Scotiabank Investment Study asks Canadians: "What would you do with a $1,000
tax refund?"

Paying down debt as popular as saving or investing

TORONTO, Feb. 24 /CNW/ - With this year's RRSP contribution deadline looming - on Monday, March 1, 2010 - Canadians still have a few more days to invest in an RRSP and realize some tax savings. A recent study conducted by TNS Canadian Facts for Scotiabank asked investment decision-makers how they would allocate a hypothetical $1,000 tax refund and found that the typical person would allot about a third of their refund ($336) to pay off debt, while an equal proportion (33 per cent) would be put into a savings account ($196) or into investments ($129).

"The emphasis placed on debt repayment as well as building up their savings and investments points to an overall desire on the part of Canadians to rebalance their personal balance sheet as the economy slowly continues to improve," said Adam Salahudeen, Senior Manager, Taxation Advisory Services, Scotiabank. "Depositing your tax refund in an RRSP for tax deferral on income in the year ahead is a tried and tested strategy. Another way to optimize both savings and investments is to allocate a portion of your refund to a Tax-Free Savings Account (TFSA). This way, you can invest after-tax dollars to earn tax-free growth throughout your lifetime and you also have the flexibility to withdraw funds at any time without penalty."

While respondents in every region of the country indicated they would allocate the greatest proportion of their tax refund to debt repayment, there are some regional differences with respect to saving and investing priorities:

    -   Prairie and British Columbia residents place a higher priority on
        allocating part of their tax refund to savings over investments
        ($262 vs. $88 in the Prairies and $250 vs. $138 in B.C.).
    -   Saving versus investing allocations are most evenly split in Ontario
        ($164 to savings compared to $149 to investments).
    -   Quebec investors, meanwhile, are the most likely to allocate some of
        their refund to a vacation ($124) or spend it on their home ($111).

The study also found that while males and females give priority to paying off debt, women are significantly more likely to deposit money into a savings account rather than investing it ($233 vs. $91), while men are evenly split between saving and investing ($164 and $160 respectively).

Regarding the upcoming tax season, the study also found that many Canadians are turning their attention to their tax returns and the tax credits available to them:

    -   Four out of five of those surveyed (79 per cent) indicate they have
        or plan to take advantage of available tax credits this year.
    -   The charitable tax credit is the most widely used (49 per cent)
        followed by the home renovation tax credit (38 per cent) and the
        medical expenses tax credit (36 per cent).

"It's encouraging to see so many Canadians using the tax credits available to them in an effort to reduce their taxes this year. For example, using the Temporary Home Renovation Tax Credit for renovation costs in excess of $1,000 up to a maximum of $10,000 provides up to $1,350 in tax relief," explained Mr. Salahudeen.

"It's also good news for charities that the charitable tax credit is so well-used by Canadians. They should also keep in mind that it can be an effective planning tool to minimize taxes for clients who are expecting large capital gains or, on the flip side, would like to donate to charity stocks that are underperforming well below their original price," added Mr. Salahudeen.

It is somewhat surprising, Mr. Salahudeen observed, that only 13 per cent of those surveyed have used or plan to use the transit pass tax credit or fitness tax credit, which enables parents to claim for eligible activities that their children are involved in, and reminds Canadians to ensure that they are taking advantage of all of the tax credits available to them.

It is also interesting to note that only one in six Canadians (16 per cent) indicate that they have or expect to take advantage of eco rebates available to them under the Energy Efficient Housing Program or the Government of Canada's ecoENERGY Retrofit Program.

TNS Canadian Facts ( is one of Canada's most prestigious full-service marketing, opinion and social research organizations. TNS, who recently merged with Research International, is the world's largest custom research agency delivering actionable insights and research-based business advice to its clients so they can make more effective business decisions. TNS offers comprehensive industry knowledge within the Consumer, Technology, Finance, Automotive and Political & Social sectors, supported by a unique product offering that stretches across the entire range of marketing and business issues, specializing in product development & innovation, brand & communication, stakeholder management, retail & shopper, and qualitative research. Delivering best-in-class service across more than 70 countries, TNS is part of the Kantar Group. Please visit for more information.

Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With close to 68,000 employees, Scotiabank Group and its affiliates serve approximately 14.6 million customers in some 50 countries around the world. Scotiabank offers a diverse range of products and services including personal, commercial, corporate and investment banking. With more than $496 billion in assets (as at October 31, 2009), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit

SOURCE Scotiabank - Products & Services

For further information: For further information: Patty Stathokostas, Scotiabank Public Affairs, (416) 866-3625,

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