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Trudeau’s Exit Deepens Tax Uncertainty

Prime Minister Justin Trudeau’s unexpected decision to step down and prorogue Parliament has thrown the future of Canada’s controversial capital gains tax proposal into disarray. While prorogation halts all legislative progress, the Canada Revenue Agency remains silent on how it will handle taxes already collected under the proposed changes, leaving businesses, investors, and taxpayers in limbo.

Unveiled in the 2024 federal budget, the capital gains tax proposal aimed to increase the taxable portion of capital gains from 50% to 66.67% for individuals earning over $250,000 annually. The government anticipated the measure would generate $19.3 billion in revenue over five years. However, resistance from the business community and political gridlock delayed its implementation.

You can read more on the matter here.

What’s going on?

• Kevin O’Leary Joins Frank McCourt’s TikTok Bid As Nationwide Ban Deadline Looms (theDeepDive)

• Canada Post returns to full service for domestic parcels after strike (Globe)

• Disney to Take 70% Stake in Fubo Live TV Merger (theDeepDive)

• US corporate bankruptcies hit 14-year high as interest rates take toll (FT)

• Bitcoin’s Decline Is Exposing Cracks in MicroStrategy’s Strategy (theDeepDive)

• Highest UK Debt Costs Since 1998 Risk More Labour Tax Hikes (Bloomberg)

• Would You Live On Top of A Costco? (theDeepDive)

• U.S. in Talks to Swap Detained Americans in Afghanistan for Guantanamo Prisoner (WSJ)

• Tensions Mount at Barrick Gold Subsidiary in Tanzania (theDeepDive)

• U.S. Steel CEO calls for Trump to take fresh look at Nippon deal, slams Biden decision as corrupt (CNBC)

• China’s Iron-Ore Imports to Break Records in 2025 Amid Steel Sector Struggles (theDeepDive)

• Alberta Premier Danielle Smith calls for quick election after Trudeau announces plan to step down (Global)

What’s the latest?

• Trump: President-elect Donald Trump is set to announce a $20 billion investment by DAMAC chairman Hussain Sajwani to build new U.S. data centers. The investment highlights foreign backing for U.S. infrastructure development.

• Real Estate: Canada's real estate market is expected to recover in 2025, driven by lower interest rates, increased investor sentiment, and a predicted 6% rise in home prices. Commercial sectors like industrial, multi-family, and retail properties are gaining interest, while residential sales are poised for recovery as first-time buyers re-enter the market. Office properties, particularly suburban and high-quality spaces, show signs of improvement, with downtown offices remaining key to transaction volumes.

• Trade Deficit: Canada's merchandise trade deficit narrowed to $323 million in November from $544 million in October. Exports rose 2.2% to $66.1 billion, driven by a 4.4% increase in consumer goods and an 11.9% surge in pharmaceutical products. Imports grew 1.8% to $66.4 billion, led by a 3.8% rise in consumer goods and a 4.3% increase in industrial chemical, plastic, and rubber products.

• CRA: The Canada Revenue Agency will continue administering proposed capital gains tax changes, increasing taxable portions of gains from one-half to two-thirds for companies and individuals earning above $250,000, despite Parliament being prorogued until March 24. Taxpayer forms reflecting the changes will be issued by January 31, but the CRA will halt administration if Parliament resumes and the government abandons the proposal. This follows Prime Minister Justin Trudeau's resignation, which caused legislative uncertainty.

• Panera: Panera Brands CEO Jose Dueñas has stepped down, with CFO Paul Carbone stepping in as interim CEO while the company searches for a permanent leader. Dueñas, who became CEO in July 2023, will serve as a special advisor through March as Panera continues preparing for a delayed IPO. Parent company JAB Holding acquired Panera for $7.5 billion in 2017 and has faced setbacks, including market challenges, in its efforts to take the brand public. Panera confidentially filed for an IPO in December 2023 but has yet to proceed amid a sluggish IPO market in 2024.

Cameco BLINDSIDED: Inkai JV sees production halted

The stock market and stuff

• Scotiabank Cedes Operations in Deal with Davivienda, To Take $1.7B In Losses (theDeepDive)

• Total Energy Services plans $61.9 million in capital spending for 2025 (BNN)

• GFL Sells Majority Interest In Environmental Services Segment For $6.2 Billion (theDeepDive)

• Meta ends third-party fact-checking scheme as it prepares for return of Trump (FT)

• Osisko Gold Royalties Reports Prelim Q4 Production Of 20,005 GEOs (theDeepDive)

In the juniors

• Verses AI Raises $20 Million From AI-Focused Institutions (theDeepDive)

• Arbor Metals Completes Phase 1 Diamond Drilling at Jarnet Lithium Project (JMN)

• CanAlaska Announces $12.5 Million Exploration Program At West McArthur (theDeepDive)

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