If you don’t mind, thank you for letting me continue the peeling of the mail started yesterday, otherwise I won’t get through it…
Hélène begins to lose patience.
His accountant delivered his tax return on April 15. She has long since received her tax refund from Quebec, but the one from Ottawa is long overdue. Each time she calls the Canada Revenue Agency (CRA) for an explanation, she gets a different, always unsatisfactory answer. When she consults her file on the Canada Revenue Agency website (My Account), it says “processing”.
“For once I withdraw money, I pay more in installments each month. When we owe them money, it doesn’t take long for us to receive the invoice. What do you think I should do? »
No doubt, something is wrong. If the declaration was sent electronically, the notice of assessment should have been issued two weeks later. By mail, the treatment stretches over eight weeks. There, four months passed.
According to accountant Simon Elliott, such delays, while not normal, are not exceptional. They can be caused by several factors, for example when claiming certain tax credits that require additional validation (credit for disabled person, credit for high medical expenses, etc.).
Installments at issue
In the case of our reader, he suspects a problem with installment payments.
“There is a good chance that the delay is caused by a discrepancy between the amount of installments paid entered on the declaration and the amount which appears in the file of the CRA”, explains the accountant, who evokes a bug. Under these conditions, the file would block automatically.
Simon Elliot recommends calling the Canada Revenue Agency back and requesting that the processing of the file be expedited.
“We’re off peak, it’s easier to talk to an agent. The CRA now provides real-time wait times on its website in the Contact Information section. »
Here’s the address : https://www.canada.ca/fr/agence-revenu/organisation/coordonnees.html
Moral of the story: don’t make more deposits than required.
Divergences in exchange-traded funds (ETFs)
Yves realized that Exchange Traded Funds (ETFs) of the same market index could show different returns.
“An index fund is supposed to replicate the index. From one provider to another, the return should therefore be similar,” concludes our reader.
However, by manipulating data on the Disnat platform, he found significant differences between funds tracing the main index of the American stock market, the S&P 500. Over a period of 10 years, the latter appreciated by 201%. The iShare ETF (XSP) returned 185%, the BMO ETF (ZSP) returned 276% and the Horizons ETF (HXS) returned 351%!
What is the explanation?
I asked the specialist on the subject Raymond Kerzérho.
“These are more different products than they appear on the surface,” begins the principal researcher at PWL Capital, a portfolio management company.
iShare’s XSP fund is a Canadian fund that invests in the S&P 500 with currency hedging. The ETF contains a mechanism that aims to smooth fluctuations between the greenback and the loonie. “Calculated in Canadian dollars, the return is largely erased by hedging,” explains Raymond Kerzérho.
BMO’s ZSP does not have such coverage. The expert points out that the product has not been around for 10 years, so the 10-year performance displayed cannot be relied upon.
Horizons’ HXS ETF is also unhedged, and its performance takes into account the appreciation of the US dollar against the loonie. “According to my data, the S&P 500 in Canadian dollars is performing better than the HXS fund. The difference comes from management fees,” says the expert.
In its promotional sheet, Horizons explains that it will capture the total return of the S&P 500 index by buying derivatives (“swap” contracts). I’ll spare you the details, but the company claims its method is more tax-efficient and offers superior returns. “Could this be the reason for this discrepancy? asks reader Yves.
Raymond Kerzérho persists: the gains were inflated by the appreciation of the US dollar, and not by the use of derivatives.
The tree, the sequel
Earlier this summer, I told you about the grief my neighbors and I felt after the loss of a mature tree in the backyard of our duplex in Montreal. I ended this column by inviting you to give us recommendations on how to replace our Manitoba maple. I mainly received emails to dissuade us from planting a honey locust, an idea that I had mentioned. “Too much trouble! We then thought of a plastic Christmas tree.
Our choice finally fell on an essence that no one offered us: an olive tree from Bohemia. It was my neighbor who found the best word to describe it: romantic.