Your personal finances are possibly the most important aspect of turning your immigration into a successful settlement.
These pages are for general background information and you should seek professional financial advice before making any decisions.
Obviously, every country does things differently - especially when it comes to banking, finances and taxation. One major difference we found from the UK was that all the large banks charge for everyday banking services.
We have pages on Money Transfer, which is packed with essential reading on how to transfer your money with the best rates and service.
Personal Banking and Finances
which covers all the everyday banking and finances available,
and how you are affected and things to do before you emigrate.
As post secondary education is not free or subsidized in Canada, the
Registered Education Savings Plan
page is a must see for anybody with kids who may head off to university or college as the fees can seriously damage your finances.
The page on money transfer is a critical read (link above) and the section on payroll deductions below sheds some light on how much you can expect to lose from your pay!
Benefits and Welfare
There are five main areas of
provided by the Federal and Provincial governments.
1. You will find the details on pensions and retirement in the Pensions page link above.
2. The Workers Compensation Board is administered by each Province and provides assistance for workers injured or made ill through their employment. You will find all the information and links on this subject in each Province's pages.
3. Social Assistance (welfare) payments are made to those who are out of work and is the most basic form of benefit. Eligibility and payment details are the responsibility of each Province. Once again information and links can be found in each Province's pages.
Employment Insurance (EI)
is a benefit paid to eligible people that have contributed sufficiently to the scheme and then lost their employment through no fault of their own. To apply, you need to submit either an online application or apply in person at your local branch of "Human Resources and Skill Development Canada" (HRSDC). You can apply once you have been out of work and without pay for 7 consecutive days.
Do not delay in filing any application as lengthy delays may affect the amount you receive. You will have to go 2 weeks unpaid as part of a waiting period before any payments are made. Depending upon your circumstances, payments may be made for up to 45 weeks. At all times you must be actively seeking work whilst being paid EI.
There are other benefits that fall under the EI umbrella such as enrolment in a recognised training program, work sharing, maternity or parental leave and some illness. The latest benefit is the compassionate care paymants should you have to give up work to care for a seriously ill relative who may pass away.
Any fraudulent claims will be strictly dealt with and will affect any future claims you may make - even if they are legitimate.
The EI is funded by regular payments from your paycheck (if employed) or annually with your tax return if you are self employed. For 2011, you can expect to pay 1.78% of your pay to an annual maximum of $786.86 as an employee.
Canada Child Tax Benefit (CCTB)
has several qualification factors. You must live with and be legally responsible for a child under 18 years old. You and/or your common law partner must also be a resident of Canada.
The benefit is paid tax free to assist qualifying families with the cost of raising children and is a welcome boost to your finances. There are no waiting or qualifying periods and so it is adviseable to apply for it as soon as possible on arrival or after a child is born.
The amount you will receive (if any!) will depend on the number of kids you have, where you reside in Canada, family net income for the previous year and if any extra disability payments are due. Once you have been resident for a year your family net income will be calculated from the previous years tax return. The amount payable is recalculated every July and paid monthly from July to June to following year.
When you first land, ensure that you have details of your pay - payslips, tax receipts etc. and all previous finances to make the application process easier for you. The forms require the annual NET family income to be declared in Canadian Dollars so you will have to convert . Contact The Canada Revenue Agency (CRA) for the conversion rates for the particular year and currency. We had to provide the previous 3 years income - make sure you put in the net income - if you put the gross figure in it'll cost you money and damage your finances!
Though each Province/Territory has its own programs, the CRA administers all the programs except Ontario and uebec. The CRA will automatically submit the information to those Provinces on your behalf. For further details on each Provincial program use the links to the Provincial Government sites provided in each Province page.
Another recent initiative announced by the Harper Government that came into effect is the child care tax credit. This gives the family $100.00 per month per child under 6 and is meant to offset the cost of childcare for working parents or allow other parents to stay at home. This income is taxable at the end of the tax year.
Personal credit will differ depending upon your financial circumstances. However, its fairly certain that you will have to start over once you land in Canada.
If you land with a fairly sizeable amount of cash please bear in mind that it is important to build your credit rating.
If you pay cash for everything, you will be "invisible" to the rating agencies and will struggle to qualify later on if you require a credit card, store credit or if your finances require a personal loan. You do have to be careful as multiple credit applications will also harm your rating! We weren't able to gain any kind of store credit (interest free, buy now pay later etc.) for the first 3 months we were here.
Many independant card issuers will require a deposit equal to your limit for up to 12 months while they ensure you are credit worthy. This will tie up your funds unnecessarily so speak to one of the main banks they should issue you a credit card - (if not go somewhere else) - without a security deposit. Most credit cards have the point schemes so it can pay to buy major purchases on the card, collect the points and pay off before the interest is due.
After the 3 months, you should be able to start applying for the store credit and begin building up your rating. Handled properly, soon you will have a good rating and be able to pick and choose the best deals and options to suit your finances.
This is the part that almost caught us out and ruined our finances when we first arrived. My budgets were based on a gross wage as I totally forgot about income tax!!!!!
Obviously, the biggest is the federal income tax coupled with the Provincial income tax. The 2011 Federal allowance is $10,527 tax credit (called a Basic Personal Amount). Then 0 > 41,544is 15.5%, 41,544 > 83,088 is 22%, 83,088 > 128,800 is 26% and above 128,800 is 29%.
Each Province will have a different rate of taxation so the specific figures will be found in the Province pages. You can safely bet that once the tax free allowances have been used you will lose around 40% through income tax!
Other deductions that can hit your finances can be found through using free tax prep software.
There may be the Provincial health plan fees and also any RRSP payments you may opt to make or Union fees (where applicable).
Next, the Employment Insurance (EI) and Canadian Pension Plan (CPP). Both are covered in detail at the top of this page - and have set maximums. The total EI (1.78%) you will pay is around $786.86 a year and the CPP (4.95%) is $2,217.60 They are deducted at a set percentage (in brackets for 2011) of your salary so if you earn a high salary you can normally have made all the payments early in the year. Once paid off you have a break until January 1st the next year.
Other deductions that can hit your finances may be the Provincial health plan fees and also any RRSP payments you may opt to make or Union fees (where applicable).
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