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6- The Oakville Beaver Weekend, Saturday March 22, 2008 www.oakvillebeaver.com The Oakville Beaver 467 Speers Rd., Oakville Ont. L6K 3S4 (905) 845-3824 Fax: 337-5567 Classified Advertising: 905-632-4440 Circulation: 845-9742 The Oakville Beaver is a member of the Ontario Press Council. The council is located at 80 Gould St., Suite 206, Toronto, Ont., M5B 2M7. Phone (416) 340-1981. Advertising is accepted on the condition that, in the event of a typographical error, that portion of advertising space occupied by the erroneous item, together with a reasonable allowance for signature, will not be charged for, but the balance of the advertisement will be paid for at the applicable rate.The publisher reserves the right to categorize advertisements or decline. Editorial and advertising content of the Oakville Beaver is protected by copyright. Unauthorized use is prohibited. Commentary NEIL OLIVER Publisher DAVID HARVEY General Manager JILL DAVIS Editor in Chief ROD JERRED Managing Editor DANIEL BAIRD Advertising Director RIZIERO VERTOLLI Photography Director SANDY PARE Business Manager Metroland Media Group Ltd. includes: Ajax/Pickering News Advertiser, Alliston Herald/Courier, Arthur Enterprise News, Barrie Advance, Caledon Enterprise, Brampton Guardian, Burlington Post, Burlington Shopping News, City Parent, Collingwood/Wasaga Connection, East York Mirror, Erin Advocate/Country Routes, Etobicoke Guardian, Flamborough Review, Georgetown Independent/Acton Free Press, Harriston Review, Huronia Business Times, Lindsay This Week, Markham Economist & Sun, Midland/Penetanguishine Mirror, Milton MARK DILLS Director of Production MANUEL GARCIA Production Manager CHARLENE HALL Director of Distribution ALEXANDRIA ANCHOR Circ. Manager WEBSITE oakvil ebeaver.com The Oakville Beaver is a division of Guest Columnist Plan not the best plan Garth Turner, Halton MP he minister of finance, Jim Flaherty, says the centerpiece of his new budget is a tax-free savings plan for Canadians. Does it measure up? Who can make the best use of this? And how does it differ from the RRSP? This was a plan I pitched Flaherty on in April, 2006. As a Garth Turner Conservative MP, I delivered to the guy a massive pre-budget report that more than 10,000 Canadians had helped me write. The after-tax savings account was one of 11 recommendations I made (and a family tax return, income-splitting for seniors, means-testing the child care payment, balanced budget legislation etc.), and I pointed out such a scheme has worked successfully in the US and the UK. I supported the idea because it makes sense for many Canadians as a supplement to the RRSP ­ which is how I envisioned it, with a restriction on withdrawals before retirement. Yet the new Conservative plan allows people to take money out at any time, for any reason, which changes it from a tool to help diffuse our coming retirement time bomb to another way to fund consumer spending. That is a fatal mistake. Here's how this kind of vehicle (called a Roth IRA in the States) works: You put money aside, up to a yearly threshold (to be $5,000), in a special account and invest it in anything you want ­ stocks, bonds, GICs, mutual funds etc. Any growth on that investment accumulates free of tax (like an RRSP). But (unlike an RRSP) there's no tax deduction for making the contribution. You can withdraw funds without triggering tax. Missed contributions can be made up in future years, and are not affected by the withdrawal. In Question Period last week several Conservative MPs praised this as a financial tool that will enrich most Canadians. Examples cited ­ single moms who now enjoy tax-free savings growth, and young couples squirelling away for their first home. Hearing this made me very happy MPs do not give financial advice (well, most MPs, anyway). The reality is, in almost every instance one can imagine, an RRSP is a far superior choice than the new TFSA. A single mom can get a big chunk of her income taxes back by sticking money in an RRSP, whereas she'd get nothing from a TFSA. Ditto for the young couple, who can contribute savings to an RRSP, get a big tax refund, then withdraw their RRSP money ­ add the refund in ­ and make an even larger downpayment on a house. All completely tax-free, under the Home Buyer's Plan. Sadly, given the way Ottawa has chosen to build this thing, there is only one group of people giddy with delight at getting a new tax shelter, and that is the affluent. Since most Canadians do not have RRSPs, and since we contribute only seven per cent a year of what we are allowed, that remains the best savings vehicle. For the rich, it's another story. Those people in retirement who have accumulated money find all RRSP withdrawals are taxed at the maximum rate ­ no advantage to having sheltered the funds. People with good pensions (like MPs) have little use for RRSPs, for the same reason. But for these folks, the TFSA is a fat gift. Suddenly, they can invest $5,000 a year in a tax-free account yielding capital gains, which will escape Canada Revenue Agency's icy grip. Then they can withdraw this without triggering any other tax. The national savings rate is zero. The average Canadian owes $116 for every $100 in assets they own. Household debt has never been this high, and mortgage debt has tripled over the past decade. How is a savings plan supposed to save us, when we have no money to save? If we did have cash to set aside, we'd be smarter to do it in an RRSP, and get half back as a tax refund. Remember, $3,000 plunked into a registered retirement plan will yield up to $1,500, courtesy of your fellow taxpayers. Think hard before you leap into this tax-free account. This one's also free of common sense. IAN OLIVER Group Publisher Media Group Ltd. T Canadian Champion, Milton Shopping News, Mississauga Business Times, Mississauga News, Napanee Guide, Newmarket/Aurora EraBanner, Northumberland News, North York Mirror, Oakville Beaver, Oakville Shopping News, Oldtimers Hockey News, Orillia Today, Oshawa/Whitby/Clarington Port Perry This Week, Owen Sound Tribune, Palmerston Observer, Peterborough This Week, Picton County Guide, Richmond Hill/Thornhill/Vaughan Liberal, Scarborough Mirror, Stouffville/Uxbridge Tribune, Forever Young, City of York Guardian RECOGNIZED FOR EXCELLENCE BY: Ontario Community Newspapers Association Canadian Community Newspapers Association Suburban Newspapers of America THE OAKVILLE BEAVER IS PROUD OFFICIAL MEDIA SPONSOR FOR: United Way of Oakville TV AUCTION Today we offer no practical tips for surviving Earth Hour O n Saturday, March 29, from 8-9 p.m., I'll be in the dark. Now, people who know me might suggest that I'm in the dark most of the time, but on this particular day, for that particular hour, I'll truly be in the dark as we turn off all our lights in honour of Earth Hour. In case you are in the dark, Earth Hour was conceived by the World Wildlife Fund Australia to raise awareness of global climate change, and to show that by working together people can make a difference. The cool concept became a reality last March 31, as 2.2-million well-intentioned Aussies, and 2,100 businesses in Sydney, flicked off their lights for one hour, reducing the city's energy consumption by 10.2 percent, the equivalent of taking 48,000 cars off the road for 60 minutes. This year, Earth Hour has gone global with major cities around the world participating, including Tel Aviv, Copenhagen, Manila, Melbourne, Chicago, Toronto, Ottawa, Vancouver, Montreal and the megalopolis of Moffat (pop: 19) where yours truly happens to reside. Earth Hour's lofty goal is to reduce carbon emissions to the equivalent level of taking 480,000 cars off our roadways for an hour. Now, as someone who loves the planet, and who is frequently in the dark, I'm here to help you embrace (or, at very least, endure) Earth Hour. You see, living in the country, I have more than my fair share of experience living without lights. Power outages are a way of life up here in the middle of nowhere. Rarely does a month go by where we don't unexpectedly find ourselves in the dark, without lights, heat (or air conditioning Andy Juniper in the summer), and without running water (actually, we fast learned that once the power goes kaput, you still get one free flush on each toilet before you run out of primed water, and luck). Now, in the case of Earth Hour, we will have the distinct advantage of knowing when darkness will descend (since we'll be the ones purposely doing the darkening). Of course, the biggest problem with power outages is the lack of advance notice. Typically, they come just when you're sitting down to watch your favorite TV show, or when you have a roast in the oven, or, in my wife's case, when you're halfway through lathering your locks in the shower. One night last week our power died for no apparent reason just as we were preparing dinner (all food prep stopped cold!). While I doubt we will ever enjoy a power outage, we have come to approach them with a certain co-operative pioneer spirit: one of us blindly stumbles off in search of candles, another staggers in search of matches, while another tracks down any of the innumerable flashlights with dead batteries that we keep handy about the house. Overall, we've come to enjoy the feeling of roughing it, of getting back to nature the way God intended. We like sitting around the lit candles, wondering what to do with ourselves until our beloved power returns, wondering how long it will take for the house to completely cool off and for us to freeze to death. We like complaining together in loud, squawky unison until, like last week, one of us suggests a survival run to a (typically well-lit) Starbucks. Okay, so maybe I don't have a whole lot of practical advice on how to embrace (or, at least, endure) Earth Hour. But I have faith that you'll take part. Because it's our planet, it's only one hour, and it's important. Like flossing your teeth and eating your vegetables. Andy Juniper can be visited at his Web site, www.strangledeggs.com, or contacted at ajuniper@strangledeggs.com.