Generally Accepted Accounting Principles (GAAP):

Conventions, rules and procedures that define accepted accounting practices in Canada.

GDP:

Gross Domestic Product. A measure of a country's total output of goods and services.

Gift:

An asset transferred without legal considerations. If the grantor and beneficiary are non-arm's length, the grantor may have to pay assessed capital gains on the fair market value of the gift.

Gold Standard:

A monetary system based on convertibility into gold, e.g. a nation issues paper currency and fully backs it in gold. The two "moneys"' are gold and paper, are then freely interchangeable in terms of each other.

Goods and Services Tax (GST):

GST is a value-added-tax levied on all goods and services sold in Canada. Goods and services are currently taxed at a rate of 7 per cent of their cost.

Grantor:

The person establishing and transferring assets to a trust or individual, also known as the setter.

The original owner of a property.

Gross Debt Service Ratio (GDS):

The percentage of gross annual income required to cover payments associated with housing (mortgage principal and interest, taxes, secondary financing, space heating, and 50% of condominium fees, if applicable). Most lenders prefer that the GDS be no more than 30%.

Gross Domestic Product (GDP):

This is the most frequently used measure of Canada's overall economic performances. It's the sum of all the goods and services produced in the economy. A change in GDP represents growth or contraction of the economy.

Gross Domestic Product (Nominal):

The total value of production is the nominal GDP. Comprehensive figures are published every three months, and are adjusted to smooth the effects of seasonal changes in the economy. A separate monthly series of seasonally adjusted GDP accounts provide a more frequent monitor of the activity

Gross Domestic Product (Real GDP):

Is a calculation of national accounts that is adjusted for inflation so that it measures the volume of production, rather than the value.

Gross Effective Rent (the landlord - Real Estate):

Calculated by combining the net net effective rent with the building's quoted reality taxes and operating expenses. (See net effective rent)

Gross Effective Rent (to tenant - Real Estate):

This is the annualized "all-in" average rent to be paid by the tenant over the term. To calculate, divide the total present value value cost of occupancy by the area. Take the present value per square foot and amortize it over the term of the lease at an appropriate discount rate. The monthly payment multiplied by 12 is the gross effective rent on the lease. The (GER) can be used to compare scenarios whose lease terms are not exactly the same.

Gross Income:

Income before taxes including wages, income from investments, monetary gifts, and liquid assets.

Gross National Product (GNP):

At one time, GNP was the conventional measure of economic expansion. The major difference between the two yardsticks are that GDP does not include returns from Canadian investments abroad, but does include the returns from foreign capital invested here. GNP includes goods and services produced by Canadians abroad, but doesn't include returns to non residents from Canadian investments in other countries.

Gross Spread:

The difference between the price that the issuer receives for its securities and the price that investors pay for them. This spread equals the selling concession plus the management and underwriting fees.

Grossed-Up Dividend:

Dividends paid by a Canadian corporation to an individual are increased by one-third in calculating income for tax purposes. Individuals are then allowed a 20% dividend tax credit on the grossed-up dividend against total taxes payable. If you receive a cash dividend of $750, it will be grossed up to $1000, and you will receive a $200 reduction in your federal tax and $50 to $80 in provincial tax payable.

Group Insurance:

A form of insurance designed to insure classes of persons rather than specific individuals.

Growth Stock:

The common equity of a company that consistently grows significantly faster than the economy.

Guaranteed Income Supplement:

The amount payable to low income earners who are recipients of the OAS.

Guaranteed Interest Annuities (GIA):

A type of debt security contract sold to individuals by life insurance companies. Much like the GIC, it carries deposit insurance. Comcorp is the name of the industry insurance scheme. GIAs are offered in both redeemable and non-redeemable formats, and pay interest at a fixed rate.

Guaranteed Investment Certificates (GIC):

A type of debt security sold to individuals by banks and trust companies. They usually cannot be cashed before the specified redemption date, and pay interest at a fixed rate.

Guaranteed Term:

The length of time for which annuity payments are guaranteed. If the annuitant dies before the specified term, payments to the beneficiary will continue until the term ends.

Guarantor:

A third party who agrees to repay any outstanding balance on a loan if you fail to do so. A guarantor is responsible for the debt only if the principal debtor defaults on the loan.

This Glossary of financial terms was created by Fiscal Agents Financial Information Services, Research Department. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording, or otherwise, without the prior written permission of Fiscal Agents. Copyright Fiscal Agents © 2000. All Worldwide Rights Reserved. Click to contact Glossary editor or see the permissions page.