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Investment funds issued by a labour organization. A portion of these funds are invested in startups or small and medium-sized enterprises (SMEs) in order to create or maintain jobs. These funds usually generate tax benefits for investors.
Last survivor insurance
Life insurance that covers at least two persons and pays a certain amount on the death of the last surviving insured.
Leverage (loan-based investment)
Borrowing money in order to invest increases the potential gains, as well as the potential losses, of any investment. Loan-based investments therefore carry more risk and require caution on the part of investors. If you are thinking of borrowing to invest, make sure you are fully aware of the potential loss this could represent should the value of your investment drop.
An amount owed, e.g., a mortgage balance, bank loans, a credit card balance, etc.
Annuity that provides periodic payments until the death of the annuitant.
Life income fund (LIF)
Tax shelter that allows taxes on the investment income it generates to be deferred. Funds invested in a LIF are often derived from a supplemental pension plan. Unlike an RRSP, the holder of a LIF is required to withdraw a minimum amount each year. In addition, holders cannot withdraw more than a certain amount from a LIF each year, to ensure that income can be provided for life. Amounts withdrawn are taxable.
Contract under which the insurer enters into an agreement with the insured in exchange for a premium, to pay the beneficiary the benefit provided for in the contract in the event of the insured’s death or until a specified period during his/her lifetime.
In insurance, it is the maximum the insured will receive for a given item in case of loss.
Limited partnership units are issued by a partnership. A general partner manages the partnership and limited partners supply the capital. The liability of limited partners is limited to their investment outlay. These partnerships usually invest in a particular sector such as real estate or the oil and gas industry. They often provide tax benefits that may be transferable from the partnership to the limited partners.
Amount that could be obtained on the dissolution of a company.
The ability to easily convert an investment into cash without significant cost.
Company share that is traded on a stock exchange. For a company to be registered, it must meet certain criteria, rules, and regulations, and pay listing fees.
Locked-in retirement account (LIRA)
Tax shelter that allows holders to defer payment of income taxes on investment income until amounts are withdrawn from the LIRA. The funds usually stem from amounts accumulated in a supplemental pension plan (SPP). Since the amounts in a LIRA are locked in, these funds can only be used to draw a lifetime income in retirement. To do so, you must transfer amounts held in a LIRA into a life income fund (LIF) or purchase a life annuity from an insurance company.
Long-term debt (not current debt)
Amount of money that a natural person or legal person must pay back, generally with interest. However, the amount is not due within one year.
Damage sustained following an unfavourable event, for example death, illness, fire, accident, etc.
Loss of employment insurance
Insurance that repays a debt or portion thereof when the borrower loses his/her job. A number of restrictions may apply.
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Account for which a client has given a third party formal written authorization to make all required investment transactions in consideration of a fee.
A charge levied by mutual funds to pay for management expertise and administration costs.
Account opened with a dealer that a client may use for margin buying, i.e., using money borrowed through the dealer.
Borrowing money in order to invest. This increases the potential gains, as well as the potential losses, on any investment (leverage effect). Margin buying thus increases risk and requires caution on the part of investors.
Also called borrowing to invest.
Marginal tax rate
Tax rate applicable to the highest taxable income bracket.
The value of a company determined by multiplying the number of common shares by its market price.
Most recent price at which a security (e.g., share, bond, etc.) was traded.
MD&A (Management’s Discussion & Analysis)
Document that explains, through the eyes of management, the company’s results for the period covered by the financial statements as well as the company’s financial condition and future prospects. This report completes the financial statements but does not form part of these statements.
All diseases and other health problems experienced by a person and his/her ascendants and descendants.
That part of the financial market in which short-term securities (current assets) are bought and sold, such as Treasury bills, short-term bonds, guaranteed investment certificates, etc.
Mutual benefit association
An association without share capital that provides benefits to members and their families in the event of a loss. Benefits may be available in the event of death, illness, or accident.
Fund made up of money pooled by investors and managed on their behalf by a manager. The manager uses the money to purchase stocks, bonds, or other securities according to the fund’s objectives. Ownership is in the form of shares if the mutual fund is set up as a business corporation, and in the form of units if the fund is set up as a trust (the most common form). Holders have voting rights. These securities have no maturity.
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Named peril insurance covers losses only for causes that are specifically described in your contract.
Assets less debt.
Document signed by the insured after a claim has been filed. This document states that the insurer is currently investigating the circumstances of the loss and reserves the right to apply possible policy restrictions or exclusions that might result in denial of coverage.
Notice of meeting
Notice sent to shareholders announcing the date, time and location of the shareholders’ meeting. The notice of meeting is usually included with the information circular.
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