Introduction
Enclosed in this Portfolio Managers’ Notes, we present BMO Nesbitt Burns’ latest portfolio strategy report to give you an update on our strategist’s perspective after the U.S. election. In addition, we have included a research report on TC Energy, that is held in our Model Portfolio, after it released strong earnings in Q3/24.
Under the Wealth Management section, we have included an article that discusses the impact of the new family law legislation (Bill 56) for de facto spouses with children. We have also included an article that discusses Donor Advised Funds as we head into the holiday season where many people consider philanthropic giving. It is a tax efficient way to make meaningful donations to charitable organizations.
We also remind you of the dates and limits for RRSP, TFSA, and RESP contributions. We encourage all of those that have not yet completed all their 2024 contributions to their registered plans to proceed as soon as funds are available.
Of note within our team, we would like to congratulate Laura Donolo who has successfully completed all 3 levels of the CFA Program and has been awarded the CFA designation (Chartered Financial Analyst).
We trust you all had a nice autumn and remind you that we are here to help if you have any questions or would like to review your investment portfolio or your financial plan.
Market Research Market Insights Investment Strategy- November 2024: Analysts: Stéphane Rochon, CFA, Equity Strategist
Description: Red Sweep: Trump the Sequel
It was a sweep. While Kamala Harris had been gaining in some polls in the last week, the U.S. chose to give Donald Trump a second term. Republicans now control the Presidency as well as the U.S. Senate, while leading in House seats. The policy implications are profound. This opens the door to a host of Trump/Republican policies to be enacted both domestically and internationally.
From a market perspective, promises of corporate tax cuts will likely be positive for stocks. A back-of-the-envelope calculation shows about a five percent increase in S&P 500 earnings per share from Trump’s proposal to cut corporate taxes from 21% to 15% for companies that produce goods in the United States. Additionally, the prospect of less regulation and potentially more lax antitrust merger enforcement is contributing to the risk-on mood. Some of this was already priced in but net-net a few points of upside will still be gained.
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TC Energy: TRP-TSX Q3 - Firing on All Cylinders; Target to $66 vs. $55 Bottom Line:
The Q3/24 earnings report highlighted the strength of TRP's existing energy infrastructure footprint (2024 EBITDA guide tracking to higher end) and strong project execution (2024 capex revised lower -8% and Southeast Gateway pipeline project -11%). As such, the path to lower balance sheet leverage is happening quicker than expected. While we are maintaining our Market Perform rating, we are increasing our target to $66 (vs. $55) reflecting a higher target multiple (to 12.5x EBITDA vs. 11.5x), USD F/X benefit, and further de-leveraging success (on lower capex). Read More (please contact us)
Wealth Management
Parental Union for De Facto Spouses Québec's New Family Law Legislation
On May 30, 2024, Québec's National Assembly passed Bill 56, introducing an Act respecting family law reform and establishing the parental union regime (the "new Act"). This Act received Royal Assent on June 4, 2024, and creates a parental union regime for de facto spouses who are parents of the same child, born or adopted after June 29, 2025. Various Québec laws, including the Civil Code of Québec ("CCQ"), will be amended to confer certain rights on de facto spouses within a parental union. Read More
Five things to know about donor-advised funds as we head into the giving season
As leaves descend from the trees in earnest, a new season is upon us – no, not fall, but rather what’s known as “the giving season,” which is highlighted by National Philanthropy Day on November 15, and Giving Tuesday on December 3. Whether there’s a specific cause that’s near to your heart or you want to share your wealth with those who need it, Canadian charities could certainly use your support.
According to CanadaHelps’ 2024 Giving Report, the total amount donated to charity in 2023 was only marginally higher than in 2022 – $430.3 million versus $429.8 million. What’s more, one in five Canadians are now looking to charities to meet basic needs like food and shelter. However, figuring out where and how much to donate can be overwhelming
Contribution Reminder For Your RRSP, TFSA and RESP Accounts Maximizing the value of your registered plans by making annual contributions to your Registered Retirement Savings Plan (“RRSP”), Tax-Free Savings Account (“TFSA”), and Registered Education Savings Plan (“RESP”) is an important wealth planning strategy. By making your annual contribution(s) early in the year, you’ll benefit from the tax-sheltered growth all year long.
The RRSP contribution amount for 2024 is the lesser of $31,560 or 18% of your 2023 earned income.
TFSA contribution amount for 2024 is $7,000 or cumulative of $95,000 for 2024 if you have never contributed to a TFSA account.
The RESP is an excellent way to save for post secondary education for your children. A contribution of $2,500 to the RESP leads to a combined 30% in government matching savings grants.
For clients with children turning 18 this year that are considering the purchase of their first home, if you have funds available for savings, take advantage of the new FHSA. Regards, Tim, Catherine, and Edward