A prescription for a long and healthy life

On Tuesday, February 7th, clients and colleagues of Cumberland Private Wealth were treated to a presentation by Dr. Elaine Chin, a leading expert on preventive healthcare and wellness strategies. Despite the health concerns facing many Canadians and the strain on our healthcare system, the doctor gave hope and guidance to those who are willing to take control of their own well-being.

Dr. Chin is a pioneer in wellness, a best-selling author and media personality, and has impacted corporate Canada as a Chief Wellness Officer. From her clinic in Toronto’s Yorkville neighbourhood, she coaches her patients on how to transition from reactive to proactive healthcare so they can live healthier lives.

Chronic issues overwhelming the system


Before getting into her prescription, Dr. Chin outlined two realities shaping the healthcare environment for Canadians.

The first is a healthcare system that, in Dr. Chin’s words, is going up in flames. Systemic forces such as competition, economic pressure, social issues, technology and regulation are running headlong into a human resources shortage, resulting in disturbing statistics such as 6.5 million Canadians without access to a doctor or nurse practitioner, and Ontarians waiting more than six months to see a specialist.

The second reality is the prevalence of four conditions that contribute to more than 80% of all chronic suffering and premature death: heart attack and stroke, cancer, diabetes, and dementia. Dr. Chin pointed to worrying disease trends, such as a 77% increase in new cancer cases and a world in which the majority of people will be considered obese by the year 2030.

The prescription starts with you


Despite the health challenges facing Canadians and the world, Dr. Chin’s message is ultimately one of hope, because she believes that a large proportion of chronic disease and premature death is actually within our power to prevent.

She introduced a flowchart that showed how the risk factors for cardiovascular disease, heart attack, stroke, dementia, diabetes, kidney failure, and even cancer can be connected to one another, and how they can all fall under the broader umbrella of metabolic syndrome – a condition marked by abnormal biochemistry, obesity, and high blood pressure.

Dr. Chin proposed that, by tracking and improving our biochemistry, maintaining a healthy weight, and managing blood pressure, we can dramatically decrease the odds of experiencing the cascade of negative health effects stemming from metabolic syndrome.

Here are the four steps of Dr. Chin’s recommended process:

  • Know your numbers. Your numbers can mean everything from your body weight, blood pressure, and blood work data to the results of genetic testing for disease markers and MRI or CT imaging to see what’s happening inside your body. This step identifies problem areas and establishes a baseline so you can track your progress over time.
  • Create a health action plan. Your health action plan is how you address the numbers that need improvement. It generally means eating right, sleeping well, and staying active. It might also mean using drugs when necessary, adding supplements that can alter your epigenetics, and considering hormone replacement therapy when indicated.
  • Stay on track with coaching. Implementing your health action plan requires discipline. While you make efforts to eat enough protein, track the quality of your sleep, or count your daily steps, you might also draw on the support of professionals who can help you optimize your efforts, whether it’s a fitness trainer or a naturopathic doctor.
  • Reset and update. Like any plan, you need to adapt as conditions change – both in your body and in the external environment. Regular check-ins with your healthcare provider can help ensure that your numbers are moving in the right direction and that you are doing what you can to stay ahead of preventable health concerns.

The second half of Dr. Chin’s presentation was a Q&A period with the audience. The conversation covered many topics, including the importance of lifting weights to maintain bone density and muscle mass, the benefits of sauna and cold plunge, the dangers of environmental and lifestyle toxins such as smoking, alcohol, smog and pesticides, and the social and mental toxicity of our screen-obsessed culture.

Parallels with wealth management


Dr. Chin pointed to the many parallels between how we manage our wealth and how we manage our health. By setting goals, taking an objective look at the numbers, creating a plan, and working with good advisors to execute it over time, she believes that you can build a “health portfolio” that keeps you in good spirits for many more years to come.

For a more detailed discussion of the event or for access to a video replay, please contact your Cumberland Portfolio Manager.

Three experts on the future of real estate

On Wednesday, September 27th, some of our clients, friends and neighbours from the Yorkville area gathered at Cumberland Private Wealth to hear three leading experts share their diverse viewpoints as investors, developers and visionaries in the Canadian real estate market.

Who’s buying and where? Which way is the market going? Is the office market doomed? These questions and more are on the minds of many these days, and we were honoured to have some of the best real estate minds in Canada on our stage. Cumberland partner, Alex von Schroeter, kicked off the evening with an introduction, then gave the podium to Chairman and co-founder, Gerry Connor, who lead a lively discussion with our panel of experts.

First up was Julie Di Lorenzo, CEO Mirabella Corp, who fielded some tough questions around the Canadian housing crisis. She noted that the supply shortage is severe, and that part of the problem is a lack of qualified developers:

“There’s a shortage of people that take the projects from start to finish, which is what legacy developers used to do. So the solutions are there, but there’s going to be a long runway to accomplish where we need to go. We’re falling further and further behind. I think CIBC says that we’re 350,000 units short today. In the past, we were producing 85,000 units a year, but we’re going to be down to 30,000 or 40,000 units. We should be doubling the housing supply, but we’re going in the other direction.”

However, Julie pointed to a few reasons for optimism. Among them, a younger cohort of engineers who are increasingly looking to apply their skills to industrial engineering and building materials, which may help accelerate innovation for developers.

She also sees the potential for new finance tools to assist the housing industry, such as having CMHC underpin construction loans so that more projects can get off the ground, and the introduction of US-style mortgages with much longer terms that match the amortization of the mortgage with the long term nature of the asset and provide greater financial security to homeowners.

Julie believes that many of the finance tools and other solutions that would be helpful already exist, but just need to be made a higher priority at the political and regulatory levels. She says that now is “actually the first time that [housing] is on the radar screen of policymakers.”

The next panelist was Morris Kansun, President of Sierra Communities, who described one of the key dynamics that he sees in the Toronto condominium space:

“In the majority of new condo sales in specific GTA areas in which we are developing our condos, the typical buyer is someone like a plumber from Brampton. He’s got a couple hundred thousand dollars and he might not understand the stock market, so he goes and puts a deposit down for a new condo. He puts a mortgage on it and rents it out. If he can make a few bucks after paying the mortgage, great, but if he doesn’t, he doesn’t really care, because 25 years from now, he’s got a condo worth a couple million dollars with no mortgage on it, and that’s his retirement.”

The panel agreed that that this scenario and others like it account for a large number of Toronto’s rental stock today. There was also discussion around some of the dynamics happening around the condo market, including the opportunity to snag deals that arise when overstretched buyers can’t close on new construction units in today’s high-rate environment, and the opportunity for developers to pivot towards more purpose-built rental projects.

Next, Michael Emory, Chair of Allied REIT, was confronted with “the elephant in the room,” which is the future of office real estate in the work-from-home era.

As a pioneer of transforming old industrial buildings into some of the hippest workspaces across Canada, he said that he is certain that, “The urban core will continue to expand, to grow, become deeper, richer, more mixed use, and more vital to our life as a nation and to our lives as human beings. So, with that as a foundation, there isn’t the slightest concern on my part.”

He went on to outline some of the innovative ways that developers can reshape the urban core to keep pace with changing expectations. He used the recent Allied project, The Well at 470 Front St West in Toronto, as an example:

“The Well addresses the underlying realities of urban transformation, which is that people want to live, work, recreate and learn in the same environment. It makes for safer streets and more amenities. Everybody is attracted to restaurants, theaters, and places that address our desire for human culture. So the basis for the success of The Well, in my opinion, is that it is a large-scale, mixed use development in what is probably the most desirable urban neighborhood in Toronto. The great thing is there are many similar neighborhoods across Canada.”

In summary, the current real estate environment is one with a unique set of challenges, from higher interest rates and input costs to declining productivity, financing hurdles and glacial regulatory regimes. However, it is also a time of opportunity, with rising demand from an unprecedented influx of new Canadians, regional pockets of compelling value spanning from London to Barrie and beyond, and promising new strategies, whether that means building new rental stock, or finding creative ways to blend multiple uses in a single development.

This article is just the tip of the iceberg of a discussion that lasted about 90 minutes, including a dynamic Q&A with the audience members. For a more detailed content and takeaways from the event or for access to a video replay, please contact your Cumberland Portfolio Manager.

Housing market insights from a leading insider

How does the real estate picture look for 2023? Steve Tabrizi, Chief Operating Officer and partner at the RE/MAX Hallmark Group of Companies, recently shared his unique perspective with our clients and friends.

Tabrizi is a seasoned real estate investor and co-founder of the largest independent RE/MAX operation in the world. His team of over 1,900 agents close a sale every 18 minutes, and did more than $19 billion in transactions in 2021. Needless to say, he has seen a lot of real estate deals come across his desk.

As in previous visits to Cumberland, Steve presented a flurry of facts, anecdotes, insights and opinions about Canadian housing and the many economic, social, and political factors that shape its trajectory.

Here are some of his most memorable points:

Activity is returning. In May of 2023, the number of real estate units changing hands rose almost 25% versus May of 2022. Along with that, prices rebounded, with the average detached home now changing hands just below the price of one year ago, and almost 8% higher than in May 2021. The one area of weakness is new listings, which dropped 19% in May 2023 vs. May 2022, likely reflecting a reluctance of many buyers and sellers to transact in today’s environment of higher interest rates.

Buyers and sellers are uncertain. On the evening of Steve’s presentation, the Bank of Canada rate stood at 4.75% and, as he predicted, it rose to 5% the very next day. He shared survey results showing that 65% of Canadians have concerns about buying a home right now. They worry about paying too much (60%), unforeseen costs (54%), and living with post-home buying costs (51%). Despite these concerns, 44% of recent buyers were involved in a bidding war and 35% paid more than they had planned.

Renting will increase. Steve shared an anecdote about a professional couple who are renting a home in the upper beaches for $5,900/month. Why would they pay such high rent rather than buy? Because, even with two six-figure salaries and disciplined savings, it will take them years to accumulate a reasonable downpayment for an equivalent home. He remarked that Canada will likely become increasingly like Europe, where home ownership is not as attainable and renting will be more common, particularly among those who cannot turn to “the bank of mom and dad” for home financing.

Population growth is fuelling the market. Steve provided a deep dive into the impact of record-high immigration on housing, the economy and our infrastructure. In 2022, Canada processed 5.2 million applications for permanent residence, temporary residence and citizenship, and welcomed one million new Canadians. Meanwhile, real estate listings are at record lows and Toronto built less than five new housing units per 1,000 residents in 2022, with the rate of building only slightly higher in other cities. Steve concurs with the general view that immigration will continue to stress the housing supply, with long-term upward pressure on rents and prices, particularly in places with transit access to major job markets.

Condos may offer opportunities. In 2020, 60% of rental condos were cash flow positive for the landlord. In 2022, that number dropped to 48%. Still, with the coming stream of immigrants and continuing economic barriers to home ownership, Steve believes that selected condos may be the best investment housing unit for landlords in the GTA, with the average two-bedroom condo now commanding $3,300 per month in rent. Steve also commented that there may be a specific pocket of opportunity in instances where an owner purchased a condo on a pre-construction basis and it is now being offered as an assignment sale because they were unable to finance the closing costs.

The housing shortage needs new solutions. Steve believes that radical policy changes are needed to increase the housing stock in Canada, including finding ways to align federal, provincial and city policies. Some examples he gave were tying federal transit funding to housing completions, permitting temporary foreign construction workers to increase the speed at which building can happen, selling federal buildings to private housing developers, and giving financial bonuses to cities that encourage housing. He also shared the example of Dallas, Texas, which has used economic incentives to attract non-oil industry employers and expand the diversity of its workforce. He posited that smaller Canadian cities could benefit from similar strategies to spur growth, attract immigrants, and ease the pressure on housing in our handful of major employment centres.

As always, Steve shared far too many pertinent observations and interesting data points to capture in this brief summary. To learn more, we are pleased to share a copy of Steve’s slide presentation, and to address any questions that you may have. Please contact your Cumberland Portfolio Manager at any time.

Cumberland Foundations Circle brings charitable sector together

On a Tuesday afternoon in June, donors, executives, board members, and experts from the charitable sector came together to make connections and share their experiences at the inaugural Cumberland Foundations Circle event.

At Cumberland, we’ve been involved in helping foundations and endowments manage their investment assets for many years. However, one comment that frequently arises is that there is a need for greater peer support for and information exchange within those in the nonprofit space. We created the Cumberland Foundations Circle as a way to encourage more community, collaboration and support that brings real value.

Great speakers and friendly networking

Around two dozen invitees gathered at noon for a light lunch before our President and CEO, Charlie Sims, took the podium to officially kick things off. Charlie’s remarks addressed the value that philanthropy creates for society, some of the key challenges facing the sector, and the impact of these challenges on the investment decisions facing boards and investment committees today.

Charlie then introduced Brad Offman, founder of Spire Philanthropy, who took a deep dive into the current trends shaping the landscape for Canadian foundations. Brad provided insight on issues such as the higher disbursements quota, changes to donees, evolving donor sources and attitudes, increasing scrutiny around how charities are being evaluated, and new offerings coming to market for those who wish to become donors.

Next to present was John Poulter, CFA, Portfolio Manager at Cumberland Investment Counsel and founding partner at Cumberland Partners Ltd.. John presented proprietary research on how foundations and endowments can expect to achieve the recently increased 5%+ minimum annual disbursement while remaining conservative in their investment policies and still continuing to grow their assets. His findings provide some focus and new direction to charities who may be grappling with this issue.

Finally, Charlie sat down with Bruce Lawson, currently Special Advisor to The Counselling Foundation of Canada and formerly its long time President, for a fireside chat on how focus and collaboration create value in the philanthropic sector. During this candid discussion and subsequent Q&A, Bruce shared a multitude of insights and personal experiences that he has gained as a member of a prominent philanthropic family and a true innovator in the not-for-profit space. He reviewed a few of the ways in which the Foundation has made strong impact including recent funding projects to indigenous communities in Canada.

After the speakers wrapped up, the event continued onto our third floor patio overlooking Yorkville Ave. Most of the attendees stayed to enjoy a cool drink, continue the conversation, and make what we hope will be lasting connections with one another.

Join us next time

If you are involved in the stewardship of charitable assets, whether as part of a public-facing organization or a private foundation, the Cumberland Foundations Circle is a place where you can connect with like-minded individuals.

If you would like to learn more, or join the guest list for a future event, please send us a line here.

How could AI affect you?

As a technology, AI has the potential to bring about significant benefits to society by automating tasks, providing insights into large amounts of data, and enabling new types of applications.

On the other hand, AI also poses some challenges and concerns. Some worry about the potential for job displacement, bias and fairness issues in algorithmic decision making, privacy and security concerns, and the potential for AI to be used in harmful ways if not properly regulated.

If this introduction sounds like something written by a journalist or think tank, guess again. It was written by ChatGPT, the Large Language Model that hit 100 million monthly active users in January 2023, making it the fastest-growing computer application in history.

In May of this year, clients and colleagues of Cumberland Private Wealth were invited to a discussion on AI – what it is, what it can do, where it’s going, and how it might affect us all. The presenters included Barbara Gray of Brady Capital Research, an expert on the impact of artificial intelligence, as well as Charlie Sims, Peter Jackson, and Levon Barker of Cumberland Private Wealth Management.

Changing the way we travel, eat and invest


Sims pointed out that most of us are already interacting with AI on a regular basis, whether through navigation in our cars, facial detection on our phones, autocorrect on our devices, or search and recommendation algorithms when we use the web.

Gray presented her view that there are three main layers at which she believes companies will use AI to unlock greater value:

The surface layer, where value is extracted by unlocking the productivity and efficiency of people and processes
The middle later, where new value is originated by making products and services better and more attractive
The deepest layer, where companies capture value by unlocking the so-called long tail – using data to deliver highly customized, niche solutions and experiences.

To highlight the power of the long tail, consider the difference between offering a hotel stay where every room is more or less the same, vs. using AI to sift through thousands of short-term rental properties to deliver the perfect vacation spot based on your unique preferences.

Gray also highlighted ways in which companies can connect their long tails of knowledge, data, content, goods and services together to create integrated consumer experiences. Imagine being able to ask for a delicious, low-calorie, Spanish-influenced meal, and an AI network being able to extract just the right recipe from one source, evaluate the nutritional data from another source, order the ingredients from yet another source, and have them delivered to your door together alongside cooking instructions.

During the Q&A portion of the discussion, the Cumberland team shared insights into the kinds of companies that they believe can benefit from advances in AI and the kinds that could be at risk of being disrupted. They also discussed regulation, ethics, and some of the ways in which Cumberland has been experimenting with AI tools in the investment research process and in automating the client experience.

From digital transformation to AI transformation


Gray expects AI to transform everything from Hollywood screenplays to medical diagnostics, music production to government agencies. Although many of the changes will be positive for companies and consumers, there remains the obvious question of how quickly workers who are displaced by the technology will be able to regain their economic footing. She believes that new jobs and modes of value creation will inevitably emerge, even if we can’t predict exactly what that will look like from our current vantage point. 9She remains optimistic overall regarding the benefits from AI.

How will AI affect you? It largely depends on where you stand. Massive transformations of this sort will produce various gains and losses, and it’s possible that many of us will experience both sides of the coin. Gray believes that the best strategy is to work on adapting rather than trying to resist or deny the changes that are already well underway. She predicts that the transformation to an AI-driven world will mirror the digital transformation of past decades – only much faster this time.

Please watch the full presentation here, and let us know if you have any questions, we would be pleased to hear from you and address them as best we can.

An insider’s look at the housing market

What drove real estate to record highs in 2022, and what is the outlook from here? For answers, clients and friends of Cumberland were recently treated to a fascinating presentation by Steve Tabrizi, Chief Operating Officer and partner at the RE/MAX Hallmark Group of Companies.

Tabrizi has a truly unique perspective on Canadian housing, with nearly three decades of real estate investment experience, and as a driving force behind the largest independent RE/MAX operation in the world, with over 1,800 agents working out of 78 offices. The last time he visited Cumberland, in 2019, he delivered remarks that proved remarkably prescient.

Among those remarks was the idea that, as Toronto becomes the “New York City of Canada,” the affordability picture may change permanently, meaning not everybody will be able to attain home ownership in the city, as is already the case in Manhattan and many European cities too.

However, during the pandemic, a confluence of factors came to bear: interest rates so low that money was essentially “free,” and a window of time when many had more mobility due to working from home and more disposable income from curtailed travel and discretionary spending, plus COVID stimulus.

The result was a burst in real estate activity as younger buyers in particular seized what many saw as a once-in-a-lifetime opportunity to purchase homes – some in the city, many pushed by rising prices to a 100km radius of the city, and a surprising amount even extending themselves to buy cottages.

Where we stand now

Today, on the other side of pandemic lock-downs and with interest rates suddenly much higher, media headlines are crowing about the potential for a “historic real estate correction,” but Tabrizi warns against such hyperbole.

Yes, some prices are down year to date, but most regions are still up versus 2021, and any prudent analysis should consider at least a three-year time window. Tabrizi provided further data demonstrating that the current market favours neither buyers nor sellers, and is balanced in terms of the amount of available inventory and the number of sales versus the number of listings.

Looking forward, Tabrizi touched on a few key trends at play:

Interest rates
“If the Bank of Canada pushes interest rates above the neutral zone (estimated at 3-4% based on given historical levels), it will cause a recession. Housing affordability issues will persist either way, because high prices and high interest rates both reduce affordability.”

“Inflation pressure really took off in March, and we will probably go for a 15-month cycle, meaning by next September we will see inflation probably sitting at in and around 4-4.5%. This should set the stage for further engagement of the market.”

“Investors, defined as Canadians who own more than one property, mostly resident in Canada but not exclusively) own more than a third of homes built after 2016. They own 1-in-5 homes overall, and 1-in-3 new homes. These multi-property owners are growing and are closely monitoring the shift of the market saying that ‘In February I was paying for the downtown detached home in Riverdale $1.5 or $1.7 million and now I can buy it for $1.2 million.’ So a number of them are doubling down and actually increasing their investments. Some expect to do so later.

Tabrizi sees a strong employment picture, growing immigration, and a Canadian economy with significantly less housing units per capita than any G7 country. In other words, despite some short-term uncertainty, the fundamental supply/demand picture remains favorable for real estate over any reasonable period of time.

Over the course of the presentation, Tabrizi shared so many interesting stories and noteworthy data points, it’s difficult to capture them all.

If you’d like to learn more, please contact us so we can share a variety of the information he provided us. Thanks Steve!

When You Should Consider Our Automated Portfolio Advisor Tool

Generations of investors have trusted Cumberland Private Wealth for highly individual portfolio advice and investment management. However, there are many situations where our automated Portfolio Advisor Tool (PAT) might be better suited to your needs.

Cumberland PAT gives you access to the same investment expertise as our Private Clients, except in a digital form available at a minimum account size of $50,000 with human support when you need it.

Here are some of the ways our clients are utilizing Cumberland PAT:

Smaller accounts. You may be a Private Wealth client with a smaller account to manage, such as a TFSA, education savings plan or other registered account. PAT brings an efficient solution.

Building wealth
. You may be rapidly building your wealth, but not be quite ready for significant Private Wealth advisory services. PAT is a great bridge to get there.

Family ties. You may be the child or grandchild of a Private Wealth client and may be seeking to establish your own relationship with Cumberland. PAT is a perfect starting point.

Digital preference. You may want access to the track record of our investment team and simply prefer a digital investment experience. If so, welcome aboard.

Planners and advisors. You may be a financial professional who wants access to our investment skill for your clients. PAT can be a powerful complement to your practice.

Workplaces. You may run a workplace savings program and want a professional, higher tier of investment expertise for your people. PAT works very well at work!

Cumberland PAT is a digital-first way to access the same investment management expertise that has guided our Private Clients through decades of bubbles, recessions and pandemics. Whatever the future may bring, PAT is a terrific way to position your investments right now.

Simply click here to schedule a 30-minute chat to learn more.

Deep Roots, Stronger Together

On May 2, Cumberland Private Wealth completed the previously announced merger with Perron & Partners. So, how did two successful independent firms separated by 2,100 miles decide to join forces and Go Far Together? Let me tell you.

Both firms have a lot in common. To start with, both were founded by entrepreneurial industry veterans. Both firms were employee-owned with no affiliations to any financial organizations. Both had strong values and believed deeply in the client experience.

This article appeared in the Spring 2018 issue of our newsletter, “Interest Gained”. To read the full newsletter, please click here.

Implications of 2018 Budget on Tax for Private Corporations

As many Canadians are aware, the Department of Finance has made major changes to the taxation of shareholders effective for 2018. What used to be known as “kiddie tax” is now referred to as “tax on split income” or “TOSI” and it can potentially apply to almost anyone with residency ties to Canada. The budget also introduced new rules for corporations earning passive income, which will become effective in 2019. As a result, incorporated professionals are more restricted in their tax planning, leading some to ask: “Is it still worth it”? The classic tax-planning answer, of course, is “it depends”. This article explains some of the recent tax law changes, and considers some situations where professional corporations (“PCs”) may still offer tax and financial planning benefits.

This article appeared in the Spring 2018 issue of our newsletter, “Interest Gained”. To read the full newsletter, please click here.

Cumberland Partners Limited announces the completion of the previously announced merger with Norrep Investment Management Group Inc. and Perron & Partners Wealth Management Corp.

Toronto (ON) – May 2, 2018 Cumberland Partners Limited (CPL, parent company of Cumberland Private Wealth Management Inc. and Cumberland Investment Counsel Inc.), Norrep Investment Management Group Inc. (NCM – Norrep Capital Management), and Perron & Partners Wealth Management Corp. and Perron Asset Management Inc. (Perron & Partners) and their related entities announced today the successful closing of the merger announced on February 5, 2018.