It’s been a busy month for journalists. The end of the year means one thing — top 10 lists! Every single reporter around the world has or is about to make some sort of year-end or, this year, decade-end list; it’s just what we do. So, I will join my fellow scribes in making a list, but because it’s 12:24 on Christmas Eve, it won’t be a top 10. Without further adieu is my top 7 Canadian financial stories of 2009.
1. The recession:
Naturally, this tops pretty much every business-related top 10 list. And for good reason. It dominated the news cycle, hundreds of thousands of Canadians were laid off, massive amounts of stimulus was injected into the economy and the repercussions of the global collapse continue.
2. The Federal debt:
It’s related to the recession, but deserves a spot all on its own. The Conservative government racked up a $56 billion deficit in 2009. Some will argue it was needed, while others will say Harper and Flaherty went overboard, but anyway you look at it that’s a lot of money. (Yes, it’s not nearly as much as the U.S. or even other developed countries, but it’s still a hefty sum.) Now the question becomes, how are we going to pay for this?
3. Tax free-savings account
It’s a bit ironic to be heralding a new investment vehicle when no one wanted to put their money in anything this year, but the TFSA, which came into being on January 2, is a powerful savings tool. Canadians can deposit $5,000 a year into the account and then pull the money out without paying any taxes. As more years pass, and the accumulation room grows (if you didn’t deposit $5,000 this year, you can save $10,000 the next), the TFSA will become even more important to financial planning.
4. Homegrown ponzi schemes
While Bernie Madoff’s scam affected some Canadians, we were lucky enough to have a few Ponzi schemers that we can unfortunately call our own. Quebec-based “adviser” Earl Jones allegedly stole $50 million from family, friends and other investors. That was huge news over the summer, but two Albertans — Milowe Brost and Gary Sorenson — take the Ponzi prize. They allgedly swindeled between $100 million and $400 million from clients.
5. Harmonized sales tax
When B.C. and Ontario’s provincial governments said they were going to harmonize the GST and PST, investors went nuts. It takes effect next July, but people are already upset that they’ll have to pay 13% on their mutual fund investments — right now investors are only charged 5% GST. There’s some talk that the provincial leaders will exempt mutual funds from the tax, but nothing has been set in stone as of yet.
6. Pension reform
Do you have money saved for retirement? If you’re like one-third of the Canadian population that answer would be no. What about a company pension? Apparently, 66% of private sector workers don’t have one. That’s got the government worried. In the last few weeks, meetings have taken place all over the country (with one big gathering in Whitehorse of the country’s finance ministers) to talk pension reform. There’s no answer yet on how to boost pensions and secure retirement savings for Canadians, but the leaders have agreed to commit resources to this issue.
7. Stock market rebound
We all knew the market would come back at some point, right? It’s up nearly 30% from the start of the year. That’s great news — the world hasn’t completely collapsed — but don’t get too excited. The economy is still fragile and who knows what will happen next year. Still, when you’re feeling all warm and fuzzy over the next few days, say a little thank you for the TSX’s upswing.
There were many other important stories this year, and I encourage you to let us know your picks.
I’m heading out west for the week, so have a great holiday and a Happy New Year.