Settlement Information for Newcomers

Settlement Information For Newcomers

Settling in BC: Questions and Answers

Immigrants have many questions about living, studying, and working in BC.

The NewToBC team has collected 100s of questions that are often asked by new immigrants before or after they arrive in BC. To answer these questions, the team researched and found the most up-to-date and credible sources of information. Look through the lists of categories and questions for information about immigration, employment, education, health, housing, banking, the BC legal system, and transportation.

Many newcomers have shared with the NewToBC team that they wished they had known about this resource sooner!

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Money and Banking

Money Basics

The monetary system in Canada is based on dollars and cents. All of Canada uses the Canadian Dollar (C$ or CAD). Canadian bills or bank notes are commonly available in $5, $10, $20, $50 and $100 denominations. They are brightly coloured, making them easy to tell apart from one another. Canadian coins include the toonie ($2), loonie ($1), quarter ($0.25), dime ($0.10) and nickel ($0.05). In 2014, the Government of Canada stopped making the penny ($0.01), so purchase totals are rounded off to the nearest penny.

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Opening a Bank Account

Before you choose a place to bank, find out what kind of accounts they offer, ask about banking charges and interest on your money, and consider how far it is from where you live or work. Ask family members, friends or colleagues what banks they use and visit different banks online or in-person to find out more. The biggest Canadian banks are Royal Bank of Canada (RBC), TD Canada Trust, Canadian Imperial Bank of Commerce (CIBC), Scotiabank and Bank of Montreal (BMO). There are also many regional banks, credit unions and international banks, such as Vancity, Coast Capital Savings, HSBC, Citibank, ING and UBS.

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A chequing account is used for withdrawals and deposits. Money in a chequing account is easy to use and can be withdrawn using cheques, automated bank machines (ABMs) and electronic debit cards. A savings account is a safe place to keep money for short periods of time. You will earn a small amount of interest on balances that stay in the account. A chequing-savings account pays interest and lets you write cheques. A term deposit usually pays more interest than a savings account, but you have to leave the money in the account for a certain length of time (a term).

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You can open an account at a bank, credit union or trust company. You will need to present two pieces of identification, such as a Canadian driver’s license, Social Insurance Number (SIN) card or Permanent Resident (PR) card. You can use a foreign passport or employee identity card with a photograph as secondary identification.

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Most banks will allow future clients to start their bank account application online before they arrive in BC. Some banks that have branches overseas may allow you to open a bank account, send money and/or apply for a credit card before you leave your home country, but you will need to activate your account when you arrive in BC.

A debit card is a plastic card issued by a financial institution and used to access money from a bank account. You can use a debit card at an automated bank machine (ABM) or a point of sale terminal, such as at the checkout at a grocery store. You will be asked to swipe or insert the card into the terminal and enter a personal identification number (PIN) code on a PIN pad. Your financial institution may set a daily limit on the amount of money that you can withdraw from your account with your debit card. You may be charged a convenience fee or surcharge when you use your debit card to make purchases in stores or withdraw money from an ABM.

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Sending and Receiving Money

You can bring money into Canada in different forms, such as cash, stocks, bonds, debentures, treasury bills, bank drafts, cheques, traveller’s cheques, money orders or a transfer of funds between your bank and a Canadian bank. When you arrive, you must tell the border official if you are carrying more than C$10,000, or the equivalent in another currency. If you do not declare it, you may need to pay a fine or face other penalties. You are not taxed on the money you bring when you land in Canada as a Permanent Resident (PR).

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Canadian banks and foreign exchange companies can send money to banks in most countries. You can also mail a money order or draft, which you can get at a bank, foreign exchange company or post office. Check first that the money order or draft can be cashed in the country where you are sending it.

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Credit and Loans

A credit card lets you buy things now and pay for them later. You can get credit cards from banks (e.g. Visa, MasterCard), department stores or gas companies. If you do not pay the full amount of the credit card bill each month, you will have to pay interest. The interest on some credit cards is higher than on others. In British Columbia, most banks will not give you a credit card if you do not have a Canadian credit history. However, if you are a new immigrant, there are some ways that you may be able to get a credit card.

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A loan gives you a large amount of money at once, and you begin paying interest on the total amount immediately, regardless of when you actually use the money. A loan must be repaid with interest on or before a fixed date. A line of credit is a type of loan that lets you borrow money as needed, up to a maximum amount. You are only charged interest on the amount that you use (rather than the total amount), from the day that you withdraw it until the day that you pay it back in full. Interest rates on a line of credit are generally low and the limits are usually high.

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A credit-reporting agency will collect information whenever you take out a loan, use a credit card, or take advantage of a “buy now, pay later” offer. They will check whether or not you make your payments on time and how long it takes you to pay back money that you have borrowed. This information becomes part of what is called your credit history. Financial institutions usually check your credit history when deciding whether or not to give you a loan or credit. Landlords may use your credit history to decide whether or not they will rent to you. If your credit history is poor, a lender may refuse to give you a loan or you may have to pay a higher interest rate. In Canada, there are two credit-reporting agencies – Equifax and TransUnion.

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One of the ways to start building a Canadian credit history is to get a credit card. To maintain a good credit history, you will need to pay your bills in full and on time, including rent, utilities, cable and insurance premiums.

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Credit card fraud is a growing trend in Canada. You can protect yourself from credit card fraud by keeping your credit cards and credit card numbers secure, being careful when using your credit card online, shredding anything with your credit card number on it, only giving out your credit card number when necessary, reporting suspicious activity immediately, and reviewing your billing statements each month.

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Identity theft is a growing trend in Canada. It occurs when someone steals your personal information, such as your name, address, Social Insurance Number (SIN), banking information or credit card information. Thieves are able to use the information they steal to open new bank accounts, order cell phones, take out mortgages on the victim’s property, and buy cars and furniture.

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Savings and Investments

There are different types of savings accounts available in British Columbia. You can save money in a savings account or Tax-Free Savings Account (TFSA). You can also save money for your retirement in a Registered Retirement Savings Plan (RRSP) or for your children’s education in a Registered Education Savings Plan (RESP). With a TFSA, RRSP and RESP, you will not have to pay taxes on the interest that you earn, but there is a maximum amount that can be invested each year. Your financial institution can help you choose the best option.

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There are different types of investments sold by banks and other financial companies in British Columbia. Low-risk investments include Guaranteed Investment Certificates (GICs), treasury bills and government and corporate bonds. High-risk investments include stocks and shares. Mutual funds and exchange-traded funds are also common investment options, but it is important to know what types of investments are included in these options because it will affect the risk level. When considering investments, you should look at the fees that apply because they will have an impact on your return.

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Taxes

In Canada, the federal, provincial/territorial and municipal governments collect money from individuals and businesses to help pay for government programs and services, such as roads, parks, community centres, schools, health care and welfare. Common taxes include income taxes, sales taxes, property taxes and business taxes.

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In Canada, residents must pay income tax on the money that they earn, which is collected by the Canada Revenue Agency. If you have a salary, taxes are taken off automatically throughout the year. If you are self-employed, you will have to pay your income tax in a single payment or in several payments. Each year, you must submit an Income Tax and Benefit Return to tell the government how much you made and how much tax you paid. On this return, you list your taxable income, deductions and tax credits to calculate how much tax you owe. If you paid too much tax, you will get a refund. If you paid too little tax, you will have to pay more. You will also need to file a tax return to qualify for government benefits, such as the Canada Child Tax Benefit, Universal Child Care Benefit and GST Credit. In general, you will want to file a tax return even you don’t have any income. For example, you could claim a GST credit even with no income.

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If you are a resident of British Columbia, you must fill out an income tax form each year and send it to the federal government by April 30. Even if you have no income in Canada, you must still report your income from outside Canada. You must also report and pay tax on any income you receive from investments. If you are self-employed or own a business, you must fill out and send in an income tax form by June 15, but you still have to pay any taxes owing by April 30. You can submit your income tax form in different ways – by mail, phone or online.

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During March and April, many community and settlement agencies offer free help to newcomers with filling in income tax forms. Contact local settlement agencies for more information. You can also pay someone to help you, such as an accountant or a tax preparation company.

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