Parents of infant who died in wrong-way crash on Ontario's Hwy. 401 were in same vehicle
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Are you a newcomer to Canada? Whether you’re an international student, travelling on Canada’s new digital nomad visa, a tourist, or have recently immigrated to the country, it’s important to learn the basics of how the country’s financial system works.
Here’s a quick rundown of the fundamentals, so you can better understand how Canadian currency works, as well as how to open a bank account, build your credit, and file your taxes.
Before long, you’ll be a pro!
If you’ve just arrived in the country, you can visit a foreign exchange centre to swap your native currency for Canadian currency that you can spend on local goods and services.
If you’re visiting from the United States, you’ll find Canada’s monetary system is very similar. The two countries share many of the same currency denominations, and the value of everyday items such as milk and bread are also similar.
If you’re visiting from elsewhere in the world, though, it may seem quite different than what you’re used to.
The Canadian dollar (CAD) is the country’s currency. We have colourful bills denoting major denominations, including:
We also have coins denominating amounts less than $1, including:
One of the neat things about living in Canada is that we regularly use $1 and $2 coins as well, with $1 coins referred to as “loonies” (due to the image of a loon on the back of the coin), and $2 coins called “toonies” (a combination of the words “two” and “loonie”).
Most modern businesses in Canada accept card payments on the Visa, Mastercard, and American Express networks. As long as your bank or credit card company allows you to use your card in a foreign country, you shouldn’t have any issues paying for items with your card.
Keep in mind, though, that some banks and credit cards may charge foreign transaction fees. Be sure to double-check with your bank or credit card provider so you can budget for this properly.
Once you’re a full-time resident in Canada, you can open up a Canadian bank account, which can reduce international transaction fees and make things simpler. Most banks require the following documentation to open a basic chequing account for daily spending:
Some banks are only open to permanent residents and citizens, while others accept temporary residents, international students, and even overseas applicants.
The “big five” banks in Canada are:
These are, by far, the biggest banks and you’ll find ATMs for these all over the country. There are also a number of smaller, more local banks and credit unions as well as online banks that you can apply for as well.
Major banks such as those listed above are usually a first stop for people looking to get a mortgage or other loans in Canada. However, you should shop around for the best rates. You can contact mortgage brokers or other banks and credit unions for quotes.
As a Canadian resident, you can also open special registered accounts at many financial institutions. These accounts are tax-advantaged, meaning they are exempt from taxation or feature other types of tax benefits. They may allow you to build your savings for future expenses such as your first home, your child’s college education or your retirement.
Some of the most popular accounts include:
There are several ways to transfer money to and from Canada. Here are some popular ways to do so:
1. Bank wire transfers: Most major banks and credit unions in Canada offer international wire transfer services. You'll need the recipient's bank account details, including their International Bank Account Number (IBAN) or equivalent, and the bank's SWIFT code, also known as the Bank Identifier Code.
2. Online money transfer services: These platforms can offer more competitive exchange rates and lower fees than banks. Some examples of these are Wise, Paypal/Xoom, and Remitly. You can check the exchange rates offered by these platforms and compare them to some of Canada’s larger banks. This is my preferred method to transfer money, as it is often significantly cheaper and quicker than other options.
3. Money transfer operators (MTOs): These companies provide money transfer services, but don’t require the sender or recipient to have a bank account. Some examples are Western Union and Moneygram. Companies that offer this service usually have higher fees than other options on this list.
4. Cheques and money orders: These methods are more traditional ways of sending money internationally, but they also tend to take longer than some of the other options on this list. These documents can be purchased at banks or post offices and sent anywhere in the world.
5. Prepaid debit cards: These can be loaded with funds and used internationally. Some providers might offer better exchange rates and lower fees than traditional methods of transferring money.
Canada has two major credit bureaus – Equifax and TransUnion.
Whenever you apply for a credit card or loan, the creditor will run your information through these databases to determine your overall creditworthiness.
If you’re just starting out with no credit, applying for a prepaid “secured” credit card is a good way to start. This will allow you to build good payment history, after which you may consider applying for a traditional line of credit.
Credit scores in Canada typically range between 300 (the lowest) and 900 (the highest). Here is how your score determines your overall credit rating:
The better your score is, the more likely you will get approved for financial products such as cashback rewards cards and personal loans. Higher credit scores may also help you receive a more favourable interest rate.
If you’re unsure about your credit, you can get your credit report from either credit bureau for free.
Last but not least, Canadian residents are required to file an annual tax return with the Canada Revenue Agency (CRA). On your tax return, you’ll claim your total annual revenue, which will determine your tax bracket and the total amount of taxes you owe to the local provincial government and the Canadian federal government.
Income earned before someone arrives in Canada is not subject to Canadian taxes. But once someone becomes a Canadian resident, for tax purposes, they have to declare income from anywhere in the world on their tax return.
You can file your taxes online using software approved by the CRA or visit a professional tax preparer to help you with the process.
You’ll also be able to apply for eligible deductions, such as child-care expenses, which could reduce your overall tax obligation.
Most jobs automatically take income taxes out of your paycheque before issuing it to you. If this is your situation, then you may be eligible for a tax refund at the end of the year (if you’ve overpaid taxes).
However, if you're self-employed or have not had your income taxes deducted from your paycheques, then you’ll likely owe taxes at the end of the year. In this case, it’s important to budget for income taxes ahead of time, setting money aside in a savings account so that you’re not caught off guard.
If you’re new to the country, learning how to navigate the financial system can take a few weeks or months. However, it will all make sense with a bit of time and practice.
Start with the basics, and learn how to use Canadian currency. Once you’ve established your residency, open a bank account, start saving money, and build your credit. From here, it’s a good idea to speak with a financial adviser to create a long-term retirement and investing plan for the future.
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
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