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Page2THEHALTONHILLSH0MESTYLE Saturday Octobcr27 1990 Investor Protection Fund sets industry standards By DIANNE Business Analyst Thomson News Service If you have cash stock or other securities sitting in an account with an investment dealer you will be pleased to hear about the Canadian investor Protection Fund This is the brokerage industry s version of deposit insurance You also will want to know about its limits The new fund replaces the Contingency Fund which was not sufficient to meet the needs of to day s more dangerous marketplace Stockbrokers have until the end of the month to give clients tion pamphlets about the new pro tection The fund has million in cash and a 40milhon line of credit The money comes from member dealers It will cover up to of your cash held by an investment dealer This is the same as the Canada Deposit Insurance Corp covers at banks and trust com panies LIMIT Coverage of cash plus securities will be limited to a maximum of per investor This is something to bear in mind when do ing business with an investment dealer It is not unusual for investors to have a big sum of cash waiting for the right moment to bu And man investors hae more than in stocks bonds or other securities Dianne Maley Such things as registered retire ment savings plans and trusts are covered separately to a maximum of Thus if you had 000 in an cash and in stocks would be fully covered Part of the new plan requires the CIPF board to keep close tabs on investment dealers It will conduct supnse audits on member firms for example It will help set standards for capital adequacy and financial reporting No big investment dealer has col lapsed in recent times This makes it hard to sa whether the funds pro tection is enough It is impossible to predict the outcome of a big bankruptcy if it were ac wrongdoing by in siders The fact that the fund is financed by the itself rather than government and ultimateK the tax payers is a strong incentive for members to police each other The failure of one would hurt them all financially It would also erode public confidence in the industry plunging it into crisis Naturally dealers are eager to reassure clients that their money is safe Don Leslie president of the is busy explaining to in vestors how fund works Many Canadians prefer to keep their monev in the bank COMPETITORS Indeed with bankers moving into the territory once dominated by in vestment dealers it is getting harder for the latter to find new business Most of the big banks offer discount stock trading They manage and sell their own mutual funds Thev sell Dealers meanwhile are stepping into the role of financial planners But thev are finding it difficult Financial planning is as time- consuming as it is comprehensive Stockbrokers disguised as financial planners will have a bias toward selling stocks mutual funds and other things that generate good com ssion Still the planning side of the brokerage business will grow So will the size of individual accounts This makes it all the more urgent for investors funds to be safe In the end the s monitoring role will be as important if not more so than its coverage Weather records are useful In September a British armv lieutenant set up a weather station on the grounds of what later became the University of Toronto Todav his observations rank as the oldest in Canada continuous 1d0 vear old weather record a record that climate experts sa is becoming more useful everv year There are some ven practical things you can do with old weather data comments David Phillips a with Environment Canada Atmospheric ment Service Archived records can help make life safer more comfortable and more pro fitable ALS has close to three billion observations stored in its com puters the product of more than active and onceactive weather stations In addition it has countless cloud and radar photos plus data from remotesensing satellites Climate information on file en compasses dailv temperature wind and precipitation readings from across the countrj he says It also includes at least a dozen weather elements that never make it on the airwaves things like soil moisture lake levels and snow pack conditions The data helps staff respond to a steadilv increasing demand for climate information In 1990 alone the service expects to process more thanibo queries Queries range from the mundane to the sophisticated savs Phillips Brewing important for tea taste NO Brewing tea is a simple procedure but following a few basic steps can make all the difference in how that tea tastes For a better cup of tea follow these directions Try to use a thin cup preferably bone china since too thick a recep tacle does not fully compliment the taste Do not use the same cup for other hot beverages as the tea can be tamed by their flavours Use perforated tea bags when possible The quality and flavour is often than loose tea or ordinary tea bags since the former may be too strong while the latter may trap some of the flavour in the perforated bag Warm the teapot or cup with hot water to ensure that when the water touches the tea it stays at the boiling point and aids infusion Use freshly boiled water Never leave stale water in the kettle to boil again Use fresh water from a tap that is run for seconds before filling the kettle Let the tea stand in a pot for no more than four minutes and in cup for no more than a minute If you use new round bags let them stand in a pot for approximately three minutes and to 0 seconds in a cup The vast majority involve helping school teachers Sunday sailors and others schedule outdoor events Somebodv may want to know when to expect ideal ski conditions in Banff he suggests In other words when are five hours of sun shine a suitable snow base and a minimum wind chill factor most likely to happen at once For such a request we could ask our computer to calculate the fre quency of these conditions Based on vears of records it might recom mend the last week of ebruary Archived climate data is an in valuable resource for farmers he adds It can help them make better decisions on almost every aspect of farming from choosing suitable crop varieties to deciding when to plant or harvest Other beneficiaries include chitects and engineers who often have to climate extremes into account when designing structures Likewise someone planning the construction f a large water reser voir in northern Ontario might wish to know whether there will be enough water to fill it in dry years Archived weather records have been used to monitor climate change says Phillips for example long term records serve as ben values comparing the rate and extent of global warming However the causes of long term climate and weather changes are complex and diff cult to sort out As Phillips points out we know that Toronto is now about degrees Celsius warmer than it was one hun dred years ago But most of that was caused by urban growth not glohdl warming Silence News Survey Completed Wednesday October MORTGAGE RATES ANNUAL INTEREST SIX MONTH ONE YEAR TWO YEAR THREE YEAR FOUR YEAR FIVE YEAR TRUST COMPANIES Canada Trust NA 13 13 13 13 Municipal Trust 13 13 13 13 50 13 Trust 13 25 13 13 25 13 25 CHARTERED BANKS Bank of Commerce 13 50 13 13 13 13 13 Bank of Montreal NA 13 13 25 13 13 1320 Bank of Nova Scotia 13 13 13 25 13 Royal Bank 13 13 13 13 13 Toronto Dominion 13 13 13 25 13 13 This survey was prepared to help the Herald Homestyle readers track weekly Bank and Trust Company rates Massive misinformation about the GST NO One of the hottest issues on the minds of Canadians these days is the federal government s intention to introduce a Goods and Services Tax GST on January Despite months of cross Canada debate there is massive formation afloat about the GST which is a replacement tax for the current Federal Sales Tax and will be applied on a wide range of goods and services at the consumer level The purpose of this piece is to outline basic information that con sumers in the housing market should know if indeed the Goods and Ser vices Tax becomes the law of the next New Year Day NEW HOUSING The basic rate of the Goods and Services Tax will be 7 per cent Recognizing the special and tial nature of housing the govern ment has introduced a rebate pro gram for buyers of newly constructed homes including con dominiums which will be used as a principal residence that is owner occupied Provided their new home costs or less these buyers will receive a GST rebate pegged at 2 per cent of the purchase price to a maximum of In other words they will pay a on only 5 per cent which the government calculates as being the amount of federal Sales Tax hidden in the cost of the new house As we said the GST will replace Federal Sales lax rebate program will be ad ministered by the home builder and will be available at the time of pur chase New homes priced in excess of will not receive a GST rebate These conditions apply in cases where the new home is purchased from a builder who supplies both the land and the house as part of a single transactions Where a purchaser quires the land separately from the house and undertakes all or part of the construction the amount of the GST rebate will depend on the total value of house and land together In addition for these owner built homes the rebate will depend on whether GST was paid on the land at the time of its acquisition The new home rebate program under the Goods and Services Tax will cost the government million and is expected to cover about per cent of new homes the transitional period after the GST is introduced there will be another form of rebate available to purchasers of single family homes which were essential ly completed but unsold prior to January 1 This is a rebate of the F ederal Sales Tax content estimated to be part of the house price If the purchase of the new home under these conditions closes before February the purchaser will be eligible for a rebate equal to two- thirds of the estimated FST The rebate will be reduced to one third of estimated for sales closing on or after February and before April One things owners of existing homes should know is that there will be Goods and Services lax at 7 per cent charged on a number of vices traditionally associated with the buying and selling of residential property Real estate fees legal and appraisal fees charges payable to moving companies all will attract the Thin article in suppled by Real I- slate for the benefit of consumers In the housing market For more linn on the ST and housing contact your local a it a real estate board or write to The Ileal stale Association Manager Govern ment Industry It lions Queen Street Ottawa KlRSAI