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Proudly treating Canadians differently


Over 200 years later, Ben Franklin’s quip about the certainty of death and taxes is sadly still true. We can’t help you cheat death, but we can help a little bit with your taxes – if you live in the west anyway.

Did you know fund companies are required to charge harmonized sales tax (HST or QST) to investors from the six provinces that have it (Ontario, Quebec, New Brunswick, Newfoundland, Nova Scotia and Prince Edward Island)? Thing is, the majority of investors west of Ontario (in Alberta, British Columbia, Manitoba, Saskatchewan, Northwest Territories, Nunavut and the Yukon) are also forced to pay the tax when they really shouldn’t have to. Fund companies apply it across the board because it’s simply easier to treat everyone the same. Nor are you likely to hear investors living in HST provinces complain that their investment costs are being subsidized by their westerly counterparts.

We’re having “Nunavut”!

At EdgePoint, we continually strive to build a seawall against excess costs for our clients. It’s why our fees are among the lowest in Canada. Our operating expenses have only decreased thanks to efficiencies we’ve gained, but it wasn’t until we launched our non-HST series in 2010 that we discovered another way to help investors in provinces and territories west of Ontario.

Other fund companies have had non-HST products in the past, but we suspect they found it created a mountain of paperwork and today, according to our research, we’re the only company left to offer a non-HST option across our entire lineup. Sure, it’s more work for us, but putting client needs first leads us to do things like charging tax only when necessary.

It adds up

An additional 0.22% to 0.40% may not seem like enough to cause a stampede, but extra fees eventually grow from sea to sky. Over 15 years, the differencei on a $50,000 investment growing 10% per year is between $6,423 and $9,956 (net of fees). In 30 years, an investor could potentially save more than $62,000 in taxes, an amount big enough to spot as a storm across the Prairies!

Impact of non-HST savings on a
$50,000 investment with 10% annual growth

A chart showing the portfolio value difference over 15 and 30 years of  HST versus non-HST series for the four EdgePoint Portfolios assuming a $50,000 investment with 10% annual growth.  EdgePoint Global Portfolio 15 years: $10,379 30 years: $62,282  EdgePoint Global Growth & Income Portfolio 15 years: $8,919 30 years: $54,635  EdgePoint Canadian Portfolio 15 years: $7,096 30 years: $42,910  EdgePoint Canadian Growth & Income Portfolio 15 years: $5,350 30 years: $33,053

Avoiding, not evading

Tax evasion took down Al Capone, so we aren’t suggesting people not pay their taxesii. What we are suggesting is that, when it makes sense, minimizing investment costs like taxes means you’ll hold onto a lot more than just a few cents over time.

iThe difference takes into account discounts that come from the non-HST series and lower EdgePoint management and trading expenses.
iiIncluded for informational purposes and so that you can’t name us as an accessory in a tax evasion case.

Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus and Fund Facts before investing. Copies are available from your financial advisor or at www.edgepointwealth.com. Unless otherwise indicated, rates of return for periods greater than one year are historical annual compound total returns net of fees including changes in unit value and reinvestment of all distributions, and do not take into account any sales, redemption, distribution or optional charges, or income taxes payable by any securityholder, which would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. This is not an offer to purchase. Mutual funds can only be purchased through a registered dealer and are available only in those jurisdictions where they may be lawfully offered for sale. This document is not intended to provide legal, accounting, tax or specific investment advice. Information contained in this document was obtained from sources believed to be reliable; however, EdgePoint does not assume any responsibility for losses, whether direct, special or consequential, that arise out of the use of this information. Portfolio holdings are subject to change. EdgePoint mutual funds are managed by EdgePoint Investment Group Inc., a related party of EdgePoint Wealth Management Inc. EdgePoint® is a registered trademark of EdgePoint Investment Group Inc.