In Canada you can deduct expenses for investment, including interest, which can make trading on margin more attractive. Instead of paying 7%, I’m actually paying 7% * (1-marginal tax rate). Say my marginal tax rate was 25%, I’m actually only paying 5.25% after I get my tax deduction. With the Bank of Montreal stock I bought recently, I’m anticipating a 4% dividend-yield, which should be 3.5% after I’ve paid taxes (since dividends are taxed at 1/2 the income rate). Therefore if the long term appreciation of this stock is greater than 1.75% buying it on margin makes sense (which is what I did).