<\/p>\n
\u201cEverybody talks about tariffs as the first thing. Tariffs are the last thing. Tariffs are part of the negotiation.\u201d<\/em><\/p>\n\u2013 Wilbur Ross<\/em><\/p>\n<\/iframe><\/p>\n<h2>There is No Good Time to Write a Financial Newsletter in 2025<\/h2>\n<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n<p>The\u00a0<a href=\"https:\/\/www.bbc.com\/news\/articles\/c627nx42xelo\">25% tariffs on Canadian imports<\/a>\u00a0and 10% on Canadian energy exports signed into law by U.S. President Trump have forced many industries to reassess their strategies.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Canada exports 75%<\/a>\u00a0of its goods to the U.S., meaning a sudden increase in costs for American buyers could hit demand and slow trade. However, we also need to consider that since peaking at 0.83 US\/CDN in June of 2021, the Canadian dollar has taken a nose dive to 0.69 US\/CDN. That 17% depreciation of the Canadian dollar does significantly help offset some of the price increases for U.S. importers. But, beyond immediate cost considerations, tariffs have historically rippled through an economy in complex and often unpredictable ways.<\/p>\n<p>Before tariffs are even applied, uncertainty alone can freeze investment decisions, as businesses struggle to commit to long-term plans without clarity on pricing structures, supply chains, and cross-border demand. We saw this as soon as the threat was uttered with Canadian\u00a0<a href=\"https:\/\/financialpost.com\/commodities\/mining\/canada-mexico-steelmakers-refuse-new-us-orders\">steelmakers rejecting orders<\/a>\u00a0to the U.S. In some cases, U.S. buyers will accelerate orders of Canadian goods ahead of the tariff\u2019s implementation, giving the illusion of short-term growth. Now that the\u00a0<a href=\"https:\/\/financialpost.com\/news\/donald-trump-executive-order-imposing-tariffs-canada\">executive order is signed<\/a>\u00a0and that ship has sailed, those same buyers will now undoubtedly cut back, leading to an economic drag that lasts well beyond the initial adjustment period.<\/p>\n<p>Once the tariffs are active, the impact filters through several channels. The most direct effect is an increase in the price of Canadian goods for U.S. buyers, which, depending on the industry, can lead to substitution effects. If there are cheaper alternatives, demand for Canadian exports will drop more sharply. However, in industries where Canadian goods are more difficult to replace, the decline in demand may be more gradual, though still persistent. The extent of the damage depends on whether U.S. companies can absorb the cost or must pass it on to consumers.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Retaliatory tariffs from Canada<\/a>\u00a0add another layer of economic pain, reducing U.S. exports into Canada and potentially triggering further rounds of economic countermeasures. This kind of drawn-out trade conflict erodes business confidence, depresses investment, and can weaken job creation on both sides of the border.<\/p>\n<p>The landscape in Canada was already shaky, with U.S. tariffs serving as the last straw on the economic camel\u2019s back. The Canadian government has now responded in kind, with Trudeau announcing 25% tariffs on $107B of U.S. goods, including beer, wine, bourbon, fruit, and household appliances. Additional measures on critical minerals and energy procurement are being considered, all of which add another layer of inflationary pressure at a time when households are already stretched. Meanwhile, the Bank of Canada has stepped in with its\u00a0<a href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/bank-canada-cuts-rates-says-tariff-war-could-be-very-damaging-2025-01-29\/\">sixth consecutive rate cut,<\/a>\u00a0bringing the policy rate down to 3%. Governor Tiff Macklem warns, however, that if tariffs lead to sustained inflation, the Bank of Canada may have to shift its focus back toward controlling price pressures rather than continuing to support economic growth.<\/p>\n<p>Further complicating the landscape is the political uncertainty following Trudeau\u2019s resignation announcement. Mark Carney and Chrystia Freeland have emerged as\u00a0<a href=\"https:\/\/gfmag.com\/economics-policy-regulation\/canada-replace-trudeau\/\">frontrunners in the Liberal leadership race<\/a>, with Carney making waves by pledging to\u00a0<a href=\"https:\/\/nationalpost.com\/news\/canada\/mark-carney-carbon-tax-halifax\">scrap the consumer carbon tax<\/a>. At the same time, Pierre Poilievre\u2019s Conservatives hold a\u00a0<a href=\"https:\/\/www.aljazeera.com\/news\/2025\/1\/24\/canadas-liberal-leadership-race-whos-running-to-replace-justin-trudeau\">significant lead in the polls<\/a>. Poilievre has built momentum on the back of his \u201cAxe the Tax\u201d campaign centred on carbon pricing and\u00a0<a href=\"https:\/\/x.com\/PierrePoilievre\/status\/1886086133286928415\">held a press conference on January 2<\/a> where he called on the federal Liberal government to recall Parliament in the face of the U.S. tariff announcement.<\/p>\n<p>While macroeconomic and political developments dominate the headlines, external factors continue to reshape financial markets in ways that cannot be ignored. The AI revolution has taken an unexpected turn with the\u00a0<a href=\"https:\/\/www.reuters.com\/technology\/artificial-intelligence\/what-is-deepseek-why-is-it-disrupting-ai-sector-2025-01-27\/\">rapid rise of DeepSeek<\/a>, a Chinese startup whose AI models are now competing with industry leaders like OpenAI and Meta at a fraction of the cost. DeepSeek\u2019s AI assistant has overtaken ChatGPT as the top free app in the U.S. App Store, sending shockwaves through the tech sector. The company claims its AI models are 20-50 times cheaper to operate than OpenAI\u2019s equivalents, raising serious questions about the future of AI investment. Even Nvidia\u2019s stock took a hit as investors reassessed the long-term viability of traditional AI infrastructure spending. When you need less processing power, you need less chipsets. These developments are more than just a tech story\u2014they are shifting the fundamental economic landscape and deserve the attention of investors looking to position ahead of structural market changes.<\/p>\n<figure id=\"attachment_2236\" aria-describedby=\"caption-attachment-2236\" style=\"width: 618px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-2236\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png\" alt=\"\" width=\"618\" height=\"361\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png 618w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1-300x175.png 300w\" sizes=\"(max-width: 618px) 100vw, 618px\" \/><figcaption id=\"caption-attachment-2236\" class=\"wp-caption-text\">Source: Mackenzie Financial<\/figcaption><\/figure>\n<p>Amid all these moving pieces, our approach to overall portfolio strategy remains unchanged. While there were no tactical asset mix changes made this quarter, there were significant changes made to our model holdings that we feel better align our strategy with the themes we\u2019re now navigating. Our fixed income allocations are adjusted in anticipation of further rate cuts while carefully managing inflation risks. On the equity side, we maintain our underweight position in Canadian markets, currently sitting at -7%. Currency-wise, our Serenity Portfolio investors have benefitted from having the majority of their holdings denominated in U.S. dollars and unhedged. Our full listing of portfolio changes detailed separately below represents exposure adjustments that we find prudent for navigating the governments, policies and events still to come. The temptation to time investments and change strategy based on reactionary events is ever-present, but history consistently rewards those who focus on fundamentals rather than headlines.<\/p>\n<p>There is never a perfect time to release a newsletter, just as there is never a perfect time to invest. The nature of financial markets is unpredictability, and while the headlines will continue to roll in, long-term wealth-building relies on strategy, not reaction. The trades for 2025\u2019s themes were made in 2024, and this year we\u2019ll be positioning for next-step themes, as always. Looking to next month\u2019s newsletter, we\u2019re going to be taking a deeper dive into all things\u00a0<strong>\u201cFrontier\u201d<\/strong>\u00a0market: AI investments, disruptive technology trends, blockchain and\u00a0<em>God forbid<\/em>, crypto currency. This will coincide with the launch of new investment opportunities in this space on our platform. It\u2019s important to note that these offerings will not be added to our core Serenity models by default and will be included in your portfolio by request only. We (<em>Ryan, reluctantly<\/em>) recognize that many of our investors have had an interest in investing in these technologies and sectors, and we figure if you\u2019re going to drink, we\u2019d prefer you do it in the house under adult supervision. Stay tuned.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-2237\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png\" alt=\"\" width=\"778\" height=\"568\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png 778w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-300x219.png 300w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-768x561.png 768w\" sizes=\"(max-width: 778px) 100vw, 778px\" \/><\/p>\n<h2><span class=\"tinyMce-placeholder\"><strong>Portfolio Update \u2013 January 2025<\/strong><\/span><\/h2>\n<p>No changes to overall tactical asset mix this quarter.<\/p>\n<p><strong>Fixed Income Moves<\/strong><\/p>\n<ul>\n<li><strong>VSB:<\/strong>\u00a0Trimmed to 20% (from 25%)\u2014rate cut expectations already mostly priced in.<\/li>\n<li><strong>VAB:<\/strong>\u00a0Exited (from 20%)\u2014dropping our passive exposure to general Canadian bond market.<\/li>\n<li><strong>BSKT:<\/strong>\u00a0New 25% allocation\u2014added for active approach and added flexibility with corporate credit.<\/li>\n<\/ul>\n<p><strong>U.S. Equity Changes<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Intuit (2%)\u2014strong growth outlook.<\/li>\n<li><strong>Boosted:<\/strong>\u00a0Broadcom (from 2% to 4%)\u2014rising revenue & EPS.<\/li>\n<li><strong>Cut:<\/strong>\u00a0Analog Devices (from 4% to 2%)\u2014weakening outlook.<\/li>\n<li><strong>Exited:<\/strong>\u00a0Moderna (from 2%)\u2014investment thesis no longer holds.<\/li>\n<\/ul>\n<p><strong>Canadian Equity Shifts<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Shopify (5%), CIBC (5%), Manulife (4%), Constellation Software (4%), CN Rail (3%), National Bank (3%)\u2014growth & financials tilt prudent for potential conservative fiscal policy.<\/li>\n<li><strong>Reduced:<\/strong>\u00a0Enbridge (to 4%), CP (to 3%), Loblaw (to 2%), Rogers (to 2%), Telus (to 2%), Brookfield (to 2%), WSP (to 2%), Topaz (to 2%)\u2014tightening exposure in favour of growth factors.<\/li>\n<li>Adjustments reflect a steady hand\u2014staying ahead of shifts, not chasing them.<\/li>\n<\/ul>\n<h2><strong>Gold Seal Insights<\/strong><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1631 size-medium alignleft\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg\" alt=\"Tanya\" width=\"214\" height=\"300\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg 214w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background.jpg 587w\" sizes=\"(max-width: 214px) 100vw, 214px\" \/><\/p>\n<h3>Tanya’s Tips: Federal Government Defers Capital Gains Inclusion Rate Increase to 2026<\/h3>\n<p>In a significant update, Finance Minister Dominic LeBlanc announced last week that the federal government will\u00a0<strong>postpone the planned increase to the capital gains inclusion rate<\/strong>\u2014from one-half to two-thirds\u2014until\u00a0<strong>January 1, 2026<\/strong>. This is a shift from the previously scheduled implementation date of\u00a0<strong>June 25, 2024<\/strong>.<\/p>\n<p>For those who had already made financial decisions based on the earlier timeline, this announcement may come as a shock. However, it does provide clarity for 2024 tax planning, allowing individuals and businesses to adjust accordingly.<\/p>\n<p><strong>What Stays the Same?\u00a0<\/strong>Despite the delay in the inclusion rate change, some key measures remain on track:<\/p>\n<ol>\n<li><strong>Lifetime Capital Gains Exemption (LCGE) Increase<\/strong>\u00a0\u2013 The planned\u00a0<strong>increase to $1.25 million<\/strong>\u00a0for qualified property remains\u00a0<strong>effective June 25, 2024<\/strong>. This is\u00a0<strong>not<\/strong>\u00a0being pushed to 2026.<\/li>\n<li><strong>$250,000 Annual Threshold for Individuals<\/strong>\u00a0\u2013 Individuals will still have the first $250,000 of annual capital gains taxed at the lower 50% inclusion rate, with only gains\u00a0<strong>above this threshold<\/strong>\u00a0subject to the new two-thirds rate. However, this change is now scheduled to take effect\u00a0<strong>January 1, 2026<\/strong>.<\/li>\n<li><strong>Canadian Entrepreneurs\u2019 Incentive<\/strong>\u00a0\u2013 This measure, introduced in the\u00a02024 Federal Budget, remains on course to take effect on\u00a0<strong>January 1, 2025<\/strong>.<\/li>\n<\/ol>\n<p><strong>What This Means for Tax Filings<\/strong><\/p>\n<p>Given today\u2019s announcement, the\u00a0<strong>Canada Revenue Agency (CRA) is unlikely to enforce the higher inclusion rate for 2024<\/strong>\u00a0unless new legislation is passed.\u00a0For businesses and individuals who already filed tax returns based on the original June 25, 2024 timeline,\u00a0<strong>amendments may be required<\/strong>\u00a0to recover any excess taxes paid. If this applies to you, consulting with your tax professional is advised.<\/p>\n<p>For the official news release and additional details, visit the\u00a0<a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2025\/01\/government-of-canada-announces-deferral-in-implementation-of-change-to-capital-gains-inclusion-rate.html\" target=\"_blank\" rel=\"noopener\">Department of Finance website.<\/a><\/p>\n<p>As always, if you have questions about how these changes impact your financial strategy, we\u2019re here to help.<\/p>\n<h2>Noteworthy Links<\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/u-s-benefits-from-canadian-trade-at-least-as-much-as-canada-report\/\" target=\"_blank\" rel=\"noopener\">US benefits from Canadian trade at least as much as Canada\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.cfr.org\/article\/what-trumps-trade-war-would-mean-nine-charts\" target=\"_blank\" rel=\"noopener\">What a Trump trade war would mean in nine charts\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/nationalpost.com\/opinion\/danielle-smith-heres-how-canada-can-stop-making-things-worse\" target=\"_blank\" rel=\"noopener\">Here’s how Canada can stop making things worse<\/a>\u00a0<\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.indigo.ca\/en-ca\/books\/best-books-of-2024\/\" target=\"_blank\" rel=\"noopener\">Indigo’s Best Books of 2024<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/ca.finance.yahoo.com\/news\/how-to-make-your-2025-financial-goals-last-beyond-january-164059418.html\" target=\"_blank\" rel=\"noopener\">How to make your 2025 financial goals last beyond January<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/bigmail.wellington-altus.ca\/t\/c\/ab1aef4c-7b87-444c-809f-c7390f0523de\/01883503-aeb5-7c3f-c27d-8ef3c14ec8c8\" target=\"_blank\" rel=\"noopener\">Trump tariffs would push Bank of Canada to cut interest rates more this year, says BMO<\/a><\/strong><\/li>\n<\/ul>\n<h2><strong>Picture of the Month<\/strong><\/h2>\n<p> <\/p>\n<figure id=\"attachment_2238\" aria-describedby=\"caption-attachment-2238\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2238\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg\" alt=\"\" width=\"700\" height=\"793\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg 265w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-904x1024.jpg 904w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-768x870.jpg 768w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped.jpg 1200w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><figcaption id=\"caption-attachment-2238\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.visualcapitalist.com\/prediction-consensus-what-the-experts-see-coming-in-2025\/#google_vignette\">Visual Capitalist<\/a><\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n","protected":false},"author":169,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-2235","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/users\/169"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/comments?post=2235"}],"version-history":[{"count":7,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions"}],"predecessor-version":[{"id":2447,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions\/2447"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/media?parent=2235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/categories?post=2235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/tags?post=2235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\u2013 Wilbur Ross<\/em><\/p>\n<\/iframe><\/p>\n<h2>There is No Good Time to Write a Financial Newsletter in 2025<\/h2>\n<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n<p>The\u00a0<a href=\"https:\/\/www.bbc.com\/news\/articles\/c627nx42xelo\">25% tariffs on Canadian imports<\/a>\u00a0and 10% on Canadian energy exports signed into law by U.S. President Trump have forced many industries to reassess their strategies.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Canada exports 75%<\/a>\u00a0of its goods to the U.S., meaning a sudden increase in costs for American buyers could hit demand and slow trade. However, we also need to consider that since peaking at 0.83 US\/CDN in June of 2021, the Canadian dollar has taken a nose dive to 0.69 US\/CDN. That 17% depreciation of the Canadian dollar does significantly help offset some of the price increases for U.S. importers. But, beyond immediate cost considerations, tariffs have historically rippled through an economy in complex and often unpredictable ways.<\/p>\n<p>Before tariffs are even applied, uncertainty alone can freeze investment decisions, as businesses struggle to commit to long-term plans without clarity on pricing structures, supply chains, and cross-border demand. We saw this as soon as the threat was uttered with Canadian\u00a0<a href=\"https:\/\/financialpost.com\/commodities\/mining\/canada-mexico-steelmakers-refuse-new-us-orders\">steelmakers rejecting orders<\/a>\u00a0to the U.S. In some cases, U.S. buyers will accelerate orders of Canadian goods ahead of the tariff\u2019s implementation, giving the illusion of short-term growth. Now that the\u00a0<a href=\"https:\/\/financialpost.com\/news\/donald-trump-executive-order-imposing-tariffs-canada\">executive order is signed<\/a>\u00a0and that ship has sailed, those same buyers will now undoubtedly cut back, leading to an economic drag that lasts well beyond the initial adjustment period.<\/p>\n<p>Once the tariffs are active, the impact filters through several channels. The most direct effect is an increase in the price of Canadian goods for U.S. buyers, which, depending on the industry, can lead to substitution effects. If there are cheaper alternatives, demand for Canadian exports will drop more sharply. However, in industries where Canadian goods are more difficult to replace, the decline in demand may be more gradual, though still persistent. The extent of the damage depends on whether U.S. companies can absorb the cost or must pass it on to consumers.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Retaliatory tariffs from Canada<\/a>\u00a0add another layer of economic pain, reducing U.S. exports into Canada and potentially triggering further rounds of economic countermeasures. This kind of drawn-out trade conflict erodes business confidence, depresses investment, and can weaken job creation on both sides of the border.<\/p>\n<p>The landscape in Canada was already shaky, with U.S. tariffs serving as the last straw on the economic camel\u2019s back. The Canadian government has now responded in kind, with Trudeau announcing 25% tariffs on $107B of U.S. goods, including beer, wine, bourbon, fruit, and household appliances. Additional measures on critical minerals and energy procurement are being considered, all of which add another layer of inflationary pressure at a time when households are already stretched. Meanwhile, the Bank of Canada has stepped in with its\u00a0<a href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/bank-canada-cuts-rates-says-tariff-war-could-be-very-damaging-2025-01-29\/\">sixth consecutive rate cut,<\/a>\u00a0bringing the policy rate down to 3%. Governor Tiff Macklem warns, however, that if tariffs lead to sustained inflation, the Bank of Canada may have to shift its focus back toward controlling price pressures rather than continuing to support economic growth.<\/p>\n<p>Further complicating the landscape is the political uncertainty following Trudeau\u2019s resignation announcement. Mark Carney and Chrystia Freeland have emerged as\u00a0<a href=\"https:\/\/gfmag.com\/economics-policy-regulation\/canada-replace-trudeau\/\">frontrunners in the Liberal leadership race<\/a>, with Carney making waves by pledging to\u00a0<a href=\"https:\/\/nationalpost.com\/news\/canada\/mark-carney-carbon-tax-halifax\">scrap the consumer carbon tax<\/a>. At the same time, Pierre Poilievre\u2019s Conservatives hold a\u00a0<a href=\"https:\/\/www.aljazeera.com\/news\/2025\/1\/24\/canadas-liberal-leadership-race-whos-running-to-replace-justin-trudeau\">significant lead in the polls<\/a>. Poilievre has built momentum on the back of his \u201cAxe the Tax\u201d campaign centred on carbon pricing and\u00a0<a href=\"https:\/\/x.com\/PierrePoilievre\/status\/1886086133286928415\">held a press conference on January 2<\/a> where he called on the federal Liberal government to recall Parliament in the face of the U.S. tariff announcement.<\/p>\n<p>While macroeconomic and political developments dominate the headlines, external factors continue to reshape financial markets in ways that cannot be ignored. The AI revolution has taken an unexpected turn with the\u00a0<a href=\"https:\/\/www.reuters.com\/technology\/artificial-intelligence\/what-is-deepseek-why-is-it-disrupting-ai-sector-2025-01-27\/\">rapid rise of DeepSeek<\/a>, a Chinese startup whose AI models are now competing with industry leaders like OpenAI and Meta at a fraction of the cost. DeepSeek\u2019s AI assistant has overtaken ChatGPT as the top free app in the U.S. App Store, sending shockwaves through the tech sector. The company claims its AI models are 20-50 times cheaper to operate than OpenAI\u2019s equivalents, raising serious questions about the future of AI investment. Even Nvidia\u2019s stock took a hit as investors reassessed the long-term viability of traditional AI infrastructure spending. When you need less processing power, you need less chipsets. These developments are more than just a tech story\u2014they are shifting the fundamental economic landscape and deserve the attention of investors looking to position ahead of structural market changes.<\/p>\n<figure id=\"attachment_2236\" aria-describedby=\"caption-attachment-2236\" style=\"width: 618px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-2236\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png\" alt=\"\" width=\"618\" height=\"361\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png 618w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1-300x175.png 300w\" sizes=\"(max-width: 618px) 100vw, 618px\" \/><figcaption id=\"caption-attachment-2236\" class=\"wp-caption-text\">Source: Mackenzie Financial<\/figcaption><\/figure>\n<p>Amid all these moving pieces, our approach to overall portfolio strategy remains unchanged. While there were no tactical asset mix changes made this quarter, there were significant changes made to our model holdings that we feel better align our strategy with the themes we\u2019re now navigating. Our fixed income allocations are adjusted in anticipation of further rate cuts while carefully managing inflation risks. On the equity side, we maintain our underweight position in Canadian markets, currently sitting at -7%. Currency-wise, our Serenity Portfolio investors have benefitted from having the majority of their holdings denominated in U.S. dollars and unhedged. Our full listing of portfolio changes detailed separately below represents exposure adjustments that we find prudent for navigating the governments, policies and events still to come. The temptation to time investments and change strategy based on reactionary events is ever-present, but history consistently rewards those who focus on fundamentals rather than headlines.<\/p>\n<p>There is never a perfect time to release a newsletter, just as there is never a perfect time to invest. The nature of financial markets is unpredictability, and while the headlines will continue to roll in, long-term wealth-building relies on strategy, not reaction. The trades for 2025\u2019s themes were made in 2024, and this year we\u2019ll be positioning for next-step themes, as always. Looking to next month\u2019s newsletter, we\u2019re going to be taking a deeper dive into all things\u00a0<strong>\u201cFrontier\u201d<\/strong>\u00a0market: AI investments, disruptive technology trends, blockchain and\u00a0<em>God forbid<\/em>, crypto currency. This will coincide with the launch of new investment opportunities in this space on our platform. It\u2019s important to note that these offerings will not be added to our core Serenity models by default and will be included in your portfolio by request only. We (<em>Ryan, reluctantly<\/em>) recognize that many of our investors have had an interest in investing in these technologies and sectors, and we figure if you\u2019re going to drink, we\u2019d prefer you do it in the house under adult supervision. Stay tuned.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-2237\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png\" alt=\"\" width=\"778\" height=\"568\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png 778w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-300x219.png 300w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-768x561.png 768w\" sizes=\"(max-width: 778px) 100vw, 778px\" \/><\/p>\n<h2><span class=\"tinyMce-placeholder\"><strong>Portfolio Update \u2013 January 2025<\/strong><\/span><\/h2>\n<p>No changes to overall tactical asset mix this quarter.<\/p>\n<p><strong>Fixed Income Moves<\/strong><\/p>\n<ul>\n<li><strong>VSB:<\/strong>\u00a0Trimmed to 20% (from 25%)\u2014rate cut expectations already mostly priced in.<\/li>\n<li><strong>VAB:<\/strong>\u00a0Exited (from 20%)\u2014dropping our passive exposure to general Canadian bond market.<\/li>\n<li><strong>BSKT:<\/strong>\u00a0New 25% allocation\u2014added for active approach and added flexibility with corporate credit.<\/li>\n<\/ul>\n<p><strong>U.S. Equity Changes<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Intuit (2%)\u2014strong growth outlook.<\/li>\n<li><strong>Boosted:<\/strong>\u00a0Broadcom (from 2% to 4%)\u2014rising revenue & EPS.<\/li>\n<li><strong>Cut:<\/strong>\u00a0Analog Devices (from 4% to 2%)\u2014weakening outlook.<\/li>\n<li><strong>Exited:<\/strong>\u00a0Moderna (from 2%)\u2014investment thesis no longer holds.<\/li>\n<\/ul>\n<p><strong>Canadian Equity Shifts<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Shopify (5%), CIBC (5%), Manulife (4%), Constellation Software (4%), CN Rail (3%), National Bank (3%)\u2014growth & financials tilt prudent for potential conservative fiscal policy.<\/li>\n<li><strong>Reduced:<\/strong>\u00a0Enbridge (to 4%), CP (to 3%), Loblaw (to 2%), Rogers (to 2%), Telus (to 2%), Brookfield (to 2%), WSP (to 2%), Topaz (to 2%)\u2014tightening exposure in favour of growth factors.<\/li>\n<li>Adjustments reflect a steady hand\u2014staying ahead of shifts, not chasing them.<\/li>\n<\/ul>\n<h2><strong>Gold Seal Insights<\/strong><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1631 size-medium alignleft\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg\" alt=\"Tanya\" width=\"214\" height=\"300\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg 214w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background.jpg 587w\" sizes=\"(max-width: 214px) 100vw, 214px\" \/><\/p>\n<h3>Tanya’s Tips: Federal Government Defers Capital Gains Inclusion Rate Increase to 2026<\/h3>\n<p>In a significant update, Finance Minister Dominic LeBlanc announced last week that the federal government will\u00a0<strong>postpone the planned increase to the capital gains inclusion rate<\/strong>\u2014from one-half to two-thirds\u2014until\u00a0<strong>January 1, 2026<\/strong>. This is a shift from the previously scheduled implementation date of\u00a0<strong>June 25, 2024<\/strong>.<\/p>\n<p>For those who had already made financial decisions based on the earlier timeline, this announcement may come as a shock. However, it does provide clarity for 2024 tax planning, allowing individuals and businesses to adjust accordingly.<\/p>\n<p><strong>What Stays the Same?\u00a0<\/strong>Despite the delay in the inclusion rate change, some key measures remain on track:<\/p>\n<ol>\n<li><strong>Lifetime Capital Gains Exemption (LCGE) Increase<\/strong>\u00a0\u2013 The planned\u00a0<strong>increase to $1.25 million<\/strong>\u00a0for qualified property remains\u00a0<strong>effective June 25, 2024<\/strong>. This is\u00a0<strong>not<\/strong>\u00a0being pushed to 2026.<\/li>\n<li><strong>$250,000 Annual Threshold for Individuals<\/strong>\u00a0\u2013 Individuals will still have the first $250,000 of annual capital gains taxed at the lower 50% inclusion rate, with only gains\u00a0<strong>above this threshold<\/strong>\u00a0subject to the new two-thirds rate. However, this change is now scheduled to take effect\u00a0<strong>January 1, 2026<\/strong>.<\/li>\n<li><strong>Canadian Entrepreneurs\u2019 Incentive<\/strong>\u00a0\u2013 This measure, introduced in the\u00a02024 Federal Budget, remains on course to take effect on\u00a0<strong>January 1, 2025<\/strong>.<\/li>\n<\/ol>\n<p><strong>What This Means for Tax Filings<\/strong><\/p>\n<p>Given today\u2019s announcement, the\u00a0<strong>Canada Revenue Agency (CRA) is unlikely to enforce the higher inclusion rate for 2024<\/strong>\u00a0unless new legislation is passed.\u00a0For businesses and individuals who already filed tax returns based on the original June 25, 2024 timeline,\u00a0<strong>amendments may be required<\/strong>\u00a0to recover any excess taxes paid. If this applies to you, consulting with your tax professional is advised.<\/p>\n<p>For the official news release and additional details, visit the\u00a0<a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2025\/01\/government-of-canada-announces-deferral-in-implementation-of-change-to-capital-gains-inclusion-rate.html\" target=\"_blank\" rel=\"noopener\">Department of Finance website.<\/a><\/p>\n<p>As always, if you have questions about how these changes impact your financial strategy, we\u2019re here to help.<\/p>\n<h2>Noteworthy Links<\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/u-s-benefits-from-canadian-trade-at-least-as-much-as-canada-report\/\" target=\"_blank\" rel=\"noopener\">US benefits from Canadian trade at least as much as Canada\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.cfr.org\/article\/what-trumps-trade-war-would-mean-nine-charts\" target=\"_blank\" rel=\"noopener\">What a Trump trade war would mean in nine charts\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/nationalpost.com\/opinion\/danielle-smith-heres-how-canada-can-stop-making-things-worse\" target=\"_blank\" rel=\"noopener\">Here’s how Canada can stop making things worse<\/a>\u00a0<\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.indigo.ca\/en-ca\/books\/best-books-of-2024\/\" target=\"_blank\" rel=\"noopener\">Indigo’s Best Books of 2024<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/ca.finance.yahoo.com\/news\/how-to-make-your-2025-financial-goals-last-beyond-january-164059418.html\" target=\"_blank\" rel=\"noopener\">How to make your 2025 financial goals last beyond January<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/bigmail.wellington-altus.ca\/t\/c\/ab1aef4c-7b87-444c-809f-c7390f0523de\/01883503-aeb5-7c3f-c27d-8ef3c14ec8c8\" target=\"_blank\" rel=\"noopener\">Trump tariffs would push Bank of Canada to cut interest rates more this year, says BMO<\/a><\/strong><\/li>\n<\/ul>\n<h2><strong>Picture of the Month<\/strong><\/h2>\n<p> <\/p>\n<figure id=\"attachment_2238\" aria-describedby=\"caption-attachment-2238\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2238\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg\" alt=\"\" width=\"700\" height=\"793\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg 265w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-904x1024.jpg 904w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-768x870.jpg 768w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped.jpg 1200w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><figcaption id=\"caption-attachment-2238\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.visualcapitalist.com\/prediction-consensus-what-the-experts-see-coming-in-2025\/#google_vignette\">Visual Capitalist<\/a><\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n","protected":false},"author":169,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-2235","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/users\/169"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/comments?post=2235"}],"version-history":[{"count":7,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions"}],"predecessor-version":[{"id":2447,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions\/2447"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/media?parent=2235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/categories?post=2235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/tags?post=2235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
<\/iframe><\/p>\n<h2>There is No Good Time to Write a Financial Newsletter in 2025<\/h2>\n<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n<p>The\u00a0<a href=\"https:\/\/www.bbc.com\/news\/articles\/c627nx42xelo\">25% tariffs on Canadian imports<\/a>\u00a0and 10% on Canadian energy exports signed into law by U.S. President Trump have forced many industries to reassess their strategies.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Canada exports 75%<\/a>\u00a0of its goods to the U.S., meaning a sudden increase in costs for American buyers could hit demand and slow trade. However, we also need to consider that since peaking at 0.83 US\/CDN in June of 2021, the Canadian dollar has taken a nose dive to 0.69 US\/CDN. That 17% depreciation of the Canadian dollar does significantly help offset some of the price increases for U.S. importers. But, beyond immediate cost considerations, tariffs have historically rippled through an economy in complex and often unpredictable ways.<\/p>\n<p>Before tariffs are even applied, uncertainty alone can freeze investment decisions, as businesses struggle to commit to long-term plans without clarity on pricing structures, supply chains, and cross-border demand. We saw this as soon as the threat was uttered with Canadian\u00a0<a href=\"https:\/\/financialpost.com\/commodities\/mining\/canada-mexico-steelmakers-refuse-new-us-orders\">steelmakers rejecting orders<\/a>\u00a0to the U.S. In some cases, U.S. buyers will accelerate orders of Canadian goods ahead of the tariff\u2019s implementation, giving the illusion of short-term growth. Now that the\u00a0<a href=\"https:\/\/financialpost.com\/news\/donald-trump-executive-order-imposing-tariffs-canada\">executive order is signed<\/a>\u00a0and that ship has sailed, those same buyers will now undoubtedly cut back, leading to an economic drag that lasts well beyond the initial adjustment period.<\/p>\n<p>Once the tariffs are active, the impact filters through several channels. The most direct effect is an increase in the price of Canadian goods for U.S. buyers, which, depending on the industry, can lead to substitution effects. If there are cheaper alternatives, demand for Canadian exports will drop more sharply. However, in industries where Canadian goods are more difficult to replace, the decline in demand may be more gradual, though still persistent. The extent of the damage depends on whether U.S. companies can absorb the cost or must pass it on to consumers.\u00a0<a href=\"https:\/\/www.reuters.com\/world\/americas\/canadas-trudeau-announces-counter-tariffs-2025-02-02\/?\">Retaliatory tariffs from Canada<\/a>\u00a0add another layer of economic pain, reducing U.S. exports into Canada and potentially triggering further rounds of economic countermeasures. This kind of drawn-out trade conflict erodes business confidence, depresses investment, and can weaken job creation on both sides of the border.<\/p>\n<p>The landscape in Canada was already shaky, with U.S. tariffs serving as the last straw on the economic camel\u2019s back. The Canadian government has now responded in kind, with Trudeau announcing 25% tariffs on $107B of U.S. goods, including beer, wine, bourbon, fruit, and household appliances. Additional measures on critical minerals and energy procurement are being considered, all of which add another layer of inflationary pressure at a time when households are already stretched. Meanwhile, the Bank of Canada has stepped in with its\u00a0<a href=\"https:\/\/www.reuters.com\/markets\/rates-bonds\/bank-canada-cuts-rates-says-tariff-war-could-be-very-damaging-2025-01-29\/\">sixth consecutive rate cut,<\/a>\u00a0bringing the policy rate down to 3%. Governor Tiff Macklem warns, however, that if tariffs lead to sustained inflation, the Bank of Canada may have to shift its focus back toward controlling price pressures rather than continuing to support economic growth.<\/p>\n<p>Further complicating the landscape is the political uncertainty following Trudeau\u2019s resignation announcement. Mark Carney and Chrystia Freeland have emerged as\u00a0<a href=\"https:\/\/gfmag.com\/economics-policy-regulation\/canada-replace-trudeau\/\">frontrunners in the Liberal leadership race<\/a>, with Carney making waves by pledging to\u00a0<a href=\"https:\/\/nationalpost.com\/news\/canada\/mark-carney-carbon-tax-halifax\">scrap the consumer carbon tax<\/a>. At the same time, Pierre Poilievre\u2019s Conservatives hold a\u00a0<a href=\"https:\/\/www.aljazeera.com\/news\/2025\/1\/24\/canadas-liberal-leadership-race-whos-running-to-replace-justin-trudeau\">significant lead in the polls<\/a>. Poilievre has built momentum on the back of his \u201cAxe the Tax\u201d campaign centred on carbon pricing and\u00a0<a href=\"https:\/\/x.com\/PierrePoilievre\/status\/1886086133286928415\">held a press conference on January 2<\/a> where he called on the federal Liberal government to recall Parliament in the face of the U.S. tariff announcement.<\/p>\n<p>While macroeconomic and political developments dominate the headlines, external factors continue to reshape financial markets in ways that cannot be ignored. The AI revolution has taken an unexpected turn with the\u00a0<a href=\"https:\/\/www.reuters.com\/technology\/artificial-intelligence\/what-is-deepseek-why-is-it-disrupting-ai-sector-2025-01-27\/\">rapid rise of DeepSeek<\/a>, a Chinese startup whose AI models are now competing with industry leaders like OpenAI and Meta at a fraction of the cost. DeepSeek\u2019s AI assistant has overtaken ChatGPT as the top free app in the U.S. App Store, sending shockwaves through the tech sector. The company claims its AI models are 20-50 times cheaper to operate than OpenAI\u2019s equivalents, raising serious questions about the future of AI investment. Even Nvidia\u2019s stock took a hit as investors reassessed the long-term viability of traditional AI infrastructure spending. When you need less processing power, you need less chipsets. These developments are more than just a tech story\u2014they are shifting the fundamental economic landscape and deserve the attention of investors looking to position ahead of structural market changes.<\/p>\n<figure id=\"attachment_2236\" aria-describedby=\"caption-attachment-2236\" style=\"width: 618px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-2236\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png\" alt=\"\" width=\"618\" height=\"361\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1.png 618w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/DeepSeek1-300x175.png 300w\" sizes=\"(max-width: 618px) 100vw, 618px\" \/><figcaption id=\"caption-attachment-2236\" class=\"wp-caption-text\">Source: Mackenzie Financial<\/figcaption><\/figure>\n<p>Amid all these moving pieces, our approach to overall portfolio strategy remains unchanged. While there were no tactical asset mix changes made this quarter, there were significant changes made to our model holdings that we feel better align our strategy with the themes we\u2019re now navigating. Our fixed income allocations are adjusted in anticipation of further rate cuts while carefully managing inflation risks. On the equity side, we maintain our underweight position in Canadian markets, currently sitting at -7%. Currency-wise, our Serenity Portfolio investors have benefitted from having the majority of their holdings denominated in U.S. dollars and unhedged. Our full listing of portfolio changes detailed separately below represents exposure adjustments that we find prudent for navigating the governments, policies and events still to come. The temptation to time investments and change strategy based on reactionary events is ever-present, but history consistently rewards those who focus on fundamentals rather than headlines.<\/p>\n<p>There is never a perfect time to release a newsletter, just as there is never a perfect time to invest. The nature of financial markets is unpredictability, and while the headlines will continue to roll in, long-term wealth-building relies on strategy, not reaction. The trades for 2025\u2019s themes were made in 2024, and this year we\u2019ll be positioning for next-step themes, as always. Looking to next month\u2019s newsletter, we\u2019re going to be taking a deeper dive into all things\u00a0<strong>\u201cFrontier\u201d<\/strong>\u00a0market: AI investments, disruptive technology trends, blockchain and\u00a0<em>God forbid<\/em>, crypto currency. This will coincide with the launch of new investment opportunities in this space on our platform. It\u2019s important to note that these offerings will not be added to our core Serenity models by default and will be included in your portfolio by request only. We (<em>Ryan, reluctantly<\/em>) recognize that many of our investors have had an interest in investing in these technologies and sectors, and we figure if you\u2019re going to drink, we\u2019d prefer you do it in the house under adult supervision. Stay tuned.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-2237\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png\" alt=\"\" width=\"778\" height=\"568\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight.png 778w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-300x219.png 300w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/fight-768x561.png 768w\" sizes=\"(max-width: 778px) 100vw, 778px\" \/><\/p>\n<h2><span class=\"tinyMce-placeholder\"><strong>Portfolio Update \u2013 January 2025<\/strong><\/span><\/h2>\n<p>No changes to overall tactical asset mix this quarter.<\/p>\n<p><strong>Fixed Income Moves<\/strong><\/p>\n<ul>\n<li><strong>VSB:<\/strong>\u00a0Trimmed to 20% (from 25%)\u2014rate cut expectations already mostly priced in.<\/li>\n<li><strong>VAB:<\/strong>\u00a0Exited (from 20%)\u2014dropping our passive exposure to general Canadian bond market.<\/li>\n<li><strong>BSKT:<\/strong>\u00a0New 25% allocation\u2014added for active approach and added flexibility with corporate credit.<\/li>\n<\/ul>\n<p><strong>U.S. Equity Changes<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Intuit (2%)\u2014strong growth outlook.<\/li>\n<li><strong>Boosted:<\/strong>\u00a0Broadcom (from 2% to 4%)\u2014rising revenue & EPS.<\/li>\n<li><strong>Cut:<\/strong>\u00a0Analog Devices (from 4% to 2%)\u2014weakening outlook.<\/li>\n<li><strong>Exited:<\/strong>\u00a0Moderna (from 2%)\u2014investment thesis no longer holds.<\/li>\n<\/ul>\n<p><strong>Canadian Equity Shifts<\/strong><\/p>\n<ul>\n<li><strong>Added:<\/strong>\u00a0Shopify (5%), CIBC (5%), Manulife (4%), Constellation Software (4%), CN Rail (3%), National Bank (3%)\u2014growth & financials tilt prudent for potential conservative fiscal policy.<\/li>\n<li><strong>Reduced:<\/strong>\u00a0Enbridge (to 4%), CP (to 3%), Loblaw (to 2%), Rogers (to 2%), Telus (to 2%), Brookfield (to 2%), WSP (to 2%), Topaz (to 2%)\u2014tightening exposure in favour of growth factors.<\/li>\n<li>Adjustments reflect a steady hand\u2014staying ahead of shifts, not chasing them.<\/li>\n<\/ul>\n<h2><strong>Gold Seal Insights<\/strong><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1631 size-medium alignleft\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg\" alt=\"Tanya\" width=\"214\" height=\"300\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background-214x300.jpg 214w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2023\/11\/Tanya-White-Background.jpg 587w\" sizes=\"(max-width: 214px) 100vw, 214px\" \/><\/p>\n<h3>Tanya’s Tips: Federal Government Defers Capital Gains Inclusion Rate Increase to 2026<\/h3>\n<p>In a significant update, Finance Minister Dominic LeBlanc announced last week that the federal government will\u00a0<strong>postpone the planned increase to the capital gains inclusion rate<\/strong>\u2014from one-half to two-thirds\u2014until\u00a0<strong>January 1, 2026<\/strong>. This is a shift from the previously scheduled implementation date of\u00a0<strong>June 25, 2024<\/strong>.<\/p>\n<p>For those who had already made financial decisions based on the earlier timeline, this announcement may come as a shock. However, it does provide clarity for 2024 tax planning, allowing individuals and businesses to adjust accordingly.<\/p>\n<p><strong>What Stays the Same?\u00a0<\/strong>Despite the delay in the inclusion rate change, some key measures remain on track:<\/p>\n<ol>\n<li><strong>Lifetime Capital Gains Exemption (LCGE) Increase<\/strong>\u00a0\u2013 The planned\u00a0<strong>increase to $1.25 million<\/strong>\u00a0for qualified property remains\u00a0<strong>effective June 25, 2024<\/strong>. This is\u00a0<strong>not<\/strong>\u00a0being pushed to 2026.<\/li>\n<li><strong>$250,000 Annual Threshold for Individuals<\/strong>\u00a0\u2013 Individuals will still have the first $250,000 of annual capital gains taxed at the lower 50% inclusion rate, with only gains\u00a0<strong>above this threshold<\/strong>\u00a0subject to the new two-thirds rate. However, this change is now scheduled to take effect\u00a0<strong>January 1, 2026<\/strong>.<\/li>\n<li><strong>Canadian Entrepreneurs\u2019 Incentive<\/strong>\u00a0\u2013 This measure, introduced in the\u00a02024 Federal Budget, remains on course to take effect on\u00a0<strong>January 1, 2025<\/strong>.<\/li>\n<\/ol>\n<p><strong>What This Means for Tax Filings<\/strong><\/p>\n<p>Given today\u2019s announcement, the\u00a0<strong>Canada Revenue Agency (CRA) is unlikely to enforce the higher inclusion rate for 2024<\/strong>\u00a0unless new legislation is passed.\u00a0For businesses and individuals who already filed tax returns based on the original June 25, 2024 timeline,\u00a0<strong>amendments may be required<\/strong>\u00a0to recover any excess taxes paid. If this applies to you, consulting with your tax professional is advised.<\/p>\n<p>For the official news release and additional details, visit the\u00a0<a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2025\/01\/government-of-canada-announces-deferral-in-implementation-of-change-to-capital-gains-inclusion-rate.html\" target=\"_blank\" rel=\"noopener\">Department of Finance website.<\/a><\/p>\n<p>As always, if you have questions about how these changes impact your financial strategy, we\u2019re here to help.<\/p>\n<h2>Noteworthy Links<\/h2>\n<ul>\n<li><strong><a href=\"https:\/\/www.investmentexecutive.com\/news\/research-and-markets\/u-s-benefits-from-canadian-trade-at-least-as-much-as-canada-report\/\" target=\"_blank\" rel=\"noopener\">US benefits from Canadian trade at least as much as Canada\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.cfr.org\/article\/what-trumps-trade-war-would-mean-nine-charts\" target=\"_blank\" rel=\"noopener\">What a Trump trade war would mean in nine charts\u00a0<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/nationalpost.com\/opinion\/danielle-smith-heres-how-canada-can-stop-making-things-worse\" target=\"_blank\" rel=\"noopener\">Here’s how Canada can stop making things worse<\/a>\u00a0<\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.indigo.ca\/en-ca\/books\/best-books-of-2024\/\" target=\"_blank\" rel=\"noopener\">Indigo’s Best Books of 2024<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/ca.finance.yahoo.com\/news\/how-to-make-your-2025-financial-goals-last-beyond-january-164059418.html\" target=\"_blank\" rel=\"noopener\">How to make your 2025 financial goals last beyond January<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/bigmail.wellington-altus.ca\/t\/c\/ab1aef4c-7b87-444c-809f-c7390f0523de\/01883503-aeb5-7c3f-c27d-8ef3c14ec8c8\" target=\"_blank\" rel=\"noopener\">Trump tariffs would push Bank of Canada to cut interest rates more this year, says BMO<\/a><\/strong><\/li>\n<\/ul>\n<h2><strong>Picture of the Month<\/strong><\/h2>\n<p> <\/p>\n<figure id=\"attachment_2238\" aria-describedby=\"caption-attachment-2238\" style=\"width: 700px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2238\" src=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg\" alt=\"\" width=\"700\" height=\"793\" srcset=\"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-265x300.jpg 265w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-904x1024.jpg 904w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped-768x870.jpg 768w, https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-content\/uploads\/sites\/159\/2025\/02\/Prediction-Consensus-cropped.jpg 1200w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/><figcaption id=\"caption-attachment-2238\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.visualcapitalist.com\/prediction-consensus-what-the-experts-see-coming-in-2025\/#google_vignette\">Visual Capitalist<\/a><\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Much has transpired in North America since we released our traditional, playful holiday poem and at this rate, we may not be able to lose a month on lighthearted coverage. By the time this newsletter is published, it’s likely that another executive order, artificial intelligence (AI) breakthrough, government resignation, prorogation, tariff, or other market-moving development has emerged\u2014somehow still managing to be absent from our 2025 bingo card. Among the latest disruptions, President Donald Trump\u2019s tariffs on Canadian goods have created a new economic landscape, one that demands strategic adjustments rather than reactionary panic.<\/p>\n","protected":false},"author":169,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-2235","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/users\/169"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/comments?post=2235"}],"version-history":[{"count":7,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions"}],"predecessor-version":[{"id":2447,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/posts\/2235\/revisions\/2447"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/media?parent=2235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/categories?post=2235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/goldsealfinancialgroup\/wp-json\/wp\/v2\/tags?post=2235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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