What is a K-Shaped Economy?

A K‑shaped economy describes a recovery (or downturn) where different groups of people, industries, or regions move in opposite directions — some sharply up, others sharply down. Picture the letter K: one arm goes up, the other goes down. That’s the metaphor.

 In a K‑shaped economy:

Ø  One segment experiences growth 

Higher‑income workers, large corporations, tech sectors, asset owners, and people who can work remotely often see rising incomes, profits, and wealth. 

Ø    Another segment declines

Lower‑income workers, small businesses, service industries, and people in jobs requiring physical presence may face job losses, reduced hours, or slower recovery.

The result is divergence, not convergence.

How should investors invest in a K-Shaped Economy?

• Investors should seek maximum diversification, favoring MIC and REIT pooled funds, increasing duration in GICs and adding exposure to international equities and real assets like gold and real estate.

RRSP deadline strategy for tax return

If you are in a 30% tax bracket, a $10,000 RRSP deduction could save you about $3,000 in tax. 

And if you make your contribution in the final days of the cutoff and immediately file your return, you could get your tax refund within a few weeks.  If you invest in our mortgage fund at an 8% estimated return, your one year return, including the tax savings, on the $10,000 is 38%

To maximize tax savings through RRSP contributions, consider the following strategies:

1.     Contribute within the deadline: Ensure contributions are made by March 2, 2026, to claim the deduction on the previous year's tax return.

2.     Maximize contribution limits: The maximum annual ceiling for RRSP contributions is $32,490 for 2025, but your actual deduction limit will be lower due to personal adjustments.

3.     Use the first 60 days rule: Contributions made in the first two months of the year can be claimed as a deduction on the previous year's tax return.

4.     Consider spouse's RRSP: If you earn a higher income than your partner, a Spousal RRSP can balance your future retirement income.

5.     Stay informed: Keep up with the latest CRA updates and changes to RRSP rules to ensure you're making the most of your contributions.

By following these strategies, you can effectively manage your RRSP contributions and potentially lower your tax bill for the 2025 tax year.