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Le Classique

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The Canadian CMV Foundation is proud to announce that its 6th annual Western Canada’s Largest Winter Outdoor 3 on 3 Ball Hockey Festival, Le Classique will be held on February 9th & 10th, 2018 at Whittier Park (Grounds of Festival du Voyageur).  The tournament is widely recognized as being the most important sporting event on the winter calendar in Manitoba. The tournament is the Canadian CMV Foundation‘s largest annual fundraiser and has allowed them to continue funding CMV vaccine research.

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LeClassique.ca

Transcription

I’m Rob Tétrault. Until my son was born neither myself, or my wife Michelle had ever heard of Congenital CMV, the number one cause of infant disability in North America. After seeing the effects of CMV we wanted to make a difference. The result: the Canadian CMV Foundation and Le Classique, Western Canada’s largest outdoor 3-on-3 ball hockey tournament. So, if you’re 10th and 11th February at Whittier Park, it’s hockey, a Friday night social, live bands, kids activities, food, prizes and more. Proceeds help fund CMV Research. Register now at leclassique.ca.

6th Annual Le Classique

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The Canadian CMV Foundation is proud to announce that its 6th annual Western Canada’s Largest Winter Outdoor 3 on 3 Ball Hockey Festival, Le Classique will be held on February 9th & 10th, 2018 at Whittier Park (Grounds of Festival du Voyageur).  The tournament is widely recognized as being the most important sporting event on the winter calendar in Manitoba. The tournament is the Canadian CMV Foundation‘s largest annual fundraiser and has allowed them to continue funding CMV vaccine research.

Since its first year, the tournament has continuously grown at an impressive pace by adding teams, divisions and activities to the weekend, and this year is no different. This year will feature 5 divisions (novice, competitive, corporate, women’s and Co-Ed), will host a huge social on the Friday night and children’s activities on Saturday afternoon. The weekend is a fun filled affair with activities for all ages.

As Chair of the Foundation, I couldn’t be more excited to be hosting the sixth year of this great fundraiser. Le Classique is really what started it all for our wonderful foundation. When Marc Foidart and I started this event 6 plus years ago, we knew we wanted to host a community event, we knew we wanted to throw a party, but at the same time, we knew we wanted to raise money. The Canadian CMV Foundation is the result of all that hard work. This year, we’ve set the target at $75,000.

In its relatively short period of existence, the Canadian CMV Foundation has had some remarkable successes. In 2016, the Charity doubled its endowment fund, grew its Medical Advisory Committee Nationally, joined forces with the Global Network of CMV Foundations, gained significant traction in its effort to enact legislative change and started planning for the first ever National CMV Summit.


ABOUT CONGENITAL CMV

Congenital Cytomegalovirus (CMV for short), is a debilitating congenital birth defect that can cause serious disease in babies who were infected with CMV before birth. It is the #1 cause of infant disability in North America, with about 1 in 150 children born with the condition. For more information on congenital CMV, you can visit www.cmvcanada.com .

Transcription: Buying and Investing in Bitcoin

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Paul: What are people saying in Winnipeg about Bitcoin? And what are they saying about you?

And what are they asking you?

Rob: Well they’re certainly asking me, And I certainly get a lot of inquiries , And it’s something that I didn’t think I will feel as many phone calls or texts on my phone or  emails about but it’s wrapping up lately obviously which brings us back to the old what do I tell the clients.

Well I tell them one that’s extremely speculative, obviously everyone who comes on the show says that.

Anyone who’s got any kind of background in economics, I think, would say that.

I tell them, I strongly encourage them not to participate, to stay away.

And then I also monitor on my own side, I monitor a couple tests , just to keep track of how bubbly I think we are and how close we are to the end.

Paul: What if they are insistent, what would you say to somebody who is insistent they want some bitcoin in their portfolio, how much of a … what kind of weighting would you reluctantly advise them to take on at these 17 thousand dollar bitcoin.

Rob: I would actually refuse to do it, I would refuse to participate in any way and I would go on record  saying “I’m not going to advise you to do that”, and if they’re going to do it elsewhere or on their own or whatever, I would strongly advise them that it has got to be speculative, it’s got to be less than 5% of your portfolio at the absolute most, it’s got to be money you know you can lose because this is like going to the roulette table and there’s no number that wins, you’re taking your 15 thousand dollars/17 thousand dollars you’re putting it on a number that isn’t on the wheel in my view, so I feel that strongly about it.

And one thing I monitor Paul, I monitor a couple of tests that I kind of created over time.

One is the client inquiry test – so how many inquiries am I getting per day on my phone, on email of people reaching out to me saying “Hey, I want to buy Bitcoin” and what I’ve seen is it’s very similar to the curve of the price of Bitcoin, so now I’m getting multiple asks per day and I track them and I keep tabs of how many people are texting me per day, how many random people in the streets, you know everyone has heard about the taxi driver asking you about a stock tip, you should stay away from that stock – you should sell it.

Well the same thing with Bitcoin, now how many people are asking me and I still think though, for what it’s worth, that there’s a little bit of room here In the Bitcoin yet.

Paul: People want in because they’re seeing it as a high growth potential asset, if you’re steering them away from Bitcoin, if they want growth in their portfolios, what type of assets would you direct them to?

Rob: I preach quality, I’ve preached quality since day one to all my clients, I like to understand the cash flow, I like to understand how the company’s going to be profitable, I look at dividend growth.

My dad always says “I’ll buy Bitcoin when it pays a dividend”.

But realistically, it’s something that I would much rather own, if you’re going to go growth there are a whole bunch of sectors that exist that you can get growth in that are gambling but like tech or healthcare, there’s a whole bunch of growth sectors that exist in the US more than in Canada.

But if we get back to Bitcoin just for a second say “Ok, so how many people are in right now, we want to measure how close we are to the end of this bubble”

The bubble us going to burst, the bubble WILL BURST, mark my word folks, and when it does burst how much time do we have left so I think there’s still a little bit of time left because not everyone is in yet, Paul.

Paul: That is Rob Tétrault on Bitcoins, up next today is top business headlines including Hunter Harrison forced to take medical leave from his job as CEO of CSX, you’re watching The Street here on BNN.

Transcription: Linamar to buy Macdon for 1.2 Billion

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Paul: We’re back with Rob Tetrault, he’s a portfolio manager at National Bank Financial. He’s based in Winnipeg. He comes to Toronto every now and again and when he does, we ask him if he can sit in with us. It’s a great day to have you here because Linamar, one of the biggest auto parts companies in this country and indeed on the planet, has made an acquisition outside of its core business, which of course is auto parts, into the agricultural sector. It’s purchasing a company called Macdon, which I had not heard of prior to today because it’s not a publicly traded company but you’ve heard of it because it’s a Winnipeg company.

Rob: It is. I love coming on here and talking about Winnipeg stories or Manitoba stories. I’m a proud Manitoban. This is a great story. This is a family-owned business. They’ve been in Winnipeg for 70 years or so. Very successful. A lot of people work there. It’s one of the big players in Winnipeg. I actually know some of the executives there and they sold for a billion dollars. Obviously, for them, we don’t know what the multiple is. We will never know that. It’s a private company but obviously, if they decide to sell a family-owned tightly held company, it must have been a good price. I also like it for Linamar as well.

Paul: Why do you like it from Linamar’s point of view?  It’s clearly a diversification play by Linamar out of the core market segment. Linamar does have an agricultural segment already. It’s based in Hungary I believe. These operations are going to be combined in a corporate way with the Hungarian operations. Why do you like it from Linamar’s point of view?

Rob: Two reasons. One, obviously it’s a creative and it’s immediately adding to cash flow. They will be able to obviously…and I hate that some probably Winnipeggers might lose their jobs long term, but they will be able to add to the bottom line simply by economies of scale. Two, the big one. Anytime I see a deal, Paul, I always look at the metrics, “Did they issue debt or did they raise capital?” They did not raise capital for this, they issued debt, which means they’re paying 4% or whatever their rate is, probably in the four and a half range. They’re getting something a creative at the 10 to 12 percent range so that’s going to be a multiplier. I think that’s a great deal for them.

Paul: You like the fact that the shares are not being issued and the share base is not being diluted down.

Rob: Correct. We don’t want dilution.  If I’m an owner of Linamar I don’t want dilution, I don’t want to dilute 10% just to get 10%. I want to be able to pay with debt. Provided the leverage ratios make sense, and I think they do for them, I think no dilution. Likely a very good play.

Federal government provides details on income sprinkling for business owners

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On July 18, 2017, the federal government announced its intention to eliminate a number of tax planning strategies commonly used by small business owners. The proposed changes were widely contested and subsequently revised on October 16, 2017. The revisions included promises to simplify the proposal on income sprinkling and to provide draft legislation by the Fall of 2017.

Details were released on December 13, 2017 along with confirmation they will take effect in 2018. The “kiddie tax” will be expanded to include dividends paid to spouses and adult children that do not fall within any of the exclusions and do not meet a reasonability test.

Exclusions:

  • Dividends paid to a spouse will be excluded from the new rules provided the business owner meaningfully contributed to the business and is aged 65 or over,
  • Dividends paid to adults aged 18 or over will be excluded from the new rules provided the individual made a substantial labor contribution (generally, an average of 20 hours per week) to the business during the year or in any of the 5 previous years (the 5 previous years do not need to be consecutive). If the business is seasonal, the labour contribution requirement will only be applied for the part of the year in which the business operates. Records such as timesheets, schedules, log books or information contained in the payroll records will be used to establish the number of hours the individual worked in any given year,
  • Dividends paid to adults aged 25 or over will be excluded from the new rules provided the adult owns at least 10% or more (measured in votes and value) of a corporation that earns less than 90% of its income from the provision of services and is not a professional corporation,
  • Generally, the measures will not limit access to the lifetime capital gains exemption,

Reasonability test

For individuals between the ages of 18 and 24, dividends received must represent a reasonable return on property contributed to the business. The reasonableness criteria include:

  • “Safe Harbour Capital Return”: the return on property contributed to the business will be reasonable provided it does not exceed a prescribed returned determined by a formula, and
  • “Arm’s Length Capital”: the property contributed cannot be property derived from property income of a related business, borrowed under a loan or transferred from a related person.

For individuals aged 25 or over, payments that are reasonable based on the following criteria:

  • Work performed in support of the business
  • Property contributed directly or indirectly to the business
  • Risk assumed in respect of the business
  • Amounts paid or payable by any person or partnership to or for the benefit of the individual in respect of the business; and
  • Other factors that may be relevant

Where an individual acquired property as a consequence of the death of another individual, special rules will apply for determining whether a dividend is excluded or reasonable or is a taxable capital gain from the disposition of excluded shares. 

Next Steps

Dividends paid to family members in 2018 and subsequent years that do not meet the “excluded” or “reasonableness” test will be taxed at the highest marginal tax rate.  We recommend that you speak to your professional tax advisor regarding paying dividends to family members prior to the end of the year.

The government has also confirmed its intention to limit tax deferral opportunities by retaining passive investments inside of a corporate. However, details will only be released in the 2018 Federal Budget.

We will continue to keep you informed of changes as they occur.

Cedric Paquin, CPA, CA, CFP
Wealth Planning Consultant

National Bank Financial is an indirect wholly-owned subsidiary of National Bank of Canada. The National Bank of Canada is a public company listed on the Toronto Stock Exchange (NA: TSX). The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. The opinions expressed herein do not necessarily reflect those of National Bank Financial.

New Flyer BNN prediction video

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Transcript

Rob: New Flyer is another Manitoba companies.

Andrew: The bus maker.

Rob: The bus maker, and they’ve acquired Motor Coach Industries, tons and tons of synergies there. In my mind, the market is underestimating what those synergies are going to be, and Soubry is a great CEO and they’re doing it the right way for sure.

United Way National Bank Financial ping pong tournament

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Rob and the Tetrault Wealth Advisory Group were proud to host this year’s annual United Way National Bank Financial ping pong tournament on December 1st 2017. With our biggest turnout yet, we managed to raise over $500 for the United Way charity foundation. The second annual ping-pong tournament was a great success. Rob is seen handing out the trophy to the winners of their respective division. Our very own Karen Kazina from the Tetrault Wealth Advisory Group took home the Women’s Division Championship and Anuj Maini was this year’s Men’s Division Champion. Congratulations to both of them and thanks to everyone that participated.