| Money123 is taking a little break and will be back Jan. 8. Happy holidays everyone!  Omicron and your flight It was only two weeks ago that I wrote about what the then-emerging Omicron variant might mean for holiday travel plans, insurance and refunds. In that article, I focused mostly on international travel, which seemed the most at risk of disruption (and, indeed, Ottawa has reestablished an advisory against non-essential travel abroad). But with the variant spreading so quickly, even domestic travel no longer seems like a safe bet. Air Canada told Global News the "plan is to operate its schedule," my colleague Ahmar Khan reports. The company said it will continue to honour refundable tickets "as per those ticket terms and conditions." For those with non-refundable tickets, it is allowing passengers to change their flight to another date without any fee, cancel their travel and receive a fully transferable voucher that does not expire or cancel and convert to Aeroplan points and receive an additional 65 per cent. That policy, though, does change after Dec. 31, according to Air Canada's website. When a flight is changed in 2022, passengers can make a change at no cost, but will pay the difference in fare price if the new ticket is more expensive. Here’s more on how WestJet is handling the situation and other things to consider if you were set to take off in the next few days.  No change on the mortgage stress test (for now) The mortgage stress test isn’t getting any tougher, at least for now. Financial regulators said earlier this year they’d review the rate used to vet mortgage borrowers’ finances at least every December. This was the first such review, and nothing changed, which will come as a relief for anyone hoping to get into the housing market next spring. If you’re applying for a mortgage at a federally regulated lender with a down payment of 20 per cent or more you’ll have to prove that you would be able to carry a monthly payment as if you had an interest rate of 5.25 per cent or the equivalent of your contractual trade plus two percentage points, whichever is higher. Here’s more on the mortgage stress test.  What does Omicron mean for interest rates? Omicron is a threat to the economic recovery, but does that mean the Bank of Canada might postpone a widely expected interest rate hike this spring? Quite the opposite, according to analysts. With inflation surging, Canada’s central bank is likely to give itself the option to raise borrowing costs earlier than planned, not later. The earliest hike could come as early as March, according to Andrew Kelvin, chief Canada strategist at TD Securities. *** My book Money Like You Mean It – Personal Finance Tactics for the Real World, is out! You can find it on Indigo, Amazon and many local bookstores. ________________________ – THE QUESTION – “I have dual American-Canadian citizenship and am still required to file my U.S. tax return every year. I have lived in Canada since I was 17 years old, all of my work history is in Canada, and I have no plans to ever return to the U.S. to live. I am considering renouncing my U.S. citizenship but wondering if I would be giving up any retirement benefits from the U.S. government by doing so.“ — A Money123 reader “This question incorporates many complicated factors that will differ based on specific financial, family and professional circumstances. However, some broad considerations will generally be relevant. There is a difference between an obligation to file a U.S. tax return and an obligation to pay U.S. tax. It is unlikely that a U.S. citizen residing in Canada would be required to pay U.S. income tax on income earned as an employee of a Canadian employer for services in Canada. Obviously, there is a cost of time and/or money to prepare a U.S. tax return, and there is an annoyance factor, but it is crucial to distinguish between a tax liability and the annoyance of annual filings. The future is hard to predict. In my opinion, a responsible professional advisor does not allow any statement containing the words ‘I have no plans to ever’ to go unchallenged. The way you formulated your question indicates you have primarily, if not exclusively, wage income as an employee of Canadian employers. An individual with no work history in the U.S. would probably not qualify for U.S. retirement benefits (‘social security’) based solely on their Canadian employment. However, the tests used by government agencies in these situations are complicated and at times inconsistent. It sounds like the U.S. filings are mostly annoying, but that there is no significant economic benefit arising from U.S. citizenship. The question does not reference other government largesse, such as child tax credits or recent pandemic assistance. I would hope that the ultimate decision is based on additional (perhaps more significant factors) such as availability and cost of health care, family relationships and ownership (if any) of assets subject to irreconcilable tax treatments on the two sides of the border.” — Saul Abrams, licensed foreign legal consultant, Field Law ___________________________ Want your money question answered by an expert? Get in touch! | 
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