Preferred stock can often trump debt when it comes to how much you retain of the income. If you hold preferred shares outside of a tax free savings account (TFSA) or your RRSP, you will get a better tax treatment on the dividends. For a base income of  $50,000 per year at your job, additional preferred dividends of $2,000  will pay $283 less in federal tax than the like amount of interest income. If your holdings are within a TFSA or RRSP, the tax benefit disappears.

For some preferred issues, there is another plus that is not often mentioned. If you elect a dividend reinvestment plan (DRIP) certain issuers like Royal Bank and CIBC will reinvest your dividends in common shares of the bank. This way you become a holder of both types of issues for each institution without incurring any additional brokerage fees. For example, 500 shares of Royal Bank’s AD $25 par preferred will generate $562.50 in dividends a year which will buy about 11 of the bank’s common shares paying a dividend of $2.16 each. After five years, you will have received about $2,815 in preferred dividends and an additional $297 in common dividends and hold approximately 55 common shares of Royal Bank.

There are around 180 fixed dividend preferred shares listed on the TSX. In the table below we examined shares of this type issued by the five big banks. The results are impressive. To Oct. 11, 2011, the average year to date total return (capital gains plus dividend yield) for these 34 issues was 10.66%. The same average for the common stock of these banks was a decline of 0.53% and the TSX composite lost 9.9%. If you don’t want to buy individual issues, there are some ETFs that might be interesting. Claymore S&P/TSX CDN Preferred Share ETF (CPD) had a total return of 2.08% and a dividend yield of about 4.8%. Horizons Preferred Share ETF (HPR) comes in with total returns and dividend yields of (3.40%) and 4.25% respectively. iShares S&P/TSX North American Preferred Share Index has a total return of 0.24% and a yield of 4.41%.

First on this list and also number one in four of the last six rankings of all the 180 cities is Ottawa-Gatineau with a population of 1.13 million. Ottawa became capital of the then Province of Canada in 1857 partly because it was militarily defensible and further from the U.S. border than most of the other major cities. In 1867, it became the capital of the newly confederated country of Canada. Originally, the area’s industry was lumber based with easy transportation to Montreal and Kingston via the Ottawa River and Rideau Canal. Today the area’s major business is government.

Ottawa-Gatineau is not first in any category but also does not score badly in any area. The highest score out of 180 was fifth and the lowest was 124^th. Of the 21 items measured, there were five items in the first quintile, nine in the second, four in the third, three in the fourth and none in the fifth. The lowest scoring items were house prices, number of health professionals and number of rainy and snowy days. The highest scoring areas were culture, transit, doctors, newer cars on the road and population growth.

Edmonton AB, the most northerly city on this list, had a 2006 population of 730,000 and comes in as number two and 8^th overall. The Hudson’s Bay Company had trading posts in the Edmonton area in the late 1700s. The city was incorporated in 1904 and became the capital of Alberta in 1906. In 1947, oil was discovered near the city and now the economy is focused on energy and government.

Edmonton has challenges with higher housing prices, cold weather and crime. It ranks well in provincial income and sales taxes, two of the three income categories, and transit. Other areas where Edmonton came in the top half of the rankings were: time to buy a house, population growth, number of doctors and health professionals, unemployment, precipitation, pollution and culture.

Winnipeg MB, with a metropolitan area population of 695,000 in 2006, is the capital of the province and comes in at number three on this list and 10^th overall. Winnipeg was permanently settled in 1812 and was incorporated as a city in 1873. Finance, manufacturing and government have augmented the original still strong economic base of grain and transportation.

Winnipeg scores poorly for crime, cold weather and provincial income taxes. House prices, discretionary income, population growth and walk or bike to work score in the middle of the rankings. Doctors, health professionals, household income and culture all come in the top third of our rankings. Transit, unemployment, precipitation and air quality all score in the top 20% of all cities.

Calgary AB had 1.1 million people in the metro area in 2006 and holds fourth place on our largest cities list and 16^th overall. Calgary was incorporated as a town in 1884 and European settlement goes back to the late 1700s when cartographer David Thomson wintered here. The original economies of meatpacking, cattle marketing, transportation and distribution are still around but take a back seat to oil, which is the predominant employer in the city. Other industries include manufacturing, high-tech, ecommerce, tourism and finance.

Calgary’s challenges include high house prices, cold weather and a low number of health professionals. Also population growth and walking or biking to work come in at 114^th and 119^th respectively out of the 180 cities measured. Good news includes: one of the highest average household and discretionary incomes in the country (6^th and 5^th out of 180), a relatively low crime rate, good number of doctors, a high number of sunny days and an excellent transit system. The high income helps to take the sting out of house prices.

Number five on this list and 29^th overall with a 2006 population of 578,000 is the city of Vancouver BC. The area was explored in the 1790s but was not settled until the mid-1800s and grew rapidly after the completion of the first transcontinental railway line 20 years later. The founding economy of transportation and trade is now augmented by finance, tourism, film, resource industries and aviation.

The country’s highest housing prices are a problem in Vancouver. Housing price and affordability count for over 14% of the total grade and the city is in last place in these categories. Other challenges for this city are high crime, unemployment (110 out of 180) and weather. Although Vancouver ranks number three out of 180 cities for having a warm climate, it also has a lot of precipitation. The city scores in the top 10 of our main list for being able to walk or bike to work, transit and culture. It also lands in the top third in two of our income categories, population growth and clean air.

Mississauga ON which is number six on our list and 32^nd overall had a 2006 population of 669,000 making it the second largest city in the Greater Toronto area and one of the largest cities on the Great Lakes. Although the area has been settled since the early 1800s, Mississauga is the youngest community on this list, formed in 1968 by the amalgamation of several smaller towns. Today it has a varied economy that includes transportation, biotech, high technology, manufacturing, real estate and finance. Pearson International Airport, the country’s busiest, is one of the over 40 of Canada’s largest 500 companies headquartered here.

Mississauga scores low in the areas of housing affordability and walking or biking to work. It also ranks in the bottom half of all our cities (117 out of 180) in the unemployment category. On the plus side, the city is safe with a low crime rate, has excellent transit, good weather, a healthy population growth and high household incomes.

Coming in at number seven and 74^th overall is Hamilton ON with a 2006 population of 505,000. The area has been settled since the late 1700s and Hamilton became a city in 1846. Located at the western end of Lake Ontario, the city has been a center for steel manufacturing for well over a century. Currently, Hamilton is the source of about 60% of the steel made in Canada. Manufacturing is still its largest employer followed by health, social services, education, finance, insurance, real estate and construction.

Reflecting its overall rank of 74^th out of 180, Hamilton ranks around the middle in many of our categories. It scores in the bottom quartile for house prices, the time to buy a house and air quality. It lands in the third quartile for the number of people who walk or bike to work and number of new cars on the road. Household average income, discretionary income, crime, population, health professionals and doctors, unemployment, weather and culture all fall in the second quartile and transit is in the first quartile.

Toronto ON, is the largest city in Canada with over 2.5 million people and lands in 8^th spot on our large cities list and 88^th overall. The capital of Ontario is the only city on this list to have the distinction of being captured and occupied by a foreign army. During the war of 1812, the American army captured Toronto, then known as York, and burned the legislative assembly buildings. Over 5.5 million people or one in six Canadians live in the Greater Toronto Area. The city now has a diverse economy focused on finance, government, manufacturing, transportation, services, media, real estate and tourism.

Toronto has challenges with the cost and affordability of housing. Also unemployment at the end of 2010 was high and population growth from 2001 to 2006 was less than 1%. These four items account for about 33% of the total points. The city also ranks in the lower half of all our communities for number of doctors, health professionals and discretionary income. Toronto ranks in the second quartile in the areas of crime, weather, household income and walking or biking to work and lands in 2^nd and 3^rd place overall for transit and culture respectively.

Montreal QC, the second largest city in Canada with a 2006 census population of 1.6 million people, is number nine on this list and 123^rd overall. The area of has been settled since the mid 1600s. Montreal was incorporated as a city in 1832 and by 1900 had over 250,000 people. The original economic base of trade and transportation has expanded greatly to include finance, aerospace, printing, telecommunications, tourism, pharmaceuticals, textiles, software and tobacco.

Like Toronto, Montreal does not perform as well as many of the surrounding cities that comprise the census metropolitan areas. The city falls in the fourth quartile in the areas of housing prices and affordability, average household incomes, discretionary income and unemployment. Also Quebec has some of the highest income and sales taxes in the country. The city ranks around the middle of all cities measured for population growth, crime, health professionals and weather. Montreal does quite well in the categories of walking and biking to work, culture and newer cars and is number one in the transit category.

Whitehorse, Yk. may surprise people as our number one city with fewer than 25,000 people and 12th overall. Whitehorse is the capital of the Yukon Territory and was incorporated in 1950. The city has a rich history going back to the gold rush of the 1890s and currently relies on mining, government and tourism as significant parts of its economy.

As you would expect, a city that is only 700 kilometers south of the Arctic Circle ranks low on the weather scale (143 out of 180). Crime is an issue and house prices trend to the high side. However, Whitehorse performs very well in most of the other categories. It ranks number one in two of the three income measurements and number 43 in the third. Provincial income and sales tax are low compared to the rest of the country. A population growth of 7% ranks Whitehorse number eight of all the cities in our study. Looking for work is easier here with a ranking of 11 out of 180 in our unemployment rate. Lastly, it comes in number 10 in our culture ranking which measures the percentage of people employed in arts, culture, recreation and sports.

Canmore, Alta. is number two on our list and number 27 of all 180 cities measured. Located on the edge of Banff National Park, about an hour’s drive west of Calgary, Canmore was a coal-mining town from the early 1900s till 1979 when mining operations were closed for good. Due principally to the 1988 Olympics, the city has re invented itself as a tourism and recreation destination.

The biggest challenge in Canmore is house prices, which are the highest in our study other than Vancouver. Cold weather and transit are also issues. Other areas perform well. The city ranks number two on the ability to walk or bike to work. Two of the three income measurements are in the top 10 and the city is number six out of 180 for low unemployment. Canmore boasts a reasonably low crime rate and provincial income and sales taxes are low or non-existent.

Number three on this list and 28th overall is Cobourg, Ont., a city on the shores of Lake Ontario about 90 kilometers east of Toronto. The area has been settled since the 1790s and the city got its present name in 1819. Now it has a mixed economy comprised of manufacturing, health care, retail and tourism. Its waterfront and historic downtown attract visitors.

Cobourg does not score near the bottom of any category. In the areas of house prices, a couple of income rankings, unemployment and doctors, the city finishes in the bottom half of the overall rankings. Cobourg’s weather is the fourth best in the country according to our measurements. Also walk or biking to work ranked 14 out of 180 and population growth, crime and culture did well.

Port Hope, Ont. is number four on the list and 33rd overall and is located 12 kilometers west of Cobourg making it neighbors on this list and on the map. The town was incorporated in 1834 after 40 years of settlement and became a transportation hub for many years. Currently, the largest employer is Cameco Corp., which operates a nuclear fuel conversion plant. The local economy also depends on several smaller manufacturers, retail and tourism.

Port Hope has a low number of doctors and health professionals. It also falls in the bottom half of our rankings for housing affordability, transit and the number of people who walk or bike to work. Next to Oakville, Ont., Port Hope has the best weather in the country. It also scores very well in crime, has good cultural representation, low unemployment, a very reasonable level of population growth and better than average personal income levels.

Our fifth city and 39th overall is Yellowknife Nwt. The most northerly city on our list, Yellowknife is the capital of the Northwest Territories. Prospectors moved to the region in the 1930s and it became a municipality in 1953. Currently the city’s economy is based on diamond and gold mining, government and tourism.

As expected, Yellowknife ranks low on our weather scale. It also has high crime rates and housing is quite expensive. On the plus side, the city is number one for walking and biking to work, the best city for provincial sales and income taxes, and ranks number three in two of the income categories and number 25 in the third. It also ranks high on our culture measurement and scores well for the number of doctors.

The rest of the list is as follows:

6. Thomson, Man.
7. Swift Current, Sask.
8. Portage la Praire, Man.
9. Yorkton, Sask.
10. Camrose, Alta.
11 Hawkesbury, Ont.
12. Salmon Arm, B.C.
13. Tillsonburg, Ont.
14. Wetaskiwin, Alta.
15. Cold Lake, Alta.
16. Ingersoll, Ont.
17. Collingwood, Ont.
18. Estevan, Sask.
19. North Battleford, Sask.
20. Riviere-du-Loup, Que.
21. Brooks, Alta.
22. Dawson Creek. B.C.
23. Okotoks, Alta.
24. Pembroke, Ont.
25. Elliot Lake, Ont.
26. Grand Falls-Windsor, Nfld.
27. Amos, Que.
28. Kenora, Ont.
29. Cranbrook. B.C.
30. Petawawa, Ont.
31. Edmundston, N.B.
32. Cowansville, Que.
33. Lachute, Que.
34. Dolbeau-Mistassini, Que.
35. Temiskaming Shores, Ont.
36. Matane, Que.
37. Campbellton, N.B.
38. Squamish, B.C.
39. Prince Rupert, B.C.
40. Terrace, B.C.
41. Miramichi, N.B.
42. Powell River, B.C.
43. La Tuque, Que.
44. Summerside, PEI
45. Quesnel, B.C.
46 Williams Lake, B.C.
47 Bay Roberts, Nfld.