Canadian banks

[Alan Bowler]

A while ago I wrote that the big Canadian banks have
a long track record of being good investments, but
the financial regulator had blocked their usual dividend
hikes during Covid. The restriction was lifted this
week and immediately the two big insurance companies
bumped their dividends Manulife (18%) and Sun Life (20%).

The banks are expected to follow suit this month when they
announce their 4th quarter results.

[uncle_vito]

Thanks for the info. I get ticked that canuck companies with hold taxes for US investors.

[Alan Bowler]

On 2021-11-10 10:12 p.m., uncle_vito wrote:

> Thanks for the info.
> I get ticked that canuck companies with hold taxes for US investors.

As I have pointed out before, it makes no difference in your
total tax bill. It is just the two countries doing about
a 50/50 split on the taxes you pay. The same thing happens
to me on dividends I get from Proctor & Gamble and other
US companies I own.

Almost every country in the world will withhold some
amount of taxes on dividends paid to non-residents.
If there is a tax treaty like Canada and the US have
usually the two countries about split the tax take.
If there is no treaty you may end up paying double
taxation on a portion. E.g. there is no treaty between
Canada and Brazil so if I owned shares in Vale, Brazil
would withhold about 30% of any dividends but I could
only claim about 15% as already paid foreign tax, and would
be double taxed on the other 15%.

Currently the UK seems to be an exception and doesn't
withhold taxes on dividends (at least for Canadians)
so for Barclays Bank and BT Group (British telecom),
the Canadian governments get all the tax from me.
This may not last, between Brexit and incompetent
handling of COVID-19 the UK will be getting desperate
for tax revenue and sticking to foreigners is easy
politics.

Note. If you hold a Canadian stock in a retirement account
like an IRA the is no Canadian withholding tax, and eventually the
US will collect all the taxes as you draw down the account.

[uncle_vito]

Thanks for the explanation. I had heard it before but was not convinced. I am sure to tell my tax prep person of the dividends withheld so I am taxxed properly. This is for my EMERA shares.

[Alan Bowler]

Bank of Nova Scotia bumped its dividend by 11% today.