The ruse

WOLF modified

Remember the moaning, wailing and faux outrage on this pathetic blog last autumn over the Trudeau plan to neuter tax-free savings accounts? Sure ya do. The lefty moisters said TFSAs are a sop to the rich, since only 1%ers could afford to utilize them. Besides, it was robbing the government of gazillions that should go to better causes. Like giving them money.

The right-wing fossils argued in defence of keeping the contribution limit at ten grand, saying this was already after-tax money and TFSAs are by far the most democratic of investment vehicles, since everybody gets the same limit regardless of age or income. Besides, TFSAs benefit the young to a greater extent thanks to long-term compounding, plus we all have an obligation to save and invest. The T2-loving lefties countered, claiming the public pension system needs to be stronger, giving a better safety net for all. Besides, investing is hard.

Meanwhile, I was not above pointing out that if the kids really care about tax breaks and income inequality, they should target RRSPs instead – which truly benefit the rich. But nobody cared. Justin made the TFSA into a political football – the symbol of unfairness to the 99% – and the game was on.

As you know, one of the very first acts of the new government was to denut the TFSA, slashing the limit from ten thousands to fifty-five hundred. This was done in concert with implementing the new ETR tax (eat-the-rich) and bringing in a small middle-class tax reduction. The cost of doing this, about $1.5 billion per year.

Well, now we have some facts. Bad news for the moisters.

On Tuesday the Department of Finance published a sexy fat document called Report on Federal Tax Expenditures—Concepts, Estimates and Evaluations. A ‘tax expenditure’ is a reduction in potential tax revenues resulting from a government exemption policy. Like letting you write off your bus pass, or your kid’s music lessons, or your home office expenses or your RRSP contribution. In the case of the TFSA, the ‘tax expenditure’ amounts to the revenue the government might have collected on the money inside TFSAs if that cash had been invested outside, with the gains subject to tax.

This is what the Liberals had argued: letting rich people (the only ones who could possible find $900 a month to invest) shelter the money (which had already been taxed) from additional tax constituted a great burden on the public purse. But they were wrong. As they were in claiming a new tax on the rich would pay for a cut for the middle. Ditto with a deficit three times the size of the one pledged. Plus the broken promise of a balanced budget in four years.

So here’s what we now know. Write it down.

Over seven years the ‘cost’ of having TFSAs in place (including the $10,000 limit) was $3.7 billion. Hmm, say the Vespa-riding, condo-dwelling, scruffy hipsters, that sounds like a lot. And it is. But in context, not so much.

The ‘tax expenditure’ cost of RRSPs, in contrast, was $107.7 billion over the same period of time – or almost 30 times as great – and the lion’s share of that money went, proportionately, to the top income-earners.

Hell, it even cost the government ten times more than TFSAs ($31.6 billion) to remove the HST on groceries. Giving everyone a basic personal exemption from income tax (of $11,327) – which benefits lower-income filers the most – cost the feds a whopping $256 billion in foregone revenues. And how about union dues? Allowing brothers and sisters to write them off taxable income cost more than $7 billion, or twice the amount lost to TFSAs.

Meanwhile there are far more people opening up and contributing to TFSAs than retirement savings plans. A survey by H&R Block found a scant 18% of Canadians plan on making an RRSP contribution this year, but it’s certain that number will include many high-income folks who can score a 40% or 50% return on their investment by doing so. RRSPs can be used for serious tax avoidance – to shift income from a fat year to a thin one. To shovel money into the name of your less-taxed spouse. To finance a mat leave. To take investment assets now being taxed and render their gains tax-free. To collect a free refund, then use it to buy a house.

In short, those justice-seeking, T2 supporters who swallowed the rhetoric about TFSAs favouring the rich and robbing the system, should feel jaded. Not only have they diminished a tool which could yield huge benefits as they age and grow wealth, but they’re perpetuating a current system dramatically skewed to the rich. In short, they were played.

228 comments ↓

#1 Doug t on 02.24.16 at 5:22 pm

Fist

#2 Doug t on 02.24.16 at 5:26 pm

Played – flayed – slayed – Harper – Trudeau or insert any other – the people never get what they want – they get what is given to them.

#3 Courage and Poo on 02.24.16 at 5:28 pm

First

#4 pathcontrolmonk on 02.24.16 at 5:29 pm

$11,327 just happens to be the MSRP of a KIA Soul, coincidence?

#5 Moveonwithyourlife on 02.24.16 at 5:32 pm

Your tears are bitter.

It’s as if this was the first transfer of power in Canadian history. Are you really going to whine about it for 4 years?

The numbers come from the Department of Finance, not me. You were had. — Garth

#6 db on 02.24.16 at 5:32 pm

Is it possible to ever write off a TFSA loss? Any circumstance where you could do that?

Nope. — Garth

#7 r1200c on 02.24.16 at 5:33 pm

Canada’s top deficits of the past decade

2009 – 55.6 Billion
2010 – 33.4 Billion
2011 – 26.3 Billion
2012 – 18.4 Billion

http://www.cbc.ca/news/multimedia/canada-s-deficits-and-surpluses-1963-to-2015-1.3042571

Don’t think this upcoming year’s is going to crack the top 3…

Great financial crisis – 2008, 2009, 2010. Some context is helpful in understanding numbers. — Garth

#8 thebarold on 02.24.16 at 5:35 pm

Is the RRSP value the tax lost today only or includes the impact of the expected taxes when the funds are withdrawn from the RRSP at retirement and then taxed?

Net loss of revenue. — Garth

#9 blurgblarg on 02.24.16 at 5:43 pm

So your point is that RRSPs should have been cut instead.

You’re probably right. However, at LEAST the TFSAs were put back to $5500. Not as effective as the RRSP reduction as you point out but at least it’s something.

No it’s not. Bad public policy, with no discernible public benefit and long-term negative consequences. It was a political move only. — Garth

#10 Balmuto on 02.24.16 at 5:48 pm

The TSFA is definitely a more equitable structure than an RRSP. But I wonder, even at the lower limit, how many people have used up all their accumulated RRSP and TSFA contribution room? I asked this question to my co-workers – some of us had filled up one or the other, but none of us had filled up both. I bet the percentage of Canadians that have done so is vanishingly small. So while I support the higher TSFA limit, I feel the issue is a bit academic. That may be why the estimated revenue impact is so small.

#11 Dwilly on 02.24.16 at 5:48 pm

I was one of the ones who posted here months ago, in agreement with the government’s proposal to lower the TFSA limit. On further consideration of the issue, here is where I am prepared to admit I was wrong.

1) I agree that the RRSP programme is much more regressive than TFSAs, and were that your concern, it should merit the most attention.
2) No doubt there are other programmes (those cited above) that are equally regressive.
3) Given the above, I now agree that the TFSA limit debate likely did become a political football, and did not merit the attention it received.

Now here’s where this post is flawed. It’s basically the same argument my 4 year old uses consistently to deflect attention. It’s the equivalent of me robbing a bank, and when I am caught, pointing to a murderer and saying “you should let me go, because what he did was worse than me”.

In other words, increasing the TFSA limit IS regressive. And it DOES vastly disproportionately benefit people that are in absolutely no need of further “tax expenditures” (don’t take my word for it, the PBO says so). The fact that there are WORSE policies out there does not make this a GOOD policy.

So, was this politicized? I think so. Did it merit the attention it got? Probably not. Does that make it a good idea? No, it does not, and that’s where this argument falls a little short.

#12 Ray Skunk on 02.24.16 at 5:49 pm

Garth, I’m still waiting for you to tear apart the scandal-in-waiting that is the ORPP.

You lambast T2’s strategies (and rightly so), yet Wynne seems to get a free pass.

I’m sure I speak for many when I say we’re looking forward to your verbal crucifixion of her with bated breath.

The ORPP is dead in the water. Only the TV ads live on. — Garth

#13 prairiegopher on 02.24.16 at 5:49 pm

I’m sorry Garth for being so negative, but I have nothing good to say about this lot. The old man was a wash out. Looks like junior is the same. What a waste. This will set Canada back years and devastate thousands of lives.

#14 hope & ruin on 02.24.16 at 5:50 pm

People thought a trust-fund drama teacher and g-butts were looking out for the average-joe’s pocket books?

g-butts is only in ottawa to execute a personal climate change philosophy. He does not care what your standard of living is. The world is warming up.

I don’t think trudy would care if his only power as a PM was picking the cafeteria menu on parliament hill. He has more important things to worry about. Like his hair.

#15 Sam the Sham on 02.24.16 at 5:50 pm

If $10,000 TFSA was such a wonderful contribution limit, why did the Harper government wait until just before the election to raise it in 2015? 2009 to 2012 it was $5,000. 2013 to 2014 it was $5,500. $10,000 was just an election gimmy, now it’s back to $5,500, big deal!

#16 r1200c on 02.24.16 at 5:51 pm

Great financial crisis – 2008, 2009, 2010. Some context is helpful in understanding numbers. — Garth

I guess 2016 can be labelled as the Medium financial crisis then…

#17 Penny Henny on 02.24.16 at 5:52 pm

I decided to look back in time, four years ago, also a leap year. What did I see?

#1 Arse on 02.24.12 at 10:09 pm
First???

#2 AlexanderTheGreat on 02.24.12 at 10:11 pm
Hope I get first so no one else can… tired of all these firsts

#6 Smoking Man on 02.24.12 at 10:15 pm
DELETED

Not much has changed

#18 Nemesis on 02.24.16 at 5:53 pm

…”T2 supporters who swallowed the rhetoric…”… HonGT

#FunnyYouShouldSayThat,Or… #It’sUpPeriscopes!… #ForHMCSWinnipeg’s… #SaucySailors…

“If we don’t adapt, we won’t have any sailors joining.” – Rear Admiral Gilles Couturier, COMPAC

“I am speechless.” – MasterSeaman Legare

[CBC] – Canadian navy makes history with kiss between sailor and same-sex partner

http://www.cbc.ca/news/canada/british-columbia/historic-kiss-same-sex-canadian-navy-1.3461219

#BonusDiscoSeamen,Or… #OurChoreographyWas,Like… #WayBetter…

https://youtu.be/InBXu-iY7cw

#19 The other white meat (pork) on 02.24.16 at 5:56 pm

I’ve never trusted rrsps as a retirement vehicle but they’re fine for periods of unemployment or lower income years as Mr. T has often stated. It seems stupid for government to forego revenue today to collect it so many years down the road.

Somehow I think they’ll mess with the tfsa as well so as to disqualify people from benefits in the future. The temptation is just too great to “gather and share ” your wealth.

Now if they would stop talking down the damned dollar! I’m travelling soon and it seems like those clowns can’t paint the economic picture in any color other than red. Enough already!

#20 Penny Henny on 02.24.16 at 5:58 pm

Myth- RSP’s favour the very rich/ high earners.
Fact-Your RRSP contribution limit for 2015 is 18% of earned income you reported on your tax return in the previous year, up to a maximum of $24,930.

24,390/.18=135,500.

Not so rich at all as per you Garth. You regularly mention that someone making $200,000 per year is not rich.

The more you make the greater the tax savings. Thus a person making over $250,000 can get a 50% reduction in taxable income – paying $12,000 less for the maximum contribution – while someone earning $135,000 can save ‘only’ $10,400. — Garth

#21 MSM-Free Zone on 02.24.16 at 5:58 pm

Whether it’s lying about taxing income trusts (Harpocrites) or lying about TFSA limits to protect the public purse (Selfiecrites), I have become numbly accustomed to being financially betrayed by successive federal, provincial, and civic governments in this country, regardless of political stripe.

As has been pointed out numerous times on this blog, the only defense is an educated offense, which is why I check in here every evening.

#22 Ray Skunk on 02.24.16 at 5:59 pm

The ORPP is dead in the water. Only the TV ads live on. — Garth

I know it’s on thin ice, but if it is truly dead I’d be overjoyed. Care to share your thoughts to put the fears to bed once and for all?

A dead ORPP does not preclude you tearing several strips off Wynne, for all of her crimes against fiscal conservatism. If you could run an entry on a Friday it would tee up a nice weekend for me.

#23 SWL1976 on 02.24.16 at 6:03 pm

Played – Like all the Conservatives out there who actually thought they had a Conservative government at the helm.

It doesn’t much matter who’s in charge now, until we as a society relinquish power, control, and respect from the real counterfeiters (the private central banking cartel) we are reduced to nothing more than a dog chasing its own tail.

Most know or could easily know the truth, but most seem to prefer the lies we are fed.

#24 Random on 02.24.16 at 6:05 pm

@#7: [b]”Canada’s top deficits of the past decade

2009 – 55.6 Billion
2010 – 33.4 Billion
2011 – 26.3 Billion
2012 – 18.4 Billion

http://www.cbc.ca/news/multimedia/canada-s-deficits-and-surpluses-1963-to-2015-1.3042571

Don’t think this upcoming year’s is going to crack the top 3…

Great financial crisis – 2008, 2009, 2010. Some context is helpful in understanding numbers. — Garth”

Well, Canadian economy is spiraling into another great financial crisis, driven by sudden drop in oil prices and surprisingly high amounts of consumer and mortgage debt accumulated over a decade of cheap money.

Today RBC said their profits were flat, partially due to issues with lending and capital businesses. Time to wake up and smell the rot.

#25 Anthony on 02.24.16 at 6:05 pm

I emailed about this issue, asking to decrease RRSP instead of TFSA and received this response:

“I just wanted to thank you for contacting the office of Justin Trudeau, and let you know that I have forwarded your letter to both Mr. Trudeau and our policy people directly.”

Oh well, looks like I’m putting an extra $4500 in RRSP this year, which means less government revenue now rather than in the future.

#26 GB on 02.24.16 at 6:05 pm

I’m not going to deny that the TFSA cut was primarily a political move. However, I maintain that the 10K was excessive and skewed in favour of the wealthy.

I’m not against the wealthy and I’m all for responsible investing so to me…whatever. The 10K or not is no big deal to me.

But no way in HE (double hockey sticks) you can convince me that there was approximately….oh….1% of the population that could realistically take advantage of that golden investment opportunity.

In other words…ya…the wealthy loved it.

You are blind to a key point – room for TFSAs, like RRSPs, accumulates. Over a person’s lifetime there will be moments (like a severance package or inheritance, or salary increases) when having vehicles like these is crucial to financial independence. I find it astonishing people argue so passionately for higher taxes. — Garth

#27 JSS on 02.24.16 at 6:06 pm

RBC raised dividend on common shares from 79 cents to 81 cents.

Rub your tummy.

#28 Londoner on 02.24.16 at 6:07 pm

The TFSA equivalent in the UK is called an ISA. The annual contribution limit is £15k (approx $30k). I wonder what the “tax expenditure” is on that.

Btw – it looks like the BoC is finally admitting to what I’ve been saying for a long while:

1. Monetary policy will not be used to tackle consumer debt

2. Interest rates will be kept low despite inflation

I feel sorry for anyone who, over the past few years, bought into the meme that interest rates would rise significantly.

#29 AB Boxster on 02.24.16 at 6:12 pm

Careful Garth,

By pointing out that the changes to the TFSA were political, and that other programs such as RRSP’s tax refunds, excluding HST tax on groceries,and even the personal exemption, cost the government far more in revenues, you can be sure that the current liberals will be looking to close all of the ‘blatantly unfair’ tax loopholes.

They are aready considering changes for small corporations, and I have heard potential changes to the way that Capital gains are taxed.

As the other ‘tax avoidance schemes of the rich’ are withdrawn then the Liberals and their supporters will be able to finally create the ‘Just Society’ that T1 began and T2 hopes to deliver.

#30 valleyrenter on 02.24.16 at 6:12 pm

A buddy of mine from younger days is a mortgage broker in YVR. Part of his networking is on social media, and as such it shows up on my FB newsfeed. One of his “likes” caught my eye, it was from a realtress advertising a box in the sky at just under $600,000. Interesting part about it was that on FB she had it listed as an assignment, yet when I clicked on the link it went to (xyz) real estate’s home page which has it listed as for sale. No mention of assignment anywhere on the main website. Could this be a case of those “in the know” inside her inner FB circle being privy to info not made public?

Also getting listings showing up because of friends “liking” other realtors. Been noticing a lot of realtors are “testing the waters” on FB before a home hits the MLS. One in particular this past week was advertised at $600,000 for a SFD in Langley, not yet on MLS. Two days later, they put it out there that this same home is listed on MLS at $619,900.

#31 Penny Henny on 02.24.16 at 6:16 pm

#7 r1200c on 02.24.16 at 5:33 pm
Canada’s top deficits of the past decade

2009 – 55.6 Billion
2010 – 33.4 Billion
2011 – 26.3 Billion
2012 – 18.4 Billion

http://www.cbc.ca/news/multimedia/canada-s-deficits-and-surpluses-1963-to-2015-1.3042571

Don’t think this upcoming year’s is going to crack the top 3…

Great financial crisis – 2008, 2009, 2010. Some context is helpful in understanding numbers. — Garth

/////////////////////////////////////////

I’m sure that Ross Kay would say that adjusting those numbers with inflation would make them even higher today.

#32 james on 02.24.16 at 6:18 pm

That’s all well and good, but I want some more details on this:

http://www.cbc.ca/news/politics/millennials-money-canada-generation-1.3462064

It would take some pretty strong evidence to convince me of the claim the CBC is making.

#33 tundra pete on 02.24.16 at 6:18 pm

T2 gained votes on colgate polished pearly whites, $300.00 form fitting designer trousers, telling little white lies and selfies. Most didn’t care what he was pedaling, they just thought he looked good.

At least he hasn’t prorogued parliament, created a media blackout, lied to parliament, lied to Canadians and sold all our resources at bargain prices with the option of suing us if required.

Now if we can just get through the next few months until we start the infrastructure projects. At least that will be a government doing what they are supposed to do when all else is going downhill.

#34 GB on 02.24.16 at 6:20 pm

Thanks for the reply Garth but I just think you have an unrealistic view of the realities facing the majority of Canadians.

Few folks have severance packages really and most of those “benefits” are being wiped out anyway.

I was raised in a middle class family…both parents now 80 and as I expect like most average Canadians…no “inheritance” expectation (again I think inheritance is a wealthy persons “problem”…wealth generally begets wealth).

And there is no such thing as significant salary increases for average workers in Canada. Raises generally struggle to pace inflation.

Average Canadians understand all this.

#35 ROCK BEATS PAPER on 02.24.16 at 6:20 pm

I wonder if TFSA benefit the rich because they utlize the max accross their entire family. I wonder if rich families have more kids and then “gift” the max TFSA to each family member. A wealthy family of 5, could have been dropping in $50K per year for two adults with three older kids?

#36 Bright Light on 02.24.16 at 6:23 pm

I wondered what the ETR meant in 407 ETR!

#37 Goofy 2 Shoes on 02.24.16 at 6:26 pm

People are voting based on promises for things they don’t understand. How can anyone apply critical thinking when you don’t know when you are only given part of the story or bad information. Not to mention some of this stuff in extremely complex and there may be no *correct* answer to a problem, but perhaps only the least offensive solution.

How do we change this so people can see through the incomplete or distorted facts and make informed decisions?

So many comments I’ve seen on this blog demonstrate that people repeat whatever they hear, not knowing if it is fact or fiction but pass it off as truth.

#38 Bobs ur uncle on 02.24.16 at 6:26 pm

Raising the limit to 10k in the first place was a political move – worked brilliantly as evidenced by so many posters here saying ‘I’m voting for Harper on the TFSA issue alone’. I don’t recall any Trudeau supporters saying the same about the reduction to 5500. IE it was really only a big issue for conservative supporters. Most of the moisters have no idea what a TFSA is.

On the tax the rich item – yes you definitely have a point there. The Feds created a big hole with their middle-class tax cut that they will have trouble filling.

#39 IHCTD9 on 02.24.16 at 6:28 pm

#11 Dwilly on 02.24.16 at 5:48 pm
I was one of the ones who posted here months ago, in agreement with the government’s proposal to lower the TFSA limit. On further consideration of the issue, here is where I am prepared to admit I was wrong.

1) I agree that the RRSP programme is much more regressive than TFSAs, and were that your concern, it should merit the most attention.
2) No doubt there are other programmes (those cited above) that are equally regressive.
3) Given the above, I now agree that the TFSA limit debate likely did become a political football, and did not merit the attention it received.

Now here’s where this post is flawed. It’s basically the same argument my 4 year old uses consistently to deflect attention. It’s the equivalent of me robbing a bank, and when I am caught, pointing to a murderer and saying “you should let me go, because what he did was worse than me”.

In other words, increasing the TFSA limit IS regressive. And it DOES vastly disproportionately benefit people that are in absolutely no need of further “tax expenditures” (don’t take my word for it, the PBO says so). The fact that there are WORSE policies out there does not make this a GOOD policy.

So, was this politicized? I think so. Did it merit the attention it got? Probably not. Does that make it a good idea? No, it does not, and that’s where this argument falls a little short.
——————————–

It only falls short if you would be happy with no tax sheltered savings for retirement at all.

Does that sound good to you?

#40 smartalox on 02.24.16 at 6:33 pm

I argued for the TFSA increase, and my outrage was genuine.

But in light of the Government’s decision, I decided instead to take advantage of the over $100k I’ve accumulated in supplemental RRSP contribution room, over and above my regular, annual RRSP contribution limit. I’ve made plans to contribute over $30k to my RRSP this year, and drop my taxable income below the top tax threshold.

I also filed a T1213, to reduce the amount of taxes deducted from my paycheques, to reduce the impact all this saving will have on my household budget, and deny the government the use of my hard-earned pay as tax revenue.

It could have been different. I could have been satisfied contributing $10k in after-tax dollars, expecting to deny tax revenue to some future government, while funding this one too much.

Instead I deny the current government its tax revenue, in a way that is far more aggressive than I had in the past.

Oh, and I also maxed out my TFSA.

#41 how tax works on 02.24.16 at 6:34 pm

A few people yesterday in the comment section complained that Garth and people here are a bunch of whiners… that they would rather have a more meaningful discussion of what the ideal tax rate is.

But in saying that – I think people have missed the point. It’s not that taxing the rich more is bad, Garth isn’t saying that… it’s the T2 is making class warfare for political points… Garth has shown that Trudeau’s math is way off (drama teacher, not a math teacher obviously!)

So read this: How tax works. This is your classic example of 10 people at a restaurant, where only one of them pay the lions share of the bill while others eat free.
http://www.snopes.com/business/taxes/howtaxes.asp


But to answer your question – what is the ideal tax?
Substantially higher consumption tax, lower income taxes. But we know it doesn’t work because the average person is stupid. Look at BC, in choosing to give up the HST and 3 billion dollars.

#42 Penny Henny on 02.24.16 at 6:34 pm

The more you make the greater the tax savings. Thus a person making over $250,000 can get a 50% reduction in taxable income – paying $12,000 less for the maximum contribution – while someone earning $135,000 can save ‘only’ $10,400. — Garth
/////////////////////////////////////////

WOW! Now that you put it that way the difference is awesomely HUGE!!!

Someone making $115,000 more per year is reaping an extra $1600 on the same RSP contribution.
Call the cops, that is insane!!!

sarc/off

Why do I bother? — Garth

#43 Panhead on 02.24.16 at 6:34 pm

Talk about stupidity … I guess you reap what you sow. Maybe the moisters got what they wanted all along, to be “players.” My stars …

#44 IHCTD9 on 02.24.16 at 6:35 pm

“On Tuesday the Department of Finance published a sexy fat document called Report on Federal Tax Expenditures—Concepts, Estimates and Evaluations. ”

———-

Garth, I feel it is my duty to inform you that earlier today, Mark informed us all that the DoF is run by a bunch of Partisan wing nuts.

We can not trust anything the DoF says, because they can say whatever they like, to make things look however they want.

However, Mark will happily provide you with the correct information with only the slightest provocation.

#45 acdel on 02.24.16 at 6:37 pm

#23 SWL1976

————————————————————-

Good Post!

Many cannot even afford to pay their electricity bill never mind making a contribution to a future.

#46 smartalox on 02.24.16 at 6:38 pm

Garth,

What’s your take on TFSAs for US Persons? If the investor owns stocks, and not mutual funds or ETFs, does the regulatory burden of filing the paperwork with the IRS for the ‘foreign trust’ account every year make it worthwhile not to have a TFSA, and pay (Canadian) tax on the earnings?

The earnings are getting to the point where the taxes may be more of a burden than the regulatory.

I’d be interested to know what you or others think of this.

#47 Canadian on 02.24.16 at 6:38 pm

Welcome to the brain drain.

#48 Penny Henny on 02.24.16 at 6:39 pm

#28 Londoner on 02.24.16 at 6:07 pm
The TFSA equivalent in the UK is called an ISA. The annual contribution limit is £15k (approx $30k). I wonder what the “tax expenditure” is on that.

Btw – it looks like the BoC is finally admitting to what I’ve been saying for a long while:

1. Monetary policy will not be used to tackle consumer debt

2. Interest rates will be kept low despite inflation

I feel sorry for anyone who, over the past few years, bought into the meme that interest rates would rise significantly.

//////////////////////////////////////

Yes your comments were well documented. Good call!!

Mark, on the other hand, keep trying to get one right. BTW, Tony is almost as bad as you.

#49 Bottoms_Up on 02.24.16 at 6:40 pm

#11 Dwilly on 02.24.16 at 5:48 pm
————————————
Yes, I agree with your thoughts on this 100%. Not sure where the “long term negative consequences” come from from not allowing rich people to shelter even more money from tax.

I think Garth has blinders on on this issue. The TFSA is a perfect vehicle in an ideal world where Canadian families have an extra $20,000 in cash lying around at the end of the year, but this is just not the reality.

The reality is TFSAs benefit those with money.

So let’s talk about the real issue here, why don’t Canadians have money?

#50 AB Boxster on 02.24.16 at 6:45 pm

I have been feeling a little under the weather lately…

And no, it has nothing to do with the recent court ruling allowing Canadians to grow their own medical Marijuana.

#51 Adam on 02.24.16 at 6:45 pm

Does the “tax expenditure” for RRSPs take into account that the government will get at least some of that money over the long term when the RRSP is collapsed? I’ll bet it doesn’t.

That was the main point against TFSAs – the money is removed from the taxable pool forever (and it can keep compounding). This is not the case with RRSPs – the money is removed from the taxable pool for a while, but it has to be taxed at some point – albeit quite possibly at a (maybe even much) lower rate than when earned as income.

I must’ve skipped over the paragraph where you explained that side of the debate in your blog entry. Let me go back and re-read it to see if I can find it…

#52 Penny Henny on 02.24.16 at 6:45 pm

Garth I know you are a very smart man.
And you have a great skill as a wordsmith!
You understand the complexities of these policies like most do not.
But, when you skate around issues and facts it makes you look like any (underloved) politician trying to twist words.
I am but a simple man, but I know when I am getting sold.

#53 Francis on 02.24.16 at 6:48 pm

Stop talking about the RRSP, if you continue the liberal will take it away.

#54 In the hospital high on meds on 02.24.16 at 6:52 pm

It seem people assume someone making 250k a year is wealth and they should pay….what a bunch of retards…..ya there gonna have a nicer car and a bigger house but these people aren’t what I would call wealthy…oh in my travels I’ve met a number of them and geuse what THEY WORK THERE ASSES OFF…..it’s the big multi national we need to keep our eyes on…..and no I don’t need to see these outfits raped out of existence….perhaps something fair would be nice….finance should be part of our curriculum with all the other core subjects..teach people basic ideas like gee I don’t know maybe business needs to make money to b viable 101
..ballance that off with business crying foul when the need to become compliant with new legislating 101…..maybe this is crazy talk cause as I pointed out I’m kind hi on all the med I’m on….but I feel pretty high right now..hospitals have the best dugs…..thank for the blog o bearded self righteous one you are doing a great sevice….and peace and love to all u blog dogs…..gotta get in line for more med….cioa

#55 Bobby on 02.24.16 at 6:58 pm

The last election was about making change, not common sense. Mr Trudeau said whatever he had to in order to be elected. It was not about sound policies, but pure politics.
As we are seeing now, many of his policies were poorly thought out and obviously made on the fly. It’s oftentimes said you get the government you deserve and I think the youngsters are now seeing what they elected.
It’s not looking that good. Selfie?

#56 Joe Schmoe on 02.24.16 at 7:00 pm

I have been prattling that the TFSA was a great vehicle for retiring boomers for a couple of years now.

I think they were ramping it up to allow those tax free gains in RE to be transferred to tax free liquid growth to avoid a run on cat food.

Pure speculation, but it my parents case it would have totally made sense. Turning their house to cash would not be enough without their corporate pensions. They would have needed to return something on their gains to survive retirement.

#57 hope & ruin on 02.24.16 at 7:02 pm

I was surprised about those stats on the two million new voters. Looks like the millennials are to blame. I think I figured out my blind spot though.

In my family: all the millennials voted conservative. Including me.

All the boomers voted liberal. Or maybe even ndp. I know. it’s weird. so much of my life makes sense now.

#58 IKnow on 02.24.16 at 7:09 pm

Alert!

Hongkongers are now complaining about a loss of quality of life:
1. Extremists staging violent anti establishments protest
2. Uncontrolled fake refugee claimants from South Asia some of them have joined gangs

Many there begin to want to emigrate, like 1997 all over again.

Effect on Vancouver house price?

Landless serfs just can’t get a break

#59 koenig on 02.24.16 at 7:12 pm

The reality, besides buying land, they have been saying since the Great Depression save. The lord provideith the government taketh away! The son of the richest person I know owned a bar. Before cities had a smoking ban, he decided to make his bar no smoking. It lasted 3months. His brother made a sign for above the bar. Non smokers are cheap and don’t drink! You know who else are cheap and don’t spend money. Savers. Government, especially Champaign sipping western wealth stealing Toronto liberals, always punish the savers by taking their money because they don’t spend it!

#60 Kilt on 02.24.16 at 7:20 pm

It’s not like they got rid of it. They just reduced. And realistically, 500 a month is more than most people are gonna save.
1000 a month for a family is still pretty good. I’m not gonna cry over it too much. Now, losing the family tax cut is another matter.
Kilt

You realize we are having this discussion because people have gorged on houses, right? It’s all about choices. — Garth

#61 AB on 02.24.16 at 7:23 pm

Way more important, how is Bandit doing Garth?

Busy growing hair! — Garth

#62 Randy Randerson on 02.24.16 at 7:25 pm

Ahh, the good old TFSA vs RRSP debate. I see the lot of Canadians are against TFSA because it benefits the rich more so than the poor. I guess said majority of Canadian never aspire to become wealthy enough to take advantage of TFSA, most of them are happy to live lives of peons in serfdom. Such a big difference between Canadians and Americans.

#63 Goofy 2 Shoes on 02.24.16 at 7:34 pm

#35 Rock Beats Paper

I wonder if TFSA benefit the rich because they utlize the max accross their entire family. I wonder if rich families have more kids and then “gift” the max TFSA to each family member. A wealthy family of 5, could have been dropping in $50K per year for two adults with three older kids?
——————————————–

I don’t think a lot of *rich people* (whatever your definition of that is) get that way from RRSP or TFSA, its merely a tool available to everyone, they just make better use of it because they can.

To be *rich* they have likely done something where they are not an employee for life – like owning a business, whether that be a professional, or anyone else offering a product or service who has the nerves to risk personal assets and uncertainty.

They may also be everyday people who live a different lifestyle, make different choices based on their own priorities. I recall in the news a while back that a young guy worked around the clock and lived like a pauper until he saved enough to buy a home outright – yet people were putting him down for it. The negative commenters weren’t willing to make the sacrifice, but he was. There was this strange jealously factor happening.

#64 Grantmi on 02.24.16 at 7:44 pm

#1 Doug t on 02.24.16 at 5:22 pm
Fist

yea! I’d love to shove mine into your face… (Damn Firsters)

#65 AB Boxster on 02.24.16 at 7:53 pm

Re TFSA vs RRSP

The RRSP was a good product 20 years ago when employment was steady. But then recessions came along, contract jobs, layoffs, etc.
RRSP’s have become mostly a tax planning tool as GT says.
Primarily for the wealthy.

I will encourage my kids to never set up an RRSP.
Unless they make big salaries.
For them its TFSA all the way.

The potential for tax free growth and tax free withdrawals makes it a far better saving vehicle than an RRSP.

Anyone who actually believe that reducing the TFSA contribution levels was a good idea, has no idea how they operate.
Either that or they expect to never save, and expect to never will have anything to ever retire on.

For all those complaining that they will never see a company pension, the simple fact is that the TFSA is the best pension option that you will ever see.
Think of it this way.
By supporting the reduction of TFSA contribution level you have just guaranteed yourself a reduced ‘pension’ 35 years from now.

You might as well have just gone to your employer and asked for a 10% reduction in your salary or a 50% increase in your taxes.

The effect is a about the same.
The financial illiteracy of people is mind boggling.

#66 IHCTD9 on 02.24.16 at 8:00 pm

#16 r1200c on 02.24.16 at 5:51 pm
Great financial crisis – 2008, 2009, 2010. Some context is helpful in understanding numbers. — Garth

I guess 2016 can be labelled as the Medium financial crisis then
—————————-

Give Trudeau some time. There is practically no doubt at this point that we will emerge from his tenure in even worse financial shape than even the worst single year of the GFC under Harper.

The only escape would be for Trudeau to break whatever little remains of his election promises that still stand.

#67 Millmech on 02.24.16 at 8:00 pm

#26 GB
TFSA @10 grand was easy to fill,putting away 25-30% of my gross wages every year and I’m middle income,alot of middle income people I know loved it and maxed out the 10 grand limit.It was a great gift way better than the RRSP and better for the lower income earners because no claw backs triggered when cash redeemed.

#68 IHCTD9 on 02.24.16 at 8:10 pm

#19 The other white meat (pork) on 02.24.16 at 5:56 pm

Somehow I think they’ll mess with the tfsa as well so as to disqualify people from benefits in the future. The temptation is just too great to “gather and share ” your wealth
—————-

I fear the same.

But, usually the government draws a line in the sand where those who have been in the game for years get a pass, where those just entering will be subject to the new rules.

The irony will be hilarious when the day comes. The millennials’n’kids justice and equality warriors will vote in politicians to eat the rich. The same politicians will make the changes which smack the Milens into retirement poverty, while the well off boomers and early gen X’ers get a pass.

#69 Brydle604 on 02.24.16 at 8:14 pm

#11
“So let’s talk about the real issue here, why don’t Canadians have money?”

Canadians do have money, they have chosen to indenture themselves in huge mortgage payments, New Cars, Helocs, to carry on their inflated life styles.

If you want to manage money you have earned, you must zero base your spending. Become financially informed and responsible.

Perhaps buy a Used car for a fraction of the price of new.

Negotiate prices, do not accept asking prices.
Shop wisely, use Amazon.ca and .com and read buyers reviews to see if the product is even worth buying.

Realize the difference between Needs and Wants.

Learn to pay Cash.

Start a savings program. ie TFSA

(I cannot believe the ignorance of some on here who say they do not have enough money to max out their TFSA. There will come a day when you will come upon a windfall, ie inheritance where this vehicle will become indispensable. Remember the yearly amount allowed is cumulative)

Use Passive Income from investments to finance your life style. ie protect your principle.

There is great safety in multiple income sources, and passive income has a much better tax treatment.

Buy a house based on the rule of 90.

Plan for your retirement years, Income is King.

The Dippers and many financially challenged Canadians seem to think they are entitled to more, more, and more, without taking personal financial responsibility for their own financial actions and think Government is going to bale them out. Good luck with that, you are on your own!

You may not need more money, just learn to manage what you already have.

This from an old guy who has made all the mistakes but has learned from them.

Just a thought …….

Garth you are a Diamond in the rough! Thanks for the Blog.

#70 Beast Killer on 02.24.16 at 8:19 pm

Here’s what you do , work only as much as you need, after putting up a pile of dividends, consciously starve the beast along the way by paying zero consumer tax, live a better life by paying no income tax. by not buying anything in Canada. Screw the Liberals and the unions that put the pathetic wankers into power. I won’t support them.

#71 joe on 02.24.16 at 8:20 pm

the tax code is too complex and so are its instruments such as TFSA and RRSP. both should be gone, along with income tax entirely in favour of a flat sales tax and consumption/usage taxes.

aside from providing unequal taxation all the current system does is force services on you in the way of banks, accountants, fines etc.. in addition to demanding personal information.

#72 Doug t on 02.24.16 at 8:22 pm

SEVENTIETH:)

#73 Tudor on 02.24.16 at 8:28 pm

This argument is disingenuous. The debate was never about *current* expenditures, which are obviously tiny since the program was in place only for a few years.

Rather, the debate was about the cumulative growth of these ‘expenditures’ as the program matured and (rich) people sheltered from tax increasingly large amounts.

We all remember Joe Oliver’s lame response about his granddaughter having to solve that issue — here’s a video if you don’t remember what was actually being debated:
http://www.cbc.ca/news/business/tfsa-changes-a-problem-for-stephen-harper-s-granddaughter-to-solve-joe-oliver-says-1.3043841

I just showed you the cost of RRSPs is 30 times worse and benefits higher income-earners far more. The argument against TFSAs is political, and bogus. Just admit you guys picked the wrong target. — Garth

#74 IHCTD9 on 02.24.16 at 8:31 pm

#32 james on 02.24.16 at 6:18 pm
That’s all well and good, but I want some more details on this:

http://www.cbc.ca/news/politics/millennials-money-canada-generation-1.3462064

It would take some pretty strong evidence to convince me of the claim the CBC is making.
—————

I’d buy it, but only from the perspective of a gross accumulation of wealth at the very top. There is no way that the “average” millennial is worth near 100k. Every post secondary educated person I know under 30 is still paying off debt, and most not working in the field for which they trained for.

I know young lawyers living in basements, making jack, struggling to pay debt, and no job security.

#75 Roland on 02.24.16 at 8:32 pm

Bear in mind that the RRSP’s–as often pointed out on this blog–are more of a tax deferral than a tax expenditure. In the end the gov’t gets to tax retirement income from an RRSP, although for most taxpayers it will be at a lower marginal rate than when they were working.

But TFSA’s are a pure tax expenditure.

The figures I presented account for tax payable upon cashing in RRSPs. The RRSP tax loss comes from the tax differential and decades of tax-free growth. All TFSA contributions are made from money already taxed. You have no point. — Garth

#76 The ruse - Realties.ca on 02.24.16 at 8:34 pm

[…] Source: http://www.greaterfool.ca/2016/02/24/the-ruse/ […]

#77 Daisy Mae on 02.24.16 at 8:37 pm

#26: “I’m not going to deny that the TFSA cut was primarily a political move…”

******************

So was Harpers’ ploy — to increase limit prior to the election. I agree with #21. It’s a dirty, dirty business. And we all know it.

#78 IHCTD9 on 02.24.16 at 8:41 pm

#40 smartalox on 02.24.16 at 6:33 pm
——–

A man (woman?) after my own heart.

I hope millions follow your example.

Wife (who voted for Trudeau) and I have done the same.

#79 Trojan House on 02.24.16 at 8:43 pm

I find it astonishing people argue so passionately for higher taxes. — Garth

Yeah, it truly is amazing. However, if you don’t think about it, you’ll sleep better.

#80 NotPoliticalJustIntelligent on 02.24.16 at 8:44 pm

Garth, the real ruse is that you’re pretending TFSAs were cut back in the name of short term gain. The point of making this reduction now is to reduce the burden in the future. You say the young would benefit from the compounding of TFSAs – this is at the expense of the future tax payer.
Ah, but remember Joe Oliver’s quote? Stephen Harper’s grandaughter will worry about it, right?

#81 Vampire Studies GMST 454 on 02.24.16 at 8:47 pm

Good post Garth

#82 IHCTD9 on 02.24.16 at 8:50 pm

#41 how tax works on 02.24.16 at 6:34 pm

But to answer your question – what is the ideal tax?
Substantially higher consumption tax, lower income taxes. But we know it doesn’t work because the average person is stupid. Look at BC, in choosing to give up the HST and 3 billion dollars.
————

Don’t get me wrong, I’d love a scheme like this.

But it will never happen, it’s way too easy to consume goods and services without paying taxes. In fact, it’s easier now than ever before in the history of the universe. It’s bigger now too, bigger than ever – and going to keep getting worse if our government wants to keep the cost of living with them on an upward trajectory.

#83 IHCTD9 on 02.24.16 at 8:54 pm

#42 Penny Henny on 02.24.16 at 6:34 pm

WOW! Now that you put it that way the difference is awesomely HUGE!!!

Someone making $115,000 more per year is reaping an extra $1600 on the same RSP contribution.
Call the cops, that is insane
—————–

Total douche.

Take a hike.

#84 Love my Kia on 02.24.16 at 8:57 pm

On the flip side of the coin, one of my coworkers just financed a condo she claims she got at 1.9 over 5 years. She had the cash to purchase outright but the mortgage broker told her it was best for her to keep the cash and invest it in some conservative holdings.

Seems like a good idea, invest it to max out on RRSP’s, no?

#85 IHCTD9 on 02.24.16 at 8:57 pm

#49 Bottoms_Up on 02.24.16 at 6:40 pm

So let’s talk about the real issue here, why don’t Canadians have money
———–

You’re joking right?

#86 For those about to flop... on 02.24.16 at 9:00 pm

So by coming home and putting $15 daily in a jar to fill my TFSA ,instead of buying over priced real estate makes me rich huh? Who new!
I won’t ever touch that money ,not even for a holiday …I’ll just go to Scotiabank once a year and they’ll move some things around and bingo,bango $1500 bucks for spring break.
I make less than 40k a year and I’m living like the 1% …things are definitely better since the Metrosexual Messiah took over.Under the Harper government I was just a bum …but now I’m a high flyer,thanks Tru2.
In my next life I want to come back as Patrick Braze
and beat the living crap out of you,I will not fail twice…

M41BC

#87 Rick on 02.24.16 at 9:04 pm

Brydle604, I agree 100%.

The world is full of financial morons. These same pinheads, believe that reducing TFSA’s was good. These are the same people, living beyond their means, eating out all the time; and having more days in the month than money. Of course, it’s always someone else’s fault. I call them the “victim generation”. Regrettably, there seem to be a lot of them. They deserve what they voted for:)

To those who complain,”the savers don’t do anything with their money”; this is for you. I understand you are financially illiterate; so I’ll make this as simple as possible. Savers, invest in mutual funds, stocks, ETF’s, bonds etc. This money is used by business to hire, expand and grow. Be thankful there are savers.

#88 Cici on 02.24.16 at 9:12 pm

Excellent post Garth. You’re the Man!

#89 TurnerNation on 02.24.16 at 9:15 pm

#23 SWL1976 all true. As we see in Nemesis’ s link it’s all about breaking down gender and culture. What makes us strong is being smashed into conformity with uncertainty.
My culture is wrong and must be beaten out of me in this open air re-education camp. My instincts cannot be trusted.

#90 Tony on 02.24.16 at 9:19 pm

The $5,500 limit forces people to buy risky stocks because the amount is so low you really can’t day trade unless you’re very good or very lucky at the onset. With the $10,000 limit the breakage on commission was much lower unless of course you own a seat on the trading floor.

#91 Oceanside on 02.24.16 at 9:19 pm

A month ago my wife said “You should stop reading Garth Turner’s blog every day, it’s making you really negative” Well, I have missed all but today and she is right, life can be so positive if you just be practical with your finances and stay away from the doomsayers.

I have been reading this blog for years, have enjoyed a fun evening with Garth (Kelowna) have bought a book and learned a lot but my wife was right, it was bringing me down….Pay attention John U and Ron J……

Spring is coming, time for motorcycle, garden, road trips……Things to look forward to.

#92 acdel on 02.24.16 at 9:23 pm

Between Heir Harper and boy wonder who took too many hits in the head by (Brazeau who is going through his own personal crisis) we are doomed!

I think that Garth and Bandit, (to chase away chew up all the meat heads) and Brad Wall, should run in the next election and fix this country.

Any takers???

#93 GB on 02.24.16 at 9:24 pm

#67 Millmech,

Do you have children?

#94 Smoking Man on 02.24.16 at 9:25 pm

Can’t belive we joined a gym today.

My son is going to get me and the wife back in shape, the only reason I can keep cancer at bay is cause I don’t feed it healthy shit. Cancer wants nothing to do with the Crap food and bozze I feed my body.

O well, maybe Ill get some blog or book food , talk about my first yoga class.

Will the hotties in yoga pants in front of me know the depth of my depravity? Fortunately for them I’m no threat at the moment. Well maybe if I get in shape.

I think of gym people as freeks of nature. Why do they run, lift weights. Put their body through torcher.

If your a gym person in port credit and spot a slow walker on the treadmill sneaking a e cig . Come say high.

#95 max on 02.24.16 at 9:30 pm

I don’t consider most middle class as rich. The dumb economists in charge of the money supply, have destroyed our purchasing power.

Back in the late 70’s, there was this show, a rich white guy took in his dead housekeepers kids. Yeah, I’m talking about Different Strokes. The rich white guy inherited $1.8million from his father. See in 79 that was considered rich. For some reason people still have the same definition of a million dollars, its rich. No its not enough money to live on. My grade 12 marketing teacher was on the board of her credit union. This was her last year teaching. Retiring. Now she did have an o.k. pension, seeing how she was at a credit union, assume safest investments. She told us, her and her husband saved. Lived more on the husbands salary over hers. He had a small printing business. Anyway, she told us they saved and are now millionaires. Told us how easy it was. I do applaud for passing this knowledge on.

I did however think in the back of my head. My parents house is $750k, Moms Jag was $75k and Dads Porsche was $110k. Even back in 91, being a millionaire was not rich. Now we have 1bedroom 500sqft “condos” in Tsawwassen for $314k. A million doesn’t buy a middle class income. So in 20 years what does Trudeau want me to be, work hard, keep the economy going to be a millionaire Wal-Mart greeter?

The Drama teacher must go!

#96 Victor V on 02.24.16 at 9:31 pm

Encana Corp to cut 20% of workforce, slash dividend, as it gears up for global cost-cutting fight

http://business.financialpost.com/news/energy/encana-corp-slashes-dividend-cuts-spending-as-it-reports-fourth-quarterly-loss-in-row?__lsa=9fb5-6973

#97 Capt. Obvious on 02.24.16 at 9:32 pm

I know young lawyers living in basements, making jack, struggling to pay debt, and no job security.

That sounds right. You should be struggling as a young lawyer. You don’t make real money unless you partner, which unless you know someone, isn’t going to happen until you’ve paid your dues.

#98 Freeman on 02.24.16 at 9:32 pm

How many people here firmly believe that a typical $1.5 Million home here in Toronto (yes, that is the ‘normal’ price here) will be selling for $15 million in 10 year’s time?
I asked 8 people I know here that question and all 8 said ‘YES’. They really do see that as what will happen to housing prices here.

#99 IHCTD9 on 02.24.16 at 9:34 pm

#51 Adam on 02.24.16 at 6:45 pm
Does the “tax expenditure” for RRSPs take into account that the government will get at least some of that money over the long term when the RRSP is collapsed? I’ll bet it doesn’t.

That was the main point against TFSAs – the money is removed from the taxable pool forever (and it can keep compounding). This is not the case with RRSPs – the money is removed from the taxable pool for a while, but it has to be taxed at some point – albeit quite possibly at a (maybe even much) lower rate than when earned as income.

I must’ve skipped over the paragraph where you explained that side of the debate in your blog entry. Let me go back and re-read it to see if I can find it…
———-

RRSP’S done right return a pittance back to the government.

Meanwhile our deficit running government borrows to replace the taxes returned on RRSP deposits, and pays interest on it for decades.

When I started out, my tax returns went back into my RRSPs the very next year generating a current tax return on the tax money I got back previously. I did this for several years to get off and running. Multiple tax returns in part generated by deposits that I never paid a dime of tax on. Got smaller every time of course, but I added to it, and kept dumping it back in.

Everything I’ve got in TFSA’s I paid taxes at my full marginal rate, and probably near the height of my earning potential. The government got way more than they will off what will be minimal retirement income drawn off RRSP’s.

#100 Yup, 4 more years... on 02.24.16 at 9:38 pm

Yes, Garth will complain 4 more years…BUT HE IS CORRECT.

T2 should have reigned in RRSPs and not TFSAs…the numbers are correct from Garth and a no brainer to understand.

Last year, did exactly what Garth said: made a large RRSP contribution as this year on pension (GofC and Work) and will get back nearly half the amount contributed as a tax refund (over $20K – waited to top it all off).

So to the whiners, zip it – Garth is correct. Dumb move by T2 and gang.

Now we will have to pay for that mistake as the Govt will have to borrow…kind of like a mortgage…dumb.

#101 45north on 02.24.16 at 9:39 pm

On Tuesday the Department of Finance published a document called Report on Federal Tax Expenditures—Concepts, Estimates and Evaluations.

Over seven years the ‘cost’ of having TFSAs in place was $3.7 billion.

The ‘tax expenditure’ cost of RRSPs, in contrast, was $107.7 billion over the same period of time.

pretty simple. I got it.

#102 Bernie on 02.24.16 at 9:39 pm

HI:RRSP’s get taxed going out so for a few folks it makes more sense to not top up those funds if your tax bracket is higher when you retire than when you put the funds in.I don’t think I will ever keep an OAS amount but that is a different story.

#103 Victoria on 02.24.16 at 9:46 pm

Sorry this is a bit off topic and I should post it on a future post but I have been trying to get my husband to sell our house and rent. We have done some lovely renovations and I want to pull our money out of real estate. I am also worried that we will never make our money back because of the renovations we have done.

A RE agent we just spoke with said that the RE industry in Victoria believes that prices will go up 10 to 15 percent this year because so many people from Vancouver are cashing out and moving to Victoria because it is cheaper that is why Victoria property will rise.

My husband won’t budge…. sigh ….

10-15 percent – invasion of the Hot Vancouver Money? Does anyone have any comments?

#104 acdel on 02.24.16 at 9:46 pm

#94 Smoking Man

Keep the JD out of the left hand and the cig out of the right and you are one step closer to having a few more years with the wife and kids, your choice!

If you are serious, good on you!

#105 Ignorance Is Bliss on 02.24.16 at 9:48 pm

#34 GB

AGREED – Average Canadians are hurting. My husband and I only made $76,000 last year combined, working our tails off in 2 “good” full-time jobs with 2 kids on the verge of adulthood. I am making the same wage I made 15-20 yrs ago. I see wages listed on job boards that should easily be $10 an hour more than they are. I am getting tired of fighting so hard to maintain our standard of living. Wishing I had exerted my full effort into trying to get a cushy gov’t job many years ago. Seems it’s the only way to a secure and comfortable future. If only we had the problem of figuring out where to invest. Keeping a roof over our heads is tough enough. Here in Ontario, Kathleen Wynne is only making matters worse to the point where I fantasize about where to move to in order to escape the crushing weight of increasing taxes and utility costs, all the while fighting to hang onto jobs with flatlining wages.

Rant over.

#106 Smoking Man on 02.24.16 at 9:54 pm

The only reason I joined the gym there is a wedding in June.

My niece is getting married. My wife having 4 sisters, I don’t half to explain this to chics. Instantly they got it figured out .

Dudes will have no idea of what I’m getting at. Feminized men might. Gays for sure.

But to my fellow neanderthal men. It’s like this.

Game on. NO one wants to be the fatest sister.

Dr Smoking Man
PhD Fatonomics

#107 IHCTD9 on 02.24.16 at 9:56 pm

#70 Beast Killer on 02.24.16 at 8:19 pm
Here’s what you do , work only as much as you need, after putting up a pile of dividends, consciously starve the beast along the way by paying zero consumer tax, live a better life by paying no income tax. by not buying anything in Canada. Screw the Liberals and the unions that put the pathetic wankers into power. I won’t support them
————–

More music to my ears :) Simply don’t pay for it.

Sock it into RRSP,s, dump the return into a TFSA.
Avoid retail
Major purchases via Kijiji
Contract work or small business for tax purposes and side income among other things
Reduce consumption across the board
Minimize exposure to conventional energy

Let the millenns and their kids foot the bill, it’s only right that they pay their fair share :)

#108 Ricardo Boyd on 02.24.16 at 9:58 pm

The TFSA is a trap. A method of providing temporary initial liquidity to the banking system when the US currency reset happens. These accounts will be the FIRST accounts confiscated. Page 145-146 of the 2013 Budget-
http://www.budget.gc.ca/2013/doc/plan/budget2013-eng.pdf

You can squawk all you want about tinfoil this and conspiracy that. WHY would this account confiscation be legislated if there was not the possibility of it happening?? I am sure the residents of Cyprus squealed the same ‘conspiracy’ garbage prior to their confiscation.

BTW the CIA created the term “conspiracy theory” in the wake of taking out JFK
http://www.washingtonsblog.com/wp-content/uploads/2015/02/CIA-conspiracy.jpg

There is no account confiscation legislation. Yes, tinfoil. — Garth

#109 IHCTD9 on 02.24.16 at 9:59 pm

#69 Brydle604 on 02.24.16 at 8:14 pm
—-

Awesome, the dogs are just crapping wisdom tonight.

Pay attention kiddies…

#110 Ricardo Boyd on 02.24.16 at 10:02 pm

Great time for a Tom Petty impersonation to!!

https://youtu.be/v-27FGbpBk4

#111 Ricardo Boyd on 02.24.16 at 10:03 pm

Wake the Flock up!

#112 Bram on 02.24.16 at 10:04 pm

Sorry for being off-topic (it does not relate to TFSA) but I thought I would check how many houses are for sale in downtown Vancouver.

There is only one for sale, a.t.m, but damn, what a beautiful little house. I don’t think you can get a better location for a SFH in the whole of Canada than English Bay, I think.

https://www.realtor.ca/Residential/Single-Family/16391730/1550-HARWOOD-STREET-Vancouver-British-Columbia-V6G1X9

If I were that rich, I would actually consider it.
Being the last lone hold-out against those rising towers.

Too bad you would get taxed to oblivion with property taxes, because it is zoned for multi family.

Bram

#113 Smoking Man on 02.24.16 at 10:04 pm

104 acdel on 02.24.16 at 9:46 pm
#94 Smoking Man

Keep the JD out of the left hand and the cig out of the right and you are one step closer to having a few more years with the wife and kids, your choice!

If you are serious, good on you!
.

Yes the pleasure of the wife and kids who terrorize my life style.

I’m cool with an early death. We are all star stuff. When the body dies the skin electrons are still orbiting the middle thing.

You never really die. But when on earth for the short time you have.

Living like me is so under rated.

#114 Hundo P on 02.24.16 at 10:07 pm

#94 Smoking Man on 02.24.16 at 9:25 pm
Can’t belive we joined a gym today.

My son is going to get me and the wife back in shape, the only reason I can keep cancer at bay is cause I don’t feed it healthy shit. Cancer wants nothing to do with the Crap food and bozze I feed my body.

O well, maybe Ill get some blog or book food , talk about my first yoga class.

Will the hotties in yoga pants in front of me know the depth of my depravity? Fortunately for them I’m no threat at the moment. Well maybe if I get in shape.
……

Well done, smoking man! A bit of advice, find a strategic treadmill or elliptical machine behind a hottie in yoga pants and I guarantee you’ll burn more calories than you thought possible.

#115 Capt. Obvious on 02.24.16 at 10:12 pm

Garth, the real ruse is that you’re pretending TFSAs were cut back in the name of short term gain. The point of making this reduction now is to reduce the burden in the future. You say the young would benefit from the compounding of TFSAs – this is at the expense of the future tax payer.

Again, you’re arguing against the concept of sheltering from taxes, which is to your benefit, and yet you cannot see this, which is hilarious. By your logic, there should be no tax shelters, tax it all, spare the children.
If I put $1 in an RRSP today, the government gives me back the, say to keep numbers round, 30 cents in tax I would have normally paid on that dollar. The government doesn’t get it today. They might get it tomorrow, they might not, it depends on my rate of return, inflation and tax rate in future when I withdraw.
I put $1 into a TFSA, I’ve already paid tax on this dollar; I actually spent $1.42 dollars to put this dollar in . The government gets to take their money and do with it what they choose (more or less). They could choose to pay down the debt to lessen the tax burden on future generations.
Garth’s right, if you care about fairness, it’s the RRSP limit that should be cut, since high income earners get more of a present benefit from the tax refund. First rule of finance: a dollar today is worth more than a dollar years from now.
But you know, given T2 seems a bit reckless with the spend, maybe I’m happy I’ll be ploughing more money into my RRSP and less into a TFSA. I’m not sure T2 would spend my present tax dollars all that well.

#116 WalMark of Sadkatoon on 02.24.16 at 10:13 pm

No it’s not. Bad public policy, with no discernible public benefit and long-term negative consequences. It was a political move only. — Garth

personally glad voters are financial illiterates. glad to keep my RRSP untouched. happy to sacrifice $5k in my TFSA for that. thank goodness poor ppl are dumb and life always punishes the dumb

#117 acdel on 02.24.16 at 10:14 pm

#105 Ignorance Is Bliss

Unfortunately, too many of us are going through the same crap. It is up to us (as Canadians) to say “enough is enough” and demand the change. This Blog (thanks to Garth is a good start) but the reality is that we all know change is needed or the outcome will be as pathetic as this great blog!

#118 AB Boxster on 02.24.16 at 10:15 pm

#42 Penny Henny on 02.24.16 at 6:34 pm


WOW! Now that you put it that way the difference is awesomely HUGE!!!

————————————–
Yeah Garth.

I mean even taking this pathetic sum of $1600 and investing it at 6% over 30 years, its still a pittance right?

Lets see, $1600 every year, compounded semi-annually for 30 years, in a TFSA…..

This guy will only be about $130,000 richer, all tax free.
Why would anyone bother for a measly $130k?

Good grief!
It’s no wonder people have no money.

#119 MF on 02.24.16 at 10:15 pm

#33 tundra pete on 02.24.16 at 6:18 pm

The evidence is the CBC mouth piece depends on millennials voting Liberal so they can keep their funding and jobs.

#28 Londoner on 02.24.16 at 6:07 pm

Nobody bought into that meme. Interest rates don’t have to “rise significantly” before damage is done. That’s the whole point.

#26 GB on 02.24.16 at 6:05 pm

I managed to put 10k in my TFSA last year and I make about 50k/year. I have never used RRSP’s once in my 32 years of life

Maybe try cutting back on the StarBucks instead of blaming “rich” people?

#77 Daisy Mae on 02.24.16 at 8:37 pm

This “ploy” was a direct benefit to the economy and the people of this country. That was the point of the whole post.

MF

#120 X on 02.24.16 at 10:16 pm

You are blind to a key point – room for TFSAs, like RRSPs, accumulates. Over a person’s lifetime there will be moments (like a severance package or inheritance, or salary increases) when having vehicles like these is crucial to financial independence. I find it astonishing people argue so passionately for higher taxes. — Garth

My mom just went though a situation where it would have benefited her to have had the accumulated room. I know the TFSA was just cut, but every little bit would have helped.

The sad thing is most people are too financially ignorant to realize this, when they actually go though such a life experience.

On a side note….never understood the hate the rich thingy…I mean I understand jealousy, but most of the people I know that are rich (and there are a few exceptions to this) have a great education, willing to guess that a lot who are jealous do not.

Also, for those of us who are employed by ‘the rich’, taxing them more, doesn’t leave me with a greater opportunity for a raise….I mean, I am sure they will figure out a way to get cash flow out of their business to support their lifestyle, but that leaves less $ to go around for the employees.

For those who voted T2 strictly based on the whole ‘rich’ thing, obviously didn’t think that one through. Although I don’t think a lot voted T2 for that alone. Must have been the good looks that put him over the top.

#121 max on 02.24.16 at 10:18 pm

Remember the main thing about industry analysis, they’ll never say the market will get bad. Hence going into 08 from 07, most economists, stock analysts, real estate experts where all saying, buy, buy, buy. The markets going up. Sales are great. Everything is about sales, if things weren’t great nobody would buy. Especially a house. Keep in mind real estate agents need two things to make a living listings and buyers for those listings.

In Victoria, my aunt and uncle are in the same boat. They borrowed against their house. Then to increase the value of the house they foolishly renovated. They are into for $670k, houses in their neighborhood haven’t been above $570k in 6 years. Sure Victoria is nice to visit, but most people I know that are young can’t wait to get off the island after they finish U-Vic. Retiree’s can’t support a market for family homes. Just like Vancouverites will soon figure out the rich foreigners can’t support theirs.

I believe, we’ll see some foreigners, the market will move a little. Supply will catch up with demand. Vancouver will epically flame out. Victoria most is retiree’s, they don’t want family homes for the most part.

#122 acdel on 02.24.16 at 10:19 pm

#112 Smoking Man

Ok Smokie I get it! All the best!

#123 WalMark of Sadkatoon on 02.24.16 at 10:20 pm

cutting the TFSA is negligible for those w money. better that the RRSP wasn’t touched. the rich get richer. with the change to the TFSA the poor just switched from shooting themselves in the foot to shooting themselves in the face. lol

#124 IHCTD9 on 02.24.16 at 10:22 pm

#94 Smoking Man on 02.24.16 at 9:25 pm
Can’t belive we joined a gym today
——–

Keep it up, weight lifting is the fountain of youth.

I’m stronger now than I was when I was in my 20’s, ever really. You’ll really notice the difference after a year or so of consistency and dedication.

Really helps when working on the dozers too.

#125 Millmech on 02.24.16 at 10:25 pm

GB
Raised two kids on my own making what I make now and was paying spousal.Payed myself first and have been doing this for quite a while,it’s all about needs first and then wants.You learn to adjust to a different standard of living,have never gone without needs always wants though and save up for them.My biggest “want”is a to be financially independent in my early fifties which I should be able to achieve.

#126 DON on 02.24.16 at 10:29 pm

#23 SWL1976 on 02.24.16 at 6:03 pm

Played – Like all the Conservatives out there who actually thought they had a Conservative government at the helm.

It doesn’t much matter who’s in charge now, until we as a society relinquish power, control, and respect from the real counterfeiters (the private central banking cartel) we are reduced to nothing more than a dog chasing its own tail.

Most know or could easily know the truth, but most seem to prefer the lies we are fed.
********************************

Nicely Put!

“If you can’t dazzle them with brilliance, baffle them with bullshit.”

― W.C. Fields

We don’t really choose our political parties they just seem to exist. The choices aren’t stellar.. more like different shades of grey.

Create issues that divide the masses. Provide limited choices. Red Blue Orange Green (Basic psych etc).

This weakens our degree of democracy. Perhaps it is time to implement processes and controls that are reflective of the degree of democracy we want for Canada. How about start with a limit on advertising and a regulator preventing illusions (non facts) to be broadcast.

Someone’s running a mok.

#127 Ricardo Boyd on 02.24.16 at 10:32 pm

WTF is your interpretation-?? Say something intelligent for ONCE.
“The Government proposes to implement a ―bail-in regime for systemically important banks….in the unlikely event that a systemically important bank depletes its
capital,” ??
Your an IDIOT.

Nothing to do with depositors. Old news. — Garth

#128 Bram on 02.24.16 at 10:38 pm

#103 Victoria on 02.24.16 at 9:46 pm
10-15 percent – invasion of the Hot Vancouver Money? Does anyone have any comments?

I would definitely not sell in Victoria at the moment.
Check teranet: there is no bubble in Victoria at the moment.
http://www.housepriceindex.ca/default.aspx

Why don’t you wait it out, if it goes bananas, then cash out. Currently it does not seem overvalued. The price graph has been very flat:

+0% over the 2008 to 2015 period!

Hell… you could argue Victoria is undervalued at the moment, because Teranet prices are not corrected for inflation. So Victoria houses are cheaper now than they were in 2008 in real prices.

Stay! Victoria is ripe for a correction up, not a correction down.

Bram

#129 Star Stuff on 02.24.16 at 10:39 pm

#113 Smoking Man on 02.24.16 at 10:04 pm

104 acdel on 02.24.16 at 9:46 pm
#94 Smoking Man

Keep the JD out of the left hand and the cig out of the right and you are one step closer to having a few more years with the wife and kids, your choice!

If you are serious, good on you!
.

Yes the pleasure of the wife and kids who terrorize my life style.

I’m cool with an early death. We are all star stuff. When the body dies the skin electrons are still orbiting the middle thing.

You never really die. But when on earth for the short time you have.

Living like me is so under rated.
—————-

Treadmills are deadly… don’t let go!

http://www.cnn.com/2015/05/06/health/goldberg-treadmill-accident-cases/

#130 MF on 02.24.16 at 10:40 pm

The last election was all about this:

“what’s in it for me?”

And not about this:

“what’s best for the country?”

As mentioned, people thought they were going to be getting thousands of dollars in the mail for free. Lol good luck with that.

Immigrant vote went for Trudeau. I am saying this because Gf is from SE Asia and is a caregiver. Been here 2 years under the TFW caregiver program (which Harper was maligned for over and over and over). Funny all her friends were raving about T2 during and after the election…..without considering the only people who can afford a caregiver are “rich people”, and without these “rich employers” having money for a caregiver then back to the Philippines they would all go.

Anyways, now they are all complaining about the refugees coming and getting immediate PR when they are stuck “working” for it. Only my Gf understood the whole thing (thanks to my educating her). I told her my vote was for both of us.

Harper actually had great programs in place (universal child care benefit, income splitting, GST tax cut, and yes the TFSA) for the middle class. Some are still around, some being phased out/changed obviously. So I say this idea that Harper was for the “rich” is preposterous.

All this points to a dumbed down population who voted for what was in it for them based on what they read in The Star/CBC first and foremost without considering anything else, or without actually doing any research on what the policies were all about.

MF

#131 MF on 02.24.16 at 10:43 pm

#23 SWL1976 on 02.24.16 at 6:03 pm

I agree that the Central Banks are losing control, but I blame this on ineptitude rather than conspiracy.

MF

#132 jane 24 on 02.24.16 at 10:44 pm

I didn’t realise that the Canadian basic personal income tax exemption was only $11,327. Canada is indeed a high tax country. Here in Britain it is £10,600 x exchange of 1.94 or a whopping $20,564 Cdn personal tax free allowance before you pay income tax.

If a couple also uses their yearly capital gains allowance wisely you can make a joint $80,000 Canadian before paying income tax.

Here the pound £ is dropping for the June 23 independence referendum. May be good time to bring some poorer performing stocks in other currencies home. Always silver lining in life.

#133 Big Dipper on 02.24.16 at 10:48 pm

Nah, the tfsa gimme was just an pre election CON stunt. It failed, just like all the others. No long term benefit for the unwashed was intended. Nice try.

“Investing is hard”. No it is not. All you need is a slick sounding formula that the sheeple will buy. Been done for centuries. I was there.

People did not vote for T2, they voted against Harpo. If Harpo and his clowns would not have been such incredible d!$kheads T2 would not have been elected. Put the blame where it belongs.

#134 acdel on 02.24.16 at 10:58 pm

#129 Star Stuff
#113 Smoking Man on 02.24.16 at 10:04 pm

104 acdel on 02.24.16 at 9:46 pm
#94 Smoking Man

Keep the JD out of the left hand and the cig out of the right and you are one step closer to having a few more years with the wife and kids, your choice!

If you are serious, good on you!
.

Yes the pleasure of the wife and kids who terrorize my life style.

I’m cool with an early death. We are all star stuff. When the body dies the skin electrons are still orbiting the middle thing.

You never really die. But when on earth for the short time you have.

Living like me is so under rated.
—————-

Treadmills are deadly… don’t let go!

http://www.cnn.com/2015/05/06/health/goldberg-treadmill-accident-cases/

———————————————————-

Dam, hate to admit that part of me laughed at the incident, but seriously the poor guy, smokie beware; perhaps ignore my earlier suggestion and keep the JD in the left hand and cig in the right, might live longer!

#135 IHCTD9 on 02.24.16 at 10:59 pm

#125 Millmech on 02.24.16 at 10:25 pm
GB
Raised two kids on my own making what I make now and was paying spousal.Payed myself first and have been doing this for quite a while,it’s all about needs first and then wants.You learn to adjust to a different standard of living,have never gone without needs always wants though and save up for them.My biggest “want”is a to be financially independent in my early fifties which I should be able to achieve.
—————————

We are cut from the same cloth. Right now I am the subject of some friendly humor at work due to my car. It is 17 years old and just suffered two major repairs that would normally would have the old girl headed for auto Valhalla. I resurrected it both times for peanuts out in my driveway, once on family day weekend when it was -17 below and windy. *

Same thing goes for handling repairs on my 136 year old house. **

After a while, all the wants just seem to dissolve into the simple desire for freedom and security – knowing you are not beholden to anyone no? No mortgage, 100’s of thousands tucked away, one day you wake up and realize that it would take a major SHTF event to rattle you. The going concerns list gets shorter every year.

(* all parts sourced new old stock on kijiji, less than 1/10 cost of new, no tax other than on 25.00 worth of freight, labour by me)

(** all materials sourced from kijiji and the local reservation new, tax free – probably 5 grand worth over 14 years, Rez has cheapest prices even before you figure in the fact that it’s tax free. All labour by me.)

#136 MF on 02.24.16 at 11:00 pm

#106 Smoking Man on 02.24.16 at 9:54 pm
#124 IHCTD9 on 02.24.16 at 10:22 pm

Indeed. Weight lifting is like investing. You don’t see big differences every day, but the longer you keep at it, the more you start to see the improvements. It should be a slow and steady process and also contain balance in the gym (# of reps sets etc.) with the rest of your life (proper diet, adequate sleep, reduced stress etc.)

Been doing it consistently since I was 15, and will continue to exercise religiously in some capacity until I leave this earth. Totally in love with it.

Even in the early 30’s, you can see who has been taking care of themselves and who has not been.. like one’s financial situation.

MF

#137 WalMark of Sadkatoon on 02.24.16 at 11:03 pm

Stop talking about the RRSP, if you continue the liberal will take it away.

no. they won’t. senior politicians are part of the wealthy. like some of the readers of this blog. they wouldn’t hurt themselves financially like that. better to appease the poor and middle class and help them cut off their only advantage, which is the TFSA. poor ppl can’t afford anything into an RRSP. that’s for us

#138 cramar on 02.24.16 at 11:03 pm

#46 smartalox on 02.24.16 at 6:38 pm
Garth,

What’s your take on TFSAs for US Persons? If the investor owns stocks, and not mutual funds or ETFs, does the regulatory burden of filing the paperwork with the IRS for the ‘foreign trust’ account every year make it worthwhile not to have a TFSA, and pay (Canadian) tax on the earnings?

The earnings are getting to the point where the taxes may be more of a burden than the regulatory.

I’d be interested to know what you or others think of this.

——————–

FORGET IT! Never mind the US tax implications, the Canadian laws will kill you!

I mentioned the TFSA to my son who lives and works in the U.S. He never heard of it, but checked and this is what he found:

“A person determined to be a non-resident of Canada for income tax purposes can hold a valid SIN and be allowed to open a TFSA; however, any contributions made while a non-resident will be subject to a 1% tax for each month the contribution stays in the account. For more information see Non-residents of Canada:”

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/lgbl-eng.html#nnrsdnt

The above link also states:

“no TFSA contribution room will accrue for any year throughout which you are a non-resident of Canada”

#139 Kilt on 02.24.16 at 11:09 pm

You realize we are having this discussion because people have gorged on houses, right? It’s all about choices. — Garth

I rent Garth. Have watched the homes around me go from 600k to 1.4 million in 7 years. And I thought they were overpriced at 600k. Now the rents are going up, and you have a tonne of people funneling in from Alberta looking for Jobs, places to rent and home to buy.
One other comment, you wondered if we like paying taxes. The government is going to get our money one way or another. I want to pay my share, but I don’t want to be beat down, work 80 hours a week to just barely get by.
What I fail to understand is why the government is unable balance the books when the economy is growing. Expected growth of 1.8% for 2016 and 2.2% for 2017. Why the hell do we need stimulus? If they can’t balance the books, maybe they need to cut back on spending.
Kilt.

#140 dan on 02.24.16 at 11:09 pm

The average person buys GICs in his tfsa and mutual funds in the rrsp.
The government loose more potential revenue on the later one.

Plus : Banks offers you rrsp loans while there’s no “tfsa loans”, what’s the effect of more debt on the economy?

#141 DON on 02.24.16 at 11:14 pm

#128 Bram on 02.24.16 at 10:38 pm

#103 Victoria on 02.24.16 at 9:46 pm
10-15 percent – invasion of the Hot Vancouver Money? Does anyone have any comments?

I would definitely not sell in Victoria at the moment.
Check teranet: there is no bubble in Victoria at the moment.
http://www.housepriceindex.ca/default.aspx

Why don’t you wait it out, if it goes bananas, then cash out. Currently it does not seem overvalued. The price graph has been very flat:

+0% over the 2008 to 2015 period!

Hell… you could argue Victoria is undervalued at the moment, because Teranet prices are not corrected for inflation. So Victoria houses are cheaper now than they were in 2008 in real prices.

Stay! Victoria is ripe for a correction up, not a correction down.

Bram
******************************

Now that was funny!

Remember Victoria is not Vancouver. If it was Vancouver wouldn’t that already be reflected in our house prices. Only two ways off this island to get to the larger cities and that’s by expensive air or ferry. I know lots of people who have multiple properties. No more talk of real estate at work. In some cases reality is setting in as takes increase ever so slowly.

thanks for the laugh

#142 AisA on 02.24.16 at 11:14 pm

I could give a hoot and and punch the palm of my left hand through my forehead, crushing my brain and pasting it against the back of my skull, or I could just go about my life as if nothing happened…. choices.

Disclosure: the first option is beginning to outweigh the latter.

Disclosure++ voted NDP to avoid punching the palm of my right hand through my forehead and pasting my brain to the back of my skull.

Disclosure+++Never voted NDP before in my life. It ain’t so easy being Southern Arctickian sometimes.

#143 acdel on 02.24.16 at 11:15 pm

#135 IHCTD9

Man, I hear you. This part of the country we have Bucks and Pick and Pull; have saved thousands in repair costs. YouTube has great tutorials on how to fix things; my bro and I accomplished all that we needed to keep them vehicles running; good on you!

#144 Smartassed Star stuff on 02.24.16 at 11:16 pm

I want to see smoking man negotiate a treadmill with a fag in one hand and a JD in the other.. afterall isn’t he a heart surgeon in his spare time! this should be easy

Surely he can do better than these poor folks…. ouch!!

https://www.youtube.com/watch?v=H-Rt0LDp0zk

—-
134 acdel on 02.24.16 at 10:58 pm

#129 Star Stuff
#113 Smoking Man on 02.24.16 at 10:04 pm

104 acdel on 02.24.16 at 9:46 pm
#94 Smoking Man

Keep the JD out of the left hand and the cig out of the right and you are one step closer to having a few more years with the wife and kids, your choice!

If you are serious, good on you!
.

Yes the pleasure of the wife and kids who terrorize my life style.

I’m cool with an early death. We are all star stuff. When the body dies the skin electrons are still orbiting the middle thing.

You never really die. But when on earth for the short time you have.

Living like me is so under rated.
—————-

Treadmills are deadly… don’t let go!

http://www.cnn.com/2015/05/06/health/goldberg-treadmill-accident-cases/

———————————————————-

Dam, hate to admit that part of me laughed at the incident, but seriously the poor guy, smokie beware; perhaps ignore my earlier suggestion and keep the JD in the left hand and cig in the right, might live longer!

#145 TRT on 02.24.16 at 11:28 pm

Another HAM buy in Vancouver neighbourhood of kitsilano. House on 33x 120 foot lot. $735,000.

That number is over asking. It is not the price. Lol

#146 IHCTD9 on 02.24.16 at 11:37 pm

#97 Capt. Obvious on 02.24.16 at 9:32 pm
I know young lawyers living in basements, making jack, struggling to pay debt, and no job security.

That sounds right. You should be struggling as a young lawyer. You don’t make real money unless you partner, which unless you know someone, isn’t going to happen until you’ve paid your dues.
———

The one guy would be about 32 now, his Dad says he is still slogging away at the student loans, still making jack.

I Work with a couple young guys, one who hopped into a machinist apprenticeship right out of high school and is now a full tradesmen in his early 20’s. He works all the OT he can, and probably makes near 70K per year. He also owns a house, rents to two buddies, even rents his garage out to some other young guys for their quads.

Hopefully a young lawyer pays his dues in 2-3 years and proceeds directly to a 300k+ a year position or it hardly seems worth it.

I did a bit of reading on the lawyer situation in Ontario because this young basement dwelling lawyer is the son of one of my customers. Frankly what I read did not sound very good. IIRC, something like 70% of family and civil cases these days are going unrepresented these days. Law firms forced into consultation roles to survive, fewer and few big firms with the big paycheques around.

At any rate, it would be hard to see that article in any way other than an extreme case of concentrated wealth on one end, with diddly on the other. The one house owning machinist I work with is the single wealthiest millennial I know, no post secondary education. The other one could be close but he went to be a teacher before giving up trying to get a position, and became a machinist. So now he rents and pays down the student loans…

#147 cramar on 02.24.16 at 11:44 pm

#124 IHCTD9 on 02.24.16 at 10:22 pm
#94 Smoking Man on 02.24.16 at 9:25 pm
Can’t belive we joined a gym today
——–

Keep it up, weight lifting is the fountain of youth.

I’m stronger now than I was when I was in my 20’s, ever really. You’ll really notice the difference after a year or so of consistency and dedication.

Really helps when working on the dozers too.

———————–

Hear! Hear! Me too!

Haven’t joined the gym yet, since I have a treadmill, weights, bands, plus lots of other purchased and homemade exercise equipment. Use to lift weights when I was a teenager, gave it up in my early 20s, and resumed again at 63. Three times a week, with HIIT on the treadmill during off days.

I would love to be as strong as I was at 20! We’ll see how close I come on my 70th birthday. Better shape now than when I was at 40, and as good as 30. Getting to 20 though, is going to be an almost impossible challenge.

#148 IHCTD9 on 02.24.16 at 11:49 pm

#136 MF on 02.24.16 at 11:00 pm
#106 Smoking Man on 02.24.16 at 9:54 pm
#124 IHCTD9 on 02.24.16 at 10:22 pm

Indeed. Weight lifting is like investing. You don’t see big differences every day, but the longer you keep at it, the more you start to see the improvements. It should be a slow and steady process and also contain balance in the gym (# of reps sets etc.) with the rest of your life (proper diet, adequate sleep, reduced stress etc.)

Been doing it consistently since I was 15, and will continue to exercise religiously in some capacity until I leave this earth. Totally in love with it.

Even in the early 30’s, you can see who has been taking care of themselves and who has not been.. like one’s financial situation.
——-

Good analogy! It is the same thing isn’t it?

Wait till you’re in your 40’s, the differences are stark. I worked with an Italian guy years ago, built like crazy, still looked awesome at 65. Sure, he dyed his (still full head) hair, but if you saw this guy in a t shirt, you’d guess 40’s, not 60’s.

#149 Randy Randerson on 02.24.16 at 11:51 pm

People are arguing that TFSA reduction is good because it will increase the amount of future revenue of Canada, thus reducing future burden. We talking about 20+ years into the horizon then, right? Now, as a LOGICAL and concerned Canadian citizen, wouldn’t you want to increase revenue and decrease burden right this fucking NOW? So, if you’re so worry about future revenue, you really should give more money to the government NOW so they don’t have to worry about future burden.

Basically, those who are worried about future burden should ask the government to tax them more now. It’s the only way that make sense. But obviously, with your Commie thinking, you’d wish the government would go after other people’s money, and not yours.

#150 DON on 02.24.16 at 11:57 pm

#139 DON on 02.24.16 at 11:14 pm

Should have read

No more talk of real estate at work. In some cases reality is setting in as taxes increase ever so slowly.

thanks for the laugh

#151 Ronaldo on 02.25.16 at 12:05 am

#145 TRT on 02.24.16 at 11:28 pm

”Another HAM buy in Vancouver neighbourhood of kitsilano. House on 33x 120 foot lot. $735,000.
————————————————————–
That number is over asking. It is not the price. Lol”
House was assessed at 2.6 mil and sold for 4.2 mil or 1.6 mil over assessed value. Insane.

http://www.vancitybuzz.com/2016/02/3555-west-1st-avenue-kitsilano/

#152 IHCTD9 on 02.25.16 at 12:06 am

#143 acdel on 02.24.16 at 11:15 pm
#135 IHCTD9

Man, I hear you. This part of the country we have Bucks and Pick and Pull; have saved thousands in repair costs. YouTube has great tutorials on how to fix things; my bro and I accomplished all that we needed to keep them vehicles running; good on you!
—————

You know it! The www is awesome for repairs, maintenance, especially diagnosis. I own an oddball make, so the Internet is a Godsend for me. I would have never gotten into old heavy equipment either without the net!

I used to go to the yards too, but it seemed like double the work LOL! Now with kijiji and Canpar, I get NOS or good used parts delivered to my door, and although it’s more money, I don’t have to lay in oil soaked mud! I am getting old and soft!!

New cars are straight out money incinerators just with depreciation alone. I buy a good newer one for the wife, I myself have two oldies, 17 and 30 years old. Always used.

I too have saved untold 1000,s in purchase price and maintenance. Guys at work can’t believe I do this to keep an old bomber on the road. Well, one guy knows why, and knows exactly what 20+ years of DIY has done for my bank account. He drives a rusty but reliable beater as well. Two turds out in the parking lot at work amongst a sea of shiney, brand new 4×4 pickup trucks HaHaHa!

#153 Vampire Studies GMST 454 on 02.25.16 at 12:31 am

Some things to keep in mind regarding “fairness”.

In BC the $150k/a earner has a marg tax rate of 43.7%
the $75k earner 29.7%
The $37500 earner 20.6%

You’ll notice the % reduction in rates between these 3 earners whose income differs in multiples of 2 is close to 30% in each case. Assuming they invest the same %
of their income in RRSPs at comparable rates of return, and have retirement incomes of half their working incomes, the % of tax reducted to the top two earners is almost identical. So it can be argued the RRSP does not benefit the rich more.

Each of the three earners can put $5500 in their TFSA and earn the same tax-free return. The lowest earner needs to make about $6900 to save this money. The top earner needs to make over $9700 to get the same tax free return. Assuming a 7% return, the lower earner shelters 1.02%of his income, the first year, the highest earner shelters only 0.26%. I would argue the TFSA is not fair, but slanted to the lower earner.

#154 drydock on 02.25.16 at 12:31 am

Smoking Man on 02.24.16 at 9:25 pm

Can’t belive we joined a gym today.

My son is going to get me and the wife back in shape, the only reason I can keep cancer at bay is cause I don’t feed it healthy shit. Cancer wants nothing to do with the Crap food and bozze I feed my body.

O well, maybe Ill get some blog or book food , talk about my first yoga class.

Will the hotties in yoga pants in front of me know the depth of my depravity? Fortunately for them I’m no threat at the moment. Well maybe if I get in shape.

I think of gym people as freeks of nature. Why do they run, lift weights. Put their body through torcher.

If your a gym person in port credit and spot a slow walker on the treadmill sneaking a e cig . Come say high.

0101010101010101010101010101010101010101

Want to really get in shape fast and make money?
Get a job with Swissport or ATS at the airport as a stacker on the ramp.
In six weeks you’ll be iron man.

#155 DON on 02.25.16 at 12:35 am

#148 IHCTD9 on 02.24.16 at 11:49 pm

#136 MF on 02.24.16 at 11:00 pm
#106 Smoking Man on 02.24.16 at 9:54 pm
#124 IHCTD9 on 02.24.16 at 10:22 pm

Indeed. Weight lifting is like investing. You don’t see big differences every day, but the longer you keep at it, the more you start to see the improvements. It should be a slow and steady process and also contain balance in the gym (# of reps sets etc.) with the rest of your life (proper diet, adequate sleep, reduced stress etc.)

Been doing it consistently since I was 15, and will continue to exercise religiously in some capacity until I leave this earth. Totally in love with it.

Even in the early 30’s, you can see who has been taking care of themselves and who has not been.. like one’s financial situation.
——-

Good analogy! It is the same thing isn’t it?

Wait till you’re in your 40’s, the differences are stark. I worked with an Italian guy years ago, built like crazy, still looked awesome at 65. Sure, he dyed his (still full head) hair, but if you saw this guy in a t shirt, you’d guess 40’s, not 60’s.
*************************

Been working out all my life…great feeling – helps regenerate the muscle. Anti aging for sure!

#156 Vampire Studies GMST 454 on 02.25.16 at 1:02 am

IHCTD9 – re 82 – one persons consumption is another
persons income, so no easier or harder to hide. consumption tax may be thought as fairer by some. I think I would be oK with it. I’m sure it would be easier to administer.

#157 IHCTD9 on 02.25.16 at 1:04 am

#147 cramar on 02.24.16 at 11:44 pm
#124 IHCTD9 on 02.24.16 at 10:22 pm
#94 Smoking Man on 02.24.16 at 9:25 pm
Can’t belive we joined a gym today
——–

Keep it up, weight lifting is the fountain of youth.

I’m stronger now than I was when I was in my 20’s, ever really. You’ll really notice the difference after a year or so of consistency and dedication.

Really helps when working on the dozers too.

———————–

Hear! Hear! Me too!

Haven’t joined the gym yet, since I have a treadmill, weights, bands, plus lots of other purchased and homemade exercise equipment. Use to lift weights when I was a teenager, gave it up in my early 20s, and resumed again at 63. Three times a week, with HIIT on the treadmill during off days.

I would love to be as strong as I was at 20! We’ll see how close I come on my 70th birthday. Better shape now than when I was at 40, and as good as 30. Getting to 20 though, is going to be an almost impossible challenge.

——

I just lift at home, it’s free! :)

I am 43, and no question am strongest now than I ever have been. I doubt that would be the case in my 60’s. My other post talking about the ripped guy I worked with who was 65, that guy was backing off on the weight to avoid injury. He did something to his shoulder, and it took a long time to heal up again. Lost ground in the interim, not worth it, he was trying to maintain at that point, not get bigger. He had been lifting for over 35 years, about 5′-6″ tall, 185 lbs, solid muscle head to toe. The muscle showed up big time on his small lean frame. I know another younger guy who had to quit lifting due to shoulder injury. It left him quick, and this guy was jacked pretty good before he had to stop.

Sure won’t hurt at your age, just don’t push the shoulders and knees too hard!

#158 cyclist on 02.25.16 at 1:07 am

Re: weight training

If you’re stronger now than in your twenties you either

– didnt do it right (or at all) in your twenties
– are in your thirties
– are on PEDs

ditto for cycling, but also add “now ride a harley”. For me, the first case applies. Am now in my 50s.

Now back to our regular blog……

#159 Smartalox on 02.25.16 at 1:53 am

Cramar #138:

Tell your son in the US To open a Roth IRA, it’s the us equivalent of the TFSA, like how the 401k is like the RRSP.

My case is different. I’m talking about a dual citizen living in Canada, accumulating lots of TFSA room, but holding stocks in an unregistered account because the US doesn’t recognize the Canadian TFSA, calling such accounts a ‘foreign trust’ and requiring special filings, as well as requiring canadian financial institutions to withhold taxes on transactions, which can then only be claimed on a US tax return.

#160 Dispatches from Under the Bridge on 02.25.16 at 2:09 am

All of which explains why Trump’s vague generalities and outright lies combined with epically ridiculous and condescending statements like “We won with the poorly educated, I love the poorly educated” work. These people actually view this as a positive shout out to them. Not that I’m a scholar, no PHD but I can think critically.

We fell for the same bullshit just from a different pasture and we always do. That said, if you watch question period and Ambrose asks the same question twice, at a minimum, and gets the same foolish answer each time it begins to come into focus why people are so disengaged until a zealot comes along. Definitely none or at least few of the current crop of politicians at the fore have any merit and haven’t for years.

It’s unfortunate you didn’t succeed in your leadership bid but it also explains why you couldn’t. Sad.
Even more sadly we voters keep perpetuating it. Justin and company are so fond of yapping about everything being a mandate when the truth of the matter is that the vast majority had had enough of Harper and were afraid of Mulcair. All of the actual issues be damned as your polls showed at least for those who responded here.

Trudeau appointed a number of zealots to cabinet, the biggest one being Bennett. If you really want to get to the bottom of an issue why would you appoint someone who has howled unsubstantiated statements on the issue for years and adopted every symbol of the aggrieved party that she can possibly wear at any one time. Obviously there are issues but they require an unbiased enquiry. When the minister in charge made up her mind what happened ten or twenty years ago (when she made up her mind not when it actually happened) I can’t see how anything she does helps anyone. IE we have it on good rumor that the numbers are more like 4,000 missing and murdered despite the RCMP saying 1,200. We base this on a sort of word of mouth study by a group that readily admits that they are talking about all women not just First Nations. Does not help First Nations, she is an idiot. But hey Carolynn keep wearing that haute couture clothing with the first nation symbols on them. By the way tell that other minister that keeps appearing with you to quit letting a blind five year old with zigzag scissors cut her hair and go to an actual stylist, she can afford it now.

I’m tempted to get into the whole fighter jets increased ground troops thing but……

By the way I’m going to build a wall around Long Branch and Smoking Fool is going to pay for it.

#161 Unprecedented whats happening in Vancouver on 02.25.16 at 2:28 am

Vancouver houses selling for incredible prices.

Almost all detached houses are selling WITHOUT ANY CONDITIONS!!! So much for the theory that people are buying with mortgages.

The trajectory for prices currently is as follows:

Vancouver city: Prices appreciation of $75,000/month

Vancouver suburbs: Price appreciation of $40,000/month.

Believe it.

#162 Good Hoot on 02.25.16 at 2:49 am

Liberals crush the dollar and jack up taxes on business and then complain about low productivity?

http://news.nationalpost.com/full-comment/john-robson-trudeaus-productivity-challenge

Now thats a hoot.

The reason Cdn companies can’t buy equipment to keep them competitive is that the Trudeau Libtards keep stamping down the loon so that foreign made machinery is too expensive to purchase while at the same time jacking up taxes to feed the greedy unions making doing business in Canada far too expensive.

Forget Canada as a a place to work or do business.

#163 Mike in Van on 02.25.16 at 3:00 am

Come on, Garth. He just returned the TFSA to the pre-Harper election promise bull that sent it to $10,000 in the first place. What worries me is where they are going to cap it. 50 years x $5000($5500… $6000) is a lot of contribution room!

#164 pbrasseur on 02.25.16 at 7:36 am

You’re right Garth, cutting TFSA was a purely political move, based on false assumptions to make the financially illiterate political left happy.

It is downright disgusting and the kind of stupid decision this country can no longer afford. T2 keeps repeating «this is 2016», it’s true the world has changed, we no longer have the margins we had when his dad was wrecking things, this time what is different is we can’t afford the stupidity.

Unfortunately this (same problem in Ontario and other provinces including Alberta) is the leadership we have, it could not have happened at a worse moment.

#165 Danforth on 02.25.16 at 7:39 am

What would be really interesting is to know what the ‘tax expenditure’ in reduced taxation revenue represents for only that top $4500 which was removed by Trudeau.

I loathed Harper, but this was a good thing he did for the middle class.

#166 maxx on 02.25.16 at 7:42 am

“Justin made the TFSA into a political football – the symbol of unfairness to the 99% – and the game was on.”

Never mind. It gave millennials and moisters with T2 leading the charge a golden opportunity to exercise their seething hatred of “the boomers” and knife them in the back.

The gigantic green-eyed monster is alive and well and has been exposed for all to see. Talk about cutting off your nose to spite your face.

Pathetic incompetence.

#167 T2_loves_U on 02.25.16 at 7:44 am

remember when your fellow canadian can’t communicate with you unless it is in the form of a bomb, to love your neighbor

https://ca.news.yahoo.com/liberals-set-unveil-changes-people-lose-canadian-citizenship-090008994.html?nhp=1

#168 hope & ruin on 02.25.16 at 7:54 am

#162 Good Hoot on 02.25.16 at 2:49 am
Liberals crush the dollar and jack up taxes on business and then complain about low productivity?
_____________________________________

And now wynne announces cap and trade carbon “pricing”.

but don’t worry Ontario it’s not a tax. It’s more like a net-zero increase in how much money you pay to government.

#169 maxx on 02.25.16 at 7:56 am

“In short, they were played.”

Regrettably, stupid cannot be cured. Those who are adept in accumulating wealth will always get richer and wannabees will always be, well,wannabees.

Perhaps all of that vitriol ought to be channeled into acquiring rather than looking for ways to hobble “the boomers”.

#170 jess on 02.25.16 at 8:01 am

From:
David Cay Johnston is a columnist for tax.com and teaches the tax, property and regulatory law of the ancient world at Syracuse University College of Law and Whitman School of Management.

9 media-perpetuated tax myths

“Big real-estate investors enjoy tax-free living under a 1993 law President Clinton signed. It lets “professional” real-estate investors use paper losses like depreciation on their buildings against any cash income, even if they end up with negative incomes like Trump.”

http://www.wweek.com/2011/04/13/9-things-the-rich-dont-want-you-to-know-about-taxes/

Takes one to know one?

Mitt Romney(carried interest?) suggests there’s a “bombshell” in Donald Trump’s taxes
CBS News‎ – 10 hours ago
Donald Trump is leaving the door open to not releasing his tax returns, just hours after Mitt

#171 gut check on 02.25.16 at 8:14 am

@ #105 Ignorance Is Bliss on 02.24.16 at 9:48 pm

*****************

you aren’t the only one. Our number & situation is slightly different, but the pinch of the decreased security & increased expenditures (all thanks to gov’t and housing costs) are really starting to hurt. The idea of any sort of comfort in retirement? I am not very sure about that at all, no matter what we do.

We also want to leave Ontario – we figure that even if the situation is not ideal somewhere else at least there will be better weather, food, and scenery.

two more things: cushy government jobs are hell on earth (IMO) I had one and left it – only made it two years before my brain and will to live shriveled up. We have money that could be invested but we’re still paralyzed… too much risk out there. (sorry garth)

#172 Herb on 02.25.16 at 8:17 am

IHCTD9,

on the last thread (“The Do-over”) you proposed a deal to me at comment #172 (http://www.greaterfool.ca/2016/02/23/the-do-over/#comment-434350).

I accepted that deal subject to a condition at comment #198 (http://www.greaterfool.ca/2016/02/23/the-do-over/#comment-434377).

I know you’ve been busy discussing weightlifting and haven’t gotten back to me, but do we have a deal or not?

#173 Jesse Harrison on 02.25.16 at 8:20 am

Ontario Liberals, Kathleen Wynee, Charles Sousa, Federal Liberals, Justin Trudeau and Bill Morneau are political hacks. It is all show and they do not want to make it look like they are going the wrong path.

The primary residence tax free capital gains policy by both Canadian, Ontario government is a lost real revenue, lost capital taxes in the hundreds of billions.

I would say at least $250 to $300 billion to start. We all know that they have a love affair and obsession with Canadian real estate prices going higher and higher with no limit.

#174 MF on 02.25.16 at 8:21 am

#148 IHCTD9 on 02.24.16 at 11:49 pm

It’s amazing isn’t it? Like you said, it is the real fountain of youth.

Congrats on the working out at home! My dad is like that Italian guy you mentioned. My dad is 70 but looks like he is 20 years younger. He is lean with his abs showing and all that at 70! Not a big guy but very lean. Over the years we built a basement gym that has everything under the sun in it. What started out as just a bench and some weights soon expanded to tons of equipment. We spent thousands and it was a great investment. One of the best anyone can do. Back when I was a busboy working at a restaurant in my teens, that is where my money went towards lol. Dad still works out down there every day. Sometimes if I want total peace and quiet, or my gym is closed I will drive over and work out down there too.

Even as a little kid, I remember going to the basement and seeing him working out. I remember sorting through halloween candy, playing nintendo down there while he was lifting away. His story is he saw Arnold in Pumping Iron way back in 1976 and that inspired him. Somewhere around the age of 15 I went down and asked him how to lift. I wanted to get better at sports (and look good for the girls obviously). The rest is history!

#155 DON on 02.25.16 at 12:35 am

Good man! Science has shown that aging muscle responds to exercise stimulus in the EXACT same way as young muscle does. A read a study that compared cross sections of both experienced (aged 60+) to younger (aged 18-30) quadricep muscle after being overloaded by weights. Both responded identically. The aged muscle was slower, but the process was identical. Anti aging indeed!

#158 cyclist on 02.25.16 at 1:07 am

Cyclists’ legs are usually gigantic and ripped. HIIT is great on the bike.

MF

#175 maxx on 02.25.16 at 8:24 am

#10 Balmuto on 02.24.16 at 5:48 pm

“The TSFA is definitely a more equitable structure than an RRSP………So while I support the higher TSFA limit, I feel the issue is a bit academic.”

In those years where it is possible, why wouldn’t you max out the RSP, take the tax credit and stuff it into the TFSA? Rinse and repeat the sh$t out of it.

#176 Noel on 02.25.16 at 8:28 am

The benefit of not having the Conservative gov’t and their regressive social policies far outweights a minor change in TFSA contribution room. This will have almost no practical impact on anyone’s life.

And how’s this for prudent Conservative fiscal management?

http://www.cbc.ca/news/politics/federal-lawyers-payback-time-1.3460499

How is a pay error within the Department of Justice possibly a Conservative policy issue? Incredible. — Garth

#177 Opening a wound on 02.25.16 at 8:29 am

#79 Trojan House on 02.24.16 at 8:43 pm
I find it astonishing people argue so passionately for higher taxes. — Garth

Yeah, it truly is amazing. However, if you don’t think about it, you’ll sleep better.

*****

Sir Garth, I had stopped thinking about the TFSA drop which was making me sleep better. Thanks for re-opening this wound!

PS to all me millennials, I am making max TFSA contributions while being too young to be a boomer. It is a matter of choices. Stop your complaining when all Sir Garth is trying to do is to show you that you will lose long term.

#178 jess on 02.25.16 at 8:33 am

good hoot …what do think about this?

anuary/ February 2012
The Myth of American Productivity

Politicians say we have the most productive workers in the world. They don’t know what they’re talking about.

By Michael Mandel

http://www.washingtonmonthly.com/magazine/january_february_2012/features/the_myth_of_american_productiv034576.php?page=all

#179 Yuus bin Haad on 02.25.16 at 9:09 am

Yup, we’re definitely devolving.

#180 Beast Killer on 02.25.16 at 9:27 am

“IHCTD9 on 02.24.16 at 9:56 pm

#70 Beast Killer on 02.24.16 at 8:19 pm
Here’s what you do , work only as much as you need, after putting up a pile of dividends, consciously starve the beast along the way by paying zero consumer tax, live a better life by paying no income tax. by not buying anything in Canada. Screw the Liberals and the unions that put the pathetic wankers into power. I won’t support them
————–

More music to my ears :) Simply don’t pay for it.

Sock it into RRSP,s, dump the return into a TFSA.
Avoid retail
Major purchases via Kijiji
Contract work or small business for tax purposes and side income among other things
Reduce consumption across the board
Minimize exposure to conventional energy

Let the millenns and their kids foot the bill, it’s only right that they pay their fair share :)”

****Dude I’m voting with my wallet and have already left Canada for a flat tax regime and no CPP or EI or sales tax or any other of that tax sucking union pandering crap. Yes sir, I said good bye to supporting the Liberal fantasy, let them boil in their own juices.

Every day we read in the paper about Liberal having lied to gain power, the platform was nothing but lies, and now the incompetence is showing through. The country and economy is is sinking like a stone. My currency here has appreciated 38% against the Lonn, and I’m in the so called ‘third world’. I can tell you it’s booming here, the sunshine’s every day, girls are stunning, the tax is reasonable, better transpo, less corruption, fewer wankers sucking off the public teat, real nice. Canada will have to pay a steep price for sleepwalking into the last election, but you’ll fell the pain without my financial support. The 15% flat tax is making me rich. I might be able to buy a house in Vanc before long with the money I didn’t have to send to the Trudeau Liberals.

#181 max on 02.25.16 at 9:39 am

I’m 43, so have maybe 20 years left of working. The liberals, have me thinking spending the next few years in the USA. Its just as easy to live in the USA, as here in Canada. Have done it before. This is the fourth liberal government in my lifetime. Even though I was a kid under T1, I think back and it was a lot harder for my Dad to make a living. When the liberals run the country, cost of living is high, even if things doing ok, it feels like a recession!

Since I was 18, I’ve always voted conservative, except one time. No, not federally. Even though they are idiots, the conservatives couldn’t win provincially and didn’t want to waste my vote and get stuck with the NDP. What turned me off liberals? Back when I was 17, the girl I was dating, her godmother was a liberal federal MP. Met the godmother a few times. After meeting her, voting liberal is treason! She was all about taking “rich” peoples money for government revenue, so the government can spend. The problem with liberal spending, they waste the money.

Now we have real estate agents, with people with money that don’t understand the dynamics of real estate investment. Bigger problem we have Bay street running Howe street, economists and money managers and even traders that don’t understand the actual function of a stock “broker” and we have a crisis brewing in the market. The people that support both markets are being laid off because of it. Bre-X can teach real estate agents a valuable lesson, don’t be greedy and kill the damn golden goose. The biggest employment sector in BC is finance, and I’m not talking home loans either. True the big money comes from Ontario, those morons bet big on oil. For the junior to medium size company, the money comes from BC. Bay street looked down on Howe street for years. It wasn’t because Vancouver was doing smaller deals. Brokers made 10 times more money on those smaller deals. Until Bay street took over and turned Howe street into money managers. All because we got greedy and killed the golden goose. And the mafia don Peter Brown wanted to be respectable broker a big money player. If we let Vancouver do their bread and butter. Real estate would be dead and working. The casino known as the junior market would be red hot and creating more real jobs. Instead we are letting the real estate agents kill the golden goose. You think back in the day Vancouver brokers picked stocks? Think again. Its all cheaper then the “publics” stock and give your mooches as Peter Brown once called them a little taste, don’t be greedy and make a million before the little penny stock hits a $1. As in double your money. The only difficult part for a broker is supply and demand! Brokers sell stock, not invest in them.

We need an old school stock promoter as finance minister, not some average boring Bay street millionaire. You see I know what sucks living under a liberal government, even if our economy is buzzing, the cost of living makes it feel like a recession. Under T1, it was a recession and everyone was miserable. T2 is letting idiots create a massive bubble in housing, the real money, stock markets are dead. Life in Canada is really going to suck.

#182 cramar on 02.25.16 at 9:40 am

#157 IHCTD9 on 02.25.16 at 1:04 am

I just lift at home, it’s free! :)

I am 43, and no question am strongest now than I ever have been. I doubt that would be the case in my 60’s. My other post talking about the ripped guy I worked with who was 65, that guy was backing off on the weight to avoid injury. He did something to his shoulder, and it took a long time to heal up again. Lost ground in the interim, not worth it, he was trying to maintain at that point, not get bigger. He had been lifting for over 35 years, about 5′-6″ tall, 185 lbs, solid muscle head to toe. The muscle showed up big time on his small lean frame. I know another younger guy who had to quit lifting due to shoulder injury. It left him quick, and this guy was jacked pretty good before he had to stop.

Sure won’t hurt at your age, just don’t push the shoulders and knees too hard!

—————-

Ain’t it the truth! Injuries are my main paranoia. I have a shoulder injury (not through exercise) for 4 months that has not healed yet. The frustrating part it limits my training and progress.

Ah, to be like Jack LaLanne! He was still doing his daily 2-hr work-out the day before he died at 96.

“Dying is easy. Living is a pain in the butt. It’s like an athletic event. You’ve got to train for it. You’ve got to eat right. You’ve got to exercise. Your health account, your bank account, they’re the same thing. The more you put in, the more you can take out. Exercise is king and nutrition is queen: together, you have a kingdom.”
– Jack LaLanne

#183 Wise One on 02.25.16 at 9:46 am

What I can’t believe is how the TFSA is considered a “rich person’s” benefit….how many middle class families of, say, teacher/nurse or accountant/govt drone are pulling in $120K to $180K family income and want to escape the punitive taxation that would occur if they had an RRSP on top of a DB pension?

And don’t tell me they’re broke, that’s only if they don’t know what the heck they’re doing!! 20K a year to his + hers TFSAs should be no problem for such a family.

#184 Noel on 02.25.16 at 10:07 am

#55 Bobby on 02.24.16 at 6:58 pm
The last election was about making change, not common sense. Mr Trudeau said whatever he had to in order to be elected. It was not about sound policies, but pure politics.
As we are seeing now, many of his policies were poorly thought out and obviously made on the fly. It’s oftentimes said you get the government you deserve and I think the youngsters are now seeing what they elected.
It’s not looking that good. Selfie?

____________________________

Trudeau’s approval ratings are through the roof positive – the majority of people like what they are seeing.

http://www.cbc.ca/news/politics/grenier-approval-ratings-polls-1.3459942

#185 cyclist on 02.25.16 at 10:12 am

174 MF – Yes, HIIT hurts. A lot. Every year i have to say to myself – “Never forget how hard this is”.

#186 cramar on 02.25.16 at 10:14 am

Saw this on the CBC news last night. So what are Millennials whining about?

Current generation of young Canadians wealthiest ever: federal study

http://www.cbc.ca/news/politics/millennials-money-canada-generation-1.3462064

The most interesting fact is the gap between the top Millennials and the rest is wider than any other generation.

Blame the Boomers! They have a paid-for house and it gets the focus off the wage gap among Millennials. A ruse I tell you!

“Of all the wealth held by those in their 20s, 70 per cent is held by the top 10 per cent and the bottom 70 per cent hold one per cent of that wealth.”

#187 Doug in Agra, India, not far from the Taj Mahal on 02.25.16 at 10:16 am

So I wonder, if this new benevolent Liberal government is against tax shelter programs that disproportionally favour the rich, why didn’t they reduce allowable RRSP contributions and keep the TFSA contribution limit at 10 grand?

Garth;
You make a valid point where, in response to comment #26, you say: I find it astonishing people argue so passionately for higher taxes. Those who do are probably low income, who won’t feel much burden from those higher taxes.

#188 unbalanced on 02.25.16 at 10:17 am

History is never forgotten. The government Can and Will change the rules anytime it wants. Learn how to beat the system.

#189 Noel on 02.25.16 at 11:03 am

#109 IHCTD9 on 02.24.16 at 9:59 pm
#69 Brydle604 on 02.24.16 at 8:14 pm
—-

Awesome, the dogs are just crapping wisdom tonight.

Pay attention kiddies…
_________________________

Like the ‘wisdom’ that housing was a bad purchase 5 years ago?

In some markets, it was. Where it involved a one-asset strategy and consequential debt, absolutely. Not big on debating, are you? — Garth

#190 Chris in Nanaimo on 02.25.16 at 11:13 am

Weightlifting….

Best exercise you will ever do, especially for anti aging. Counters muscle loss and decreasing bone density.

I got my own squat rack, the 5×5 app and went from squatting zip to 6 large (315lb) in a year.

I might add some HITT, its just having the time.

Smokng man….. you can’t out exercise a bad diet. Cut out all sugar, and reduce carbs..

Get in that squat rack, and avoid all the gym machines….waste of time.

….ever noticed how all the really fit bods are the ones lifting heavy shit off the floor.

#191 Bram on 02.25.16 at 11:36 am

Talking about cheap mortgages:
https://www.washingtonpost.com/news/where-we-live/wp/2016/02/25/mortgage-rates-sink-to-lowest-levels-in-more-than-a-year/

30yr fixed, on average 3.62%
15yr fixed, on average 2.93%

That’s States-side, but still…
It doesn’t seem that borrowing is getting more expensive anytime soon. And if you think it does, you can lock it for 30yrs for damn cheap.
Also, those numbers are averages, so a rock bottom deal would be even cheaper.

Ha ha ha … I just compared it to Canada. The rate-comparison website yielded no 15yr rates, just a 25yr RBC rate for…..

8.75%

What’s up with that?
fed rate: 0.25-0.50%
BoC rate: 0.50%

Shouldn’t our long term mortgage rates be similar also?

Bram

#192 Yes But? on 02.25.16 at 11:47 am

#184 Noel on 02.25.16 at 10:07 am

#55 Bobby on 02.24.16 at 6:58 pm
The last election was about making change, not common sense. Mr Trudeau said whatever he had to in order to be elected. It was not about sound policies, but pure politics.
As we are seeing now, many of his policies were poorly thought out and obviously made on the fly. It’s oftentimes said you get the government you deserve and I think the youngsters are now seeing what they elected.
It’s not looking that good. Selfie?

____________________________

Trudeau’s approval ratings are through the roof positive – the majority of people like what they are seeing.

http://www.cbc.ca/news/politics/grenier-approval-ratings-polls-1.3459942
____________________________________________
Sounds so familiar now read the second paragraph attachment. We are doomed.

Trudeau was a powerful and spellbinding speaker who attracted a wide following of Canadians desperate for change. He promised the disenchanted a better life and a new and glorious Canada. The Liberals appealed especially to the unemployed, young people, and members of the lower middle class (small store owners, office employees, craftsmen, and farmers).

http://www.ushmm.org/outreach/en/article.php?ModuleId=10007671

#193 Chris on 02.25.16 at 12:00 pm

“Over seven years the ‘cost’ of having TFSAs in place (including the $10,000 limit) was $3.7 billion.
The ‘tax expenditure’ cost of RRSPs, in contrast, was $107.7 billion over the same period of time.”

Of course the cost of the TFSA is going to be magnitudes smaller over that time, it just started in 2009, while the RRSP has been around for decades (late 50’s??). So the amount sheltered over all those years has got to be a bigger hit than the amount sheltered by the brand new TFSA. However, the issue is what will it cost in the future. With an RRSP you eventually pay tax on all gains as well as the contribution. With TFSA’s once you invest, the gains are forever tax free. So someone who invested well and contributed 300 K in a RRSP but grew it to 3 million will eventually pay tax on 3 million. The tax was paid on the TFSA contribution, but any growth will never be taxed.

So I think this argument is disingenuous.

The bigger issue is that Harper increased the TFSA limit from 5500 to 10 000 as a ploy to try and get re-elected, which happily backfired.

The other bigger issue is that if anyone, rich, poor or in the middle maxes out their available TFSA and RRSP limits and invests reasonably, they are gonna be just fine. The vast majority either don’t have the knowledge or available funds to do so, and that is the problem. The rich will be just fine, they will still be rich without the added 4500 contribution room. The middle will be fine if they take advantage of what is available, and if they don’t extra room wouldn’t help anyway. Instead of harping on about these things in the past, why not write a useful post advising people what to do in the present – you know, take the high road, be less partisan, write something actionable. The glass is there Garth, you choose to write about the half that is full or the half that is empty – I’d like a few posts about the full part for a change.

#194 BlackDog on 02.25.16 at 12:02 pm

@SmartALox,

Not sure there is any point having a TFSA if you are a Canadian with ‘US person’ status. Between the compliance costs of having a so-called ‘foreign trust’ and the fact that the gains are taxable in the USA, what is the point. Ditto: RESPs and RDSPs which are also foreign trusts.

And god forbid you invest in Canadian mutual funds which are considered ‘Passive Foreign Income Corporations’ which basically means a foot high stack of paperwork and confiscatory taxation to the point of making said mutual funds a complete liability. Not sure about stocks though.

Also, just a footnote. Does your son report his TFSA (and other ‘foreign’ accounts) to the Financial Crimes Enforcement Network every year on FBARs (foreign bank account reports)? If he does not, thanks to FATCA, he may find himself with a nasty penalty letter soon as Canadian banks are in the process of rounding up the ‘US slaves’…err I mean ‘US persons’ among us.

#195 pinstripe on 02.25.16 at 12:13 pm

An example of the policies set during the boom times.

http://www.cbc.ca/news/canada/edmonton/financial-woes-for-edmonton-man-waiting-weeks-for-paycheque-1.3463120

#196 BlackDog on 02.25.16 at 12:15 pm

@SmartAlox

A point of clarification: TFSA’s (like ALL ‘foreign’ aka non-US accounts) are reportable to FINCEN, but TFSA’s are not FATCA reportable. In other words, your son won’t get reported on for having a TFSA. But he will get reported on if the total value of ALL his accounts (TFSA’s, RESPs, RDSPs, RRSPs excepted) is 50K at ANY single point during the calendar year.

Most Canadians with US taint, even the ones who knew they were US taxpayers on their Canadian income and had been filing US tax returns, had NO CLUE about the FBARS. Many are sweating bullets now as the penalties for non-reporting of ‘foreign’ accounts to the Financial Crimes Enforcement Network are extremely harsh as they were originally intended for Americans living INSIDE the USA who were hiding money OUTSIDE the USA. However, it is the average, middle-class Canadians (and other ‘US persons’ world-wide) who are the ones getting hit with the FBAR penalties. Apparently out of the 7 or 8 million estimated US persons world-wide only about 500,000 even file US tax returns, and most of them have never heard of FBARS. FATCA is a real penalty bonanza for the USA, that is if they can figure out a way to collect on the penalties. So far, it has mostly been a fear campaign with various amnesty programs which continue to get less and less harsh (the prior one had ONLY a 25% guaranteed penalty on all assets) whereas the latest amnesty program has no penalties IF you meet certain requirements.

#197 IHCTD9 on 02.25.16 at 12:29 pm

IHCTD9,

on the last thread (“The Do-over”) you proposed a deal to me at comment #172 (http://www.greaterfool.ca/2016/02/23/the-do-over/#comment-434350).

I accepted that deal subject to a condition at comment #198 (http://www.greaterfool.ca/2016/02/23/the-do-over/#comment-434377).

I know you’ve been busy discussing weightlifting and haven’t gotten back to me, but do we have a deal or not?

____________________________________________

You want to change 25 billion to “X” billion (assuming you mean any number of billions) by the end of 2016 and if T2 sinks us 1 Billion minimum by this time, you will rip T2 a new one without making excuses of any kind?

Deal!

and

I win! T2 has already sunk us by Billions as of Feb 2016.

So let’s hear the T2 hatred – make it sound believable.

#198 IHCTD9 on 02.25.16 at 12:44 pm

#176 Noel on 02.25.16 at 8:28 am

This will have almost no practical impact on anyone’s life.

___________________________________________

Wrong.

#199 Vamanos Pest on 02.25.16 at 12:58 pm

Another way the left-of-center voters were misled:

-the middle class tax cut, combined with the so called 1% tax hike, which the Liberals absolutely had a mandate to push through, is hardly a benefit to the “middle class”

-(not to mention it will cost billions when it was sold as revenue neutral)

-the tax changes are of biggest benefit to a household with 180K of income coming evenly from to earners making 90k per year (statistically it’s not the 1%, but hardly the typical middle class situation)

-it would provides NO benefit to a household with a total income of 90k with 2 earners making 45k each (a much more typical middle class situation), as they don’t make enough to benefit from the tax cut

-with the tax cut and tax increase combined, a single earner gets a NET TAX CUT up to ~215k. So an individual with an income of 200K (an income solidly in the 1%) actually receives a tax cut under the new rules, while an individual with 35k in income does NOT.

Face it, if you are truly middle class and voted Liberal, you’ve been had.

#200 Reasonfirst on 02.25.16 at 1:04 pm

You know what’s ironic Garth? You did a spectacular job of skewing Harper and his cronies over the years that you probably should take some responsibility for getting the Liberals in!

#201 TurnerNation on 02.25.16 at 1:12 pm

#181 max I did read Fleecing the Lambs the story of the old VSE. Should be required reading in school!

#202 The Other Chris on 02.25.16 at 1:32 pm

I think the lesson from this discussion is probably that Justin is going to go after RRSP limits next, as being somehow “only for the wealthy”.

It’s been rumored that Morneau wants to move new civil service hires to a target benefit plan (which would be a huge change, but wouldn’t affect current hires). I’ll bet they’ll announce this right along with the RRSP changes to muddy the waters.

#203 Sal Minella on 02.25.16 at 1:33 pm

CDN $ getting lots of love today

#204 IHCTD9 on 02.25.16 at 1:39 pm

#182 cramar on 02.25.16 at 9:40 am

Ah, to be like Jack LaLanne! He was still doing his daily 2-hr work-out the day before he died at 96.

“Dying is easy. Living is a pain in the butt. It’s like an athletic event. You’ve got to train for it. You’ve got to eat right. You’ve got to exercise. Your health account, your bank account, they’re the same thing. The more you put in, the more you can take out. Exercise is king and nutrition is queen: together, you have a kingdom.”
– Jack LaLanne
_______________________________________

That is a great quote!

#205 Spiltbongwater on 02.25.16 at 1:42 pm

I remember when Garth was a Liberal politician and wrote that TFSA was for the rich. How times change.

Never happened. I worked hard to bring the TFSA into being. You are a liar. — Garth

#206 Balmuto on 02.25.16 at 1:44 pm

#175 maxx
“In those years where it is possible, why wouldn’t you max out the RSP, take the tax credit and stuff it into the TFSA? Rinse and repeat the sh$t out of it.”

Well my RSP contributions come off my payroll directly (pre-tax) so I don’t get a tax refund for them. But I agree using refunds to make TSFA contributions is a great idea. It’s always easier to take a windfall like a tax refund to make a lump-sum contribution than to save up for one.

Anyway the big elephant in the room in this discussion is, of course, debt. When you’ve got balances on credit cards, LOCs or HELOCs, you always want to pay them off first, and rightly so. But you need to keep them paid off or the cycle continues. So in order to seriously make progress on your savings – registered or otherwise – you need to be consumer-debt free. It’s a situation most Canadians aren’t in and I only came into recently. Now I can get serious about filling up all that RRSP and TSFA room, and I’m making progress. But I’ve got a lot of catching up to do. Debt sucks.

#207 Smoking Man on 02.25.16 at 1:47 pm

#190 Chris in Nanaimo on 02.25.16 at 11:13 am
Weightlifting….

Best exercise you will ever do, especially for anti aging. Counters muscle loss and decreasing bone density.

I got my own squat rack, the 5×5 app and went from squatting zip to 6 large (315lb) in a year.

I might add some HITT, its just having the time.

Smokng man….. you can’t out exercise a bad diet. Cut out all sugar, and reduce carbs..

Get in that squat rack, and avoid all the gym machines….waste of time.

….ever noticed how all the really fit bods are the ones lifting heavy shit off the floor.
……………

Just the thought of working out get me light headed. Complete waste of good drinking time.

Going to gym for my wife’s sake, I have no intention of lifting any weights what so ever.

I’ll be doing the slow walk on the treadmill with my mirror shades on, while my wife ties to win the title of fittest sister.

#208 IHCTD9 on 02.25.16 at 1:54 pm

#189 Noel on 02.25.16 at 11:03 am
#109 IHCTD9 on 02.24.16 at 9:59 pm
#69 Brydle604 on 02.24.16 at 8:14 pm
—-

Awesome, the dogs are just crapping wisdom tonight.

Pay attention kiddies…
_________________________

Like the ‘wisdom’ that housing was a bad purchase 5 years ago?
__________________________________________

I don’t know where you live, but out my way; if you paid top dollar for a nice house in a desirable area 5 years ago – you’d not be moving right now without losing your shirt on the house. There is STILL a beautiful house down the road from me, 1/2 Million, will be 365 days on the market in April. Already cut 50 G’s off the price. House was bought about 4 years ago – buddy is going to take a bath, or need to move back in. Heat is on, Hydro is on, Driveway being plowed, Lawn is maintained, property taxes are 7500.00/yr. 1 year on the market and 10G’s up in smoke for an empty house. Taxes in my area going up 5.3% 2016.

There is another nice one that went late last year, it looks like it is going to be a flip attempt. I’ll be watching it, this guy bought himself a dud and will be losing on it as well.

2016 outside of Van/GTA is going to hand all the flippers their asses and then some. Plain to see even now.

#209 Silent the people on 02.25.16 at 2:00 pm

“cushy government jobs are hell on earth (IMO) I had one and left it – only made it two years before my brain and will to live shriveled up. ”

It does say something about government jobs when if it wasn’t for the extended benefits and golden pensions –
people would leave! Maybe the government needs to trim the fat instead of all the other things they are doing….

#210 MF on 02.25.16 at 2:01 pm

#184 Noel on 02.25.16 at 10:07 am

Sorry buddy but only someone *not very bright* would believe what the CBC says about the government that pays their salaries.

Personally I believe the complete opposite: overwhelming majority disapprove. Have come across very few people who like him. Usually those who do are 1) naive and young 2) just naive 3) benefit personally as a union member or something along those lines and don’t care about the country as a whole.

MF

#211 Ponzius Pilatus on 02.25.16 at 2:01 pm

#190
….ever noticed how all the really fit bods are the ones lifting heavy shit off the floor.
———-
Yeah, I always go out on garbage day to marvel at the wannabe Schwarzeneggers as they are carrying my shit away.

#212 Entrepreneur on 02.25.16 at 2:03 pm

Seems to me that people are working around the government or moving out. Time that government system works “for” the people. Have to be one of us to understand or read the “pathetic” comments. T2 acts like he one of us but his is only acting?

Jean Chrétien, broke his promise of ridding the GST.

#213 jess on 02.25.16 at 2:08 pm

What is a Flat Tax? (Surprise, it is a VAT!)
By Len Burman :: October 24th, 2011
http://taxvox.taxpolicycenter.org/2011/10/24/2255/

Flat Taxes Are Big in the Former USSR. Have They Worked …
https://www.propublica.org/article/flat-taxes-are-big-in-the-former-ussr.-have-they-worked

http://www.bloomberg.com/bw/articles/2013-05-15/flat-tax-wave-ebbs-in-eastern-europe

#214 maxx on 02.25.16 at 2:52 pm

#206 Balmuto on 02.25.16 at 1:44 pm

Keep going, brick by brick. Might sound boring, but only in concept. Being debt-free with cash in the bank is very nearly the best feeling there is. Great stress reducer too!
Great job Balmuto!

#215 max on 02.25.16 at 2:57 pm

The key to any market is liquidity, as long as you have it, you can make money. There is no liquidity if there is no buyers. Too much of something also destroys liquidity. Liquidity creates equity.

We know have people who borrowed the equity in their homes, who are know upside down on their homes. We have people retiring with little or no savings and expect their homes to top up their savings.

We also have young people who believe government always keeps interest rates low. Money becomes cheaper and assets like houses rise. They think real estate investment is buy low, renovate and sell for a profit.

Most of my generation, Gen X, didn’t think about retirement until we started hitting 40, the kids are almost out of the house. We see our parents the boomers retiring and cashing out of their great investment their house. So now we are investing more into our houses, borrowing more against it. They feel safe doing so because its an “investment”.

We now have the highest debt to income ratio in the history of Canada.

Do you know how you make the most money as a real estate agent? Well its a listing game, you don’t even need to sell the house yourself. The more listings you have, its easy money, the more other agents look at your listings. The key to making money in real estate is becoming a listing machine. How do you get listings? You make the client think you can get the most for their house. Its so easy a monkey can do it!

Back in the old days of the VSE. Stock brokers, well they had an extreme advantage, if you had some smarts. The top guys in Vancouver, they where stock brokers, corporate finance and trader all rolled into one. If you where very smart, the top promoters came to you for venture capital and corporate finance. Oh you think being a stock broker is picking stocks for your clients? No the stocks picked you. The key was liquidity. See in exchange for your capital, you got a discount on the stock price, you also picked up warrants. These allow you to buy in the future at the discount regardless of stock price. A good broker could make a million before the stock hit a dollar. See brokers are stock sellers, not pickers.

The key besides liquidity above your discount, was don’t be greedy. At times you even support the market by buying. As long as there is buyers, you make money. Brokers also had to keep their clients from being greedy. Many a dentist became a stock promoter on the side. They sold too much stock and kill the golden goose liquidity. You also get greed like Bre-X.

Long story too long. Vancouver real estate agents have killed the golden goose. They’ve run up the prices and killed liquidity! The foreign buyer salt is a big lie. The real money investors, don’t buy family homes and multi million dollar tear downs. You know how real estate agents loose their shirts, they build a spec house!

#216 Noel on 02.25.16 at 3:04 pm

#198 IHCTD9 on 02.25.16 at 12:44 pm
#176 Noel on 02.25.16 at 8:28 am

This will have almost no practical impact on anyone’s life.

___________________________________________

Wrong.

______________

The vast majority of people can’t or won’t fully contribute to the $5,500 TFSA limit, let alone the $10,000 limit.

http://www.huffingtonpost.ca/ralph-goodale/tfsa-contribution-limit_b_7290888.html

In *theory* it could make a big difference to a lot of people, but in practice, its a meaningless difference to nearly everyone in Canada. Raising the limit and lowering it was just political theater from both sides.

You’ve got to realize that people who comment on this blog represent a very small and disproportionally wealthy subsector of the country, and most people don’t even know what a TFSA is.

#217 family beagle on 02.25.16 at 3:05 pm

The greater fear, as it was explained to me…

Area code 604 houses increasing up to $1000 per day in sfh equity.
$80k down payment and $40k in payments nets $300k back per annum. Plus you can live in it. No brainer if you can buy in. This is west coast math.

Two years ago suburban sfh was $520k. This year 780k. Next year 1 mill. Year after will be 1.3 mill. Projected return on $80k down and 5 years of payments… almost $800,000. In eight years, could be closer to 3 mill for a suburban 604 rancher with yard.

That means 604 yokels who bought a moldy shack will exceed politicians, engineers, lawyers, doctors and most CEOs in Canada for best annual returns. Translation: a 7-11 clerk that bought in to YVR real estate eight years ago is smarter than most other Canadians in financial matters.

What’s the math…250% per year? No close in that opportunity window for the foreseeable future. All indicators point to Vancouver and GVRD enjoying a long run with haven status. If locals must leave due to the cost of living they are easily replaced with temp foreign workers who will gladdly live in multiples per rental address. Locals should have parlayed funds into a down payment back when rents equalled mortgage payments. Now the spread is too great and $4k per month in a mortgage payment is ridiculous on local wages. Should have bought when payment was $750/mo for a 604 bungalow. Within 20 years, a new, wealthier class of people will be imported to maintain rising prices and virtually replace the existing citizens who couldn’t keep up. BC gov is all about maximizing speculative gains in real estate and will use legislation, leverage and taxation to generate returns for home buyers and force out poor seniors and other unproductive members of society. There are ten other provinces for anyone born here who can’t compete for shelter. There are also trailer parks in the interior. 70% of YVR households have a stake in homeownership and will not reduce price. There are more buyers than sellers. Even the Finance Minister who makes policy is heavily invested in BC real estate and so far has made decisions that positively affect prices upwards and inhibit lower ilks from jepardizing that trend. BC is the last getaway for the world’s smart and rich. (The wealthy are sending their kids here because it is safe. That says everything.) $4 million for average Vancouver residential lot in 4 years would be dovish. Accepting this bull market separates a happy, wealthy 7-11 clerk from the angry advisors who missed the boat. Those who cashed in their RRSP to buy YVR real estate made the best financial decision of their lives and perhaps the best financial decision in Canada. When they sell, they can easily top up their rrsps. And in any three days from listing your sfh on the market, you can take that to the bank.

Vancouver is not experiencing a bubble. It’s experiencing the next leg up.

(Upon hearing this new perspective from my tire dealer, I immediately bought an RV park just outside 604 to maximize gains on the future welfare market.)

#218 Noel on 02.25.16 at 3:17 pm

#208 IHCTD9

I don’t know where you live…

_________

A decent neighbourhood in Toronto proper, doing quite well on the equity returns in the home.

Still broke Garth’s rule of 90 when I bought though. Refinanced after 5 years at the lowest rates in history. I got pretty lucky I guess, but you have to make your own luck.

#219 Stew on 02.25.16 at 3:21 pm

Eliminate FEDERAL income tax altogether. Create a consumption tax ONLY. People will have more money to spend. Simple but the dumb government will never do that

#220 Mark on 02.25.16 at 3:50 pm

“I think the lesson from this discussion is probably that Justin is going to go after RRSP limits next, as being somehow “only for the wealthy”.”

And what would be the problem with that? The government should be doing everything in its power right now to get people out of fixed income, and into taking more risk. The RRSP, like the TFSA, is basically a tax shelter that provides a disproportionate benefit to people who invest in fixed income. Fixed income investments which, of course, go into the banking system and are used as the source of funding for the real estate bubble.

Maybe abolishing RRSPs/TFSAs/RPP’s and just going with a UK-style capital gains and/or investment income tax exemption would be a superior way to go ($80k tax-free for a married couple according to one poster here!). Would be a lot simpler than having a whole industry of trustees running around, and a huge pile of limitations on the sort of investments that are eligible. Also, far more friendly to small business who would have an easier time raising capital.

#221 IHCTD9 on 02.25.16 at 4:01 pm

#216 Noel on 02.25.16 at 3:04 pm

The vast majority of people can’t or won’t fully contribute to the $5,500 TFSA limit, let alone the $10,000 limit.

http://www.huffingtonpost.ca/ralph-goodale/tfsa-contribution-limit_b_7290888.html

In *theory* it could make a big difference to a lot of people, but in practice, its a meaningless difference to nearly everyone in Canada. Raising the limit and lowering it was just political theater from both sides.

You’ve got to realize that people who comment on this blog represent a very small and disproportionally wealthy subsector of the country, and most people don’t even know what a TFSA is.
___________________________________________

I hear your point, but that is no reason to get rid of it. We’ve already seen the net loss in tax revenue compared to that of RRSP’s is peanuts. If it is true that no one hardly uses it, then doubling the limit still will not significantly increase revenue loss for the Gov.

Guys like me and many others hear aren’t so much rich as we are “long suffering” savers, cost slashers, and live a modest life well within our means to allow savings to happen. We’re not 1%’ers, but we could have really benefitted from the TFSA increase as our life choices have made that contribution increase a possibility.

Youth loses the most. If TFSA’s were around in my 20’s, I don’t know if I would have put money anywhere else. I currently maintain an “emergency fund” because I can’t pull from my RRSP’s without getting taxed big as I still work full time. A TFSA would eliminate the need for an emergency fund altogether. Education savings could have gone in there too. Any long term savings goal for any reason could have been done within a TFSA and reaped tax free gains while being built up for what ever use you had planned

Millennials on down lost huge with this blunder by T2 – way more than anyone else. The “rich” Boomers and early GenX’ers were always pretty much stuck with RRSP’s as the TFSA came along too late in the game for us.

#222 Nemesis on 02.25.16 at 4:09 pm

#ReptilianRuses,Or… #IsThatASnapperInYourTrousers,Mr.Dong?…

[G&M] – Ontario man who smuggled 38 turtles in his pants fined, given probation

…”Dong Yan of Windsor, Ont., was convicted earlier this month of illegally importing ringed map turtles, diamondback terrapins, three-toed box turtles, spotted turtles and red-eared sliders into Canada…

…Last December, a Canadian man caught with dozens of turtles in his pants pleaded guilty in a Michigan federal court to smuggling. Kai Xu was caught in 2014 at a border crossing with 51 snappers taped to his body.”…

http://www.theglobeandmail.com/news/national/ontario-man-who-smuggled-38-turtles-in-his-pants-fined-given-probation/article28905898/

#223 max on 02.25.16 at 4:23 pm

Fleecing the lamb is a good read. But really the old school brokers, may seem like they are rigging the game and stealing everyone’s money. Fact is they created a market. Now days its dead and nobody is making money. With gold above $1k, resource stocks should be flying, not real estate.

#224 Smoking Man on 02.25.16 at 4:45 pm

Ha The machine is going to go hard vs Trump tonight.

Look for rebuttals to these Sr Don.

Howard Stern tapes. “I am an honest man what you see is what you get, unlike these guys next to me who need to fallow there downers instructions”

KKK David Duke and white nazi support him. “Everyone loves me”

Show your tax returns. “Fk you, none of your business, Romney is a loser, couldn’t even beat Obama and you want me to listen to a loser”

That will just about clinch it for you.

Conservative Party of Canada, I`m coming going to be the back room guy. Butts you are mine.

#225 Mike on 02.25.16 at 4:47 pm

“The housing bubble is only in Vancouver, saucy bits of the Lower Mainland, 416 detached, hunks of the 905…”

How do you feel about Guelph? I have to admit I was surprised to read the above sentence.

#226 jess on 02.25.16 at 5:51 pm

https://www.newyorkfed.org/newsevents/speeches/2016/dud160115

=====
https://www.bettermarkets.com/blog/better-markets-stands-against-paul-ryan%E2%80%99s-dol-rule-opposition
https://www.bettermarkets.com/blog

#227 Herb on 02.25.16 at 8:43 pm

#197 IHTCD9,

c’mon now, I know you’re not dumb, just Conservative! The “x” = 1 B in this deal, but whatever billions the PM spends to what effect we can foresee realistically.

Perhaps “T2” is the politician of my dreams, the one who does what is necessary for the common good without fear or favour. I thought Harper was that man in 2006 and voted for him. And on the day of his first swearing in I realized that he was not, and damned him accordingly.

Haven’t reached that point with Trudeau. If I do, you’ll read about it right here, and as soon as it happens. But I’m not going to heap derision on him just because he is a Liberal and I am not. That’s the Conservative bag. I’ll wait see what he’s done and how it’s going to work.

You just might have to wait until the end of the year for my reaction. On the other hand, you could always post the Conservative program to rescue the economy – costed, with source of funding identified, please – and if I think it’s going to work, I’ll curse Trudeau for a fool if he doesn’t follow it.

#228 slick on 02.25.16 at 11:34 pm

#35 Rock beats paper

our situation exactly.