There is certainly no consensus about what will be highlighted in the federal budget released this wee.
Some analysts say there is reason to expect much more spending. There are the promises to the NDP for expanded social programs, a recognition that Canada’s defence commitments are way behind and so on.
If there is a big spending increase, the question is whether taxes will go up to fund it. One fear, especially in the commercial sector, is that the capital gains tax will be expanded.
But, there are also some who say there may be an equal amount of force pushing against a tax increase. There are two factors here. First, we all save tons of money during the pandemic and it is available to be released as consumer spending so the government can pull back. The feds call this “preloaded stimulus” meaning the pump is primed.
Second, rising commodity prices are a windfall for government an they will have no need to tax us any further and still see a lower deficit.
