Money123: Will Loblaw bend to the boycott?

The Loblaw boycott begins

Some Canadians plan to forgo shopping at Loblaw’s many, many properties this month as part of a boycott organized by frustrated consumers on Reddit.

Years of rising grocery bills and perceived greed from Canada’s biggest grocers has culminated in the campaign, but experts who spoke to Global News say Loblaw itself has become the “lightning rod” for those frustrations.

Loblaw is the biggest player in the country’s heavily concentrated grocery sector, which makes it an easy target for consumers, a professor of marketing in the Rotman School of Management at the University of Toronto says.

“When an industry is put under a magnifying glass, as is the case with our grocery sector, the people need a whipping boy,” David Soberman tells Global News.

Executives at Loblaw itself made similar points this week, with Chairman Galen G. Weston arguing the criticisms of the grocer are “misguided.”

But as the online group leading the campaign swells in members, can the boycott make a dent on Loblaw’s bottom line? Read more to hear what experts say.

How capital gains changes are hitting cottage country

One change proposed in the Liberals’ 2024 federal budget is spurring some “anxiety” among cottage owners, according to some market experts who spoke to Global News this week.

Proposed changes to capital gains taxes, which would see an individual who realizes more than $250,000 in annual gains pay a higher inclusion rate, are leading some cottage owners to wonder if they should sell and realize their profits before the new rules come into effect on June 25.

“There’s a lot of chatter. A lot of people have anxiety about it. A lot of people feel that it’s going to affect them a lot more than probably it will,” says Mark Pedlar, a broker with Re/Max Bluewater Realty in Grand Bend, Ont.

But Pedlar says rushing a cottage to market in order to avoid a bigger bill on capital gains could force a seller to make a bigger compromise on price than they would in less hurried circumstances. In the bigger picture, it might not be worth the bigger tax hit, he argues.

But experts say there are some individuals who might benefit from making some administrative changes to their cottage title before the June 25 deadline. Read more on the cottage market “anxiety” here.

Unpaid work punishing caregivers

A cohort of some 1.8 million adult Canadians are feeling “sandwiched” by caregiving needs, often between young kids and their own aging parents, data shows.

A Statistics Canada report released last month shows that this demographic is under a great deal of stress, affecting their physical, mental and financial well-being.

As the oldest generation is tending to live longer and many Canadian adults wait until later to have kids, these sandwiched caregivers are often forced to care for those older and young at the same time.

It’s a burden that Marci Gray, CEO and lead psychotherapist at Gray Matter Health, knows too well, being sandwiched between three teenage kids, her own parents and a centenarian grandmother.

“I’ve already done the crash and burn in my own life. I’ve already done that where I hit the wall and couldn’t go further and couldn’t go on,” she tells Global News. “So I’ve learned from my own experience that that’s not a way to go, that you’ve really got to continue to look after yourself in order to thrive.”

Read more about the demographic shifts affecting Canada’s caregivers, and how those like Gray are finding ways to cope.

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– THE QUESTION –

“My question pertains to my mother’s principal residence. She lives in New Brunswick. She wants to put me on title as a ‘joint tenant’ so there won’t be a need for me to pay capital gains tax when the property becomes mine upon her death. It’s unclear to me if that is accurate. I live in Newfoundland. I’m a renter, so I don’t own a property. I don’t wish to move to N.B. or live in the house. What are the tax implications when I become the sole owner following her passing, if I simply sell the property?”

— A Money123 reader 

“Making you a ‘joint tenant’ on your mother’s home should not affect capital gains. While she is alive, it is her principal residence, so no capital gains apply. She can then leave the home to you in her will.

The issue with capital gains tax starts once you own it. You don’t own any other property, so you could declare it as your principal residence. You have to ‘ordinarily inhabit’ for at least a short period of time to declare it as your principal residence, and it should not be a rental property. This means you could go there briefly once per year and leave it vacant. Then it could be your principal residence and you would not have to pay capital gains tax.

The first question for you: will you want to keep the property if you do not live there? If you sell it shortly after inheriting it, there should be no capital gains tax. If you are not going to live there or rent it out, it is probably best for you to sell it and invest it for your own life.

Your mother is probably confusing probate fees with capital gains tax. If you inherit a home, there is a probate fee on the value, which is 0.5 per cent, or $5 for every $1,000 of home value, in New Brunswick. If she puts you on title as ‘joint tenant,’ you automatically own it on her death and avoid the probate fee. However, this fee is small. On a $250,000 home, it is only $1,250. It is not like income or capital gains tax. In fact, the legal fees to add your name would likely be almost as much as the probate fee you could save.

There is a compelling reason not to be a ‘joint tenant,’ though. The Liberal government has new rules on trusts, which technically include homes or bank/investment accounts where parents add their children to the title for estate planning purposes. You would not owe tax, but would have to file a T3 Trust tax return every year. An accountant will probably charge you $500 or $1,000 to do this. If you don’t file it, there is a $2,500 penalty every year.

Quite comically, just days before the deadline for filing these T3 tax returns this year, the Canada Revenue Agency announced that there is no penalty this year, but have not said anything about next year.

I suggest not to go on title. Just have your mother leave the property to you in her will. You can sell it once she is gone and should not have to worry about capital gains tax. Adding your name opens up a whole new problem for you.”

–  Ed Rempel, fee-for-service financial planner and tax accountant, Unconventional Wisdom

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