If you are using a non-registered (cash) account for your investing for cash flow and dividends, you may want to invest in Canadian Eligible Dividend payers. The dividends they pay get taxed very leniently, especially in lower tax brackets – check www.taxtips.ca for your province’s tax treatment. In BC, if I have no other income, the first approximately $50,000 of the dividends is not taxed at all, for example – see below. The government is encouraging us to buy Canadian. And the money you keep, not the money you earn, is important.
I compiled a list of Canadian dividend payers, and classified what types of dividends they pay. I tried to find a list online previously, and mine appears to be the first one. Even the CRA tells you to check the company’s Press Releases or website (Investor section). You should confirm the taxes on the dividends before buying the stock, by looking for “eligible”, “eligible dividends”, “enhanced” and the phrase section 89(14) of the Income Tax Act on the company’s site or in the Press Releases.
You also have to be an individual (other than select trusts) and be a Canadian Resident to qualify for the great tax treatment.
Canadian Money Talk 