Bill’s Blog | February 3, 2025
Once again, Canadians face more crisis and inflation due to a lack of leadership in Ottawa. Tariffs have the potential to create serious havoc in the Canadian economy. Tariffs are nothing new, as Canada and the USA have duked it out in the past, and eventually, resolutions will be found several months later if we have sound leadership. The challenge this time is that Canada already has a very weak economy and can not afford another shock.
This month, I will have a brief blog just to highlight the key points of this tariff war and what to do. I will be attending the World Outlook Conference this Friday and Saturday in Vancouver, and next month, I will provide a more comprehensive outlook for 2025. Once again, I will have the privilege of listening to world-class experts and I will share with you their key points in March’s Blog.
Tariffs incoming, and what to expect?
- February 4, 2025, 25% tariffs on all Canadian goods and 10% on oil.
- The Canadian Loonie hit a low not seen since 2003. .68 cents (down 7.26% from a year ago) and expect our dollar to further decline if the tariff war continues.
- Tariff costs are passed on to suppliers and then to YOU and ME!
- Expect Volatile Stock markets!
- Expect inflation in Canada to go UP.
- Expect gas prices to go UP.
- Expect Unemployment to go UP. Frances Donald, RBC Chief Economist, recently warned if tariffs remain in place for 6 months, the result could be “one of the most prolonged, problematic recessions Canada has ever experienced.” There could be up to 400,000 job losses!
- GDP in Canada would decline from 1 to 3.25%.
- Canadians will become LESS wealthy as our currency crashes.
- Industries that will be hard-hit will be the automotive industry and companies that sell products mainly to the USA markets.
So, what is one to do?
- Buy Canadian products or non-US products.
- Consider not travel to the USA.
- Build up your savings as quickly as possible.
- Buy Gold and Silver to preserve your wealth. Gold is up one year: 37.31%, and YTD as of Friday 6.63%. Silver is up one year: 36.36% and YTD 8.31% as of Friday. I expect both metals to perform very well again in 2025 and beyond. There are significant risks and uncertainties for the foreseeable future, and precious metals shine in this environment. I have helped clients across Canada purchase Gold and Silver for over 15 years. Ask me about the discount I provide on purchasing all gold and silver products. World-class storage is also available.
- Be defensive if you remain in the stock market. Do NOT panic sell if you are in the markets, but be properly diversified into multiple asset classes, and I recommend you use Stop Losses and Hedging strategies to protect against a correction or crash. If you need help, please reach out to me.
- I recommend active portfolio management in this type of market.
I hope you have found the Blog helpful as we navigate turbulent waters.
Bill Westmacott: Financial Educator, BC Life Insurance Broker and Wealth Solution Provider.