The Benefits of Decluttering at Work

Edmonton mortgage broker First Foundation has an interesting blog post up about the benefits of de-cluttering your desk:


Canada Revenue Agency Updates Prescribed Rate for Q4 2013

The Canada Revenue Agency (CRA) has updated the Prescribed Rate of Interest for low-interest loans, effective October 1, 2013, to 2% – up from 1% for the previous quarter (and all the way back to April of 2009).

What does this mean to you? Well, if you’re thinking about getting a Group Employee Mortgage interest subsidy, your employer can subsidize your effective interest rate down to as low as 2% before triggering a taxable benefit. The Financial Post has an article about how this affects family loans among family members. These are now taxable below 2% as are a number of other loans at effective rates below 2%.

This increase to the Prescribed Rate also affects income splitting arrangements.

If you have questions about a Group Mortgage Interest Subsidy for your employees feel free to contact us anytime.

Variety of Tax-Free Benefits for Employees

Recently, the Financial Post featured an article by Tom Nicolopoulos of KPMG in which he wrote about a variety of tax-free benefits that employers can offer their employees.

The author’s focus was on health club memberships and fitness activities that may, or may not, be non-taxable benefits to the employee. As usual with these types of benefits, the key is in the administration of the program and the interpretation of that implementation by the Canada Revenue Agency (CRA). Accountants and tax planners earn large sums of money interpreting the CRA’s rules and obtaining interpretations from the CRA directly.

The author also indicated that the CRA publishes a document called Employers’ Guide Taxable Benefits and Allowances which lists up to 75 benefits. Among them is included loans obtained as a result of employment, which is where Group Employee Mortgages come in.

The CRA publishes certain rules when it comes to employers obtaining or arranging a loan for employees, including whether or not the loan is a taxable benefit or not. I’ve included it below for your reference.

If your company is looking for ways to compensate employees for attraction and retention purposes then consider a group mortgage subsidy from GEM – it may be more effective than bonuses and other forms of compensation and, implemented properly, is a potentially non-taxable benefit that your employees will appreciate greatly.

Employers Guide to Taxable Benefits and Allowances – CRA – Canada Revenue Agency

Mortgage Rate Update June 17, 2013

Lately there has been a lot of talk about interest rates. When the Bank of Canada decided to stand pat recently a lot of people were wondering if rates were going to stay flat indefinitely.

But wait, don’t forget that fixed interest rates are much more closely linked to bond yields as opposed to the overnight rate…so even when the Bank of Canada does nothing, rates can still go up or down.

In fact, over the past 4-6 weeks bond yields have gone up tremendously and as a result, most fixed-rates – especially the five year fixed rate – have gone up.

Our friends over at First Foundation have the latest canadian mortgage rates and you can also subscribe to the interest rate rss feed if you’d like.

How does a group mortgage work?

If you’re an employee of a company with a flex benefits plan that offers you something like a health care spending account, then you already have a good idea how a GEM Group Employee Mortgage can work.

Essentially, instead of arranging and paying a mortgage directly with a bank or other financial institution, under a the Group Employee Mortgage plan, your employer would arrange a mortgage for you and also subsidize a portion of the interest you pay as part of the mortgage.

The benefit to you, as the employee, is that you can earn additional funds that are directed towards your biggest expense – your mortgage – while at the same time earning this additional income in a tax-free way (*when implemented properly in compliance with CRA rules).

Your employer builds goodwill with the employees, helps to reduce your overall cost of living while demonstrating that they are a great employer worthy of your loyalty.

GEM can be an extremely tax efficient form of compensation, and a great alternative or even better, supplement, to existing group benefit plans and total rewards compensation programs.

Check out our fun little infographic below for a better idea how it works, and if you have an awesome boss, let them know about GEM – you’ll be glad you did!

group mortgage benefit

Alberta Economy Heating Up

It certainly seems as though Alberta is enjoying success that other jurisdictions can only dream about.  Unlike Europe, where debt troubles abound and bailouts are being discussed on every corner, or the US where unemployment is still a major problem in many areas, or even some of Canada’s more troubled provinces like Ontario where manufacturing is struggling and the debt load is escalating, we Albertans have it pretty good!

Recently we found out that Alberta tops Canada’s growth rankings, according to RBC, that Edmonton’s affluence recently attracted a major US retailer, and that employers in Western Canada are optimistic about hiring, among other good news articles.

As you can imagine, all of this growth in Western Canada drives demand for employees and companies looking to hire are actively seeking new ways to attract and retain talented people.

We’re biased, of course, but we think that a Group Employee Mortgage Plan is a unique and very effective way to do just that.  If you would like to learn more, then we would be happy to answer any of your questions.  Feel free to contact us anytime.

Here’s a short video with a bit of background on the economy in Alberta:


Alberta Economy Creating Housing and Employment Growth

Recently Alberta’s economy has been performing very well, in particular in relation to other provinces and most of the US.  A lot of this can be attributed to a strong oil industry in our province, however, there are other underlying policies that help as well, such as relatively low taxes, a well-educated population, good sized centres in both Calgary and Edmonton, and a stable democracy.

Two examples of the success of Alberta’s economy are found in recent articles:

  1. Year-over-year employment growth highest in Alberta for March: Almost 65,000 jobs added since this time last year.
  2. Edmonton Housing Starts Jump

This is great news for our economy and lifts the fortunes of a number of different industries.

That said, it also poses a unique challenge for Alberta businesses who are seeking to attract and retain new employees.  Some questions they might find themselves asking are:

  • How can we compete for talent without breaking the bank?
  • How do we avoid rapidly escalating salaries like the last boom, while still being able to compete for great people?
  • What can we offer our existing staff or new hires that’s unique, different, valuable?

One option many employers may not have had access to before that can be a unique part of any good compensation plan is a Group Employee Mortgage Plan.  Essentially these plans can function as part of a benefits or compensation plan, allowing an employer to offer different classes of employees varying levels of mortgage subsidies, that, implemented properly, are allowed by the CRA and can be quite tax efficient for both the employer and employee.  Employers looking to shore up their HR practices in preparation for another labour shortage should consider the value of a mortgage subsidy program.

There are important guidelines to follow and rules that CRA requires employers to abide by when implementing one of these plans, much like other benefits.  When implemented properly with the help of a firm specializing in these programs, they can be a great attraction and retention tool and offer the employees a far more compelling benefit than a bonus, raise, or more dental work.