Canada’s economy grew by a greater-than-expected 0.3% in May and looks set to turn in its best annualized quarterly performance for more than three years, official data indicated on Friday.
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[The growth] indicates annualized second-quarter growth of 3.4%, significantly higher than the Bank of Canada’s July 15 forecast of 2.5%, and the highest annualized quarterly increase since the 4.3% seen in the first three months of 2023.
The central bank left its benchmark overnight rate unchanged at 2.25% on July 15 and said growth would strengthen in the second half of the year as inflation pressures eased and firms continued to adapt to U.S. tariffs.
“The economy appears to have found ways to navigate the current cloud of uncertainty relating to trade with the United States,” said Royce Mendes, managing director and head of macro strategy at Desjardins.
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Unpopular in practice is different from unpopular in concept (look at cutting emissions, for another great example), and both are different than bad. Other than that, pretty much: The government won’t raise taxes because it’s unpopular when they do. (Thank you for asking, by the way, It’s hard to just insert “this is my thesis”)
Sure, they might be forced to raise taxes eventually. Probably, even; it’s happened before. Or, maybe some socialist firebrand will come in and make extremely progressive taxes their signature policy (meaning they have to go with the flow elsewhere). But, this is descriptively, factually, why hikes don’t happen that much.
Now, normatively, you can make whatever you want of that.