Tag: Economy

A Watched Pot With A Frog In It

Back in the spring, markets reeled after Trump announced a new round of unilateral tariffs. The April 2nd announcement triggered a week of panic selling until the administration promised a temporary 90-day pause to pursue trade negotiations. Nine months later, the U.S. now has the highest tariff levels in over a century, economic data is showing signs of weakening, and discussions of a market bubble are widespread. Why, then, is the stock market still so high?

The most immediate reason is the concentration of market leadership. The “Magnificent Seven” tech giants now account for more than 35% of the S&P 500, while the top ten companies make up nearly 40%. The gap between the S&P 500 and its equal-weighted equivalent is just shy of 10%, while the Magnificent Seven themselves have delivered a combined return of roughly 27.6% year-to-date. The comparison to the dot-com era is easy to make, but the fundamental difference is profitability: Apple, Google, Microsoft, Amazon, Meta and others continue to generate substantial earnings and hold enormous balance-sheet reserves. This profitability has helped anchor market confidence.

Figure 1 Growth of the Magnificent Seven as a part of  the S&P 500

Another factor is the lag in how economic data reflects policy changes. Despite the risks tariffs pose, the full impact has not yet shown up in backward-looking data like GDP or employment reports. Investors expecting an immediate shock instead found resilient quarterly numbers, reinforcing confidence rather than shaking it.

Figure 2 Effective tariff rates over time, from the Yale Budget Lab

There is also a deeper structural issue: the increasing concentration of economic power and spending. As wealth inequality widens, a large share of U.S. households are contributing less to measured economic activity. Recent consumer expenditure data suggests that the top 10% of households now account for roughly 50% of all consumer spending, while the bottom 60% contribute less than 20%. This means that economic stress among the majority of households may not meaningfully register in the headline data that markets rely on. Meanwhile, AI-related capital investment makes up a growing share of the remainder of measured economic activity.

Figure 3 Widening wealth disparities between households and consumer spending

This combination — delayed data effects, high concentration of consumption, and sustained AI investment — has helped keep investor sentiment resilient, even as negative signals accumulate beneath the surface. It has also masked the risks of allowing speculative dynamics to develop largely unchecked.

Figure 4 Growth of Personal Consumption as a percentage of GDP

Concerns about an AI bubble are growing. Estimates of total AI investment now exceed $3 trillion when considering capital expenditures, valuations, and related infrastructure spending. Commercial use cases outside of a few sectors remain limited. Some firms have begun participating in “circular funding arrangements,” where they invest in each other’s AI initiatives to reinforce perceived valuations. Even industry leaders acknowledge the speculative environment: Sam Altman, the CEO of Open AI has said there is likely a bubble, while Jeff Bezos has called this a “good bubble” that will still produce transformative breakthroughs.

History suggests that speculative cycles are remarkably resistant to logic. They often convert skeptics into participants, including professional money managers who join in under client pressure. Market bubbles resemble the proverbial frog in a pot: the danger rises slowly enough to dull caution.

Yet they also resemble the “watched pot” that never seems to boil. As long as new capital continues to flow into AI-linked investments, momentum can persist. Predicting the end of a bubble is famously difficult — markets can remain irrational longer than investors can remain solvent.

So what should investors do? Awareness of rising risk is the starting point. We may not be able to time the end of the AI boom, but we can examine investor behavior for signs of speculative excess.

Consider Tesla. After the election, the stock surged nearly 98% in six weeks on enthusiasm linked to political alignment and narrative momentum. Since then, sales have weakened, profitability has declined, and competition has intensified — yet the stock remains 10% above its level on inauguration day and has more than doubled off its lows. Tesla’s valuation continues to reflect belief in future breakthroughs rather than current operational performance. It is a clear illustration of narrative overpowering fundamentals — a hallmark of speculative markets.

Figure 6 Tesla stock performance from November 4, 2024 to November 4, 2025

If this environment feels uncomfortable, it may be time to review portfolio risk exposure. Reducing equity risk comes with trade-offs — especially missing out on momentum-driven gains — but clarity on long-term goals can help prevent emotionally driven decision making.

Market manias are difficult to avoid and even harder to detach from when others are benefiting. The antidote is a disciplined investment plan that emphasizes long-term objectives over short-term excitement. In a world where the water may be warming around us, it is better to be a watcher than the frog.

by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

Separating Fact and Fiction in Investing

Is America’s economy failing? Has Trump undone the American economic empire? Do ports sit empty? Are people being laid off? Have world leaders conspired to control America’s debt?

These are just some of the headlines and subjects floating around the internet. Depending on who you are and where your political allegiances lay, the answers will be self-evident. Trump is either a an economic genius and unparalleled negotiator, or he is a clumsy and indifferent conman masquerading as successful businessman and politician.

For investors this presents a real challenge. These questions aren’t just thought experiments. Depending on the answers they may significantly impact where one chooses to invest, and the more polemical the question the farther we may get from a useful answer, regardless of politics. If our goal is to ask questions to reveal truth, we may find ourselves confused as to why markets have surged back from their lows (as of May 12th the major US indices have almost recovered from their tumble at the beginning of April) even while business reporting warns of a potential for a worsening economy.

One way to make better sense of what’s happening is to put ourselves in the shoes of Donald Trump’s administrative allies. Imagine what someone who believes in what Donald Trump is doing would say about his economic plans. Its not as though they haven’t heard economists and businesses express doubt and worry about the actions of his administration. So how would they defend them?

In my imagining I believe they would argue something like the following:

                The United States is enormously rich but wastes money on cheap goods from China, and while some of these goods don’t need to be made here, America has lost enough manufacturing jobs that its worthwhile experimenting with tariffs to bring jobs back. Over the past 45 years we’ve seen countless evidence that playing by the rules of globalization reduces the ability of governments to help their most vulnerable citizens, and money has become too fluid and too willing to cross borders at the expense of their domestic homes. Regardless of what people fear, America remains the richest country in the world, with the largest consumer base, and that combined with the existing strength of the US economy will be enough to bring industry back to the US in some capacity while tariffs on junk from other countries will help pay for renewed and permanent tax cuts. Market volatility will be temporary while the economy realigns itself, but the combination of lower taxes and existing economic strength will ultimately help lift the markets even higher.

You don’t have to believe in such a claim, or even pretend this was what Donald Trump campaigned on. What I’m putting forth is a set of ideas (picked up through numerous interviews and speeches) that I believe his administration finds largely defensible and recognizable, and would be a better frame of reference for understanding their actions. Let’s start with the recent indication that GDP is contracting. In traditional economic terms, two quarters of back-to-back GDP contractions constitute a recession. We’ve had more than a few of those over the past decade, but few people would say that we’ve had recessions. The reason for this might be best expressed by Jason Furman; an American economist, professor at Harvard, and former deputy director of the US National Economic Council, in a recent editorial in the Financial Times. Outlining the importance of “Core GDP” vs “GDP”, he points out that Core GDP (actually known as Real Final Sales to Private Domestic Purchasers) better reflects consumer spending and private investment while the traditional GDP includes net exports, inventories, and government spending, all things in flux because of Trump’s new administration. So, while the GDP contracted in Q1 of this year, the Core GDP was up in the first three months.

What about rumours of empty ports and empty shelves? Reportedly Trump was shaken following meetings with the heads of three major retailers about shelves being empty if the tariff’s remain at 145% on China. Trump seems to have vacillated a number of times about the size and implementation of the tariffs, but as of today they remain intact. Asked about higher prices and fewer options Trump seemed dismissive of concerns over the Chinese trade war declaring “maybe the children will have two dolls instead of thirty dolls, and maybe those dolls will cost a couple of bucks more.”

Is Trump being dismissive? Yes, but he’s also not worried that shelves will be empty. Though shipping and imports are down as we head into May for cargo coming from China, far from alarmist rumours that docks are sitting empty there is still plenty of ocean-going traffic coming from China.

 Does this mean that there won’t be furloughed dock workers or empty shelves? According to the Port of Los Angeles there has been a 35% drop week over week of expected cargo, and a 14% decline from the previous year. That very well may lead to reduced working hours and fewer options in stores, but the discrepancy between what’s being shared online and what is likely to actually happen is probably enough to gird the loins for Trump’s team to continue their policies.

What about layoffs? Fears about unemployment remain high, but as the most recent jobs report shows hiring remains robust and the unemployment rate, already very low, remains unchanged.

This discrepancy between a popular public impression and the on-the-ground economic reality gives room to Trump’s administration to continue ahead with ideas that remain controversial, as well as opening up investors to making mistakes in their allocations. For the time being, Trump does have a reservoir of economic and political strength to call on. He may be using that reserve up, but may also have guessed with some accuracy that the global economy will keep doing business with America regardless of whatever feathers he ruffles.

But markets may also not be calculating the longer-term direction correctly, mispricing assets and remaining too optimistic. Since Trump’s re-election markets have been shown to be placated by the promise of deferred tariffs, as though deferring them is really the prelude of getting rid of them. Trump doesn’t help this by going back and forth on their implementation, but listening to his words, and following his actions, I feel that it would be a mistake to assume that the tariffs will ultimately be rescinded.

This past week changes to the auto-tariffs were announced, reducing some of the duplication of tariffs on steel and aluminum, but also laid out reimbursements and tariff relief for parts manufacturers need to import. These changes also make clear the groundwork for a longer and more durable tariff regime. Trump himself has been quick to correct any reporting that suggests that he’s backtracking or creating exemptions for specific products, and that some products may end up with different tariff treatment, but will still be subject to tariffs.

This seems best exemplified by the announcement of the US-UK trade deal. Called “a starting point” by the British ambassador, the Trump administration has said the deal is “maxed out”, leaving in place a 10% tariff on British imports, with a reduced tariff on British cars, steel, and aluminum (the deal effectively lowers car and steel duties to the flat 10% rates, down from 27.5%).

Whether deals such as these are anything for the market to get excited about is a question that will be answered with time, like all the unanswered questions that have been introduced this year. What investors must work on is remaining clear eyed about what is happening, and resist submitting to their own partisan preferences. Trump may yet undermine the US economy, and trade deals may turn out to simply be acknowledgements of existing tariff rates, or perhaps the opposite may happen. But recognizing that reality is more mixed and that we do not yet have a clear picture about the future will promote more time tested strategies for sensible investing.

Aligned Capital Partners Inc. (“ACPI”) is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and the Canadian Investment Regulatory Organization (“CIRO”).  Investment services are provided through Walker Wealth Management, an approved trade name of ACPI.  Only investment-related products and services are offered through ACPI/Walker Wealth Management and covered by the CIPF. Financial planning services are provided through Walker Wealth Management. Walker Wealth Management is an independent company separate and distinct from ACPI/Walker Wealth Management.

by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

Seriously and Literally

In 2016, Donald Trump supporters said that you should take him seriously, but not literally. His first press secretary, Anthony Scaramucci said “don’t take him literally, take him symbolically.” This defense of Trump was meant to highlight that while he may have said incredibly controversial things, much of that was just talk, and it was his message behind the words that you should really pay attention to.

But Trump himself has contradicted this view more than once, frequently saying “I don’t kid” when challenged on policy (the exact comment came about in 2020 over coronavirus testing). In other words, Trump has let people know that you shouldn’t be surprised when he does do things that seemed initially outrageous. For the wider world this has meant that you should take Trump at his word, and that even if some of his rhetoric is just that, rhetoric, you would be foolish to ignore the substance of his messages.

Since his re-election Trump’s focus has been squarely on tariffs, promising them on China (a further 10%), on BRIC nations (100%) and Canada and Mexico (25% each). He’s suggested that some of the tariffs can be avoided for Canada and Mexico over better border controls on drugs and illegal immigrants, but whether this is true is unknown. Political commentators like David Frum have pointed out that Trump’s views on trade have been consistent since his first considered run for the presidency in 1987, that he is hostile to trade and sees it as a zero-sum game.

A close-up of a piece of paper Description automatically generatedIn 2025 world leaders and policy shapers believe Trump should be taken both seriously and literally. While the current political situation in Canada has been turbulent, the view of the government and provinces is almost unanimous (Quebec and Alberta remain the perennial opponents to joining the band wagon). Doug Ford took the initiative to announce that Ontario could stop energy exports to the US in the event of a trade fight, a position seconded by BC’s premier David Eby.

But in the United States the threat of aggressive and expanding tariffs have also been taken literally, notably by Jerome Powell of the Federal Reserve. On December 18th, in a move that shook markets, Jerome Powell did announce a final rate cut for 2024, but stressed that future cuts were heavily dependent on inflation, which will likely rise if Trump enacts his regime of trading tariffs. Markets were quick to react, and though 2024 will be remembered as a pretty good year for investors, the speed and size of the market sell-off was newsworthy, being the largest since August.

The next morning and markets began on a relatively positive note, continuing a trend of brief panics followed by long yawns as markets simply resume their upward momentum. Little seems to have dissuaded the bull market since 2022 and with the US economy still showing itself to be very strong there’s every chance that the brief panic on December 18th was just that, a moment of panic at the end of 2024. But Trump, like the rest of us, doesn’t live in longer and slower news cycles. Instead market panics live on in social media, and run the risk of coalescing into counter narratives that Trump might hurt the economy more than help it (its notable that the economy has been very strong under Biden, but that didn’t change the perception that Trump had been the better economic steward).

In 2018 Jerome Powell began raising rates to blunt the sharper edges of a hot economy and return interest rates to somewhere near a historic norm. Since 2008 rates had remained at emergency low levels, and there was a genuine concern that markets were becoming addicted to cheap cash. In October of that year Jerome Powell made clear that rate hikes would continue until the Fed felt they’d reached a neutral rate, news not well received by the stock market. From October to the end of the year the S&P 500 lost 18% by December 24th, before rebounding slightly by the New Year. Markets had posted decent returns to the end of September, but wiped out those gains and finished the year -6.24% . During the last months of the year Trump made repeated efforts to pressure Powell to halt or cut rates, often publicly over Twitter.

My opinion is that Trump likes the ambiguity surrounding his pronouncements. Whether he actually intends to implement all the tariffs he’s discussed, whether they are bargaining positions, or whether he can be talked out of them is a grey area that offers him a position of strength. Politicians may be particularly vulnerable to his vagaries since they often wish to protect the status quo while Trump feels free to be a disruptor. But that grey area only works as a negotiating tactic so long as people believe that deals can be reached. If nations come to believe that Trump is serious and literal about tariffs and don’t believe they can be avoided, you are only left with a trade war. Similarly if you are in charge of the Federal Reserve and believe that Trump will do what he says, then you have every reason to pursue positions that curb inflation.

Following Trump’s election Jerome Powell was asked whether he would resign as the Federal Reserve chair, and was clear in his response; he will not, he is not required to leave, and cannot be compelled to. Trump already has a difficult and publicly hostile history with Powell, and its easy to imagine that if Powell is taking Trump seriously, he will move into direct conflict with Trump because of his policies, not in spite of them. Similarly conflict may be around the corner on diplomatic issues for the exact same reason. If Mexico feels it can’t avoid a trade fight with the US, you can assume that Mexico might be less interested in working to curb migrants at the US border. In Canada the same might be true, negotiating with someone who has no intent to make a deal (or honor the one already made) is not likely to build support for concessions.

Today Trump will take office following his inauguration, and he’s expected to sign a number of executive orders kicking off his next term. He has posed as a disruptor, and has nominated a number of other unusual thinkers and people opposed to the status quo to make up his cabinet. Whether they all take those roles and can do what they say they plan too is yet to be seen, but on December 18th we may have gotten some insight into what that future might look like, a future where Donald Trump is taken at his word, both seriously and literally.  

Aligned Capital Partners Inc. (“ACPI”) is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and the Canadian Investment Regulatory Organization (“CIRO”).  Investment services are provided through Walker Welath Management, an approved trade name of ACPI.  Only investment-related products and services are offered through ACPI/Walker Wealth Management and covered by the CIPF. Financial planning services are provided through Walker Wealth Management. Walker Wealth Management is an independent company seperate and distinct from ACPI/Walker Wealth Management.

by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

Why is Inflation So Hard to Beat?

April was a turbulent month for markets. Having begun 2024 with an abundance of enthusiasm about the prospect of (very near) interest rate cuts from central banks, an improving economy both domestically and abroad, and resilient employment, 2024 promised the fulfillment of a long-held dream; for the central banks of Canada and the United States to tackle inflation without causing a recession.

Though recessions seem to not be lurking in the immediate vicinity, the best-case scenario for the year is now fully off the table. Several months of higher-than-expected inflation numbers have caused markets to reconsider their earlier optimism and contemplate some of the more pessimistic predictions for economies.

In turn, US markets shed several percentage points through the first two weeks of April, not wiping out the year’s gains but reducing them by about half. Bond markets, having placed bets on rate cuts and longer duration bonds have retreated as well, wiping out gains for the year and forcing bond traders to retrench into safer, shorter duration positions.

Markets have steadied since then, and have been encouraged by Jerome Powell’s statements that the Fed still intends to cut rates, but the earlier optimism about many cuts totalling more than 1% for the year seem unlikely, and even now we will need more data in the coming months to trigger the first cut that had been anticipated for the early year.

Why is this, and why have markets been so easily convinced that rates were bound to fall so quickly?

There’s no obvious single answer. Like many issues surrounding complicated problems a multitude of events, including human bias and the best of intentions have formed the foundations for a great deal of misunderstanding. For the Fed’s part, it has remained committed that data will drive all interest rate decisions, a sensible argument but one that has tied their hands. Investors and analysts have shown a natural bias of optimism, and have assumed that with the bulk of inflation easily defeated through 2022 and 2023 that the final pieces would fall easily into place. This optimism has not learned from the recent past, as 2023 began in much a similar way, with anticipation of rate cuts happening in the second and third quarter of the year only to have rates start increasing in May.

But after these more human problems, what remains are a series of headwinds that will likely be with us for the foreseeable future. While prices of many commodities have fallen from their peaks, and “supply chain constraints” are no longer choking the global trade network, the world is fundamentally different than its was before 2020. China’s relationship with the West is now more openly antagonistic, and a combination of “reshoring” or “friend shoring” is ensuring that costs will be higher than they were in the past. Food prices have continued to rise, with sometimes opaque reasons. In some instances there are clear justifications for higher costs, like bird flu affecting American egg prices or higher gas charges pushing up the cost of shipping. But other times it seems that prices have risen because grocery stores simply can. Finally, commodity prices, while lower than they were in 2021/2022, remain above pre-covid levels. This applies especially to the price of energy, which seems set to stay elevated for the near term.

Performance of the 1 year WTI contract – Source: Bloomberg

Underlying this remains some larger issues about inflation’s presence in our lives before 2020. As I’ve previously written, many parts of our society were experiencing inflation long before CPI began to worry economists and other experts. Prices of physical goods had been falling for decades, but price of homes, child care, education, and food had all been climbing over that same period. The price of housing might be better if governments took a more active role in getting the cost of development down, but permits and other government fees now account for anywhere between 20% (CMHC estimates) to 60% when all taxes, red tape, permit costs and development charges are accounted for, a lucrative source of funds for municipal budgets.

From blog Carpe Diem by Mark Perry:
Source: https://www.aei.org/carpe-diem/chart-of-the-day-or-century-8/

 Additionally, since 2008 interest rates had been at “emergency levels”, the lowest borrowing costs of any time in history. Those near zero rates, which were intended to help remove slack from the economy and encourage large capital expenditure instead stimulated enormous share buybacks among major corporations. Instead of new jobs and a hotter economy we got increasing share prices and more corporate debt.

Problems that take a long time to form do not get fixed quickly. Repeatedly markets have shown an impatience for corrections and are quick to assume that pauses in inflation must mean that the trend of higher prices has both been beaten and that interest rates can fall back to previous emergency levels. Even if interest rates are at sufficient levels to regain control over the direction of inflation, it still doesn’t mean that rates can fall quickly, and the longer rates stay elevated above the emergency levels of the past, the deeper and more costly current interest rates become to the economy.

In Canada low interest rates helped stimulate an enormous increase in property values through the 2010s and into the pandemic. Higher interest rates threaten those gains and as we go through 2024, almost 60% of mortgages will have renewed into more expensive loans since rates began climbing. Even if interest rates begin to fall, homeowners can expect that the cost of borrowing will be much higher than they’ve been for many years. Between the desire of home owners to keep house values high, municipalities to keep their tax bases stable, and banks to ensure that the value of properties they’ve underwritten don’t move too much, the pressure to get inflation down runs squarely into our own self interest.

The urgency and desire for lower interest rates are real, but so are the headwinds that keeps inflation pressure high.

Walker Wealth Management is a trade name of Aligned Capital Partners Inc. (ACPI)* – if applicable ACPI is regulated by the Investment Industry Regulatory Organization of Canada (http://www.iiroc.ca) and a Member of the Canadian Investor Protection Fund (http://www.cipf.ca). (Advisor Name) is registered to advise in (securities and/or mutual funds) to clients residing in (List Provinces).

This publication is for informational purposes only and shall not be construed to constitute any form of investment advice. The views expressed are those of the author and may not necessarily be those of ACPI. Opinions expressed are as of the date of this publication and are subject to change without notice and information has been compiled from sources believed to be reliable. This publication has been prepared for general circulation and without regard to the individual financial circumstances and objectives of persons who receive it. You should not act or rely on the information without seeking the advice of the appropriate professional.

Investment products are provided by ACPI and include, but are not limited to, mutual funds, stocks, and

bonds. Non-securities related business includes, without limitation, fee-based financial planning services; estate and tax planning; tax return preparation services; advising in or selling any type of insurance product; any type of mortgage service. Accordingly, ACPI is not providing and does not supervise any of the above noted activities and you should not rely on ACPI for any review of any non-securities services provided by Adrian Walker.

Any investment products and services referred to herein are only available to investors in certain jurisdictions where they may be legally offered and to certain investors who are qualified according to the laws of the applicable jurisdiction. The information contained does not constitute an offer or solicitation to buy or sell any product or service.

by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc

Who Will We Hold Accountable?

June is here and the summer promises to be hot, sunny and inviting. Yet Canadians are still struggling with the pandemic, with daily numbers still in the 100s of new cases and the curve being bent slowly. Far from crushing the pandemic or setting up a robust testing and tracing system Canadians are being reprimanded for being to close to each other in parks and watching the mayor of Toronto walk around incapable of wearing a mask properly.

These results are not nationally representative, but regionally specific. Quebec is currently the worst affected province, with Montreal the country’s epicentre for the virus. Ontario fairs only a little better, while the rest of the country is beginning to move to reopening. In all, while Canada largely sidestepped an out of control spike, we have failed to bring the virus under control.

Fighting the pandemic has taken an enormous financial and emotional toll, to citizens, to cities, and to the economy. Economic lifeboats to offset the worst of the effects have cost in the hundreds of billions and will represent a sizeable financial burden for the foreseeable future. That cost has been born willingly, with people foregoing seeing relatives and friends, risking the survival of businesses, and saying goodbye to loved ones who died in hospital alone, all in an effort to smother a new and existential threat to our well being.

But Canadians will be right to wonder whether our governments maximized our response and put our consent to be governed to good use, or did they squander it in bizarre and foolish ways? I’m sorry to say that it’s probably the latter.

Cast your mind back to March (roughly 100 years ago) and recall that the minister of health, Patty Hajdu had insisted that the coronavirus posed a minimal risk to Canadians. Questions about whether we should be wearing masks were dismissed as misguided and the idea that closing borders to people travelling to places that had been Covid-19 hotspots was considered useless or potentially even discriminatory.

What an innocent time.

Today masks are recommended (sort of) albeit reluctantly, borders are largely closed and social distancing is not simply a recommendation, but mandatory and enforced by private businesses. Concerns about racism have been buried under a growing mountain of evidence that China actively misled the world about the severity of the new epidemic while simultaneously buying as much personal protective equipment as it could.

Given the conceivable difficulty with getting people to “socially distance” responsibly, something that people have never done in a society accustomed to largely doing what it likes with little fear from its government, the political opposition to masks has remained particularly puzzling. What has struck people as one of the most simple and straightforward ways to improve safety by embracing an obvious form of precaution has been regularly opposed by every public health official for all kinds of reasons right up to the moment that they decided that it was a good idea.

Other concerns about our government’s handling of the pandemic seem even worse. Though Ontario and Canada at large were meant to be better prepared as a result of the SARS outbreak, at every turn it seems that its quite the opposite. The national stockpile turns out to not have been much of a stockpile at all. Ontario’s own stockpile was largely destroyed in 2013 when it was supposed to expire and not replaced at the time (in a cruel twist of irony that expiry date was revealed to likely have been too early). In a recent interview, when Dr. Theresa Tam was asked whether concerns over pandemic preparedness had been presented to the cabinet she was cut off by the Minister of Health and reminded that all conversations with the cabinet are private.

The only thing that might have made up for all these missteps would have been an effective test and trace system that would have over-tested the population so that it could get out ahead of the virus and proactively isolated carriers. By comparison testing remains well below where it needs to be to accomplish this. In fact, to get a clear sense of just how far behind we are on the testing consider that in Ethiopia (ETHIOPIA!) the capital is testing people door-to-door! Meanwhile, here in Toronto it’s unclear whether you should even go in for testing or just stay home.

This isn’t a political rant. I’m under no illusions that another party or another leader might have made better or more decisive decisions. If anything multiple parties are to blame for the failed efforts to deal with the pandemic at every level of government. If I needed to find a single example that encapsulated the level of this failure, please consider that last week the Toronto Star reported that the TTC was trying to find out if they could legally enforce wearing masks on buses and subways! Months after a pandemic has ravaged people’s lives and eroded billions in wealth, only now does the TTC aim to see if it can enforce the most basic form of prevention for buses and subways. Even a cursory glance at where most of Toronto’s cases have been are aligned with poorer neighbourhoods that depend on more public transit.

These questions aren’t academic, and they aren’t partisan. The stakes are very real and the crisis will have a long reach into the future. Canadians have spent the last decade acquiring sizeable debt anchored by home values, with governments and banks happy to pretend that this debt was a form of wealth. Today the financial situation looks considerably worse, and one way to mitigate the damage to the economy would be to reopen the economy with confidence. Sadly, in the hands of our existing political class, such a thing remains out of reach.

Information in this commentary is for informational purposes only and not meant to be personalized investment advice. The content has been prepared by Adrian Walker from sources believed to be accurate. The opinions expressed are of the author and do not necessarily represent those of ACPI.

by The Walker Report of Walker Wealth Management and Aligned Capital Partners Inc