The Canadian Money Glossary

A

Amortization

The schedule of how a loan (usually a mortgage) gets paid off over time. A 25-year amortization means your mortgage is structured to be fully paid in 25 years. In Canada, most mortgages have a 5-year term inside a 25- or 30-year amortization — you renew the term every 5 years at the rate available then.

AML Anti-Money Laundering

The rules Canadian banks follow to spot and report suspicious money movement. Why you can’t deposit $10,000+ in cash without the teller filing a report; why moving large amounts across borders triggers a CRA declaration. Enforced by FINTRAC.

Asset Allocation

How you split your investments between stocks, bonds, and cash. A younger person might be 80% stocks / 20% bonds; someone near retirement might flip that. There’s no “right” answer — it depends on how long until you need the money and how much short-term loss you can stomach.

B

BoC (Bank of Canada)

Canada's central bank. Sets the overnight interest rate that drives the prime rate every other Canadian rate (mortgages, HELOCs, credit cards, GICs) is built on. Meets to set rates 8 times a year.

Beneficiary

The person who gets the money in an account (RRSP, TFSA, FHSA, life insurance) when you die. The beneficiary you name on the account overrides your will — so name one, and update it after life events (marriage, divorce, baby).

BNPL Buy Now Pay Later

Services like Klarna, Afterpay, and Sezzle that let you split a purchase into 4 interest-free payments. Some of them now report to Canadian credit bureaus — a missed payment can ding your credit. Use carefully.

BoC Bank of Canada

Canada’s central bank. They set the overnight rate, which is the base interest rate every other Canadian bank uses to price loans, mortgages, and savings. When the BoC raises rates, your mortgage rate goes up too.

C

CRA (Canada Revenue Agency)

The federal agency that collects taxes and administers most government benefit programs. Files tax returns, sends GST/HST credits, pays the Canada Child Benefit, and audits returns. The Quebec equivalent is Revenu Québec.

CPP (Canada Pension Plan)

Mandatory federal retirement pension. Both employees and employers contribute about 5.95% of earned income (up to a yearly cap). You can start collecting as early as 60, but the longer you wait (up to 70), the higher your monthly payment.

CESG (Canada Education Savings Grant)

Government grant of 20% on the first $2,500 you contribute to a RESP each year, up to $500 annually per child and $7,200 lifetime. Free money for your kid's post-secondary education.

CDIC (Canada Deposit Insurance Corporation)

Federal Crown corporation that insures deposits at member banks up to $100,000 per depositor, per insured category, per institution. Covers chequing, savings, GICs, term deposits — not stocks, ETFs, mutual funds, or crypto.

CCB (Canada Child Benefit)

Tax-free monthly payment from the CRA to families with kids under 18. Up to about $7,787 per child under 6 and $6,570 per child 6-17 in the 2025-2026 benefit year. Requires you to file a tax return each year (even with zero income).

Capital Gains

The profit when you sell an investment (stocks, ETFs, real estate that isn’t your primary home) for more than you paid. In Canada, only 50% of capital gains are taxed at your regular income rate (verify current inclusion rate at canada.ca — rules have shifted).

CASL Canada’s Anti-Spam Legislation

The law that requires Canadian businesses to get your express consent before sending marketing emails, and to give you a one-click unsubscribe. Why every newsletter signup form has fine print about consent.

CCB Canada Child Benefit

A tax-free monthly payment from the federal government to families with kids under 18. The amount depends on your income — lower income, higher benefit. You apply once via CRA My Account and it deposits automatically.

CDCP Canadian Dental Care Plan

A federal dental insurance program launched in 2024 for residents with household income under $90,000 who don’t have private dental coverage. Covers cleanings, fillings, dentures, and some surgeries.

CDIC Canada Deposit Insurance Corporation

The federal agency that insures your bank deposits up to $100,000 per eligible category, per member bank. If your bank fails, CDIC pays you back. Why “online-only” Canadian banks (EQ, Tangerine, etc.) are still safe — they’re CDIC members.

CPI Consumer Price Index

How Statistics Canada measures inflation — the average change in price for a basket of household goods (food, rent, gas, utilities). When you hear “inflation is at 3%,” that’s CPI.

CPP Canada Pension Plan

A monthly retirement payment you get for life, starting any time between age 60 and 70. The amount depends on how much you contributed during your working years (via payroll deductions). Delaying past 65 gives you a bigger monthly cheque.

CRA Canada Revenue Agency

The federal tax agency. They collect your income tax, run benefits (CCB, GST/HST credit), and audit returns. CRA My Account is their online portal — register early, it’s the single most useful financial admin tool in Canada.

Credit Report

The full history of every credit account you’ve ever had, every payment (on time or late), and any collections or bankruptcies. Maintained by Equifax and TransUnion. Free to pull anytime via Borrowell or Credit Karma.

Credit Score

A 300–900 number that summarizes your credit report into one risk signal for lenders. 660+ is “good,” 750+ unlocks the best rates. Built by paying credit accounts on time + keeping balances low.

Credit Utilization

How much of your credit card limit you’re using. If your card has a $5,000 limit and you’ve spent $1,500, utilization is 30%. Keeping it under 30% (ideally under 10%) helps your credit score.

D

DTC (Disability Tax Credit)

Federal non-refundable tax credit that reduces income tax owed if you (or a dependent) have a severe and prolonged impairment. Form T2201 must be approved by the CRA. Getting the DTC also unlocks the RDSP and other disability benefits.

DCA Dollar-Cost Averaging

Investing the same dollar amount on a regular schedule (e.g., $200 the 1st of every month) regardless of what the market is doing. Removes the temptation to “time the market” and smooths out your average purchase price.

Direct Deposit

When your employer deposits your pay directly into your bank account instead of giving you a paper cheque. To set up, your employer needs your bank’s transit, institution, and account number — get them from a voided cheque or your bank’s online portal.

Diversification

Not putting all your eggs in one basket. Spreading investments across different companies, industries, and countries so that one going bad doesn’t sink the whole portfolio. Index funds give you diversification automatically.

E

ETF (Exchange-Traded Fund)

A bundle of investments (stocks, bonds, or both) that trades on a stock exchange like a single share. Lower fees than mutual funds — typically 0.05-0.30% per year vs 1.5-2.5% for mutual funds. The dominant choice for DIY investors in Canada.

EI (Employment Insurance)

Federal program that pays temporary income to workers who lose their job through no fault of their own, plus parental leave, sickness benefits, and special programs. Funded by mandatory employee + employer payroll deductions. Apply through Service Canada.

Emergency Fund

Cash set aside specifically for surprises — job loss, medical bills, urgent car repair. Aim for 3 to 6 months of essential expenses, kept in a high-interest savings account separate from your daily chequing.

Equifax

One of Canada’s two main credit bureaus (the other is TransUnion). They maintain your credit report and produce a credit score. Banks and lenders pull from one or both when you apply for credit.

ETF Exchange-Traded Fund

A basket of stocks, bonds, or other assets that trades on a stock exchange like a single stock. Most index funds in Canada are now ETFs (VFV, XEQT, VEQT, etc.). Lower fees than mutual funds.

E-Transfer Interac e-Transfer

The Canadian way to send money between bank accounts using just an email or phone number. Free at most banks for incoming, often free for sending too. The default for splitting rent, paying back friends, etc.

Executor

The person you name in your will to handle your estate after you die — pay your debts, file your final tax return, distribute what’s left. Picking the right person matters more than people realize. They should be organized, willing, and ideally Canadian.

F

FHSA (First Home Savings Account)

Newest registered account in Canada (launched April 2023). Combines an RRSP-style tax refund AND a TFSA-style tax-free withdrawal — but only for first-home purchases. $8,000 annual / $40,000 lifetime cap. If you never buy a home, it rolls into your RRSP tax-free.

FCAC (Financial Consumer Agency of Canada)

Federal regulator that protects financial consumers — enforces banking codes, publishes consumer guides, monitors compliance. The right place to file a complaint if a federally regulated financial institution treats you unfairly.

FHSA First Home Savings Account

A registered account introduced in 2023 for Canadians saving for their first home. $8,000/year, $40,000 lifetime cap. Contributions are tax-deductible (like RRSP) AND withdrawals are tax-free for a first home (like TFSA). If you never buy, it rolls into your RRSP.

FINTRAC

Canada’s anti-money-laundering watchdog. Banks are legally required to report any cash deposit over $10,000 or any suspicious transaction to FINTRAC. Why customs asks about cash at the border.

G

GIC (Guaranteed Investment Certificate)

A deposit you lock in for a fixed term (30 days to 10 years) in exchange for a guaranteed interest rate. CDIC-insured up to $100,000 per institution per category. Lower returns than stocks but zero risk of loss — useful for money you need on a specific date.

GIC Guaranteed Investment Certificate

A deposit product where you lock in a fixed amount of money for a set term (90 days to 10 years) at a guaranteed interest rate. CDIC-insured. Lower returns than stocks, but you literally cannot lose your principal.

GST / HST

The federal sales tax (GST, 5%) and the combined federal+provincial sales tax (HST, 13–15% depending on province) added to most goods and services. If you’re low-to-modest income, you may qualify for the quarterly GST/HST Credit — apply via CRA.

H

HISA (High-Interest Savings Account)

A savings account that pays meaningfully more interest than a regular bank savings account. As of 2026, digital banks (EQ, Wealthsimple, Tangerine, Simplii) offer 2.5%-4% vs 0.05-0.5% at the big six. Same CDIC protection.

HBP (Home Buyers' Plan)

Lets first-time home buyers withdraw up to $60,000 (raised in 2024 from $35,000) from their RRSP tax-free to buy a first home. Must be repaid over 15 years starting the second year after withdrawal — missed repayments count as taxable income.

HELOC Home Equity Line of Credit

A line of credit secured against the equity in your home. Lower interest than unsecured credit, but if you can’t pay, the bank can force a sale of your house. Powerful and dangerous in equal measure.

HISA High-Interest Savings Account

A savings account that pays meaningfully more interest than a chequing or basic savings account (typically 2–5% APY in 2025–2026). EQ Bank, Wealthsimple Cash, and Tangerine are common picks. Liquid (you can withdraw anytime), CDIC-insured.

I

Index Fund

A fund that holds a tiny piece of every company in a market index (e.g., the S&P 500 or the entire Canadian stock market). Low fees, no manager guessing. Over decades, index funds beat the average actively-managed fund.

Inflation

The general rise in prices over time — why a coffee that cost $1.50 in 2010 is $3 today. Measured by CPI. If your savings earn less than inflation, you’re losing purchasing power.

L

LLP (Lifelong Learning Plan)

Lets you withdraw up to $10,000 per year (max $20,000 total) from your RRSP tax-free to fund full-time education for yourself or your spouse. Must be repaid over 10 years starting 5 years after the first withdrawal.

LIF (Life Income Fund)

A retirement income account that LIRAs convert into. Forces you to withdraw a minimum percentage each year (set by province + age) and caps how much you can withdraw, so the money lasts a lifetime. Distinct from a RRIF, which has no max withdrawal.

LIRA (Locked-In Retirement Account)

What your former employer's pension money rolls into when you change jobs (or leave). The money is locked until retirement age (province-specific rules); when you reach it, you convert the LIRA into a LIF (Life Income Fund) or annuity to draw income from.

Liquidity

How fast you can turn an asset into cash without losing value. Cash in a chequing account is the most liquid. A house is one of the least liquid — selling takes months. Emergency funds need to be in liquid accounts.

M

Marginal Tax Rate

The tax rate on your next dollar of income — i.e., the top bracket you’ve reached. Different from your effective (average) rate. Used to estimate how much an RRSP contribution will save you in tax.

Mortgage Stress Test

A federal rule that requires lenders to qualify you at a higher rate than what you’re actually borrowing — to make sure you could still afford the mortgage if rates rise. Why your bank might pre-approve you for less than you expected.

N

NOA (Notice of Assessment)

The CRA's response to your tax return. Confirms your final tax position, shows your RRSP/TFSA room for the coming year, and lists any carryforwards. Landlords and lenders often ask to see it as proof of income.

NETFILE

The CRA's direct online tax-filing service. Used by all certified tax software (Wealthsimple Tax, TurboTax, StudioTax). Submitting via NETFILE is faster than paper filing — refunds typically arrive within 8 business days if you have direct deposit set up.

Net Worth

Everything you own minus everything you owe. (Cash + investments + home equity) − (mortgage + credit card debt + student loans + car loan) = net worth. The single best long-term financial scoreboard.

NOA Notice of Assessment

The CRA’s official response after you file your tax return — confirms your refund, balance owing, or assessment. Keep it; lenders often ask to see it as proof of income.

O

OAS (Old Age Security)

Federal monthly pension paid to seniors 65+ who meet residency requirements (10+ years in Canada after age 18). Maximum payment ~$735/month in 2026. Income over ~$90K starts triggering an OAS clawback.

OAS Old Age Security

A federal monthly pension paid to most Canadians 65+ regardless of work history. Separate from CPP. The amount adjusts quarterly with inflation. High-income retirees get it partially clawed back.

OHIP / MSP / AHCIP Provincial Health Insurance

Each province runs its own public health insurance — OHIP (Ontario), MSP (BC), AHCIP (Alberta), RAMQ (Quebec), etc. Most have a 3-month waiting period when you arrive — apply day one.

OSFI Office of the Superintendent of Financial Institutions

The federal regulator that oversees Canadian banks, insurance companies, and pension plans. They make sure the big banks have enough capital and aren’t taking reckless risks.

Overnight Rate

The interest rate the Bank of Canada charges other banks for overnight loans. It anchors every other rate in the economy — your mortgage, your car loan, the rate on your savings account. Set 8 times a year.

P

POA Power of Attorney

A legal document letting someone act on your behalf if you can’t (e.g., dementia, hospitalization). Two kinds: financial POA (banking, bills) and personal-care POA (medical decisions). Set these up while you’re healthy — it’s too late once you need them.

Pre-Authorized Payment PAP

You authorize a company (utility, gym, insurer) to pull money directly from your account on a schedule. Convenient, but cancelling them is harder than starting — check your account every few months.

Prime Rate

The rate Canadian banks charge their most creditworthy customers. Moves up and down with the BoC overnight rate. Variable-rate mortgages and HELOCs are usually priced as “prime + X%.”

Probate

The legal process of validating a will after someone dies. Takes weeks to months. Provincial fees apply (Ontario charges ~1.5% of estate value). Joint accounts and named beneficiaries usually skip probate — one reason to set those up properly.

R

RRIF (Registered Retirement Income Fund)

What your RRSP converts into by December 31 of the year you turn 71. Forces you to withdraw a minimum percentage each year (starting ~5.28% at age 71, rising to 20% at age 95). Withdrawals are taxed as income at your marginal rate.

RESP (Registered Education Savings Plan)

Tax-deferred savings account for a child's post-secondary education. Government matches 20% of your contributions (CESG) up to $500/year per child, max $7,200 lifetime. The money grows tax-free; the child pays tax on withdrawals at their (usually low) student rate.

RDSP (Registered Disability Savings Plan)

Tax-advantaged savings account for Canadians eligible for the Disability Tax Credit (DTC). Government matches contributions up to $90,000 lifetime — the most generous match in any Canadian account. Many families miss out because of the DTC application step.

Remittance

Money sent across borders — usually from someone living abroad back to family in their country of origin. For Canadian newcomers, Wise, Remitly, and WorldRemit are typically cheaper than a bank wire (which can charge $20–$40 in fees plus a worse exchange rate).

RESP Registered Education Savings Plan

A registered account for your kid’s future education. The government adds a 20% Canada Education Savings Grant (CESG) on top of what you contribute (up to $500/year per child). Free money if you have kids.

Risk Tolerance

How much short-term loss you can stomach without panicking and selling. Critical for picking your asset allocation. If a 30% drop in your portfolio would make you sell, your tolerance is low — and that’s fine, but invest accordingly.

Robo-Advisor

A platform that builds you a diversified portfolio of ETFs based on a short questionnaire about your goals and risk tolerance. Wealthsimple Invest, Questwealth, Justwealth are the main Canadian options. Lower fees than mutual funds, less effort than DIY investing.

RRSP Registered Retirement Savings Plan

A registered account where contributions are tax-deductible (you get money back at tax time) and money grows tax-free inside. You pay tax when you withdraw — usually in retirement when your income is lower. Contribution room is 18% of your previous year’s earned income, up to an annual cap (~$32,490 for 2025; verify current at canada.ca).

RRIF Registered Retirement Income Fund

What your RRSP becomes when you’re ready to start withdrawing in retirement. Mandatory conversion by the year you turn 71. You must withdraw a minimum percentage every year (which grows as you age).

S

Secured Credit Card

A credit card you back with a refundable deposit (e.g., put down $500, get a $500 limit). The ideal first card for newcomers building Canadian credit. Use it, pay it in full monthly, graduate to an unsecured card after 6–12 months.

SIN Social Insurance Number

A 9-digit number you need to legally work in Canada, file taxes, and open many financial accounts. Apply via Service Canada (online if you’re a permanent resident or citizen) — usually arrives in days.

Spousal RRSP

An RRSP you contribute to in your spouse’s name. Useful when one partner earns much more — they get the tax deduction now, the lower-income spouse withdraws later at a lower tax rate. Income splitting, the legal way.

Super Visa Insurance

Medical insurance for parents and grandparents visiting Canada on a Super Visa. Canada requires at least $100,000 in coverage valid for one year, purchased from a Canadian insurer. Costs vary by age and pre-existing conditions.

T

TFSA (Tax-Free Savings Account)

A "tax wrapper" that lets investments grow tax-free forever and be withdrawn anytime without tax. 2026 limit: $7,000. Cumulative limit since 2009 for a lifelong Canadian resident: $102,000. The single most generous account the government offers Canadians.

T1 General

The main personal income tax return form Canadian residents file every year. Most filing software (Wealthsimple Tax, TurboTax, NETFILE-certified tools) walks you through it.

T4 Slip

The slip your employer sends you every February showing total income paid + taxes deducted for the previous year. You need it to file your tax return. Lost it? Your employer or CRA My Account can re-issue.

T5 Slip

The slip you get from a Canadian financial institution if your investments paid more than $50 in interest or dividends in a year. Report it on your tax return.

Tax Bracket

Income ranges where each “next dollar” of income is taxed at a different (higher) rate. Canada has federal brackets plus provincial brackets on top. Only the income in each bracket is taxed at that bracket’s rate — making more money never costs you net income.

TFSA Tax-Free Savings Account

A registered account where anything that grows inside (interest, dividends, capital gains) is tax-free forever — even when you withdraw. 2025 annual contribution limit: $7,000 (verify 2026 amount at canada.ca). Cumulative room since 2009 is around $109,000 for anyone who’s been a Canadian resident the whole time.

TransUnion

One of Canada’s two main credit bureaus (the other is Equifax). Some lenders pull from one, some from the other, some from both. Your scores can differ slightly between the two.

W

Will

A legal document that says who gets your stuff when you die, who raises your kids, who handles your estate (the executor). If you die without one, the province decides — and the process is slower, more expensive, and may not match what you wanted.

Wire Transfer

An older, slower, expensive way to move money internationally between banks. $20–$50 in fees per transfer plus a wide exchange-rate spread. Mostly displaced by Wise, Remitly, and similar services for personal remittances.

Wise formerly TransferWise

A fintech company that lets Canadians send money abroad at the real (mid-market) exchange rate plus a small transparent fee. Usually 5–10× cheaper than a bank wire transfer. CDIC-insured for funds held in your Wise account.