Canada is likely to elect another minority government next week, with no party able to win absolute control of the House of Commons. That could be a recipe for higher taxes and more spending, according to National Bank of Canada.

Polls show Justin Trudeau’s Liberals in a tight race with the Conservatives, and the balance of power could be held by a New Democratic Party with a “tax- and-spend orientation,” Warren Lovely, the Montreal-based bank’s chief rates and public sector strategist, said in a report to investors. “Canadian businesses, high income earners and the wealthy may wish to take note.”

The New Democrats, led by Jagmeet Singh, have a platform that includes higher corporate taxes and higher taxes on top earners and investors. The party is proposing that 75 per cent of capital gains would be taxable, up from 50 per cent, to help pay for increased social spending…read more.