Money123: Are the days of $1/L gas in the rear view?

What’s fuelling higher gas prices

The days of pulling up to the pumps and seeing regular gasoline prices below $1 per litre are well behind Canadians, according to a new report this week from GasBuddy.

Patrick De Haan, petroleum industry analyst at the company, pointed mostly at the federal carbon price, which rose to $80 a tonne on April 1, up from $65 a tonne. That translated to a rise in gasoline prices of about 3.3 cents per litre on average Monday.

However, De Haan also noted that geopolitical strife like Russia’s war on Ukraine, more expensive summer gas, increased demand amid summer travel and maintenance at refineries also push prices up.

“It’s becoming more obvious that with every yearly increase, it’s becoming less and less likely that we would see a sub-dollar-a-litre-price,” De Haan told Global News.

Canadians receive a rebate from the carbon pricing regime, but experts who spoke to Global News say it’s unlikely they’ll recoup all the costs tied to higher prices at the pumps.

Read more on what motorists can expect at the pumps going forward.

Canadians seek relief in the federal budget

The carbon price is also a top priority for some Canadians in the upcoming federal budget on April 16.

Polling released this week from Ipsos done exclusively for Global News shows that the rising cost of living is the top priority for Canadians (44 per cent) heading into the Liberals’ latest spending plans. Behind that are investments in health care (38 per cent) and a reduction in personal taxes (33 per cent).

Putting a freeze on the aforementioned carbon price is a top priority for only 20 per cent of those surveyed, but the issue rises to the top of the list for voters leaning toward the Conservative Party in the next federal election.

“All those issues, in some way, shape or form, are tied to the amount of money that Canadians have that seems to be draining from their wallet at record speeds these days,” Sean Simpson, senior vice-president at Ipsos Global Affairs, told Global News.

But the upcoming budget will be a critically important one for the Liberals, who are lagging behind the Conservatives by a wide margin, according to the latest Ipsos polling.

Read more on what kind of relief Canadians are hoping for in the budget and what it means for the Liberal government’s prospects.

How to dodge the ‘pink tax’

The carbon price isn’t the only cost getting attention heading into budget season. Calls are growing to remove the “pink tax” – higher prices attached to items gendered for women – via legislation in the federal budget.

A recent petition started by three high school students in Ottawa is urging officials to take action so that women in Canada don’t have to pay more than men for daily essentials, like toiletries and clothing.

Nagwa Abdelaziz, 17, told Global News this week that her mother has started buying her men’s razors because they’re cheaper and even work better than the same products targeted at women.

Calgary’s Janine Rogan, author of the book The Pink Tax, told Global News this week that stepping outside of corporations’ gendered marketing like that is a way to save money on razors and other essentials.

“Getting smart about those types of things and being aware can absolutely make a difference,” she said.

Read more on what you can do to avoid the “pink tax” and what Ottawa has said it’s doing to address the concerns.

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– THE QUESTION –

“I’m mid-career in my 30s and lucky enough to have no debt and have maxed out annual contributions to my FHSA, TFSA and RRSP. I’m saving to buy a house. I am married but we don’t have kids. Where’s the best place for me to put my excess savings now to save for the home and my future?”

— A Money123 reader 

“If you are lucky enough to be maxed out on contributions to your registered retirement savings plan, tax-free savings account and first home savings account, that is fantastic.

If you are saving outside of those accounts, your investment income will be taxable. The most tax-efficient type of investment income to earn is capital gains – buying an investment and selling it for a profit – followed by Canadian dividends from Canadian stocks. Interest income as well as foreign dividends are taxed at the highest rate.

It could be tempting to invest for capital gains and buy stocks with a low dividend or no dividend. But with a potential home purchase or the chance of starting a family, you could have some big expenses coming up. So, you have to balance striving for high returns and tax reduction with the time horizon for the money.

Some financial advisors who sell insurance might suggest a life insurance policy with an investment component like universal life or whole life insurance. This may save tax but at the expense of higher fees for the investments and an investment account that may be more complex to access than you really need at this point in your life.

A high-interest savings account or investments with a low to moderate risk tolerance might be best if you could need this money in a few years.”

–  Jason Heath, managing director, Objective Financial Partners

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