Monday, March 19, 2007

Why Im in Favour of Fixing the Fiscal Imbalance

This past weekend everywhere I looked I was being told about what to expect from today's budget. At the top of the list was the Conservative Government's attempt to fix the current fiscal imbalance. As a resident of Ontario I have been hearing for years about the fiscal imbalance. If you live in Ontario you pay more in federal tax than the federal government pays back to the province of Ontario.

There are two reasons why I think this fiscal imbalance needs to be fixed immediately:

1)I live in Ontario. Until 2006 I took Toronto's public transit at least 40 times/month and I know how poorly it operates at time. My fiance currently takes the GO train into work every day and we both experience the problems that delays can bring. We both have worked in Ontario's hospitals and we have seen the need for additional equipment/staff (at times). Ontario's fine Premier Dalton McGuinty (insert sarcasm here) has told me repeatedly that were it not Ontarians subsidizing the rest of Canada with their tax dollars, all this would be fixed.

2)The reason that I think carries the most water is that subsidizing other provinces makes us all worse off in the long run. Canada is a fairly left wing nation with a large social safety net which I definitely appreciate. It is something that makes us a role model for nations around the world. However, transfers from the rich to the poor provinces (within reason) is not something I think benefits the country as a whole. I think a perfect example of why this isn't necessary is Alberta. For the past few years Alberta has been booming. As a result there has been a huge influx of people looking for the highest paying jobs. The labour supply will move if given an incentive to. Instead though, Canada is looking to take money from Alberta and Ontario and give it to provinces that are not as rich to subsidize their job markets (either directly or indirectly) in the form of social programs. If the market doesn't demand jobs in all provinces, Canada shouldn't try to force it. In a global economy, long-term subsidies prevent innovation and reduce competitiveness.

Thursday, March 15, 2007

My New Favorite Credit Card

For the last year and a half I have been exclusively using my Capital One credit card. At 6.9% I just couldn't pass up the interest rate. Now that I'm settled into my first house Ive realized that despite every surprise or hiccup along the way, I always pay off my balance. Therefore it doesnt matter what my interest rate is, Im never paying it. So off I went to look for the best no-fee credit card I could find.

Hands down it is the MBNA Starwood Preferred Guest Mastercard. They start you off with 5,000 points and give you another 5,000 the first time you stay at a Starwood Hotel/Resort. You also receive 1 point for every $2 spent, plus a 5,000 bonus at each of $10,000, $20,000, $30,000. So spending at each of these levels is equal to 1 point per dollar.

The best part for me is that the points are transferrable to 30 different airlines, with 5,000 bonus points being given for every 20,000 transferred. Using American Airlines as an example, flights from Toronto to anywhere in the US (that I have seen) are 25,000 miles. Because of the bonus 5,000 you only use 20,000 points.

For me this works out to a free flight every year with $20,000 spent on the card. A 1% dividend card would only yeild $200/year with this amount of spending versus approximately $400 for the flight. The points are even more valuable if you use the points for hotel stays (starting at 2,000/night).

What is your favorite credit card?

Do It Yourself Project #1-Closet Doors

Last August when my fiance and I moved into our first house we compiled a list of things we wanted to do to our new home. The first was to get rid of the old flooring upstairs. The second was painting. Somewhere between projects one and two we realized that we were going to have to replace our closet doors.

The previous owners of our house loved wallpaper, not that there is anything wrong with that. Unfortunately the wallpaper they used upstairs was quickly showing why late 80s style didn't last long. Along with the walls, in two of the upstairs rooms they had wallpapered over the closet doors. We figured that this was just another example of their passion for wallpaper and we planned to strip the doors prior to painting the rooms. When we did it became apparent that these doors simply had to go. The problem was that underneath this wallpaper was a dark wooden laminate that likely came with the house when it was built in 1985.

Off to Home Depot we went. When we arrived the real challenge of this project began. Our closet door openings we larger than the "stock" sizes they had at HD. OUCH, instead of $300 combined for stock doors, custom doors were going to be almost twice that.

Either I had watched too many episodes of Holmes on Homes or my frugal gene kicked in, but I left HD with the stock doors, some power tools and some trim with the intention of "Doing it Myself".

My plan was to frame in the closet door opening to stock size (the opening was about 1 1/2" too wide and 1" too tall) and hide the framing with some trim. Having only once before used a mitre saw I knew I could be in trouble, but I was up for the challenge. With very few mistakes along the way I finished my project in about a week (painting took the majority of the time) and frankly it turned out about 100X better than I expected.

Take a look for yourself:

In the end the project cost me about $475, so I saved about $75 versus buying custom. However, I now own a mitre saw ($79.99 reg $159.99) and a couple extra tools that were part of the $475.

Up next, replacing the laundry tub in the basement!