Settling in BC: Questions and Answers

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 Money in a chequing account is easy to use and can be withdrawn using cheques, automated bank machines (ABMs) and electronic debit cards.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).

For more information:

• Financial Consumer Agency of Canada: Which Account Is Right for You?

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.

For more information:

• Canadian Bankers Association: Opening a Bank Account

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.

For more information:

• Financial Consumer Agency of Canada: Debit Cards

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.

For more information:

• WelcomeBC: Managing Your Money
• Canadian Immigrant: How to Save Fees on Sending Money Overseas

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.

For more information:

• Financial Consumer Agency of Canada: Personal Loans

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.

For more information:

• Financial Consumer Agency of Canada: Credit Report and Credit Score

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.

For more information:

• Financial Consumer Agency of Canada: How Can I Build My Credit History for My Credit Report

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.

For more information:

• Canadian Bankers Association: Credit Card Fraud
• RCMP: Credit Card Fraud

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.

For more information:

• Canadian Anti-Fraud Centre: Identity Theft and Identify Fraud

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.

For more information:

• BC Securities Commission: Investment Basics
• Financial Consumer Agency of Canada: Investments – The Basics
• Canadian Securities Administrators: Investments at a Glance

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.

For more information:

• Canada Revenue Agency: Learning about Taxes
• Government of BC: Personal Income Tax
• Canada Revenue Agency: Do you have to file a return? 

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.

For more information:

• Canada Revenue Agency: Newcomers to Canada
• Canada Revenue Agency: Information for Individuals and Families
• Canada Revenue Agency: Do you have to file a return? 

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.

For more information:

• Canada Revenue Agency: Community Volunteer Income Tax Program
• NewToBC Inventory: Find Free Volunteer Income Tax Programs in Your Community