A good week in markets, and a long-ish write-up today, only mostly boring.

 

2023 Fall Economic Statement to be tabled Nov. 21. If you’re the sort who likes to watch time-lapse scalp infections on YouTube, stay tuned for the 2023 Fall Economic Statement, which will be delivered by Canadian Finance Minister, Chrystia Freeland this coming Tuesday.

True story: The day of the likely large mini-budget, a few reporters and financial analysists will be let into a locked-down room (picture the accounting trolls deep in the caves beneath Dilbert’s office). Here they get a sneak preview of the figures for a few hours, allowing them to prepare their response to the budget, which they’re not allowed to release until after the formal information is presented to the House of Commons. (During lockdown, they’re only allowed to eat stale saltines, are offered no beverages, and there are no bathrooms).

Once the update is tabled in the House of Commons, a few smart people at RBC will review the content, after a quick visit to the washroom. If there are significant changes announced they’ll prepare an article which we can share as a follow-up to this one. Then, if we like the article, we let them eat dinner.

 

In case you were wondering who’s going to pay for all that… and you can’t quite figure out what that sound is… that strange buzzing noise, what is it? Something… It’s getting closer now… I think… wait… It’s a google of money-hoovering policies seemingly written to punish work. A freakish swarm of giant ambition-sucking mosquitos riding Harleys.

 

Nobody minds paying his share, but excess taxation can feel like a festering boil on the neck of initiative. If we muster the courage to work through it, the infection could grow arms and legs, and eventually become self-aware

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Meanwhile, the changes floated in the 2023 spring budget may impact you (like a cast iron pot). Some of the more obnoxious proposals from this spring are still up in the air, and are reviewed briefly in the attached file here: Spring Budget Summary. Investors might especially take note of:

Alternative Minimum Tax (AMT) proposals, with a situation-specific higher capital gains tax rate. Because earning a profit is just naughty.

Proposed new capital gain taxes triggered on securities donated to charity. Because they got bored with hiding under bridges to haunt little kids on their way to school.

 

But seriously folks: Once the new federal update is released next week, you and/or your accountant may want to consider some of the strategies shown here: (Tax Planning for 2023) and there may be other strategies that anticipate the possible AMT changes noted above.

 

Hopefully these will all be made clearer by next Tuesday.

 

Here’s our weekly Global Insights if you’re so inclined:

 

UK: Stagflation nation?

The UK economy is stagnating. The struggling Conservative government may attempt to revive the economy through targeted tax cuts at its upcoming Autumn Statement, though this could underpin already sticky inflation. We explore what the opposition Labour Party would do should it gain power and observe that there are opportunities in equities and fixed income despite the lacklustre macro backdrop.

 

Regional developments: Canadian housing affordability still under pressure; U.S. inflation slowed more than expected in October; Softer inflation results boost European equities; Progress made on U.S.-China relationship at APEC summit.

More here:  Global Insight Weekly

 

Have a great weekend!

Mark