A heads up on the budget, and a rant

Canada is # 55 in worldwide statistics for population of  fully vaccinated citizens. At less than 2% vaccinated – we are rated as “below the world average” according to the latest data from John Hopkins University of Medicine. Implications for investors – particularly surrounding our taxable income and investment profits, are discussed today.

Warning: rant

To start, I must warn you that I am about to rant a bit here. For good reason. Justin Trudeau lovers, beware. Don’t read this if you feel that the Liberals are “your guys”. I don’t want to argue my point here, and  will not post comments as such. Write your own blog if you feel differently.  After the rant are thoughts on dealing with potential budget changes. Skip to that part if you love the PM. These are my opinions and not necessarily those of my staff. I do this blog for free and don’t post annoying flash-ads etc. Instead…The price of admission is that once in a while I blow some steam off.

The rant

As the rest of the world was preparing to import vaccines, Justin Trudeau prorogued Parliament last summer. Other governments stayed open- it was only too obvious that this was an attempt to make Canadians forget about his WE scandal, and to avoid answering parliamentary enquiry about his expenditures. Expenditures that extended far beyond COVID stimulation – when we needed the money the most. This blog covers just some of those expenditures. You will be shocked.

Other Governments, who stayed open during the crises, got on top of ordering the vaccines. President Trump secured a $200MM deposit with Pfizer last summer, while Israel and other nations were leaders the situation. Hey, we didn’t need to be #1…but # 55 and “below average”?  After all the propaganda spewed about Canada’s wonderful response during the initial stages of COVID, and the subsequent boasting by Canadians of our superiority to USA’s control measures….the tables have reversed. It was ironic that Canada discouraged travel to the USA (for example) this winter when, in fact, Canada was the more dangerous place to be. Propaganda had us believe otherwise. The truth is, well over 50% of all Americans are already vaccinated (21% fully vaccinated). They are seeing declining trends in the virus. Meanwhile, ours are increasing. Where’s the Canadian Government bravado, boasting about COVID protocol now?

Canada’s embarrassing vaccine shortage is forcing many people to be told to wait 3 months for their second shots in the 2-shot protocols – for example, my brother in law and a friend were both told that 3 months is their wait times for the second shot. This, when the Pfizer and Moderna recommend 3 & 4 weeks respectively, with a maximum of 6 weeks between if circumstances make the recommended protocol impossible. In other words, less shots – at the wrong interval – in Canada. At least, that’s according to this article.

As such, much of Canada is forced into lockdown thanks to our Prime Minister’s “decisions”. Canadians blame the lockdowns on the provincial governments. For example, Ontario, Alberta, Quebec premiers are facing some wrath due to the nonstop lockdowns. The fact is, the premiers are not to blame. The blame lies directly with Justin Trudeau for not keeping government open while other countries did. Proroguing government, hiding in his cottage, and not facing the music for his third ethics charge (yes, three of them).  This influenced his ability to be on top of the vaccines. Canadian job loses, small business closures and wealth disparity continues to get more polarized due to one person’s decision to put himself ahead of the country. This is creating higher debt, which in the long run will need to be paid off – our taxes will rise to pay for Trudeau’s decisions.  And more importantly – people are getting sick, or dying. If Trudeau had been on top of purchasing the vaccines, how many people would have been saved? The answer wasn’t to lock things down (close the door when the horse escapes the barn). The answer was to do the right thing at the right time like the grown-up country governments did, and get the vaccine rolling on time. Unforgiveable.

Ok- rant behind me – where do you and I as investors fit in given that we must pay the price for our PM’s hide & seek game (beyond living in the one of the worlds worst COVID – safe environments)?

Budget considerations for investors and tax payers

As CERB cheque continue to go out, I am hearing more and more about our government embracing the idealism of Universal Basic Income. Free money for everyone.  Although unlikely to be enacted in the upcoming budget, I hear it is on the table for future budgets. Larry McDonald of Beartraps recently noted in a research report that due to the COVID support CQ’s in the USA, companies are finding it hard to fill entry level jobs. This, despite high unemployment. In other words, when the spread between a wage and a free paycheck from the government isn’t wide enough, who wants to work? How will this affect corporate profitability? How will the free money for all be paid for? Perhaps by taxpayers who actually work, just maybe?

Capital gains taxes?

More pressing is the proposal by the Federal Liberals (Ontario) regarding budget changes. Take a look at the list below. I am hearing from reliable sources that there is a very high probability of the capital gains tax going from 50% inclusive to 60% inclusive in the Federal budget on April 19th. Thereafter, the amount of gains fully taxed will continue to creep up every year. See the proposal listed below.

To me, this adds further incentive to trade vs buy and hold. I am not a tax advisor, and would steer you to talk to your own advisor. But, in my mind, I have always argued that if a portfolio doubles in 10 years, it is better to realize 1/10th of the gain through trading each year rather than buy and hold the same stocks and realize the entire 100% gain in 10 years. To me -his makes sense from a marginal tax rate (spreading gains may reduce your marginal rates) and a future taxation point of view (taxes rarely go down over time). Now we have a probable policy that should solidify my view on realizing gain incrementally rather than waiting for a future date. Rising taxes each year.

As for the inheritance tax, and other suggestions. Well, perhaps Former Trudeau voters will be recipients of many of these new taxes. Personally, I like the Max Bernier flat tax system. But that’s a discussion left for another day. For now- brace yourself, crew. Consider the potential of the list below, should any of these be suggestions be enacted, within your own financial planning:

 

 

14 Comments

  • I don’t understand why we don’t have a flat tax system so every citizen pays the same percentage. The tax system seems to be the only area where we go against the Charter of Rights in not treating all citizens equally. Also noticed they failed in their Liberal data to show that the top 10% pay more than half the taxes but I guess that goes against their agenda. Before anyone thinks I’m just another rich guy whining about taxes I make the average income for a Canadian

    Reply
    • True Shawn
      The tiered system destroys incentive. Eg–My son is a tradesman. He will not work past a certain number of hours as he starts working on 50 cent dollars. He doesn’t see the point.

      Reply
  • Good read. The government waste of money is unbelievable. Max out rrsp and tfsa I guess. Put everything under the lower income spouse (stocks, rental property , etc). Ensure you own one principle residence per family unit (don’t buy at the top if you live in Toronto or Vancouver though lol).
    And of course have a boatload of deductions 😀

    Reply
  • I’ve been told my second dose will be 4 months out … 3rd world country!

    Some might suggest that there were other factors at play that contributed to Canada’s dismal access to vaccine supply, such as the giant desperate vacuum sucking up supply to our south, but overall, it’s a sorry outcome.

    Reply
    • More that the USA and 53 other countries had a plan- Trump was on it when Trudeau shut down parliament and was hiding at his taxpayer-funded cottage. The 54 countries ahead of us, not just the USA, put their countries first. That was their job, their responsibility. One cannot blame them for looking after their own countries best interests – unlike our guy. We like to blame others–but the fact is there was no reason for Canada not to get a fair share – to be proactive. 54 other countries beat us to the punch bowl. Somehow…..
      Read the link on maximum recommended times between the shots–as given by PFE / Moderna. Make noise about it. Its unacceptable IMO.

      Reply
      • No doubt about it, Canada has performed badly on vaccine timelines. My four month wait for 2nd Moderna shot is no where near the guideline and *suggests those in power were at best weak in their advocacy for Canada.

        That said, my time in gov showed me the public seldom knows the true complexity of issues faced by politicians, so I will leave it to others to do the lambasting 😉

        Reply
  • Refreshing to read -I am in close contact with major manufacturers and I can tell you there sentiment is the same but they refuse to say anything because of the funding provided. Trudeau bought the media and bought the business – the sad part is they are not willing to say anything publicly so I have no idea how to crush this useless POS. Canadians bitch about every they can – every bitch about every right but nobody comes together to protest for the right to get back to normal and none of the governmental people are accountable for anything they do. Any charts on that one?

    Reply
  • I will start with I totally agree that Trudeau has failed to lead the country through this crisis, frankly he has been M.I.A. That said I don’t think the Ont. Provincial government has done a great job during the latter half of this pandemic either. I find there has been a real lack of planning at all levels of government in Canada and yes the lack there of starts at the top!
    Keith you mention Trump a couple of times during your rant. You seem to imply that Trump was a head of the curve on this, really? Well over half a million dead in the US, most of that before he left office, and when he left his only real plan was to relieve corporations of any legal jeopardy to due Covid19. Yes, the US is way ahead on vaccinating its population now but I think any open minded individual would credit Biden more than Trump.
    That was meant as just a general comment Keith. I enjoy your blog, get a kick out of your rants and appreciate the time you spend trying to educate and guide us. I have read your book and look forward to your ordering your new one but what I am really looking forward to is the day I can see another one of your live presentations.
    PS on a lighter note; are you still logging big kilometres?
    Carey

    Reply
    • Thanks Carey
      Everyone discounts ANYTHING that Trump does as evil or wrong. Yes, he was behind the curve for the first half of 2021. But he got on it in the second half and ordered vaccines. Do you think that Biden managed to order the amount of vaccines that has put the USA in a leading position? He took office on January 20th 2021. The vaccines were already well into distribution by then. So yes, Trump f-d up in the beginning, but then, unlike our idiot, was at the very least on par with the world for vaccine procurement when it came time to get the train rolling. Hate him for other reasons – but at least he did his job of getting it rolling re vaccines – and no, I don’t have a MAGA hat. This is just my unbiased way of looking at it. Facts is facts. we are at 2%, USA is at 50% distribution. Somebody did something wrong on our end and something right in the rest of the world (not just USA).

      And yes, Biden has done a great job of making sure distribution has moved well. Lets substitute the names and say “the USA” rather than the name of leaders. Who cares? Its the 2% vs. 50% point I was trying to make. People cannot stand if you say even one positive thing about Trump. The media has taught us well. Again, no MAGA hat. So forget I said anything about Trump. The USA has done a good job. Canada has not. Period.
      Anyhow,
      Yes, doing my training, with hope there will be a race season for they type of bike racing I do (time trialing)–this type of racing is single-start racing one minute between each competitor, so its “socially distanced” racing. In fact, we are not allowed to draft (ride behind another rider) in a TT race. So the authorities have approved a race season. In fact, I am helping to run some TT races in Barrie this summer. Should be fun.

      Reply
  • “Facts is facts. we are at 2%, USA is at 50% distribution. Somebody did something wrong on our end and something right in the rest of the world (not just USA).” I can’t argue that!

    For the record: I don’t vote for any “party” ; I don’t love or hate any politician ; I just assess a politicians policies, decision making abilities and their plan of action strategies. You can guess the grade Trudeau has now. (tragically, lol)

    Good luck in the new season. I can appreciate the dedication it takes at our age to maintain a competitive level. I have grown fond of Zwift to the point where I might just leave my bike in the trainer all year. (safer is my excuse)

    Reply
    • Thanks Carey
      I sense you have an ability to ascertain beyond the BS — makes you a good candidate for investment success!

      Reply
  • The S&P/ASX200 ended Friday with a fall of 0.8%, even though April 2021 was the best month for the Australian Market in the last 5 months. Most of the sectors are in red, with Financials being the best performer gaining 1.61% for the past five days.ASX started the new month with a gain of 1.70 points to 7024.10 at 02:20 pm AEST.

    Reply
    • We have a position in the Australian iShares ETF–bought it on the breakout through $23 long termed resistance. Given the commodity influence and other factors, we are bullish

      Reply

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