The fleecing

DOG HOTEL modified

Will T2 goose capital gains taxes in March 22 budget?

What a strange place this is. Reader surveys have told us a big proportion of the people who furtively read this blog in the can, on the elevator or while pretending to do something useful, are rich. One percenters. Before the last federal election we found a majority were conservatives (even though they hated the leader). They make big money. They have mucho assets.

But a quick read (if you can stand it) of the comments section also shows needy, whiny millennials, jealous genXers, moldy basement-dwelling renters and an alarming number of lefties who espouse social justice over capitalism, blame Boomers for an imperfect world, decry central banks, think markets are rigged, love tax-and-spend governments, hate the 1% and worship T2.

In other words, if we ever have a GreaterFool picnic, it’ll be pure carnage. Blood everywhere. So we won’t.

Looks like we’re about to embark on another issue promising to divide these groups even more than did the new eat-the-rich Trudeau tax bracket or the neutering of the harmless TFSA. Hey, here’s Paul, a rich guy with concerns the Liberals are about to stick it to investors with a new capital gains tax grab:

“Very long time reader on the blog and just wondering what you think the odds are of an increase in capital gains tax from current 50% to 75% or 100%. Would it be immediate or retroactive to beginning of year which would seem to drastically unfair as I have been invested for 10 years in some stocks with large gains.

“This knee jerk increased double tax could cost me a ton of cash (I know, big tears for your capital gains) but it makes me think I could have done just as well moving up in housing market when you consider no tax on capital gains of housing.”

For the record, when you invest in an asset that rises in value, it’s considered a capital gain. Because risk is involved (as opposed to holding a GIC or earning money from rent or a job), the tax system rewards investors. Half the gain is tax-free. The other half is taxed at one’s marginal rate. These days that makes the max cap gains tax about 26%. For most people, it amounts to roughly 15%, which means you keep 85% of the gain.

The lefties hate this (along with the dividend tax credit). They say all income, regardless of where it comes from, should be fleeced equally. So income from a job, from investing in a  high-risk Internet start-up, from a GIC at the bank, from renting out your basement, from your personal corporation – should be hit the same way, at the same rate. They oppose a tax system trying to guide people into higher-risk investments (that often lead to job creation), seeing this as just another sop to the wealthy.

The T2 gang was silent on any change to cap gains in the election platform, but a few days ago released a report (which was linked here) fueling the ire of the downtrodden masses. The Department of Finance claims the preferential tax treatment of capital gains ‘costs’ Ottawa about $12 billion a year in revenues that would accrue if they were taxed as regular income, like working at a Timmies.

Moreover, tax dude and advisor Jamie Golombek has mashed some numbers showing  75% of capital gains were claimed by people making over a hundred grand a year (the top 8%) and half by folks earning over $250,000 (yes, the 1%ers). That puts this issue in the crosshairs of a government that has already declared open season on the successful with (a) a new tax bracket, (b) the TFSA contribution fizzle and (c) coming rules to gut tax advantages of personal corps (the ‘doctor tax’).

So, this is our Bernie Sanders moment.

That avowed socialist (the kids love him, too) has as a part of his US presidential campaign the elimination of the capital gains advantage, bloating the top rate from 23.8% to 64.2%. But, alas, Bernie is toast. Americans – their 401k retirement plans stuffed with US equities – would never vote for that.

And neither did we, of course. As mentioned, the Liberal platform made no mention of diddling with taxation on investment income. For good reason. Swelling capital gains taxes here could divert a lot of risk capital to the US, since that can happen with a few mouse clicks. It would seriously disadvantage Canadian start-ups (which employ a lot of millennials). It would obviously impact the equity market and the hard-hit energy sector (which employs legions). “You could decimate an industry that’s already on its knees,” said one energy CEO this week. “We just hope the government is truly informed on this issue.”

Don’t we all?

In fact, the greatest revenue cost of the federal government in this area comes from not taxing the capital gains people make when selling their houses. This includes all those folks in the GTA and YVR who have made heaps of money without any effort, creating no new jobs nor adding to any payroll, who may have sold out to evil Chinese guys and whose tax-free profits added significantly to the wealth and generational disparity now gripping the nation. Besides, by winning the house lottery, tax-free, many of these sellers have simply saddled their (young) purchasers with a lifetime or debt, not tax-deductible. Suck. Blow. Oh Canada.

If the people really craved fairness – and affordable houses  –  they’d demand such leadership.

But don’t hold your breath. Just your nose.

242 comments ↓

#1 Canadian on 03.08.16 at 6:17 pm

So the NIMBYs and the social engineers who want oil banned, speed limits reduced and alcohol and cigarettes taxes into irrelevance think making it HARDER to diversify the economy is the way to diversify the economy?

Time to double down on working in construction or real estate I guess, its the only thing in Canada with any growth potential. Trudeau is out for the FI in FIRE.

Woe to any tech startup dumb enough to think Canada is a place to put roots.

#2 Jimmy on 03.08.16 at 6:21 pm

0
50
66 2/3
75
66 2/3
50
? :(

#3 Fred on 03.08.16 at 6:22 pm

Anybody seen my keys?

#4 Ole Doberman on 03.08.16 at 6:23 pm

Calgary is tearing apart at the seams, check out this place that finally sold:

http://www.prospectsweb.com/prospects/m.do?tk=a530fac0f3bd3025d42887ad5e542252

After 150K in renos and price reduced by 65K

OPEN HOUSE Saturday 27th 2pm-4pm<— ***** $65,000******* drop in price on this extremely renovated home located in a very quiet Estate area of Sandstone. Nice, safe cul de sac with a large, sunny west backyard. This over 2000 sq ft two story split has almost $150,000 put into this home over the last 3 years. From the roof to basement development you will never have seen a renovation like this one!!!! Book your appointment to view the incredible kitchen, bathrooms, flooring, granite, new windows, walk in closet with built ins, an ensuite to die for..etc etc etc. Easy access to Deerfoot Trail, Centre street and Country Hills Boulevard. Why buy a new home way out when you can have this rare opportunity to live close in and have all the finishings of a new home? 112 Santana Court N.W.

Wonder how the seller could have possibly made money on that!

#5 backbencher on 03.08.16 at 6:24 pm

Hear, Hear

#6 Suede on 03.08.16 at 6:25 pm

Brain Drain 2.0

When does the Exodus begin (if it has not already) if this goes through?

I’m liking the Phoenix area

Didn’t the Feds learn from the “We’ll tax the rich more” and then “We didn’t realize that we overesetimated this windfall by $2B”

no merde,

You think us investors won’t find another way to put money into the markets. come on now

#7 GB on 03.08.16 at 6:27 pm

As is typically the case, a balanced view is probably the correct one. And I think your world view is skewed in favour of the wealthy.

The thing is Garth, throughout history, a healthy balance between the wealthy and the working class is the steam that gets economies rolling.

What we have been witnessing over the past decade and a half is a complete yard sale on the working class in favour of tax breaks for wealthy corporations and those with the capital to invest (and hide it…eh ehmm..KPMG)

The result? What we have now. Stagnation and perpetually low interest rates just to keep our economies above water.

It just doesn’t trickle down sir. Just doesn’t. Greed tends to result in hoarding behavior and…well….off shore accounts to boot.

All that we are witnessing now is a healthy transition back to balance.

It’s probably the right things to do and I think history will both prove this out just as well as history demonstrates that systems skewed in favour of the 1% tend to result in epic economic failure.

I’m not sure why you don’t see this.

#8 acdel on 03.08.16 at 6:28 pm

So, if the lady T2 does decide to implement Capital Gains Tax from 50 to possibly 100% as well as adding an additional 300 thousand plus immigrants to Canada per year, what is the logical choice? Investing or RE?

#9 Nobody on 03.08.16 at 6:29 pm

My taxable funds are already invested in US companies – given that Canada’s economy consists of selling bitumen at loss, a few banks fleecing customers and an aircraft company that couldn’t give away planes if it included a free hockey player.
A hike in capital gains would hurt but I don’t see how I would escape that by being invested in VUN rather than VCN.

#10 Ft Mac House Guy on 03.08.16 at 6:30 pm

Sorry for being a little off topic here, but if we’re talking about Trudeau trying to tax us more, then I guess the topic of Carbon Tax is slightly on topic…

A tree can absorb 1 ton of CO2 in 40 years, or 0.025tons per year (FACT). Canadians each produce 14 tons of CO2 per year (FACT), so you’d essentially need to ‘own’ 560 trees in order to be carbon neutral, right? Well, there’s 318 billion trees in Canada (FACT) (2nd only to Russia), or ~9000 trees per Canadian. If my math is right, I’d say Canadians are definitely carbon neutral, no? What am I missing here? I’ve also read that when you include all industry, businesses, etc it works out to be 20tons of CO2 per Canadian, so still majorly net negative carbon emitters.

Also, based on the estimate that there are 3 trillion trees on Earth, and 7 billion people, that would be 428 trees per person. Canadians at 14tons per year is definitely on the high side globally, and I don’t know what the average is per person globally, but I’d estimate that 428 trees per person would cover us (many countries are like 0.2tons per year)… So if that assumption is correct, why the global warming? And if it really is as simple as planting 560 trees per person, then why isn’t any government pushing for more trees and instead pushing for carbon taxes to ‘push’ us to produce less carbon? Other than the obvious answer that governments are just using it as a tax grab, where is my logic skewed? If I’m even remotely correct, I sure hope people start talking about this more, and that eventually some MSM starts asking the question, because I’d love to hear what our governments (pretty much everyone except Wall in Sask) give for an excuse for scamming us out of our money.

#11 Frank on 03.08.16 at 6:32 pm

Instead of coming up with ideas of what not to do. We should come up with ideas of how tonoffer Canadians more financial security and combat income inequality.

#12 Bram on 03.08.16 at 6:34 pm

I voted for the Liberals.
The online vote-compass put me exactly in the middle of conservatives/liberals.

When I heard Justin promising to axe the JSF, my mind was made up: I don’t want Canada spending obscene money on something we don’t need.

Guess what, Justin flat out broke his promise a few days ago: http://www.defensenews.com/story/defense/air-space/2016/03/05/canadian-participation-f-35-program-remains-murky/81202784/

I don’t get it: traditional excuses like: “We had to compromise for coalition party” or “It turns out we cannot afford it.” do not apply here. Flat out promising one thing, doing another?

So my trust in him is dwindling at the moment.
I wouldn’t put it past him to turn up the taxes, including capital gains tax.

Bram

#13 common sense on 03.08.16 at 6:35 pm

Give people tax free gains on their first principal residence sale and tax at a percentage on each ensuing sale for life.

2nd sale 10%, 3rd sale 20%, and so on…

Everyone wins. Simple.

#14 ronh on 03.08.16 at 6:35 pm

Dont the banks take that gic money and loan it out to startups? I’m wrong! Who knew.

#15 Greg b on 03.08.16 at 6:36 pm

Could it be true Garth? What do we do if T2 destroys the CDN economy by goosing the cap gains tax?

#16 Rick on 03.08.16 at 6:36 pm

So glad I don’t work any more. My income is low, and the libs, get nothing!

#17 NoOneOfConsequence on 03.08.16 at 6:37 pm

All governments know how to do is raise taxes. There is no down sizing of government. It’s pathetic. If the government functionaries decided to down size government, the first thing they would do would be to establish a planning committee, and a new department dedicated to downsizing.

Hmmm….anyone see a problem here….

The biggest step one could make towards positive change would be to outlaw career politicians, and make it illegal for the government to borrow money unless the nation was at risk.

We need to stop the endlessly aimless growth and expansion of government.

#18 Mike in the Okanagan on 03.08.16 at 6:38 pm

I agree with you Garth. Either leave the cap gain rate alone (since they didn’t campaign on revising it) or tack the rate on all capital gain including houses. Let’s see how that goes over.

#19 MSM-Free Zone on 03.08.16 at 6:38 pm

You lost me at “Suck it Up”.

#20 JJ on 03.08.16 at 6:38 pm

Garth, what are your thoughts on this report:

http://vancouver.ca/news-calendar/city-releases-comprehensive-study-on-empty-homes.aspx

*10,800 homes out of the 225,000 studied were empty for one year or more.*

#21 tundra pete on 03.08.16 at 6:41 pm

Is this the 911 mainland China foreign buyers blog?

#22 MustyCouchPotato on 03.08.16 at 6:41 pm

Haha! First

#23 Cara on 03.08.16 at 6:43 pm

“They say all income, regardless of where it comes from, should tax fleeced equally.”

This sentence needs some help. If I give you free proof reading, could I get some free financial advice? We keep investing with TNLATB and it’s not getting us anywhere.

I finally got my husband reading this blog though, it only took 8 years of me saying, “Garth said…” So maybe at some point we will steer our ship alright. But we live in Alberta and things look to be titling pretty quick and apparently they’re weren’t enough life boats for the voyage.

#24 Mark on 03.08.16 at 6:43 pm

Capital gains taxes? I doubt it. “Because its 2015” guy might not have the greatest ideas when it comes to government finances, but I don’t think he’s that dumb as to attack capital formation in Canada. And applying capital gains tax to houses basically would be touching a sort of “third rail”, so no expansion of the tax there.

I could see (and kind of hope) that they close the loophole for REITs. And making rent on a primary residence tax-deductible would be nice (as homeowners don’t pay any income tax on their imputed rent). But in all seriousness, apart from a minor few tweaks, probably won’t see much in terms of tax changes other than those already announced. Perhaps they’ll roll out a cumulative ceiling for the TFSA though. I could totally see that happening.

#25 acdel on 03.08.16 at 6:45 pm

Interesting read:

http://www.bloomberg.com/news/articles/2016-03-08/phantom-goods-disguise-billions-in-china-illicit-money-outflows

#26 Doug t on 03.08.16 at 6:45 pm

can’t remember the the last good “leader” this country had – then again I haven’t voted in 30 years either.

#27 Death for Metal on 03.08.16 at 6:46 pm

Chicken Feed!

#28 Genuinely worried on 03.08.16 at 6:46 pm

This is a seriously scary post.

How probable is it that the government would make such a horrific move?

#29 Westcoaster on 03.08.16 at 6:47 pm

That would be one of the last things this country needs – punishing the few percent who (like me) have no company pension but who have diligently put money into something resembling Garth’s balanced portfolio over the years. To have that taxed at an increased rate would create some sense of equitability perhaps but would, at the same time, plunge many thousands more into financial insecurity, n’est-ce pas?

#30 Investx on 03.08.16 at 6:53 pm

Yeah, discourage investing, entrepeneurship and trying to get ahead. Real smart.

The Left can be so loony.

#31 Silent the people on 03.08.16 at 6:53 pm

Capital gains should be taxed at a higher rate! We need
the money to keep and grow the government jobs! The
idea of cost cutting is absurd! Governments need your money! A simple general tax return is also required! “How much did you make? Send it in!”
Would be sufficient!

#32 Ed on 03.08.16 at 6:54 pm

Only about 1200 more sleeps till we get to have a say in things again…hope I make it.

#33 Jonathan on 03.08.16 at 6:57 pm

Agreed. If they were to move to tax capital gains same as income, then there should be no free ride for capital gains from housing period. And don’t try to stand on the “housing is a right how can you tax someone’s residence…” Either treat it all the same way, or don’t touch it, can’t just diddle the half that suits your needs.

#34 RTTG on 03.08.16 at 6:58 pm

“They oppose a tax system trying to guide people into higher-risk investments (that often lead to job creation), seeing this as just another sop to the wealthy.”

I’m an economist and so do I for a few reasons that Garth should know a little better:

1.) The problem right now is not on the supply side. Businesses are plenty liquid, sitting on excess cash. It’s just nobody will buy their stuff. Customers create jobs. Employers just find them package them, and subcontract them to staff.

2.) Don’t pretend that state laxity in allowing labour-selling-corporations with non-compete clauses, oh, sorry, I gotta translate that into neoliberalspeak: Greedy unions. Hasn’t driven down wages, increased the rewards to capital holders and that this hasn’t stuffed asset prices so badly that every low-information retail investor found housing the only place left where they might ever hope to compete. Low wages are keeping entrepreneurs from getting started. I know Garth is smart enough to understand a second-order effect when he sees one, and Card-Krueger have more than established it… not to mention the American and Canadian experiences with minimum-wage to productivity ratio over the last decade-and-a-half.

3.) We gotta fund Basic Income, so yes, the boomers must pay. The pensioners must pay. The whiny needy millenials are the only age bracket that’s seen their income fall in real terms.

It’s not because we’re too busy tweeting, it’s because there’ve been massive barriers to entry to the middle-class erected so that the boomers, after deciding to raid the public purse and sell the silverware to lower their taxes for the last thirty years, could ensure that their dilligent hard-working child with sciatica from lugging around all those participant trophies, won’t be burdened with the work or lifestyle of the precariat. We need to cut everyone a check. It will remove so many distortions from the economy.

If nobody ends up homeless because they don’t like the working conditions, employers (who also get BI and who also like money, just as workers do) will have to stop trying to burn through their staff and treat their human resources as renewable resources.

Free markets aren’t free, Garth. Read your Stiglitz.

PS: I’m also a conservative.

#35 Retired Boomer WI on 03.08.16 at 7:01 pm

Taxing Capital Gains on a house (or land) is a CAPITAL idea!! That might screw the current flippers, as to qualify for long term Capital gains, doesn’t the asset need to be held more than a year (US rules), otherwise any gain is at your current marginal rate.

That might ‘pop’ the RE balloon without much bloodshed at present.

You could place into the law RE held more than 10 years is exempt from the Tax.

#36 Damifino on 03.08.16 at 7:01 pm

Vancouver City council has received the results of an independent power consumption study indicating that purchased city condos are about 12.5% vacant:

http://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=VG080100&mobile=false

The mayor of the world’s ‘greedest’ city, Mayor Gregor Robertson commented:

“We know that there are thousands of units of empty homes that potentially could be available for rental, when we have one of the tightest rental markets in the world,… This could be a great new supply of housing — thousands of units that could be available and also generate revenue for their owners.”

Translation from ‘speculation-speak’ into English:

“We know that thousands of misguided condominium purchasers here in Vanhatten are sitting on vacant units waiting for huge annual double digit gains to materialize. Meanwhile, steep carrying costs are eroding these unwise investments. This could be a great opportunity for them to mitigate their ongoing losses to some degree and reduce their potential for defaulting on city taxes.”

#37 Bytor the Snow Dog on 03.08.16 at 7:02 pm

@7 GB-

Sums it up perfectly.

#38 Winterpeg on 03.08.16 at 7:03 pm

“In fact, the greatest revenue cost of the federal government in this area comes from not taxing the capital gains people make when selling their houses. ”

Are we now talking about possible capital gains on a principle residence as well as a second property ( e.g.: rental or cottage property, once it is sold)?

#39 crowdedelevatorfartz on 03.08.16 at 7:04 pm

If there are elevators involved in a group picnic…….I’m in.

#40 kommykim on 03.08.16 at 7:04 pm

Besides complicating your taxes, I don’t see what the big deal is. Capital gain rates have changed in the past:

http://www.taxspecialistgroup.ca/public/taxPerspectives.asp?art=20&amp;

#41 Millennial Realist on 03.08.16 at 7:04 pm

Tax every dollar, from every source, absolutely equally.

Real estate gains, stock profits, inheritances – they should all be treated the same as other income.

And we would all enjoy lower tax rates as a result.

I can hardly wait for the one percenters to now attack me with their “reasons” why we should instead maintain a hopelessly convoluted, preferential taxation system that favours the few.

Fire away, all you entitled scam artist criminals and intellectual frauds :)

(First you better take those calls on line 1 and 2, from CRA and KPMG, could be important!)

http://www.cbc.ca/news/business/cra-kpmg-anger-at-secret-deal-1.3479792

The reasons were detailed in the post. Read it. — Garth

#42 Callous on 03.08.16 at 7:06 pm

T2 is making me callous… namely the ‘struggling middle class’. He makes broad strokes and while we are borderline 1%-ers, I know full well what it was like to grow up poor, be in the middle class, and only in recent years, move above that.

My observation is that too many of the so called struggling middle class are in fact, not struggling. Like Garth’s post, the love to get a new car, or a car lease, granite countertops, go on vacations, wear expensive yoga attire, buy coffee at Starbucks, etc.

In my upbringing, there was none of that. My mom never once bought me ice-cream outside, because the cost of one cone could buy an entire carton. We would line up multiple times at the store to buy rolls of toilet paper when it was on sale. Unmatching furniture at home – you got that right.

The point of my rant? It’s okay to struggle and scrimp and save. But don’t the hell make the 1%-ers be the bad guys here. Heck, I’m perfectly happy to pay more taxes – but you should show me appreciation for my savings, hardwork, risk-taking, job-creation, and investments.

Instead, the real enemy are spenders. And those who go into debt unnecessarily.

Tax spending. Consumption taxes are good (with rebates for low-income folks).

#43 Mike on 03.08.16 at 7:06 pm

I think it’s time to have a capital gains tax on all housing effective Jan 1, this year.

It will get all the cheats and greedy ones, bring the value of property down and catch the off shore purchasers as well.

#44 Mark on 03.08.16 at 7:09 pm

“*10,800 homes out of the 225,000 studied were empty for one year or more.*”

Sounds like a lack of physical demand relative to supply. Like Nortel (and Cisco’s and Lucent’s) warehouses of Internet routers that were produced in speculation of being able to sell them.

As prices continue to fall, a lot of that inventory will flood the market.

#45 Smoking Man on 03.08.16 at 7:10 pm

Why is anyone suprised.

Gerald Butts who is T2 and Wynnes go to wack job. Google him.

He wants a zero emission economy, only way to get that is to destroy the economy, T2 policys will do that.

This ain’t going to be an accident. It’s deliberate.

Butts is no fool, I bet by the time your daughters are selling there asses for a loaf of bread , Butts will be richer than Al Gore.

Look at Greece we are next.

#46 Randy on 03.08.16 at 7:15 pm

Liberals will endorse full taxation on profits made on the sale of your home, condo or farm. It’s inevitable. They have no choices left and they refuse to cut spending.

#47 Panhead on 03.08.16 at 7:18 pm

Out here in 604land surely we must be against the tax wall already. Everybody bitching, bridge tolls, ICBC skimming, Hydro skimmimg, etc etc etc. Now the Feds talking more? And on our houses? The moister’s will love this. By the way, how many province’s have the deadly property purchase tax? Any? All?

#48 TurnerNation on 03.08.16 at 7:18 pm

This comments section will balance itself.

#49 My Life is a Pile of Shit on 03.08.16 at 7:19 pm

#22 Cara on 03.08.16 at 6:43 pm

“If I give you free proof reading, could I get some free financial advice?…apparently they’re [sic] weren’t enough life boats for the voyage.”

There is nothing more embarrassing than asking to be a proof reader and making the most egregious grammatical mistake (there/their/they’re).

#50 Trojan House on 03.08.16 at 7:23 pm

#7 GB
“…as history demonstrates that systems skewed in favour of the 1% tend to result in epic economic failure.”

Not true. History actually demonstrates that economic failures came as a result of government debt and taxation. The net result has been revolutions or war.

#51 Looney Baloney on 03.08.16 at 7:24 pm

who may have sold out to evil Chinese guys

Aha! Good to see you have finally coming around on the HAM issue.

I guess the gubment needs more money for the upcoming Ontariowe handout plan, which the rest of the provinces would then adopt. Why do we even bother. Might as well sign up now for a good seat on the gubment’s lap and get permanently attached to its teat.

Mr. G, how come you are wasting your time writing blogs, when you should be trying to figure out ways to make more money, so us plebs can ask the gubment to steal it and fork some over to us?

#52 Nemesis on 03.08.16 at 7:24 pm

“We just hope the government is truly informed on this issue.” – O&G CEO

#TopOfThePrimeMinisterialAgenda!… #Oh,Wait.

http://tinyurl.com/htybgbo

http://tinyurl.com/hm6t2yx

http://tinyurl.com/gqrt9v3

#53 paul on 03.08.16 at 7:26 pm

#27 Genuinely worried on 03.08.16 at 6:46 pm

This is a seriously scary post.

How probable is it that the government would make such a horrific move?
————————————————————-
At one time there was no tax on interest earned for the bank. Then they brought in tax after the first $1,000 now what ever you get is taxed.
Also we had a $500,000 life time tax free on investments poof gone with a stroke of a pen .

They want it all tax when you make it,tax hidden in every thing you buy plus another 13% puffer just for fun!!!

#54 prairiegopher on 03.08.16 at 7:28 pm

DELETED (anti-immigrant)

#55 Red Deer Rob on 03.08.16 at 7:28 pm

It’s way too easy to become apathetic in this day and age. Every month were trudging closer and closer to that socialist utopia lefties envision.

What does a whiny millenial do when their economic opportunities and freedoms are being eroded?

Maybe the best thing to do is sit back and enjoy this decline. Or, inversly, go balls to the wall, leverage to the tits and accelerate this insanity.

The libertarian in me hates this system.

#56 Looney Baloney on 03.08.16 at 7:29 pm

@ #22 Cara

But we live in Alberta and things look to be titling pretty quick and apparently they’re weren’t enough life boats for the voyage.

Might want to double check your own sentences before offering grammar Nazi services to others.

#57 Looney Baloney on 03.08.16 at 7:31 pm

@#18 MSM-Free Zone

Yeah I can see how that would have distracted you.

#58 Joseph R. on 03.08.16 at 7:31 pm

#12 Bram on 03.08.16 at 6:34 pm

The legislative branch of the government can’t break or change, modify or nullify contracts: doing so would violate a hallmark of Common Law, which is what Contract law falls under. Free men (and women) and moral persons (Corporations) have the right to willfully enter a contract with any parties he/she/it chooses without government interference. If the government deems say contract undesirable, it must provide appropriate compensation to all parties.

The only branch of government that can break a contract is the judicial branch (judges and courts) by declaring it invalid and it can only do so for VERY specific reasons: e.g.: negotiated and signed under duress, signed not in good faith, fraudulent representation and so on.

Also, the legislative branch can’t get out of an obligation or contract by declaring a party guilty of crime without going through a trial. That would be a considered as a bill of attainder, which is unconstitutional.

#59 The Other Chris on 03.08.16 at 7:36 pm

What a terrible move, if true.

I’m wondering if they might just be planning to scrap the Lifetime Capital Gains Exemption (LCGE) for qualified small business corporation shares, rather than changing the rules for all capital gains. That would be along the lines of targeting small business owners, whom Trudeau expressed disapproval of during the campaign.

#60 Thomas on 03.08.16 at 7:36 pm

I don’t think I have ever seen one person just destroy an economy on every front as I have seen these past few months. Canada will be set back decades. I’m in the USA, and hope to move back one day when I retire. But at this rate their might not be anything worth coming back too.

++++++++++++++++++++

Trudeau threatens to wipe out $36 billion investment in BC LNG terminal

Malaysia’s Petronas threatening to abandon LNG project over new climate change rules

Claudia Cattaneo | March 7, 2016 6:32 PM ET

CALGARY • Malaysia’s Petronas is frustrated that Prime Minister Justin Trudeau’s climate-change priorities are introducing new uncertainty for its proposed $36 billion Pacific NorthWest LNG project in northern British Columbia and has threatened to walk away if it doesn’t get federal approval by March 31, according to a source close to the project.

#61 Throwaway on 03.08.16 at 7:37 pm

Wouldn’t this trigger a severe ‘correction’ in Canadian financial markets?

#62 common sense on 03.08.16 at 7:38 pm

#28 Westcoaster

They have to get the money somewhere….why not on those who have it in RRSP, TFSA’s…

They know it’s there for the picking. Or should I say Purging?

Once again, better to be a 1%’er and take care of yourself or a low income person and have the middle class take care of you.

Thank you greed , bad decisions and ageing demographics!

#63 meslippery on 03.08.16 at 7:40 pm

#4 Ole Doberman on 03.08.16 at 6:23 pm

List and sold price ??

#64 not 1st on 03.08.16 at 7:41 pm

I think Garth once said that govt is never going to mess with all these programs so stop worrying about. Worry about climate change or something else more real.

Lets list them

1. Income trusts
2. TFSAs
3. Income splitting

and soon to be;

4. personal corporations
5. capital gains tax
6. dividend income
7. carbon tax
8. new tax brackets

Incorrect. — Garth

#65 Nemesis on 03.08.16 at 7:46 pm

#ItGetsBetter,Or… #BecauseIt’s2018?…

“I am pleased to announce today, right here, that a Canadian woman will be featured on the very first of the next series of bills expected in 2018,” Trudeau told a news conference marking the occasion.

[TimesColonist] – Canadian bank note will feature a woman in 2018, nominations invited

Prime Minister Justin Trudeau and Finance Minister Bill Morneau marked International Women’s Day on Tuesday by launching the search for a new face for the currency…

… The bank is asking the public to nominate women deserving of the recognition, provided they meet the criteria. Submissions can be made on the bank’s website between now and April 15.

The nominee must be a Canadian woman who demonstrated outstanding leadership, achievement or distinction in any field, benefiting the people of Canada…”…

http://www.timescolonist.com/canadian-bank-note-will-feature-a-woman-in-2018-nominations-invited-1.2192975

[NoteToGT: Personally, I rather fancy Canada’s best known nutritional expert: https://upload.wikimedia.org/wikipedia/commons/f/f9/Pamela_Anderson_2.jpg ]

#66 Victor V on 03.08.16 at 7:49 pm

The Chase: With $1 million in hand, two Vancouver expats set out to buy a semi in Trinity Bellwoods

http://torontolife.com/real-estate/houses/the-chase-trinity-bellwoods-semi/

#67 Cici on 03.08.16 at 7:51 pm

What a stupid government. But the last one was too.

And what a stupid nation. People who think that merely piping oil to tidewater will solve Canada’s Energy problem, “leftie-socialist” (yeah,right) youth who spend all their money on haircuts and cell phones and whining about foreigners and 1%ers who create jobs because they can’t buy houses, and seniors and moisters who are dangerously leveraged to the hilt on RE, but have precious little actual disposable income…hence a pending credit and retirement crisis.

Here are my predictions:

* Justin attempts to eat the rich with his new capital gains taxes
* The rich give him the big middle finger by offshoring their money and setting up tech firms and medical offices in other countries
*The retirees keep speculating on houses, and the millenials keep getting squeezed out
* The millenials can’t find jobs after big corpo torques out of Canada
* The millenials can’t find doctors to treat their STDs
* And eventually, there’s a real estate downturn that wipes out a bunch of boomer and moister paper wealth
* The liberals never get re-elected in Canada

AMEN

#68 IHCTD9 on 03.08.16 at 7:52 pm

#12 Bram on 03.08.16 at 6:34 pm
I voted for the Liberals.
The online vote-compass put me exactly in the middle of conservatives/liberals.

When I heard Justin promising to axe the JSF, my mind was made up: I don’t want Canada spending obscene money on something we don’t need.

Guess what, Justin flat out broke his promise a few days ago: http://www.defensenews.com/story/defense/air-space/2016/03/05/canadian-participation-f-35-program-remains-murky/81202784/

I don’t get it: traditional excuses like: “We had to compromise for coalition party” or “It turns out we cannot afford it.” do not apply here. Flat out promising one thing, doing another?

So my trust in him is dwindling at the moment.
I wouldn’t put it past him to turn up the taxes, including capital gains tax.

Bram
_______________________________________

“Ooh Superman where are you now
When everything’s gone wrong somehow
The men of steel, the men of power
Are losing control by the hour.”

Get used to it. He’s screwed and we’re all going to pay for it.

… and it’s only just begun.

#69 Brazil ex-pat on 03.08.16 at 7:58 pm

Thank you all for listing all the reasons why we left Canada. Good luck to you all !!

#70 IHCTD9 on 03.08.16 at 8:03 pm

#7 GB on 03.08.16 at 6:27 pm
As is typically the case, a balanced view is probably the correct one. And I think your world view is skewed in favour of the wealthy.

The thing is Garth, throughout history, a healthy balance between the wealthy and the working class is the steam that gets economies rolling.

___________________________________

Won’t work.

You’ll get the opposite of what was intended

95% guaranteed.

#71 VICTORIA TEA PARTY on 03.08.16 at 8:04 pm

#7 GB — YOU’RE OUT TO LUNCH

“…All that we are witnessing now is a healthy transition back to balance.”

Stuff and nonsense!

You’ve not studied your economic, nor any other history, in that written exercise of your’s.

Why? It displays your general ignorance of what makes the economic world go ’round AT THIS TIME.

It is not the greedy one percenters, of whom there are hardly any in our fair land.

It is the unbelievable amounts of debt, racked up by every industrial country since 2008 (through quantitative easing) that is driving economies into oblivion.

Instead we must thank central banks everywhere, and their so-called “betters” in the political and business elites, for encouraging such outrageous behaviours.

The pols wanted the money-printing to persuade stupid voters, that the loot would bring prosperity, and re-election of said pols.

And then there were the business classes (including the tiny numbers of one percenters) who began trading in this funny money for a seemingly unlimited amount of filthy lucre (including profits) thanks to pocketing lots of very low interest rate charges, that accumulated as the money was printed up seemingly without end. A real pile has been amassed since ’08. And some central banks are still printing up this junk.

The beneficiaries in the US and EU, as just two examples, would INCLUDE shareholders of commercial banks(including pensions funds everywhere, your’s as well BTW).

While the sources of this money rankles and nauseates normal folks there is an upside: those dividends circulating throughout our overindebted and slow-growing economies kept, and still keep, tummies full, cars on the road, real estate going up, yuppies bitching about the environment, and so on.

The money comes illegitimately for sure but there has to be some upside to what is a Hell-bound train of a world economy.

Taxing the very rich more will NOT SOLVE YOUR PROBLEMS. Put them in the poor house and your life will suck more than you can possibly imagine. The class structure lives and will never die.

I hope St. Garth, of Better Times Just Around the Corner,
is NOT privy to anything else that might be ongoing behind the scenes, but which he cannot write about now.

If he is then, #7, you’ll get your wish, and what you damn-well deserve. It won’t be pretty. And you won’t be so sanguine about the wonders of more socialism to come.

#72 Entrepreneur on 03.08.16 at 8:09 pm

Picnics can be rewarding even when it rains.

Trees and carbon tax #10 Ft Mac House Guy…But, but that sounds good but does it matter where the trees are planted or not? The math adds up but take away the trees that are shipped raw to other countries like in B.C. and you have a (what shall I call it) earth’s treeless valley. There are other issues here as well, taking material out of the earth (tree roots, oil, gold, water, etc.) that is upsetting the planet. The First Nations on 350.org are saying to leave the oil in the ground and I agree.

We need a business leader with an understanding of the climate. One who can relate to the small guy and speak for us. Oh right, we have welfare or unemployment insurance or some other social group ready to throw us in when not working and when that runs out become homeless.

No wonder in the seventies and eighties ran to work for the government. in the seventies some of us worked to stay away from government social assistance but now it is impossible as you would fall behind and sink.

#73 Seventh Saul on 03.08.16 at 8:09 pm

Sorry for the trouble, but somebody is going to have to explain this one to me.

From what I understand, “diverting risk capital to the US” by investing outside of Canadian markets won’t actually reduce your Canadian tax burden (assuming equal returns), as capital gains are treated the same by the CRA no matter the nationality of the investment target.

It seems to me that the only way for Canadians to dodge a lower capital gains exemption in Canada is to pick up and move to another country with a higher capital gains exemption and file taxes there.

#74 That guy on 03.08.16 at 8:13 pm

The idea that there is large risk in the stock market and therefore a lower capital gains tax is justified is silly. First, over long time periods, as this blog has said over and over, the stock market is exceptionally safe and provides a superior return compared to housing. Second, you only get taxed if you make money as a whole – i.e you can bank capital losses. That’s a pretty sweet low risk deal if you ask me.

Also, making housing taxable would be amazingly stupid right now – at the top of a bubble??. Let everyone bank a ton of capital losses once the eventual corrections happens? NOPE.

Capital gains are earned, or capital losses incurred, on a host of assets. This is not a stock market issue. — Garth

#75 Ole Doberman on 03.08.16 at 8:15 pm

#62 meslippery on 03.08.16 at 7:40 pm

#4 Ole Doberman on 03.08.16 at 6:23 pm

List and sold price ??
—————————————————–
Who knows man it’s Canada – that’s top secret to protect the industry.
Hopefully Super Gartho will change that.

#76 acdel on 03.08.16 at 8:17 pm

#64 Nemesis

I think that T2 would be a shoe in, Pam second but our Queen Elizabeth may have something to say about that! :)

#77 Andrew Woburn on 03.08.16 at 8:17 pm

“The lefties hate this (along with the dividend tax credit). They say all income, regardless of where it comes from, should fleeced equally.”

People, we fought this battle once already in the early 70’s when the Carter Commission set out to overhaul income tax. The Commission said, loud, clearly and often, that a buck is a buck and all profits should be taxed at full rates including capital gains. Before this there was no tax on capital gains at all. The oligarchs were not amused.

Mr. Carter was a better policy wonk than he was a politician. By the time the dust settled, the “buck is a buck” mantra was roadkill and our current 50% capital gain regime was in place. Not even the radical Trudeau senior tried to mess with this compromise, he who brought in wage and price controls and the War Measures Act.

The US has just woken up to oligarchs but we’ve always had them starting probably with the “Family Compact”. They are just a lot quieter than their US counterparts and more effective. If our shiny new PM wants to take them on over capital gains in the middle of a serious business slowdown, he’ll wish he had invaded Syria instead. That is, of course, unless social democracy has suddenly broken out in Canada.

#78 IHCTD9 on 03.08.16 at 8:20 pm

#23 Mark on 03.08.16 at 6:43 pm
Capital gains taxes? I doubt it. “Because its 2015” guy might not have the greatest ideas when it comes to government finances, but I don’t think he’s that dumb as to attack capital formation in Canada.
_____________________________________

I dunno Mark, is he that dumb?

Look at all the help he has given Canadians so far.

I would trust a milkweed to run the country better than Trudeau.

A wild parsnip would produce better policy than Trudeau, and be less irritating to boot.

In fact, I would sooner see a 4×8 sheet of plywood in Ottawa before Trudeau.

Anything that would sit there silent, doing nothing at all, would be better than that blockheaded twit we are currently stuck with.

#79 mathman on 03.08.16 at 8:21 pm

Taxing capital gains at a higher rate is such a great idea! Lets make it punitive for successful people, innovators and entrepreneurs to do business in Canada. The hard working successful people in this country already pay so little in tax. Capital will continue to flood into the country to support business despite offering no risk premium to potential investors! BS.

this is another idea that will render Canada the great land for the poor, and devoid of any innovation.

today because of our fascination with RE, Canadian style entrepreneurship = working a crappy job in the public sector with no chance of getting fired and moonlighting
as a property God buying 3 condos and renting them out cash flow negative each month thinking you are brilliant in the process

Canadian style innovation – turning your basement into a rental suite because that is the only way to pay the bills. You have a great place with some dick in the basement playing his or her guitar that entertains their tinder friends nightly.

The longer the gasbag inflates, the harder the fall will be. I’m more than happy to relocate to another country the second I am asked to pay more and or taxpayers are asked to bail out people that blew their brains out speculating on real estate.

What T2 and his fellow liberal arts grads fail to realize is that it has never been easier to emigrate in history if you have the right skill package. Making things difficult for those that create wealth for themselves and jobs for others in the process is not a stimulative policy.

#80 Gulf Breeze on 03.08.16 at 8:25 pm

I’m all for anything that encourages a huge business exodus from the U.S. to Canada.

If Garth is correct, some of the things I would personally like to see implemented, like an increase in capital gains, probably shouldn’t take place.

It’s weird, I like paying taxes. It makes me happy. I like hospitals, schools, roads, criminal justice infrastructure.

In short, I really dig a civilized society and feel privileged to be able to be in a position to help pay for it. If Trudeau wants to raise my income taxes, I’m all for it.

I don’t own a car, don’t buy a lot of clothes, have no kids, very little debt. I even cut my own hair. I make a fair amount of money.

I want to live in a world where everybody’s basics are taken care of.

#81 sockeye sam on 03.08.16 at 8:28 pm

#19 JJ
Didn’t the hydro companies promise they wouldn’t be spying on us before they implemented the SMART METERS. So now they can track if the house is occupied or not by gauging the power usage.If these people who buy and fly are really worried about the smart meters watching there movements all they have to do is buy timers for the appliances. Problem solved. I wonder how the city of Vancouver is about to have first contact with the absentee home owner and what are they going to say. “We’ve been spying on you?I think they tried that with the pot growers and it got shut down.

#82 For those about to flop... on 03.08.16 at 8:28 pm

So, this is our Bernie Sanders moment.-Garth

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

You mean we don’t have to brush our hair anymore?

M41BC

#83 rOCK BEATS PAPER on 03.08.16 at 8:28 pm

Happy woman’s day! Gambay

#84 james on 03.08.16 at 8:32 pm

“Reader surveys have told us a big proportion of the people who furtively read this blog…are rich.”

That conflates income with wealth.

A good number of readers have high income. That does not necessarily mean high wealth.

I surveyed both. — Garth

#85 One Percenter on 03.08.16 at 8:33 pm

Sorry whiners, but as a deserving member of the elite, my dollars should be worth more than yours.

Is it my fault that you are poor, or a woman, or black, or did not position yourself to have access to insider information, or simply that you chose your parents badly?

Sheesh!

Get over yourselves. You are pathetic.

We make the dough, we make the rules.

Even when you think you voted for ‘change’, LOL.

Stop whining and go to bed. The tax farm needs you to show up for work on time.

Obey and learn.

#86 For those about to flop... on 03.08.16 at 8:38 pm

Boss,during your time as a politician was the preferred method of investing amongst your colleagues real estate or stock market?

Seems like today they’re all pro real estate.

M41BC

#87 james on 03.08.16 at 8:39 pm

#1

“Woe to any tech startup dumb enough to think Canada is a place to put roots.”

Oddly enough, I’m participating in the creation of a Canadian startup right now (even though I live and work in the USA). The other founders are resident Canadian citizens.

Why? The changes in the Canadian economy are actually causing major pressures on established industries that have traditionally been inefficient and unresponsive to consumers. Part of the cartel/protectionist mentality in Canada that is starting to come under some pressure. We see an opportunity that is worth exploring.

It is somewhat sad that the last thing Canadians seem to think of is starting a business. The default approach to life planning seems to be one of two options:

1) angrily demand the government takes care of you
2) gather up your clams and plunk them down on the most pricey home you can afford

If you tell your Canadian mom that you are spending 200k on a down payment, she’ll pat you on the back. Tell her that you are putting 200k down on a business venture, she’ll tell you that you are crazy. It is too risky, she will say.

#88 WalMark of Sadkatoon on 03.08.16 at 8:40 pm

condo buyers in vancouver and toronto are nuts. seriously. wtf

http://www.financialpost.com/m/wp/blog.html?b=business.financialpost.com/news/economy/bubble-fears-spread-beyond-housing-bears-as-vancouver-condo-building-smashes-records

#89 Bottoms_Up on 03.08.16 at 8:47 pm

#7 GB on 03.08.16 at 6:27 pm
——————————-
Yep. The rich have lobbied hard to ensure the more money they have, the less tax they pay. And it use to be CEOs made 10x the average worker. Now it’s 100x, or more. Taxes buy civilization…safety… and paved roads.

We really do need solid leadership that stands up for the middle class, but also that understands these macroeconomic issues of taxation and impact on the economy and jobs. Remove loopholes, increase the personal limit, bust the people and companies that are doing illegal stuff to hide their money….would be a good start.

#90 Mark on 03.08.16 at 8:53 pm

“If you tell your Canadian mom that you are spending 200k on a down payment, she’ll pat you on the back. Tell her that you are putting 200k down on a business venture, she’ll tell you that you are crazy. It is too risky, she will say.”

I hammered away at this point in one of my posts yesterday. One can buy already well established, de-risked Canadian businesses for an after-tax equivalent of roughly 1/3rd to 1/5th of the cost of housing. That is to say, investing one’s (20%) downpayment funds in simple XIU, yields exposure to the same amount of after-tax return on investment that a condo delivers 100% paid up (and most don’t have the funds to pay up on a condo purchase up-front, so they finance it, which usually makes the cost situation even worse!).

There are very few ‘free lunches’ in modern Canadian society. Avoiding the overpriced housing market and investing in the out of favour stock market is one of the very few “free lunches” we have these days. At these extremities, it can easily mean the difference between retiring at 45, or retiring at 60. Trips overseas every year, or a perpetual string of “staycations”. RE investors are pretty much lighting money ablaze these days by buying or continuing to hold RE.

(and no, my momma doesn’t think I’m crazy, although the past number of years have really tested my patience and those of others who own investments in lieu of owning houses, that’s for sure!)

#91 dosouth on 03.08.16 at 8:54 pm

So any bets on the prime rate tomorrow….I’m hoping for a drop…

No change. — Garth

#92 Bottoms_Up on 03.08.16 at 8:56 pm

#70 VICTORIA TEA PARTY on 03.08.16 at 8:04 pm
———————-
Riiiight…..privatize profits, publicize debt. Bailouts….companies such as apple hiding billions from taxation offshore…under-the-table deals…..unclaimed rental income….etc. etc. Yes, there is a reason governments need to take on debt.

#93 Cici on 03.08.16 at 8:56 pm

#35 Millenial SURrealist

Dude you are out to lunch…inheritance money has already been taxed. So you are proposing double taxation…that’s winner. Your “brilliant” strategy will just result in more boomers “gifting” their money untaxed to their precious snowflakes before they craok, thus encouraging new heights in the real estate bubble and more RE money laundering.

Maybe we should double or triple tax your university fees, haircuts, vespa, iPhones and groceries too…if we really want to be “equal” and “liberal.”

God, Canaduh is doomed.

#94 understood by few on 03.08.16 at 9:03 pm

So it sounds like the same geniuses that think the tfsa is for the rich now think every dollar of income should be “taxed the same”.

Of course that is the goal of the current system. Dividend credit is there because that income has already been taxed within a corporation. Tax it at an investor’s marginal rate and it’s being taxed twice and at an absurd rate. Of course investing is for the rich. Who can afford both a house and investing? Only the rich!

#95 Rocko on 03.08.16 at 9:06 pm

I don’t come here as often as I used to, but this article today from Macleans made me think of you and this blog, Garth. I like the exponential growth curve. Totally sets the stage doesn’t it? Much love.

#96 Rocko on 03.08.16 at 9:06 pm

I guess a link would help:

http://www.macleans.ca/economy/economicanalysis/the-insane-expectations-driving-the-canadian-housing-market/

#97 WalMark of Sadkatoon on 03.08.16 at 9:11 pm

what happens when real estate prices in vancouver and toronto start going down? exactly. nothing good. more capital gains tax on asset flips within a short period of time? i can be convinced

#98 Bottoms_Up on 03.08.16 at 9:11 pm

#10 Ft Mac House Guy on 03.08.16 at 6:30 pm
————————
The carbon neutral argument is a false argument…..we are part of a global habitat, that keeps all of humanity alive. To suggest we have some “license” to pollute carbon into the atmosphere just because we live on a heavily treed continent is ridiculous to say the least. That’s what you’re missing. A similar argument would be “China pollutes way worse than us, so our pollution doesn’t matter”.

We are all in this together, and it is going to take concerted global effort for effective change.

#99 Future Expatriate on 03.08.16 at 9:16 pm

“Bernie is toast”

Thanks Garth, you made my day.

#100 mjw on 03.08.16 at 9:17 pm

I am all for it. Tax the capital gains at the same overall rate as the middle-income family who must declare their income from renting a basement suite to cover the monthly mortgage payment. I have ABSOLUTELY no problem with that. When are you going to do a piece again of what is like living in Denmark or other Nordic country. I am getting nostalgic. Too bad I don’t speak Danish.

#101 Randy Randerson on 03.08.16 at 9:18 pm

T2, you can go stick a carrot up your butt if you decide to mess with the capital gain tax. I’m now planning to move to the states in the near future.

#102 joblo on 03.08.16 at 9:20 pm

T2, bit of advice:
Get on with legalizing pot and tax it.
Legalize Ladies of the night, tax em.
Raise the GST, tax consumption.

Let cap gains alone.
Your welcome.

#103 RayofLight on 03.08.16 at 9:25 pm

Canada already is far behind the US in productivity. Increasing productivity is the only real long term assurance for increasing the country’s standard of living. The following article by the Frazer Institute may be a bit dated, but the message is still relevant. Decreasing taxes on business and capital is the direction to go.
https://www.fraserinstitute.org/article/fix-canadas-productivity-gap

#104 Randy Randerson on 03.08.16 at 9:29 pm

On the Vancouver forum of Reddit, it’s full of left-wing nuts who would love to live in a communist utopia. Spoiler alert, it sucks when you have to line up for your weekly ration of beets and bread.

Explaining the situation rationally is like convincing a slave owner back in the 1800’s that slavery is bad. You can’t win against someone with an IQ that’s less than 80.

#105 Where is report link? on 03.08.16 at 9:29 pm

“The T2 gang was silent on any change to cap gains in the election platform, but a few days ago released a report (which was linked here) fueling the ire of the downtrodden masses. The Department of Finance claims the preferential tax treatment of capital gains ‘costs’ Ottawa about $12 billion a year in revenues that would accrue if they were taxed as regular income, like working at a Timmies.”

I looked at your past blog posts and do not find a link in any of them?! Can you (re)post the link, please?

On a related note, when I google the news for reports on a possible cap gains tax increase or elimination, nothing pops up. One would think that something like this would cause a lot of consternation, and that many would wonder whether it would legally be possible to make an increase effective retroactively as per a past date…

Report here. — Garth

#106 TurnerNation on 03.08.16 at 9:30 pm

Even if Canada took those taxes extra from us we’d not see a dime of that.

Already we’re paying 50-60% of income to fees and taxes.

Yet by First World standards we are sub standard in every way:
Military
Transportation network
Airlines
Education
Healthcare
Support for indigenous people (they too are being robbed by corrupt bands and see little money)
Housing prices.
Consumer choice and Duopolies.

We are but a UK slave colony. Work harder, faster, whipped by taxation.

Put it this way. In Ireland do you find chains of authentic Canadian pubs?
Does Boston have a Toronto Pizza franchise?
N’awlins restaurant in TO….do they have a T’aronna eatert in the Big Easy?

Laughable. Malibu condos in Toronto. Do they similarly have Wasaga beach named condos down there?

Of course not. We have nothing but simpering smirking socialists here.

#107 Where is report link? on 03.08.16 at 9:32 pm

I found the link:
http://www.fin.gc.ca/n16/16-026-eng.asp

Would it be legal for the govt to announce a cap gains rate increase effective as per a past date?

#108 Toronto on 03.08.16 at 9:44 pm

Garth, What are your thoughts on guaranteed income that has been mentioned by the Ontario Liberal Government. Do you think will affect real estate prices? Is this disguised as a mortgage bailout, to keep prices high?

It’s a myth. — Garth

#109 Herethere on 03.08.16 at 9:50 pm

Guess that by reading the majority of today’s comments, many people have decided, to avail themselves, to the advice of, just move, go away. As allegedly pronounced by some people squirting under the brilliant sun, to fellow Vancouver residents, feeling overwhelmed.

#110 Tony on 03.08.16 at 9:53 pm

Re: #60 Throwaway on 03.08.16 at 7:37 pm

Yes and people with money would rush to get their money outside of Canada.

#111 BK on 03.08.16 at 9:53 pm

This blog gave me hope….

Now depression….

Sounds like nothing will be done to slow down housing market…..

Interest rates will eventually rise very very slowly….

My meager earnings in the market if any will be taxed higher…

I’ve waited 10 years and still sinking deeper into the never ending hole!

Our only hope is to acquire a rather large amount of inheritance…. If and a big if, your lucky enough to.

#112 Millmech on 03.08.16 at 9:54 pm

#7 GB
A truly canadian post,why try being better,smarter,have initiative like a lot of the 1%,just drag them down to your level.We need them,they give us something to drive for,inspiration to make ourselves better off(how uncanadian of me).Here is your canadian award ribbon,doesn’t say first,just participant.

#113 macroman on 03.08.16 at 9:57 pm

#48, MLIAPOS, re #22 Cara, you missed “titling”

Now I have to admit I was titilated until I realized titling might be a breast feeding ling.

Anyways, good catch on Cara the editor for Garth. What a fail.

#114 BS on 03.08.16 at 10:00 pm

The Department of Finance claims the preferential tax treatment of capital gains ‘costs’ Ottawa about $12 billion a year in revenues that would accrue if they were taxed as regular income

Just another dumb T2 idea. If they tried to increase capital gains taxes it would lower government revenue. People would buy less equities and other assets because the risk/reward would be less favorable. Less investment = less capital gains taxes. There would also be more tax evasion on asset sales and offshore type investments. And most people who already held equities or other assets with gains would not sell them due to the massive taxation. The government gets no taxes if people do not sell. Net government taxes/revenue would plummet.

Then T2 would be thrown out, tax laws changed back by the new Conservative government and we would be back to normal. Can’t wait.

#115 Smoking Man on 03.08.16 at 10:00 pm

Trump is going to be the next President of the United states. What I called it back when he said ban some people we can’t vet

Print this post , put it on the fridge with a magnet. If I’m wrong you have chirping rights.

But like how often is the god of Herdonomics wrong.

#116 statsfreak on 03.08.16 at 10:02 pm

If they do tax personal corporations, I guess that would affect an awful lot of realtors who have set up their business that way.

#117 Catalyst on 03.08.16 at 10:06 pm

Where do you think their surplus income will flow if not to investment assets? You guessed it….real estate.

#118 conan on 03.08.16 at 10:08 pm

What? No picnic? A Lefty Losers vs Righty Rockheads softball game sounds alright. There has to be beer though….. I do not see blood happening. Nope, I see bud happening and the cops at 4 am to shut us down.

#119 Linda on 03.08.16 at 10:19 pm

It’s a bit weird to have this discussion the same day as the news that KPMG clients who defrauded our system of millions were allowed to get away with it by the Canada Revenue Agency (under Harper).

Our tax system is really messed up. I am inclined to think that the best solution is probably the simplest. A buck is a buck, tax them all equally. Most executive types do nothing to earn their stock options and huge salaries anyway.

As for the offshoring stuff, I think that people who do this sort of thing, and their financial advisors, deserve the stiffest penalties our system offers, be that life in prison (even the death penalty if we choose to have that) or simply revoking their citizenship and seizing their property before sending them on a boat offshore to one of their tax havens.

This insane accumulation of wealth by those at the top simply must stop, or our society will be destroyed.

#120 Old stock Canadian on 03.08.16 at 10:20 pm

under Turner dictatership, people are mercy of the 1 percent. Empowering the 1 percent is the only way other people have life.
At the Davos, Zakira ask Trudeau2 , how on earth you won the election by saying you will run deficit because deficit consider a bad word in politics. Most of the jobs created in Canada are just redundant by inefficent planning. Next election the party that claim we will increase the unemployment by 50% would win. This is paradigm shift . watch Davos A World Without Work?
https://www.youtube.com/watch?v=UnNs2MYVQoE

#121 Siva on 03.08.16 at 10:23 pm

Bernie is not toast, at least not yet. He is winning Michigan. If he wins rust belt states that will make him a stronger general election candidate against Trump, who is winning the same swing states on the republican side. Dems will be taking a chance with Hillary in general election.

#122 John in Mtl on 03.08.16 at 10:35 pm

@ #78 sockeye sam on 03.08.16 at 8:28 pm
#19 JJ
“Didn’t the hydro companies promise they wouldn’t be spying on us before they implemented the SMART METERS. So now they can track if the house is occupied or not by gauging the power usage.”

Smart meters are only a more convenient and granular way to spy. Manually reading the meter once a month and compiling the results for billing & other purposes accomplished the very same “spying” for as long as the electric meter has been around!

#123 BK on 03.08.16 at 10:38 pm

And let me tell you a little something about investing.

Garth makes it sound easy, 70% of the time it gives you returns.

“Most” people commenting on this blog are older wealthy home owners.

Well here is the new real word situation.

Unless you have been given a significant amount of money or have done really well in real estate you will not have much money to invest.

It takes a lot of invested money to make money.

Most Millennials/GenX non home owners I know of in Van might be able to invest $10,000 per year.

Let’s take best case scenario “no fluke stocks”, 20% return per year, $10,000 invested per year for 5 years.

Your $10,000 compounding making 20%/year = $90000, profit of $40,000 over 5 years.

So said millennial/Genx’r who can’t afford home will make $40,000 in 5 years best case scenario on high risk investments

That’s peanuts and will get you knowhere!!!!!!

GARTH!!!!!!! PLEASE READ!!!

How are the huge amounts of people described above going to survive?

Priced out of the realestate market and not enough money to invest and make anything significant.

Please don’t give millenialls/genx’rs a hard time for feeling entitled. We work just as hard as you for 1/10 the reward.

My parents single average income 25 years ago bought what I would only dream of with my well above average double income.

So the older wealthy homeowners/ greater fool bloggers out there put yourselves in our shoes…..

If you had to do it all over again, you would be whining too!!

I’d be moving. — Garth

#124 Smoking Man on 03.08.16 at 10:42 pm

I’m sure a lot of dogs are wondering why I sport a tin foil fedora.

Lets go back too mid August of 2011, my first pro gig as a code smith, I loved it. I worked for Lucent Technologies in Wippany New Jersay.

Amazing, I shared the same office with the dude who invented Linux.

I know my contract was up at end of September 2001.

I interviewed with the folks of Canter Fitzgerald. Got the job, starting date Oct 1st. These human beings where awesome, Got invited to cook outs (for Canadians it’s a barbecue) with people in the firm before I even started.

The chic that hired me, yeah she was hot, a loving mother and wife with an autistic kid. He was a beauty. His name was Wyatt, I was trying to make him laugh, he gave me a heart felt hug that blew my mind. He worshiped his mom and everyone in the room equally.

His mom and dad loved him to death. as did I.

The beauty of the un-brain washable.

His mom died on September 11th, with many people I met at several cook outs who were so cool.

If I’m too extreme on the Neocons who did this. Too bad. Fk you. Justice is coming.

You killed a shit load of my really god friends. that is the main reason , got rid of my old ones, and why I don’t look for more.

Go Trump, please hang the bastards hopefully on the ten foot Mexican wall. The neocons, make a shit load of loot with Mexican drug trade. Almost had my own kid jump off a bridge because of it.

I saw Building 7 fall, I knew right there and then. Wyatt was robbed by really bad ass Americans neocons.

On 911 he lost his Mon, I lost my Job with amazing people, lovely beautiful Americans with old fashion values.

Go Trump.

#125 TurnerNation on 03.08.16 at 10:42 pm

Someday everyone will see what’s in Smoking man’s comment tonight.

It’s not left vs right but a global agenda. Which country gets manufacturing, which country gets depopulated? Human trafficking and smuggling is top business in world always.

Laos/Cambodia/Vietnam and…Syria were bombed into sweatshop nations.
Ask yourself why some countries -like Israel – are not being bombarded or displaced by refugees.
Why Haiti (a hub of drugs and human trafficking) was further destroyed and kept poor (no word about the billions we sent there eh? A global duo of ex-pres conmen even came on Teevee to sell us)

Everything has been decided and computer simulated. Iceland was the first blow
Worked well.

#126 Capt. Obvious on 03.08.16 at 10:44 pm

I’m going to lose my shit if T2 jacks the capital gains tax rate. As if saving wasn’t difficult enough, let’s put up another drag on returns. Are they daft?

#127 Calamity Jane on 03.08.16 at 10:44 pm

Milennial Realist.

From one millenial to another – dont be an a$$ and leave my inheritance alone. That money has alreasy been taxed at the highest personal income rate because of my parents hard work and success. Now you want it to be taxed double because of my (admittedly recent) success. Hands off. Not all rich people are lazy jerks who do nothing an exploit others. We work long hours and provide good income for our employeea and also create a lot of jobs for our suppliers and related businesses who work with us. So yeah, we assume the risk and invest our money to expand, we get the reward. Not you. So stop whining and go try to steal someone elses lunch.

#128 TRT on 03.08.16 at 10:45 pm

Here’s a solution to Vancouver’s housing “problem”. A problem that was deliberately engineered:

1) Only enable Citizens and Permanent Residents to buy homes. (The only policy with teeth that will have an effect).

2) Institute a capital gains tax on homes owned for less than 1 year.

3) Cross check income on mortgage applications directly from CRA.

This would steer foreign money inflows flow into financial industries like yours Garth.

The development industry and banks would oppose this though.

#129 Parsonage on 03.08.16 at 10:48 pm

#22
#55

Further proof reading:

“But we live in Alberta and things look to be titling pretty quick ”

“titling” as in:
https://en.wikipedia.org/wiki/Land_titling

Or, given the later reference to boats, is it possible the word was intended to be “tilting”?

3

#130 common sense on 03.08.16 at 10:50 pm

#121 Tiurner Nation

Great post…

As “Knowledge is power” and more and more information is shared, the TRUTH on many levels is slowly coming out.

And you wonder why China, Cuba want to control the internet so much. See what it did to the Middle East. Those who control the media influence minds…

#131 Retired Boomer WI on 03.08.16 at 10:51 pm

Interesting post comments tonight.

Seems Taxation is the thing. TFSA room trimmed back (a form of ‘taxation’ isn’t it)? If you’re going to shelter more money, either you do it RRSP with TAX deductions upfront, you merely give it back later, perhaps at a lower tax rate.

Cap Gains tax rates should be lower than the mean income tax rates paid to compensate the investor for the risk of loss. Assuming you can not ‘write off’ your incurred losses against gains 1 for 1, or at a much reduced limit annually like we have in the US, perhaps I could go for a somewhat higher cap gains rate.

Real Property held less than say 7 or 10 years you should pay the long term cap gains rate on any gain. There should be compensating legislation as well, of writing off capital losses on selling the real property. Fair is fair.

There are few “Free Lunches” in the world.

My biggest fear is the GDP growth which has stagnated, along with near zero bound interest rates. That is an economy and currency killer long term.

Oil glut longer term begs the oil price to drift lower, perhaps, much lower. Hardly out of the woods on this yet.

No politicians are sharing their thoughts on the long term, why is that??

RB

#132 West Coast on 03.08.16 at 10:55 pm

…….well I totally get it about the picnic…anyway if we had it in my ‘hood (YVR) it’d be rained out , so let’s not………..
……you’re right, Garth…. we are a whiny lot.
If we live in a ‘hood where prices are rising and it puts us at a disadvantage – we’ll whine……..if we live in a hood where prices are falling and it’s not in our favour……we’ll whine…….We all want it just right (whatever that is!)…….and with your blog we have an outlet for whatever ‘housing frustration’ we are feeling………
Personally, I enjoy renting, but I can’t say I wouldn’t like to own (if I were mortgage free!). On the other hand, the really happy owners I know are the ones who are (or who are partners of) the male or female equivalent of ‘Mike Holmes’. If there is a problem with the house or land, they can fix it. If they have to hire someone to do the work, they know who and when to call and what the fair price for service is. The rest seem to live in state of permanent ‘house frustration’ or semi-squalor’. Believe me I know a fair share of folks living in dumpy million dollar plus houses (sad but true).
Garth, maybe you need to practise some tough love and leave us alone for a while. We’ll probably play much nicer if you ignore us for a few days.

#133 IHCTD9 on 03.08.16 at 11:02 pm

#116 Linda on 03.08.16 at 10:19 pm
…be that life in prison (even the death penalty if we choose to have that) or simply revoking their citizenship and seizing their property before sending them on a boat offshore….
——-

Wow!

You want to execute tax evaders?

Holy Moly!

You think that is a good fix?

Good grief Woman, get yourself into therapy!!

#134 Rabbit One on 03.08.16 at 11:04 pm

I am 1%-er income wise, have low 7 digits liquid assets, I don’t support NDPs, or socialist mind.

Granted this is a financial blog, so it is 100% valid to talk about financial success and be smart on money.

I am 100% responsible on what and how I do with my money.

That is totally business decision.

If you are businessmen, your ultimate gola is to make profit, as far as you don’t commit crime.

But it is totally different if you are a policitian.

What you are saying is correct on business decision based.
Not always correct on politics base.

Now so many debts in the worls, surpass ciclycal capacity, government is so short sited.

For instance, BC Government and COV is aggressively selling public land in prime location to private developers these days.

It is great business decision, but when precious public land in prime area is sold, they are permanently gone.
Could they lease out instead? no discussion.

Not saying government cannot sell public land, but speed and scale is expanding year by year.

How I read today’s entry is more money is always right, in personal business / investment decision, AND also on politics. (no matter what)

We, Canadian citizens deserve our governments, maybe?

#135 MF on 03.08.16 at 11:05 pm

#125 TurnerNation on 03.08.16 at 10:42 pm

That’s because, in case you have not been paying attention for the past 60 years, Israel is at war with Syria (amongst other arab nations).

You should then ask yourself where the migrants are from.

By the way, still waiting on what the “elites are planning” for the Superbowl and Christmas eve.

MF

#136 IHCTD9 on 03.08.16 at 11:06 pm

#123 BK on 03.08.16 at 10:38 pm

——–

Yep, move. Solve all your problems with one word.

If you continue to live in a region where you are doomed to be brokeass till death, who’s fault is that?

It’s your fault homie.

#137 MF on 03.08.16 at 11:09 pm

#124 Smoking Man on 03.08.16 at 10:42 pm

Hey I’m also a Trump supporter, but you mention Neocons a lot.

Here is the wiki definition of “Neocon” from
https://en.wikipedia.org/wiki/Neoconservatism

“Neoconservatism (commonly shortened to neocon) is a political movement born in the United States during the 1960s among Democrats who became disenchanted with the party’s domestic and especially foreign policy. Many of its adherents became politically famous during the Republican presidential administrations of the 1970s, 1980s, 1990s and 2000s. ”

After 8 years of Democrat rule, and with many people unhappy with where the US stands, does that not sound eerily similar to a certain someone?

MF

#138 IHCTD9 on 03.08.16 at 11:11 pm

#118 conan on 03.08.16 at 10:08 pm
What? No picnic? A Lefty Losers vs Righty Rockheads softball game sounds alright. There has to be beer though….. I do not see blood happening. Nope, I see bud happening and the cops at 4 am to shut us down.

——-

Haha, nice :) add a 50/50 draw, closest guess to the actual date of Van RE crash wins – payout after it tanks!

#139 Smoking Man on 03.08.16 at 11:12 pm

#127 Calamity Jane on 03.08.16 at 10:44 pm
Milennial Realist.

From one millenial to another – dont be an a$$ and leave my inheritance alone. That money has alreasy been taxed at the highest personal income rate because of my parents hard work and success. Now you want it to be taxed double because of my (admittedly recent) success. Hands off. Not all rich people are lazy jerks who do nothing an exploit others. We work long hours and provide good income for our employeea and also create a lot of jobs for our suppliers and related businesses who work with us. So yeah, we assume the risk and invest our money to expand, we get the reward. Not you. So stop whining and go try to steal someone elses lunch.
………….
Good luck on the conversion, thees mind fked feminist men.

fk can’t walk, cant talk , cant type , good night

#140 Two-thirds on 03.08.16 at 11:18 pm

So currently a member of the Canadian “middle-class” and happy to see more people join in. Life is good here, even without the house/mortgage combo.

But, if I want more, if I work harder, save more, invest, or whatever it is that those purported bastards on the level above me do to get there, is it worth it?

Is it bad to want upper social mobility?

What incentive is there for us middle-class chumps to better our lot in life? Higher taxes? Being hated by all?

Or are we destined to stay where we are and be content knowing we are not evil, we are not rich?

Is this what top-notch governments should aim for?

#141 IHCTD9 on 03.08.16 at 11:19 pm

#109 Herethere on 03.08.16 at 9:50 pm

…some people squirting under the brilliant sun,…
——–

Sometimes auto-correct says the damndest things lol!

#142 MF on 03.08.16 at 11:30 pm

Lol whoever voted for this guy was duped and is “simple”. I legit can’t look at him without getting pissed off. I go on a bodybuilding forum every once in a while. The other day someone mentioned the drama teacher in a thread and every Canadian on there chimed in with:

-Can’t stand him, hate everything he stands for, hate all his policies, think he is a liar etc. for pages and pages.

And now our capital gains may be taxed higher to pay for….what exactly? More “refugees”? More worthless “initiatives” and platitudes/selfies?

Most of the people I know who voted Trudeau are 1) lazy millennials who have not worked a real job in their lives, 2) lazy potheads, 3) and older people who have made bad choices in life like having kids young/not doing university and who are stuck in low end jobs as a result of their own screw ups.

Millennial_Realist:

So my parents/grandparents worked their ass off and came here with nothing just so you can take their legacy because you want it? F you. Not my problem if someone didn’t have hard working ancestors.

MF

#143 bmc on 03.08.16 at 11:31 pm

Can’t believe how many have posted in favour of increased taxation, we in Ontario are witness to an out of control spendthrift government, and it seems, the more they take in or borrow, the more they waste, they have almost tripled our debt, and we have nothing to show for it
And guess what, the movers and shakers behind the scenes of the Ontario government are now advising T2, and in Ontario all the greatest minds and think tanks across the country cannot persuade this government from acting on bad ideas, expect the same with T2
Incompetent governance has saddled the country with debt, and they are going to add much much more, we have moved beyond reasonable taxation to the blatant confiscation of our wealth, and I can’t believe anyone would advocate for more, anytime taxation increases we all suffer,rich and poor and mostly the middle class

#144 Mark on 03.08.16 at 11:37 pm

“Canada already is far behind the US in productivity.”

I’ve seen this claim repeated repeatedly, but I’ve always wondered how true it is. A lot of ‘productivity’ is based on GDP. GDP can be artificially inflated through zero-sum “financial” activity which doesn’t put any additional goods and services into the pockets of consumers, but rather, just shifts money from one account to another (usually from the middle class to the upper class).

Strip out the financial sector, and what’s the true productivity position of Canada vs. the USA? Canada is able to run long-term trade surpluses, while the US only runs long-term trade deficits. Are Americans big spenders relative to Canadians? Or are they *really* not any more productive than Canadians in what *really* matters?

#145 IHCTD9 on 03.08.16 at 11:39 pm

#102 joblo on 03.08.16 at 9:20 pm
T2, bit of advice:
Get on with legalizing pot and tax it.
Legalize Ladies of the night, tax em.
Raise the GST, tax consumption.

Let cap gains alone.
Your welcome
——————–

Good ideas, but won’t make enough money.

12 billion from drugs, hookers and GST? Not in a million years!

Why? We can say no to hookers and blow real easy, super easy. Cutting consumption is easy, avoiding retail is easy. Barter and trade is easy.

T2 – you need cash now, and it has to be a reliable stream. Easy, tax electricity out the back door, gasoline up the wazoo, take over property taxation and double it across the board, quintuple fees on drivers licenses and vehicle registrations, tax all insurances 25%.

You know, all the stuff we can’t say no to. This will work for a year, maybe two. After that you’ll be permanently screwed.

#146 West Coast on 03.08.16 at 11:45 pm

BTW Happy International Women’s Day to all…..
https://www.youtube.com/watch?v=HKEr5U8ERgc

#147 Ft Mac House Guy on 03.08.16 at 11:50 pm

#98 Bottoms_Up on 03.08.16 at 9:11 pm
#10 Ft Mac House Guy on 03.08.16 at 6:30 pm
————————
The carbon neutral argument is a false argument…..we are part of a global habitat, that keeps all of humanity alive. To suggest we have some “license” to pollute carbon into the atmosphere just because we live on a heavily treed continent is ridiculous to say the least. That’s what you’re missing. A similar argument would be “China pollutes way worse than us, so our pollution doesn’t matter”.

We are all in this together, and it is going to take concerted global effort for effective change.
**************************************
Ok, but did you see the 2nd part of my statement, where there is nearly enough trees on Earth to make the entire globe carbon neutral? Or if we’re not, and we’re close – why not plant a couple billion more trees?

I’m not saying I’m right, I’m just raising the question to get a discussion going. Personally to me, planting a bunch more trees seems like a more logical and meaningful way to combat global warming vs having the Alberta NDP government charge my family an extra $1000 per year starting in 2017 in the form of a carbon tax b/c I’m forced to heat my home and fuel my car.

#148 Roland on 03.08.16 at 11:53 pm

The capital gains exemption from the sale of a principal residence ought to always have been capped at the median national housing price (on some sort of 5 or 10 year moving average). Otherwise, that tax exemption is a massive effective subsidy to certain cities, at the expense of the rest of the country.

While some may claim that there is a certain amount of logic to the preferential tax rate for capital gains, the 50% treatment is a fairly recent development, and excessive.

Governments in the past couple of decades have exhibited an obvious bias in favour of large investors. It’s time for that political trend to swing back a bit–indeed that’s the only way to avoid a dangerous polarization in society and politics in the long run.

The trouble is, if a gov’t starts taxing capital gains more heavily, the increased revenue would probably not be used to alleviate the punitive existing tax burden on wage and salary earners.

#149 DON on 03.08.16 at 11:58 pm

#60 Thomas on 03.08.16 at 7:36 pm

I don’t think I have ever seen one person just destroy an economy on every front as I have seen these past few months. Canada will be set back decades. I’m in the USA, and hope to move back one day when I retire. But at this rate their might not be anything worth coming back too.

++++++++++++++++++++

Trudeau threatens to wipe out $36 billion investment in BC LNG terminal

Malaysia’s Petronas threatening to abandon LNG project over new climate change rules

Claudia Cattaneo | March 7, 2016 6:32 PM ET

CALGARY • Malaysia’s Petronas is frustrated that Prime Minister Justin Trudeau’s climate-change priorities are introducing new uncertainty for its proposed $36 billion Pacific NorthWest LNG project in northern British Columbia and has threatened to walk away if it doesn’t get federal approval by March 31, according to a source close to the project.
*******************

The scandal plagued Malaysia gov proposed a (and it is not 36 billion) project with the corrupt politicians at a time when LNG prices tanked. Malaysia has not signed any deal and has already announced it will be cutting back on capital projects as other countries come online. Best we can do it to provide it to Canadians at a cheap price to become more competitive to cushion the blow the TPP will reign down. We need to dismantle the national parties and start over at the community level.

Thomas the deal was dead years ago just convenient at this point to blame it on Trudeau. BC sold the farm on this one.

#150 CleverTitle on 03.08.16 at 11:58 pm

#127 Calamity Jane
Thank you, thank you, thank you. So tired of entitled losers who can’t see the effort/sleeplessness required to take a real risk in the real world.

#151 nonplused on 03.08.16 at 11:59 pm

I a world of 2% inflation, which is the target if not currently the reality, capital gains taxes are really just property taxes. At 2% inflation the price of everything doubles every 35 years, and with a capital gains tax the government gets 25% of the new value or 50% of the original value every 35 years. (It’s less with the current deductions).

Also, raising rates has been shown time and time again not to raise tax revenues, after a certain point of taxation. The reason is because there is only so much money. So if you raise the Doctor Tax as Garth calls it, well guess what? The gardener gets laid off, goes on social assistance, and stops paying taxes. All you can do by raising taxes is change who spends the money, it doesn’t make any more of it.

Tax the doctors more and they’ll have to buy Fords instead of BMW’s. This means the doctor pays more tax, the Ford dealer pays slightly more tax, and the BMW dealer pays a lot less tax but the amount paid in total remains the same. It can’t be any other way unless the doctors are storing all their after tax money in pickle jars buried in the back yard. If they are spending it, it’s getting taxed already. If they are investing it they are getting taxed on the dividends and gains. If they are putting it in an RRSP they’ll get taxed on it when they retire. It’s all getting taxed plenty already.

Sometimes you can test the validity of a theory at the extremes. So if higher taxes are the secret to prosperity let’s move the tax rate for all individuals regardless of income or source to 100%. Let’s see how that kick starts the economy. In fact, why stop there? Let’s try a 200% income tax level and a $50,000 minimum, regardless of income! Surely that will eliminate the deficit! Nutley’s wet dream come true.

Adam Smith proved it many, many years ago. Prosperity comes from exploiting natural resources and the investment of labor, not from taxes. Taxes significantly reduce the ability of a nation to reinvest labor, and thus slowly bleed the country dry. (In Adam Smith’s world “capital” was improvements to plant and equipment, land, transport, etc. that improved productivity, not bankers printing money. Paper money in his time was thought to be a failed experiment, a last gasp at air from a drowning government.)

While I’m at it I’m going to take a swipe at corporate taxes which I think should be zero. Reason? Corporations don’t really exist, they are owned by shareholders not themselves. And guess what all those shareholders are doing when they get their dividend? Paying taxes. So a corporate tax is really a double tax on a person’s income. Let the corporations dividend out all the money or reinvest it, eliminate the dividend tax reduction, and vola! Same tax revenue unless the money is used to reinvest, in which case you get more taxes later.

My contention would be that if RIM (Blackberry) not faced such high corporate tax rates, they may have been able to get their current products to market in time to fend of Apple, which was really just building a Blackberry knock off. But without the cash they couldn’t speed up the development and marketing. I had a Blackberry that could do everything an iPhone could do well before the iPhone came out. It had a camera, held up to 8 gig of songs, all kinds of things, and was the world’s #1 smart phone. Some say they invented the smart phone. But once Apple entered the market Blackberry couldn’t keep up because the government wanted half their retained earnings. That’s how “economic diversification” works in a socialist utopia as envisioned by Nutley and Glamboy.

#152 IHCTD9 on 03.09.16 at 12:00 am

#41 Millennial Realist on 03.08.16 at 7:04 pm
——

This is stupid on Nitro Methane under a roots blowing 50 lbs of boost.

#153 DON on 03.09.16 at 12:12 am

#115 Smoking Man on 03.08.16 at 10:00 pm

Trump is going to be the next President of the United states. What I called it back when he said ban some people we can’t vet

Print this post , put it on the fridge with a magnet. If I’m wrong you have chirping rights.

But like how often is the god of Herdonomics wrong

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

yup…unless they have surprises his bluntness is appealing to Americans.

#154 The American on 03.09.16 at 12:18 am

Smoking Man, you’re entertaining to say the least. But, you will assuredly be eating crow come election day. Trump will no way in hell be President. It simply will not happen. Mark these words, and watch and wait. The President is a Democrat. For your viewing pleasure… https://www.youtube.com/watch?v=uG5kSgJtyQg

#155 DON on 03.09.16 at 12:18 am

#121 Siva on 03.08.16 at 10:23 pm

Bernie is not toast, at least not yet. He is winning Michigan. If he wins rust belt states that will make him a stronger general election candidate against Trump, who is winning the same swing states on the republican side. Dems will be taking a chance with Hillary in general election
****************
We can also hope for some sanity.

#156 pathcontrolmonk on 03.09.16 at 12:35 am

Garth, great blog as always but perhaps it is time to migrate GF to a format where blogdogs can follow/reply to specific comments without having to scroll through 200 comments, many quoting with cut&paste. Just my humble $0.02. Please?

#157 Big Dipper on 03.09.16 at 12:48 am

More crocodile tears for the poor misunderstood rich by Garth Turner. Again the much discredited fallacy of job creation by the top 1 percent.

The rich love to use the Nations infrastructure, demand quality health care, personal protection and superior education for their kids.

They just don’t want to pay for it.

They’d love it if the middle class and working poor pay for it and that is exactly what they got with the previous conservatives. Dividend tax credits and freebie capital gains are not enough. Gimme more! Make my income tax free!

Meanwhile there has been massive hoarding of capital at the corporate and top income levels. This over supply of unproductive capital has lead to stagnant job and income growth as well as historically low interest rates.

The solution? Tax the wealth and spend it on infrastructure, education, environmental improvements and anything else that will get this economy going again.

#158 understood by few on 03.09.16 at 12:55 am

I’d be moving. -Garth

This. Plenty of affordable places in Canada to live. Even more in the US. If you make above median you can live quite well in most of Canada. Just not yvr or yyj. Boohoo.

#159 Raging Ranter on 03.09.16 at 1:11 am

I wouldn’t oppose raising the capital gains inclusion rate to 75% if they also allowed an inflation adjustment into capital gains calculations, thus eliminating the tax on phantom capital gains. Long term capital gains are severely penalized by this phantom income, often forcing one to pay tax on “income” that actually represents a substantial capital loss. Allowing taxpayers to inflate the original adjusted cost base to today’s dollars using the BoC’s inflation calculator would be simple enough. But of course they’ll never do this, as they would lose much of the perceived “benefit” (i.e. more tax revenue) of goosing the inclusion rate in the first place.

This government’s priorities are: A) raising more revue B) soaking the “rich”, and C) appearing (but only appearing) to give the middle class a break. Eliminating phantom capital gains income, and the tax on that phantom income, serves none of these purposes, regardless of how much sense it makes.

#160 Vers on 03.09.16 at 2:04 am

Ok, I’ll bite.

What would the affect of a capital gains tax increase be on housing prices if the primary residence exemption were farked with (fully or partially eliminated thereby making home ownership taxable)?

It would exacerbate the supply problem because potential sellers would no longer be able to move up in the market as easily, as their after tax (and transaction fees) proceeds would mean they would not be able to buy a home of similar value with the same equity position taxes and fees come out of equity – doh).

Not as many people downsizing either. No more selling 2200 block west, and moving to 2200 east and banking windfall profits. Less sellers would have the effect of raising prices in short term, not crashing the market. People would wait to sell until after the next election, and it would be the party that restored the primary residence exemption that would win the next one.

So it ain’t happening. Besides, too many politicos own houses as there one true asset (besides their DB pensions).

I could see the gov screw with the small business capital gains exemption though. Kind of like the ‘doctor tax’ this matches the current ‘off with their heads’ mentality of the proletarian masses whence reflecting on how to respect business/capitalist types in general.

But not the capital gains exemption on farm property, they wouldn’t go there. Too many chickens to kill, too close the tarsands. Enter tar and feather joke here.

I could also see the gov look to define some forms of capital gains as income. Like making the primary residence exemption rules harder to qualify for (two or three years instead of one, etc.) to better define those that make interior design/renovation of their home their primary job, and ‘flipping’ residences every 1.5 years, as many couples currently do in the YVR and TO hot spots.

If capital gains taxes were increased on equity markets, it could be crippling on some downtrodden industries right now, ie energy, mining… it could also drive funds into the bond and alternative income markets, lead to a ton of foreign takeovers of Canadian natural resource companies, and make even more people pissed off about TFSA reductions.

And so a broad scale change is prob not happening either. What could happen though, is a lifetime cap on how many capital gains any one person can make, before they have to report 60%, 75%, etc.

So, for example, now that tfsa’s can help shelter twice their size worth of capital gains every year, maybe the lobs say that everyone can (starting in 2018 or 2019) report $1m in capital gains during lifetime that are reportable at 50%, then between $1-5m they have to report 66.7%, and anything over $5m would only get a 25% tax break…

Please don’t slag me, I am a small business owner and capitalist, but I do see the winds of change in the air, and there are many ways to start cutting off a few heads out there. The ones mentioned above are but a few to help get the imagination going.

The funny thing is most people are concerned about capital gains taxes – because they expect they may have future taxable gains. The gov could allow asset values to be crystallized for reporting of future gains, which could become an opportunity to rebalance personal assets, do comprehensive wealth planning, etc. so the wealthy would most likely not be badly hurt by much of this. Especially if we are in a deflationary period. In a sideways market, capital gains for the 99% will be neglible anyway.

And as for the 1%? Who cares? Lower my income taxes, and I’ll throw bread buns and coleslaw at the 1%ers at that first picnic all day long. We should all welcome anything that can promote entrepreneurship in this country, small business development over big businesses reliant on tax subsidies. Train people to work for themselves and not get taxed and red taped to death, rather than watch inter generational wealth transfer turn heirs into capitalists with no human capital to speak of.

Off with their heads! :-) Oops that might be my kid.

#161 Cara on 03.09.16 at 2:37 am

Oh dear, lol. I’m not a grammar nazi at all, but I do notice errors when I read articles and see them all over. Just offering help, but at the time I wrote the post I had man-thumbs and autocorrect stepping in to help.
So, it was a joke, my “editing” and expectation of “free advice” (have been around for 8 years reading, I’ve gotten lots. I really want to meet Wisconsin dude. He seems so nice)

The word should have been “tilting” and god damn you autocorrect if I know nothing else, I know my “there”s. In fact, how do you comfort a Sad Grammar Nazi? Hug them, pat them gently on the back and whisper, “they’re, there, their, it’ll be alright.”

I must have bad Karma or something. Carry on.

#162 Mimi on 03.09.16 at 2:44 am

On news the other night when reporting on the Winn governments free university tuiton for students from families making under 50 k, my husband and I noticed every single kid in the screen shot was wearing a $1000 Canada Goose jacket with apple phones etc. Do we really think the tuition is what caused the massive debt?
My husband and I paid for his school out of pocket on 2 $20 an hour incomes while raising a new baby and maxing out her RESP. Sure we lived in a frugal rental, no restaurants, no Canada Goose…but fast forward 5 years and we make over 150k a year, small mortgage no other debt. Most Canadians could pay school, put 10k in a tfsa if they didn’t keep raking up their credit card with stupid purchases. Why are we rewarding bad behavior? All these “bandaids” won’t fix the problem which is for the most part personal irresponsibility.

#163 Vers on 03.09.16 at 2:45 am

As they say, garbage in, garbage out. What an absolute waste of time and tax payer money that report on unoccupied housing is. In the methodology section it explains that, if an otherwise completely unoccupied condo unit had its vacant landlord show up and stay in it (or even a friend, relative, or someone painting it or doing minor renovations) for only one week , in any of the months of June, July, August or September (ie when everyone wants to come to Vancouver), the methodology used to compile the report would report the condo ‘occupied’.

Bullshit. That kind of crap should honestly cost someone their job. That is so intellectually offside, it almost has to be purposefully done. The company should rename itself, ecopoopoobatmanstats that st inc.

#164 Lobster Man on 03.09.16 at 2:47 am

I can see the day of the next “Carter Commission”, with the subsequent introduction of Canadian Federal Government’s attempting to recoup the next level of “tax expenditures”. The Carter Commission II will recommend an annual wealth-tax to be paid by all Canadians. This will be the most efficient form of taxation, more efficient than consumption tax, and certainly more efficient than income tax. There is no leakage. In one scoop, you get taxed on your house (just like property tax to the City), your RRSP, your TFSA and everything else you own, even if there have no gains.

#165 observer on 03.09.16 at 3:33 am

http://business.financialpost.com/personal-finance/debt/how-canadas-auto-loan-bubble-has-become-a-ticking-time-bomb

Its amazing how stupid our government is. The lower the interest rates to ultra low, to get all spenders spending. Now we have huge house hold debt, add 8 year car loans to the mix and who knows what else.

I’m sure most of these people can’t make their monthly payments and are hedging the value of their houses to pay off this ongoing spending spree they are accustomed to. They are probably taking out loans to pay off their loans.

Anyways as Canadians keep on digging deep an inch at a time, they will suddenly find they are 6 feet under before they know it!

#166 Sabrina on 03.09.16 at 4:03 am

Garth, you can’t be pro-central planning, by way of the Fed, Bank of Canada, stimulus measures, QE, auto industry bailouts, etc, and still call yourself a capitalist.

Capitalism would have let GM fail. Would you have done that Garth?

How about your praise for the Fed’s stimulus measures Garth? How is an appointed body picking the interest rate any different than Communist party members picking the price of bread?

Seriously, Garth a free-market capitalist? Get real.

#167 #1 Canadian...Nicely said on 03.09.16 at 5:51 am

#1 Canadian says it all and I agree.

T2 wrong headed about capital gains allowance to be possibly decreased.

Garth is correct about the end result being capital fleeing south of the border.

If you want to tax the 1% then increase their marginal tax rate AND DO NOT TARGET THEM with other methods that make their conducting business or investing difficult.

Eisenhower had a 70% MTR on the top tax bracket then and did not mess with other allowances…guess what, the economy improved as the 1% invested their money instead of holding on to it.

T2 can learn from this.

But yet again, no one is willing to learn from history thinking that somehow they are much smarter…history shows us they are not. Human arrogance/ego is a powerful and destructive force.

#168 salonist on 03.09.16 at 7:12 am

#161 Cara

this is for the nectonite

the newyorker comma queen video series

http://video.newyorker.com/series/comma-queen

#169 fancy_pants on 03.09.16 at 7:17 am

the leftist self entitled generation will soon have us all scraping the bottom of a barrel. Yep, hold on to your wallets b/c it turns out the budget doesn’t balance itself. who knew?

#170 help_us_all on 03.09.16 at 7:26 am

for those who need a recap, Trudy is spending your children’s future today, for your enemies of tomorrow. How do you like your trojan horse gift wrapped?

http://www.cp24.com/world/israel-must-be-wiped-out-written-on-side-of-iranian-missiles-1.2809660

you. will. see.

#171 Q on 03.09.16 at 7:27 am

I’d be moving. — Garth

To where? Legit question, Garth. What little remains of good jobs are all in the craziest real estate markets. Or did you mean moving to another country? If so, again I ask, where. If you’re gonna spread the wisdom, don’t hold back.

Spoken like a person who has traveled little. — Garth

#172 Pepito on 03.09.16 at 7:32 am

Tax empty housing at a higher rate than either owner occupied or rented. Tax non-resident owned rentals at a higher rate than resident owned. Done in Spain. Works for all the right reasons.

Tax all income the same.. dividends, capital gains, wages etc. Garth’s argument re rewarding risk is as much bovine excrement as is the trickle down BS. Investors don’t take risks because of preferential tax treatment; they do it because of greed for bigger profits. Investors don’t stop investing because their profits are taxed closer to the rate on wages just as bond and GIC buyers don’t stop buying those financial instruments because they are taxed at the rate as same as wages.

Worried about investors going to the US, Garth? Didn’t you advise investors here to do just that when the loony and the tsx were on the way down? Clearly, the investor class will do whatever gives them more free money regardless of tax policy. …. including making up scare mongering garbage myths on how policies which
try to restore societal economic balance are bound to fail.

#173 pBrasseur on 03.09.16 at 7:42 am

«Will T2 goose capital gains taxes in March 22 budget»

No way. Although there are surely some in their circles that would promote the idea, I doubt even the socialist liberals would be stupid enough to do that.

Capital gain is the bait on which capitalism is founded, if you touch that you’ll end up quickly in some very deep s**t.

#174 pBrasseur on 03.09.16 at 7:50 am

Taxing 100% of capital gains as income would not only be insane economically as it would severely discourage investment and probably drive a lot of money out of this country.

It would also be equivalent to taxing inflation. So for someone who invests for the long run not only you’d get little or no reward for risking an investment, you might actually lose money in real terms…

#175 fancy_pants on 03.09.16 at 7:57 am

#142 MF on 03.08.16 at 11:30 pm

yep, this is where we are headed:
—————

Suppose that every day, ten men go out for lunch and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men ate lunch in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball.

“Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily lunch by $20.00.” So lunch for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to eat his lunch.

So the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% off).
The sixth now paid $2 instead of $3 (33% off).
The seventh now paid $5 instead of $7 (28% off).
The eighth now paid $9 instead of $12 (25% off).
The ninth now paid $14 instead of $18 (22% off).
The tenth now paid $49 instead of $59 (16% off).

Each of the six was better off than before. And the first four continued to eat lunch for free. But, once outside the bar, the men began to compare the amount they got off.

The sixth man said, “I only got $1 off out of the $20 while the tenth man got $10 off!”

“Yeah, that’s right,” exclaimed the fifth man. “I only got $1 off, too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man. “Why should he get $10 off, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and told him they they were angry that he got so much off while they each got very little.

The next day the tenth man didn’t show up for lunch, so the nine sat down and had their lunchs without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money amongst all of them for even half of the bill!

And that is how our tax system works. The people who already pay the highest taxes will naturally get the largest benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start eating overseas, where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.

#176 Sheane Wallace on 03.09.16 at 8:00 am

I see,

So your 0.5 % on that GIC at the bank is taxable as it is a ‘gain’ while they steal 4-5 % by suppressing real rates due to idiotic BOC policies and while real inflation is at least 4-5 %?

And at the same time the idiots with no money leveraged 20:1 and insured by the idiotic taxpayers through an idiotic government at the expense of the savers are making tons of gains tax free?

Fantastic! Where do I sign (not)?

I am absolutely certain that loonie would be the first western currency to disintegrate and potentially hyper inflate.

GT, what makes you think that grabs of RRSPs and Negative Interest Rates on deposits are not possible under this idiotic government?

I am scared to death so I am exploring US jobs and the first thing I would do moving out is to collapse my RRSP.

#177 Noel on 03.09.16 at 8:18 am

Insulting your future customers and entire generations is a great way to drum up business!

You want to work with me? Aw, I’m touched. But no thanks. — Garth

#178 crowdedelevatorfartz on 03.09.16 at 8:23 am

@#69 Brazil Ex pat
“Thank you all for listing all the reasons why we left Canada. Good luck to you all !!”
+++++++++++++++++++++++++++++++++++

Hows that Zika thing workin for ya?
Will the Owe-limp-ick stadiums be finished on time and massively over budget?
Will any countries that count show up?
Will the president of Brazil be there to greet them or will she be in jail for fraud?
Brazil, the land that Portugal used as a penal colony …….

#179 Sean on 03.09.16 at 8:23 am

Tracked this portfolio with the correct garth weights from January this year when the sky was falling.

XIU +9.61%
XSP +5.18%
XIN +0.71%
XRE +10.79%
XSB -0.63%
XPF +0.72%

Total gain: +4.07%

Up a couple grand on 50k in.

#180 fancy_pants on 03.09.16 at 8:24 am

overtaxing the rich: a cautionary tale

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/how-splitting-the-dinner-bill-relates-to-tax-cuts/article24441644/

#181 Millmech on 03.09.16 at 8:37 am

#123 BK
I’ve been doing that for about 20 yrs now,got a very nice nest egg now and adding 30% of my gross wage to it every two weeks(pay yourself first,live below your means)run your numbers out on an investment calculator for 40years compounded yearly and post the numbers.I haven’t blown my brains out on real estate debt,actually it’s not a viable financial option as the house I would want would cost over 3 times my lifetime of rent(guess I should bitch and moan).
I’m a middle income earner I my mid forties and will be financially independent by fifty by doing roughly what you posted go check out mrmoneymoustache see how it’s done.

#182 data on 03.09.16 at 8:51 am

Confusion over rational voter or rich Canadian voter?

This is strange, but the reason it’s confusing is that rich Canadians also voted liberal – they said yes to tax me more personally, yes to get rid of my CPCC, yes to decrease my investment return value and yes to whatever else that weighed personally more for social justice rather then financial justice.

Now why would a rational person do this? Clearly Canadians are not hurting, infact research now shows the youth are better off then ever before and as you pointed out, we are running out houses and people are walking around with 2M$ in purchasing power……

So rationally you would vote liberal pain only if you are not in great financial shape, but that is not the case in Canada as seen from the housing market..

So where is the pain showing? Retail sales > loss jobs > can’t pay for that expensive home > WANT CHANGE > Whoever is not in power, wins….

It’s a cycle seen time and time again…now T2 will helicopter cash into the economy on March 22nd, get your knee pads and net, you will need when you are jobless…

#183 Noel on 03.09.16 at 8:54 am

You want to work with me? Aw, I’m touched. But no thanks. — Garth

__________________

Honestly, I considered it – But went with a rental property instead. Made way more than 6%!

#184 fancy_pants on 03.09.16 at 9:16 am

a tax refresher for the children

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/how-splitting-the-dinner-bill-relates-to-tax-cuts/article24441644/

#185 Alyssa Hanes on 03.09.16 at 9:28 am

T2, Wynee, Clark, Notley etc. and all lefties tax government, public sector worker pensions and government, public sector benefits progressively. Yes, this even means politician’s pensions too.

The first $15,000 at 25%, next $15,000 at 35%, next $10,000 at 40%, next $10,000 at 45%, next $10,000 at 50%, next $10,000 at 55%, next $10,000 at 60%, next $10,000 at 65% and remainder at 75%.

This way CBC’s Mansbridge can pay his fair share on his $300,000+ a year gold plated pension and benefits.

#186 Smoking Man on 03.09.16 at 9:45 am

#154 The American on 03.09.16 at 12:18 am
Smoking Man, you’re entertaining to say the least. But, you will assuredly be eating crow come election day. Trump will no way in hell be President. It simply will not happen. Mark these words, and watch and wait. The President is a Democrat. For your viewing pleasure… https://www.youtube.com/watch?v=uG5kSgJtyQg
……..

Obviously you don’t study Herdonomics.

There are a lot of un-schooled, un-feminized pissed off white young men out there. They make up the biggest losers on the labor participation rate.

Trump is going to rip Hilary to shreds, he is going to pull in a tone of democrats that don`t hang out at Starbucks. If he wan`t to clinch it early , he goes with Ben Carson as running mate.

#187 Josh in Calgary on 03.09.16 at 9:54 am

Garth (or anyone else),
I thought the reason that Capital Gains and dividends were taxed at a lower rate was because the company already pays taxes on their profits. So 27% or so. To then tax that by 50% more is crazy. Like Garth said, what’s left for any investor? And before you wail on about rich paying there share a lot of these investments are held by pensions, the CPP being one of them. With fewer and fewer defined benefit pensions this is what all of us have to rely on to save for our retirements.

And then of course you risk mobile capital fleeing the country, but the main reason that capital gains are taxed less is the one I mentioned (or so I thought).

#188 The Other Chris on 03.09.16 at 10:02 am

Did anyone see this article in today’s National Post? 12.5% of Vancouver condos are vacant/uninhabited:

http://business.financialpost.com/personal-finance/mortgages-real-estate/more-than-one-in-10-vancouver-condos-sit-empty-in-city-desperate-for-affordable-housing

#189 Tony on 03.09.16 at 10:09 am

Mario Draghi speaks tomorrow if he says rate cuts it will be the opportunity of the year to short stocks at the close this Friday. Looking for a retest of the August 2015 lows no matter what he says. No rate cuts then you should pick today to go short stocks. Buy on the rumour sell on the news. Tomorrow the news is the Draghi speech.

#190 saskatoon on 03.09.16 at 10:14 am

#133 IHCTD9
#119 Linda

she probably thinks it is also possible to be a good mom AND have a job.

lol.

#191 A Canadian Abroad on 03.09.16 at 10:16 am

Where is MY Canada rant?

I’m glad my post will be lower here as I’m not happy about posting it. But…

“What has happened to MY Canada?”

The Canada where people worked hard to succeed?

Now success comes from not working but collecting gov’t handouts/pogy/AISH/disability/anything I can get for free on the backs of others.

Canadian success now comes from ENTITLEMENT and “tax the rich”.

Tax the rich, penalize the rich, redistribute their wealth! Why not burn them at the stake for being successful? DAMN #successies!

WE the successful can afford to leave Canada or we can afford to build Canada. You don’t have to be a 1%er, you just have to CONTRIUBUTE and not TAKE.

#192 David L Tindall on 03.09.16 at 10:29 am

So Garth I sent you a comment last October about the KPMG scandal which you ignored. Too bad, you could have scooped the CBC.

#193 Penny Henny on 03.09.16 at 10:29 am

Is the current capital gains exemption of 50% only applicable to Canadian equities?

#194 Penny Henny on 03.09.16 at 10:30 am

Is the current capital gains exemption of 50% only applicable to Canadian equities??

#195 Sonny on 03.09.16 at 10:31 am

Bank of Canada keeps key interest rate at 0.5%

http://www.cbc.ca/news/business/bank-of-canada-interest-rate-1.3483080

#196 Noel on 03.09.16 at 10:57 am

#188 A Canadian Abroad on 03.09.16 at 10:16 am
Where is MY Canada rant?

I’m glad my post will be lower here as I’m not happy about posting it. But…

“What has happened to MY Canada?”

The Canada where people worked hard to succeed?

Now success comes from not working but collecting gov’t handouts/pogy/AISH/disability/anything I can get for free on the backs of others.

Canadian success now comes from ENTITLEMENT and “tax the rich”.

Tax the rich, penalize the rich, redistribute their wealth! Why not burn them at the stake for being successful? DAMN #successies!

WE the successful can afford to leave Canada or we can afford to build Canada. You don’t have to be a 1%er, you just have to CONTRIUBUTE and not TAKE.

______________________

You’re suffering from the ‘golden age fallacy’, a belief that in the past times were better, simpler, more honest. This stems from when you were a child and life was actually simpler for you because your parents took care of you and shielded you from the harsher realities of life.

Fact is, life has become so much easier for the wealthy over the last 4 decades. The top marginal tax rate has fallen dramatically, and wealth has become much more polarized, while the median income has fallen. There are no more ‘entitled’ people now than there were in the past.

“Marginal tax rates have fallen dramatically over the past half-century for Canada’s richest. In 1948, the top marginal tax rate levied on taxable incomes over $250,000 (in 1948 dollars) was 80%. In 2009, the top marginal rate levied on income was 42.92%, averaged across all provinces—and it applied to all incomes over $126,264.10 The top marginal tax rate varies from province to province.”

http://ywcacanada.ca/data/research_docs/00000192.pdf

#197 Red Herring post 185 on 03.09.16 at 10:59 am

The vacant study is a red herring for the sheep.

Only allow citizens to purchase Canadian property. Problem solved.

#198 Penny Henny on 03.09.16 at 10:59 am

The mayor of the world’s ‘greedest’ city, Mayor Gregor Robertson commented:

“We know that there are thousands of units of empty homes that potentially could be available for rental, when we have one of the tightest rental markets in the world,… This could be a great new supply of housing — thousands of units that could be available and also generate revenue for their owners.”

and then there is Mark

#44 Mark on 03.08.16 at 7:09 pm
“*10,800 homes out of the 225,000 studied were empty for one year or more.*”

Sounds like a lack of physical demand relative to supply. Like Nortel (and Cisco’s and Lucent’s) warehouses of Internet routers that were produced in speculation of being able to sell them.

As prices continue to fall, a lot of that inventory will flood the market.

Mark. Seek help.

#199 Rabbit One on 03.09.16 at 11:00 am

TFSA

The period we are awareof new $10,000 in year 2015 was very short time, like 8 month?

And $10,000 limit given in 2015 is untouched. Still there for everyone.

All accumulated limit still there, too.

T2’s $5,500 / year limit is just same as beginning of 2015. He didn’t reduce the limit, really.

If one cannot do max $10,000, can you do $100, or $500?

If not even contributing small amount, you cannot blame riches who can contribute max all the time.

#200 IHCTD9 on 03.09.16 at 11:25 am

#151 nonplused on 03.08.16 at 11:59 pm
I a world of 2% inflation, which is the target if not currently the reality, capital gains taxes are really just property taxes. At 2% inflation the price of everything doubles every 35 years, and with a capital gains tax the government gets 25% of the new value or 50% of the original value every 35 years. (It’s less with the current deductions)…
_____________

Excellent post. A lot of what you talk about is related to the Laffer Curve: the theoretical maximum a population can be taxed before revenue starts going down instead of up. History has proven maximum revenue comes well before 80% taxation, most folks figure in between 60-70% before everything goes down the tubes.

T2 clearly wants to explore this theory.

#201 Mike in Edm on 03.09.16 at 11:33 am

#4 Ole Doberman on 03.08.16 at 6:23 pm
Calgary is tearing apart at the seams, check out this place that finally sold:

http://www.prospectsweb.com/prospects/m.do?tk=a530fac0f3bd3025d42887ad5e542252
*****************************************
Maybe I’m blind, but what was the final selling price of this place?

#202 Dups on 03.09.16 at 11:45 am

More taxes on the successful, great…..
Soon the only people left in Canada would be: sheepels, ,government workers, and one eyed Cyclops. After they have chased out all the successful they will turn on each other, since they will not have any one else left to tax.
I am disappointed at these type of decisions by our government. No wonder why we are never too patriotic or proud of our government or our country as a consequence. I am not sure any more if I would want to raise my family in a country where the possibilities are taken away every time a new liberal government comes to power in means of more taxes. They are giving us no choice but to move away to US where freedom is still alive and breathing. Wake up Canada we are not communist China. We are being “Normalized” by our own government. We are supposed to be a free country. Are we really?!!!! Take away financial freedom and we are not so free any more. Time of the guns has gone and passed, this is the financial security time. All the wars are now fought financially by means of sanctions etc. Our government is declaring war onto its smart population in means of more taxes. If they get rid of the smart, successful, the brain, la crème de la crème, then they can manipulate and take advantage of the left over population much easier. One day we would look like a mediocre country when compared to the best out there.

#203 IHCTD9 on 03.09.16 at 11:53 am

#171 Q on 03.09.16 at 7:27 am
I’d be moving. — Garth

To where? Legit question, Garth. What little remains of good jobs are all in the craziest real estate markets. Or did you mean moving to another country? If so, again I ask, where. If you’re gonna spread the wisdom, don’t hold back.
_________________________________________

Anywhere in Canada where you net a better result? Do the math.

We live in a small hamlet, I commute 12 minutes to a small city where I work, 43,000 population. My wife commutes 20 minutes to her job in a different small city, 50,000 population.

Our house cost 1.4X income in 2001. We currently make low six figures combined, house is paid, no debt, nice nest egg on the go.

Today our house would cost us 1.9X income, so we could still save like crazy while paying the mortgage with ease.

I have 2 x 1 acre lots I could sever off my land that would fetch probably 60G’s each. I do many other things to cut costs and earn extra income as well that I would never get away with in a sub division.

Go East of Bowmanville right along the 401 – lots of folks doing great all the way to Kingston.

#204 foreign worker on 03.09.16 at 12:00 pm

1. Tax the non citizen triple the property taxes and call it a day, let them pay for all the freebies the hilly billy believe they deserve from government. (See USA)
2. If everybody considers home an investment tax the proceeds and eliminate flipping: sold in 1st year tax 80% of profit, next 2 years 60%, next 2 years 30%, 10% after 5 years flat. (See Switzerland)
3. Release more government land
4. Force the builders to have at least 40% of the condos with 3 bedrooms so you can raise a family in decent conditions
5. Also CMHC should back up at the most 500.000$ houses, if you cannot gather 10% down probably not be able to pay for it at some point

Vote me as PM

#205 cramar on 03.09.16 at 12:08 pm

#171 Q on 03.09.16 at 7:27 am

I’d be moving. — Garth

To where? Legit question, Garth. What little remains of good jobs are all in the craziest real estate markets. Or did you mean moving to another country? If so, again I ask, where. If you’re gonna spread the wisdom, don’t hold back.

Spoken like a person who has traveled little. — Garth

———————–

An even more fundamental question is define these “good jobs” that chains someone to the two cities with unaffordable housing?

#206 Shane on 03.09.16 at 12:22 pm

“”China has experienced massive capital outflows since August 2015,” the Hong Kong-based Deutsche Bank economists, Zhiwei Zhang and Li Zeng, wrote in their Feb. 29 report.”

http://www.bloomberg.com/news/articles/2016-03-08/phantom-goods-disguise-billions-in-china-illicit-money-outflows

—————

Aug 2015 is the exact time Vancouver real estate went vertical. How much more proof do you need?

#207 Randy Randerson on 03.09.16 at 12:29 pm

Best comment about Van housing is from some dumbass asking the government to force the owners of empty condos to sell them. As if the owners will sell them at below market price. Spoiler alert, you still can’t afford it!

And why do you want the government confiscate private property? What makes people think it’s ok to go after privately held RE and not privately held pension? Think about it people.

#208 John Doe on 03.09.16 at 12:37 pm

Hmm, I wonder if this hotel has ever had a dog that have shit in the middle of the bed or piss in every corner of the room.
just saying!

#209 Chumpy le chump on 03.09.16 at 12:37 pm

I’ve decided to bail. Listing the house and going to rent instead. My only hope is that i can get out of this quickly.

I’ll let you guys know how it goes, if only to provide others a glimpse of what is happening on the ground in West Van.

Peace

#210 Bottoms_Up on 03.09.16 at 12:48 pm

#119 Linda on 03.08.16 at 10:19 pm
————————————————
It’s not really that they were allowed to get away with it. They still owed the taxes+interest in arrears. There just wasn’t an associated penalty.

Think of it as a decent warning. They were also encouraged to do this by so called professional tax/estate planners….and others are allowed to come forward and pay arrear taxes without penalty.

#211 IHCTD9 on 03.09.16 at 12:52 pm

#192 Noel on 03.09.16 at 10:57 am

…Fact is, life has become so much easier for the wealthy over the last 4 decades. The top marginal tax rate has fallen dramatically, and wealth has become much more polarized, while the median income has fallen. There are no more ‘entitled’ people now than there were in the past.

“Marginal tax rates have fallen dramatically over the past half-century for Canada’s richest. In 1948, the top marginal tax rate levied on taxable incomes over $250,000 (in 1948 dollars) was 80%. In 2009, the top marginal rate levied on income was 42.92%, averaged across all provinces—and it applied to all incomes over $126,264.10 The top marginal tax rate varies from province to province.”

http://ywcacanada.ca/data/research_docs/00000192.pdf
______________

I hear what you’re saying, but you can’t describe how the “rich” are doing by looking at marginal tax rates. Income tax variations impact the poor and middle class – not actual rich folks. Very few Canadians making over 250K are doing so on a straight salary (as Trudeau found out quickly via his botched tax cut for the middle class).

Folks making 127K and paying 43% income tax on their paycheques aren’t rich obviously. They are middle class and government employees getting slaughtered by abusive taxation.

Fact is, you just can’t snap your fingers and extort revenue from actual rich folks. Look at the CRA groveling at KPMG clients’ feet making secret “no consequence” deals trying to get their tax revenue as an example.

#212 WalMark of Sadkatoon on 03.09.16 at 12:54 pm

Mark. Seek help.

lol what a clown

#213 Vacant homes on 03.09.16 at 12:57 pm

Prices and rent going up b/c of this

http://www.metronews.ca/news/vancouver/2016/03/08/vancouver-report-reveals-thousands-of-vacant-housing-units.html

#214 Francesca on 03.09.16 at 1:01 pm

Many people I know have been getting unusually aggressive letters from CRA lately asking for money. Often, the reasons invoked don’t make any sense.

Garth, are your sure taxation will increase from next year and that it has not already started?

#215 VICTORY TEA PARTY on 03.09.16 at 1:06 pm

#92 Bottoms Up

YOU’RE TOO SIMPLE BY HALF

The reason large corporations, including Apple (every Millennial’s favourite outfit because of its obnoxious plastic toys products), “hide” their money offshore (they actually simply do not repatriate profits) in the US case, is that US corporate tax rates are amongst the highest in the industrial world.

The ONLY “job” of money is to find a nice warm inexpensive “place to live” while all about it is blowin’ in the wind.

Your very good friend Mr. Obama (and maybe soon Mr. Trudeau), meanwhile, HAS DONE NOTHING TO CHANGE THIS STATE OF AFFAIRS IN THE PAST SEVEN YEARS of his reign.

Nor, for that matter, any number of his predecessors.

Why?

Political corruption at every level for one. For another, Wall Street influence that allows the American Empire’s crony capitalist class to range across the world dispensing everything from misery to profits (only to good allies and friends) in its wake.

This is what the Mercantile World has been all about since the 1500s in downtown Europe, starting with the Hanseatic trade alliances in the Baltic states (eventual source of the Baltic Dry Index); rise of the Dutch and English East India (1599) Companies; and the ORIGINAL Hong Kong and Shanghai Bank (1860s UK) one of whose activities involved profiting from the opium trade in China.

Check this out from Wikipedia:

“…The Hongkong and Shanghai Bank” was founded by Scotsman Sir Thomas Sutherland in the then British colony of Hong Kong on 3 March 1865, and in Shanghai a month later, benefiting from the start of trading into China, including opium trading.[18] It was formally incorporated as “The Hongkong and Shanghai Banking Corporation” by an Ordinance of the Legislative Council of Hong Kong on 14 August 1866.[2] In 1980, HSBC acquired a 51% shareholding in US-based Marine Midland Bank, which it extended to full ownership in 1987. On 6 October 1989, it was renamed …”The Hongkong and Shanghai Banking Corporation Limited”, and became registered as a regulated bank with the then Banking Commissioner of the Government of Hong Kong.[19]…”

STUDY YOUR HISTORY

This is why China still “hates” the round-eyes, a fall-out from the Opium wars ONE classic reason (there are others). Can’t trust ’em as far as they can throw ’em. That’s ALSO why Donald Trump is bitching so much about US/China trade policies because they are not favouring the US. Of course they’re not.

Regardless of Left or Right wing politics, the Mercantilists grind on relentlessly and will do so until the very last government has expired. As I wrote in my previous posting there has never been a time in human history where there HASN’T been a class structure or system.

I guess under your favourite system (Socialist Utopia) everyone is equal, to one another, except for those who are a little more equal than others: read George Orwell’s Animal Farm, and Uncle Karl’s various nefarious works for further and final clarifications.

Not even the vaunted Mr. Trudeau can crack this system. Can’t and won’t.

Millennials everywhere need to crack a few books and study their history, something few have done to date.

Then they’ll know why THEIR entitlement generation is utterly doomed. Won’t survive no matter how many times they vote NDP, or scuk back sidewalk cafe lattees.

Bonne Chance and all that rubbish.

#216 HD on 03.09.16 at 1:39 pm

@ #205 Chumpy le chump on 03.09.16 at 12:37 pm

Please keep us posted. Good luck.

Best,

HD

#217 max on 03.09.16 at 1:40 pm

People are not walking out with $2million in purchasing power. Most have to pay the bank most of the money. Even if their house netted $2million in tax free cash. Its not very much purchasing. As an example, most lotto winners end up bankrupt. Reality, Canadians may have more millionaires, but they are paper tigers. In that they can’t buy very much. Once you start spending the principal with no way to replace it. The money is gone fast! Hence lotto winners usually go bankrupt, same with retired pro athletes, and actors when their careers stall.

We all think we keep interest rates low so people can spend on more expensive stuff. No, its to get savers to go out and invest in riskier passive income generation. Namely government bonds.

#218 Noel on 03.09.16 at 1:45 pm

#207 IHCTD9

Fact is, you just can’t snap your fingers and extort revenue from actual rich folks. Look at the CRA groveling at KPMG clients’ feet making secret “no consequence” deals trying to get their tax revenue as an example.

______________

Yup, that is a good point. There needs to be much more work done by the CRA to fry the big tax cheats. I’m not a conspiracy buff, but there has to be some major influence from some wealthy tax cheats that has prevented, and is preventing this.

Unfortunately the Liberal government is just another flavour of the Conservatives with a better looking spokesman in this regard. Not holding my breath for any substantive change.

#219 Mark on 03.09.16 at 1:54 pm

“Mark. Seek help.”

I beg your pardon? That was completely uncalled for. All of those empty units make up the overall inventory of the housing market, and as Vancouver RE prices continue to fall, eventually that inventory will get flushed into the marketplace.

Mayor Robertson doesn’t know what he’s talking about. If the rental market were really the tightest in the world, we’d be seeing double-digit rent increases until such abated. Yet rents are barely moving, if at all, in Vancouver.

#220 IHCTD9 on 03.09.16 at 1:55 pm

#206 Bottoms_Up on 03.09.16 at 12:48 pm
#119 Linda on 03.08.16 at 10:19 pm
————————————————
It’s not really that they were allowed to get away with it. They still owed the taxes+interest in arrears. There just wasn’t an associated penalty.

Think of it as a decent warning. They were also encouraged to do this by so called professional tax/estate planners….and others are allowed to come forward and pay arrear taxes without penalty.
______________________________________

I think Linda already made it clear that she’d rather just shoot them in the back of the head and be done with it.

#221 Nemesis on 03.09.16 at 2:40 pm

“Don’t hold your breath. Just your nose.” – HonGT

#WhistlingPastTheGraveyard,Or… #TheBoulevardsOfBrokenDreams?…

[TheProvince] – Former ‘wholesaler’ lifts lid on a dark side of Vancouver’s red-hot real estate market: Woman quit the game for moral reasons, cites ‘elder abuse’

…”In eight years Amanda has never seen the market hotter than it is right now, and her colleagues are urging her to start wholesaling again.

“A lot of money is leaving China, so now every second day people are asking if I can go out and find places for them. They have tons of money,” Amanda said. “They are basically brokering business deals specifically for Chinese investors.”

She said the mechanics of wholesaling schemes work like this:

The investor behind the unlicensed broker targets a block, often with older homes, and gives the wholesaler cash in a legal trust.

The wholesaler persuades a homeowner to sell, offering immediate cash, no subjects, no home inspections, and savings on realtor fees.

While the wholesaler claims to represent one buyer, or in some cases to be the buyer, Amanda said three or four contract flippers are often already lined up, with an end-buyer from China who will eventually take title in most cases. These unlicensed broker deals appear to be illegal.”…

http://www.theprovince.com/business/story.html?id=11771306

SpecialBonusCentreFold: http://tinyurl.com/z9s4t8d

#222 Ponzius Pilatus on 03.09.16 at 2:43 pm

I think dividend tax credits and tax deductible interest on loans are sufficient incentive for stock investors.
Tax the capital gains fully.

#223 understood by few on 03.09.16 at 3:09 pm

#171 Q on 03.09.16 at 7:27 am

To where? Legit question, Garth. What little remains of good jobs are all in the craziest real estate markets. Or did you mean moving to another country? If so, again I ask, where. If you’re gonna spread the wisdom, don’t hold back.

———

“Your defeatist attitude’ll get you no where fast”Del

Have you even seriously looked? I doubt it. Maybe you kind-of searched online, one time. What cities are possible depends on your education / training, but there are jobs all over Canada. Yeah, they may pay “less” (in terms of gross pay), but relative to local cost of living they probably pay a lot more (especially compared to YVR which isn’t competitive with even Seattle in terms of pay.. with how much housing costs in Van wages should compete with SF or LA).

If you want specific recommendations, then state what industry you are in.

#224 IHCTD9 on 03.09.16 at 3:24 pm

#205 Chumpy le chump on 03.09.16 at 12:37 pm
I’ve decided to bail. Listing the house and going to rent instead. My only hope is that i can get out of this quickly.

I’ll let you guys know how it goes, if only to provide others a glimpse of what is happening on the ground in West Van.

Peace

____________________________________________

Keep us in the loop

My vote is gtfo of Van, rent or buy elsewhere, invest the proceeds.

#225 Melt or Crash on 03.09.16 at 3:33 pm

Lets recap who the next beneficiaries of a slow melt would be as opposed to a rapid, painful crash:

1. Over-leveraged homeowners of all demographics: They now have time to unload their house on a greater fool catching a falling knife, and still walk away with gains. No penalties there.

2. Boomers with the majority of their wealth tied up in real estate: They get to benefit from putting all their eggs in one basket, as they have the time to leisurely downsize and take their real estate gains and invest it elsewhere. Many years of a younger generation funding their retirement through buying their homes.

3. Landlords: They get to benefit from a nice steady trickle of sellers choosing to rent for many many years and prices ‘slowly’ make their way back to fundamentals (if fundamentals actually mean anything in a market heavily influenced by the free flow of foreign capital). As long as prices keep going down, the majority of people will likely rent than take the psychological risk of investing in a declining asset.

4. The Real Estate Industry: Instead of having their ridiculous commissions cut in half by a rapidly declining market, they get to continue to buy and sell for many many more years, reaping the rewards of an entrenched economic sector in a slowly declining market. That 25 year old realtor still gets another 10 plus years of fat commissions, given that ‘prices are sticky on the way down,’ ‘that there will be no crash,’ and we had a 13 year bull run in places like Vancouver.

5. Investment Firms: I dare say that even investment firms would prefer a slow melt as they get a steady stream of boomers downsizing with cash in their pockets, and they get to manage the funds for years for those risk aversive renters waiting for the right time to ‘jump into the market.’

6. Provincial Governments / Federal Government: Provincial governments would continue to take advantage of windfall funds from property transfer taxes and and a heathy residential real estate sectors, weakening the desire to shift resources into productive sectors

If there was a quick slide in price, like the US style, then the nation would become stronger as people would re-allocate capital into productive sectors.

Sure, some families would suffer for a few years, but as the US has shown, those families would have time to make up the loses. After a 3 years slide in prices, the US turned around and is getting stronger.

You know who the net losers are in a slow melt in prices? The renters, and the financially prudent, who have to wait for many more years in order to buy and justify sitting out of the market for so long.

If my measly balanced portfolio gains are taxed even more because of federal changes, and real estate remains untouched, then there really is no other investment strategy except real estate. Throw in the recently announced increase of new families coming to Canada, and this sector will remain the top performer across the country for some time.

Poor analysis. In a slow melt, people hang on and ride it down. Wait, and watch. — Garth

#226 hope & ruin on 03.09.16 at 3:42 pm

#80 Gulf Breeze on 03.08.16 at 8:25 pm

I don’t own a car, don’t buy a lot of clothes, have no kids, very little debt. I even cut my own hair. I make a fair amount of money.
___________________________________________

I think no car, old clothes and cutting your own hair might be related to having no kids. Just maybe….

#227 Dogman01 on 03.09.16 at 3:42 pm

acdel on 03.08.16 at 6:28 pm
So, if the lady T2 does decide to implement Capital Gains Tax from 50 to possibly 100% as well as adding an additional 300 thousand plus immigrants to Canada per year, what is the logical choice? Investing or RE?

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

My thoughts exactly; add in no tax on the gain of my primary residence, permanent ultra-low interest rates….

All the cards are stacked in the house’s favor….pun 

#228 acdel on 03.09.16 at 3:44 pm

#217 Nemesis

Good post, the retro centre fold brings back memories.

After reading all the posts from the West Coast one comes to the conclusion that it is not necessarily foreign money that is causing the issue, it’s the crooked realtors, brokers, wholesalers and contract flippers and of course greed comes into place.

The focus should be directed on the crooked ones’….

#229 Dogman01 on 03.09.16 at 3:47 pm

#7 GB on 03.08.16 at 6:27 pm

The thing is Garth, throughout history, a healthy balance between the wealthy and the working class is the steam that gets economies rolling.

What we have been witnessing over the past decade and a half is a complete yard sale on the working class in favour of tax breaks for wealthy corporations and those with the capital to invest (and hide it…eh ehmm..KPMG)

The result? What we have now. Stagnation and perpetually low interest rates just to keep our economies above water.

It just doesn’t trickle down sir. Just doesn’t. Greed tends to result in hoarding behavior and…well….off shore accounts to boot.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

No it does not ever Trickle down, report for the IMF further debunking the fable of “Trickle Down”

https://www.imf.org/external/pubs/cat/longres.aspx?sk=42986.0

The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down.

#230 Long Time Lurker Here on 03.09.16 at 3:58 pm

Tax, tax, tax. That’s all that the government wants, as if we haven’t been taxed enough.

Instead of just straight up asking for tax money, why not create some kind of tax credits (non linear of course) e.g. if you spent $X in something, you get $Y tax credit. So instead of handing over money directly to the government, it trickles down the economy where more people will be benefited from the money, which will eventually turn into some kind of tax ultimately collected by the government.

Penalizing the hard working people is not the way to go. Neither is handing out free money to the “poor”. Make people work for that money. Make it accessible, but not free.

#231 A Canadian Abroad on 03.09.16 at 4:02 pm

#192 Noel on 03.09.16 at 10:57 am
#188 A Canadian Abroad on 03.09.16 at 10:16 am
“You’re suffering from the ‘golden age fallacy’, a belief that in the past times were better, simpler, more honest.”

That’s partly true indeed. And while I wasn’t around working in the 80’s, I have seen today, and even your PDF report shows, the vast majority of wealth comes from income. I can’t understand why, today, it’s lets tax those (beyond what’s fair) who are successful.

To me it says: “Successful? Don’t move/live in Canada! we will make you pay beyond what’s fair”

#232 Ronaldo on 03.09.16 at 4:08 pm

Today’s “The Province” headlines:

WILL YOU SELL ME YOUR HOUSE?

http://www.pressreader.com/canada/the-province/20160309/281586649695747

Yep, fleecing. Much like what was happening in the early 70’s in Vancouver when Realturds were going house to house offering to buy our grandparents house and turning around and selling to another realtor, and so on and so on. In an 18 month period prices had more than doubled. Then, September 74 came and the lights went out on real estate. Prices declined 20% overnite and 40% by the time it was done. I suspect this time could be much worse once the herd starts to list. Just did a walkabout in the Mt. Pleasant area again after two weeks. A 30 sq. block area, only 1 for sale sign.

#233 Randy Randerson on 03.09.16 at 4:26 pm

Millennials, if you think the 30’s is the gold age, here are a few things that will put you in perspective:

Polio and iron lungs, high infant mortality, no known cause of heart attack and its cure, no internet (ergo no Facebook, Instagram, and any sort of ways to post your narcissistic a-hold drippings), no easy way to travel to other parts of the world, let alone the country, etc…

On the plus side, there was WWII and its holocaust horror, and the fact that it killed a bunch of people and freeing up the job market. I guess that’s what the Millennials really want.

#234 acdel on 03.09.16 at 4:32 pm

#222 Dogman01

My thoughts exactly; add in no tax on the gain of my primary residence, permanent ultra-low interest rates….

All the cards are stacked in the house’s favor….pun

—————————————————-

That’s the choice one has to carefully consider. We need immigration due to our median age; at the same time the new immigrants need a home.

Now there is this possibility of the Capital Gains tax increase. One has to consider both options.

#235 I'm stupid on 03.09.16 at 4:32 pm

T2 won’t dare screw with cap gains. It would be suicide. Corps already pay tax then investors pay cap gains tax. Increasing it would cause companies to relocate because in a global world no one wants to deal with a govt that’s unpredictable.

#236 The Donald on 03.09.16 at 4:38 pm

Love the info-graphic at
http://news.nationalpost.com/news/canada/were-not-realtors-former-wholesaler-reveals-hidden-dark-side-of-vancouvers-red-hot-real-estate-market

To sum it up, in Vancouver, the housing foodchain is: Homeowners -> Wholesalers -> Local Investors -> Realtors -> Chinese Investors

#237 John on 03.09.16 at 4:58 pm

Well, taxing capital gains at 100% will be the final thing I need to push me out of this country and live in the Caribbean instead. I’m sure a lot of other Canadians with money would do the same thing. The government is so stupid and short sighted. Get ready for a mass outflow of wealth.

#238 Nemesis on 03.09.16 at 5:06 pm

#AccordingToSaskatchewan… #”It’sBetterInBC!”,Or…

“If this is a trend now, if the Saskatchewan government is going to start putting people on a buses, you know that is just inhumane. It is not good public health. It is not good social policy, and it really does nothing for those individuals who are on that bus.” – Vancouver City Councillor Kerry Jang

[CBC] – Saskatchewan buys one-way bus ticket to B.C. for homeless men

http://www.cbc.ca/news/canada/british-columbia/saskatchewan-buys-one-way-bus-ticket-to-b-c-for-homeless-men-1.3483429

SpecialBonusFoldOut! It’s “AllAboard the BradWall Express” on Saskatchewan’s Famous PacificNorthWest ShelterScenicCruiser: http://tinyurl.com/zj5tv34

#239 Bram on 03.09.16 at 5:09 pm

#232 The Donald on 03.09.16 at 4:38 pm
To sum it up, in Vancouver, the housing foodchain is: Homeowners -> Wholesalers -> Local Investors -> Realtors -> Chinese Investors

So it’s time for the free market to fix this.
Amazon or Google should set up a broker site coupling Canadian home owners with investors from abroad.

Net result: Home owners fetch more for their home, Chinese investor pays less for the home, market price goes down without hurting the sellers.
The only losers here are the middle men.

Bram

#240 Panhead on 03.09.16 at 5:12 pm

#212 HD on 03.09.16 at 1:39 pm
@ #205 Chumpy le chump on 03.09.16 at 12:37 pm
Please keep us posted. Good luck.

Good luck is a nice thought but he won’t need it … he’ll make off like a bandit right now.
I still remember a co-worker who decided to sell his house in South Burnaby in a HOT market some years ago. His next door neighbour listed his house and a real estate sign got planted on his lawn. My bud made up a home made sign “for sale by owner” and planted in his lawn right across from his neighbours. When the planned open house next door arrived my bud’s phone started ringing and voila … cash sale that very day sans real estate commish … poor guy didn’t live long enough to enjoy his gains though … hope Chumply does.

#241 bill on 03.09.16 at 5:34 pm

#234 Nemesis on 03.09.16 at 5:06 pm
reminded me of this for some reason….
http://24.media.tumblr.com/tumblr_mekkoaWuMJ1rjbqwno1_500.jpg

#242 Todo lo bueno tiene un final ! on 03.10.16 at 11:18 am

I guess this picture would be the appropriate follow-up to Garth’s visual storytelling

http://img.picturequotes.com/2/20/19714/you-can-have-too-much-of-a-good-thing-quote-1.jpg