Canadians should expect even more spending in federal fall economic statement

The Trudeau government will soon release its fall economic statement. Though technically intended to be an update on the fiscal plan in this year’s budget, in recent years the fall economic statement has more closely resembled a “mini-budget” that unveils new (and often significant) spending commitments and initiatives.

Let’s look at the data.

The chart below includes projections of annual federal program spending from a series of federal budgets and updates, beginning with the 2022 budget and ending with the latest 2024 budget. Program spending equals total spending minus debt interest costs, and represents discretionary spending by the federal government.

Clearly, there’s a trend that with every consecutive budget and fiscal update the Trudeau government revises spending estimates upwards. Take the last two fiscal years, 2023/24 and 2024/25, for example. Budget 2022 projected annual program spending of $436.5 billion for the 2023/24 fiscal year. Yet the fall economic statement released just months later revised that spending estimate up to $449.8 billion, and later releases showed even higher spending.

The issue is even more stark when examining spending projections for the current fiscal year. Budget 2022 projected annual spending of $441.6 billion in 2024/25. Since then, every subsequent fiscal release has revised that estimate higher and higher, to the point that Budget 2024 estimates program spending of $483.6 billion for this year—representing a $42.0 billion increase from the projections only two years ago.

Meanwhile, as spending estimates are revised upwards, plans to reduce the federal deficit are consistently pushed off into later years.

For example, the 2022 fall economic statement projected a deficit of $25.4 billion for the 2024/25 fiscal year, and declining deficits in the years to come, before reaching an eventual surplus of $4.5 billion in 2027/28. However, subsequent budgets and fiscal updates again revised those estimates. The latest budget projects a deficit of $39.8 billion in 2024/25 that will decline to a $26.8 billion deficit by 2027/28. In other words, though budgets and fiscal updates have consistently projected declining deficits between 2024/25 and 2027/28, each subsequent document has produced larger deficits throughout the fiscal outlook and pushed the timeline for balanced budgets further into the future.

These data illustrate the Trudeau government’s lack of accountability to its own fiscal plans. Though the unpredictable nature of forecasting means the government is unlikely to exactly meet future projections, it’s still reasonable to expect it will roughly follow its own fiscal plans. However, time and time again Canadians have been sold a certain plan, only to have it change dramatically mere months later due to the government’s unwillingness to restrain spending. We shouldn’t expect the upcoming fall economic statement to be any different.

Authors:

Jake Fuss and Grady Munro

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Trump eyes end of capital gains tax in 2025

Published on April 7, 2025

Todayville

MxM News

Quick Hit:

In a historic announcement that rattled markets and reignited debate over tax policy, President Donald Trump revealed plans to eliminate the capital gains tax starting in 2025. The unprecedented move would allow Americans to retain all profits from asset sales—whether in stocks, real estate, or other investments. Supporters tout it as a bold pro-growth measure, while critics warn it may cause budget strain and market instability.

Key Details:

President Trump announced the elimination of capital gains tax effective 2025, describing it as a move to reward success and promote wealth-building.
Currently, capital gains are taxed at rates up to 20%, with additional surcharges for high earners.
The announcement caused a major rally across financial markets, though critics claim the change favors the wealthy and could disrupt the economy.

Diving Deeper:

At a press conference on Monday, President Trump laid out a sweeping proposal to eliminate the capital gains tax in its entirety, calling it a “long-overdue correction” to what he described as a punitive tax on prosperity. “Why should you be punished for building wealth?” he asked. “This is America—we reward success.” If enacted, the change would allow investors to retain 100% of profits from the sale of assets such as stocks, homes, and businesses, with zero tax liability.

This proposal marks a sharp departure from decades of entrenched U.S. tax policy. Currently, long-term capital gains are taxed at rates ranging from 0% to 20%, with potential surcharges including the 3.8% Net Investment Income Tax for high earners. Trump’s plan would zero out those liabilities entirely starting in the 2025 tax year.

Conservative economists and market analysts have lauded the move as potentially the most transformative supply-side reform since the Reagan era. They argue that removing the tax will unshackle trillions of dollars currently locked in unrealized gains, spurring investment, entrepreneurship, and broader economic dynamism. “This is a game-changer,” said one pro-growth advocate. “It sends a clear message that America is back to being the most investment-friendly nation on Earth.”

Predictably, left-wing critics erupted. One Democratic senator labeled the measure a “grenade” that would detonate the federal budget and widen the wealth gap. Others warned of asset bubbles and increased volatility as investors rush to dump assets ahead of the reform’s implementation. These concerns, however, do not seem to have spooked the markets—at least not yet.

The Dow Jones Industrial Average jumped nearly 600 points following the announcement, while cryptocurrencies surged on expectations of tax-free gains. Real estate portals and trading platforms like Robinhood and E*TRADE saw surges in activity as users began strategizing around the policy’s timing. Online, the announcement triggered a wave of memes and commentary. The hashtag #NoCapGains began trending on X (formerly Twitter), with some calling it a “wealth liberation act” and others denouncing it as “Robin Hood in reverse.”

Legislation to formalize the proposal is expected to hit Congress within weeks. While Republicans have largely expressed support, Democrats are preparing for a fierce battle. It’s unclear whether some establishment Republicans—many of whom have been resistant to bold reform under Trump—will help move the bill forward or slow-walk it in favor of more moderate compromises.

Until the law is officially passed, financial advisors are urging caution. “The promise of zero capital gains tax is tempting,” one planner said, “but don’t bet the farm until it’s signed, sealed, and delivered.”

Still, with the 2025 tax season approaching fast, the stakes are enormous. If passed, Trump’s plan would not only mark one of the most dramatic tax overhauls in modern history—it would redefine the very incentives that drive American investment and wealth accumulation.

Business

Trump threatens additional 50% tariffs on China, urges ‘patience’

Published on April 7, 2025

Todayville

From The Center Square

By Casey Harper

President Donald Trump threatened to ratchet up tariffs against China after China upped its own tariffs against the U.S. in response to the president’s tariffs policy announcement earlier this month.

The Chinese Communist Party raised its tariffs on U.S. goods to 34%, ignoring Trump’s warning not to retaliate, which does not include Chinese tariffs on specific U.S. goods like natural gas.

That 34% figure matches the additional tariffs the president put on China in his announcement of the new tariff policy on April 2, an announcement that brought overall tariffs against China to 54%.

Trump argues that tariffs are not the only way China takes advantage of the U.S.

“Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set,” Trump said in a statement online.

“Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” he continued.

“Additionally, all talks with China concerning their requested meetings with us will be terminated!” the president said. “Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”

Trump also urged Americans to be patient with his tariff policy as stocks continued to decline.

The president unveiled a sweeping set of reciprocal tariffs during a press conference earlier this month, and since that announcement the markets have seen sharp declines.

“The United States has a chance to do something that should have been done DECADES AGO,” Trump said on TruthSocial, his social media platform. “Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!”

Democratic and some Republican critics have blasted the president’s tariffs, a policy previously foreign to the Republican Party in modern politics.

Trump has admitted there will be some pain but argued that the tariffs will reinvigorate domestic manufacturing in the U.S. and raise revenue for the federal government. He also says the tariffs will help the U.S. negotiate better trade deals with other countries, many of which currently charge steep tariffs against the U.S.

Critics argue the tariffs will increase prices for Americans and hurt the economy and U.S. trading relationships.

Trump and his allies have argued the U.S. has been manipulated and taken advantage of in the previous tariff system, all while manufacturing jobs were shipped overseas. Now, they argue, much of our manufacturing is done by one of our greatest adversaries: China.

“Countries from all over the World are talking to us,” Trump said. “Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate! They have treated the U.S. very poorly on Trade. They don’t take our cars, but we take MILLIONS of theirs. Likewise Agriculture, and many other ‘things.’ It all has to change, but especially with CHINA!!!”

Sen. Rand Paul, R-Ky., has helped lead the charge of Republicans who oppose the president’s new trade policy.

“Politicians should pay attention to the millions of investors who are worried that widespread tariffs will lead to a recession,” Paul wrote on X Friday.

Trump’s comments suggest that he is doubling down, not backing off, of his new tariff policy, likely part of the reason markets continued to slide Monday. Trump pointed to other signs of economic health, and his Treasury Secretary Scott Bessent has pointed out that the stock market is only one marker of the economy and one in which half of Americans have no stake.

“Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place,” Trump said. “This is despite the fact that the biggest abuser of them all, China, whose markets are crashing, just raised its Tariffs by 34%, on top of its long term ridiculously high Tariffs (Plus!), not acknowledging my warning for abusing countries not to retaliate. They’ve made enough, for decades, taking advantage of the Good OL’ USA!”