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A first-time homebuyer’s guide to Canadian government programs and incentives

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Photos: James Bombales

Whether you want to stop paying skyrocketing rental rates, start building equity, or own property that can be passed down to your children, purchasing a home is likely a long-term goal of yours. However, with rising home costs and the mortgage stress test introduced in 2018, achieving that goal can be a challenge for many Canadians. Fortunately, there are a number of programs and incentives offered by the federal government that first-time homebuyers can apply for.

“First-time homebuyers in Canada have the opportunity to take advantage of some great federal government programs to assist them when purchasing their first home,” says Michael Therriault, Financial Advisor at Scotiabank. “They can apply for multiple programs as long as they are eligible, so it is strongly recommended for potential first-time homebuyers to meet with a financial advisor at their bank to go over their individual circumstances and to help determine the best program(s) for them.”



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1. Home Buyer’s Plan

Early withdrawals from an RRSP are usually considered taxable income, but with the Government Home Buyer’s Plan, you can apply your RRSP savings toward the price of your home — tax free.

“The Home Buyer’s Plan (HBP) is a program that allows you to withdraw up to $25,000 ($50,000 per couple) in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability,” says Olga Coulter, Senior Account Manager at the Canada Mortgage and Housing Corporation (CMHC). “To be eligible, you must be a first-time homebuyer (ie. you haven’t purchased a home or lived in a spouse’s home within the last four years) and have a written agreement to buy or build a qualifying home for yourself or for a related person with a disability.”

However, it’s important to note that that these funds must have been in your account for at least 90 days before the purchase of your home and they do have to be paid back within a 15-year timeframe. “Essentially, you are ‘borrowing’ these funds from your RRSP as they need to be repaid over a 15-year period beginning the second calendar year after the withdrawal,” adds Therriault.



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2. First-Time Home Buyers’ Tax Credit

Introduced in 2009, the First-Time Home Buyers’ (FTHB) Tax Credit helps to make purchasing a home more affordable by allowing Canadians to claim a portion of their home purchase on their personal tax return that same year. This helps to offset expenses like legal fees, home inspections and other closing costs.

“The FTHB Tax Credit offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009,” says Coulter. “For an eligible individual, the credit will provide up to $750 in federal tax relief.”

To be eligible, you, your spouse or common-law partner must have acquired a qualifying home (a unit located in Canada purchased after January 27, 2009) and cannot have lived in another home you or your partner owned in the year of acquisition or in any of the four preceding years.



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3. GST/HST New Housing Rebate

If you are purchasing a new construction home, performing substantial renovations to an existing home, or rebuilding a home that was destroyed by fire, you will want to apply for the GST/HST New Housing Rebate. Filling in this form can save you thousands of dollars, as it recovers a portion of the goods and services tax (GST) or the federal part of the harmonized sales tax (HST) if all eligibility conditions are met.

“You may qualify for a rebate of part of the GST or HST that you paid on the purchase price or cost of building your new house, or on converting a non-residential property into a house,” explains Coulter. “You may also be eligible if you are doing substantial renovations or have hired someone to complete substantial renovations to an existing home, such as an addition.”

CMHC Mortgage Loan Insurance Programs

In addition to tax-related programs, first-time homebuyers have access to several CMHC Mortgage Loan Insurance Programs that can help them achieve the dream of homeownership. Listed below, these programs offer flexible terms and conditions to meet a variety of financing needs and are available throughout the country.



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4. CMHC Purchase

While it’s ideal to put at least 20 percent down, home prices in cities throughout Canada are rising faster than many homebuyers can save. “CMHC Purchase can help open the doors to homeownership by enabling homebuyers to buy a home with a minimum down payment of 5 percent,” says Coulter. “The premiums can either be paid up front in a lump sum or incorporated into an applicant’s mortgage loan payments.”



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5. CMHC Improvement

With such tight housing markets throughout the country, homebuyers may be interested in purchasing a fixer-upper that needs a little TLC. “CMHC Improvement allows the purchase of an existing residential property with improvements and new construction financing,” explains Coulter. “Features include flexible financing options with the option for CMHC to manage up to four advances at no cost to the borrower.”



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6. CMHC Newcomers

Obtaining a mortgage can be especially difficult for newcomers to Canada. If you’re a permanent resident with a strong credit rating you may be able to qualify for a typical bank mortgage, however, if you don’t meet all the criteria, the CMHC Newcomers program can help.

“We have helped newcomers with permanent resident status become homeowners with a minimum down payment starting at 5 percent – regardless of how long they have been in Canada,” says Coulter. “Non-permanent residents can also purchase a home with a minimum down payment of 10 percent of the value of the home.”



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7. CMHC Self-Employed

Homebuyers who are self-employed may have difficulty qualifying for a mortgage given that their monthly income may be less predictable. CMHC’s Self-Employed program allows business owners with proper documentation to access mortgage loan insurance under the same criteria and insurance premiums as those with more calculable income.

“Self-employed Canadians make up about 15 percent of Canada’s labour force,” says Coulter. “CMHC facilitates access to mortgage loan insurance for business owners by providing enhanced flexibility for satisfying income and employment requirements for all self-employed borrowers at no additional cost.”



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8. CMHC Green Home

“CMHC Green Home encourages homebuyers to choose more energy-efficient housing options to increase comfort and healthier living, while reducing greenhouse gas emissions,” says Coulter. “The program offers a partial premium refund of up to 25 percent directly to borrowers who either buy, build or renovate a home to make it more energy-efficient using CMHC insured financing.”

The amount of the refund varies depending on the level of energy-efficiency achieved by your home as assessed by Natural Resource Canada (NRCan). Condo buyers are also eligible for the CMHC Green Home refund if the building is built to the LEED Canada New Construction standard.

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Is getting an MBA worth it? How to make a decision

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Obtaining an MBA degree requires a significant amount of investment. You’re not only spending money but investing a large amount of time and effort into it.

While preparing for your MBA, it is important to critically access if the benefits of enrolling in a graduate business school outweigh the costs, according to experts. Your current financial capabilities and commitments are key factors to consider before determining whether applying for an MBA is the right choice for you.

According to experts, one great way to weigh the short-term financial benefits of an MBA is to research the average salary of recent graduates of business schools and compare that figure with the average number of student loan debt.

Of all the ranked business schools that provided salary figures in the U.S. News Best Business Schools ranking, the average starting salary among 2018 graduates from full-time MBA programs was $87,683.88. While for 2018 graduates of full-time MBA program at the ranked business schools, the average debt burden was $51,671.90.

For schools that provided both salary and debt figures, the average salary for MBA graduates was $86,253.72—167% higher than the average debt burden at those schools.

Mike Catania, the founder of the coupon website PromotionCode.org and a student in the executive MBA program at the University of California—Los Angeles Anderson School of Management, noted that one of the major reasons he chose to attend business school was a strong desire to expand his network.

“I got exactly what I wanted – access to brilliant classmates and faculty that I would never have encountered on my own,” he noted. “It’s difficult to ascribe a value to that, but I look at it as only temporarily intangible – the relationships forged over the next few years will positively affect my opportunities as an entrepreneur moving forward.”

According to a financial ROI report on MBA published by Quacquarelli Symonds—a higher education data, consulting and research company—within 10 years of earning an MBA degree, the average MBA graduates from either a U.S. or international business school had an estimated ROI of $390,751—even after deducting tuition and opportunity costs of attending an MBA program. The report also went further to show that the average decade-long ROI of an MBA graduate from the Stanford University Graduate School of Business is higher than $1 million.

While the financial benefit of an MBA degree is a huge factor to consider, experts also note that there are other non-financial factors to consider, such as if getting the degree would either facilitate career change or accelerate career advancement.

“Often candidates have a career progression in mind – ask whether people who have followed that path have been helped by an MBA,” said Mark W. Nelson, the dean of Cornell University’s Samuel Curtis Johnson Graduate School of Management. “Also, consider your personal opportunities for growth. What do you want to work on? Consider how an MBA would help you develop those capabilities.”

For example, with the future of data analyticslooking bright for data scientists, getting an MBA might be what you need to boost your chances of landing a great job.

Another important thing to consider when deciding to pursue an MBA degree is your current lifestyle. It is a venture that requires serious commitments, said Catania.

“It’s just going to eat up so much of your time, and all of the (business) schools make it abundantly clear that this is on par with a job,” he adds.

Also, Nelson noted that an MBA is best suited for individuals who want to begin a major change in their career path. “An MBA is a good path when candidates are looking for a career switch or a significant career advancement,” he said.

However, Elissa Sangster, CEO of the Forté Foundation—a non-profit organization with a mission to increase the representation of women in business schools and corporate leadership positions—warns that an MBA is not necessary for every type of business career.

“You could trick yourself into thinking you need to go and pursue an MBA because, if you’re going to run a yoga studio or you’re going to … open up a car wash or run a food truck, those are all businesses,” she said.

“Getting an expensive MBA degree may not be a smart financial decision for someone who wants to run a small local business, while it could be a strategic move for someone who hopes to start or manage a large, influential corporation.”

According to Phil Strazzulla, an entrepreneur and the founder of two companies in the software sector – Select Software Reviews and NextWave Hire – who earned an MBA from Harvard Business School, he noted that while it is a chance worth taking, it is one that needs to be carefully analysed.

“Chances are, if you’re thinking about getting an MBA, you are an analytically rigorous person who’s done the analysis on whether it makes sense to pay now for future gains in salary,” he said. “And, if you go to a top school, it undoubtedly is. However, the other way I’d recommend thinking about your decision is how it’ll impact your overall happiness.”

Furthermore, SiqiMou, the co-founder and CEO of the tech-driven beauty company HelloAva who earned an MBA degree from Stanford, notes that one of the key advantages of attending a high-quality business school is that it provides exposure to a wide array of career opportunities.

“I would say the advantage of coming to one of these relatively prestigious business schools is that you have a lot of options that are open to you,” she said. “You can go back into finance or consulting types of jobs, or you can also start something yourself.”

Bachenheimer, a clinical professor of management at Pace University’s Lubin School of Business in New York City, added that an MBA provides project-based learning activities that allow students to practice solving real business problems.

“An MBA can be much more than the knowledge and skills acquired through coursework; it can truly expand you and your world,” he said.

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Comment se protéger des risques associés à l’utilisation des outils bancaires

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La technologie financière est en constante évolution. L’introduction continuelle de nouvelles options bancaires en est la preuve.

Fintech (abréviation de technologie financière) est un terme qui désigne tout type d’innovation technologique utilisée pour soutenir ou fournir des services financiers. Une telle innovation entraîne des changements importants dans le secteur financier, et donne naissance à une gamme de nouveaux modèles d’affaires, d’applications, de processus et de produits.

Si les applications financières vous permettent d’accéder facilement à vos finances personnelles, elles peuvent aussi comporter des risques allant du vol de vos renseignements bancaires, tels que votre numéro de carte de débit ou de crédit, votre nom d’utilisateur et votre numéro d’identification personnel.

C’est pourquoi il est important d’être très vigilent en partageant vos informations personnelles et bancaires en ligne. Saviez-vous qu’en fournissant vos informations bancaires ou de carte de crédit à une application financière, vous pourriez risquer de violer l’accord d’utilisation de votre institution financière?

Ce qui veut dire que, quelles que soient les caractéristiques de sécurité mises en place par une application financière, votre institution financière peut vous tenir responsable en cas de vol et d’utilisation de vos renseignements personnels à votre insu ou sans votre approbation.

Voici quelques conseils pour vous aider à protéger vos informations personnelles et bancaires, ou celles de votre carte de crédit lorsque vous utilisez les applications financières :

  • Vérifiez l’accord d’utilisation de votre banque avant de partager vos informations personnelles et bancaires, ou de carte de crédit à travers les applications financières.
  • Consultez la politique de protection contre la fraude de votre institution financière pour savoir qui est responsable de toute transaction non autorisée par vous-même .
  • Cherchez à comprendre quelles mesures de sécurité sont en place et comment vos renseignements personnels pourraient être utilisés.
  • Vérifiez régulièrement votre dossier de crédit pour voir s’il n’y a pas de demande de crédit que vous n’avez pas faite ou encore une transaction que vous n’avez pas effectuée.

Si vous soupçonnez que vos informations ont été compromises, changez immédiatement vos mots de passe. Examinez vos relevés de compte et de carte de crédit pour y détecter toutes anomalies, et signalez toute transaction suspecte à votre institution financière.

Vous pourriez aussi commander et vérifier votre dossier de crédit.

Visitez le site web de l’Agence de la consommation en matière financière du Canada pour de plus amples renseignements sur les risques associés au partage de renseignements bancaires sur des applications financières à canada.ca/argent.

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Comment agir efficacement en cas de fraude

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Chaque année, des milliers de Canadiens perdent des millions de dollars à cause de fraudeurs. Adolescents, aînés, gens d’affaires, tout le monde peut en être victime. Pourtant, seulement 5% des fraudes sont signalées aux autorités.

Si vous avez été victime de fraude, la meilleure chose à faire est de le signaler aux autorités concernées, et peu importe son ampleur. Ne vous sentez surtout pas honteux d’avoir été piégé car vous n’êtes pas seul à être tombé dans le panneau. En rapportant cette fraude, vous allez aider d’autres personnes à ne pas en être victime. De plus, dans la plupart des cas, l’institution financière ouvrira une enquête et vous remboursera l’argent perdu.

Gardez en tête que protéger vos renseignements personnels est essentiel pour éviter la fraude. Voici comment agir si vous suspectez une transaction inhabituelle dans vos comptes :

  • Changez immédiatement votre NIP et signalez la fraude à votre institution financière et au Centre antifraude du Canada. Informez-les également de toute correspondance suspecte que vous recevez au sujet de vos comptes.
  • Lorsque vous communiquez avec votre institution financière, assurez-vous d’utiliser le numéro de téléphone figurant sur votre relevé de compte ou au verso de votre carte de crédit ou de débit.
  • Si vous recevez des courriels trompeurs, vous pouvez envoyer une plainte au Centre de signalement des pourriels. Les escroqueries financières comprennent souvent des offres de vente ou des promotions de produits et services financiers, comme les régimes de retraite, les fonds de placement gérés, les conseils financiers, l’assurance et les comptes de crédit et de dépôt.

Le Bureau de la concurrence du Canada dispose d’un excellent guide appelé le Petit Livre noir de la fraude, et fournit beaucoup d’autres renseignements utiles par l’entremise du Centre antifraude du Canada.

Pour plus d’information, visitez le site web de l’Agence de la consommation en matière financière du Canada qui offre également une foule de renseignements et d’outils pour vous aider à vous protéger contre les fraudes et les escroqueries à canada.ca/argent.

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