Crazy Election With Huge Stakes, Trump vs Powell and Gold

Canada Election – Your Heart or Your Head?

I have been in this country a long time and have never seen an election anything like this one. For one thing of many, it seems there is more concern of a foreign leader, Trump, than who will lead Canada. Or are many picking a PM to fight Trump?

There is a great divide as it would seem Canada is importing the American division into Canada. According to poll analysis, the younger generation want change, the Conservatives while the older baby boomers are mostly Liberal, afraid or hate Trump.

It certainly seems like an emotional election over a intellectual one in many instances!

Let me explain

We pretty much know the party platforms and policies so there is much to go on. It does not mean the party will honor their pledges and policies, but lets look at the policies we know.

After 10 years, we know the Liberals and their policies. For sure they have adopted many of the popular Conservative policies. Can you trust a party that does an about face at election time?

The Conservatives are all about change and change can scare some people, but younger people have experienced the failed Liberal policies that have affected them more than the older retirees, so want change, the Conservatives.

I know at least 30 to 40 Millennials and they are all voting Conservative. I know a lot of baby boomers too and most are voting Conservative. However, there is an apparent divide among young and old.

Older baby boomers would be far better with a Conservative government. The Conservatives are promising a 2.5% tax cut on the low tax bracket vs 1% by the Liberals. The Conservatives are proposing a $10,000 increase in the old age tax exemption. That is huge, especially for those with additional company pension plans or still working part time. A retired couple can make an addition $20,000 of income tax free.

Normally voters will vote the way that benefits them the most personally, but according to polls it is different this time. Older people are more fearful of change and maybe that is why? Older people are more apt to watch CBC news that is really Liberal government propaganda, maybe another reason. The Liberals are really pushing a platform to fight Trump and his tariffs, PM Carney keeps saying it is the biggest crisis to ever hit Canada. Does that make older people more afraid?

Does it just play on emotion, because of the Trump hatred?

At the debate, Bloc Quebecois Leader Yves-Francois Blanchet made a very good point to PM Carney. He basically said that all this infrastructure Carney intends to build to make Canada more independent to fight Trump tariffs will take 10 to 15 years. Trump will be long gone and in his 90s.

Of course we know the whole fight Trump thing is just an election platform to get a fear vote!!!!!!

What are the other major policy differences? I will touch on the few main ones.

Carbon Tax

This is highly unpopular so the Liberals ended the consumer carbon tax, a tax the Conservatives were against for years. The Liberals are keeping an industrial carbon tax and plan to implement more of that. Will they put a carbon tax on, at the oil and gas well head? I am not sure and they have announced no information on how they intend to do this, but the only thing for sure – it will raise prices for Canadians. The Conservatives promise to eliminate all carbon tax, including industrial.

Immigration

Both parties are kind of vague here and that is because they want to keep the immigration and their ethnic group votes. However, this is probably the biggest problem in Canada because it has been way too high, driving the housing, medical, education and crime crisis. Canada has not increased infrastructure to support these huge numbers and the open border policy has allowed too much crime in. Now, even recent immigrants are leaving Canada because it is a broken promise.

Carney and the Liberals have talked about reducing and capping numbers, but it is not near enough. Immigration Canada reports their reduction goals, but even if they make these, it is not near enough. If reduction goals are met, well over another 1 million will come to Canada this year. The Liberals are pro immigration because they want to transform Canada into a socialist society so I have my doubts about these reductions.

And than there are refugees. The number has exploded by almost 4 fold in recent years. The number was about 40 to 45K in 2016 to 2021. In 2024 there was over 75k Ukraine refugees alone and about the same in 2023. Add in other countries and Canada is taking in over 150k per year.

Poilievre, the Conservatives have only said they will reduce immigration to match available infrastructure. Pretty vague, but I would bet by that, it will be a significant reduction.

I actually predict record numbers in 2025 unless the Conservatives win. Because of the immigration policy in the U.S., very large number of U.S. illegals are pouring into Canada. As always Canada is slow on stats but the latest numbers for Q4 2024 show the highest number of irregular refugee border crossings since mid 2022. Irregular means in between ports of entry. In late March the NY Post reported - “More illegal migrants are fleeing into Canada over the northern border than are coming into US after Trump’s crackdown.”

Data from Canada Border Services Agency shows the number of asylum claims at the St-Bernard-de-Lacolle point of entry has increased since the start of the year, with a high of 1,356 applications in March and 557 claims as of Saturday for April 5. Most refugees arrive in Canada at airports because we have no way to send them back, they are stuck here.

Housing

Both parties say they will build a lot of new housing and plans differ, but are about the same on reducing HST taxes on houses below price caps and first time buyers.

PM Carney talks about building fast, small war time like houses at a pace never seen before. I don't know how they plan to do this? They could build factories and train workers that will take time or maybe just import small houses from China?. Where will they put them and he has mentioned military bases. I have visited plenty, these military base housing and I can tell you, it is not the Canadian dream.

Poilievre Conservatives say they will entice municipalities to approve more housing by holding or advancing federal funds. They also have a plan to train and bring in more trades people. That is the real problem and a shortage in Canada. However, it takes 3 to 5 years to train and obtain a trade license. This sounds like a more realistic long term plan, but won't be easy.

Municipalities add a lot to the cost and delays with all their building fees and slow approvals. Maybe Poilievre's plan will change this but I have my doubts with these governments getting off their butts.

Either way, this is a long term problem, that is more affected short term by immigration policies above.

I believe there is a better chance of the market fixing the problem than government, like a collapse in prices, but unfortunate that will be accompanied by a plunge in jobs and income so not to afford even lower prices. More trades workers in Canada is the most important in all cases.

Tax, Spending and Investment

The Liberals have always been a tax and spend government and I doubt that will change. There current platform is estimated at $130 billion in additional spending over 4 years. This will be outspending Trudeau and we know what happened there. These estimates are always too optimistic so it will cost much more. There will be a lot more carbon tax, payroll taxes and maybe some new tax agenda. That is what Liberals do best, but they promise it is all to help you.

The Conservative platform is projecting a $31 billion deficit for this year, down from the $65.2 billion the Liberals posted for 2023/2024 fiscal year. In the fall economic statement, the Liberal government of former PM Justin Trudeau projected the deficit over the next four years to be $131.4 billion. So the Conservative platform looks to be a little less than Trudeau's projection. The Conservatives are promising to cut $23 billion in government program spending over four years – a figure that includes their promise to defund the CBC.

No surprise the Conservative platform is far less than the Liberals. Carney said his budget was no ordinary one and he was right about that.

The biggest problem in Canada is a lack of investment due to burdensome permitting process and highest tax levels in the world, along with costly carbon taxes. The Conservatives will do much more to reduce taxes and help bring back investment, but I am doubtful on their success.

There has been a total loss of confidence in Canada by investors and that will take years to turn around if at all possible. If the Liberals win the election, there is no doubt investment will continue to decline. The Conservatives would at least stop the decline and small possibility of a reversal.

Predictions

There is no doubt that the majority of Liberal voters are doing so in fear of Trump. And the majority of Conservative voters are doing so in hope of a better future with change.

From what I see in the real world, the polls are wrong, just as we have witnessed in previous U.S. elections. I believe many of the polls are polling lob-sided numbers of those over 55 who seem to be swayed more Liberal in this election, they have not reached new and younger voters.

Most of these polls use IVR calls, you know the computer calls that asks you to press certain buttons. They typically get a low answer rates unless the participant is really upset or concerned on the topic, what I mean is emotional. In this election there is a high rate of emotion against Trump, that the Liberals are heavily pushing a narrative on. Because of the heavily pushed narrative, those with Trump fears mostly vote Liberal. They are likely answering more IVR calls.

The latest Ipsos poll after last weeks TV debates conducted exclusively for Global News found the Liberals are still in the lead, but are now just three points ahead of the Conservatives, who continue to gain momentum in the home stretch. The three-point gap between the two leading parties is within the poll’s 3.8 per cent margin of error, and the smallest since the campaign began last month.

Mainstreet Research's poll as of yesterday had Liberals and Conservatives neck in neck at 40.4% each, but still a slim Liberal majority. Their track record has been very good.

Most of the Canadian election is decided in the 3 main cities of Montreal, Toronto and Vancouver. They have the majority of immigrants and new Canadians that tend to vote Liberal, because the Liberal policies got them here. I don't think Conservatives will make much of an inroad here, perhaps a handful of new seats. However, because polls are way off, there maybe more Conservative seats won here than I expect. The Conservatives will need a big blue wave in the eastern provinces and rural areas.

There has been nothing done about Chinese election interference, just small talk. There is no doubt it has been going on in the Liberals favor. Another factor that helps sway votes in the 3 big cities.

It appears there has been record turnout with the advance polls and this seems like a very hot and contested election. You have motivation on one side that hates Trump and the other side disgusted with Trudeau 2.0 that wants a change. If anyone told me in January or February that what Trump did or does would change the Canadian election, I would not have believed it, but here it is!!!!!!!!!!!

I believe this will be a very close election with a minority government. I am going out a bit because of faulty poll data and predicting a minority Conservative government.

What results will mean

A Liberal win will definitely mean high immigration, taxes and spending which is basically the same path the country has been on. The Carney government is the same as Trudeau, same people. Yup Carney is simply Trudeau 2.0. The country will decline further into a 3^rd world country and will basically end up at a point of no return. The country will go into total failure and disarray. Sorry to be so negative and blunt. A change in direction is imperative and I doubt Carney and the Liberals will go through with their promises. Trudeau promised higher Canada pensions in 2 previous elections that never came about.

A Conservative win will mean a sliver of hope. This country is so far gone and in decline, I am doubtful it can be turned around. There is a possibility with the right policies, but changing and enacting the right policies will be a very difficult task.

I believe Canadian investors should continue to invest in U.S. equities over Canadian and a solid weighting in gold and gold stocks. A good level of cash is a good idea too, as there will be investment opportunities as the U.S. goes into recession and Canada a deeper one. I don't think there will be much of a move in any market sectors no matter who wins this election because so much investment money has already fled Canada and it won't be quick and easy to get that back. Canada is already a dead horse, not in the race.

I highly recommend this 18 minute podcast by 'Moose on the Loose'. I have watched this guy several times and his information has been accurate. He is obviously Conservative but gives you an alternate look that you don't see with the main stream narrative of the constant Trump tariff fear.

On the Trump tariff deal, many countries are trying to negotiate buying more U.S. LNG exports to help balance their trade. Imagine if Canada could have got somewhere on this under the Liberal's thumb. LNG could be one of the slivers of hope with a Conservative win.

Trump vs Powell

This is the latest narrative about the big bad orange man. In an attempt to influence policy, President Trump has repeatedly called Jay Powell "Mr. Too Late," especially when "Europe has already 'lowered' seven times." You don't have to look too far to Powell's infamous transitory call in 2021 that I called wishful thinking. As we know price pressures were spiraling out of control.

As Bank of America's Michael Hartnett pointed out on Friday...Fed cut 50bps in Sept. when stock market at record high, Atlanta Fed was forecasting +3% US GDP growth. Fed now determined not to cut rates after 20% market plunge, Atlanta Fed forecasting -3% GDP growth.

It seems Trump has a point and every president would like low interest rates, but I don't think Trump and most others realize the market has had enough of government large deficit spending. The Fed could lower rates, but does not mean the market will follow as we have recently witnessed.

The Fed Chair is approved by the Senate and Trump simply can't fire him and never before has a president fired a Fed Chair. I think this is just more Trump diversion and rhetoric. Powell will lower rates and it will be too late as the economy will be in recession. That said, perhaps that is necessary before the market will take the Fed's lead to lower rates.

Gold did not move up because Trump wants to fire Powell, but it was maybe a reminder to markets that interest rates will be falling. That will be another positive for gold and then after that the Fed will have to resort to QE and add rocket fuel to gold.

Besides the Atlanta Fed now predicting negative GDP, the oil price is also screaming recession.

I might not have anymore pre election update unless there is a big change in the polls or something. I am obviously Conservative, but no matter how you vote, I hope everyone is using their head more than the heart. We are all not the same, so have different policy priorities. Mine are for my kids and grandchildren. I will do just fine no matter the outcome.