A broker's statement packs a lot of information into few columns, and two of them create most of the confusion: the average cost — "average price" on some statements — and the adjusted cost base (ACB). They look alike, but they answer different questions.
The average cost — what my shares cost me
The average cost ("average price" on some statements) is the total cost of your purchases divided by the number of shares held.
A neutral worked example:
- Purchase of 10 shares at $100: cost $1,000.
- Purchase of 10 shares at $140: total cost $2,400 for 20 shares.
- Average cost: $2,400 ÷ 20 = $120.
Note what a sale does — and does not do: selling 5 shares at any price removes 5 × $120 = $600 from the total cost, and the average cost of the remaining shares stays $120. The sale price affects your gain, not the average cost of what remains.
The ACB — the tax version of the same idea
The adjusted cost base is the corresponding tax concept, the one that in principle serves to calculate the capital gain in a non-registered account. It starts from the same calculation, but with additional rules: it is normally computed per security, across all accounts at all of your brokers, and certain situations adjust it (acquisition costs, losses followed by a quick repurchase, particular distributions from some funds…).
Hence frequent discrepancies: the "average price" shown by a broker only knows the transactions made there — it is not necessarily your ACB.
Why two brokers show different figures
- One includes transaction fees in the cost, the other shows them separately.
- A transfer of securities between institutions sometimes arrives with an incomplete original cost.
- Past splits may be reflected differently.
None of these gaps is necessarily an error — they are different conventions around the same history.
What this changes for your tracking
Everyfolio computes the average cost from the transactions you entered in it, purchase fees included, using the weighted-average-cost method illustrated above. It is a tracking tool: for your tax filings, the figure that governs remains the one established under the tax rules, backed by official slips and statements.
Challenge: check my understanding
With an account, the challenge opens: four questions on this article, and a state that follows you.
Official sources
The tax treatment of the adjusted cost base and of dispositions is set by the Canada Revenue Agency; these rules change. Quebec residents also file with Revenu Québec, which applies its own reporting rules to the same disposition.
- Canada Revenue Agency — line 12700, capital gains (and losses): https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains.html
- Canada Revenue Agency — guide T4037, Capital Gains (adjusted cost base): https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037.html
Informative, general content — not personalized advice. For your situation: your institution or an advisor.