From the Editor: The End Game

Q1 | March 2020

Laptop, notebook, Tablet and coffee on work desk

Dianne C. White, CPA, CA, CFP, TEP

March 31, 2020

Image used with permission: iStock/PRImageFactory


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From the Editor: The End Game

Q1 | March 2020

Drastic times call for drastic measures, as we currently try to flatten the curve of COVID-19 cases in hopes of alleviating the future strain on hospitals. So here we are, in a two-week suspension of all non-essential services, with governments across the country urging everyone to stay home, avoid contact with others and only go out if absolutely necessary.

There has already been a marked, unprecedented impact on economic activity. Canada and the U.S. will surely slide into a steep recession this year. We continue to monitor the long-term, fundamental outlook for all of our holdings. We are following the news and learning about the virus, government responses and the economic implications. At this point, it is unclear how this will play out over the next few months. There is a lot of uncertainty about our society’s health and the economy. However, we do know the end game and that is: this too shall pass.

In the meantime, it is important to focus on what we can control. As investment managers we focus on our investment philosophy and process. We continue to assess our holdings, and look for opportunities to make additional investments when the time is right. As individuals, we can cut back on our spending (not hard with so many businesses closed) and heed the advice of governments and doctors to stay home and distance ourselves socially. We can also make sure we support those most vulnerable in our society. Many of us have aging parents and know people with health issues. Give them a call, arrange for groceries to be delivered and, most importantly, encourage them to stay home and stay healthy.

For those that do not receive our email blasts, we want to reassure you that Nexus and our custodian, RBC Investor Services, are considered essential businesses. We will continue to operate as we have been. While most of our team is working from home, we do have a few people physically in the office in order to send and receive mail and otherwise deal with the physical documents that remain part of our business.

You should also be aware that the Federal Government has announced several tax-related changes to help Canadians manage through the disruption of COVID-19. The CRA has extended the tax filing deadline from April 30th to June 1st this year for salaried employees. For self-employed individuals, the filing deadline remains the same at June 15th. The deadline to pay any tax owing for the 2019 tax year has been extended from April 30th to Sept 1st, 2020. For trusts, the filing deadline has been extended from March 31st to May 1st this year. Tax filing deadlines for corporations and partnerships remain unchanged.

The Government will also allow those with Registered Retirement Income Funds (“RRIFs”) and similar vehicles to take out 25% less than the normal required minimum withdrawal for 2020. Reducing your RRIF withdrawal isn’t for everyone, and will depend on your own financial circumstances. We are working out implementation details with RBC and will be in touch with clients. This may be attractive for those clients who want to reduce their 2020 taxable income, or simply lower withdrawals from their portfolio.

In this issue of Nexus Notes you will find an article on what it means to be an equity investor during times of market disruption, and why it’s important to take the long view. We also have an article about why the tax planning portion of your financial plan should map out tax strategies well in advance of the crush of tax time. Finally, to you and your families, try and make the most of your stay-at-home time and stay healthy!

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