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money

Retirees rack p debtStefania Moretti

QMI Agency

So much for leaving a littlesomething behind for lovedones.

Older Canadians are grow-ing their debt loads faster thanany other age group and retir-ing more indebted than ever,according to a new report by TDEconomics.

Significant household debthas been piling up for all ages inCanada in both absolute termsand relative to income since2007.

While younger Canadianscontinue to record the heaviestdebt burdens, its the 65-and-upage group that has been rakingdebt up quickest, the reportbased on data compiled by IpsosReid said.

In fact, retirees and older workers have been growingdebt at three times the averagepace, said TD vice-president anddeputy chief economist DerekBurleton.

While older Canadians tendto carry lower debt balances andhave larger assets to falls backon, the trend is still worrisome,

he said.The fact that Canadians areentering retirement with moredebt raises questions about theirlong-term financial security.

Instead of hitting the spendingbrakes as paycheques shrink inretirement, older Canadians arehitting the debt accelerator.

Much of this debt accumula-tion reflects investment in realestate as low interest rates andthe promise of big returns lureall kinds of buyers back into themarket.

savings: TD vice-president says seniors nancial security could be threatened

One-in-five Canadians havefallen prey to a marketing scameither over the phone or online,according to a new Visa Canadareport.

Visa polled more than 1,000Canadians for its second annualdeceptive marketing surveyand found 77% of respondentsclaim to be aware of scams thatinvolve hidden clauses resultingin recurring payments or addi-tional fees, yet 21% have been

victimized.More than 60% said theyve

shopped online in the past12 months, but of those onlyone-quarter read the entireterms of conditions of sale

while 27% read nothing at all.Although the majority of

retailers are legitimate and trust-worthy, its vital that consumersreview the terms and conditionsof an offer before they commit tobuy remembering the adagethat if it seems too good to betrue, it probably is, said GordJamieson, head of paymentsystem risk at Visa Canada.

Visa also found a whopping94% of credit card holders reviewtheir statements at the end ofevery month for unauthorizedcharges. Shoppers should beon the lookout for clauses thatbind them to ongoing payments,complicated cancellation andreturn policies and pre-checkedconsent boxes whereby consum-ers who do not actively opt-outof an offer are automaticallycharged for it.

QMI Agency

economy: Canadian trade expected to under pe rorm

Canadas trade portfolio isexpected to under-perform com-pared to rest of the world overthe next 15 years, according to anew, sobering report by HSBC.

Canadian trade is expectedto grow by nearly 59% by 2025

whereas world trade will grow by73%, the bank said.

It is predicted that Canadasgrowth will be modest, fuelledby expanding trade routes withChina, the report stated, addingthat Canadas share of worldtrade will fall from 2.8% in 2010to 2.2% in 2020.

C a n a d i a n m e r c h a n d i s etrade volumes are projected tohit $1,075 billion in 2025 from

$758.3 billion in 2010.Global volumes, meanwhile,

are seen hitting $43.6 trillion,compared to $27.2 trillion today,mainly on growth in Egypt, India,China, Indonesia and Brazil.

In the shorter term, Canadastrade growth is expected toslow by more than 10% over thenext 12 months after a strongrebound last year.

The bank stated that whileCanada fared well in the 2008crisis largely because BayStreet was shielded from thefinancial turmoil the countryhas proved less resilient as therecovery has started.

Economists are now forecast-

ing that Canadas overall eco-nomic growth to come in at 3.9%in 2011, down from more than5% in 2010.

Only the automotive sector inCanada has managed to reachpre-crisis levels, HSBC said.

Still, Canada remains animportant hub for commodi-ties with routes beyond the U.S.and to places like Norway andRussia where export values areseen growing to $4.9 billion and$5.7 billion by 2025.

New trade corridors are alsoopening up with Asia, the reportsaid.

QMI Agency

Growth to be modest,

HSBC report says

regulator: Agency looks at 4,400 complaints

Canadians

ticked atfinancialinstitutions

Mortgage and credit-cardcompanies managed to tickCanadians off most this past

year, according to an indepen-dent federal regulators annualreport.

The Financial Consu mer Agency of Canada (FCAC), which regulates retail associa-tions, trust and loan companies,insurance companies, banks andpayment card network opera-tors, sifted through some 4,400general consumer complaintsthis past year and investigated860 of them for potential com-

pliance violations, up from 821last year.

In most cases, institutionstook the steps needed to get backin line with the law.

In 36 cases however, the FCACwas forced to undertake variousenforcement actions resulting in$175,000 in fines.

The top issues were mort-gage penalties, cost of borrow-ing related to credit cards andcomplaints over credit-card debtcollection.

On Tu esday, lawyers inVancouver announced that theyhave launched a Canada-wideclass action lawsuit against CIBCMortgages Inc. over the way theinstitution calculates penaltiesfor mortgage prepayment oncontracts dating to 2005.

business: Investors ofer $22 a share or retail chain

Ares, CPPIB pay $1.6B for 99 Cents Only Stores Ares Management LLC and

Canada Pension Plan InvestmentBoard agreed to buy 99 CentsOnly Stores for about $1.6 bil-lion in cash, topping a rival offerby private equity firm LeonardGreen & Partners.

Ares Management is team-ing up with the members of theSchiffer/Gold family, who arethe biggest shareholders in thecompany, to offer $22 a sharefor the retailer, compared withLeonard Greens $19.09 bid.

The latest offer represents a32% premium to the stockstrading levels prior to LeonardGreens offer, which was madein March.

Reuters

business: BlackBerry service disrupted in Latin America

Jaguar calls for new leader, breakup of RIMTORONTO A growing mass

of Research In Motion inves-tors are backing calls for a saleor breakup of the companythat makes the BlackBerry and

wants a new, transformationalleader at its helm, according to

a shareholder leading the drivefor change.

Jaguar Financial Corp. said onTuesday that at least 8% of stockholders are behind its campaignfor a shakeup, and that percent-age could keep rising.

Meanwhile, disruptions toBlackBerry services spread toLatin America on Tuesday, morethan a day after users in Europe,the Middle East and Africa.

Reuters

Consumer complaints

Credit 237

922

779

414

273

273

75

173

374

794

13

21

3

47

7

Credit cards

Deposit accounts

FCAC

Financial institutionsor other companies

Financial literacy

Insurance

Investments

Lines of credit

Loans

Mortgages

Payday loans

Miscellaneous

PublicationsReferrals to other

departmentsor organizations

Number of complaints received by Financial Comsumer Agencyof Canada, April 1, 2010, to March 31, 2011

Total

complaints4,405

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VISIT

_ _ _ _

The suit alleges that CIBC(and its subsidiaries FirstLineM o r t g a g e s , H y p o t h e q u e sFirstLine, Presidents ChoiceF i n a n c i a l a n d C h o i x d uPresident Services Financiers)provided, for certain mortgagecontracts, terms and condi-tions that gave the institutioncomplete discretion when itcame to calcu lating penal-ties in the case of mortgageprepayment.

An FCAC spokesman said she

could not disclose whether theregulator has investigated CIBCover its mortgage prepaymentpenalties in the past.

Aside from its enforcementduties, the FCAC spent some ofits $12-million budget expandingits financial literacy programsand established a new researchfunction to deepen its abilityto address emerging consumerissues and trends.

QMI Agency

And while debt used to fundasset growth is usually desirable,those aged 44-64 and 65+ are theonly groups where debt growthhas outstripped asset growthover the last decade, Burletonsaid.

Seniors are spending on luxuryitems too. The numbers suggestthey have either increased thenumber of cars they own or aredriving more expensive cars.

If the debt trend amongseniors were to continue, it could

threaten their standard of livingand exacerbate volatility in assetmarkets, pension fund deficitsand declining employment pen-sion coverage, the bank said.

stefania.moretti@canoe.ca

QMI AGENCYSource: HSBC

Canadas trade forecastAccording to a report released by HSBC, Canadas trade portfolio

is expected to under-perform over the next 15 years.

0 1 2 3 4 5 6 7 8

2011-20

2011-25

2021-25

2016-20

2011-15

Timeperiod

Forecast real trade growth, Canada and World 2011-25

% Wo rl d % C an ad a

Fraud

1 in 5fall preyto scams

Percent change from 2002-2011, by age group

0%

50%

100%

150%

200%

DebtAssets

18-24 25-44 45-64 65+