|  Russia invades ‘Europe’s breadbasket’ Russia‘s invasion of Ukraine has shaken global markets, driving prices up on commodities including oil, wheat and other grains. With such a significant portion of the world’s wheat exports coming from the Ukraine and Russia, experts say prolonged conflict in the region is likely to push costs higher in the bakery and beyond. Food inflation might hit baked goods first, but Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, tells Global News that costs will soon be passed on to other aisles in the grocery store as feed for livestock becomes more expensive and prices on meat, dairy and eggs rise in turn. Inflation on food products was already set to rise in the months to come, but Charlebois predicts the Russia-Ukraine crisis will only worsen the ongoing supply chain impacts on Canadians trying to save money on groceries. "We don't know how long this conflict is going to last. But the longer it lasts, the more companies will have to revisit their procurement strategy and how they price their products towards their customers,” he says. Read more here about how Canada’s own wheat industry is reacting to the invasion in eastern Europe.  High prices shifting habits Even before conflict overseas threatened global prices, Canadians were already starting to shift their spending when it comes to food. A survey released this week from the Angus Reid Institute shows 46 per cent of Canadian consumers are switching to cheaper brands at the grocery store, one-third are cutting back on meat, and one in five are buying less fresh fruit and vegetables. Sixty-two per cent of survey respondents also reported eating out less and a quarter said they're drinking less alcohol. Rising prices on dairy, continued supply chain problems and, yes, the ever-present pressure of inflation are likely to add $1,000 to the annual food bills of an average Canadian family of four, according to Canada's Food Price Report. Four per cent of survey respondents across the country reported visiting a food bank more often than usual as a result of the increased prices. Have your spending habits changed in the face of rising prices? Read more on the survey here and you’ll quickly see you’re not alone.  And then there’s interest rates In an effort to tamp down on runaway inflation, the Bank of Canada has signalled it will start to hike interest rates in the months to come, with many economists expecting the central bank’s key lending rate to rise at its next announcement on March 2. But even if the move is aimed to promote stability and predictability in the markets, a majority of Canadians are concerned about the impact of rising interest rates on their bottom line. Some 55 per cent of Canadians surveyed in an Ipsos poll commissioned by MNP Ltd. said they are concerned about the impact of rising interest rates on their finances. Meanwhile, 81 per cent said they'll be more careful spending money as interest rates rise. But perhaps surprisingly, one in four also said they don't have a solid grasp of how rising rates would affect their finances. If you’re among the one in four Canadians confused by interest rate hikes, or if you’re just looking for tips to mitigate the higher costs of borrowing on your own finances, Global News reporter Craig Lord broke the topic down with some experts here. ________________________ – THE QUESTION – “I have two RRSP accounts and one TFSA. I would like to make a deposit every two weeks into my TFSA, taking from one of my RRSP accounts. Can I do this without being dinged for tax? I live in Alberta.” — A Money123 reader “Good question! Frequent contributions to one’s TFSA are a great way to save for the long term. I recommend to every single one of my clients that they try their best to maximize their TFSA contributions each and every year. The problem specifically with what you are suggesting from a tax perspective is that one cannot simply transfer funds from one’s RRSP into one’s TFSA directly. The transfer out of your RRSP would be considered a withdrawal from the RRSP for tax purposes. The withdrawal would be included in your income and taxes would be payable at your marginal tax rates. Depending on the amount of the RRSP withdrawal, income taxes would be withheld at source. Once the funds are out of the RRSP and in your personal hands, you can then make the TFSA contribution. This strategy may or may not make sense. The answer would depend on your marginal tax bracket in the year of the RRSP withdrawal, how old you are, and what your short, medium and long-term goals are with the savings. If you are in a low tax bracket, this strategy could actually make sense. If you are in a very high tax bracket, this probably doesn’t make a lot of sense.“ -Neal Winokur, CPA, co-founder of RealtyTax.ca and author of The Grumpy Accountant
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