Although the Canadian equity index return remains negative on the year, the Canadian economy appears to be doing much better. The May GDP growth number came in at an increase of 0.6%
----- up from April's 0.2% increase. This puts the second quarter's number on track for a robust annual increase of 3.8%, if June falls in line, leaving economists fairly excited, as growth seems to be coming from a wide range of sectors.
Another positive indicator has been the recent surge in oil prices
----- a surge economists believe is due to Chinese demand and Saudi Arabia's indication it will continue to restrict some production.
Also riding high
----- possibly because of the above trends and the interest rate increase
----- is the loonie, which has risen to a two-year high of $0.80 USD. Although this will likely make shoppers and travellers happy, a stronger dollar isn't all good news since it usually hurts business revenues for Canadian companies that export to the U.S. and other countries.
On the security side, the markets have been fairly placid, with the exception of Canadian energy securities rising, though not to the same extent as the underlying commodities.
Potential corporate tax code changes
Many of you have likely heard about the federal government's possible crack down on those who use their corporations to reduce or defer their overall tax bill. The Liberals are soliciting feedback from tax professionals and business owners on solutions to close the perceived tax gap. The deadline for submissions is set to be Oct. 2, 2017.
Although it looks like the government will follow through on this, particularly because it involves increasing taxes, as most political observers know, intentions don't always result in actions. Having said that,
if you're a business owner, it may be a good idea to reach out to your accountant or tax planner in case something does come into effect as early as January 2018.
Have a great long weekend everyone!