Your setup plan

Personalized for Quebec, 250K mortgage, 2 years to renewal, 47% MTR. Print it. Walk through it step by step.

Recommended product

1st choice

National Bank All-In-One

Immediate re-advance, up to 99 sub-accounts, Prime + 0.5%, approx 6.95/mo fee. The cleanest product for Smith tracing.

2nd choice

Manulife One

If you prefer a single-account life with integrated chequing. Higher fee (16.95/mo) but more flexible.

Warning:

Timing: 2 years to renewal

Do NOT break your existing mortgage. Wait until renewal. In the meantime, complete the Pre-work phase (reading, IPS, accountant selection).

Pre-work (now, before renewal)

Read Income Tax Folio S3-F6-C1 (Interest Deductibility) — canada.caRead Robinson Smith, Master Your Mortgage for Financial Freedom (2019)Write a one-page investment policy statementFind an accountant with prior ITA 20(1)(c) experience. Ask: have you filed line 22100 claims with HELOC-sourced interest?Find a fee-only financial planner (no commissions)Interview two mortgage brokers who know re-advanceable products

At renewal (month T-0)

Apply for National Bank All-In-One re-advanceable mortgageRequest the charge registered at 80% of appraised home value (520K on your 650K home)Confirm automatic re-advance on the HELOC sub-accountRequest 3 HELOC sub-accounts: one for Smith investing, one for personal use, one reserveConfirm HELOC rate: Prime + 0.5%Confirm the monthly fee and how it is charged

Brokerage setup (within 7 days of mortgage close)

Open a new non-registered brokerage account (Questrade or Wealthsimple Self-Directed)Name it clearly (Smith Manoeuvre or SM-Investments)Disable DRIP on all holdingsSet up linked personal chequing for dividend sweepsDocument the target holdings per your IPS (recommended for Quebec: 80% VDY, 20% CPD)

Automation (within 14 days)

Automatic recurring HELOC-to-brokerage transfer: 339 per month, 2nd of monthAutomatic purchase of target ETF (or calendar reminder for manual buys)Automatic dividend sweep from brokerage to chequingAutomatic mortgage prepayment from chequing when dividends accumulateEnable HELOC interest capitalization (pays itself from HELOC)

Documentation infrastructure (month 1)

Create Smith Manoeuvre folder (cloud + local backup)Subfolder per yearSet up compliance ledger (this app, or custom spreadsheet)Calendar: 30 min/month on 1st of month for record-keepingCalendar: 2 hours in February for annual reconciliationCalendar: April tax filing with your accountant

First tax return (year 1, April)

Provide accountant with the annual reconciliation spreadsheetProvide T5 from lender and T5/T3 from brokerageFederal: claim HELOC interest on line 22100 (Carrying charges)Quebec: file Schedule N (Adjustment of Investment Expenses) with TP-1Quebec: record carry-forward on Schedule N for future useWhen refund arrives: 100% to mortgage prepayment

Questions to ask your accountant

1. Have you filed line 22100 claims with HELOC-sourced interest in the past? How many, for how many clients?

2. Are you familiar with S3-F6-C1 and the direct-use test?

3. Do you file Schedule N routinely for Quebec residents?

4. What is your fee structure for the additional work in a Smith year?

5. What happens if CRA sends a review letter — do you handle it, and at what cost?

6. Can I see a redacted example of a prior client's return?

Red flags in an accountant

Error:

Has never heard of Smith Manoeuvre or ITA 20(1)(c).

Thinks interest on a HELOC is automatically deductible if it is a HELOC.

Does not know what Schedule N is (Quebec residents).

Charges a flat fee without discussing the extra complexity of the Smith return.

Will not provide references from prior Smith clients.

Your Year 1 calendar, in one view

Mar 2028

Mortgage renewal, open All-In-One

Apr 2028

Brokerage setup, first draws

Monthly

339 cycle on autopilot

Apr 2029

First Smith tax return