “Now, this is a small part of the population. In Canada, this would be probably under two or three per cent of people actually insisting on using cash. But it’s not nothing.”

Park also says when you depend on electronic systems, you’re susceptible to hacks and power outages. Still, he believes the benefits far outweigh the risks.

“I think this would put us in the best spot, and I’d like cash to go away cause I think cash creates risk,” said Park. “Imagine how much you could save by not having to worry about people stealing money from others. Because if somebody steals your wallet, your money is gone.”

In concluding their paper, the authors leave little debate in which way we’re headed.

It reads, “We find that a cashless society would not generally cause material system-wide problems.”

In other words, we’re moving toward becoming completely cashless, whether we like it or not.

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Do you know what kind of condo you’re buying?

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(NC) Condominiums can come in all shapes and sizes. But it’s important to know that not all condos are created equal when it comes to warranty coverage.

Whether you’re buying a condominium townhouse, loft-style two-bedroom or a high-rise studio, they are all classified as condominiums if you own your unit while at the same time share access (and the associated fees) for facilities ranging from pools and parking garages to elevators and driveways, otherwise known as common elements.

The most common types of condos are standard condominiums and common elements condominiums. The determination of how a condominium project is designated happens during the planning stage when the builder proposes the project and the municipality approves it.

When you’re in the market to buy, you need to know how your chosen condo is classified because it affects the warranty coverage under the Ontario New Home Warranties Plan Act. Standard condominiums have warranty coverage for units and common elements, but common elements condominiums only have unit coverage.

How could this affect you as the owner? If your condo complex has underground parking and, for example, there are problems with leaks or a faulty door, the condo designation will determine whether there’s warranty coverage.

If your unit is a standard condominium development, then the common elements warranty may cover the repairs. If it’s a common element condominium development, then repairs might have to be covered by the condo corporation’s insurance, which could impact your condo fees or require a special assessment on all the owners.

To avoid surprises, you should have a real estate lawyer review the Declaration and Description attached to your purchase agreement to be sure that you know the designation and boundaries of the unit you’re looking to purchase. Find more information on the types of condos and their coverage at tarion.com.

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5 savvy renovations to make your kitchen look like new

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(NC) The kitchen is the heart and focal point of any home. But if yours is looking a little tired, a few simple renovations can change the feel of the entire space.

Whether you’ve just moved in, have been meaning to update for years or are experiencing life changes, remember that a kitchen uplift doesn’t have to come with a huge price tag. These small-scale projects could be the change your kitchen needs:

  1. Brighten it up.Adding LED lights below your cabinets will brighten your backsplash and counter and provide a warm glow. Place your favourite containers below to act as focal points – those copper canisters that are hiding under the island and the marble coasters you couldn’t resist can now all be on display.
  2. Swap the old with the new.The backsplash is the first thing you see, so replacing it can be enough to give the space a whole new look. Try a unique shape or colour to change things up, like turquoise or patterned tiles, hexagon-shaped tiles or even a full slab of stainless steel.
  3. Rework what you have.People often think new cabinets are necessary for a kitchen reno, but a lot can be done with what you’ve got. Repainting the cabinets and switching out the knobs to chic new handles will do wonders for a makeover.
  4. Don’t hide away.Try adding some open shelving in an unused spot, such as above the sink or window, or next to the cabinets. Display your most beautiful dishes and add some decorative pieces to give the space a modern, airy feel.
  5. Add new materials into the mix.Changing the island to a butcher-block counter adds warmth and practicality.

Taking on a renovation can often feel overwhelming. But if you talk to your contractor about budgeting and spreading out payments through services like The Home Depot Project Loan, it can be easier than you think. The service allows you to finance any home projects, big or small and is available at locations across Canada.

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Real Estate

How to afford a home renovation that fits your life

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(NC) Changing seasons always bring about the desire to update our living spaces. But your life stage and budget can influence what kind of upgrades you can make. Here are some tips to get you started.

Assess the investment. The first step is to gauge how much value your investment will bring, whether you’re looking to sell or grow into a family home. A common misconception among home owners is that all renovations will increase a home’s value; unfortunately, this is not always the case. It’s always a good idea to strategically renovate the space to fit your life plan and goals.

Plan for both long- and short-term value. As a homeowner, it is important to assess what kind of value items can contribute to your life plan. Searching for products that are energy efficient, like an eco-friendly washing machine or water filtration system, can help you save on your monthly bills. A long-term investment, such as hardwood floors or bathroom tiles, can spruce up a living space for years to come. While sometimes this require a larger budget, the project can be both appealing to future buyers and stand the test of time in a family home.

Create a renovation budget. Once you have a clear plan, you’ll need to create a budget to align with your financial goals. Always ensure your budget includes any interest you’ll be paying. Ask multiple sources for competitive quotes.

Use a payment plan. For those high-ticket investment items, consider using a payment plan. Payment solutions such as The Home Depot Project Loan can help with bigger renovations. This allows you to stick to your budgeting goals while using a flexible payment plan to make larger purchases more accessible.

Use DIY to offset costs. In addition to using a payment plan, taking on a few safe and simple renovation projects yourself is an easy way to offset renovation costs. Your local hardware store can help source materials and provide helpful tips to make those do-it-yourself projects, such as refinishing cabinets or sanding old hardwood floors, a breeze.

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