As Canada barrels toward a federal election on April 28th, investors are closely watching the policy ideas proposed by Conservative Leader Pierre Poilievre. His platform promises significant changes that, if he is elected, could reshape the Canadian investment landscape.
Before we begin, a few things to bear in mind about the Conservative leader, given all of the misinformation that infests the internet. Posts about his voting history imply his public opposition to the Liberals is not reflective of his record in Parliament. However, some deep-dive assessments of his history are thoroughly researched and offer insight not readily found in mainstream media.
Four investment catalysts in Pierre Poilievre’s Canada
- Tax reforms
- “Pay-As-You-Go Law” to cap federal spending
- Housing affordability
- Infrastructure development
Economic vision and principles
Since being elected in 2004 at the age of 25, Pierre Poilievre’s economic vision is rooted in free-market principles, inspired by economist Milton Friedman. He advocates for reducing federal control over economic activities, promoting private sector growth, and limiting government intervention. His approach emphasizes a “bottom-up, free-enterprise agenda” rather than “top-down state capitalism.” His blog, though full of AI-generated images that aren’t disclosed as such, goes into more detail.
Tax reforms
One of Poilievre’s major policies is substantial tax reform. He proposes the creation of a tax reform task force within 60 days of taking office. This task force aims to simplify the tax system, reduce bureaucracy, and eliminate corporate welfare to large corporations.
Poilievre’s “Canada First Reinvestment Tax Cut” is also designed to incentivize reinvestment within Canada. This policy would allow individuals and businesses to pay no capital gains tax when reinvesting proceeds from asset sales in Canada, creating an incentive to keep capital within the country.
The Conservatives say that the tax cut, available to investors from Canada Day until the end of 2026, will become permanent if it successfully stimulates economic growth. The party also notes that any gains from Canadian investments will remain taxable when the investor fully cashes out or transfers the proceeds out of Canada.
Investment catalyst: This tax reform agenda is designed to stimulate economic growth by simplifying the tax system and reducing the burden on businesses and individuals. This task force aims to streamline the tax code, eliminate corporate welfare, and reduce bureaucracy. This proposed tax cut, if it passes, could attract significant capital back into Canada, fostering economic growth and creating new investment opportunities.
Spending cuts and fiscal responsibility
Poilievre pitched a “Pay-As-You-Go Law” to cap federal spending at budgeted amounts. This policy aims to ensure fiscal responsibility and prevent excessive government spending.
Investment catalyst: This legislation requires the government to offset every dollar of new spending with cuts to existing programs, hoping to ensure fiscal responsibility and preventing excessive government expenditure. By reducing the deficit and controlling inflationary pressures, this policy aims to create a more stable economic environment for investors. Exemptions for national emergencies and previously budgeted spending increases, such as the Canada Health Transfer and military spending, ensure that essential services remain unaffected
Housing affordability
Housing affordability has been on the minds of voters for decades but is often a subject talked about during elections and soon forgotten once Parliament gets to work.
Poilievre’s platform proposes measures to increase housing supply and reduce regulatory barriers that hinder development. By tackling the housing crisis, the Conservates want to make homeownership more accessible, which could have positive ripple effects on the real estate market and related investments.
However, reaching back to the “tax reforms” subject on this, one housing industry expert, the president and broker of record at Realosophy Realty John Pasalis, told Storeys.com that he is wary that the policy will worsen housing affordability by driving the equity-rich boomer generation to sell businesses or existing real estate to buy up single-family homes as rental investments, encouraging speculative investment in real estate, driving up prices, and shutting young Canadians out of the housing market.
Investment catalyst: Addressing housing affordability is a central component of Poilievre’s platform. This act proposes measures to increase housing supply and reduce regulatory barriers that hinder development. Under this plan, cities must increase the number of homes built by 15 per cent annually or risk losing federal funding. Local governments that exceed this target receive a “building bonus,” while those that fall short face penalties.
Poilievre also plans to convert 15 per cent of federal buildings into affordable housing within 18 months. These initiatives aim to alleviate the housing crisis, making homeownership more accessible and potentially boosting the real estate market.
Infrastructure development
Poilievre’s infrastructure development plans focus on modernizing Canada’s transportation and energy systems. By investing in critical infrastructure, he aims to boost economic growth and create opportunities for investors in sectors such as construction, energy, and technology.
Investment catalyst: Poilievre’s infrastructure development plans focus on modernizing Canada’s transportation and energy systems. He proposes the creation of a “Canada First National Energy Corridor” to fast-track approvals for transmission lines, railways, pipelines, and other critical infrastructure. This corridor aims to reduce dependence on the United States and facilitate the transport of resources within Canada and to global markets.
Impact on the investment landscape
Poilievre’s policies are designed to create a more favorable environment for investors by promoting private sector growth, reducing taxes, and ensuring fiscal responsibility. His focus on housing affordability and infrastructure development could lead to increased investment opportunities in real estate and related industries. The “Canada First Reinvestment Tax Cut” has the potential to attract significant capital back into the country, fostering economic growth and job creation. The dividends might be as beefy as his pension.
Love that word “Reform!”
Pierre Poilievre’s policy ideas present a potential new vision for the Canadian investment landscape. Investors should closely monitor these proposals and consider their potential impact on various sectors. It is anyone’s guess where things will fall once the dust settles after April 28th.
Once a popular shoe-in to win the election, Poilievre’s popularity among voters appears to be waning according to polls compare to his chief competition, Prime Minister Mark Carney. Click here to read more on the investment catalysts simmering around Mark Carney’s Canada.
How are you positioning your portfolio to capitalize on Canada’s near-term political environment? Which stocks do you consider prospective plays?
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(Top photo via the Conservative Party of Canada website.)
