Everything You Need to Know on Wednesday: Ottawa Moves to Raise Inclusion Rate on Capital Gains Taxes in 2024 Budget

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,304.40, up 0.37%.

● Budget 2024 prioritizes housing while taxing highest earners, deficit projected at $39.8B

● Ottawa moves to raise inclusion rate on capital gains taxes in 2024 budget

● Macquarie strategists forecast higher build in US crude oil inventories week over week

● Stocks to watch: TC Energy

Today, the Canadian dollar is trading at 72.42 cents US, a slight increase from Tuesday.

The S&P/TSX 60 Index Standard Futures (SXF) are currently trading at 1,304.40, which is up 0.37% from the previous close.

In an effort to level the playing field for young people, in the 2024 federal budget, the government is targeting Canada's highest earners with new taxes in order to help offset billions in new spending to enhance the country's housing supply and social supports.

Aiming to give Canadian millennials and Generation Z "a fair chance at a middle class life," Deputy Prime Minister and Finance Minister Chrystia Freeland's budget outlines how the Liberals plan to allocate $39.2 billion in net-new spending, while upholding the intended fiscal guardrails.

Framed as pursuing tax fairness, one of the main ways the Liberals are planning to bring in new revenue is by "asking" Canada's very wealthiest to pay more, with Freeland saying it would be irresponsible to pass on more debt to future generations by ignoring the fiscal anchors Freeland tied government to last fall.

However, with still no projected budget balance and bigger deficits forecasted in every year ahead than was previously projected, the budget — titled "Fairness for Every Generation" — notes that federal public debt charges are on track to balloon to $64.3 billion in 2028-29.

Aside from the weeks long pre-budget blitz of expected new measures, the 2024 budget includes some additional offerings for small businesses and entrepreneurs – including through a new carbon rebate – and finally puts dollar figures on the first phase of national pharmacare, as well as the long-promised disability benefit.

Overall, the 2024 federal budget includes $52.9 billion in new spending plans – some of which is loan-based and reliant on provincial buy-in – as well as an estimated $20 billion in new tax revenue, including tobacco and vaping taxes.

The federal government announced intentions to raise the inclusion rate on capital gains taxes for corporations and individuals earning beyond a certain threshold, which will impact wealthy individuals who are benefiting from tax advantages not available to middle class Canadians, according to the Budget 2024.

On Tuesday, Finance Minister Chrystia Freeland tabled the federal government’s 2024 budget which included changes to capital gains taxes. New changes to Canada’s tax system are expected to generate $21.9 billion in revenue over five years, according to the budget. The resulting revenue could partially offset new spending allocated to things like increasing Canada’s housing supply. Tax benefits to entrepreneurs were also included in the budget.

“Budget 2024 announces the government’s intention to increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024,” the budget reads.

Macquarie strategists in a Tuesday note forecast a build in US crude oil inventories of 9.0 million barrels for the week ended April 12, up from a 5.8-million-barrel build for the week ended April 5.

The total US crude balance is once again expected to realize looser than anticipated following a prolonged stretch of tighter-than-expected weekly balances, the strategists said.

From refineries, crude runs were modeled down by 0.2 MBD. Among net imports, the strategists forecast a large nominal decrease, with exports sharply higher by 1 MBD and imports also up 0.2 MBD. Timing of cargoes remains a source of potential volatility.

The strategists look for a bounce-back of 1.0 MBD in implied domestic supply following a particularly soft nominal print last week.

Meanwhile, the strategists expect a slightly larger increase in strategic petroleum reserve of 0.7 million barrels on the week.

Among products, healthy draws of 3.0 million barrels in gasoline and 3.9 million barrels in distillate are anticipated this week. Implied demand for gasoline, distillate and jet fuel was modeled at 14.5 MBD.

The Calgary-based pipeline operator confirmed the rupture in a statement late Tuesday afternoon.

"We are working closely with first responders in the region, including RCMP, Yellowhead County and Alberta Wildfire," the company said.

"An initial ignition of natural gas at the rupture site is now extinguished. We are working to support Alberta Wildfire in their response to contain a secondary fire."

TC Energy Corp. had said in a statement released earlier in the day that it was alerted at approximately 11 a.m. Tuesday of an "incident" on its NGTL pipeline system in Yellowhead County, about 40 kilometres northwest of Edson and 55 kilometres northeast of Hinton.

The company said the affected section of the pipeline had been isolated and shut down, and there were no reports of injuries.

But Charlotte Charbonneau, area information co-ordinator with Alberta Forestry and Parks, said the pipeline incident had sparked a wildfire in the area that — as of mid-afternoon — was 10 hectares in size.

Source: BNN Bloomberg, Financial Post, MT Newswire