Canada is at a critical stage and needs politicians with courage and conviction to outline a strong financial foundation for a prosperous future, writes Oakville-based financial advisor Peter Watson.
The 2024 federal budget was a missed opportunity 鈥 but not without at least one positive.
The budget contained many strategies designed to build more housing units. These ideas were publicized in previous weeks.
Affordable housing is an issue for Canadians and a political requirement if the Liberal government has any chance of winning the next federal election.
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The Justin Trudeau government鈥檚 bold housing announcements were welcome, but regrettably are too little too late. The lead time for building houses that are needed now was years ago, even perhaps a decade ago.
Unfortunately, the budget’s projected deficit this year is $40 billion. This is despite having higher government revenues than forecasted because we escaped the predicted recession. Ottawa is also introducing a higher capital gains tax.
Our current challenge is dealing with our massive federal debt, which continues to grow. There will be future challenges and we don’t know what they might be and when we might face them.
We just went through the COVID-19 pandemic. The government wisely invested money to support Canadians and their businesses. That was a job well done, but it was expensive.
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In financial planning terms, we sometimes refer to building up a nest egg to pay for a future unexpected cost as an 鈥渆mergency fund.鈥
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What kind of a financial tailspin would our federal government be in if there was another significant challenge that required a large infusion of cash?
We do not have an emergency fund. Instead, we have a huge debt that would curtail our ability to react and spend on the next challenge.
Canadians need an ongoing conversation with federal leaders on how we are going to regain financial stability. That conversation didn’t start with this budget.
Canada is at a critical stage and needs politicians with courage and conviction to outline a strong financial foundation for a prosperous future.
Peter Watson, of Watson Investments MBA, CFP庐, R.F.P., CIM庐, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through .
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