Plus: the house of mouse always wins April 8, 2024 Sign Up | View online IN THIS ISSUE 8 min read 🥵 Dry prairies 💍 Wealthy couples 🚗 Rusty Teslas There are two big mistakes you can make in your first year of marriage: not checking for explosives under your car if you’re hiding from the Mafia in Sicily (RIP Apollonia) and not getting all the tax credits you can from the CRA. We offer some tips on the latter below. | Paramount Pictures THE WEEK IN MARKETS Why Wall Street Has No Words The song remains the same: optimism all around — about the global economy, about sales and profits staying strong, even about interest rates remaining high for longer than expected, which no longer feels like a harbinger of storm clouds ahead and more like confidence in a humming economy continuing to hum. Consider last week’s U.S. jobs report: 303,000 jobs added, wages still climbing, the 39th straight month of growth, and no inflationary pressure in sight. No wonder Wall Street is “borderline speechless.” (Canadian hiring was a bit weaker in March, but not enough to buck the positive trend.) The S&P and Nasdaq are both up 10% on the year, and the TSX is now up 7% — all at or near all-time highs. Bloomberg’s Odd Lots newsletter is calling this stretch “the long boom.” But is a reality check coming soon? Q1 earnings season kicks off this week, and the numbers won’t lie. THE WEEK IN ONE NUMBER -2.3% If you follow the advice of the majority of financial influencers, or finfluencers, that’s how much your investments will likely underperform expectations each month, according to the Swiss Finance Institute. WHAT HAPPENED LAST WEEK IMPORTANT The prairies ponder a water pipeline. Western Canada’s agriculture and natural-gas industries are buckling under what B.C.’s premier calls “the most dramatic drought conditions we’ve seen,” and the crisis is prompting towns to float a fresh solution: treat water like gas and pipe it in. “Water trading” has fast become a global industry, and it might soon take hold here in Canada. In Alberta, 80% of the water is in the northern part of the province, while 80% of the demand is down south, and trucking it in costs a pricey $7,500/day. Alberta’s agriculture and oil-and-gas industries bring in about $9 billion and $90 billion a year, respectively, and a water pipeline could help prevent the price of the commodities from going sky-high. Does marriage make you richer? Bustle noted in a much-talked-about essay that the net worth of U.S. couples is nine times (9x!) higher than singles, up from four times in 2010. The trend, we hate to report, is similar in Canada, where the average single earns 34% less than a person in a long-term relationship and has a mere 25% of their net worth. Why does cohabiting help you get ahead? For starters, fixed expenses (e.g., rent) are cheaper divided by two, and it’s easier to make risky yet potentially lucrative career leaps when you have the safety net of a second income. So next time you’re third-wheeling at dinner, let your married pal pick up the cheque. INTERESTING Iger escapes a mousetrap. Disney CEO Bob Iger triumphed over activist investor/billionaire Nelson Peltz in an uncommonly dramatic proxy fight for control of the Mouse House, which Peltz contended needed a gut remodel. Disney’s streaming business has lost around US$10 billion since 2019. And, according to Peltz, the studio stumbled by making “woke” movies, like Black Panther (which was a huge hit), and not firing people fast enough to cut costs. (Iger canned 7,000 employees last spring.) To keep Iger in the C-Suite, the Disney board spent US$40 million to run ads comparing Peltz to Pinocchio. But what doomed Peltz was probably just a good old-fashioned stock rally: Disney shares are up 40% in the past six months. Is Tesla’s stock starting to rust? The world’s biggest EV producer has been struggling to meet lofty sales expectations, and its most recent whiff — by a whopping 14% — was the company’s biggest yet. The sales miss sent Tesla shares south by 7%, which was enough to make it the Nasdaq 100’s worst performer of the year. If Elon is searching for a silver lining, big sticker prices and high rates are weighing on the entire global EV market, not just Tesla. China-based BYD missed sales expectations by a whoppping-with-three-p’s 43%, handing the title of top EV seller back to Musk & Co. Help us win a Webby! What does TLDR have in common with Taylor Swift and Ryan Gosling? We’re all nominated for Webby Awards, which recognize excellence in online media. We’re up against U.S. media behemoth CNN in the Business, News & Tech Newsletter category. So we need your vote! —Sarah Rieger FROM OUR SPONSOR THE FOMO INDEX by Stacey Woods IMPORTANT 💰 New Loblaws CEO made $22 million last year. Looks like someone won’t need that full 50% discount on expiring food. Source 💸 CashMoney and LendDirect’s parent company files for creditor protection. Calling its own parent company to wire it some money. Source 📉 Trump’s media company shares down 30% after reporting US$58M in losses last year. Trump Bibles are still priceless, though. Source 🥇 Alberta distillery beats Scotland, Ireland in a whisky-making competition. Scotland, Ireland still beat everyone in whisky-drinking competition. Source CRASH & BURN TO THE MOON 😢 Scary, kids, scary! Honorary Canadian/SCTV alum Joe Flaherty goes to the Evil House of Pancakes in the sky. Source 🍞 Amazon stores ditching “Just Walk Out” technology rather than calling it what it is: “1,000 People Watching You in India.” Source 🏨 Niagara Falls hotel prices soaring for the eclipse. $800 for a Marriott, and that doesn’t include a Toblerone on your pillow. Source 🖥️ Dust off your standing desks and crack open the tequila: WeWork set to emerge from bankruptcy by May 31. Source WHO CARES WHAT’S UP THIS WEEK The Bank of Canada will probably hold rates steady (Wednesday). Most experts say not to expect rate cuts until summer at the earliest, but maybe Tiff will throw markets a curveball. Several big U.S. banks kick off Q1 earnings season (Friday). Among them: Wells Fargo, JPMorgan Chase, and Citigroup. THE BIG IMPORTANT STORY FINANCE FOR HUMANS Two Big Life Moments Will Affect Your Taxes. Here’s How to Maximum Your Deductions Good news if you’re the sort of person who loves filling out forms and poring over crinkled-up receipts: it’s tax season! And if you’re the sort of person who loathes such tasks, well, we can’t blame you. All the same, with the April 30 filing deadline approaching, we thought we’d share some advice regarding two common-ish life events with major tax implications: 1) getting married or moving in with your significant other, and 2) having a kiddo. And if you got hitched or had a kid prior to 2023, you’d be wise to read on to make sure you’re maximizing your deductions, because not overpaying the government is a sure way to build wealth. You can also check out a longer version of this article, which has pointers for folks who are heading off to university or bought a home. Let’s get to it: Scenario #1: You’ve Shacked Up With Your Significant Other The big perk of marriage (besides companionship, etc.) is that you and your partner can share tax credits and benefits. Couples in a common-law relationship can do the same. In either case, you’ll need to update your relationship status with the Canada Revenue Agency (and with Revenu Québec if you live in the province). Why bother? Because cohabiting couples can… [1] claim the pooled charitable donations and pooled medical expenses amounts on whichever partner’s return will provide optimal savings (probably the higher earner). [2] transfer unused credits for things like age, Canada caregiver, disability, pension, and tuition amounts. If you haven’t used them and your partner can, you can pass them along. The annual cap is $2,000 for pension transfers and $5,000 for tuition transfers. [3] split pension income to take advantage of different marginal tax rates and reduce overall income taxes. [4] claim any remaining credit from one partner’s Basic Personal Amount on the other partner’s return. Scenario #2: Your Family Got Bigger Adding a child to your family means less sleep, more stress, and discovering just how much more room there is in your heart than you expected. And tax breaks! A few of the biggies: PRE-STORK TAX BREAKS [1] Medical expenses. Ultrasounds, IVF treatments, fertility-related prescriptions, prenatal and postnatal treatments, hospital services — you can claim all sorts of birth-related expenses. [2] Adoption expenses. You can currently claim a federal credit of up to $18,210 in adoption-related expenses, and many provinces offer additional credits, so be sure to check. POST-STORK TAX BREAKS [1] Registered Education Savings Plan (RESP). This is a tax-advantaged account to help save for university. The government will match — that’s right, match — 20% of contributions up to $2,500 a year, for a lifetime total of up to $7,200. [2] Regional grants. If you live in Quebec, félicitations: the provincial government will kick in a match of 10% of your RESP contributions, up to a max of $250. Other provinces, like B.C., offer similar RESP gifts. [3] Canada Learning Bond (CLB). Children of eligible low-income families can receive a $500 deposit in their RESP from the government the first year it’s opened. Then, every year after that until they turn 15, they’ll get an additional $100, up to a maximum $2,000 benefit. [4] Canada Child Benefit (CCB). Depending on your income, marital status, and kid’s age, you may qualify for up to $7,437 per child per year in tax-free support. You can apply for this benefit when registering a birth in your province or territory or online through your CRA My Account. OK! That’s probably all you can stand reading about taxes in one sitting. Good luck! OTHER VERY GOOD READS ☠️ Are Workplaces Inherently Toxic? How dream jobs become nightmares | The Walrus 🫎 Remembering Bob the Elk The life and death of a beloved B.C. bull | The Narwhal 🚧 How to Survive Every Terrestrial Threat Imaginable A primer on enduring wildfires, extreme heat, pandemics, and more | Toronto Life THE WISDOM OF X We’re all truly living our best lives on Teams… THOUGHTS ON TODAY’S ISSUE? Love it Good So so This week’s newsletter contributors: Ben Mathis-Lilley (writer), Devin Gordon (writer), Stacey Woods (writer), Sarah Rieger (news writer), Ambrose Martos (fact checker), Ciara Rickard (copy editor), Clare Douglas (copy editor), Sara Black McCulloch (fact checker), Mohini Tailor (senior lifecycle marketing specialist), Matthew Karasz (markets editor) Jared Sullivan (senior editor), Peter Martin (senior editor), Kat Angus (managing editor), and Devin Friedman (editor-in-chief). Wealthsimple Media Inc. 80 Spadina Ave Suite 400 Toronto, ON, M5V 2J4 Replies to this email address are not monitored. Have questions? 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