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(April 26, 2007) David Dodge will not seek a second term as governor of the Bank of Canada. Dodge, who has headed up the bank since February 2001, will continue in the role until January 31, 2008.

Before his term as the head of the BoC, Dodge held roles as the deputy minister of finance and the deputy minister of health. Although he was promoted to his current role during a federal Liberal government, Conservative Minister of Finance Jim Flaherty had nothing but praise for Dodge’s tenure.

“Governor Dodge has served Canada in the finest tradition of central bankers, and his influence has been felt not only here but around the world. In particular, his strong leadership during the turbulent post-9/11 period has helped Canada lead the group of seven countries in economic growth,” a statement from Flaherty said.

Dodge says he announced his intentions early so the BoC would have ample time to find a replacement. The BoC will formally begin the selection process in June and hopes to announce Dodge’s successor by the fall.

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Tax season costs Canadians billions: Fraser Institute

(April 26, 2007) A study by Conservative think tank, the Fraser Institute, says preparing, filing and submitting Canadian tax returns and maintaining a government bureaucracy that manages the tax system cost between $19 billion and $31 billion in 2005.

“That translates to a cost of $585 to $955 for every man, woman and child in the country,” says Jason Clemens, director of fiscal studies at the Fraser Institute and study co-author.

The study, entitled Compliance and Administrative Costs of Taxation in Canada, examined two types of costs associated with taxation — compliance costs and administrative costs. Compliance costs are expenses incurred by those filing taxes, while administrative costs are those incurred by the government to collect taxes.

“The myriad complexities and regulations of Canada’s tax system are increasing the costs of paying our taxes. We’re essentially being forced to pay more money in order to give our money to governments,” Clemens says.

Clemens points to the recently created fitness tax credit as an example of adding unforeseen costs to the tax system.

“People may like the idea of receiving a tax break for putting their kids in sports,” he says. “But to get that tax break, parents have to make sure they obtain receipts for all their kids’ sports. Volunteers from athletic associations have to be sure they issue the receipts. Organizations have to make sure they are eligible under CRA guidelines to provide receipts. When you add up all the time and costs, it adds up to millions of dollars. And it appears to be getting worse.”

Clemens advocates that the government make tax administration more efficient. He says the government can start by eliminating tax policies that add complexity to the tax system, such as special preferences, multiple tax rates and the number of taxes collected.

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TD AMERITRADE launches online portfolios

(April 26, 2007) TD AMERITRADE Holding Corporation is launching Amerivest Target Date Investment Portfolios, a new addition to the family of online advisory services from Amerivest Investment Management.

TD AMERITRADE says the asset weightings in each portfolio are adjusted based on recommendations from the online advisory service, to slowly reduce risk exposure. Over time, the product’s focus moves to preserving capital for withdrawal.

Six Amerivest Target Date Portfolios are currently available, each with strategies defined by an investment horizon. Portfolios with longer time horizons will have greater and longer initial equity exposure and will experience greater volatility and risk. In addition to selecting a time frame, advisors can tailor an ETF portfolio recommendation based on the client’s goals, risk tolerance and budget.

“Amerivest has helped individual investors understand that it’s really not that tough to take control of your finances,” said Dave Kelley, president of TD AMERITRADE’s retail investor group. “Whether you need the money in five years or thirty, these portfolios make planning for the long term even less complicated and time-consuming than before.”

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AGF increases foreign content in funds

(April 26, 2007) AGF Funds is increasing the foreign content limits on seven of its equity funds, effective immediately.

The AGF Canada Class foreign content limit will increase to 10% while the AGF Canadian Stock, AGF Canadian Real Value, AGF Canadian Growth Equity, AGF Canadian Small Cap, AGF Canadian Resources and AGF Precious Metals will see their foreign content limits increased to 49%.

AGF chief investment officer Martin Hubbes says, despite increased limits, the decision to modify foreign asset allocations rests with fund managers.

“It will be up to each of the managers to decide if and by how much they want to increase the foreign content. This will depend on their investment styles and strategies,” Hubbes says. “Attractive investment opportunities and the potential for long-term returns will continue to determine where we invest — whether in Canada or overseas.”

(04/26/07)