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The money and other benefits flowing to individuals, firms and other groups. For the purposes of the personal income tax, income is specifically defined to exclude certain types of income, such as an amount received from a life insurance policy following someone's death. Income includes wages, interest, dividends, realized capital gains, private and public pension payments, rents, royalties, net business income and self-employment income. For more information, visit the Canada Customs and Revenue Agency Web site.
Income-testing occurs when the level of a benefit is based on the recipient's income level. As net income rises, income-tested benefits, such as the age credit, decrease. For example, if net income rises from $29,000 to $30,000, the amount of the age credit received will be lower by about $105.
A statistical measure of the state of the stock market or economy. There are indexes that measure changes in the prices of consumer goods and services (e.g., consumer price index) and others that measure the value of groups of stocks or bonds (e.g., stock market index).
Index-linked deposit (ILD)
A term deposit that pays a rate of return based on the performance of one or more financial indicators such as the level of a stock market index (e.g., Toronto Stock Exchange [TSX] 60 or 35) over the term of the deposit. It differs from a savings product that pays a fixed rate of interest and assures a guaranteed return on the investment, such as a traditional GIC or term deposit. With an ILD, the original deposit is guaranteed but any return is not. An example is a market-linked GIC: if the stock market rises over the term of the investment, the investor benefits from the rise up to a maximum return. If there is no rise in the stock market, the original deposit remains fully protected but the investor will receive no return (i.e., no interest is payable).
Industrial Research Assistance Program (IRAP)
IRAP promotes the diffusion of technology and is a valuable national program for small businesses. For more information, visit the National Research Council of Canada IRAP Web page.
The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period of time, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a percentage increase in the consumer price index (CPI). Canada's inflation target, as set out by the federal government and the Bank of Canada, aims to keep inflation within a range of 1 to 3 per cent. If the rate of inflation is 10 per cent a year, $100 worth of purchases last year will, on average, cost $110 this year. At the same inflation rate, those purchases will cost $121 next year, and so on. For more information, visit the Bank of Canada's Inflation Calculator or Statistics Canada's Consumer Price Index Web page.
A knowledge-based economy dominated by knowledge-based industries such as computers, pharmaceuticals and consulting services.
Input Tax Credit
The input tax credit mechanism under the goods and services tax (GST) effectively provides a refund to registered businesses of all GST paid on inputs involved in the production and sale of taxable goods and services. In this manner, the input tax credit minimizes the amount of indirect tax embedded in the price of Canadian-produced goods and services, making them more competitive internationally and in the domestic market.
Government tax and regulatory powers used to influence market behaviour.
A request for payment of benefits under the terms of an insurance policy.
A person or party requesting payment of benefits under the terms of an insurance policy.
Insurance Companies Act
Federal legislation governing the structure and operation of federally incorporated or registered insurance companies in Canada.
A written document that serves as evidence of insurance coverage and contains pertinent information about the benefits, coverage and owner, as well as its associated obligations.
National organization of financial institutions and technology service providers, allowing Canadians convenient access to their deposit accounts through the shared network of automated banking machines and Interac Direct Payment, the debit card service.
Interac Direct Payment
A means of paying for goods and services with a debit card that authorizes transfer of the funds, via the Interac Direct Payment network, directly from the purchaser's account to the merchant's account.
The cost of borrowed money – the price that lenders charge borrowers for the use of the lender's money. Interest is paid on deposits because they are, in effect, loans to the bank or other deposit-taking institution.
The interest payable on a debt expressed as a percentage of the debt over a period of time (usually a year). If a loan's interest rate is 8 per cent annually you pay $8 interest each year for every $100 borrowed.
International Association of Insurance Supervisors (IAIS)
The IAIS is a forum for some 100 insurance regulators from over 70 countries. The work of the IAIS parallels the initiatives of the Canadian Council of Insurance Regulators to achieve consensus on general supervisory principles for both domestic and cross-border operations. For more information, visit the IAIS Web site.
International Monetary Fund (IMF)
An agency of the United Nations established in 1944 along with the World Bank to promote post-war economic recovery, development and trade principally by helping to ensure a stable system of international exchange. The IMF has evolved since its inception, but remains focused on overseeing the international monetary system, which includes promoting balance of payments stability (e.g. helping to resolve debt problems) and encouraging member governments to implement appropriate macroeconomic and structural policies. For more information visit the International Monetary Fund and the World Bank Web sites.
International Organization of Securities Commissions (IOSCO)
An association consisting of 134 securities commissions. It aims to foster co-operation among members, promote high standards of securities regulation, facilitate the exchange of information, and encourage the establishment of standards and effective surveillance of international securities transactions. For more information, visit the IOSCO Web site.
In its broadest sense, investment consists of putting an asset into a form that is intended to increase its value. In an economic context, however, it refers to spending on capital goods in order to increase output - building a new factory, purchasing new equipment or public spending on infrastructure.
A firm that trades securities for its clients and offers other investment services. Also known as a securities dealer or brokerage house.
Investment Dealers Association (IDA)
Formed in 1916, the IDA is the national self-regulatory organization of the securities industry. It monitors and regulates the activities of investment dealers, and promotes the interests of the securities industry.
The income received from investment in securities and property. It includes rent from property, dividends from shares in corporations, and interest from bonds, guaranteed investment certificates, bank accounts, certificates of deposit, Treasury bills, and other financial securities.
Investment Tax Credit
A tax credit usually calculated as a fixed percentage of qualifying investments in scientific research and experimental development and in certain regions.