Portfolio Managers' Notes


November 2023



Enclosed in this Portfolio Managers’ Notes, we present BMO Nesbitt Burns’ latest portfolio strategy report to give you an update on equity markets and our strategist’s perspective. In addition, we have included the second quarter earnings report on PrairieSky Royalty, a Model Portfolio holding.


Under the Wealth Management section, we have included an article on the tax advantage of discount bonds, a fixed income strategy that we have been utilizing in taxable accounts where appropriate. We have also included an article that details the safeguards that are in place at BMO Nesbitt Burns to protect your assets. Finally, we remind you of the dates and limits for RRSP, TFSA, and RESP contributions. We would also remind our clients, in the March budget for Quebec, as of January 1, 2024, the Quebec Government will increase the maximum age at which an individual can apply for Quebec Pension Plan (QPP) benefits from age 70 to 72. 


First Home Savings Account - Now Available

The tax-free First Home Savings Account (“FHSA”) is a new registered plan which enables prospective first-time home buyers (18 and over) to contribute $8,000 annually up to a total of $40,000 toward saving for their first home on a tax-free basis. Like a Registered Retirement Savings Plan (“RRSP”), contributions to an FHSA are tax-deductible, and withdrawals to purchase a first home – including from investment income – are non-taxable, like a Tax-Free Savings Account (“TFSA”).


Market Research
Market Insights
Equity and Fixed Income Strategy:
Analysts: Stéphane Rochon, CFA, Equity Strategist and Richard Belley, CFA, Fixed Income Strategist.
It's All About Those Rates

Violence, political upheaval, and interest rate increases. Sadly, those factors have come to define much of 2023. Not surprisingly, investors are in a sour mood and much of the market has been under pressure. The silver lining however is that recent weakness has created value in several sectors and stocks although our modus operandi is still very much to be selective. In other words, the focus should continue to be on companies with strong competitive positions, rock solid balance sheets, and reasonably valued stocks. Importantly, the odds of a North American recession in the next year has steadily decreased on our models (now below 45% but still far from negligible of course). This considerably lowers the odds of a painful bear market at least in the next few quarters. It is also a good omen for the Canadian market (i.e. TSX) which is more economically sensitive than the S&P 500 and far less expensive.
Read More

Rogers Comm.: RCI.b-TSX
Excellent Q3; Outperforming Synergy Realization Execution

Bottom Line:

Revenue was in line while EBITDA was 2% better than expectations. EPS was $1.27 ($1.09 Street). Postpaid phone net adds were impressive at 225k vs. 191k consensus, ARPU beat by 2% and churn was in line. The wireless loading environment continues to favour Rogers. Internet and Video loading beat expectations with support from bundling and a repackaged video product. FCF expectations were raised to the upper end of $2.2-2.5B guidance. Synergy and debt pacing are tracking 3-6 months ahead of plan with a $600mm synergy run rate expected by year-end.
Read More (please contact us)

Wealth Management

Intergenerational Transfers of Family Businesses
Proposed Tax Changes

The Canadian tax legislation contains a number of anti-avoidance tax measures such as those which seek to prevent corporate “surplus stripping,” that can create a higher tax cost on the transfer of a business to a family member versus a sale to a third-party purchaser. This article focuses on important recent developments addressing this inconsistency in the tax legislation, as it relates to an anti-avoidance rule applicable to certain intergenerational transfers of shares. It also outlines the government’s latest response to ensure proper facilitation of genuine intergenerational share transfers, while preventing tax avoidance that could compromise the integrity of Canada’s tax system.
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Taking Money Out of an RESP

As the new school year begins, many students are preparing to take the next big step in their educational journey by heading off to university, college, or another continuing education program aligned with their interests and career aspirations. Fortunately, if you’ve planned ahead and contributed to a Registered Education Savings Plan (“RESP”), your child, grandchild, or another qualifying beneficiary of the plan, will have the means to fulfil their post-secondary education goals and start to withdraw funds from their RESP. 


This article provides information on how, and when, to withdraw funds from an RESP, as well as information on qualifying educational institutions and programs. In situations where the RESP beneficiary decides not to pursue post-secondary studies or leaves before completing a qualifying program, the subscriber of the plan must decide what to do with the money that has accumulated in the RESP.
Read More


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.


RRSP contribution amount for 2023 is the lesser of $30,780 or 18% of your 2022 earned income.


TFSA contribution amount for 2023 is $6,500 or cumulative of $88,000 for 2023 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.


Tim, Catherine, and Edward