“The biggest issue is for the people who pre-emptively tried to get ahead of this tax change,” said Benedet, portfolio manager at Purpose Investments. “They might have sold their business or disposed of some capital assets, which they had large gains on, to get ahead of this thinking that was smart tax planning.”
Though the debacle caused plenty of turmoil for investors, Benedet is happy that the Carney government was quick to reverse Trudeau’s tax policy, as investors and advisors are now able to create tax plans around a policy they are familiar with.
“Do I think it’s a good move by the government? Absolutely. I think it is the right thing to do. But for those clients who went through with transactions to try to make the smart tax decisions, they’re sort of stuck, you can’t undo those transactions,” he said. “The good news is that it’s just reverting back to the old playbook. You’re going back to the old tax strategies.”
Benedet emphasized the need for advisors to check in with clients who rushed to sell during the months of chaos and ensure they are still on track to meet their financial goals. He says that in the bigger picture the debacle will be seen as “an annoyance” for investors and clients.
“In the future, I think they’ll look back on this as a messy, messy period,” he said. “But right now, I think it’s a matter of having those conversations with clients who’ve had to to deal with it, and make sure their plans are still on track.”
