This scenario could look like that of 2015, underline the Financial Post.
Indeed, Justin Trudeau may be able to form a majority government, as was the case six years ago, indicates a recent survey by the firm Abacus Data.
At the time, the Liberal government raised taxes to the point of raising the maximum combined rate above 50% in most provinces. Justin Trudeau then pointed out the small business owners, described as tax evaders, continues Martin Pelletier, a portfolio manager at Wellington-Altus Private Counsel, author of this post published by the Financial Post.
However, the federal government has increased its debt to deal with the economic crisis created by the pandemic. So far, the Bank of Canada (BoC) has bought out the federal debt massively, while keeping its interest rates at a historically low level.
This strategy has encouraged the purchase of real estate, to the point that housing represented 54% of GDP growth in the first quarter of 2021. The problem is that these investments are not put into productive assets, points out the author of the post, which accuses the BoC of printing money to finance federal debt. A somewhat erroneous picture since the creation of money is done exclusively by commercial banks when they grant loans, but we can understand his criticism nonetheless.
Rising oil and gas prices could help the federal government pay off its debt. But the writer of the post expects more taxpayers to foot the bill. They should therefore prepare for an increase in their contributions to federal revenues … while including this preparation in long-term planning.
The ultimate goal of planning should obviously not be to protect against a tax increase. The latter must be focused on long-term personal and financial goals, but it must take into account changes in tax rules.
–
