November 13, 2020

Everybody’s got an idea for a new tax:

As brightening vaccine prospects tease a return to pre-pandemic normalcy and employers map out when and how remote workers return to the office, analysts at Deutsche Bank are proposing a “privilege tax” on post-pandemic work from home to subsidize lost wages for low-income workers.
  • Deutsche argues that remote workers contribute less to the economy’s infrastructure while still receiving its benefits, and says that a 5% tax on individuals levied against their wages on days they decide to work remotely would “leave them no worse off than if they had chosen to go into the office.”
  • Similarly, the bank proposes levying the 5% tax on employers for each employee who decides to work from home permanently, saying that companies could even be better off despite the tax given potential savings on office downsizing and general maintenance.
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 0.4983 % 1,734.5
FixedFloater 0.00 % 0.00 % 0 0.00 0 0.4983 % 3,182.8
Floater 4.91 % 4.97 % 41,061 15.52 3 0.4983 % 1,834.3
OpRet 0.00 % 0.00 % 0 0.00 0 -0.1724 % 3,546.8
SplitShare 4.78 % 4.56 % 40,260 3.49 8 -0.1724 % 4,235.7
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.1724 % 3,304.9
Perpetual-Premium 5.35 % 3.12 % 76,687 0.28 14 0.0391 % 3,183.0
Perpetual-Discount 5.17 % 5.17 % 78,630 15.16 19 0.1445 % 3,588.9
FixedReset Disc 5.35 % 4.13 % 125,716 16.53 64 0.2452 % 2,166.6
Insurance Straight 5.07 % 4.88 % 99,866 15.13 22 0.1518 % 3,498.3
FloatingReset 1.99 % 2.42 % 50,518 1.20 3 -0.0503 % 1,806.1
FixedReset Prem 5.20 % 3.08 % 221,143 0.74 15 0.0850 % 2,664.4
FixedReset Bank Non 1.94 % 2.20 % 173,941 1.20 2 -0.0201 % 2,861.9
FixedReset Ins Non 5.37 % 4.25 % 69,289 16.43 22 1.0753 % 2,248.1
Performance Highlights
Issue Index Change Notes
RY.PR.Z FixedReset Disc -2.90 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 18.05
Evaluated at bid price : 18.05
Bid-YTW : 3.96 %
SLF.PR.G FixedReset Ins Non -2.46 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 11.10
Evaluated at bid price : 11.10
Bid-YTW : 4.24 %
NA.PR.W FixedReset Disc -2.40 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 17.08
Evaluated at bid price : 17.08
Bid-YTW : 4.36 %
PWF.PR.P FixedReset Disc -1.82 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 10.80
Evaluated at bid price : 10.80
Bid-YTW : 4.81 %
CM.PR.Q FixedReset Disc -1.74 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 19.15
Evaluated at bid price : 19.15
Bid-YTW : 4.24 %
MFC.PR.Q FixedReset Ins Non -1.03 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 19.30
Evaluated at bid price : 19.30
Bid-YTW : 4.27 %
BMO.PR.D FixedReset Disc 1.08 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 22.94
Evaluated at bid price : 23.32
Bid-YTW : 3.95 %
MFC.PR.F FixedReset Ins Non 1.09 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 11.12
Evaluated at bid price : 11.12
Bid-YTW : 4.29 %
BMO.PR.E FixedReset Disc 1.10 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 21.15
Evaluated at bid price : 21.15
Bid-YTW : 4.03 %
BNS.PR.I FixedReset Disc 1.24 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 21.15
Evaluated at bid price : 21.15
Bid-YTW : 3.81 %
TD.PF.I FixedReset Disc 1.44 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 22.87
Evaluated at bid price : 23.21
Bid-YTW : 3.84 %
SLF.PR.H FixedReset Ins Non 1.61 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 15.75
Evaluated at bid price : 15.75
Bid-YTW : 4.24 %
BAM.PR.R FixedReset Disc 1.89 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 13.45
Evaluated at bid price : 13.45
Bid-YTW : 5.22 %
BMO.PR.Y FixedReset Disc 2.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 19.75
Evaluated at bid price : 19.75
Bid-YTW : 3.99 %
MFC.PR.H FixedReset Ins Non 2.36 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 21.39
Evaluated at bid price : 21.70
Bid-YTW : 4.23 %
TD.PF.C FixedReset Disc 2.49 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 18.91
Evaluated at bid price : 18.91
Bid-YTW : 3.93 %
MFC.PR.N FixedReset Ins Non 3.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 17.91
Evaluated at bid price : 17.91
Bid-YTW : 4.20 %
MFC.PR.M FixedReset Ins Non 15.82 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 18.30
Evaluated at bid price : 18.30
Bid-YTW : 4.20 %
Volume Highlights
Issue Index Shares
Traded
Notes
NA.PR.A FixedReset Prem 104,242 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-08-15
Maturity Price : 25.00
Evaluated at bid price : 25.41
Bid-YTW : 3.19 %
TD.PF.H FixedReset Prem 47,925 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-10-31
Maturity Price : 25.00
Evaluated at bid price : 25.30
Bid-YTW : 3.78 %
SLF.PR.A Insurance Straight 38,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 24.26
Evaluated at bid price : 24.56
Bid-YTW : 4.88 %
TRP.PR.G FixedReset Disc 35,090 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 15.22
Evaluated at bid price : 15.22
Bid-YTW : 5.64 %
PWF.PR.K Perpetual-Discount 34,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 23.86
Evaluated at bid price : 24.11
Bid-YTW : 5.16 %
BAM.PF.G FixedReset Disc 32,635 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 15.56
Evaluated at bid price : 15.56
Bid-YTW : 5.36 %
There were 17 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
NA.PR.W FixedReset Disc Quote: 17.08 – 17.75
Spot Rate : 0.6700
Average : 0.3974

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 17.08
Evaluated at bid price : 17.08
Bid-YTW : 4.36 %

CU.PR.E Perpetual-Discount Quote: 24.35 – 25.00
Spot Rate : 0.6500
Average : 0.3814

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 24.05
Evaluated at bid price : 24.35
Bid-YTW : 5.03 %

PWF.PR.G Perpetual-Premium Quote: 25.35 – 25.94
Spot Rate : 0.5900
Average : 0.3609

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2020-12-13
Maturity Price : 25.00
Evaluated at bid price : 25.35
Bid-YTW : -8.32 %

RY.PR.Z FixedReset Disc Quote: 18.05 – 18.65
Spot Rate : 0.6000
Average : 0.3959

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 18.05
Evaluated at bid price : 18.05
Bid-YTW : 3.96 %

MFC.PR.F FixedReset Ins Non Quote: 11.12 – 11.94
Spot Rate : 0.8200
Average : 0.6259

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 11.12
Evaluated at bid price : 11.12
Bid-YTW : 4.29 %

CU.PR.C FixedReset Disc Quote: 17.10 – 17.81
Spot Rate : 0.7100
Average : 0.5304

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2050-11-13
Maturity Price : 17.10
Evaluated at bid price : 17.10
Bid-YTW : 4.25 %

7 Responses to “November 13, 2020”

  1. newbiepref says:

    Hi James, I was wondering if you have a point of view on this

    Thanks

    https://www.bce.ca/investors/preferred-shares/2020-notice-of-dividend-rate-november-13.pdf

  2. stusclues says:

    “Deutsche argues that remote workers contribute less to the economy’s infrastructure while still receiving its benefits”

    This is not so simple. Increases in work-from-home decreases pressure on infrastructure and results in lower long-term capital investment requirements for infrastructure. Operating costs, on a per unit basis, might increase if existing infrastructure cannot be scaled – i.e. reduction in capacity/frequency of buses, trains, etc.

    There are way better ways to raise revenue than this dumb idea.

  3. jiHymas says:

    I was wondering if you have a point of view on this

    See BCE.PR.R To Reset To 3.018%

  4. newbiepref says:

    Thanks James for your analysis of the BCE reset.

  5. paradon says:

    Although a 5% tax in remote workers may seem like a dumb idea, the point is that every level of Government is going to be turning over ever rock they can find to try and find new sources of revenue to help them pay their debts. Anticipating what might be coming and preparing your investment portfolio accordingly will be an imperative.

  6. jiHymas says:

    Linda Nazareth writes in the Globe:

    Putting a tax on workers outside of the office will inevitably mean fewer will be able to do so, at a cost to them, their employers and potentially the larger economy. As well, the premise behind a work-from-home tax is that workers doing so are somehow doing something bad for the economy, although it is not at all clear this is the case.

    In the end, we may have to levy taxes on businesses or individuals to cover some difficult transitions, and we may indeed have to look at the idea of a universal basic income, as well as government-sponsored training and a larger role for non-profits and educational institutions in training and retraining. We may also have to think about the cost of supporting businesses that will inevitably fail as it becomes increasingly clear that emerging from the pandemic will not result in a total return to work as usual – with the requisite purchases of coffee and sandwiches near the office.

  7. mbarbon says:

    Or we can learn to be more energy efficient, using less of the resources (ie oil/gas) to move a few pounds of “brain” to a set location.

    We can then sell these resources to foreigners, gaining much needed foreign income.

    Then resources spent on building roads/etc can be used to build stuff that can be sold so that it can be sold.

    Both of these are required to payoff the huge debt we have built up.

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