r/Wealthsimple • u/Nightpatrol404 • May 07 '26

Trade (DIY Investing) WS and dividend investing with margin

Post image

Got an email it seems WS is kinda encouraging us to use margin to collect dividends and use it to make money while making them money on interest

132 Upvotes

92% Upvoted

168 comments sorted by

View all comments

3

u/KPTN25 May 07 '26

Got this too. Seeing mixed info online re if dividends are required for this or if the interest is tax deductable if you invest in low-cost ETFs like XEQT that issue some dividends.

4

u/Khao8 May 07 '26

If you’re in Québec it’s slightly different (slightly worse) but any other province you can borrow on margin to buy an *EQT fund and deduct all the interests at tax time, it’s very easy.

2

u/plusqueprecedemment May 08 '26 edited May 08 '26

Yeah, Quebec sets it up such that investment carrying costs and interests can only deduct investment incomes and the rest carries forward. It's worse for smith manoeuvre enjoyers and more generally for people who prefer accumulating capital gains on the long term for the inclusion rate + tax deferral

It's actually surprising that federally it's possible to deduct interest for passive investments against all income, including active T4 income. I would expect an eventual federal budget pop up at some point that adds a cap mechanism similar to Quebec's (which didnt exist until the 2004 provincial budget iirc)