Dear valued client,
Markets rose again this week despite an uptick in inflation figures.
According to Statistics Canada, inflation increased to 2.9% in May (compared to 2.7% in April). This acceleration broke a four-month trend of easing price pressures and complicates the Bank of Canada’s future decisions on interest rates, following a recent cut to 4.75%. This development reduces the likelihood of a July rate cut, although another inflation report is due before the decision on July 24th. Key contributors to the inflation increase include mortgage interest costs and rent – shelter costs remain a significant factor.
On Monday, the Liberal’s tax increase was officially put on the books. Currently, 50% of capital gains are taxed at one’s marginal tax rate, but under the new rule, this will apply only to the first $250,000 in gains; any gains over that amount will be taxed at 66.67%. Primary residences and registered accounts (TFSAs and RRSPs, for instance) remain exempt from capital gains tax. However, second homes and investments in non-registered accounts are not. Corporate capital gains will also be taxed at the newly imposed higher rate, prompting potential restructuring for business owners. Many argue this change is punitive to long-term, conscientious investors, incentivizing wealthy individuals and entrepreneurs to explore opportunities outside of Canada.
President Biden and former President Trump debated last night under new rules compared to their 2020 encounter. Hosted by CNN and available for streaming, the debate bypassed the Commission on Presidential Debates, featuring no live audience, muted microphones when the other candidate is speaking, and a ban on props or written notes on stage. During the debate, Biden, with a raspy voice, stumbled through some answers, raising concerns among Democrats. Trump maintained a relatively composed demeanor, avoiding his usual bombastic rhetoric. While the new rules ensured a cleaner discussion, the debate provided little new information on the candidates’ policy positions.
Julian Assange, the WikiLeaks founder, will be released from prison after pleading guilty to a single felony charge of illegally obtaining and disclosing national security material. Assange, who has been pursued by the U.S. authorities since publishing sensitive documents in the 2010s exposing the government’s corruption, is not expected to serve any more jail time after already serving several years in a British prison while fighting extradition. He will now be allowed to return to Australia, concluding a politically contentious saga. Assange is scheduled to appear in a U.S. federal court in the Northern Mariana Islands to enter the plea before flying to Australia to take care of his precarious health condition.
“If I and other whistleblowers are sentenced to long years in prison without so much as a chance to explain our motivations to a jury, it will have a deeply chilling effect on future whistleblowers working as I did to expose government abuse and overreach. It will chill speech. It will corrode the quality of our democracy.” – Edward Snowden
“The sad truth is that societies that demand whistleblowers be martyrs often find themselves without either, and always when it matters the most.” – Edward Snowden
“I have another name for what they’re terming whistleblowers, and that’s righteous heroes. From Bradley Manning to Snowden. They’re people of conscience who are unwilling to turn a blind eye to the crimes of our government. And thank goodness for them.” – Tom Morello
Have a terrific weekend,
PW
