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Explanations, at length.
Written for someone who has never held a fund, with no jargon left undefined — anything unfamiliar is in the glossary.
A guide to dividend investing in Canada
Where the money comes from, what you can realistically expect, why the highest yield is usually the worst one, and which account each holding belongs in. The whole subject in one pass.
How dividends are taxed in Canada
A dividend is not one kind of income. The same payment can arrive as four different things, each taxed on its own path, and the account you hold it in decides which of those paths applies.
TFSA vs RRSP for dividends
The two accounts shelter income in opposite directions, and dividends interact with each one differently. Which holding goes where is decidable, and getting it backwards has a running annual cost.
What actually happens when you receive your first dividend
Three dates decide whether you get paid, the share price drops the morning you qualify, and the amount that lands is rarely the one you calculated. None of that is a mistake.
Monthly vs quarterly dividends — does the schedule matter?
Paid twelve times a year instead of four sounds meaningfully better. The compounding advantage is real, and it is far smaller than most people assume. What the schedule signals matters more.
What is a covered call ETF, and where does the yield come from?
Double-digit yields on blue-chip holdings look like something for nothing. The fund is selling away its upside for cash, and the trade has a specific shape — good in some markets, quietly costly in others.
Living off dividends in Canada — what the number actually has to be
The capital required is larger than a yield calculation suggests, because the income has to survive inflation and tax as well as arrive. Here is the arithmetic, and the failure mode that catches people.
RRIF minimum withdrawals — the schedule you cannot opt out of
An RRSP has to become something else by the end of the year you turn 71, and from the year after, a prescribed percentage comes out annually whether you need it or not. Here is the schedule and what it does to a dividend portfolio.
The OAS clawback, and why dividends trip it early
Old Age Security is recovered at 15 cents on the dollar above an income threshold. The threshold is tested against net income — which counts the grossed-up dividend, not the amount that reached your account.
Which account to draw down first
The conventional order — taxable, then RRSP, then TFSA — is a default rather than an answer. Four things override it, and for a dividend investor two of them usually do.
Foreign withholding tax beyond the US
The 15% US rate and its RRSP exemption are well known. Everything else is not — other treaties, the fund-level layer, and the one case where an account that shelters income makes the tax unrecoverable.
Should I borrow to max out my TFSA?
Borrowing at 4.45% to collect 6% inside a tax-free account looks like a clean spread. One rule removes most of the advantage, and three others decide whether what is left is worth the risk.
T3 and T5 slips — which you get, and when
Corporations issue T5s in February. Funds structured as trusts issue T3s at the end of March, and amend them. If you hold Canadian income ETFs, filing in early March means filing an amended return.
The superficial loss rule
Sell at a loss and buy back within 30 days and the loss is denied — not deferred to a better year, denied for that year and added to the cost base instead. A DRIP can trigger it without you placing a trade at all.
How DRIPs actually work in Canada
The version your discount broker offers buys whole shares only, leaves the remainder as cash, and creates a taxable acquisition every time it runs. The version the company offers is different, and often better.
Where eligible and non-eligible dividends come from
The difference is not a choice the payer makes. It follows from the rate of corporate tax already paid on the profit, which is why public companies pay one kind and a small business corporation usually pays the other.
The FHSA — the account that does both things
A First Home Savings Account gives an RRSP-style deduction going in and TFSA-style tax-free withdrawal coming out. For a dividend investor there is one trap, and it is the same one a TFSA has.