Market Update April 2023
The 2023 federal budget was recently released, and we want to keep you informed on how it may affect you and your family in this market update.
The main priorities of this budget are to make life more affordable, encourage investments in green energy, provide improved healthcare services, and roll out the next stage of the federal dental care program.
Here are some of the key points:
$43B in net new spending over six years.
Doubling of GST rebate extended for lower-income Canadians, up to $467 for a family.
$13B over five years to implement a dental care plan for families earning less than $90K.
$20B over six years for tax credits to promote investment in green technologies.
$4B over seven years for an Indigenous housing strategy.
$359 million over five years for programs addressing the opioid crisis.
$158 million over three years for a suicide prevention hotline, launching Nov. 30.
Creation of a new agency to combat the foreign interference.
The deficit for 2022-23 is expected to be $43B, higher than projected in the fall.
Higher than expected deficits are projected for the next 5 years.
The federal debt hits $1.18 trillion. Debt-to-GDP ratio will rise slightly over the next 2 years.
Overall, this budget offers a number of measures to help Canadians, including financial support for dental care, students, and low-income families. There is also a significant focus on green investments and improved healthcare services, including addressing the opioid crisis and improving access to mental health resources.
Focusing on the positives, one of the highlights of the budget for small businesses is a reduction in interchange fees charged by Visa and Mastercard for small businesses. This measure is expected to save eligible small businesses in Canada approximately $1 billion over five years and could help small business owners to preserve their capital and minimize their expenses.
The initiatives to fund dental and healthcare expenses would spare clients from having to draw from their portfolios to cover such costs. Many of our clients, particularly those in retirement, lack dental benefits and have encountered significant dental bills. Some have had to withdraw as much as $10,000 from their portfolios to pay for these expenses, which has had an impact on their overall financial objectives.
At Silverbirch, we believe in investing for income, preserving capital, and minimizing risk. The proposed 2023 federal budget offers opportunities for our clients to continue to align to their objectives and these three pillars.
We will continue to monitor the impact of the federal budget, as well as other factors such as interest rates and inflation that affect our markets, and keep you up to date on any recent developments.
If you have any questions or concerns regarding how the budget may impact your investment portfolio, please do not hesitate to contact us.
Please see National Bank of Canada’s in-depth report on the Federal 2023 Budget - Basic budgetary instincts (and impact of slower growth) on display
Thank you for your continued trust and support.