Weekly Wrap

Let’s recap the month that was before talking about this week. Global equities were mixed in September, with only U.S. equities and Emerging Markets posting gains. The real story, though, wasn’t equities – it was bonds, with Government of Canada yields jumping between 15 and 30 basis points while U.S. Treasury yields climbed 15-50 basis points pressuring both equity prices and investor sentiment overall. Developed international markets were down with investor concerns about the region’s vulnerability to rising energy costs. But the area has held up nicely YTD as it offers less exposure to AI-related themes, making them an attractive option for investors seeking diversification. Precious metals came under pressure as rising interest rates increased the opportunity costs of holding non-yielding assets such as gold and silver.

As for this week, U.S. markets are mixed as of writing with the S&P 500 eking out a gain, the Dow down by almost a percent, and the Nasdaq solidly up close to 1.5% due to cooler-than-expected September job report and retreating Treasury yields, which eased concerns over further Fed rate hikes. The TSX is in the red to the tune of 0.40% largely on the heels of the materials and financial sectors. The Emerging Market saw a sell-off this week and is in negative territory with a -1.58% return. Oil finished the week lower, and gold looks to have a second straight weekly drop.

Market Insights

Canadian cities ranked among weakest real estate markets worldwide. UBS, a global wealth management firm, published its annual Global Real Estate Bubble Index last week. It dives into price trends, bubble risks, among other metrics. UBS rates Toronto’s bubble risk as ‘moderate’ as it does Vancouver’s. From the 2022 peak, Vancouver’s prices are down about 20% with home sales sitting at 25-year lows. They also monitor something called the price-to-rent ratio which is an indicator of how long it would take a renter to have paid enough rent to own a 650 square foot apartment. In Vancouver, it would take around 23 years. The current market environment favors renters as rents continue to come down, and buyers with prices as low as they are but probably doesn’t favor investors, especially with mortgage rates creeping up.

Investment implications from the Canada Investment Summit. Over 100 global investors recently gathered in Toronto to explore Canada's investment landscape, and the numbers are compelling. A prospectus unveiled 160+ projects worth approximately US$500B across Energy, Infrastructure, and Materials—positioning Canada for a potential 10+ year investment supercycle. Unsurprisingly, energy dominates, representing nearly 50% of proposed capital investment. Major initiatives include the West Coast oil pipeline, Ksi Lisims LNG Terminal, and substantial wind energy projects like Wind West. The Power and Utilities sector features hydro-electric, nuclear, and transmission infrastructure, while over 50 mining and critical minerals projects are in various development stages. Transportation and infrastructure investments span high-speed rail, ports, AI data centres, and advanced manufacturing.

Western Canada (BC and Alberta) leads due to energy and mining exposure. Nova Scotia benefits from clean energy and port projects, though many remain early-stage. Manitoba's significant allocation is anchored by the Port of Churchill expansion—a transformative US$3.9B initial investment with US$57B eventual capital needs—critical for diversifying trade routes. Recent federal initiatives are creating tailwinds. The new Productivity Mega-Deduction slashes the marginal effective tax rate on new business investment to 6.4%. Concurrently, the expanded Build Canada Act streamlines approvals and fast-tracks major projects. Success hinges on multiple factors: improved tax and regulatory systems, reduced interprovincial trade barriers, and adequate skilled labour availability. While implementation timelines extend beyond immediate horizons, broad-based TSX sector beneficiaries are positioned to capture this infrastructure wave. 

Portfolio Update

There is no portfolio update this week.

Please note any changes apply to our Private Investment Management (PIM) portfolios only, subject to restrictions. Please call to clarify if you have any questions.

Planning On

Planning On: Tax Credits & Deductions for Seniors

If you or a family member are 65 or older, hopefully you are not leaving any money on the table when it comes to taxes. Canada offers several credits and deductions specifically designed for seniors and their caregivers—and while your accountant or tax software should be prompting you about these, they are still worth knowing about.

The big hitters? The age amount can reduce your federal taxes by up to $1,289 (assuming your income sits below the phase-out threshold – the credit is reduced by $.14 for every $1 of net income above $46,432 and completely eliminated at net income of $112,203), and if you're receiving pension income, the pension income amount gives you a credit on the first $2,000 of eligible payments. Be careful with RSP withdrawals as they are not considered pension income. You would need to transfer to a RIF first and then withdraw to ensure it is eligible (and then also available for pension splitting). Any unused credits can often be transferred to your spouse.

Beyond the obvious, there are some gem-level credits worth exploring. The Disability Tax Credit opens doors for those with a severe, prolonged impairment. If you're supporting a spouse or dependent, the Canada caregiver amount can help offset costs. And if accessibility renovations are on your radar, the Home Accessibility Tax Credit offers a non-refundable tax credit of up to $2,800 for renovation expenses to improve accessibility and safety of your home.

Don't overlook medical expenses either—they can often be claimed as a credit, even if incurred outside Canada. Plus, if you're building an additional suite for a parent or grandparent 65+, the Multigenerational Home Renovation credit can hit up to $7,000.

The Canada Caregiver Amount is a non-refundable tax credit you can claim if you support a spouse or dependent who has a physical or mental impairment. The key requirement for this is that the person you are supporting must regularly and consistently rely on you for the basic necessities of life (food, shelter, and clothing).

The takeaway? The rules here are genuinely complex, and many of these credits are non-refundable (meaning they disappear if you don't use them). Work with us and a qualified tax professional to ensure you're capturing everything available to you and your family. 

This information is not intended to provide legal, tax, or insurance advice. To ensure that your own circumstances have been properly considered and that action is taken based on the latest information available, you should obtain professional advice from a qualified lawyer or accountant, as applicable, before acting on any of the information.

Updates from the Team

Walk & Roll for UNITI Update

On September 26th, Team Milau stepped out to walk for a cause that matters. At South Surrey Athletic Park, our team rallied together and raised $41,420 for Walk & Roll for UNITI. The event surpassed its goal and raised $105,000 across all participants! The event didn't just move the needle, it created something truly special, reminding us why community support is at the heart of who we are.

Charts of the Week

Feel free to share this newsletter with anyone who might benefit from it or find value in it. Thank you for reading our commentary. We welcome your feedback!

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