The Liberal government’s resolution to introduce Budget 2024 in the House earlier today did not include Chrystia Freeland’s proposed capital gains tax adjustments.

These measures, which include raising the capital gains inclusion rate from half to two-thirds, increasing the Lifetime Capital Gains Exemption, and creating a new incentive for entrepreneurs, have sparked strong opposition from the country’s technology elite.

During a news conference today, Finance Minister Chrystia Freeland reiterated the federal government’s support for these policies but declined to answer journalists’ inquiries about why they were not included in today’s motion. It now looks that Freeland intends to seek approval from Parliament through separate legislation.

“We are very committed to the capital gains measures that we put forward in the budget,” said Freeland, who added that “further details and implementing legislation will be forthcoming,” but did not provide a particular date or explain why they were absent from today’s motion.

When asked if she had removed these capital gains tax provisions from this bill to compel the Conservatives to vote on this specific issue, Freeland replied, “No,” and grinned.

The motion contains several of the other measures outlined in Budget 2024. The federal government restated its plans for the new capital gains measures to take effect on June 25, but has yet to provide draft legislation or a detailed technical briefing on these changes.

Capital Gains Tax a Political Football

Ben Bergen, president of the Council of Canadian Innovators, told BetaKit that it is unclear whether implementing capital gains changes through separate legislation is a “political football,” or if it simply indicates that the government has “not done its homework” on what the capital gains changes will mean for the economy.

“[This government] really struggles at some of the most basic elements of execution, and whether or not they’re able to deliver it on the 25th [is a] question mark,” Bergen told CNN. “But given what we’ve seen so far from this government over the last eight years, don’t hold your breath.”

“One simple reason for not including the capital gains tax changes in the budget implementation bill is that the government has not yet written them,” CD Howe Institute CEO William Robson told BetaKit.

“The budget provided only additional details on the rules before the higher rates go into effect on June 25th. “We may not have clarity even then,” Robson warned. “The government might believe this is smart politics. “It’s bad tax policy.”

BetaKit has contacted the Ministry of Finance for comment on why these changes were excluded from today’s motion, when it intends to share the full details of these changes and introduce legislation to support them, and whether such legislation is expected to be implemented by June 25, when the changes are scheduled to take effect.

Canadian tech executives outraged

These capital gains tax adjustments are intended to fund billions of dollars in new expenditure on housing and other priorities while also increasing tax equity between middle-class and wealthy Canadians. Freeland referred to them as the “fiscal foundation” for the government’s other investments.

“Our view is it is absolutely fair to ask those in our country who are at the very top to contribute a little bit more, and that is why we put forward a plan—which we are absolutely committed to—to increasing the capital gains inclusion rate,” Freeland said in a statement.

However, many Canadian tech executives are outraged by them: over 2,000 have signed an open letter urging the federal government to reconsider, claiming that they will hinder tech entrepreneurship and investment while exacerbating Canada’s already-existing productivity difficulties.

In a recent op-ed for The Globe and Mail, Robson stated that the next two months will likely be a “scramble” as the government attempts to issue the rules before June 25. Robson said that the government should “back up the budget’s capital gains tax proposals with rules or abandon them.”

Robson also remarked that the government may not be concerned about completing its deadline. “The June implementation of a higher inclusion rate that is retroactive—affecting past gains, not just those that accrue in the future—matters more to its revenue plans than the permanent changes,” Robson stated in an email.

Bergen noted that putting the capital gains measures to a vote suggests the government is attempting to “line up political parties” by positioning the Conservatives to vote against the reforms. On the other hand, he speculated that given the extensive—but not universal—backlash from Canadian tech executives and others, the government may be aiming to “remove the problem child” from the budget.

Bergen stated that the impact of these measures on businesses, employees, and investors will be highly depending on how the new laws are implemented. “The fact that we have so much ambiguity and chaos in this process is again just another indication of where this government is,” he said.

Canada’s Trans Mountain Pipeline Starts Operations After 12 Years and $25 Billion

Canada’s Trans Mountain Pipeline Starts Operations After 12 Years and $25 Billion

With the cost of living consistently on the rise, more Canadians are continually turning to credit. Canadian’s owe more debt relative to their income than they did before Justin Trudeau and his liberals came to power in 2015.

Many Canadians are on the verge of going bankrupt due to increased debt carrying costs, living expenses, and concerns about the possibility of further interest rate and price increases.

Higher interest rates may have deterred Canadians from borrowing, but they remain optimistic. I’m hoping that interest rates will be reduced and the debt they’re collecting will become more affordable.

According to Bank of Canada data, household credit increased in February and has accelerated slightly since then. This raises some concerns for the country, which is already experiencing slowing economic growth as a result of its enormous debt levels.

Canadian households have recently reduced their borrowing, yet they have nonetheless accrued a significant amount of debt. Household debt increased by 0.3% (+$10.1 billion) to $2.94 trillion in February.

This boosted yearly growth to 3.4% (+$96.1 billion), marking the fourth consecutive month of acceleration.

Canadians Under Mountains of Household Debt

The roughly $3 trillion in debt sounds monstrous, and it is. Between March 2020 and the most recent figures, consumers added $541 billion to their debt load. After just under four years, accumulation was 50% faster than in the years prior rate reduction.

According to the most recent data, Canada’s household debt-to-GDP ratio was around 132% in February. Statistics Canada announced Wednesday that Canada has the highest household debt-to-disposable income ratio of any G7 countries.

According to Canada’s 2023 Financial Stress Index, money is the top stressor for Canadians, with 40% citing it as their primary source of stress, surpassing personal health, relationships, and job for the sixth year in a row.

And financial problems are affecting people’s quality of life and sleep.

Leger’s poll of more than 2,000 Canadians discovered that 48% of adults had lost sleep and 36% have experienced mental health issues as a result of financial stress. Nearly half of poll respondents (48%) reported having less disposable income than a year ago.

According to writer and political commentator David Moscrop, Canada’s housing problem is unprecedented, and half the country lives paycheck to paycheck.

In a classic example of disconnect, some Trudeau Liberals believe the party’s biggest problem is that people don’t realize how terrific a job they’re doing.

According to Moscrop, half of the country is living paycheck to paycheck, suffering from crippling debt, and dealing with a housing and homelessness crisis, while working families are increasingly reliant on food banks to get by.

Inflation and Interest Rates Rising

More than half of Canadians feel their personal finances are worse now than they were in 2015, when Prime Minister Justin Trudeau campaigned on a promise to support the middle class and those aspiring to it.

A jump in inflation, and the interest-rate hikes intended to combat it, have pinched deeply indebted Canadians, who have also stated that the high cost of living is the most important factor influencing how they intend to vote.

According to a Nanos Research study for Bloomberg News, 53% of people say their personal finances are worse now than they were eight years ago, while 24% say they are better off and 21% say nothing has changed.

Those aged 35 to 54 were the most likely to be experiencing financial difficulties, with 61% reporting a worsening situation.

The poll explains why Trudeau’s government is finishing the year with low ratings. “When the economy is flat and people are concerned about paying their bills, they become agitated and seek to punish the incumbent government,” said Nik Nanos, the polling firm’s chief data scientist. “If you are struggling to pay for housing or the groceries, you might think, ‘What do I have to lose with a change in government?'”

If an election were conducted today, over 45% of Canadians indicated the cost of living, including housing, groceries, and energy costs, would be the most important factor influencing their vote. The environment (14%) and health care (12%) are next on the list.

Between November 30 and December 2, Nanos conducted a telephone and online poll of 1,069 Canadians. The margin of error is 3 percentage points (19 times out of 20).

Soaring Inflation in Canada

In Canada, inflation is certainly easing. It remained constant at 3.1% annually in November, down from 8.1% in June 2022. While this is improvement, it is cold consolation for some Canadian households, which have experienced one of the most precipitous declines in purchasing power in history.

According to Bloomberg calculations, Canada’s consumer price index is 10% higher than it would have been if inflation had remained at its pre-pandemic pace. Shelter and food inflation are both roughly 14% higher.

Prices rose at an annual rate of roughly 1.8% during the time the Bank of Canada introduced inflation targeting in the early 1990s and 2020.

According to the central bank, property prices in Canada have not been this high since the early 1980s.

Though an election isn’t due until 2025, Trudeau’s biggest adversary, Conservative Leader Pierre Poilievre, has launched campaign-style advertising attacking the prime minister for rising housing, food, and energy costs. “After eight years, Justin Trudeau is not worth the cost,” Poilievre frequently states.

Majority of Canadians Can’t Afford a Home

Despite a rush of affordability announcements from Trudeau’s Liberals, including a $4-billion fund for cities to develop housing and competition-law revisions aimed at decreasing supermarket prices, most polls place the Tories roughly 10 points ahead.

“The Conservative party continues to vote against funding for housing,” Trudeau said Thursday in Toronto, where he unveiled $471 million to accelerate home building. “If it were up to them, we wouldn’t be here today.” But our Liberal strategy is to collaborate with municipalities. Our strategy is to invest in individuals. It is to invest for the future.”

Trudeau is not alone in facing an angry electorate frustrated by the loss of purchasing power. Many US voters do not appear to be buying President Joe Biden’s economic message, despite the fact that price rises have slowed since last year.

“Inflation kills governments,” said Mike Moffatt, senior policy director at the Smart Prosperity Institute and Trudeau’s former economic adviser from 2013 to 2015.

Moffatt stated in an interview that U.S. President Jimmy Carter lost his campaign for a second term by a landslide in 1980 when the Federal Reserve aggressively raised interest rates to combat inflation.

In the midst of recent price increases, voters in Australia and New Zealand ousted their incumbent administrations, and the ruling Conservative Party in the United Kingdom is now polling poorly.

“There is unrest. “People see costs going up and up, but they don’t see their paychecks going up,” he said. “It’s going to be a very difficult thing for the federal government to deal with because so many of these factors are global in nature.”

 

 

The Securities and Exchange Commission (SEC) of the Philippines to deactivate Binance from their app stores. A press release on Tuesday stated that the regulator had written to Google and Apple requesting that Binance-controlled applications be removed from the Google Play Store and Apple App Store.

According to Emilio Aquino, chair of the Securities and Exchange Commission, the public’s continued access to Binance’s websites and apps “threatens the security of Filipino investors’ funds.”

According to the agency, Binance operated as an unregistered broker and offered unregistered securities to Filipinos, violating Philippine securities laws. As of the time of this writing, neither nor Google nor Apple could be reached for comment.

According to Aquino, blocking from the Apple and Google app stores would help prevent “further proliferation of its illegal activities in the country and to protect investors from its negative economic effects.”

The National Telecommunications Commission of the Philippines has previously blocked access to website in the country.

Earlier this year, the SEC warned the public against using in the Philippines, and began examining the possibility of blocking Binance’s services there. According to the SEC, Binance has actively promoted its services on social media to attract funds from Filipinos, despite the fact that it is not licensed.

As a result, the watchdog is urging Filipinos who have invested to close their positions as soon as possible, or to transfer their crypto holdings to their own crypto wallets or exchanges registered in the country.

Richard Teng, formerly CEO of UAE regulator Abu Dhabi Global Markets, was appointed as Binance’s CEO following a settlement with the U.S. government that involves a $4.3 billion fine for alleged money laundering violations. In addition to the action,

Binance has been witness to a litany of woes recently.

Former CEO Changpeng Zhao has been charged with violating the Bank Secrecy Act and has agreed to step down. Zhao’s sentencing is scheduled for April 30.

Several lawsuits have been filed against by the Securities and Exchange Commission and the Commodity Futures Trading Commission regarding alleged mismanagement of customer assets and the operation of an illegal, unregistered exchange.