Investors punish Equifax for Social Security data breach

Investors punish Equifax for Social Security data breach


Investors were bailing out on Equifax a day after the credit monitoring company said a data breach exposed the Social Security numbers and other personal data of 143 million Americans.

As of midday on Friday, Equifax shares fell about 13% in heavy trading. The decline equates to about $2.28 billion in lost market value.

The company is one of three major U.S. credit bureaus, the declines extended to its competitors. TransUnion fell 4% and Experian stock declined 1% in London.

Lenders rely on the information collected by the credit bureaus to help them decide whether to approve financing for homes, cars and credit cards. Credit checks are even sometimes done by employers when deciding whom to hire for a job.

Also read:

Regulators focus on cybersecurity

Major data breach touches U.S. robo, but risk ‘extremely low’

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Published at Fri, 08 Sep 2017 12:15:56 -0400

ECB holds key rate, cuts inflation forecast

ECB holds key rate, cuts inflation forecast


The ECB has left its key interest rates and bond-purchase stimulus program unchanged.

The central bank left its benchmark short-term interest rate at zero, and its deposit rate at negative 0.4%, both record lows.

The decision was announced after a meeting Thursday of the bank’s 25-member governing council in Frankfurt.

The bond purchases are set to run at 60 billion euros (US$72 billion) per month through the end of the year, and longer if needed to raise inflation from the current 1.5% toward the bank’s goal of just under 2%.

The ECB also lowered its forecasts for inflation — to 1.2% next year from 1.3% previously and to 1.5% in 2019 from 1.6%. However, it raised its economic growth forecast this year to 2.2% from 1.9% previously.

A stronger euro can hurt eurozone exports and lower inflation which the ECB is trying to raise through its 60 billion euros ($72 billion) per month in bond purchases.

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Published at Thu, 07 Sep 2017 10:03:18 -0400

Get ready for more single women clients

Get ready for more single women clients

Copyright: rmarmion / 123RF Stock Photo

Women’s increasing wealth has implications for advisors, says an Investment Planning Counsel (IPC) white paper.

Citing research from Investor Economics, the report says that by 2026, Canadian women will control nearly half of all accumulated financial wealth. That’s significant compared to a decade earlier, when the share was closer to one-third.

In particular, the paper focuses on the growing number of widows and divorced women, which reached about 2.5 million in 2015 (17% of adult females).

Read: Make these moves first when divorce strikes

“There is every reason to expect that this number will continue to rise,” says the report, which cites women’s tendency to outlive men, as well as the large number of baby boomers. Also, after divorce, more men than women tend to remarry or establish common-law relationships.

And for Canadians over age 65, 43% are single — the majority being women.

Read: What new StatsCan data say about how clients live now

“The challenge for financial advisors is to develop expertise in dealing not only with widows, but widows who are likely to be over the age of 65, with limited financial knowledge,” says the report. “Helping elder women to avoid a decline in their living standards is both a responsibility and an opportunity for financial advisors.”

What advisors can do

Following divorce or the death of a spouse, women tend to change advisors, so understanding how to serve these investors is crucial. In fact, research finds that 70% of women change their advisors within a year of a partner’s death.

Research also shows fewer than a quarter of widows are inclined to work with an advisor to get the most out of their savings, and less than 20% expressed a concern about the tax consequences of making withdrawals from their portfolios. For those who are divorced, only a quarter see value in working with an advisor.

Among high-net-worth clients, women tend to feel less secure than men. Specifically, these women feel less prepared and less educated about finances.

Read: Mutual funds are tried and true, but some investors ruled by emotions

Compared to men generally, women also tend to worry more about being a burden to family. “Clearly, there is a place for insurance in the financial plans of women,” says the report.

To serve women clients, financial advisors must “deal with the total balance sheet and cash-flow issues, and not assume that investment success is the priority,” says the report. That’s because women clients care about “assured outcomes,” not performance.

Though most advisors — both men and women — don’t think they should treat female clients differently from male clients, there are distinct differences, maintains the report.

At the same time, remember that clients are individuals. A senior IPC advisor is quoted in the report as saying, “Women are not just a singular group. They are hard to generalize.”

For more details on this client segment, including cited research, read the full report.

Also read:

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Published at Thu, 07 Sep 2017 11:43:28 -0400

OSC to hold roundtable to discuss women on boards

OSC to hold roundtable to discuss women on boards


The Ontario Securities Commission will hold a roundtable to discuss the findings of its third annual review of disclosures related to women on boards and in executive positions.

The review looked at disclosures under National Instrument 58-101: Disclosure of Corporate Governance Practices relating to women on boards and in executive officer positions, and will be published in the coming weeks.

Read: Advise clients wanting to join boards

The roundtable takes place on October 24, from 9 a.m. to 11 a.m. on the 22nd floor of the OSC’s offices (20 Queen St. West in Toronto).

The event will feature a panel discussion on the results of the review, as well as the benefits, challenges and experiences associated with the existing disclosure requirements.

Panellists include representatives of issuers, investors and proxy advisors, as well as governance experts.

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Published at Thu, 07 Sep 2017 11:45:14 -0400

Why to watch the Ontario government, pre-election

Why to watch the Ontario government, pre-election


One could say that Ontario, under Premier Kathleen Wynne, has had an outsized impact on Canada’s economy.

From electricity rate cuts to minimum wage increases, the province has affected the national consumer psyche, business competitiveness, inflation and even BoC policy, writes Warren Lovely, head of public sector research for National Bank of Canada, in a research note.

The province, he says, has performed with 2.5% real GDP growth per year since 2014, offsetting weakness in Canada’s resource-intensive jurisdictions. Given significant policy changes under the current provincial government — what could be referred to as the “Wynne effect” — it’s time to turn attention to potential “pro-cyclical” fiscal stimulus linked to next year’s provincial election, Lovely says.

Below are some of Wynne’s policy impacts, and what to watch for.

Housing market reforms

Ontario’s “Fair Housing Plan,” announced in April, “keyed a change in market psychology,” Lovely says. Housing resales have fallen in the Toronto area’s 416 and 905 area codes and prices have cooled. Ontario’s measures have come amid additional federal rules intended to slow mortgage lending.

Electricity price relief

“You could write a book on Ontario’s electricity market reforms,” says Lovely.

The provincial government’s bid to cut residential electricity rates by an average of 25% “has left an immediate and indelible mark on CPI,” he writes, comparing the move to a tax cut for residential hydro customers.

All things being the same, he says the hydro savings should flow back into the economy in the form of additional near-term consumer spending.

Minimum wage increase

Ontario’s minimum wage is set to rise from $11.40 per hour to $14 per hour as of January 2018, followed by an additional gain to $15 per hour in January 2019.

Lovely and his colleagues say this “near record increase” in Ontario’s minimum wage could impact 41% of the provincial workforce – that is, the 24% of people earning less than $15 per hour and the 17% who make between $15 and $19.99 per hour.

Financial markets have yet to integrate the short-term impact of this minimum wage increase into the 2018 outlook, he says, which should mean faster growth with higher inflation.

Election stimulus?

Given what Wynne has done so far, it’s important to consider pre-election policy pledges.

Ontarians head into a provincial election in June 2018, and it’s not hard to foresee “a slate of pre-election goodies, above and beyond what’s already been announced,” Lovely writes.

Revenue from the province’s economic growth could mean additional promises like tax relief, measures for businesses to counter the cost of the minimum wage increase, or further stimulus for consumers.

Writes Lovely: “An Ontario ‘Fair Tax Plan’ has a certain ring to it, don’t you think?”

Also read: 

Toronto average home price falls for 4th consecutive month

Clients can’t find money to save: survey

BoC hikes key rate to 1% as strong growth broadens

Ontario businesses to take $23-million hit from reforms: coalition

Published at Thu, 07 Sep 2017 11:45:34 -0400

Laurentian fined $200K after lapsing on registration conditions

Laurentian fined $200K after lapsing on registration conditions

Legal Issues

Laurentian Bank Securities faces a $200,000 fine from IIROC after failing to comply with registration training requirements and not adequately supervising a dealing rep.

Laurentian Bank failed to take reasonable steps to ensure that three of its representatives were proficient through a 90-day training program, says IIROC, the self-regulatory body for investment dealers.

Two reps registered with IIROC in July and August 2011 without completed their 90-day training periods, IIROC says. Then, in December 2011, another IIROC registration for a third representative was attempted, again without completing the 90-day training.

Additionally, Laurentian did not have a system allowing adequate supervision of the business activities of one of the representatives, IIROC says.

The bank neglected to “ensure compliance with one of the conditions of registration imposed on [the] representative by the Approval Committee of the Québec District Council, namely periodic visits to his place of work, contrary to IIROC Dealer Member Rule 38.1,” IIROC says.

The violations happened between 2011 and 2013. In addition to the fine, Laurentian agreed to pay costs of $20,000.

The bank fully cooperated with the IIROC investigation, which was initiated in December 2012.

Published at Thu, 07 Sep 2017 13:25:51 -0400 Canada Creates NAFTA Environment Advisory Council Canada Creates NAFTA Environment Advisory Council

by Mike Godfrey,, Washington

04 September 2017

The Canadian Government has announced the creation of a new council that will provide advice on the environment during the NAFTA re-negotiation talks.

The 10-member NAFTA Advisory Council on the Environment has been set up because the Canadian Government is seeking to strengthen the environmental protections in the agreement. Members of the Council include former Quebec and British Columbia premiers, a former Saskatchewan cabinet minister, and the Inuit Tapiriit Kanatmi president.

When NAFTA entered into force in 1994, it was the first free trade agreement to link the environment and trade, through a chapter on environmental cooperation between Canada, the US, and Mexico.

Environment Minister Catherine McKenna said: “Canadians understand that the economy and the environment go hand in hand. Clean air and clean water know no boundaries, and they are top priorities for Canadians, Americans, and Mexicans. Modernizing NAFTA to strengthen environmental protections will make us more competitive, not less.”

“The leaders on Canada’s NAFTA Advisory Council on the Environment will advise our government on how to protect the environment, grow our economy, and promote Canadian interests.”

Published at Sun, 03 Sep 2017 20:00:00 -0400 Canadian Businesses Urge Gov't To Scrap Tax Plans Canadian Businesses Urge Gov't To Scrap Tax Plans

by Mike Godfrey,, Washington

04 September 2017

Thirty-five Canadian business organizations have written to Finance Minister Bill Morneau to ask that he scrap proposals to crack down on the use of tax planning strategies by private corporations.

The business groups have together formed the Coalition for Small Business Tax Fairness to oppose the Government’s proposals. Signatories of the letter include the Canadian Chamber of Commerce, the Canadian Taxpayers Federation, the Retail Council of Canada, Restaurants Canada, the Canadian Dental Association, the Canadian Medical Association, and the Canadian Association of Farm Advisors.

According to the letter, the Government’s reforms “are not minor amendments, but are sweeping changes that will affect all sectors of Canada’s business community.”

Dan Kelly, President of the Canadian Federation of Independent Business, said: “These proposals, while intended to target the wealthy, will hurt middle-class business owners from every sector of the economy. These are shop owners, farmers, doctors, financial planners, homebuilders, and trades in all sectors – the entrepreneurial families who are the backbone of the economy and responsible for the majority of the job creation in Canada.”

“Our coming together highlights the urgency of combatting these proposals which, if legislated, would signify the biggest changes to the business tax system in decades.”

In July, the Government launched a consultation on how best to crack down on three tax planning practices it believes are being used to gain unfair tax advantages. The consultation is open until October 2.

The Government wants to tackle so-called income sprinkling, whereby income is diverted from a high-income individual to family members with lower personal tax rates, or to family members who may not be taxable at all. It also wants to ensure that the tax treatment of passive investments retained in a corporation is fair, and to prevent the surplus income of a private corporation from being converted to a lower-taxed capital gain and stripped from the corporation.

The letter explained that members of the signatory organizations “feel unfairly targeted, intentionally or not, by the changes and painted as ‘tax cheats’ by the federal Government simply for accessing tax planning tools that they have been encouraged to use for decades.” It warned that the changes will make the Income Tax Act still more difficult to interpret and will increase business uncertainty for independent business owners.

Turning to the specific proposals, the letter argued that the proposed reform of income sprinkling rules demonstrates “a lack of understanding on the part of the Government on how independent business truly functions.” It stated that it is inappropriate to compare an entrepreneur with a salaried employee and stressed that many business owners do not have access to safeguards such as employment insurance for job security.

The letter added that passive investments in corporations “serve as insurance against emergencies and unforeseen costs,” and the changes are likely to make firms more vulnerable in difficult economic times. It explained that passive investments help businesses to save for major investments, expansion and innovation, and that the reforms would reduce the ability of business owners to invest in their business.

The proposed amendments to the capital gains tax rules would, according to the letter, serve “almost as a form of retroactive taxation,” as they could affect business value appreciations from the past. The changes could also “result in the double taxation of some estates, and could make it more difficult for business owners looking to do intergenerational business transfers.”

The letter concluded by urging Morneau to take the proposals off the table. It asked Morneau to engage in meaningful consultations with the business community to address any shortcomings in tax policy.

Published at Sun, 03 Sep 2017 20:00:00 -0400 Trudeau Holds Ground On Controversial Tax Changes Trudeau Holds Ground On Controversial Tax Changes

by Mike Godfrey,, Washington

05 September 2017

Canadian Prime Minister Justin Trudeau has said that he will “make no apologies” for the Government’s approach to taxation, following a backlash against proposed changes to tax planning rules.

In July, the Government launched a 75-day consultation on how best to crack down on three tax planning practices it believes are being used to gain unfair tax advantages. The consultation focuses on so-called income sprinkling, the retention of passive investments in a private corporation, and the conversion of the surplus income of a private corporation to a lower-taxed capital gain.

Speaking in Saskatoon, Trudeau said: “We are doing more for the people who need it, less for the people who don’t. I will make no apologies for this approach. It’s what Canadians expect of us when we say we are going to grow the middle class and those working hard to join it.”

Trudeau did however note that the Government is currently engaged in a consultation on the proposals. He said the Government is “hearing feedback from Canadians that want to make sure that this does help the middle class and that is what we are very much focused on.”

Trudeau stressed that he is “happy to have discussions and feedback from interested Canadians who want to make our tax code fairer and we’re going to take all of those reflections into account.”

Last week, 35 business organizations wrote to Finance Minister Bill Morneau to ask that he scrap the proposals. Forming themselves into a Coalition for Small Business Tax Fairness, the groups criticized what they said were “sweeping changes that will affect all sectors of Canada’s business community.”

The letter said that small businesses felt they are being “unfairly targeted, intentionally or not, by the changes and painted as ‘tax cheats’ by the federal Government simply for accessing tax planning tools that they have been encouraged to use for decades.”

According to reports, Morneau held an hour-long conference call with Liberal MPs concerned about the impact of the plans. A spokesperson for Morneau told the Financial Post that the purpose of the call was for the Minister “to listen to his colleagues, to dispel some myths and clearly state why the notion of tax fairness and our promise to the middle class are really at the heart of what we’re proposing here.”

The party caucus will meet this week.

Published at Mon, 04 Sep 2017 20:00:00 -0400 Morneau Meeting With SMEs To Discuss 'Tax Fairness' Morneau Meeting With SMEs To Discuss 'Tax Fairness'

by Mike Godfrey,, Washington

06 September 2017

Canadian Finance Minister Bill Morneau has launched what the Government calls a “national listening tour,” to discuss his plans to crack down on tax planning strategies used by private corporations.

Morneau met with small business owners in Vancouver on September 5, and Small Business Minister Bardish Chagger will continue the consultations in the coming days.

Morneau said of the tour: “I know first-hand that running a business is hard work. It involves taking risks, suffering setbacks, and often a great deal of sacrifice. I am committed to ensuring that this hard work is rewarded, and that Canada’s tax system continues to help businesses small and large to expand and create jobs. Meetings like the ones today are an important part of the dialogue as we consult on ways to ensure a competitive and fairer tax system for all Canadians.”

The Government believes that an increasing number of Canadians are using private corporations in ways that allow them to reduce their personal taxes. It is currently consulting on proposals for tackling so-called income sprinkling, the retention of passive investments in private corporations, and the conversion of the surplus income of private corporations to lower-taxed capital gains.

Speaking after the meeting, Morneau told reporters that there has been a 300 percent increase in the incorporation of professionals in the past 15 years. He said: “We don’t want to be in a situation where there are two classes of Canadians: one class that can incorporate, another class that can’t; one class that as a result has lower tax rates, the other that has higher tax rates. That’s not, in our estimation, a sustainable long-term future.”

Last week, 35 business organizations wrote to Morneau to ask that he scrap what they described as “sweeping changes that will affect of sectors of Canada’s business community.”

On September 5, the Canadian Federation of Independent Business (CFIB) said it delivered 14,691 petition letters to MPs from business owners concerned about the measures.

CFIB President Dan Kelly said: “In my 23 years of working on behalf of small businesses, I have not seen this degree of spontaneous outrage toward any other policy.”

Pierre Poilievre, finance critic for the opposition Conservative Party, said that the backlash against the proposals has been “immense,” and that the package would “raise taxes on our middle-class farmers and local business owners.”

Poilievre has written to Parliament’s finance committee to ask that it reconvene early for five days of hearings on the proposed changes. He said that, on the current parliamentary timetable, the committee will not meet again until shortly before the consultation closes, “making it impossible to even produce a report by the deadline.”

“Neglecting to hear from representatives of millions of affected taxpayers would be an abdication of the committee’s responsibility,” he argued.

Published at Tue, 05 Sep 2017 20:00:00 -0400