2025 Year End in Review: After Thirteen Full Years of Retirement

After leaving the workforce together 13.5 years ago, my husband Rich and I have now been retired for more than half the duration that we worked full-time.  Had this made last year’s “Retirement in Retrospect” discussion, I would have termed 2025 the “Crazy Year of Instability” with all the threats of tariffs and counter-tariffs.  While the cost of groceries and sundries has risen dramatically to the point where we had to get over sticker-shock and adjust to new “reference prices”, we were otherwise not overly affected by the trade wars. Because our retirement income strategy relies on dividends and not the value of our portfolio, we merely stood pat with our holdings and ignored the noise. Since we started our dividend income strategy back in the late 1990s, our total dividend income has now survived and continued to grow through multiple economic downturns including the 2001 burst of the Dot-Com bubble, 2008 Financial Crisis, 2015 Oil Price Collapse, and the 2020 COVID Pandemic, so we were not worried despite the 2025 Tariff Wars.

Most surprising despite all the turmoil and uncertainty in the global economy was the S&P/TSX Composite Index, which rose over 30% in 2025.  There seems to be little rhyme or reason to the stock market, so there is no point to panic or overreact.  Just as we are not concerned when our portfolio goes down, we also don’t get excited when it goes up.  These are just paper losses or gains that are transient and could quickly change.  Instead, we remain focused on our dividend income.

Dividend Income

In 2025, dividend increases came less frequently and were smaller percentagewise than from previous years, yet our total dividend income increased as usual.  In our non-registered account which funds our expenses, we were up 1.53% from the end of 2024.  For us, this was the lowest annual percentage increase since we started tracking after our retirement in 2012.  Yet, a few factors made this figure seem lower than our actual increases which we did receive from 28 of the 33 distinct companies that we own stock with.  Even BNS, the only big bank that didn’t raise its dividend in 2024, was back with a 3.77% raise at the end of May.  And as of mid December 2025, six of our companies (BMO, CIBC, Enbridge, National Bank, Royal Bank, TD) have already declared dividend increases for 2026 for a 1.52% increase. The two factors that skewed our dividend growth numbers for 2025 were as follows:

First, Bell Canada (BCE) cut its dividend by 56% which reduced our annual income by 2.3%.  In the early days of our retirement, a dividend cut of this significance would have been cause for concern.  We now own so many distinct stocks and have received large dividend increases for so many years that at this point, no cut by any one company will significantly impact us.

The other factor that directly caused a reduction in the dividends from our non-registered account was self-inflicted and intentional.  Canadian dividends are grossed up 38% when calculating taxable income (as part of the dividend tax credit formula) which directly affects how much tax we owe. Without selling stock, which could trigger capital gains, I am trying to reduce the total payouts from our non-registered account to keep the total at a reasonable figure.  To do this, I have started to donate stock to charitable organizations, but more on that later.  Without these two factors, our dividends would have increased 4.03% which is much closer to the rate of increase over the past couple of years.

DRIPS

In 2025, the newly spun off (from TRP) company South Bow Corp (SOBO), the newly merged company AW Food Services (AW.T) and the restructured Brookfield Renewable Corp (BEPC) each paid their first dividend. This had to happen before I could enroll them in the Dividend Investment Program (DRIP) within my registered accounts.  I also restarted my DRIP of BCE which I had canceled with the news of financial trouble and dividend cuts.  Since we don’t plan to sell this stock, then we might as well pick up more shares while the price is low.  My hope is that this company is part of a Telcom oligopoly so in the long run it will probably recover.  Note that we only DRIP in registered accounts so that we don't have to worry about re-calculating adjusted cost base with each DRIP share purchase.

Changes to Stock Portfolio

Rather than panic because of the market turmoil, we try to take advantage of lower stock prices. We needed to start rebuilding our TFSA accounts after raiding them to pay for condo renovations a few years back.  In each case, we contributed cash to our TFSA from excess dividend payouts, selected a stock that we wanted to purchase, set a low limit buy price and waited.  

Rich wanted to own Dollarama (DOL) stock since it is a Canadian company in a sector (retail) that was not represented in our portfolio.  This is a departure for us since DOL is a growth stock that hardly pays any dividend.  In April while tariff rhetoric was raging, Rich caught a dip in the stock and bought Dollarama for an average price of $147.45.  By the end of the month, the price had risen above $170 and as of this writing, it is hovering around $200.  Still, the value of a stock is so variable compared to its dividends.  Who knows what the price will be at when we finally want/need to sell it.  In the meantime, we make little to no earnings and don’t generate enough dividends to DRIP to gain more shares.  This is why I don’t like holding growth stocks but if there is anywhere to do it, it is within a TFSA.  

One idea that I had for trying to grow this Dollarama stock in a simulated DRIP scenario is to perform some limited form of “day-trading” within the TFSA.  I would put a limit sell of the shares at an aggressively high price to try to catch a temporary spike.  If it never hits, then Rich is no worse off than just holding the stock.  If it does hit, then I would put in a limit buy for the stock at a lower price, ensuring that the gap is large enough to buy one or more shares than he originally owned, and cover the trading fees. If the shares don’t fall from that higher price, then at least Rich will lock in his profits and can buy something else.  Because there are no tax implications in a TFSA, there is no capital gains to worry about.

To top up my TFSA, I caught a smaller dip in the market in June and bought shares in Restaurant Brand International (QSR) and Brookfield Infrastructure (BIP.UN) while they were on the decline.  Both share prices are currently higher than what I paid for them so I guess I fared well.  But I missed the biggest short-term crash that happened in September, which shows that it is impossible to time the peaks and valleys of the stock market unless you get really lucky.

In June, Parkland Corp (PKI) went through a shareholders vote to determine if it should be sold to Sunoco, an American oil and gas company in the energy sector.  This was definitely not something that we wanted to happen since we had no interest in owning shares in an American company.  We voted “No” with our few measly shares but knew that our vote would not make any difference, so we took steps to prepare for the possibility that this sale would go through.  If it did, shareholders were offered three options for each share of PKI held:

• Accept $19.80 in cash and 0.295 shares of a Sunoco subsidiary Suncorp (SUNC)

• Accept all in shares of the Sunoco subsidiary

• Accept $44 per share in cash

Since we held shares of PKI in both registered and non-registered accounts, we worried about potential capital gains triggered by this action.  As it turns out, the adjusted cost base for the PKI shares in our non-registered account was just over $45 so we should receive a small capital loss for any of the options, which we could carry forward for use in future years.  From last year’s lesson learned, I knew that we each needed to declare 50% of that loss on our tax returns.

We were not interested in having shares of SUNC and wanted to get all cash so that we could purchase shares in another Canadian dividend-paying company.  To make sure our desired option was understood, we sent an email to and phoned our discount broker Scotia iTrade several times to try to make this declaration. In each case, they said that the sale had not completed yet so they could not register our wishes.  I then sent an email to PKI Investor relations and was assured that we would be notified when it was time to make the declaration.  Accordingly, we sat back and waited to be notified which was a mistake.  Imagine my shock when I found out in November that the sale had gone through and we had missed the opportunity to make our declaration for a cash payment back in October (which we were NOT notified about!).  Now we were stuck with some cash and shares of SUNC in both my LIF and our non-registered account.  I was extremely annoyed but there did not seem to be any way to rectify the situation.

Not wanting to own this American stock, I quickly sold the shares in my locked-in Life Income Fund (LIF) for a small profit and will use the cash proceeds for my 2026 LIF withdrawal.  As it turns out, because of the crazy increases in stock in 2025, the 2nd LIF Maximum calculation rule kicked in and my allowed maximum withdrawal is multitudes larger than expected.  So, this cash came in handy!

It was trickier in our non-registered account.  First, I had to calculate whether or not we qualified for a capital loss on the PKI deal and if so, how much was the loss, based on the adjusted cost base of my PKI shares.  Looking at the transaction history of our non-registered account, I saw that my PKI shares had been deemed “sold due to merger” for a certain amount of cash and then part of that cash was used to buy shares of Suncorp.  I decided that the Suncorp part of the transaction was irrelevant and that my capital loss should be <PKI Adjusted Cost Base x # of shares – Cash from PKI sale).  Rich and I will each declare half of this loss in our 2025 tax filings.

As for the SUNC shares in our non-registered account, I put in a limit sell of these shares at the same cost that we received them for.  This should mean there is no capital gain or loss for me to deal with.  Unfortunately, the share price has fallen since we got them, so my limit sell will just sit and wait for the price to hopefully recover.  If things don’t look better by next year, I may sell anyway and bank the capital loss so I can at least use the proceeds to buy some other Canadian dividend paying stock.  Had we just been able to receive all cash, we would have avoided all this headache. In retrospect, I should have kept Googling every few weeks to verify for myself if and when the sale went through.  Lesson learned for next time.

Charitable Donations – Stock in Kind

For years both before and after retirement, we have been actively and passively trying to grow the dividend income generated from our non-registered account which pays our bills and funds our spending.  We actively bought stock before retirement and withdrew stock-in-kind from our RRIFs after retirement to add to the dividend income paid out of our non-registered account.  Passively, we let dividend increases and compounding do its magic.

Now that we are in our 60’s and moving towards a time when we will start taking CPP and OAS, we are looking at ways to slow down the growth and even reduce the payout from our dividend income.  While dividend income is taxed at a favourable rate due to the dividend tax credit, it is also “grossed up” by 38% which significantly increases our net taxable income.  If we allow this income to grow too much, it will lead to OAS claw back.

One way we can reduce the dividend income in our non-registered account is to donate stock directly to a registered charity.  This is better than selling stock and donating cash since a stock donation does not trigger capital gains. Looking at which stock to donate, we considered dumping a crappy stock that was not doing well either in terms of stock price or dividend payout.  However, this did not achieve our goal of reducing capital gain exposure if we ever lose another stock to a forced sale due to buyout or merger as happened with PKI. 

Instead, we looked at which stock would generate the most capital gain and landed on Premium Brand (PBH).  We first bought this stock when it cost around $13 a share and at its peak, it had risen to over $100.  Around the time of our donation, the stock price had dropped to around $75 but it would still be our largest capital gain if we were ever forced to sell or if the company ever got was bought out, as PKI was. We decided to donate this stock to start reducing our holdings in it.  Since we still like this company, Rich is slowly buying it back within his TFSA.

For donation of publicly traded securities, the valuation is based on the closing price on the day that the securities are sent to the charity's brokerage account from our discount broker.  We can’t really control the price of the transfer since we don’t know which day the transaction will take place.  With news of tariffs changing daily, stock prices were fluctuating like crazy. The best that I could do was to wait for a relative period of calm when prices had recovered a bit from the initial reactions to the tariffs before making my request.

There are several ways to make a stock donation to a charity. The organization Canada Helps operates as an online platform that allows you to make a stock donation to one or more registered Canadian charities. You would go to their website to access and fill out a form indicating the company or companies you want to donate to, as well as the name/description/stock ticker of the stock, # of shares and your discount broker/account information.  The form is then sent to your discount broker with a letter of direction authorizing your broker to transfer the shares. Once the shares are received by Canada Helps, they sell the shares, sending the proceeds less a fee to the charity or charities and sending you a tax receipt.

The problem is that Canada Helps takes 2-3% of the donation as a fee.  It is therefore much better to donate stock directly to the charity so that they can receive the full donation, if they are able to support this.  I contacted our desired charity and found out that they did have a process to receive stock directly through their discount broker. I received the required form from the charity, filled it out and sent the form plus a letter of direction to my discount broker. Within a couple of days, the shares were withdrawn from our non-registered account and sent to the charity.  A few days later, we received our tax receipt for the full value of the donation.  No transaction fee was charged for this process.  The added benefit of the stock donation was that we did not have to save up cash to make the donation.  All this went very smoothly and we will continue to do this going forward.

Stock-In-Kind RRIF Withdrawals

The turbulent markets provided a great opportunity to make stock-in-kind withdrawals from our RRIFs this year while prices were relatively low.  When you withdraw stock-in-kind, you can specify that it be taken out at the lowest price of the day.  The lower that price, the more shares you can take out for the same withdrawal amount.  Anticipating that Trump’s tariff threats were going to rock the stock market at least in the short term, I made preparations to take advantage of this.

First, I had to decide how much taxable income I wanted my RRIF to generate this year from both my stock-in-kind withdrawal and the amount of withholding tax that I needed/wanted to pay.  If withdrawing more than the legislated minimum from your RRIF, you are subject to paying an escalating withholding tax depending on how much you go over.  That amount is “grossed up” or increased even more when taking stock-in-kind.  I had figured out the gross-up formula back in 2019 so I knew how much was mandated.

Over the past few years, we have been withdrawing more than the legislated minimum and paying more than the required withholding tax in an attempt to reduce the sizes of our RRIFs before we turn 70.  We usually try to pay enough withholding tax to account for our entire tax burden which includes dividends from our non-registered account which we share 50/50.  We try to arrange for a small refund each year and by not owing taxes, we also avoid having to remit quarterly installment payments the following year.  To ensure that we have enough cash to cover our tax payments, we save up dividends in our RRIFs throughout the year and supplement by selling stock if we don’t have enough.

Next, I decided which stock(s) to withdraw.  I chose Manulife Financial (MFC) because we did not have as much of that company in our non-registered account, and the timing of MFC’s dividend payouts would help smooth out our monthly income flow.  I held MFC in my RRIF and Rich held it in his Spousal RRIF so I planned for us each to withdraw shares from these accounts.

I then reviewed the stock price history over the past few months and chose a price that I was hoping MFC would drop to before making our withdrawals. At the time of my review, the price was just over $44 and I settled on $42 as a reasonable drop.  Then I used my Scotia iTrade account to set an alert so that I would be notified if MFC share price dropped 2.5% or more in a day or fell below $42.  On the morning of Monday February 3, the first trading day after another tariff announcement, I received an email notification that MFC share price had dropped below $42. Checking the low of the day, I found that at opening bell the price had fallen to $41.24 while by mid day, it was back up to just under $43.  I was able to choose that lowest price of the day for our withdrawals.  As a result of all this planning, we were able to remove more stock for the same income value for our annual RRIF withdrawals.  By the end of the year, the stock price has risen to over $50.

Income Tax: Income Sharing, Sharable Spousal Tax Credits

Each year, Rich and I decide how much taxable income we want to generate and try to reach that number by first estimating how much grossed up income our dividends will earn from our non-registered account.  Then we calculate how much we can withdraw from our RRIF accounts (including withholding tax) to reach that limit. Our goal is to aggressively reduce the size of our RRIFs by the time we hit age 70 to reduce OAS claw back but not push ourselves into such a high tax bracket that we would be penalized on Basic Personal Amount (BPA) tax credit reductions.  

We try to make sure that our taxable incomes are more or less equal so that we optimize our joint tax burden.  This is mostly done by splitting the income from our non-registered account 50/50 and then withdrawing comparable amounts from our taxable registered accounts.  The latter is easy to control when withdrawing cash but more complicated when taking out stock-in-kind which is dependent on the stock prices on the day of withdrawal.

One way to help balance out our incomes is through tax credits such as charitable donations and medical expenses which can be shared between spouses.  In 2025, With Rich’s income was slightly higher so it made sense for him to take all the tax credits. Since I usually put the charitable donations in my name, I needed to use the “transfer to spouse” option to allocate them to him.  Note that for political donations, either spouse can claim the donation regardless of whose name is on the tax receipt.

Income Tax: Political Donations

Rich and I received our $200 cheques from the Ontario government around the 3rd week of January.  Apparently, the cheques were mailed based on when you submitted your 2023 tax return.  Because of our strategy to receive small refunds by pre-paying withholding tax, we usually file as early as possible to recoup that money.  As a result, we were one of the first people we knew to receive our cheques.   We saw these as “political bribe cheques” since they were issued to all taxpayers in the province and not just those who needed financial aid.  Nor did it seem coincidental that the cheques arrived just as the sitting premier called a snap election to seek a new mandate.  We decided that it would therefore be appropriate to donate the $400 that we received to our political party of choice.

This being our first political donation, I researched the details regarding any accompanying tax benefit.  I found out that making a political donation nets you a much larger tax credit than a regular donation, but the benefit is capped.  This type of donation cannot be split with your spouse, unlike a regular charity donation.  But either spouse can claim the entire credit, regardless of whose name is on the cheque.  For a political donation, you can claim 75% on the first $400 depending on whether you donate to the federal or provincial government (with varying rates depending on which province).  This contrasts with a regular donation where you receive 15% credit on the first $200, 29% on any amount after that.  Accordingly, the $400 political donation directly affects the tax payable, decreasing tax owed or increasing tax refunded by $300.

I further researched the difference between donating to a federal political party vs provincial party and decided we would get more tax benefit from a federal party since the federal rates on our taxable income (starting at 15%) were higher than provincial (starting at 5.05%).  Because of the mail strike at the end of 2024, there was an extension for charitable donations made through February 2025 to be eligible for the 2024 tax year.  This allowed me to reap the benefits a year earlier. 

Income Tax: Declaring Capital Gains and Losses / Filing Change My Return

We received all of our 2024 tax forms by mid of February and were ready to file our taxes to get our refunds as soon as possible.  But because of some stock sales that we made in our non-registered account in 2024 for rebalancing purposes, we triggered a small capital gain which we planned to claim 50/50 on our taxes and then offset with some of the capital loss that we had carried forward from previous years.  I looked at my 2023 Notice of Assessment to confirm how much unused capital loss I still had left.   

All this should have been business as usual, had it not been for the Capital Gains Increase Debacle at the end of 2024.  The government had initially declared an increase of taxable capital gains from 50% to 66.67% for any gains exceeding $200,000 starting June 2024 but then deferred and later canceled it.  As a result, the CRA forms and corresponding tax programs were in flux.  By end of February 2025, when taxes could usually be filed, the confusion had not yet been resolved.  Because of this issue, we were not able to file our taxes until well into March when the tax programs were finally updated to match the proper tax rules.

Then I noticed another wrinkle.  The T5008 form which detailed the capital gain in 2024 had both of our names on it.  This means that we had to split the gain 50/50 on our tax forms.  But in 2023, I declared the capital loss just in my name so only I had a loss on record to offset the gain.  Curiously, CRA did not flag and help me fix this mistake even though both our names were on that T5008 form as well.  But I have no doubt that they would catch and penalize us if we did not properly split the capital gain.

Not wanting to wait further to file our 2024 taxes and receive our refunds, I filed both our tax returns, splitting the capital gain 50/50.  I offset my share with my carry-forward capital loss while Rich did not, which increased his taxes owed, resulting in a smaller refund than expected.  To rectify the situation, I signed onto each of our CRA accounts and filed a “Change My Return” request for each of our 2023 filings.  On my tax return, I went to line 13200 (Capital Gains and Losses) and reduced my loss claimed by half.  On Rich’s return, I added that same amount of loss to his filing.  We got our notices of reassessment confirming that Rich now had half of the loss. Ten days later, Rich received an email from CRA requesting documented proof of the request.  Using the Submitting Documents Online feature from his CRA account, he generated a T3 form from our 2023 version of our tax program StudioTax and uploaded that along with our shared T5008 form.  By the next day, Rich received confirmation of his 2023 tax return reassessment, so now he officially had a capital loss on file.

Rich and I both received our 2024 assessments and tax refunds around April 1 and the money was deposited into our bank accounts by April 9. With our refunds safely received, I filed a “Change My Return” on his 2024 filing and applied the equivalent loss on line 25300 against his share of the gain. On June 10, Rich was notified that the reassessment was complete and on June 19, he received an additional refund. I had successfully changed our tax returns retroactively to correctly split our past capital losses and Rich successfully applied part of the losses to his taxes.  Going forward, I will know how to correctly handle future capital gains and losses from our joint non-registered account on our tax returns.

Tax Free Holiday

In late 2024, the Federal government declared a “GST tax-free holiday” from December 14, 2024, through February 15, 2025, inclusive.  This would remove the GST from certain purchase items, as well as on all groceries and restaurant meals including wine and beer (but not liquor with greater than a 20% alcohol level).  The Ontario government matched the holiday by also removing the HST, meaning no tax was charged during this time period. I initially thought it was crazy that the tax break included alcohol as opposed to necessities such as shampoo and toothpaste.  But someone explained that this policy was to spur discretionary spending to give the economy a boost.

In that light, the tax-free holiday certainly did the trick since all restaurants that we passed by seemed to be packed throughout the weekdays and weekends during this period.  We took advantage of not needing to pay tax to try some new high-end restaurants that had interested us. As a result, by the end of February, we had spent more than twice the allocated dining budget for the first 2 months.  After that binge, we seriously cut back on dining out for the next few months to get back on track.  At least the higher dining expenditures were slightly balanced out by lower grocery spendings.  It was fun while the tax-free holiday lasted and very difficult to stomach the tallies of our restaurant bills once that period was over! 

During this period, we tried out restaurants on our radar including ones that we hadn’t gotten around to yet or considered too expensive without the extra incentive.  Where possible, we went for a tasting menu to sample multiple dishes from each restaurant since it was possible we would not go back once we had to pay full fare. Spurred on by this early tax break impetus, restaurant traffic has increased Canada in 2025 as people continued to dine out more throughout the year, so this initiative seems to be a rousing success!

Annual Budget

At the start of each new year, we review how we fared against last year’s budget and make a new budget for the upcoming year, taking in mind inflation and any expected, larger-than-usual but non-recurring expenses. For example, the heat pump in our living room conked out on December 30, so we can expect an additional one-time cost to repair it in January.  That will be added to the budget.

In areas where we under-estimated the previous year, we determine if that was a one-time anomaly or whether we should increase the estimate for the upcoming year.  Throughout the year, where discretionary expenses are trending higher than expected (like our dining budget during the Tax-Free Holiday), we try to spend less in subsequent months to try to get back on budget.  Where the expenses are mandatory, we take note and allocate a higher amount the next year.

In 2025, we were over budget in a few categories including "Auto" where an unexpected expense arose, and "Entertainment" when we upgraded our theatre subscription seats and watched more shows than usual.  The auto expense was a one-time thing that won’t happen every year but we also know that the service warranty will run out for our car in August, so expenses will go up there.  Our entertainment overage will probably be ongoing so we need to add more money to that category.  

We were under our estimate in other categories while being pretty close for condo fees/utilities, groceries, sundries and subscriptions.  I will be analysing our budget results from this past year to produce a new one for 2026.  As always, we use Quicken to categorize all of our expenses and purchases throughout the year so that we can run detailed reports and have a pretty good idea of how much we spend and where our money goes. My Quicken reports give me good historic data as well, so I was able to easily find the last time that we had to replace a heat pump (in 2018 and that time, it was in our bedroom).

Overall, we were under-budget in 2025 because we over-estimated how much our vacation would cost. I prefer to allocate more towards Vacation expenditures  and ending up not needing the funds rather than feel like we need to skimp on our trips.  It costs so much to get anywhere these days and there are so many new places to visit that we are not likely to return to past locations, so we might as well do everything we want to do the first time.

Vacation

2025 marks the first of our 4-year boycott against traveling to the United States.  We usually take an annual trip to New York City to watch plays and musicals or visit some other American city as part of our vacations for the year.  We will not return to the USA until the current president is gone and/or his oppressive policies are revoked.  We also tried our best not to buy American products or foods but that was small potatoes compared to what we usually spend on travel.

Instead, we concentrated on traveling within Canada and to Europe, which aligned with our plan to check off as many of the locations on our European bucket list as much as possible before we turn 65 and health care becomes more problematic and expensive.  We started off with a week trip to British Columbia for a long-overdue trip to visit family.  It is crazy that airfare within Canada is still as expensive if not more expensive than flying abroad.  Hopefully the tariff war with the United States will rally national pride and loosen some of our inter-province trade barriers.

Knowing that we wanted to visit a new country in Western Europe that we hadn’t been to before, we also wanted to take more driving vacations before Rich gets too old to make long, extended drives.  This led to our decision to visit Scotland and in particular, Edinburgh which would fulfill another wish of mine, to attend the Edinburgh Fringe Festival. We ended up on a 23-day excursion to Scotland with 7 days in Edinburgh, 4 days in Glasgow and 12 days driving through the East coast of Scotland plus the Highlands.

Charities and their Counter-productive Solicitation Strategies

Multiple news sources have reported that charitable donations in Canada have been on the decline over the past few years, down over 5% from a decade ago.  While inflation and cost of living, economic uncertainty and shifting donor demographics have been cited as the main causes, maybe there is another reason some charities are noticing a decline.

My husband and I try to make some sort of charitable donations each year, both out of a desire to help certain causes and as a way to reduce our taxable incomes.  In the past, we really wanted to help out organizations like the Daily Food Bank or the Red Cross.  Here is the problem with these charities.  Once you donate to them for the first time, they are relentless in their frequency of soliciting for more donations and there seems to be no easy way to opt out of these requests.  If the charities had just let us donate regularly on our own timeframes, we would have gladly continued to support them each year.  But we felt so harassed by the constant bombardment of appeals via email and snail mail (the Red Cross would send unwanted “gifts” to prompt donations) that we no longer include them for consideration when we decide on our annual donation recipients.

At least we don’t receive phone calls anymore.  In the past when we had a land line, we used to receive a phone call every evening around dinner time from my old University asking for donations.  This became so annoying that once we canceled our land lines, we never give out our cell numbers unless absolutely necessary and block unknown callers so our phones don’t ring unless the numbers are in our contact lists.

I don’t understand why charities think that this type of aggressive solicitation is effective.  Perhaps it does work with some people but for us, it led to the opposite result.  After a long period of ignoring the onslaught of requests, automatically pumping emails to junk and tossing physical mail, we seem to finally be off their lists.  As much as we do want to support these charities, we cannot subject ourselves to these tactics again.  Now we give to other charities that accept our donations and don’t immediately and incessantly ask for more.

Elbows Up in Support of Canada

Unimaginable even just a year ago, the beginning of 2025 sees Canada under attack from our closest neighbour and former ally.  Not only have the extremely unjust tariffs levied by the United States upended our Canadian economy, but they have destabilized markets around the world including within the U.S. itself.  Even worse are the constant attacks on our nation’s sovereignty with threats of making Canada the 51st state.

We need to fight back however we can.  Every proud Canadian should be considering what we can do to stand up for our country, be it a token gesture or a significant act.  We acknowledge that after so many years of building ties and becoming co-dependent with America, it would be unrealistic and impossible to simply cut all association with them at the drop of a hat.  Yet we need to do something to take a stand, although what that stand consists of is an individual choice based on each person’s circumstances.  Rich and I realized that we needed to pick our battles, so we reviewed our spending and investing habits to see where we might be able to make a difference.

I read an article in the Globe and Mail about Canadian investors divesting themselves from their holdings in US companies.  This puts a new spin on the term “sin stock”, which is usually reserved for companies dealing in tobacco, liquor, gambling, weapons and sex.  We might have considered doing this if not for the fact that we don’t own any US stock and have not done so for a few years.  Our strategy has been to live off the income generated from our dividends.  To do so effectively, we need to be able to know how much the dividend payouts will be each quarter.  Adding the currency fluctuation of US dividends would have introduced too much uncertainty.  For a while, we held one or two American stocks so that we could accumulate US cash.  But then we realized we could achieve the same goal by holding Canadian stock that paid in US funds, (e.g. AQN.T, BIP.UN, SOBO.T).  Being Canadian companies, there was the added bonus that these dividends qualify for the dividend tax credit.  Therefore, selling US stock was not where we could make a stand since we didn’t own any.

When filing our taxes, we have always used the Canadian-based online tool StudioTax ($17.50+tax for up to 20 tax returns) instead of the more popular American TurboTax.  TurboTax has recently been in the news for erroneously calculating tax credits, causing multiple Canadians to be charged back taxes plus interest when audited by CRA.  It is not surprising that an American-based software would not be as in tune with the intricacies of Canadian tax rules.  Aside from the "Buy Canadian" movement, this is just another reason to use a Canadian-based tax program instead of an American one.   Other Canadian based programs include Wealthsimple Tax, UFile, FutureTax and Taxtron.  

Next, we looked at joining the movement to boycott US products whenever we could.  We would only buy American if there are no other options and if we truly could not substitute with another product or just forgo that product all together.  We would shop Canadian whenever possible or at least buy non-American products from other countries.  In the winter, when local fresh fruit is not available, instead of buying Driscoll’s strawberries from the U.S., we could opt for blueberries from Peru.  We have taken to squinting at product labels to determine their place of origin, or using phone apps such as OSCANada, Buy Beaver, Shop Canada, Buy Canadian, etc. to help determine whether a product is from Canada by scanning the bar code.  Not all products are recognized but the more common ones should be.

For a while, we even boycotted Loblaws in favour of Farm Boy and Longos because these latter stores were prominently adding signs indicating which products are Canadian and even putting some of those products on sale.  By contrast, Loblaws had no signs and were trying to tempt us by putting their US products front and centre at cut-rate prices.  Just recently, Loblaws finally seems to have wised up and now they also label and identify Canadian products.  Thank goodness some of our favourite snacks and drinks turn out to be 100% Canadian, including Hawkins Cheezies made in Bellville Ontario, Covered Bridge Potato Chips from Waterford, New Brunswick, and Great Gentleman Ginger Beer whose headquarters is in Laval, Quebec.

We are especially trying to support businesses or companies who go the extra mile for Canada.  We will be buying Chapman’s ice cream after they declared on Instagram that they would absorb any extra costs caused by tariffs. Some of their ingredients are from the US, but they are actively looking at other sources. We will try to dine at restaurants like FK and Taline, who advertised that they have taken all American wines off their menu. The following restaurants have declared that they will be trying to use only Canadian sourced products in their meals: Patois, Richmond Station, Island Oysters, Gram's Pizza, Enigma Yorkville and Unboxed Market.  Peace By Chocolate, an award-winning Nova Scotia-based chocolate bar producer founded by former Syrian refugees have produced a chocolate bar wrapped with our new hockey-based battle cry “Elbows Up”.  We decided to purchase a bunch of these bars to pass out to our friends and neighbours, both to spread the word and to support a Canadian company.

Given how intermixed our supply chain is with that of United States, we need to be careful that our efforts to punish the Americans do not inadvertently end up hurting Canadians.  Should we be boycotting a product that is owned by a US company but manufactured or processed in Canada?  Should we boycott a Canadian product that uses American ingredients?  Should we avoid an American chain restaurant that has a location in Canada and employs Canadian workers?  It is not that simple.

At any rate, the changes in our shopping habits are probably just symbolic gestures since we never spent that much money on American-only products.  Where we can truly take a stand and withhold significant amounts of our discretionary income that we used to spend on U.S. goods and services is through our travel.  Before all this nonsense started, we would visit New York City at least once a year to watch multiple Broadway shows and possibly take a second trip to another American destination.  On each of these trips, we were spending multitudes more than the cost of the jar of Stonewall Kitchen Country Ketchup, which I love but will no longer buy. We have decided that at least for the next four years or however long it takes for the insanity to end, we will not set foot in the United States again.  If every Canadian, or even a majority of them would make the same commitment, this may indeed cause enough economic pain that the American people might rise in protest to join our cause.

There are so many beautiful places to visit in the rest of the world that avoiding the U.S. should not be that much of a hardship, unless you own property there or have family to visit.  Neither of these conditions apply to us.  Another reason we have no desire to travel to the United States right now is that it actually seems dangerous. There is a lawlessness and total disregard for human rights that has become prevalent in that country ever since the new government came into power.  

We read about two sisters from Halifax who were pulled over in Ohio and detained for an hour, ostensibly for a drug search (none was found).  They were separated into two police cars and each individually questioned about whether they “preferred Canada or America”.  Then there is the Canadian woman who was detained by ICE for multiple days and even handcuffed and chained for not having all of the correct documentation when crossing the border.  

The U.S. does not seem to be treating Europeans much better either as similar reports are coming out about citizens from countries including Britain, Germany and France.  Stories like these just solidify our resolve not to travel to the United States.  But our federal and provincial governments need to make it easier for us to travel within Canada and lift intra-provincial trade and supply chain barriers.  It is crazy that it currently costs as much if not more to fly across Canada than it does to fly to Europe.  This is not a time for protectionism by each province.  It is a time for all Canadians to stand together and support each other as a country.

As I said in the beginning, as much as we want to spurn the U.S. and support Canada, it is not realistic to try to eliminate everything American.  In terms of picking our battles, our main one is travel and anything else we do is more symbolic.  For example, we have not given up using our credit cards in favour of using Interac (which is Canadian), despite VISA and Mastercard being American companies.  We are not giving up our iPhones as they are too entrenched in our lives.  And we are not giving up our streaming services which include Prime Video and Apple TV.  We did make one concession here in not purchasing our own Netflix subscription after Netflix changed the rules and prevented us from sharing an account with our friends.  I try not to feel bad about the American goods and products that we still use, but take pride that at least we are doing something to take a stand.  

We hope the rest of Canada joins us.  Let us know if you have any other ideas!

2024 Year End in Review: After Twelve Full Years of Retirement

My husband Rich and I have both reached our 60s and have now been retired for 12.5 wonderful years.  The time seems to have flown by but thinking back, I recall these years in distinct stages.  It began with an unfortunate health situation that derailed plans for our first retirement year.  Once that was behind us, we went through a few years of crazy extended vacations, traveling for up to 40-50 days in a row to make up for the limitations of our working lives where Rich’s job only allowed him to take a maximum of 7-9 consecutive vacation days at a time.  While it was thrilling to finally be able to do this, that length of time away ended up being too long for me as I missed the comfort and familiarity of home.  We settled into a more reasonable travel routine of taking vacations spanning 2-4 weeks.  All this intersected with our “home swap” days where we stayed in some fabulous places throughout Europe and lived like locals.  This too came to an end as it became more and more difficult and time-consuming to find a swap.  It was back to paying for accommodations in hotels or rental apartments with kitchens which is more to our liking.  Next, we went through the COVID and Post-COVID years where vacations ground to a halt and then very, very slowly ramped up again.  Because we were spending less on travel, this seemed to coincide with our “big expenditure” years as we had to find the money to replace our 15-year-old car and then an expensive renovation of our 20-year-old condo. This led us to 2024 which we hoped to be a normal spending year once again.

Dividend Increases + Compounding

I feel like a broken record in repeating year after year that our initial strategy for generating retirement income continues to be a winning one.  We spent years accumulating relatively stable dividend-paying stock in companies that regularly raise their dividend payouts.  Last year in our non-registered account, which funds our monthly expenses, our dividends grew by 6.54%, not including extra dividends generated from our stock-in-kind RRIF withdrawals for the year.  Compare this to 2024’s 2.4% inflation rate and we continue to do well. Overall, the dividends generated from this account are almost 200% more than in 2012 when we first retired.  Things bode well for 2025 since by December 2024, 9 of our 32 companies had already declared dividend increases for the upcoming year.

As we get closer to age 70 when we plan to start taking CPP and OAS, we will need to start worrying about our dividends growing too much (I know, first world problems…).  The dividend gross-up formula, which is used to calculate the dividend tax credit that allows our dividends to be taxed at a lower rate, involves boosting the gross value of these dividends by 38% when declaring taxable income.  As our dividends continue to grow, this will skew our overall taxable income to the point where we may experience significant if not total claw-back for OAS.  Yet, it is not as simple as selling off some of the dividend-paying stock in our non-registered account.  Most of our stocks have increased so much in value from when we first purchased them (some pre-retirement) that the capital gain hit would be enormous. 

As an alternative, I am starting to investigate how to offer stock-in-kind as charitable donation as opposed to the cash which we donate each year.  This serves multiple purposes.  First, we would not have to save up cash to make the donation, leaving us more disposable funds for expenses and discretionary use.  Second, this will reduce the dividends generated from our account without triggering capital gains.  I will be making inquiries with the organization(s) that we usually donate to, in order to figure out if and how this may work.  When deciding which stock to donate, I will be looking at the dividends that it generates, the likelihood of future increases, and the timing of when the dividend is paid out.  I try my best to make sure that we generate enough dividend each month in a quarter to cover our base monthly expenses and would like to maintain this as I slowly and strategically reduce our dividends.

EQ Bank Notice Account

A hugely traumatic event happened to us last July when our bank accounts were hacked and money illegally withdrawn.  I wrote extensively about our experience and lessons learned to better protect ourselves here: <https://retiredat48book.blogspot.com/2024/11/how-safe-is-your-money-tale-of-two.html >.  Around the same time, EQ Bank (our primary bank) introduced the Notice Savings Account which currently pays a healthy 3% interest but requires 10-days notice for withdrawals.  Rather than being an inconvenience to have to wait 10 days, we see this as a security feature since we will log onto this account once a week to make sure there are no unexpected pending withdrawals.  Rich and I each opened a Notice account and are using them to accumulate excess cash from our dividend payouts to save for upcoming vacation expenses and to keep emergency funds.

When the Notice account was first launched, it was paying a whopping 4.5%.  In reaction to the multiple interest rate cuts from the Bank of Canada, EQ Bank has had to respond by cutting its rate but 3% is still pretty good, especially since it is not a teaser rate like other banks offer for 3 months and then reduce their rate to 1% or less.

RRIF Withdrawals

For the past few years, our RRIF withdrawals involved selling stock and taking out cash to pay for major expenditures that our monthly dividends could not cover.  In 2024, we had nothing big planned so we went back to our strategy of taking out some stock in kind to boost the income in our non-registered account.  Continuing my multi-year plan to aggressively drain our RRIFs before reaching age 70, we each also use cash from our RRIF to pay off enough withholding tax to cover our total projected income tax burden for the year. From my RRIF/LIF, I withdrew shares of Bank of Montreal (BMO) and Brookfield Renewable Corp (BEPC), then sold the rest of my deadbeat Cineplex (CGI) shares as well as some shares of Parkland Fuel (PKI) to help cover the withholding tax that I wanted to pay.  Rich withdrew shares of Great West Life (GWO) and dumped his shares of Chartwell Retirement Residences (CSH.UN) to pay the withholding tax, since Chartwell had not raised its dividend in many years.

For a RRIF or LIF account, there is a legislated minimum amount that needs to be withdrawn before the end of each year.  If the minimum has not been withdrawn by the user, the institution holding the registered account will automatically make the withdrawal and will arbitrarily sell stock to cover the amount if there is not enough cash in the account.  Both Rich and I had completed our withdrawals and exceeded our annual minimums well before the end of the year.  So, imagine my shock when late on Christmas Eve, I received a text notification from EQ Bank indicating that Scotia Capital (owner of my discount broker Scotia iTrade) had made a large deposit into my bank account.

Since the hack, we are now extremely sensitive to any unexpected banking notifications.  Unfortunately, being Christmas Eve, EQ Bank was closed until December 27 and Scotia ITrade until December 28 so I could not immediately inquire about this.  After dismissing the idea that this was fraud, I considered that it could be a clerical error until I remembered about the default auto-withdrawal rule.  When I finally got through to ITrade on December 28, the agent confirmed that they had erroneously taken the minimum even though I had already withdrawn more than that.  This was disastrous for me since I had very carefully planned my net income and tax paid for the year.  This extra amount would push me into the next tax bracket and cause me to owe more tax.  I stressed to the agent how important it was for this error to be reversed.  He assured me that he would try his best to make it happen but I was not totally confident whether it would happen in time, since the 28th was a Saturday and there would only be 1.5 business days left before the end of the year.  Luckily, the extra RRIF withdrawal was reversed by mid day Monday December 30.  Even luckier was the fact that I just happened to have enough cash sitting in my account to cover that minimum.  Had they been forced to sell stock, I don’t think this could have been as easily reversed if it was even reversible at all!

Stock Portfoilio Changes

Over the past few years, we have been slowly getting rid of stock in companies who don’t raise their dividends or worse, cut dividends.  By the end of 2024, we had divested ourselves from CGX, CSH.UN, BEP.UN from our registered accounts.  In our non-registered account, we sold Sierra Senior Living Inc. for a small loss since this stock had never raised its dividend in all the time that we held it.  Along with Chartwell, this took us out of the health sector which never did much for us from a dividend perspective.  With the cash from the sale, we wanted to boost our holding in a company that we had less of in our non-registered account but one that would raise its dividend.  Thinking the banks were pretty consistent, we bought more Bank of Nova Scotia (BNS) since that was our smallest holding.  Ironically, it turned out to be the only bank that did not raise its dividend in 2024.  Hopefully this is just a temporary cash flow issue and they will return to raising in 2025, but we’ll see.

Last year, there was a significant increase in company reorganizations as companies adapted to changes in the market, industry, technology, regulations and tax laws, as well as addressing debt management or looking for efficiencies.  Several of the companies in our stock portfolio went through some sort of reorganization with varying effects to their shareholders.

In October, income trust A&W Revenue Royalties Income Fund (AW.UN), which I hold in my RRIF, merged with A&W Food Services to form A&W Food Services NewCo with a stock ticker of AW.  There are several implications for me.  After the merger, I received 97.3% of my former shares plus cash for the balance.  The new stock will pay dividends quarterly instead of monthly although the annual dividend payout per share is supposed to be the same.  While I am not happy to have lost shares in this transaction, I do like the fact that the stock is no longer an income trust.  This means at some point in the future, I can choose to withdraw this stock in kind to hold in our non-registered account.  From a diversification perspective, we will have a new sector to draw income from.  For now, I will leave this stock in my RRIF so that I can use the Dividend Reinvestment Program (DRIP) program to grow the number of shares that I own tax free.  Unfortunately, the DRIP will not be available until the new company has paid dividends for a few quarters and develops a dividend history.  I will keep an eye out for when I can enroll in it.

Also in October, TC Energy Corp (TRP) spun off its Liquids Pipelines Business to create the separate entity South Bow Corp (SOBO) as a strategic move to allow each company to focus on its core business.  For each share of TRP, investors received 0.2 shares of SOBO.  The dividend payout for TRP was reduced with the intent that it would be offset by the new dividend payout from SOBO. At first glance, it appeared that the combined dividends from the two companies seemed significantly lower than what we previously received from TRP alone.  Looking at the SOBO dividend more carefully, I realized that it was being paid in US currency similar to what Algonquin Power (AQN) does.  This made the gap much smaller and was a welcome change since it gave us another source of US cash with no currency conversion if we kept the stock on the US side of our accounts. 

As a result of the spinoff, we gained SOBO shares in our non-registered account. This would be irritating come tax time since the US dividends would have to be converted to Canadian at the appropriate rate when declaring this income.  Rather than having to go through this hassle each year for a relatively small amount, I decided to sell the SOBO in our non-registered account and use the funds to contribute to my TFSA (which had been depleted the previous year for our condo renovations) where I would repurchase the stock.  The dividend payouts will provide me with an ongoing source of US cash that I can take out tax free to add to my EQ Bank US bank account without worrying about conversion rates.  Until I need the cash, I will DRIP this stock once the DRIP becomes available.

In 2020, two of Brookfield’s Corporation’s income trusts (BIP.UN and BEP.UN) each spun off common class A stocks (BIPC and BEPC) for strategic purposes.  Rich holds BIP.UN/BIPC and I have BEP.UN/BEPC in our respective RRIFs.  The plan was to DRIP the non-income trust stock in our RRIFs for a few years and then eventually move them out to our non-registered account, again to add diversification to income-generating account.  In January 2024, I executed this plan for my RRIF and withdrew my BEPC shares in kind as part of my annual RRIF withdrawal.  In December 2024, Brookfield went through another reorganization with its BEPC and BIPC stock to account for tax inefficiencies.  In this case there was no effect for the shareholders since we received the same number of replacement shares, and the stock tickers and dividend payouts remained the same.

With all this movement, we are now down to 32 distinct companies (down from our high of 39) with representation in a variety of sectors including banks, telecommunications, insurance, oil and gas, utilities, REITs, Consumer staples and industrials.  We maintain our distribution of large/medium/small market capitalization at around 77%/22%/1% and our dividend payout is well distributed between the various sectors and companies.  We make sure we hold enough companies so that the loss of dividends from any company will not have a catastrophic impact on our income stream.

Optimize Expenses

After years being on a cell phone plan with Bell that seemed to rise in cost each year, I finally decided to look into whether we could do better than the $85 after tax for 10 gig of data that Rich and I were each paying.  We looked online into share plans with Bell, Rogers and Telus but none of them offered anything better.  In each case, we would end up with slightly more data for an even higher joint cost.   We decided to walk into a Bell store to see if they could do anything for us.  What we were told is that the stores had no power to offer deals but we were given the Bell “Customer Loyalty Retention” phone number and that agent was able to offer us some deals.

Our first offer was 120gig of data for $65 per month per person.  This is way more data than we would ever use and $20 less than what we were paying so we were ready to accept when the agent offered us a different deal.  For $55/month for 2 years, you get 70 gig of data but have to buy a low-end Motorola phone at a cost of $1 per month.  I started to say that I did not need a new phone but the agent interrupted me and said, “Think about it”.  It means for $56/month (including the cost of the phone), you get 70 gig of data for 2 years and you can throw away the phone if you want. This made sense so we went for the deal.  Once the phones were sent to us, we had to put in our existing Bell SIM cards to activate the phones and the plan.  Then we could immediately remove the SIMs and return them to our own phones.  We ended up with much more data for $30 less per month and can still use the Motorola phones on WIFI as backup if we want.  In two years when this deal runs out, I may have to phone again to try and negotiate a new deal.

When we were planning for retirement, we did the research and calculations and determined that it was not worth it to buy regular health insurance since most plans have a cap and the sweet spot to claim enough expenses to make the premiums worthwhile was small.  We decided that we would self-insure for the 17 years between our retirement and turning 65 when more medical expenses would be covered.  I did buy something called Manulife Catastrophic Insurance <https://retiredat48book.blogspot.com/2013/08/preparing-for-post-retirement-medical.html> which has a high deductible but no cap, to protect me against extraordinary medical costs.   With only 4 years to go until we turn 65, this decision to self-insure has turned out to be a good one.  There have been very few years where we spent enough on medical expenses to even qualify for the deduction on our tax returns. 

Last year turned out to be one of those years.  In 2024,  medical expenses had to exceed $2759 to qualify for the federal tax credit.  An extra, pricey dental procedure and eye care procedure pushed us past this limit.  Once we were over and qualified for the tax credit, I looked for ways to maximize expenses in 2024 since we may not generate enough in 2025.  I refilled prescriptions that were due in early January at the end of December and scheduled a discretionary eye exam for myself.  You can claim medical expenses spanning any 12 months ending in 2024 as long as those expenses were not claimed in 2023, so I was able to pick up a few pill prescriptions from 2023 to add to the total. 

Vacation

Wanting to ease back into it after COVID, and also having limited funds because of our major expenditures, we have taken relatively moderate vacations within Canada and USA over the previous 3 years.  In 2024, we finally ventured back overseas with a 2.5-week trip to Portugal.  I am in the midst of writing about that trip on my travel blog but it was a wonderful experience and a relatively inexpensive compared to other major cities in Europe.  Just before COVID hit, we had first planned a 3-week trip to Portugal that the pandemic ended up canceling. To prepare for the trip, Rich obtained a BMO Ascend World Elite Mastercard which costs $150 per year but would allow us to collect points to apply against charges to our credit card (with a better rate when used for travel), give us each free travel insurance for up to 21 days at a time, discounts on car rental and most importantly, 4 free lounge passes per year.  We were excited to use those lounge passes in 2020 for our initial Portugal trip, but obviously that didn’t happen.  

We ended up keeping the card since it gave us travel insurance for our trips to the States, and we collected BMO points for 4 years.  For our Portugal trip in 2024, we finally gained the full benefit of this credit card.  We were able to get two free lounge passes at Pearson Airport on the way out, and Lisbon Airport on the way home.  The four years of spending and collecting gave us enough points to pay for our airfares both ways.  And continuing to spend for the 3 months after we returned home, I was able to use more points to pay off a bit of our accommodation costs.

Recently we have started to load more and more apps onto our iPhones including our Presto, credit, debit and loyalty cards.  Not only is using the iPhone and Apple Pay to pay for things more secure than handing over your physical credit card which can be copied, but there was a huge advantage for the BMO Ascend World Elite Card.  It cost an extra $50 per year for a second card which I was unwilling to pay.  For years, Rich and I shared the one physical card which was really inconvenient.  Now, each of us can load the same card on our phones so I can also make purchases using the card while he carries the physical card for the times where a reader won’t accept payment by phone tap or the limit is too high.

How Safe Is Your Money? The Tale of Two Banks and a Computer Hack

Have you ever considered whether the money that you deposit into a bank account is safe?  All major banks have security declarations or “guarantees” on their websites that claim your money is safe and you will be covered if money is removed from your account without your approval, as long as you follow the listed security protocols.  But is that actually true?

Unfortunately, my family had to deal with a situation where these claims were put to the test and the results were both alarming and infuriating.  In early July 2024, a hacker somehow gained remote control of our Windows 11 laptop, possibly via some innocuous link that we inadvertently clicked while surfing on our browser. Whether through monitoring keystrokes or some other unknown method, the hacker was able to access our bank accounts with TD Bank and Equitable Bank (EQ Bank).  Once in the accounts, unauthorized contacts and billers were added and used to withdraw money via Interact transfers and bill payments.  As the funds were leaving our accounts, we were notified via email and reacted immediately to report the issues to the banks, request a freeze on our accounts to prevent further access, and report the losses to the banks’ security teams.

In each case, we informed the bank that we had read the details of its “User Security Responsibilities” and confirmed that we had followed all of them.  These included:

• Having lengthy, secure passwords that include both capital and small letters, numbers and special characters
• Never revealing our passwords to anyone else or writing them down anywhere that could be accessed by others
• Never leaving our computer physically unattended or providing access to anyone else
• Always keeping our operating system updates current including all security updates
• Regularly running anti-virus on our computer
• Checking our balances regularly for unusual activity (which I would do at least twice a week)
• Never clicking on unsafe links in emails or providing personal or financial information over the phone
• Signing off at the end of each banking session
• Informing the bank immediately if unusual activity detected

Despite following all these protocols, we still got hacked. Considering how insidious, determined and skilled that hackers are and the fact that major corporations and conglomerates around the world, with more resources than ours as mere citizens, have been compromised, I am not sure how anyone can be totally confident that their online presence is safe.  Yet we thought we would be protected because the banks assured us that our money was safe with them as long as we took the reasonably requested precautions.  The responses and treatment that we received from TD Bank vs. EQ Bank were polar opposites.

Our initial assumption was that we would get more support from TD Bank because it is a larger, more established entity with more resources, funding and hopefully insurance to deal with such cases.  This could not be further from the truth.  Within 10 minutes of being alerted about the issue, we were across the street at our local branch of TD reporting the security breach, asking for our accounts to be frozen and speaking on the phone with a TD security representative who assured us he would investigate. Responding to his questions, we advised him that we had followed all the user responsibilities that were laid on the TD website.  This was at 3pm in the afternoon.  By the next morning, we received a text message indicating that our claim had been rejected, with no explanation as to why.  We are almost certain that this first response was computer generated and that no one truly investigated our situation.

In the text, we were given the option to further escalate, which we did immediately.  Over two weeks passed before we received a letter in the mail indicating that “upon further investigation, your claim has been rejected again”. Once again there was no explanation, and no live human contacted us directly.  The wording of the letter seemed to imply that this was a form letter. In the letter, we were given an email address to send a third escalation, which again we immediately did.

It was not until early August, a full month after the hack, that we finally had a live human call to speak with us.  She asked all the questions about security protocols once again, which we assured her yet again that we had followed.  She told us that a further investigation would be held and that it would take more than two weeks.  In the meantime, our account was left with so few funds that we were under the minimum balance required for fees to be waived. To add insult to injury, while we were waiting for these lengthy appeals, a fee of $8.95 per month was being deducted.  Yet, there was no way that I was going to deposit more money into a bank that seemed to have no intention of protecting my funds.  After another two weeks and now seven weeks from the initial loss, the agent phoned us back and said unfortunately, we had been rejected again.  I demanded an explanation as to why and was told that because the hack was initiated on our computer and not their systems, TD bore no responsibility.  In essence, unless TD itself was hacked, they would not guarantee the security of your funds.  So basically, their claim that your money is safe is bogus!

Credit card companies routinely reimburse users whose cards are hacked with unauthorized purchases.  I would expect the same protection from my bank.  If it is indeed the established bank policy that it is only responsible for any hacks on its own systems as opposed to unauthorized access to its customers’ accounts, then the security guarantees on the websites are totally misleading and need to be clarified.

We were preparing to file a complaint with the external Banking Ombudsman when we found out that we had to appeal one “final” time within TD before we could escalate beyond the bank.  At this point, it felt like TD was trying to overwhelm us with bureaucracy to force us to give up.  We were able to connect with TD’s “Senior Complaints Department” around the first week of September and our assigned representative promised to do a thorough investigation, which begs the question of what they were doing the previous two months?!?

In mid September, we got a response and an offer.  Because two sums of money were withdrawn from our TD account and the second one happened while we were at the bank requesting our account be frozen, TD would reimburse us for the second (unfortunately smaller) amount.  But TD Bank stood by its policy that that it is NOT responsible for anything that happens to your bank account unless its own servers are hacked to cause the loss.  At this point, we had been fighting for so long with so little success that we decided to accept the offer and be done with it.  We then still had to wait for a bank draft to be issued and it was not until the first week of November (4 months since the hack) that we finally received it and ended this saga.

Through most of this ordeal with TD Bank, we were shown hardly any sympathy, empathy or support.  Needless to say, after this treatment, we no longer trust TD Bank and have closed and canceled all of our TD accounts and credit cards.  We will never do business with TD Bank again.

Now compare this with our experience with EQ Bank who did not reply right away but took two weeks to carefully investigate our case.  By mid July, we got a personal phone call from a security representative who sympathetically apologized for our stress and inconvenience, acknowledged that the hacking dangers are serious and prevalent, then informed us that EQ Bank would be living up to its guarantees and would return all our lost funds. Not only that, but the bank also gave us the interest that we would have accrued had the money not been illegally stolen from us. Then the agent walked us through some steps that we should take to further secure our online accounts. He agreed that while this would lessen the chance of anything like this happening to us again, but there are obviously no guarantees no matter how careful you are.  I have lauded the advantages of EQ Bank in past blogs, but after this experience, we will be loyal customers forever!

After the hack we took extreme measures to further protect ourselves from future exposures and would like to share these steps in hopes that it helps others be more secure.  Some of this may be overkill but after what we went through, better safe than sorry!

• We went to computer virus specialist firms to have our laptop and all other mobile devices including phones and tablets checked for viruses.  The suspicion was that the hack happened on the Windows laptop but scans did not reveal anything obvious, which shows how deep the virus or malware was hidden.  The safest thing to do was to totally wipe out the laptop and reinstall the operating system from scratch.  Luckily, I had a backup of all our personal data, so the impact was less catastrophic although it was still painful to have to reinstall all of my applications.  The mobile devices showed no viruses either.
• We immediately changed and further strengthened the passwords of all our bank accounts, credit cards, emails, WIFI, and all other accounts that might be linked to financial data.  Our passwords are now over 20 characters long each and heavily encoded in a secure area where we can safely look them up.  Even if someone hacked into our secure location, they would need to decode the passwords
• On all of our devices, we have migrated to the Brave browser which is more secure and blocks ads and trackers.  
• Unless the app does not provide all the functionality that we require, we will access our banking information via the bank's mobile app which is generally more secure than its website
• If we must use this browser for logging onto financial websites, we never save the login credentials and clear all cookies after every use
• From our IOS devices, we activated Face or Thumbprint authentication wherever possible
• Wherever possible, we have enabled two-factor authentication, selecting the most secure (less hackable) method of notification in the following priority order:
1. Authentication app like Microsoft Authenticator or push notification to a proprietary app which is tied to a device instead of a cell number or email address
2. Text to cell phone  (*see caveats)
3. Email
• *While text notifications are relatively safe compared to email, they are subject to the new “SIM Swap” scam (google it if you are not aware!).  We called our cell provider and asked for a note to be placed on our accounts saying we do not authorize porting our phone number to a new SIM card
• *Note also that if traveling abroad and buying a local physical or E-SIM for your visiting country, you lose access to your home cell number and therefore any text notifications.
• We turned on every reasonable alert on each of our banking apps to be notified as soon as possible regarding unexpected activities on our accounts
• Note that we had 2-factor authentication for TD Bank but it only sporadically sent an OTP (One Time Password) code as opposed to on every login.  The last time we were verified was in April
• Our Hotmail (also applies to Outlook) email accounts allow us to "go password-less” so that there is no password to hack or regularly change.  Instead, all logins to our email go through Microsoft Authenticator and require a code plus face ID.
• We will no longer ever logon to a financial institution from a Windows computer which has been proven to be more susceptible to hacking.  We will only access financial institutions via an IOS device such as our cell phones or tablets
• We bought a new, dedicated IPAD whose only function will be to access banking apps or banking websites (using the secure Brave Browser with the security measures mentioned above).  
• The IPAD will only access the internet from our secure home WIFI or via hotspot from our cell phones
• When not using the IPAD, we make sure that WIFI access is turned off 
• We continue to regularly logon to our financial accounts from this IPAD and check the listed transactions, contacts, billers and our personal profile information to confirm there were no unauthorized activities or changes
• We no longer leave our laptop connected to WIFI when not sitting at the computer but will logoff or disconnect and go into airplane mode
• We will never connect to WIFI in a public space such as an airport, hotel, or restaurant but will use cell service instead. We will never charge our devices with a public USB port.

As much as we are now forever grateful to EQ Bank, trusting it to look after our money and to have our backs if anything happens, we wish some of its security measures could be improved.

• Instead of account number, the user id to access your EQ accounts online is your email, which is easily hackable. To mitigate this, I created a new dedicated email that will only be used for this bank, as opposed to my primary email that I have used to sign up for innumerable online accounts through the years.  Presumably with less online presence, my new email will be more secure
• Currently EQ Bank only supports text or email for 2-Factor authentications and alerts.  We switched to text as the more secure method but have an issue when traveling abroad when we are forced to be notified via email. I hope that it is in EQ Bank’s plans to add a push notification option in the near future.
  

EQ Bank recently came out with a new product called the “Notice Savings Account” which offers better interest rates in exchange for requiring some number of days’ notice before executing any requested withdrawal requests.  Currently 10-day notice accounts pay 3.5%. (Note: Rates may drop as the Bank of Canada lowers its rates).  Aside from the stellar payout on savings, there is an added security bonus.  Whereas an interact transfer or bill payment occurs immediately, the 10-day notice adds an extra level of security.  If you check your Notice account at least once a week for pending transactions, you would be able to spot and stop any unauthorized withdrawal requests before they are executed.  Now if only there was an alert sent when the Notice account withdrawal request is first made, then such frequent checks might not be required.  This is a new product, so hopefully that will come soon.  I have voiced my desire for this to EQ Bank support.

After this extremely traumatic experience, which included scrambling to pay bills while not having access to our frozen bank accounts for weeks, it is clear to us where our money is protected and where it is not.  EQ Bank lived up to their security guarantee and TD Bank did not, and probably never intended to.  I urge anyone who has funds deposited with TD Bank to think twice and if you still want to stay with them, then make sure you do everything humanly possible to protect yourself, since TD obviously will not do anything for you if you are hacked.

It is quite possible that this is the modus operandi for all the Big Six banks, in which case the government needs to step in to protect its constituents.  The following legislations might help:

• Force the banks to be up front and clear in their “security guarantees” to indicate that you are not protected if you get hacked, despite never divulging your login credentials and having lengthy, hard-to-guess passwords
• Make two-factor authentication mandatory for all financial institutions, as opposed to leaving it up to the user whether or not to turn it on.  It is interesting that more and more non-financial institutions (e.g. Amazon, Booking.com) have unilaterally added 2 factor authentication to their sign on processes while it is still optional at the banks
• Force the banks to take some level of responsibility for online losses due to hacking since currently there seems to be none

I would not hold my breath hoping that the government or banks will step up to protect us, so it is up to you to protect yourself.  While extra steps such as two-factor authentication may seem to be a pain, trust me when I say that it is nothing compared to the real pain of being hacked.