May Newsletter

Hi everyone,

I hope you are enjoying the early signs of spring and replacing the snow shovels with garden tools! The longer days and more time outdoors is always a welcome change in our house!

Marc’s Thoughts

The markets drifted lower in April. The simple reason is, once again, the timing of interest rate reductions. Inflation is proving to be stickier than the Federal Reserve and the Bank of Canada would like to see, which has extended out the timing of when Prime will be cut. Some optimistic pundits were hoping for an April-June cut. I continue to believe this is an October-December situation and would like to see 0.5% come off of Prime (currently 7.2%) by the end of 2024, and that we will see Prime around 5% by the end of 2025.

As mentioned in previous newsletters, when interest rates drift lower, this will cause stocks, bonds and real estate to drift higher. While we are seeing some losses in April, this is normal. The strongest months of the year in the stock market tend to be November – March and, while no one has successfully timed the market, we can confirm that time in the market is the secret sauce. Remaining invested through the years is what produces the long term results you are hoping for.

Last month we also saw the Federal Budget rolled out. As you have seen, the inclusion rate of capital gains is increasing back to where the tax level was in the late 90’s. This does not affect the stock market.

While it is unpleasant to stomach the idea of higher taxes, it was expected. The Federal Government has been socializing the idea of higher taxes on capital gains for the past two years, and we were relieved to see that they did not touch the Principal Residence Exemption that all Canadian homeowners enjoy. This budget appears to be setting the stage for what we will see next year as an “election budget” as the Liberals try to woo voters to keep them in power.

May Events

1. Spring Cleaning – Paper shredding event

You’re invited to participate in our upcoming Document Shredding and Desk Cleanout Event. Bring your old documents, files, and let’s de-clutter together! Refreshments will be provided, and our professional shredding service will ensure your documents are securely disposed of. The event will take place in the parking lot of our office, and a food truck will be providing refreshments. Please no disks, binders or credit cards. PAPER ONLY. Friends and family welcome!

** CRA documents such as tax returns and notices of assessments should be kept for a minimum of seven years ***

Date: Tuesday, May 28th
Time: 1:00 pm – 3:00 pm EST
Location: 2 Robert Speck Pkwy parking lot, Mississauga
Click here to sign up for this event

2. The Scotiabank Women Initiative – Caregiving with Confidence

Did you know that 1 in 4 Canadians identify as a caregiver, and it’s anticipated that 1 in 2 will provide care at some point in their lifetime? To provide support and guidance for those navigating this path, we are hosting a virtual event on “Caregiving with Confidence”. In this webinar you’ll hear Life Transitions Expert, Dr. Amy D’Aprix share valuable advice on balancing emotional, family, and financial well-being when caring for your loved ones. Dr. Amy will cover strategies for having essential conversations with parents and older relatives, insights on the rising cost of care, and guidance on how to prioritize self-care and maintain personal well-being.

Date: Thursday, May 30th
Time: 2:00 pm – 3:00 pm EST
Location: Virtual event
Click here to register

Watch our new video about finding balance while caregiving, part of our ‘Conversations that count’ series.

3. TELUS Health Virtual Care Offer

At Scotia Wealth Management, we understand there is a deep connection between wellbeing and financial wellness. As a part of our holistic approach to supporting your financial health, we are excited to offer you a complimentary, one-year subscription to TELUS Health Virtual Care, starting on May 29, 2024. Through its website and app, TELUS Health Virtual Care provides confidential, 24/7 access to a range of healthcare professionals across the country in a variety of areas of support, including mental health.

If you are interested in this complimentary one-year subscription to TELUS Health Virtual Care and you haven’t reached out to us yet, please click here to let us know by May 10th so that we can send you the link to register.

Enriched Thinking

Our 2024 Federal Budget summary provides the most significant tax measures announced in the budget and the potential impact on you, your family, and your business. The federal government has focused this year’s budget on three overarching pillars:

1. building more affordable homes
2. making life cost less
3. growing the economy in a way that’s shared by all

It is notable that the budget contains a change to the capital gains inclusion rate for capital gains realized on or after June 25, 2024. Currently, 50% of a capital gain is included in calculating a taxpayer’s income (it also applies to capital losses). The budget proposes to increase the capital gains inclusion rate from 50% to 66.67% for corporations and trusts, and from 50% to 66.67% on the portion of capital gains realized in the year that exceed $250,000 for individuals, for capital gains realized on or after June 25, 2024.

Canadian investors continue to be wary of risks in the current economic climate, our most recent Scotia Global Asset Management Investor Sentiment Survey shows. Our findings suggest that investors who meet regularly with an advisor and those with a financial plan are more likely to have a positive outlook, prioritize savings and stay focused on their retirement goal. The online survey, conducted in November 2023, included 1,028 Canadians age 25 or older with investable assets of at least $25,000. Those more likely to view the current investment climate as a good time to invest include those with a financial plan.

A proactive approach to healthcare, consisting of healthy lifestyle choices and chronic condition management, is integral to our overall wellbeing. In this whitepaper, we explore the importance of health and wellness, structural-demographic shifts that have amplified the necessity of promoting healthy practices, the benefits of taking a proactive approach to healthcare, and strategies for achieving optimal health and wellbeing. The importance of being aware of health and wellness as one ages and keeping these insights top of mind when planning for the future is paramount to all Canadians.

For a shortened infographic on the above subject, click here.

Increasingly, we are seeing clients whose capacity has become a concern, which becomes apparent when they may no longer be able to understand their finances or give proper instructions. Only then do we learn of their incapacity and that their estate plan is non-existent or does not meet their current needs. Plan now – it’s never too early. By 2038, the number of Canadians living with dementia will more than double to 1,125,000.

Happy Herb Day!

May 4th is Herb Day, a holiday that encourages planting herbs and celebrating their many benefits. Herb gardening is one of the easiest (and oldest!) types of gardening. They are kind, forgiving and grow well under conditions that other plants would find difficult. Below we highlight some of the World’s most popular herbs and their benefits.

• chamomile – packs over 100 active compounds; anti-inflammatory, antimicrobial and antioxidant
• echinacea – primarily used to treat or prevent the common cold
• ginseng – frequently used in traditional Chinese medicine to reduce inflammation, boost immunity, brain function and energy levels
• ginkgo biloba – it contains a variety of potent antioxidants
• ginger – it helps relieve nausea, treat colds, migraines and high blood pressure
• turmeric – studies reveal it as effective for alleviating arthritis pain due to its anti-inflammatory properties

(content courtesy of https://extension.umn.edu/yard-and-garden-news/national-herb-week and https://www.healthline.com/nutrition/herbal-medicine#_noHeaderPrefixedContent)

Wishing you health and wealth,

Marc, Arlette, Agnes, Kathy and Jonathan