The world is changing fast. Tariffs, trade conflicts, and economic uncertainty are making it harder to predict what the future will look like for Canadians. Will we see higher tariffs? Will certain industries be hit harder than others? How will this impact our jobs, investments, and cost of living?
One thing is clear: Waiting is not a strategy. A trade war could slow the economy, making life more expensive and jobs less secure. The best thing you can do right now is take action to protect your finances before things get worse.
Here are 10 smart moves to keep your money safe and even find opportunities during uncertain times.
1. Reduce Debt Before Interest Rates Rise Again
Interest rates may drop in the short term, but they won’t stay low forever. Use this opportunity to pay down high-interest debt like credit cards, personal loans, or variable-rate mortgages. The less debt you carry, the more financial flexibility you’ll have in uncertain times.
2. Strengthen Your Emergency Fund
A trade war could lead to job losses or unexpected expenses. Do you have at least 3 to 6 months’ worth of savings set aside? If not, now is the time to start. Having cash reserves means you won’t have to rely on credit cards or loans in an emergency.
3. Start a Home-Based Business for Extra Income
If the economy slows down, jobs could be at risk, and the cost of living will likely rise. A home-based business can provide extra income and tax benefits. You may be able to deduct a portion of your:
- Mortgage interest
- Property taxes
- Utilities
- Vehicle costs
These deductions could put thousands back in your pocket while creating a financial safety net.
4. Invest in Dividend-Paying Canadian Companies
Investing in Canadian companies that pay dividends is a great way to generate passive income, even in tough times. The dividend tax credit makes these earnings even more attractive since they are taxed at a lower rate than regular income.
5. Protect Yourself from a Weaker Canadian Dollar
Trade wars often weaken the Canadian dollar, making imported goods more expensive. A smart way to protect your money is by holding some U.S. dollar investments. When the Canadian dollar drops, these investments could gain value, helping to balance your portfolio.
6. Be Smart About Taxes—Time Your Income and Deductions
If your income is lower this year, consider:
- Selling investments in taxable accounts to take advantage of lower tax rates on capital gains.
- Making RRSP or First Home Savings Account (FHSA) contributions, but waiting to claim the deduction until you’re in a higher tax bracket.
- Withdrawing money from your RRSP (only if necessary) while your tax rate is lower.
7. Take Advantage of Lower Home Prices
If the economy slows down, real estate prices could drop. If you’re a first-time homebuyer or looking to assist a child or grandchild, this could be a great opportunity. There are several tax incentives to help, including:
- The First Home Savings Account (FHSA)
- The Home Buyers’ Plan (HBP)
- Land transfer tax rebates
- The Home Buyers’ Amount
8. Upskill and Claim Education Credits
If your job or industry is at risk, investing in new skills could be a smart move. The Canada Training Credit (CTC) helps cover the cost of training and education, with a $250 annual credit (up to $5,000 in a lifetime). This can reduce taxes while helping you prepare for career changes.
9. Look for Tax-Saving Strategies for Business Owners
If you own a business, now is the time to prepare for a slowdown. Consider:
- Carrying business losses back three years (or forward up to 20 years) to reduce taxes.
- Making new capital investments to take advantage of accelerated depreciation and immediate expensing.
- Expanding internationally while the Canadian dollar is weak to attract foreign customers.
- Applying for government incentives such as tax breaks, grants, or trade-related relief programs.
10. Work with a Financial Planner to Secure Your Future
Uncertainty is dangerous when you don’t have a plan. The smartest move you can make today is to work with a financial planner who can help you prepare for any outcome. Whether it’s adjusting your investments, maximizing tax savings, or securing your retirement, having expert advice will put you in control.
