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Carney’s First Budget Signals a Generational Reset for Canada’s Finances

Prime Minister Mark Carney jokes with Minister of Finance and National Revenue Francois-Philippe Champagne as they greet families before participating in an announcement at a community centre in Ottawa, on Friday, Oct. 10, 2025. Prime Minister Mark Carney’s inaugural budget is being framed as a turning point in Canada’s fiscal direction, marking a sharp departure from the spending patterns of recent years . Presented alongside Finance Minister François-Philippe Champagne, the budget is not just a financial document but a statement of intent: to reshape the country’s economic priorities in the face of global uncertainty and domestic pressures. At the heart of the plan is a shift away from expansive spending toward what Carney has described as “tough choices” and “sacrifices.” The government has emphasized that Canada must “spend less to invest more” , signaling a reallocation of resources rather than an outright expansion of the deficit. This approach reflects Carney’s long-standing...
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Bank of Canada's Rate Cuts: The Diminishing Appeal of Cash Investments

As the Bank of Canada continues to slash interest rates, the traditional appeal of holding cash in your investment portfolio is rapidly diminishing. With the latest rate cut bringing the benchmark rate down to 3.25%, the returns on cash deposits are becoming increasingly unattractive compared to other investment options.

In a low-interest-rate environment, cash holdings yield minimal returns, failing to keep pace with inflation. This erosion of purchasing power means that investors are better off exploring alternative assets that offer higher potential returns. Equities, for instance, can provide capital appreciation and dividends, while bonds, especially those with longer durations, can offer more attractive yields.

Moreover, the Bank of Canada's indication of a slower pace of future rate cuts suggests that the window for higher interest rates on cash deposits may remain narrow for some time. Investors should consider diversifying their portfolios to include a mix of growth-oriented and income-generating assets to mitigate the impact of low interest rates.

In conclusion, while cash is essential for liquidity and risk management, relying too heavily on it in the current economic climate can hinder overall portfolio performance. It's time to reassess your investment strategy and consider opportunities that can better withstand the challenges posed by persistently low interest rates.




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