Forex Trading in Canada

Trading Discussion
1

Hey fellows,
i am going to live in Canada from February 2013 :35: So, i need some facts about trading in Canda. Maybe somone can help me with my question :slight_smile:

  1. What about taxation. How much are they and when do I have to pay? Immediately after each trade or at the end of the year with the tax declaration?

  2. What about health insurance? How much must I pay for a good one?

  3. What are the good brokers in canada?

  4. Are there something else waht i should know about trading in Canada?

It would be nice, if you can also poste a link to your answer.

Thx and regards from Germany

2
  1. Always done once at the end of the year. No taxes per trade.

As a permanent-resident reporting to the CRA? That one is complicated since it depends on how the CRA defines your trading business. When I first stared, I just reported the net capital gains without much more detail, and CRA was fine with this. However, if you start filing your income taxes and only show income from capital gains (that is, you have no other source of income) they tend to look closer at you and if they find that your trading activity is your main income source and what you spend your days doing, they might consider it a business.

I say “might” because the letter of the law is basically ‘up to CRA’s discretion based on the frequency, nature, and products you’re trading.’

So long as you have a regular day job (ie, employment income) then claiming it as a capital gain should be fine. But I have no clue how your residency status might affect your tax return, so it’s probably best to speak to a tax accountant once you’re here. Heck, I’d say speak to one regardless of how confident you are in filing your tax return.

  1. Residents won’t really have good advice here since we’re covered by our provincial health programs. Might be best to ask around ex-patriot online communities.

  2. I wish this list was long… but we have few good brokers within Canada to be honest:

Oanda has a good Canadian division (they are headquartered out of Toronto and was founded here.)

However, there is no restriction for using brokers from outside the county. While I use Oanda myself, I also trade with Peppersone in Australia.

If you care about leverage (that is, you’d like a decent amount) then offshore is the way to go for sure. Canadian brokers who are regulated by IIROC have very strict leverage limits (worse than the US.) It’s done on a per pair basis instead of account wide, and while some pairs are set near 50:1, most are 33:1 or less. Using a foreign broker (again, entirely allowed by Canadian laws) gets around this but you gotta do your own homework on that broker since IIROC won’t be there to help you.

  1. No different than anywhere else really, only that our business culture here is very conservative (in the risk sense, not political) and our social culture isn’t as enthused about ‘betting’/gambling/etc… as others. That means most people you talk to or meet won’t know much about trading outside of what they’ve seen in movies.

Hope that helps! :slight_smile: