Amanda Stanhaus

Tag: Canada

USD vs. CAD

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“Bienvenue à Montreal!”

That’s my welcome message as my American friends come to visit me in droves because the American dollar is currently stronger than the Canadian.

What does that mean?

If an American exchanges 1 USD for CAD, they receive 1.1 CAD!

Yep, more bang for their buck.

Hope to see you all in Canada soon!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Canadian Deposit Insurance Corporation

CDIC . Canada’s bank guarantee. Equivalent to America’s FDIC.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

New Year’s Resolutions

Whizz! 2013 flew by.

Yikes! 2014 is almost here.

I have lots of big dreams for 2014…I’m not ready to broadcast them yet…they will be reality soon enough!

But in regards to mundane money management—and growth— I’m going to have fun with it!

Organized by category, here are my realistic—yet fun—New Year’s resolutions.

Essentials

The ideal is to pay my credit card in full each month. I’m going to break it down and pay off my balance each Sunday. If successful, I will celebrate by going out for a Sunday nightcap!

Milestones

I’m still saving up for my Vespa. In addition to my automatic saving system, whenever I walk somewhere, the public transit fare I saved will be placed in a jar for safe keeping. The more I walk, the sooner my Vespa will be mine!

Investing

Reading in full my monthly investment statements is no easy task. Eating coconut creme cookies constantly is the easiest task I can imagine. So I am going to mix the two. I will treat myself to coconut creme cookies once a month when I read the investment statements.

Insurance

While I am still on my parents health insurance plan since I am pre-26, I do want check out these exchanges everyone is talking about.  Not that I want to buy my own health insurance until I’m 26…so I will religiously attend weekly family dinners.

Oops

Just like I am able to spot my friends’ future husbands (unfortunately, only my friend’s, not mine), I want to spot my oopses before they happen..  If the potential oops has to do with being frugal, I will ask myself, what would Warren Buffett do? And If the potential oops has to do with being fabulous, I will ask myself, what would Helen Gurley Brown do?

Convo (By: Birdie)

Just like Bettie is making financial literacy fun, I am going to break the mold of the grumpy academic economist and be the world’s first PR-perfect conversational economist. I’ll build my fan base here by translating the economic news of the week into key takeaways to provide a bird’s eye view!

O Canada (By: Belle)

Inspired by Bettie, I will do a monthly review of my RRSP while eating maple creme cookies. And when the review is fini, c’est fini avec the cookies!

Happy New Year! Best of luck with your realistic resolutions!

(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Foreign Transaction Fee

When a credit card is used in a purchase of a good in anything other than its homeland’s currency—>Fee! Fun Fact: American and Canadian “dollars” are not the same.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Government Bond

The Government needs me to spot it some $$. A formal certificate, instead of crumpled up napkin with a scribble, “I owe $$ to…”

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Interac

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Bettie tried to correct me. She did not want me to say “interac” when paying with debit, assuming it was lost in translation from my Montreal mother-tongue of french. I was the one who corrected her— interac is to debit in Canada as kleenex is to tissue in the States.

(click on the bold-faced vocab word:))

Ladies, remember the word interac whenever out with a Canadian man. It will bring back fond memories of his homeland!

Proceed cautiously if he is a Montrealer, you may be rewarded with a double cheek kiss—dodge right—it starts on left.

Interac, c’est debit in Canada. Pretty much anytime anyone uses a debit card, she is using the interac debit service.

Now, the neat thing to remember is interac has a capability that allows e-transfers. So handy when I buy everyone concert tickets and need to be paid back! Think wire transfer, mais cheaper and less complicated!

Instead of sending a check or cash, send $$ with interac e-transfers. All I need is the email or phone # of the recipient plus a security q. A notification with instructions—not $$—is sent to recipient’s email/phone so they can securely transfer the funds to their account. Yep, no account info sharing is necessary!

Et plus, interac is similar to the U.S.’s  popmoney.

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Social Insurance: Current North American Debate

Originally submitted for an independent research project comparing North America’s welfare states with Professor Antonia Maioni at McGill University.

North America’s policy makers and interest groups debating the future of their respective welfare states have lost sight of the important role of social insurance in a capitalist system. J. Donald Moon understands a democratic welfare state to be “an attempt to solve a serious moral dilemma that necessarily results from the central role of markets in modern society.”[1] Moon defines self-respect as, “one’s belief that one lives up to certain standards that define what it is to be a person of worth,” and its preservation is key to an ideal democratic welfare state.[2] Moon’s argument features T.H. Marshall’s explanation of civil, political, and social rights that facilitate equal citizenship; together these rights create equal social worth, genuine equality of respect, and consequentially, the ideal democratic welfare state.[3] To create an ideal democratic welfare state that preserves self-respect, Moon outlines the three “institutional principles” of a welfare state: achieving full employment, ensuring universal provision of social services, and establishing a comprehensive program of social insurance.[4] Moon recognizes his “institutional principles” have internal limits and various implementation options, but in general they allow for social rights to be exercised, while maintaining self-respect.[5] Moon’s argument and his “institutional principles” represent the North American consensus that created their unique liberal welfare states. Now lacking a consensus view of Moon’s “institutional principle” of social insurance to shape program reform, misinformed interest groups dominate the retrenchment debate that is resulting in reforms dismantling the social insurance programs of North America’s liberal welfare states.

Given the capitalist systems of North America’s liberal democracies, social insurance is a moderate fix. When discussing common risks, such as birth into a poor family, ill health, involuntary unemployment, etc., Theodore R. Marmor, Jerry L. Mashaw, and John Pakutka explain that “beginning with Otto von Bismarck…the social provision of income protection against these risks has been a fundamental precondition for the flourishing of industrial capitalism. Looked at historically, social insurance is a deeply conservative idea and the major viable alternative to state socialism.”[6] Marmor, Mashaw, and Pakutka describe social insurance’s original goal “to cushion workers and their families from the many threats to economic security that capitalism produces while, as the same time, permitting the market economy to produce its undeniable gains in national income.”[7] However, social insurance must adapt to reflect current realities of its beneficiaries, as Marmor, Mashaw, and Pakutka explain, “[programs] that fit well in one era can become outdated in another. A society’s underlying sense of ‘fairness’ or ‘appropriateness’ in guarding against risks to loss of income from work can change as well.”[8]A philosophical consensus and resulting reforms must reflect the times to be relevant. Lacking a consensus view of social insurance, program reform debate is commanded by interest groups that promote retrenchment.

Lacking a consensus view in favor of social insurance, interest groups calling for privatization of social insurance programs in North America are shaping the program reform debate. The circumstances of both the U.S. and Canada are similar, Keith Banting and John Myles note, “Organizations that speak on behalf of the poor are weaker, and power has moved to institutional niches less responsive to redistributive interests.”[9] Traditionally, Banting and Myles describe liberal welfare states as: “reluctant to replace market relations with social rights; instead, they seek to provide a safety net for the ‘poor’ and to encourage the bulk of the population to rely as much as possible on private sources of economic security, including occupational benefits and personal savings.”[10] Critics of the welfare state and its social insurance programs are using this liberal welfare state tradition to their advantage. Banting and Myles explain, “the redistributive role of the state has always been less developed…In liberal welfare states, mere drift in social policy can represent a victory for conservative interests.”[11] The structure and tradition of North America’s liberal welfare states is facilitating program reform debate that lacks a common vision and is dominated by misinformed interest groups.

Liberal welfare states are being highly scrutinized due to an ideological shift that now supports reform to increase privatization and individual responsibility. Yet, critics misconstrue the role of social insurance in a capitalistic market. Marmor, Mashaw, and Pakutka explain critics’ understanding of social insurance, “Rather than being seen as supporting a capitalist system by cushioning its inevitable risks, social insurance arrangements are portrayed as undermining private markets and personal responsibility, or as threatening the overall fiscal health of the nation.”[12] Inherently, the payment and services of a social insurance system are inefficient. But, when these risks are insured publicly it is comparatively more efficient than when these risks are insured privately. Social insurance programs are essential to the maintenance of market capitalism as Marmor, Mashaw, and Pakutka explain, the risks insured by social insurance are not sufficiently dealt with in private insurance markets.[13] If a welfare state’s social insurance programs are privatized, insurance premiums will quickly become unaffordable, because of the problems of adverse selection–only the highest-risk people will sign up for insurance–and moral hazard–those insured will take on extra risks because they face no downside.[14] For example, if it is a personal choice to sign up for health insurance, only those who would utilize the insurance (i.e. those already sick) will register, and then premiums would exponentially increase, as the risk is concentrated among a small sick population. Public social insurance programs that provide coverage for large and various groups are the best way to spread risk and control costs. Marmor, Mashaw, and Pakutka explain that social insurance already provides what critics want to improve, “indeed, supporting a society based on a viable vision of [personal choice, individual responsibility, and market competition] is the fundamental function of social insurance. But social insurance programs designed to maximize personal choice and promote market competition will simply not deliver adequate social insurance protections.”[15] Privatizing social insurance programs is an oxymoron, as Marmor, Mashaw, and Pakutka note, “Making social insurance programs more ‘market-like’ is seldom a reform that supports family economic security or, in the long run, the market itself.”[16] Without a consensus view of social insurance, misinformed ideologues are mistakenly implementing “fixes” to improve personal choice, individual responsibility, and market competition that will only increase inefficiency in insuring against the inherent risks of a capitalist system.

A lack of a consensus view of social insurance plagued the passage and the ongoing implementation of the U.S.’s Affordable Care Act (ACA), which Marmor describes in his article, “Health Reform 2010: The Missing Philosophical Premises in the Long-Running Health Care Debate.” The U.S. was unlike other countries that simultaneously debated universal health insurance reform policies and the philosophical implications of a proposed reform.[17] Marmor notes Obama’s campaign for health reform repeated traumatic health insurance stories and sparked many partisan commentaries, but lacked a discussion defining fairness and solidarity in this instance.[18] Because the U.S.’s health reform debate lacked a philosophical agreement and the resulting law tinkered with a variety of existing programs, Marmor poses the question, “Is the absence of philosophical consensus an important element in explaining the very mixed reform result that emerged in March of 2010?”[19] The universal mandate central to the ACA continues the U.S.’s adherence to the Bismarck system and its definition of beneficiary: a worker, who contributes, receives program benefits.[20] Marmor, Mashaw, and Pakutka note that historically, Americans defined a “universal” social insurance program as one for “workers” or “contributors.”[21] Furthermore, the ACA continues the U.S.’s tradition of defining medical care as a market good.[22] In contrast, Marmor notes a common pattern of “equal access” in the universal health care programs of Canada, France, Japan, Holland, and Germany, as each country simultaneously debated program options and philosophical implications, and each country based its conclusion on the fact that medical care is a merit good.[23] Writing in Spring 2011, Marmor foreshadowed that the lack of philosophical consensus and reform coherence would weaken the durability of the ACA.[24] If such a debate had taken place, as it had in other democracies, Marmor notes that “while mass publics may not initially grasp the moral implications of reform, over time, experiential knowledge can often shift mass opinion in favor of the moral justifications originally offered by political leaders.”[25] Instead, Obama’s political opponents and their supporters attempted to dismantle the ACA, as there is no philosophical consensus to rally all citizens.

While Canada initially reached an “equal access” consensus regarding public health insurance, outpatient prescription drugs were not initially included in the single-payer model and interest groups have influenced the recent reform. The Canada Health Act is just one example of a Canadian tradition of defining a beneficiary as a resident; this definition stems from the Beveridge system, which is financed by general tax revenues, therefore all taxpayers receive program benefits.[26] Since 1984’s Canada Health Act, recent reforms reflect changes in philosophical consensus, technological capabilities, and fiscal abilities. Carolyn Hughes Tuohy describes these reforms as part of a hybridization phase, where “opportunities for reallocation and reinvestment are seized upon by certain actors within the healthcare system who see the potential to benefit from them….These actors determine the shape of reforms…joining forces with policy makers to influence the design of policy.”[27] As technological change has rapidly improved the capabilities and effectiveness of prescription drugs, pharmaceutical spending has increased; this increased spending is shouldered by individual Canadians, as many previous inpatient drugs have become outpatient prescription drugs.[28] Provinces have individually altered their out-patient prescription drug insurance policy to address this new issue. While there is great cross-provincial variation with regard to cost-sharing, there is a philosophical consensus prioritizing social assistance recipients as beneficiaries of provincial outpatient prescription drug insurance.[29] The province of Quebec has implemented the most substantial change with regard to outpatient prescription drug insurance, Tuohy explains, “Since 1998, all residents are required to have comprehensive insurance for prescription drugs, integrating employer-based coverage into an overall regime of public and private financing and offering a public program with an income-based premium for those without access to employer-based coverage.”[30] While preserving universality, in contrast to the Canada Health Act’s Beveridgean tradition of equal access to all taxpayers, Quebec’s outpatient prescription drug insurance reform incorporated a main tenant of the Bismarck system, as benefits are based on income and program contributions.[31] Tuohy believes private insurers will continue to be allies in reform, as they were in Quebec.[32] In general, the “politics of hybridization” that characterize health insurance reform call for a public/private partnership, as policy makers must identify allies within the private healthcare system and create opportunities for them within the public system.[33] Tuohy accepts the possibility of successful private/public partnerships, to address prescription drug insurance reform, as it is true to the Canadian consensus of social insurance, while utilizing the classic liberal reform style of debate shaped by interest groups.

The risks that led to the creation of North America’s post-war liberal welfare states are not the same risks of the modern economy; as North America’s social insurance programs are reformed, the debate must include a philosophical debate and the input of interest groups. The compromises of the post-war welfare state were based on single-wage earner families; the welfare state has failed to evolve with changes in the distribution of risk to the modern-day economy.[34] Banting and Myles note, across the OECD region, the economy, family structures, and compensation schemes have driven up inequality and “frozen” welfare states are barely able to stabilize income distribution.[35] To make necessary updates to modernize the welfare state’s social insurance programs, debate in North America would benefit from a philosophical consensus and a more comprehensive, informed understanding of how social insurance can complement the capitalist system and preserve private markets.

[1] J. Donald Moon,“The Moral Basis of the Democratic Welfare State,” in Democracy and the Welfare State, ed. Amy Gutmann (Princeton : Princeton University Press, 1988), 28.

[2] Ibid, 32.

[3] Ibid, 42-3.

[4] Ibid, 44.

[5] Ibid, 44 & 52.

[6] Theodore R. Marmor, Jerry L. Mashaw, and John Pakutka, Social Insurance: America’s Neglected Heritage and Contested Future (Los Angeles: CQ Press, 2013), 67 & 217-218.

[7] Ibid, 67.

[8] Ibid, 220.

[9]Keith Banting and John Myles, “Canadian Social Futures: Concluding Reflections,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 416.

[10] Keith Banting and John Myles,“Introduction: Inequality and the Fading of Redistributive Politics,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 4.

[11] Banting and Myles,“Canadian Social Futures,”417.

[12] Marmor, Mashaw, and Pakutka, Social Insurance, 67.

[13] Ibid, 218.

[14] Ibid.

[15] Ibid, 217.

[16] Ibid, 241.

[17] Theodore R. Marmor, “Health Reform 2010: The Missing Philosophical Premises in the Long-Running Health Care Debate,” Journal of Health Politics, Policy and Law 36, no. 3 (2011): 567.

[18] Ibid, 567 & 569.

[19] Ibid, 567 & Theodore Marmor and Jonathan Oberlander, “The Patchwork: Health Reform, American Style,” Social Science & Medicine 72, no. 2 (2011): 125.

[20] Katherine Fierlbeck, Health Care in Canada: A Citizen’s Guide to Policy and Politics (Toronto: University of Toronto Press, 2012), 219.

[21] Marmor, Mashaw, and Pakutka, Social Insurance, 241.

[22] Theodore R. Marmor, “Health Reform 2010,” 569.

[23] Ibid.

[24] Ibid, 570.

[25] Ibid.

[26] Fierlbeck, Health Care in Canada, 219.

[27] Carolyn Hughes Tuohy, “Health Care Policy after Universality: Canada in Comparative Perspective,” in Inequality and the Fading of Redistributive Politics, eds. Keith Banting and John Myles (Vancouver: University of British Columbia Press, 2013), 291.

[28] Ibid, 293.

[29] Ibid, 301-2.

[30] Ibid, 302.

[31] Fierlbeck, Health Care in Canada, 219.

[32] Tuohy, 305.

[33] Ibid.

[34] Banting and Myles, “Introduction,”25.

[35] Ibid, 19 & 32.

Guaranteed Investment Certificate

GIC. Canadians buy these when they want to guarantee their principal investment and interest payments. CDIC insured.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

Guaranteed Investment Certificate

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Usually, I’m weary of guarantees. But, the CDIC is behind Guaranteed Investment Certificates (GICs), so I’m feeling good about my principal.

(click on the bold-faced vocab word:))

GICs are the Canadian equivalent of the U.S.’s Certificates of Deposit.

I invest a certain sum of money and can’t access it till it matures. I’m rewarded for my good non-withdrawing behavior with higher than usual interest payments.

There are a considerable amount of combos with my ability to choose time frame till maturity and interest payment frequency.

Ask your bank about the endless possibilities of GICs!

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(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Interac

I want her to have my money. To use this system, all I need is her email and a security question. Available in Canada only. Neat, eh?

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)