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What is the most tax efficient way to own stock in Canada? I plan on both short term and long term trading.?

I currently earn approx 50g's from crappy job income.
I trade with two pools of money, my risky capital for short term trades and my safe money for long term holds.
I have an RRSP and I max the contributions. I sometimes use this for owning stocks.
I occasionally want to sell stocks so that I can use my capital gains to buy nice stuff.
I eventually want to live of income from stock trading.
How can I pay myself more and the government less from my capital gains?
Please help.
Thanks.

Tax efficiency has got to be way down on your list of priorities. No offense but your income is not high enough to care about taxes and if half your money is an rrsp its irrelevant.

Based on your intention to speculate in the stock market with your non-RRSP portion, I would in all sincerity suggest (no joke) going to the roulette table at your local casino to "invest" the money. Your odds of winning are FAR FAR superior. Your return is 100%, not a measly 25-30% like the Canadian market just did in its most recent run. Finally, and best of all, in terms of meeting your criteria, its completely, and legally TAX-FREE.

Crazy idea eh? What's crazier is its better than your plan.

Instead of gambling your hard earned money away to buy things for now, consider socking it away painfully and slowly and let time and compounding work for you so one day far in the future you can have those things for sure.

in 2009 the new TFSA (Tax Free Savings) accounts will be available. Any gains in those accounts will not be taxed and you can cash out of them at any time with no tax consequences.

However intially you;ll only be able to contribute up to $5,000 per year (it is indexed). But any money you take out will add to your contribution room.

Well having capital gains inside your RRSP is definitely not good strategy. you do not have any 50% inclusion rate. That should all be outside of RRSP at least late in your work life.

You do not have the option to have some investments treated as trading with other investments getting the 50% inclusion rate for capital gains. So, I expect you would be best to stay with 50% inclusion rate for long term and 100% for short term.

Recently a lot of investors have discovered that leverage works both ways, fast up, fast down. that says we can be burned by using tax efficient leverage.

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