Are high grocery profits ‘greedflation’? Wondering whether the high prices you’re paying at checkout are fueling profits at major Canadian grocery chains? A new report from Dalhousie University's Agri-Food Analytics Lab says it’s hard to say for sure. While food inflation has indeed reflected rising prices for staples at the grocery store, the cost of sourcing those goods has risen in lock-step, says Sylvain Charlebois, the lab’s director. Profit margins have held "relatively consistent” at chains including Loblaw, Metro and Empire Co., leaving little public evidence of so-called "greedflation,” he says. Overall, the report says profit figures don’t point towards “commercial abuse,” but Charlebois notes a more fulsome investigation from the Competition Bureau of Canada would be needed to settle the question. Read more from Global News reporter Sean Boynton.  Can you rent to own your home? A suite of spending announcements from the federal government this week plugged the rent-to-own model as a key piece of Ottawa’s plans to restore housing affordability. Global News took a look at what the model really involves, what kinds of renters are right for it and whether it will really help Canadians afford homeownership. Rent-to-own typically sees a renter sign an agreement with their landlord to buy out the property at the end of their lease at a set price in a few years’ time. Rachel Oliver, who says she’s helped more than 700 Ontario families get “mortgage ready” this way through her company Clover Properties, says her clients typically have damaged credit or other financial obstacles that would make getting approved through traditional lenders tough. Through some credit repair strategies and “forced savings” on top of monthly rent, she says the model can be a great path to homeownership for families and an exit strategy for some investors. But others warn rent-to-own is not a “magic solution” to turn renters into buyers and question whether the federal government’s policies will add enough supply to meaningfully impact housing affordability. Read more here.  Questions for your mortgage broker If you’re already “mortgage ready” and considering jumping into the housing market as it shows signs of cooling, there are some questions you should be prepared to ask your broker or adviser to avoid being caught by surprise when checking your monthly bills. That’s especially important as the Bank of Canada gears up to make another interest rate announcement on Wednesday, with most economists expecting another oversized hike in the policy rate. One of the most important pieces of information to know is what will happen if interest rates do rise after you’ve taken out the mortgage. While a fixed-rate loan won’t see your monthly payments rise or fall when rates change, variable mortgages are a bit different. Adjustable mortgages will see your monthly costs rise immediately in step with the Bank of Canada’s rate hike, while variable-rates with fixed payments instead length your amortization period. The situation is also different for breaking your mortgage based on whether you’re on fixed or variable rates. Find out more about those important distinctions here. ________________________ – THE QUESTION – “We’ve been contributing to an RESP for our kids since they were toddlers. As of this September, they will both be in high school. Neither of them have suggested career goals that would require huge post-secondary education costs. With $35,000 in the fund now, should we continue to make monthly contributions or should we be switching to some other form of savings for their future?“ — A Money123 reader “Congratulations on being so diligent as to accumulate such a good sum of money for your children's future. The RESP is a really flexible programme that allows you to collect some good subsidies from the federal government if you have contributed at least $2500 a year for each child. It's true that the money from the government can only be used if the child pursues post secondary education. That said, those grants can be used to pay for pre-apprenticeship courses, technical school training — almost anything that requires a course of studies that goes for at least 13 weeks at an institution that issues a formal tuition fee receipt (T2202). So don't turn your back on that "free money" if you still have basic contribution room available until the end of the year in which each child turns 17. Both the grants and the investment growth are taxable to the student when they go off to school, but the money that you have been contributing can be returned to you if need be — with no tax consequences. Did you know that the amount withdrawn from the RESP is not, strictly speaking, tied to the cost of the education programme? As long as the student is registered as a full time student, you can ask for a maximum $5,000 withdrawal in the first year of enrolment and this can all be identified as being the government grants. Then in the second year, you can pull all the rest out — grants and investment growth — with no maximum. Bottom line? Keep contributing to get those grants. The kids have until they are 35 to change their minds about post secondary education!“ -Lenore Davis, founding partner, Dixon Davis Financial Planning ___________________________ Want your money question answered by an expert? Get in touch! | 
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