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On the path toward equality

It has taken couples in the LGBTQ community many years to achieve the rights and opportunities they now have in Canada. Ontario became the first Canadian province to recognize same-sex marriages in 2003. Many other provinces soon followed suit. The passing of the Canadian government’s Bill C-38 (the Civil Marriage Act) in 2005 gave married same-sex partners many of the same legal rights as other married couples. Before these important milestones were reached, many legal battles were fought across the country, paving the way for LGBTQ couples to earn the same rights and opportunities that heterosexual couples have long enjoyed. In addition to the right to marry, equality under Canada’s taxation rules was granted in 2001 when the definition of common-law partner was updated to include a same-sex partner.

TAKING THE RIGHTS AND OPPORTUNITIES YOU HAVE NOW MORE SERIOUSLY 7This significant change gave LGBTQ couples the same tax benefits as heterosexual couples, and these benefits can be used to reduce tax costs and to make tax-efficient retirement and estate plans. Even today, full equality has not yet been realized in Canada. Some legislation still puts unmarried same-sex couples at a disadvantage when it comes to certain estate planning issues.

Population on the rise
The most recent census, conducted in 2011, showed a large increase in the number of same-sex couples in Canada. In 2011, nearly 65,000 same-sex couples (0.8% of the couples population) were reported. This is almost double the number of same-sex couples reported in the census 10 years earlier. Same-sex couples tend to live in the largest cities, with almost half (45.6%) living in Toronto, Montreal and Vancouver. In contrast, only one-third (33.4%) of opposite-sex couples live in these three metropolitan areas. Since the right to marry was granted in 2005, the number of married same-sex couples has grown to more than 21,000. This represents about one-third of the same-sex couples reported in the 2011 census.

Family acceptance
The struggle for equality is not limited to the courtroom. Many members of the LGBTQ community find that the treatment received within their own families is less than equitable. Parents sometimes feel a loss when they learn their child is coming out. This sense of loss is often rooted in how parents see their own identity and future goals relating to those of their son or daughter. The conversation in the right sidebar illustrates a typical scenario that may play out in the family of an LGBTQ child.
Every child expects a supportive atmosphere within their own family. Unfortunately, parents or other family members may be judgemental and unsupportive, at least initially. This is one reason why many in the LGBTQ community choose to keep their status private. One US study asked members of the LGBTQ community how “out” they were. Only 64% of the respondents indicated that they were fully out, and 28% stated that they were mostly out. The remaining 8% indicated that they were not out at all.

Opening a line of communication early with family members is important. It may be difficult to start that conversation when some other situation arises, such as a need for financial assistance. Often this can be made possible by enlisting the help of a more open person of the parents’ generation.

Affluence in the community
Compared to the population at large, the LGBTQ community has a higher income. Statistics from the United States show that household incomes are more than 20% higher than the average American family ($61,500 vs. $50,000). This difference is perhaps not so surprising as LGBTQ couples tend to live in the largest cities, where incomes are above average.
This higher level of income, combined with the fact that same-sex couples are far less likely to have children than opposite-sex couples (9.4% vs. 47.2%), can make more discretionary income available to spend today and to save for future goals. It is wrong to assume that the goals of same-sex couples are different than those of opposite sex couples. They are very similar, and LGBTQ couples face the same challenges achieving them. In other words, the “what” that same-sex couples want to achieve for their future is no different, but at times the “how” requires some extra customization.

Changes in Old Age Security and the Canada Pension Plan
Old Age Security (OAS) has been in existence since 1927 and the Canada Pension Plan (CPP) since 1966, yet it was only in 2000 that both the benefits and obligations of these two income support programs were extended to same-sex, common-law couples. Included in these changes was the availability of survivor benefits for common-law partners of deceased individuals. These programs are important income components for retirement planning. Additionally, as long as both partners are over the age of 60 and are receiving CPP payments, it is now possible to share a portion of CPP benefits, proportional to the time spent together. This CPP sharing provides an income-splitting benefit that can lower overall income taxes for the couple. Sharing of pension credits following a separation is also possible. However, for same-sex couples this potential sharing of CPP is limited, applying only to same-sex partners that separated on or after July 31, 2000.

Changes in pensions
Pension plans are a very important source of retirement income for those fortunate to have been members of plans provided by public or private sector employers during their working years. Spouses of plan members often enjoy a number of benefits, such as a survivor pension and the ability to split a pension after the dissolution of a relationship. As with the right to marry and the tax law changes to recognize same-sex relationships, it was only recently that Ontario modernized its pension legislation to amend the definition of the term spouse. In 2005, the new terminology gave same-sex spouses the same rights as those enjoyed by opposite-sex spouses. It is important to note that the definition of the term spouse varies according to the specific legislation. For example, in pension plans governed by Ontario legislation, couples are considered to be spouses if they are married, have been living together in a conjugal relationship continuously for at least three years, or are the natural or adoptive parents of a child. However, for tax purposes the cohabitation period required is only one year.

Legislation in British Columbia and several other provinces provides same-sex couples with the same rights to spousal pension benefits as opposite-sex couples, including the ability to name a same-sex partner as the beneficiary of a pension.

Changes in employment benefits
Many large companies have instituted policies that prohibit discrimination on the basis of sexual orientation. In fact, a large proportion (88%) of Fortune 500 companies, many of which operate in Canada, have such policies. However, only 62% of Fortune 500 companies provide domestic partner health insurance benefits to their employees.

Changes in taxes
With equality granted for all Canadian tax purposes in 2001, the ability to save and defer taxes as part of both a financial plan and an estate plan became available to same-sex couples. Income-splitting strategies such as the use of spousal RRSPs, prescribed-rate loans between spouses, pension income splitting, and the transfer of certain tax credits between spouses provide excellent opportunities to reduce the overall tax bill a couple faces. Naming of a spouse or common-law partner as a beneficiary provides a mechanism for tax-deferred rollover or transfer of RRSPs, RRIFs and TFSAs to a surviving spouse after the death of the holder.
Making investment or bank accounts joint with right of survivorship will also facilitate the tax-deferred transfer of these assets upon the death of either spouse.

When it comes to estate planning, the seamless equality for same-sex couples found in tax rules is not reflected in provincial legislation. A person who dies without a Will in place is considered to be intestate. Unfortunately, intestacy rules in several provinces do not provide for same-sex partners, or for commonlaw partners in general. Instead, assets go to the closest blood relationships – such as parents, children or siblings – requiring a common-law partner to fight using other provincial
legislation for a share of assets or for financial support. This can be especially difficult if family members of the deceased partner did not support the same-sex relationship. For this reason, having a properly worded Will can help to financially protect a surviving same-sex or commonlaw spouse.

Powers of attorney
When Wills are drafted or updated, it is also important to set up powers of attorney (POAs) to protect both spouses. This will allow your trusted partner to take care of your finances and your health-care decisions should you become unable to do so yourself. If POAs are set up as enduring POAs through the use of specific wording in the documents, your choices and decisions will be carried out even if the partner who is granted the POAs becomes incapacitated.

Insurance considerations
An important aim of any financial or estate plan is to ensure that adequate financial resources are available to help meet the needs of both you and your partner. Life insurance can be updated to ensure that same-sex partners are named as beneficiaries, helping to provide sufficient funds when needed. Health insurance in the form of disability, critical illness, and long-term care insurance should also be considered. Long-term care insurance is especially important as assisted care facilities may not be supportive of same-sex relationships. To avoid the potential for discrimination based on sexual orientation at traditional long-term care facilities, there is a need to build sufficient savings into your financial plan, or to consider funding a long-term care insurance policy.

As a married or common-law couple you can benefit from the legislative changes in Canada concerning same-sex relationships. It’s essential to have an estate plan, prepare or update Wills and powers of attorney, and review your insurance needs. Updating beneficiary designations will help to ensure the needs of your partner are met, and the transition of assets according to your wishes. Feeling confident about the future comes from knowing where you stand now and how to get where you want to

A customized financial plan can put you on the right path.

For more information please visit

Timeline – Same-Sex Rights in Canada. CBC News, 2012.

Morneau Sobeco Handbook of Canadian Pension and Benefit Plans. Bethune A. Whiston, Lois C. Gottlieb. CCH Canadian Limited, 2005: p391. id=ljsyQnkr1wC&pg=PA391&lpg=PA391&dq=ita+same+sex+canada&source=bl&ots=2sVBNQKA10&sig=mNN7
Portrait of Families and Living Arrangements in Canada. Statistics Canada, 2012.

When Sons and Daughters Come Out. PFLAG Canada, 2010.
The LGBT Financial Experience – 2012-2013 Prudential Research Study. Prudential.
The 40-70 Rule: Helping Adult Children Communicate with their Aging Parents. BMO Financial Group, 2013.
The LGBT Financial Experience – 2012-2013 Prudential Research Study. Prudential.
Portrait of Families and Living Arrangements in Canada. Statistics Canada, 2012.

The History of Canada’s Public Pensions. Canadian Museum of History.

How to Apply for a Canada Pension Plan Credit Split (upon Separation or Divorce). Canada Revenue Agency, 2013. http://www.
Ontario Pension Act Amended to Include Same-Sex Spouses. James Langton. Investment Executive, June 15, 2005.

Gay and Lesbian Relationships. The Canadian Bar Association, British Columbia Branch, 2010.
LGBT Equality at the Fortune 500. The Human Rights Campaign. Site accessed May 12, 2014.

Seniors. Egale website. Accessed May 12, 2014.

“BMO (M-bar roundel symbol)” is a registered trade-mark of Bank of Montreal, used under licence.

BMO Financial Group provides this publication to clients for informational purposes only. The information herein reflects information available at the date hereof. It is based on sources that we believe to be reliable, but is not guaranteed by us, may be incomplete, or may change without notice. It is intended as advice of a general nature and is not to be construed as specific advice to any particular person nor with respect to any specific risk or insurance product. Comments included in this publication are not intended to be legal advice or a definitive analysis of tax applicability or trusts and estates law. Such comments are general in nature for illustrative purposes only. Professional advice regarding an individual’s particular position should be obtained. You should consult an independent insurance broker or advisor of your own choice for advice on your insurance needs, and seek independent legal and/or tax advice on your personal circumstances.

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Not company earnings, not data but vaccines now steering investor sentiment



Not company earnings, not data but vaccines now steering investor sentiment 8

By Marc Jones and Dhara Ranasinghe

LONDON (Reuters) – Forget economic data releases and corporate trading statements — vaccine rollout progress is what fund managers and analysts are watching to gauge which markets may recover quickest from the COVID-19 devastation and to guide their investment decisions.

Consensus is for world economic growth to rebound this year above 5%, while Refinitiv I/B/E/S forecasts that 2021 earnings will expand 38% and 21% in Europe and the United States respectively.

Yet those projections and investment themes hinge almost entirely on how quickly inoculation campaigns progress; new COVID-19 strains and fresh lockdown extensions make official data releases and company profit-loss statements hopelessly out of date for anyone who uses them to guide investment decisions.

“The vaccine race remains the major wild card here. It will shape the outlook and perceptions of global growth leadership in 2021,” said Mark McCormick, head of currency strategy at TD Securities.

“While vaccines could reinforce a more synchronized recovery in the second half (2021), the early numbers reinforce the shifting fundamental between the United States, euro zone and others.”

The question is which country will be first to vaccinate 60%-70% of its population — the threshold generally seen as conferring herd immunity, where factories, bars and hotels can safely reopen. Delays could necessitate more stimulus from governments and central banks.

Patchy vaccine progress has forced some to push back initial estimates of when herd immunity could be reached. Deutsche Bank says late autumn is now more realistic than summer, though it expects the northern hemisphere spring to be a turning point, with 20%-25% of people vaccinated and restrictions slowly being lifted.

But race winners are already becoming evident, above all Israel, where a speedy immunisation campaign has brought a torrent of investment into its markets and pushed the shekel to quarter-century highs.

(Graphic: Vaccinations per 100 people by country,


Others such as South Africa and Brazil, slower to get off the ground, have been punished by markets.

Britain’s pound meanwhile is at eight-month highs versus the euro which analysts attribute partly to better vaccination prospects; about 5 million people have had their first shot with numbers doubling in the past week.

Shamik Dhar, chief economist at BNY Mellon Investment Management expects double-digit GDP bouncebacks in Britain and the United States but noted sluggish euro zone progress.

“It is harder in the euro zone, the outlook is a bit more cloudy there as it looks like it will take longer to get herd immunity (due to slower vaccine programmes),” he added.

The euro bloc currently lags the likes of Britain and Israel in terms of per capita coverage, leading Germany to extend a hard lockdown until Feb. 14, while France and Netherlands are moving to impose night-time curfews.

Jack Allen-Reynolds, senior European economist at Capital Economics, said the slow vaccine progress and lockdowns had led him to revise down his euro zone 2021 GDP forecasts by a whole percentage point to 4%.

“We assume GDP gets back to pre-pandemic levels around 2022…the general story is that we think the euro zone will recover more slowly than US and UK.”

The United States, which started vaccinating its population last month, is also ahead of most other major economies with its vaccination rollout running at a rate of about 5 per 100.

Deutsche said at current rates 70 million Americans would have been immunised around April, the threshold for protecting the most vulnerable.

Some such as Eric Baurmeister, head of emerging markets fixed income at Morgan Stanley Investment Management, highlight risks to the vaccine trade, noting that markets appear to have more or less priced normality being restored, leaving room for disappointment.

Broadly though the view is that eventually consumers will channel pent-up savings into travel, shopping and entertainment, against a backdrop of abundant stimulus. In the meantime, investors are just trying to capture market moves when lockdowns are eased, said Hans Peterson global head of asset allocation at SEB Investment Management.

“All (market) moves depend now on the lower pace of infections,” Peterson said. “If that reverts, we have to go back to investing in the FAANGS (U.S. tech stocks) for good or for bad.”

(GRAPHIC: Renewed surge in COVID-19 across Europe –

(Reporting by Dhara Ranasinghe and Marc Jones; Additional reporting by Karin Strohecker; Writing by Sujata Rao; Editing by Hugh Lawson)

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BlackRock to add bitcoin as eligible investment to two funds



BlackRock to add bitcoin as eligible investment to two funds 9

By David Randall

(Reuters) – BlackRock Inc, the world’s largest asset manager, is adding bitcoin futures as an eligible investment to two funds, a company filing showed.

The company said it could use bitcoin derivatives for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund Inc.

The funds will invest only in cash-settled bitcoin futures traded on commodity exchanges registered with the Commodity Futures Trading Commission, the company said in a filing to the Securities and Exchange Commission on Wednesday.

A BlackRock representative declined to comment beyond the filings when contacted by Reuters.

Earlier this month, Bitcoin, the world’s most popular cryptocurrency, hit a record high of $40,000, rallying more than 900% from a low in March and having only just breached $20,000 in mid-December.

Bitcoin tumbled 10.6% in midday U.S. trading Thursday.

Other U.S.-based asset managers will likely follow BlackRock’s lead and add exposure to bitcoin in some form to their go-anywhere or macro strategies as the cryptocurrency market becomes more liquid and developed, said Todd Rosenbluth, director of mutual fund research at CFRA.

“It’s easy to see how strong the performance has been of late and look at a historical asset allocation strategy that would have included a slice of crypto and how returns would have been enhanced as a result,” he said. “Large institutional investors are going to be able to tap into the futures market in a way that a retail investor could not do.”

There is currently no U.S.-based exchange-traded fund that owns bitcoin, limiting the ability of most fund managers to own the cryptocurrency in their portfolios.

BlackRock Chief Executive Officer Larry Fink had said at the Council of Foreign Relations in December that bitcoin is seeing giant moves every day and could possibly evolve into a global market. (

(Reporting by David Randall; Additional reporting by Radhika Anilkumar and Bhargav Acharya in Bengaluru; Editing by Arun Koyyur and Lisa Shumaker)

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Bitcoin slumps 10% as pullback from record continues



Bitcoin slumps 10% as pullback from record continues 10

LONDON (Reuters) – Bitcoin slumped 10% on Thursday to a 10-day low of $31,977 as the world’s most popular cryptocurrency continued to retreat from the $42,000 record high hit on Jan. 8.

The pullback came amid growing concerns that bitcoin is one of a number of financial bubbles threatening the overall stability of global markets.

Fears that U.S. President Joe Biden’s administration could attempt to regulate cryptocurrencies have also weighed, traders said.

(Reporting by Julien Ponthus; editing by Tom Wilson)

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