National Bank has become one of the first of the big banks to make the new First Home Savings Account (FHSA) available to its clients.
The bank made the announcement on Monday, claiming it was “among the first” to offer the new account, which the federal government officially made available as of April 1.
The new registered plan allows first-time homebuyers to save up to $40,000 for the down payment on their home on a tax-free basis. Similar to the Tax-Free Savings Account (TFSA), funds in the account can be placed in a variety of investment vehicles, and can then be withdrawn tax-free as long as the funds are used for a qualifying first-home purchase.
“Every dollar counts when purchasing a first home, and we believe this product will have a positive effect by encouraging people to save early,” a spokesperson for National Bank told CMT. “It was a priority for us to offer this product as fast as possible to our clients. We are already seeing a lot of interest.”
The account was first announced in the federal government’s 2022 budget and was promoted as being available to first-time buyers starting on April 1, 2023. However, all of the Big 6 banks confirmed to CMT earlier this month that they weren’t in a position to offer the new account to clients likely until later in the 2023 tax year.
Several said they were still working to finalize the logistics of offering the account to clients, including obtaining the required government authorizations and awaiting tax reporting guidelines from the Canada Revenue Agency.
$1.7B takeover of Home Capital one step closer
Smith Financial Corporation’s acquisition of Home Capital Group is one step closer to completion after receiving the green light from the Competition Bureau.
In a release on Monday, Home Capital Group announced the deal had received a “no-action” letter from the Commissioner of Competition, meaning the Bureau will not take any action to attempt to block the deal.
Home Capital Group announced in November that it entered into a definitive agreement to be acquired by a subsidiary of Smith Financial Corporation, a company controlled by billionaire Stephen Smith, co-founder of First National Financial.
Under the terms of the deal, Smith Financial Corporation would acquire Home Capital at a purchase price of $44 per share, valuing the company at $1.7 billion.
In Monday’s release, Home Capital said the deal is expected to close by mid-2023. Under the terms of the deal, if it closes after May 20, 2023, the purchase price will rise to the equivalent of roughly $0.25 per share for every three-month delay.
Regulatory approvals are still required under the Bank Act and the Trust and Loan Companies Act.
BoC’s Macklem says rates may need to stay “higher for longer”
Bank of Canada Governor Tiff Macklem reiterated last week that interest rates may need to stay “higher for longer.”
He made the comments while talking to reporters in Washington while attending the annual International Monetary Fund meetings.
He also revealed that members of the Governing Council had discussed raising interest rates at its April 12 policy meeting. “When I say that we’ve discussed whether we’ve done enough, that does imply that one of the things we discussed is whether we need to raise rates,” he said.
In the end, the council left rates unchanged at 4.50%.
Consumer confidence rises to new high
Consumer confidence has risen to its highest level since June 2022, according to a weekly survey by Bloomberg and Nanos.
The Bloomberg Nanos Canadian Confidence Index (BNCCI) rose to 50.22 up from 48.83 last week and a low of 37.08 reached in April 2020.
The Expectations Index, which is based on surveys for the outlook for the economy and real estate prices, rose to 43.69 this week compared to 42.26 four weeks ago.
