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Conservatives Refuse To Commit To Repealing Capital Gains Tax Changes

Despite their strong criticism of the federal budget, the Conservative Party of Canada is not committing to repealing the Liberals’ planned increase in the capital gains inclusion rate.

The budget, which spans 416 pages and was introduced in the House of Commons this Tuesday, proposes hiking the rate from 50% to 67%. This adjustment would impact individuals with over $250,000 in annual capital gains starting June 25, expanding tax liabilities for them as well as for corporations and trusts.

The government argues that the tax change would affect a small segment of the population but generate substantial revenue—projected at $19.3 billion over the next five years. However, this proposal has not gone down well with several Canadian business owners and entrepreneurs, who contend that it could hamper innovation.

You can read more on the matter here.

What’s going on?

• Credit Card Delinquencies Soar to Highest Levels in Over a Decade (theDeepDive)

• Blinken says genocide in Xinjiang is ongoing in report ahead of China visit (Reuters)

• PepsiCo earnings beat estimates but product recalls, weaker lower-income consumer hurt U.S. sales (CNBC)

• Strong Aftershocks From Deadly Quake Rattle Taiwan (NYT)

• Copper Supply Disruptions Mount as Congo Halts Mine Operation Due to Radiation (theDeepDive)

• Exclusive: US preparing $1 billion weapons package for Ukraine, officials say (Reuters)

• New US Home Sales Jump to Highest Level Since September (Bloomberg)

• Canada's planned capital gains tax hike may choke mining startups, dealmakers say (Reuters)

• Google search boss warns employees of ‘new operating reality,’ urges them to move faster (CNBC)

• SEC Seeks $4.2 Billion Disgorgement, Penalties Against Terra, Do Kwon (theDeepDive)

What’s the latest?

• Viterra Concerns: Bunge Ltd.'s $8.2 billion proposal to acquire Viterra Ltd. is under scrutiny from the Canadian Competition Bureau, which has expressed concerns about potential anti-competitive effects. The Competition Bureau's worries center on the potential reduction in competition in grain purchasing in Western Canada and canola oil sales in Eastern Canada, as well as issues related to Bunge's minority stake in G3, a direct competitor of Viterra.

• Gun Buyback: Canada Post has declined to participate in the federal government's planned firearm buyback program, citing safety concerns for its employees. This decision complicates the government's efforts to collect 144,000 firearms that were banned in 2020. The types of weapons affected include "assault" and "military-style" firearms like the AR-15.

• Spotify Earnings: Spotify reported a 20% increase in revenue to €3.6 billion and a net income of €197 million. The company's paid subscribers increased by 14% year over year to 239 million, aligning with analyst expectations. Overall, Spotify's active user base rose to 615 million, although this was slightly below the anticipated 617.9 million.

• Business Activity: U.S. business activity saw its slowest expansion of the year in April, due to a reduction in demand, leading to the first employment decline since 2020. The S&P Global flash April composite index, which covers both manufacturing and service sectors, fell by 1.2 points to 50.9, marking the most significant drop since August.

• Apple Sales: Apple's smartphone shipments in China fell by 19% in the first quarter of the year, marking their worst performance since 2020. This drop resulted in Apple's market share decreasing to 15.7% from 19.7% the previous year, nearly aligning it with Huawei, which saw its sales increase by 70%.

Recent surge in gold market

The stock market and stuff

• Does Elizabeth Warren Want a 1% Wealth Tax on Crypto? (theDeepDive)

• Cathie Wood’s Popular ARK Funds Are Sinking Fast (WSJ)

• Philippines orders removal of Binance from Google and Apple app stores (CNBC)

• Trump Media CEO Devin Nunes, Citadel Securities Trade Barbs Over Short-Selling Claims (theDeepDive)

In the juniors

• DiagnaMed Launches Brain Age Brain Health AI Tool In Canada (theDeepDive)

• Power Nickel Hits 8.17% Copper Over 14.4 Metres At Lion Discovery (theDeepDive)

• Energy Fuels Shares Decline Following A$375-Million Deal To Acquire Base Resources (theDeepDive)

• Filo Corp Extends Deposit To Total Length Of 5.5 Kilometres (theDeepDive)

FULL DISCLOSURE: Power Nickel is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Power Nickel. The author has been compensated to cover Power Nickel on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.